-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Viakgg2cfKMILgOPvmkZT2iuleFYgPI6MSxmw5Q7N4dqwY0FGnmeQrigAl5wVApz wkInNfcZQ8TRliEKBIU48g== 0000947871-04-001587.txt : 20040618 0000947871-04-001587.hdr.sgml : 20040618 20040618070312 ACCESSION NUMBER: 0000947871-04-001587 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20040618 GROUP MEMBERS: CALIFORNIA U.S. HOLDINGS INC. FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INFOGRAMES ENTERTAINMENT SA CENTRAL INDEX KEY: 0001100953 STATE OF INCORPORATION: CA FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 82-84, RUE DU LER MARS 1943 STREET 2: FRANCE CITY: FRANCE STATE: A1 ZIP: 00000 MAIL ADDRESS: STREET 1: 82-84, RUE DU LER MARS 1943 STREET 2: FRANCE CITY: FRANCE STATE: A1 ZIP: 00000 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ATARI INC CENTRAL INDEX KEY: 0001002607 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 133689915 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-47017 FILM NUMBER: 04869778 BUSINESS ADDRESS: STREET 1: 417 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2127266500 MAIL ADDRESS: STREET 1: 417 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 FORMER COMPANY: FORMER CONFORMED NAME: INFOGRAMES INC DATE OF NAME CHANGE: 20000511 FORMER COMPANY: FORMER CONFORMED NAME: GT INTERACTIVE SOFTWARE CORP DATE OF NAME CHANGE: 19951023 SC 13D/A 1 sc13da_061704.txt AMENDMENT NO. 7 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549, U.S.A. SCHEDULE 13D under the Securities Exchange Act of 1934 (Amendment No. 7) ATARI, INC. ----------- (F/K/A INFOGRAMES, INC., F/K/A GT INTERACTIVE SOFTWARE CORP.) (Name of Issuer) Common Stock, par value $0.01 per share --------------------------------------- (Title of Class of Securities) 04651M 10 5 (CUSIP Number) Frederic Monnereau Infogrames Entertainment SA 1 place Verrazzano 69252 Lyon Cedex 09 France +33 (0) 4 37 64 30 00 ------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 15, 2004 ------------------------------------------------- (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 [ ]. Page 1 of 11 Pages Schedule 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. INFOGRAMES ENTERTAINMENT SA IDENTIFICATION NO. OF ABOVE PERSON - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF (a) [ ] A GROUP (SEE INSTRUCTIONS) (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) SC, OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) to 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OF PLACE OF ORGANIZATION FRANCE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 71,065,281(1) Number of shares ------------------------------------------------------ beneficially owned 8 SHARED VOTING POWER 260,000(2) by each reporting ------------------------------------------------------ person with 9 SOLE DISPOSITIVE POWER 71,065,281(3) ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 71,325,281(4) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 58.8%(5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- - --------------------- 1 Includes (i) 68,199,669 shares of Common Stock (the "CUSH Owned Shares") directly held by California U.S. Holdings, Inc., a wholly owned subsidiary of Infogrames, following the transfer of 10,600,000 shares of Common Stock by CUSH to Nexgen pursuant to the Transaction, (ii) 2,000,000 shares of Common Stock (the "Atari License Shares") issued to Atari Interactive, a wholly owned subsidiary of Infogrames, as part of the extension of the Atari name license, and 865,612 shares of Common Stock (the "IESA Owned Shares") issued to Infogrames Entertainment S.A. as part of the restructuring on September 18, 2003. This amount does not include 12,000,000 shares to be transferred by Nexgen to Cush in the event of a physical settlement of the Transaction on the Termination Date (see Item 6 below). 2 Represents a proxy for the vote of 260,000 shares of Common Stock (the "Cayre Director Proxy Shares") held by the Cayre family. 3 Includes (i) CUSH Owned Shares and (ii) the Atari License Shares. 4 Includes (i) CUSH Owned Shares, (ii) the Atari License Shares and (iii) the Cayre Director Proxy Shares. 5 Based on 121,275,614 shares of the Company's Common Stock outstanding as of June 9, 2004. Page 2 of 11 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. CALIFORNIA U.S. HOLDINGS INC. IDENTIFICATION NO. OF ABOVE PERSON - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF (a) [ ] A GROUP (SEE INSTRUCTIONS) (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) to 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OF PLACE OF ORGANIZATION CALIFORNIA - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 68,199,669(6) Number of shares ------------------------------------------------------ beneficially owned 8 SHARED VOTING POWER 260,000(7) by each reporting ------------------------------------------------------ person with 9 SOLE DISPOSITIVE POWER 68,199,669(8) ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 68,459,669(9) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 56.2%(10) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- - --------------------- 6 Represents the 68,199,669 CUSH Owned Shares following the transfer of 10,600,000 shares to Nexgen. This amount does not include 12,000,000 shares to be transferred by Nexgen to Cush in the event of a physical settlement of the Transaction on the Termination Date (see Item 6 below). 7 Represents the 260,000 Cayre Director Proxy Shares. 8 Represents the 68,199,669 CUSH Owned Shares following the transfer of 10,600,000 shares to Nexgen. This amount does not include 12,000,000 shares to be transferred by Nexgen to Cush in the event of a physical settlement of the Transaction on the Termination Date (see Item 6 below). 9 Includes (i) CUSH Owned Shares and (ii) the Cayre Director Proxy Shares. 10 Based on 121,275,614 shares of the Company's Common Stock outstanding as of June 9, 2004. Page 3 of 11 Pages This Amendment No. 7 ("Amendment No. 7") to the Schedule 13D filed on December 14, 1999, as amended by Amendment No. 1 filed with the Securities Exchange Commission (the "SEC") on January 10, 2000, as amended and restated by Amendment No. 2 filed with the SEC on May 26, 2000, as amended by Amendment No. 3 filed with the SEC on October 4, 2000, as amended by Amendment No. 4 filed with the SEC on January 8, 2001, as amended by Amendment No. 5 filed with the SEC on September 24, 2003 and by Amendment No. 6 filed with the SEC on February 24, 2004 (as so amended, the "Schedule 13D"), is filed by the undersigned to further amend the Schedule 13D. The Schedule 13D is filed with respect to the common stock, par value $.01 per share (the "Common Stock") of Atari Inc. (formerly known as Infogrames, Inc., formerly known as GT Interactive Software Corp.), a Delaware corporation (the "Company"). Capitalized terms used and not defined in this Amendment No. 6 shall have the meanings ascribed to them in the Schedule 13D. Except as specifically provided herein, this Amendment No. 7 does not modify any of the information previously reported in the Schedule 13D. Item 2. Identity and Background. This item is hereby amended and restated in its entirety to read as follows: (a) Infogrames Entertainment S.A. ("Infogrames") and California U.S. Holdings, Inc., a wholly owned subsidiary of Infogrames (previously in the Schedule 13D "Purchaser" and henceforth "CUSH", and together with Infogrames, the "Filing Persons"). (b) Infogrames is a societe anonyme organized under the laws of France. CUSH is a California corporation. (c) The address of the principal office of Infogrames is 1, place Verrazzano, 69252 Lyon Cedex 09 France. The address of the principal office of CUSH is c/o Atari, Inc. 417 Fifth Avenue, New York, NY 10016 (d) The principal business activities of the Filing Persons is the holding of equity interest in companies engaged in the business of development and distribution of computer software. (e) During the past five years, neither Filing Person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (f) Neither Filing Person is, nor, during the last five years, was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws as a result of a civil proceeding before a judicial or administrative body of competent jurisdiction nor has any such judicial or administrative body found either Filing Person was in violation of such laws. Set forth on Exhibit 1 to this Statement, and incorporated herein by reference, is the name, residence or business address, present principal occupation or employment, and citizenship, of each executive officer and director of the Filing Persons, and the name of any corporation or other organization in which such occupation or employment is conducted, together with the principal business and address of any such corporation or organization other than Infogrames or CUSH, as the case may be, for which such information is set forth. Page 4 of 11 Pages To the best of the Filing Persons' knowledge, none of the Filing Persons' directors or executive officers, (a) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) has been a party to a civil proceeding before 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 4. Purpose of the Transaction Item 4 is amended to add the following paragraphs: On June 17, 2004, CUSH settled a stock transfer (the "Transaction") with Nexgen Capital Limited ("Nexgen"). Pursuant to the Transaction CUSH agreed to transfer to Nexgen 10,600,000 shares of Common Stock of the Company (the "Transferred Shares") in consideration of a payment from Nexgen per share (the "Initial Price") equal to the volume-weighted average price of the Common Stock on the Nasdaq National Market on June 15, 2004, as published by Bloomberg. CUSH has also agreed to use its best efforts to cause the Company to file a registration statement covering the Transferred Shares pursuant to a registration rights agreement between CUSH and Nexgen, such filing being subject to approval of the Company's Board of Directors. The Filing Persons presently intend to use their best efforts to cause the Company to file a registration statement covering 19,600,000 shares and including up to 9,000,000 shares held by the Filing Persons in addition to the Transferred Shares. The Initial Price is $2.6567 and the closing date for the Transaction is June 17, 2004 (the "Effective Date"). The proceeds of the Transaction are to be used by IESA for general financing purposes. Item 5. Interest in Securities of the Issuer Item 5 is amended to add the following statements to each of the following paragraphs: (a) The responses of the Filing Persons to Rows (11) through (13) of the cover pages of this Statement are incorporated herein by reference. The calculation of the following percentages is based on the number of shares of Common Stock disclosed as outstanding as of June 9, 2004, as reported by the Company in its quarterly report on Form 10-K for the year ended March 31, 2004 as filed with the Securities & Exchange Commission on June 14, 2004. As of the closing of the Transaction on June 17, 2004, CUSH may be deemed to be the beneficial owner of 68,459,669 shares of Common Stock, including the 68,199,669 shares of Common Stock directly held by CUSH and the 260,000 shares held by the Cayre Group and subject to a proxy in favor of CUSH for the election and removal of directors pursuant to the Cayre Purchase Agreements. The 68,459,669 shares of Common Stock of which CUSH may be deemed the beneficial owner represent 56.2% of the outstanding shares of the Company. This amount does not include 12,000,000 shares to be transferred by Nexgen to CUSH in the event of a physical settlement of the Transaction on the Termination Date (see Item 6 below). Page 5 of 11 Pages As of the closing of the Transaction on June 17, 2004, Infogrames may be deemed to be the beneficial owner of the 71,325,281 shares of Common Stock, including, by virtue of its ownership of 100% of the capital stock of CUSH, 68,459,669 shares of Common Stock that are deemed beneficially owned by CUSH and, in addition, the 2,000,000 Atari License Shares held by Infogrames wholly owned subsidiary Atari Interactive and the 865,612 shares of Common Stock directly held by Infogrames. The 71,325,281 shares of which Infogrames may be deemed the beneficial owner represent 58.8% of the outstanding shares of the Company and not including 12,000,000 shares to be transferred by Nexgen to CUSH in the event of a physical settlement of the Transaction on the Termination Date (see Item 6 below). Except as disclosed in this Item 5(a), none of the Filing Persons nor, to the best of their knowledge, any of the persons listed on Exhibit 1 to this Statement beneficially owns any Shares or has the right to acquire any Shares. (b) The responses of the Filing Persons to (i) Rows (7) through (10) of the cover pages of this Statement on Schedule 13D and (ii) Item 5(a) hereof are incorporated herein by reference. Except as disclosed in this Item 5(b), none of the Filing Persons nor, to the best of their knowledge, any of the persons listed on Exhibit 1 to this Statement presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Shares which they may be deemed to beneficially own. ( c) The responses of the Filing Persons to Item 4 hereof are incorporated herein by reference. Except as disclosed in this Statement, none of the Filing Persons nor, to the best of their knowledge, any of the persons listed on Exhibit 1 to this Statement has effected any transaction in the Shares during the past 60 days. (d) To the best knowledge of the Filing Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares beneficially owned by the Filing Persons. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Pursuant to the Transaction (consisting of the ISDA Master Agreement, attached hereto as Exhibit 23, and the related form of Confirmation, as amended, attached hereto as Exhibit 24 and Exhibit 25, collectively, the "Contracts") CUSH, entered into on June 15, 2004, with Nexgen, (i) Nexgen accepted delivery from CUSH of 10,600,000 Transferred Shares at the Initial Price per share of $2.6567 (i.e. $28,161,020) paid by Nexgen to CUSH on the Effective Date (i.e. June 17, 2004), and (ii) as a collateral, CUSH paid to Nexgen $7,970,100 (the "Credit Cushion"). In the course of the Transaction, depending on Page 6 of 11 Pages the evolution of the stock price, CUSH may provide to Nexgen additional collateral. CUSH has also agreed to use its best efforts to cause the Company to file a registration statement for the benefit of Nexgen pursuant to the registration rights agreement attached hereto as Exhibit 26, such filing being subject to approval of the Company's Board of Directors. The payment obligations of CUSH pursuant to the Transaction are also secured by a parent company guarantee given by Infogrames. The Transaction will terminate on or about June 16, 2005 (the "Termination Date"). On the Termination Date, CUSH will have two options: (A) the first option is to physically settle the Transaction by CUSH taking delivery from Nexgen of 12,000,000 shares of the Company and by CUSH paying to Nexgen $23,910,300 (i.e. the sum of the 12,000,000 shares at the Initial Price - $31,880,400 - minus the Credit Cushion in the amount of $7,970,100); or (B) the second option is to cash settle the Transaction whereby (i) CUSH will receive from Nexgen an amount (the "Equity Amount"), if such amount is positive, calculated as 12,000,000 shares multiplied by the difference between (x) the final share price (calculated pursuant to the Contracts) minus (y) the Initial Price or (ii) if the Equity Amount is negative, CUSH will pay to Nexgen the absolute value of the Equity Amount. In addition, on the Termination Date, and subject to netting against other payments owing by CUSH, Nexgen will refund CUSH any additional collateral provided by CUSH. Until the Termination Date, CUSH will pay to Nexgen interest based on Libor plus 4% on a principal amount of $23,910,300 minus the value of any additional collateral provided by CUSH to Nexgen. On the Termination Date, Nexgen may also receive an appreciation percentage calculated as 25% multiplied by 12,000,000 multiplied by the difference, if positive, between the final share price and 120% of the Initial Price. The Transaction also provides for an early termination at the election of Nexgen in the event that: (i) the arithmetic average price of the stock of the Company for five successive trading days is less than $1.50, or (ii) CUSH enters into a transaction that, in the reasonable opinion of Nexgen, has a similar economic effect to the Transaction, or (iii) the Company has not filed a registration statement with Securities and Exchange Commission, or if the Transferred Shares are not registered within a certain period of time. In any of those events, CUSH will have the choice of a physical or cash settlement. Item 7. Materials to Be Filed as Exhibits Exhibit 1 Chart Regarding Executive Officers and Directors of Filing Persons. (Filed on 2/24/2004 as Exhibit 1 to Amendment 6 and incorporated herein by reference.) Exhibit 2 Joint Filing Agreement between the Filing Persons. (Filed on 12/14/1999 as Exhibit 2 to Schedule 13D and incorporated herein by reference.) Exhibit 3 Securities Purchase Agreement, dated as of November 15, 1999, among the Company and the Filing Persons. (Filed on 12/14/1999 as Exhibit 3 to Schedule 13D and incorporated herein by reference.) Page 7 of 11 Pages Exhibit 4 Short Term Note of the Company in the Principal Amount of $25.0 million. (Filed on 12/14/1999 as Exhibit 4 to Schedule 13D and incorporated herein by reference.) Exhibit 5 Warrant to Purchase 50,000 shares of Common Stock, issued to CUSH. (Filed on 12/14/1999 as Exhibit 5 to Schedule 13D and incorporated herein by reference.) Exhibit 6 5% Subordinated Convertible Note of the Company, issued to CUSH. (Filed on 1/10/2000 as Exhibit 6 to Amendment No.1 to Schedule 13D and incorporated herein by reference.) Exhibit 7 Equity Purchase and Voting Agreement, dated as of November 15, 1999, among the Filing Persons and the GAP Entities. (Filed on 12/14/1999 as Exhibit 8 to Schedule 13D and incorporated herein by reference.) Exhibit 8 Form of GAP Warrant. (Filed on 12/14/1999 as Exhibit 9 to Schedule 13D and incorporated herein by reference.) Exhibit 9 Exchange Agreement, dated as of November 15, 1999, among the Company and the GAP Entities. (Filed on 12/14/1999 as Exhibit 10 to Schedule 13D and incorporated herein by reference.) Exhibit 10 Form of Equity Purchase and Voting Agreements, dated as of November 15, 1999, among the Filing Persons and the members of the Cayre Group. (Filed on 12/14/1999 as Exhibit 11A to Schedule 13D and incorporated herein by reference.) Exhibit 11 Note Purchase Agreement, dated as of November 15, 1999, between certain members of the Cayre Group and CUSH. (Filed on 12/14/1999 as Exhibit 11B to Schedule 13D and incorporated herein by reference.) Exhibit 12 Right of First Offer Agreement, dated as of November 15, 1999, among CUSH and the Lenders. (Filed on 12/14/1999 as Exhibit 13 to Schedule 13D and incorporated herein by reference.) Exhibit 13 Supplemental Agreement, dated May 19, 2000, between Edmondson, Ward and Infogrames. (Filed on 10/04/2000 as Exhibit 13 to Amendment No. 3 and incorporated herein by reference.) Exhibit 14 Warrant Agreement, dated as of February 15, 2000, among the Company and CUSH, and Warrant to Purchase 45,000 shares of Common Stock (225,000 shares before Reverse Stock Split), issued to CUSH. (Filed on 10/04/2000 as Exhibit 14 to Amendment No. 3 and incorporated herein by reference.) Page 8 of 11 Pages Exhibit 15 Second Amended and Restated Registration Rights Agreement, dated as of October 2, 2000, between CUSH and the Company. (Filed on 10/04/2000 as Exhibit 15 to Amendment No. 3 and incorporated herein by reference.) Exhibit 16 Agreement and Plan of Merger, dated as of September 6, 2000, by and among the Company, Merger Sub, Infogrames, CUSH and INA. (Filed by the Company on 09/12/00 as Exhibit A to its Proxy Statement on Schedule 14C and incorporated herein by reference.) Exhibit 17 Stock Purchase and Exchange Agreement, dated December 28, 2001, among Infogrames and the Sellers. (Filed on 01/04/2001 as Exhibit 16 to Amendment No. 4 and incorporated herein by reference.) Exhibit 18 Convertible Subordinated Note issued by the Company to Infogrames, on December 28, 2001, in a principal amount of $40,812,000. (Filed on 01/04/2001 as Exhibit 17 to Amendment No. 4 and incorporated herein by reference.) Exhibit 19 Convertible Subordinated Note issued by the Company to Infogrames, on December 28, 2001, in a principal amount of $9,188,000. (Filed on 01/04/2001 as Exhibit 18 to Amendment No. 4 and incorporated herein by reference.) Exhibit 20 Trademark License Agreement, dated as of September 4, 2003, among Infogrames, Atari Interactive and the Company. (Filed by the Company on 09/05/03 as Exhibit 10.71 to its Registration Statement on Form S-2 and incorporated herein by reference.) Exhibit 21 Agreement Regarding Satisfaction of Debt and License Amendment, dated as of September 4, 2003, among CUSH, Infogrames and the Company. (Filed by the Company on 09/18/03 as Exhibit 10.70 to its Registration Statement on Form S-2 and incorporated herein by reference.) Exhibit 22 Underwriting Agreement, dated September 18, 2003, among the Company, Infogrames and UBS Securities LLC, Harris Nesbitt Gerard, Inc., and SoundView Technology Corporation, as Managing Underwriters. (Filed by the Company on 09/18/03 as Exhibit 1 to its Registration Statement on Form S-2 and incorporated herein by reference.) Exhibit 23 ISDA Master Agreement, dated June 11, 2004, between CUSH and Nexgen* Exhibit 24 Transaction Confirmation, dated June 11, 2004, between CUSH and Nexgen, as amended on June 15, 2004* Exhibit 25 Amendment, dated June 15, 2004, to Transaction Confirmation, dated June 11, 2004, between CUSH and Nexgen* Page 9 of 11 Pages Exhibit 26 Registration Rights Agreement, dated June 11, 2004, between CUSH and Nexgen* - ------------------ * Filed with this Amendment. Page 10 of 11 Pages 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: June 17, 2004 By: INFOGRAMES ENTERTAINMENT SA By: /s/ Bruno Bonnell --------------------------------- Bruno Bonnell Chairman and Chief Executive Officer Dated: June 17, 2004 By: CALIFORNIA U.S. HOLDINGS, INC. By: /s/ Bruno Bonnell ---------------------------------- Bruno Bonnell Chairman and Chief Executive Officer Page 11 of 11 Pages EX-23 2 ex23_061704.txt ISDA MASTER AGREEMENT Exhibit 23 (Multicurrency -- Cross Border) ISDA(R) International Swap Dealers Association, Inc. MASTER AGREEMENT dated as of: 11th June 2004 NEXGEN CAPITAL LIMITED and CALIFORNIA U.S. HOLDINGS, INC. have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will be governed by this Master Agreement, which includes the schedule (the "Schedule"), and the documents and other confirming evidence (each a "Confirmation") exchanged between the parties confirming those Transactions. Accordingly, the parties agree as follows: -- 1. Interpretation (a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement. (b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction. (c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this "Agreement"), and the parties would not otherwise enter into any Transactions. 2. Obligations (a) General Conditions. (i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement. (ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement. (iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement. (b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the 1 ISDA(R) 1992 payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objectionto such change. (c) Netting. If on any date amounts would otherwise be payable:-- (i) in the same currency; and (ii) in respect of the same Transaction, by each party to the other, then, on such date, each party's obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries. (d) Deduction or Withholding for Tax. (i) Gross-Up. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party ("X") will:-- (1) promptly notify the other party ("Y") of such requirement; (2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y; (3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:-- (A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or (B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether 2 ISDA(R) 1992 such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law. (ii) Liability. If: -- (1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4); (2) X does not so deduct or withhold; and (3) a liability resulting from such Tax is assessed directly against X, then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)). (e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement. 3. Representations Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:-- (a) Basic Representations. (i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing; (ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance; (iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; (iv) Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and 3 ISDA(R) 1992 (v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)). (b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party. (c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document. (d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect. (e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true. (f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true. 4. Agreements Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:-- (a) Furnish Specified Information. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:-- (i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation; (ii) any other documents specified in the Schedule or any Confirmation; and (iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification, in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable. (b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this 4 ISDA(R) 1992 Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future. (c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party. (d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure. (e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party's execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party. 5. Events of Default and Termination Events (a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an "Event of Default") with respect to such party:-- (i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party; (ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party; (iii) Credit Support Default. (1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed; (2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or (3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document; (iv) Misrepresentation. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated; 5 ISDA(R) 1992 (v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf); (vi) Cross Default. If "Cross Default" is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period); (vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party: -- (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or (viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer: -- 6 ISDA(R) 1992 (1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or (2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement. (b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event (i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party): -- (1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or (2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction; (ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B)); (iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii); (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in the Schedule as applying to the party, such party ("X"), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or 7 ISDA(R) 1992 (v) Additional Termination Event. If any "Additional Termination Event" is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation). Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:-- (c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not constitute an Event of Default. 6. Early Termination (a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non-defaulting Party") may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8). (b) Right to Terminate Following Termination Event. (i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require. (ii) Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist. If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i). Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party's policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed. (iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event. (iv) Right to Terminate. If: -- 8 ISDA(R) 1992 (1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party, either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions. (c) Effect of Designation. (i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing. (ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e). (d) Calculations. (i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation. (ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. (e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions shall apply based on the parties' election in the Schedule of a payment measure, either "Market Quotation" or "Loss", and a payment method, either the "First Method" or the "Second Method". If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that "Market Quotation" or the "Second Method", as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off. (i) Events of Default. If the Early Termination Date results from an Event of Default: -- 9 ISDA(R) 1992 (1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. (2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party's Loss in respect of this Agreement. (3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party's Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (ii) Termination Events. If the Early Termination Date results from a Termination Event: -- (1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions. (2) Two Affected Parties. If there are two Affected Parties: -- (A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount ("X") and the Settlement Amount of the party with the lower Settlement Amount ("Y") and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and (B) if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss ("X") and the Loss of the party with the lower Loss ("Y"). If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y. (iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because "Automatic Early Termination" applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law 10 ISDA(R) 1992 to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii). (iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses. 7. Transfer Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that: -- (a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and (b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e). Any purported transfer that is not in compliance with this Section will be void. 8. Contractual Currency (a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the "Contractual Currency"). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess. (b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term "rate of exchange" includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency. 11 ISDA(R) 1992 (c) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement. (d) Evidence of Loss. For tbe purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made. 9. Miscellaneous (a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto. (b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system. (c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction. (d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law. (e) Counterparts and Confirmations. (i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original. (ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall he entered into as soon as practicable and may he executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation. (f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege. (g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement. 10. Offices; Multibranch Parties (a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such party are the same as if it had entered into the Transaction through its head or home office. This 12 ISDA(R) 1992 representation will be deemed to be repeated by such party on each date on which a Transaction is entered into. (b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party. (c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation. 11. Expenses A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection. 12. Notices (a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:-- (i) if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date the recipient's answerback is received; (iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or (v) if sent by electronic messaging system, on the date that electronic message is received, unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day. (b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it. 13. Governing Law and Jurisdiction (a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule. (b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement ("Proceedings"), each party irrevocably:-- 13 ISDA(R) 1992 (i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction. (c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party's Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law. (d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings. 14. Definitions As used in this Agreement:-- "Additional Termination Event" has the meaning specified in Section 5(b). "Affected Party" has the meaning specified in Section 5(b). "Affected Transactions" means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions. "Affiliate" means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, "control" of any entity or person means ownership of a majority of the voting power of the entity or person. "Applicable Rate" means:-- (a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate; (b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate; 14 ISDA(R) 1992 (c) in respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and (d) in all other cases, the Termination Rate. "Burdened Party" has the meaning specified in Section 5(b). "Change in Tax Law" means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the date on which the relevant Transaction is entered into. "consent" includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent. "Credit Event Upon Merger" has the meaning specified in Section 5(b). "Credit Support Document" means any agreement or instrument that is specified as such in this Agreement. "Credit Support Provider" has the meaning specified in the Schedule. "Default Rate" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum. "Defaulting Party" has the meaning specified in Section 6(a). "Early Termination Date" means the date determined in accordance with Section 6(a) or 6(b)(iv). "Event of Default" has the meaning specified in Section 5(a) and, if applicable, in the Schedule. "Illegality" has the meaning specified in Section 5(b). "Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document). "law" includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and "lawful" and "unlawful" will be construed accordingly. "Local Business Day" means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in 15 ISDA(R) 1992 relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction. "Loss" means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets. "Market Quotation" means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the "Replacement Transaction") that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined. "Non-default Rate" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount. "Non-defaulting Party" has the meaning specified in Section 6(a). "Office" means a branch or office of a party, which may be such party's head or home office. "Potential Event of Default" means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default. "Reference Market-makers" means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which 16 ISDA(R) 1992 satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city. "Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in which the party is incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made. "Scheduled Payment Date" means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction. "Set-off" means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer. "Settlement Amount" means, with respect to a party and any Early Termination Date, the sum of: -- (a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and (b) such party's Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result. "Specified Entity" has the meanings specified in the Schedule. "Specified Indebtedness" means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money. "Specified Transaction" means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation. "Stamp Tax" means any stamp, registration, documentation or similar tax. "Tax" means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax. "Tax Event" has the meaning specified in Section 5(b). "Tax Event Upon Merger" has the meaning specified in Section 5(b). 17 ISDA(R) 1992 "Terminated Transactions" means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if "Automatic Early Termination" applies, immediately before that Early Termination Date). "Termination Currency" has the meaning specified in the Schedule. "Termination Currency Equivalent" means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the "Other Currency"), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties. "Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event. "Termination Rate" means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts. "Unpaid Amounts" owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties. IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document. NEXGEN CAPITAL LIMITED CALIFORNIA U.S. HOLDINGS, INC. By: By: ................................ ............................ Name:Mr Frank Monks Name: Mr Frederic Chesnais Title: Managing Director Title: Secretary Date: 11th June 2004 Date: 10th June 2004 18 ISDA(R) 1992 SCHEDULE to the Master Agreement dated as of 11th June 2004 between NEXGEN CAPITAL LIMITED, and CALIFORNIA U.S. HOLDINGS, INC. a company incorporated with limited a company organized under the laws liability under the laws of Ireland. of California. ("Party A") ("Party B") Part 1 Termination Provisions In this Agreement:- (i) "Specified Entity" means in relation to Party A for the purpose of:- Section 5(a)(v), None Section 5(a)(vi), None Section 5(a)(vii), None Section 5(b)(iv), None and in relation to Party B for the purpose of:- Section 5(a)(v), Affiliates Section 5(a)(vi), Affiliates Section 5(a)(vii), Affiliates Section 5(b)(iv), Affiliates (ii) The "Cross Default" provisions of Section 5(a)(vi) will apply to both parties, but shall exclude any payment default that results solely from wire transfer difficulties or an error or omission of an administrative or operational nature (so long as sufficient funds were available to the relevant party on the relevant date to make the relevant payment), but only if the payment is made within three Business Days after such transfer difficulties have been resolved or the error or omission has been notified to, or otherwise discovered by, the relevant party. (iii) "Threshold Amount" means:- (i) with respect to Party A, Five Million Euros (EUR 5,000,000); and (ii) with respect to Party B, Five Million Euros (EUR 5,000,000); 19 (iv) The "Credit Event Upon Merger" provisions of Section 5 (b)(iv) will apply to Party A and Party B, amended as follows:- "'Credit Event Upon Merger' shall mean that a Designated Event (as defined below) occurs with respect to a party (any such party "X"), and such Designated Event does not constitute an event described in Section 5(a)(viii) but the creditworthiness of X, or, if applicable in the case of paragraph (i) below, the successor, surviving or transferee entity of X, (which in either case will be the Affected Party) is materially weaker than that of X, immediately prior to such event. For purposes hereof, a Designated Event means that, after the execution date hereof: (i) X consolidates, amalgamates with or merges with or into without remaining the surviving entity, or transfers all or substantially all its assets to, or receives all or substantially all the obligations of, another entity; or (ii) any person or entity (or any group of persons or entities acting in concert) acquires directly or indirectly the beneficial ownership of equity securities having the power to elect a majority of the board of directors of X." (v) The "Automatic Early Termination" provision of Section 6 (a) will not apply to Party A and will not apply to Party B (vi) "Payments on Early Termination". For the purpose of Section 6 (e) of this Agreement: (i) Loss will apply. (ii) The Second Method will apply. (vii) "Termination Currency" means Euros. (viii) "Additional Termination Event" will apply as specified in Part 5(d). 20 Part 2 Tax Representations (a) Representations of Party A. (i) Payer Tax Representation. For the purpose of Section 3(e), Party A hereby makes the following representation: It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Sections 2(e), 6(d)(ii) or 6(e)) to be made by it to Party B under this Agreement. In making this representation, it may rely on: (A) the accuracy of any representation made by Party B pursuant to Section 3(f); (B) the satisfaction of the agreement of Party B contained in Section 4(a)(iii) and the accuracy and effectiveness of any document provided by Party B pursuant to Sections 4(a)(iii). (ii) Payee Tax Representations. For the purpose of Section 3(f), Party A makes the representation(s) specified below: It is fully eligible for the benefits of the "Business Profits" or "Industrial and Commercial Profits" provision, as the case may be, the "Interest" provision or the "Other Income" provision (if any) of the Specified Treaty with respect to any payment described in such provisions and received or to be received by it in connection with this Agreement and no such payment is attributable to a trade or business carried on by it through a permanent establishment in the Specified Jurisdiction. If such representation applies, then:- "Specified Treaty" means, with respect to a Transaction, the tax treaty applicable between the United States of America and Ireland; and "Specified Jurisdiction" means, with respect to a Transaction, the United States of America. (b) Representations of Party B (i) Payer Tax Representation. For the purpose of Section 3(e), Party B hereby makes the following representation: It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Sections 2(e), 6(d)(ii) or 6(e)) to be made by it to Party A under this Agreement. In making this representation, it may rely on: 21 (A) the accuracy of any representation made by Party A pursuant to Section 3(f); (B) the satisfaction of the agreement of Party A contained in Section 4(a)(iii) and the accuracy and effectiveness of any document provided by Party B pursuant to Sections 4(a)(iii). (ii) Payee Tax Representations. For the purpose of Section 3(f), Party B makes the representation(s) specified below: It is fully eligible for the benefits of the "Business Profits" or "Industrial and Commercial Profits" provision, as the case may be, the "Interest" provision or the "Other Income" provision (if any) of the Specified Treaty with respect to any payment described in such provisions and received or to be received by it in connection with this Agreement and no such payment is attributable to a trade or business carried on by it through a permanent establishment in the Specified Jurisdiction. If such representation applies, then:- "Specified Treaty" means, with respect to a Transaction, the tax treaty applicable between the United States of America and Ireland; and "Specified Jurisdiction" means, with respect to a Transaction, Ireland. 22 Part 3 Agreement to Deliver Documents For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the following documents, as applicable:- (a) Tax forms, documents or certificates. Tax forms, documents or certificates to be delivered are as follows :- Party required to deliver Form/Document/Certificate Date by which to be document delivered Party A and Party B Any form or certificate As soon as possible reasonably required by the after the earlier other party to enable payment of (i) reasonable or receipt of sums demand by either payable under this Agreement party and (ii) with no withholding of tax or, either party as the case may be, reduced learning that such withholding. form or document is required. (b) Other documents. Other documents to be delivered are :-
Party required to Form/Document/ Date by which to be delivered Covered by deliver document Certificate Section 3(d) Representation Party A and Party B Signature authentication On or before execution of this YES satisfactory to the other Agreement. party. Party A and Party B A copy of the annual audited As soon as possible after YES financial statements of Party reasonable demand in respect of A and Party B in those which are publicly respect of their respective available. financial years.
23 Part 4 Miscellaneous (a) Addresses for Notices. For the purposes of Section 12(a) of this Agreement: (i) All notices or communications to Party A shall, with respect to a particular Transaction, be sent to the address, telex number, or facsimile number reflected in the Confirmation of that Transaction, and any notice for purposes of Sections 5 or 6 shall be sent to: Address: Nexgen Capital Limited c/o York Stockbrokers, Inc. 610 Fifth Avenue, 6th Floor New York, N.Y. 10019 Attention: Mr Stephen N. Walker / Mr Felipe Aransaenz Facsimile: +1 212 218 8899 Telephone No: +1 212 218 8888 With a copy to: Address: Nexgen Capital Limited Ormonde House, 12 Lower Leeson Street, Dublin 2, Ireland Attention: Transaction Administration Facsimile: +353 1 439 4930 Telephone No: +353 1 439 4900 (ii) All notices or communications to Party B shall be sent to the address, telex number, or facsimile number reflected below: Address: California U.S. Holdings, Inc., c/o ATARI, Inc., 417 Fifth Avenue, New York, NY 10016, USA Attention: General Counsel Facsimile: +1 212 726 4239 Telephone No: +1 212 726 6500 With a copy to: Address: Infogrames Entertainment S.A., 1 Place Verrazzano, 69252 Lyon Cedex 09, France Attention: Attention: Mr. Frederic CHESNAIS, Mr Frederic MONNEREAU / Legal Department Facsimile: +33 4 3764 3095 Telephone No: +33 4 3764 3000 (b) Process Agent. For the purpose of Section 13(c) of this Agreement:- 24 Party A appoints as its Process Agent: G.K. Goh Securities (U.K.) Limited, 1 Queen Anne's Gate, London SW1H 9BT. Party B appoints as its Process Agent: Atari UK Ltd, Landmark House, Hammersmith Bridge Road, London W6, 9EJ. (c) Offices. The provisions of Section 10(a) will apply to this Agreement. (d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:- (i) Party A is not a Multibranch Party. (ii) Party B is not a Multibranch Party. (e) Calculation Agent. The Calculation Agent is Party A. (f) Credit Support Document. Details of any Credit Support Document:- In respect of Party A: None In respect of Party B: The Guarantee and Indemnity of Infogrames Entertainment S.A. Credit Support Provider. Credit Support Provider means:- In respect of Party A: None. In respect of Party B: Infogrames Entertainment S.A.. (g) Governing Law. This Agreement will be governed by and construed in accordance with English law. (h) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will not apply. (i) "Affiliate" for the purposes of Section 3(c) of this Agreement means any entity controlled, directly or indirectly, by the relevant party and otherwise will have the meaning specified in Section 14 of this Agreement. 25 Part 5 Other Provisions (a) Escrow. If by reason of the time difference between the cities in which payments are to be made or otherwise, it is not possible for simultaneous payments to be made on any date on which both parties are required to make payments hereunder, either party may at its option and in its sole discretion notify the other party that payments on that date are to be made in escrow. In this case deposit of the payment due earlier on that date shall be made by 2:00 p.m. (local time at the place for the earlier payment) on that date with an escrow agent selected by the party giving the notice (such escrow agent being a financial institution the long-term unsecured and unsubordinated obligations of which are rated at least AA by S & P or Aa2 by Moody's) accompanied by irrevocable payment instructions (a) to release the deposited payment to the intended recipient upon receipt by the escrow agent of the required deposit of the corresponding payment from the other party on the same date accompanied by irrevocable payment instructions to the same effect or (b) if the required deposit of the corresponding payment is not made on that same date, to return the payment deposited to the party that paid it into escrow. The party that elects to have payments made in escrow shall pay the costs of the escrow arrangements and shall cause those arrangements to provide that the intended recipient of the payment due to be deposited first shall be entitled to interest on that deposited payment for each day in the period of its deposit at the rate offered by the escrow agent for that day for overnight deposits in the relevant currency in the office where it holds that deposited payment (at 11:00 a.m. local time on that day) if that payment is not released by 5:00 p.m. local time on the date it is deposited for any reason other than the intended recipient's failure to make the escrow deposit it is required to make hereunder in a timely fashion. (b) Set-off. Any amount (the "Early Termination Amount") payable to one party (the Payee) by the other party (the Payer) under Section 6(e), in circumstances where there is a Defaulting Party or one Affected Party in the case where a Termination Event has occurred, will, at the option of the party ("X") other than the Defaulting Party or the Affected Party (and without prior notice to the Defaulting Party or the Affected Party), be reduced by its set-off against any amount(s) (the "Other Agreement Amount") payable (whether at such time or in the future or upon the occurrence of a contingency) by the Payee to the Payer (irrespective of the currency, place of payment or booking office of the obligation) under any other agreement(s) between the Payee and the Payer or instrument(s) or undertaking(s) issued or executed by one party to, or in favour of, the other party (and the Other Agreement Amount will be discharged promptly and in all respects to the extent it is so set-off). X will give notice to the other party of any set-off effected under this paragraph (b). For this purpose, either the Early Termination Amount or the Other Agreement Amount (or the relevant portion of such amounts) may be converted by X into the currency in which the other is denominated at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. 26 If an obligation is unascertained, X may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this paragraph (c) shall be effective to create a charge or other security interest. This paragraph (c) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise). (c) Representations and Warranties. Section 3(a) is amended by adding the following paragraph (vi):- Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction): (a) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgement and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. It has not received from the other party an assurance or guarantee as to the expected results of that Transaction. (b) Evaluation and Understanding. It is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the financial and other risks of that Transaction. (c) Status of Parties. The other party is not acting as a fiduciary or an advisor for it in respect of that Transaction. (d) Additional Termination Event: Impossibility. The following shall constitute an Additional Termination Event: If, after the date on which a Transaction is entered into, due to the occurrence of a natural or manmade disaster, armed conflict, act of terrorism or riot (such an event being an "Impossibility") it becomes impossible (other than as a result of its own misconduct) in the context of normal or reasonably available settlement mechanisms for a party to perform any absolute or contingent obligation, to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction. For the purpose of the foregoing Termination Event, both parties shall be Affected Parties. As a consequence of the above: (i) Section 5(c) shall be amended to read as follows:- 27 "(c) Event of Default, Illegality and Impossibility If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality or Impossibility, it will be treated as an Illegality or Impossibility, as the case may be, and will not constitute an Event of Default". (ii) Each of Sections 6(b)(ii) and 6(b)(iii) of the Agreement is hereby modified by inserting in the first line of each such sub-section the phrase "or an Impossibility under Section 5(b)(v)" between the phrase "Section 5(b)(i)(1)" and the word "or". (iii) Section 6(b)(iii) shall be amended to read as follows:- "(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1), or a Tax Event or an Impossibility occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event." (iv) The definition of "Affected Transactions" in Section 14 shall be amended to read as follows:- ""Affected Transactions" means (a) with respect to any Termination Event consisting of an Illegality, Tax Event, Tax Event Upon Merger or Impossibility, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions."; and (v) A new definition of "Impossibility" shall be inserted in Section 14 to read as follows:- "Impossibility" has the meaning specified in Section 5(b)(v) of the Agreement. (e) Two Affected Parties. If an Early Termination Date is designated pursuant to Sections 5(b)(i), (ii), or (iii) of this Agreement, both parties shall be deemed to be Affected Parties for the purpose of determining the Settlement Amount pursuant to Section to 6(e) of this Agreement. (f) Recording of Conversations. Each party to this Agreement (i) acknowledges that telephone conversations between the parties may be tape recorded by the other party, (ii) agrees to such tape recording and (iii) consents to the submission of any such tape recording in evidence in any Proceedings. (g) Third Party Rights. Pursuant to Section 1(2) of the Contracts (Rights of Third Parties) Act 1999 (the "Contracts Act") the parties intend that a person who is not a party to this Agreement has no right under the Contracts Act to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from the Contracts Act. 28 NEXGEN CAPITAL LIMITED By: Name: Mr Frank Monks Title: Managing Director Confirmed as of the date first written above: CALIFORNIA U.S. HOLDINGS, INC. By: Name: Mr Frederic Chesnais Title: Secretary 29 EX-24 3 ex24_061704.txt TRANSACTION CONFIRMATION Exhibit 24 Equity Swap Transaction Confirmation 11th June 2004 California U.S. Holdings, Inc. c/o ATARI, Inc. 417 Fifth Avenue New York, NY 10016 United States of America For the attention of: Mr Frederic Chesnais - -------------------------------------------------------------------------------- Dear Sirs, The purpose of this letter agreement (this " Confirmation") is to confirm the terms and conditions of a transaction to be entered into between us (the "Transaction"). The definitions and provisions contained in the 2000 ISDA Definitions and annex thereto (the "Swap Definitions"), and the 2002 Equity Derivatives Definitions (the "Equity Definitions" and together with the Swap Definitions, the "ISDA Definitions") as published by the International Swaps and Derivatives Associations Inc, are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will prevail. In the event of any inconsistency between the ISDA Definitions and the provisions of this Confirmation, this Confirmation will prevail. This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated on or about the date hereof, as amended and supplemented from time to time (the "Agreement"), between you and us. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below. The terms of the particular Transaction to which this Confirmation relates are as follows: General Terms: Trade Date: 11th June 2004. Effective Date: The date upon which settlement of the sale and purchase at the Relevant Price on the Trade Date of 10,600,000 Shares between the Counterparty (as seller) and the Equity Amount Payer (as purchaser) (the "Share Purchase"), provided that if such settlement has not occurred on or prior to 30th June 2004, then this Confirmation shall lapse and shall have no further effect. 1 Termination Date: The date falling one year after the Effective Date, subject to adjustment in accordance with the Modified Following Business Day Convention, and subject to the Knock-Out provisions set out below. Shares: The fully paid ordinary shares of the Issuer listed on the Exchange (ISIN: US04651M1053, Bloomberg: ATAR US). Issuer: Atari, Inc., a company incorporated under the laws of Delaware. Exchange: The National Association of Securities Dealers Automated Quotation National Market System (NASDAQ), or any successor thereto. Business Day and Currency Business Day: Any day on which commercial banks settle payments and are ordinarily open for general business (including dealings in foreign exchange and foreign currency deposits) in New York and Dublin. Equity Amount Payments: Equity Amount Payer: Nexgen Capital Limited, a company incorporated under the laws of Ireland ("Nexgen"). Equity Amount Receiver: California U.S. Holdings, Inc., a company incorporated under the laws of California (the "Counterparty"). Equity Amount Payments: On the Cash Settlement Payment Date and subject to Physical Settlement Election, either (i) Nexgen shall pay the Equity Amount (if such amount is positive), or (ii) the Counterparty shall pay the absolute value of the Equity Amount (if such amount is negative), in accordance with Section 8.6 of the Equity Definitions. Equity Amount: (i) the Number of Shares multiplied by (Final Swap Price minus the Initial Price), plus (ii) the sum of all Equity Reset Amounts. Number of Shares: 12,000,000 Shares. Equity Notional Amount: (i) 75% multiplied by the Number of Shares multiplied by the Initial Price, minus (ii) the sum of all Equity Reset Amounts (it being noted, for the avoidance of doubt, that where an Equity Reset Amount is a negative number, it shall be deducted from this sum and therefore added to the "Equity Notional Amount"). 2 Equity Notional Reset: Not Applicable (but see alternative Equity Reset provisions set out below). Initial Price: The Relevant Price as of the Effective Date. Final Call Price: The arithmetic average of the Relevant Price on each Averaging Date. Final Swap Price: The average price, weighted by volume, at which Nexgen, acting in a commercially reasonable manner, effectively unwinds its hedge in relation to this Transaction on each Averaging Date. Valuation Date: One Settlement Cycle prior to the Termination Date. Averaging Dates: Each of 25 Scheduled Trading Days immediately preceding and including the Valuation Date. Averaging Date Disruption: Modified Postponement. Relevant Price: In relation to any Exchange Business Day, the volume-weighted average price of a Share published by Bloomberg or its successor on such date. If such volume-weighted average price is not available or, as determined by the Calculation Agent, no longer reflects the same valuation or method of calculation as it did on the Trade Date, then the Calculation Agent shall determine in good faith and in a commercially reasonable manner such other valuation so as to replicate as closely as possible such price. Correspondingly, the definition of "Market Disruption Event" set out in Section 6.3 of the Equity Definitions shall be amended by the deletion of the words "at any time during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time of Knock-out Valuation Time, as the case may be" and their replacement with the words "at any time during the regular trading session on the Exchange (without regard to after hours or any other trading outside of the regular trading session hours) on the Valuation Date". Floating Amount Payments: Floating Amount Payer: The Counterparty. Notional Amount: The Equity Notional Amount on the Reset Date relating to the relevant Calculation Period. 3 Payment Dates: In respect of the "n"th such Payment Date, the date falling n x three calendar months following the Effective Date, in each case subject to adjustment in accordance with the Modified Following Business Day Convention. Floating Rate Option: USD-LIBOR-BBA. Designated Maturity: Three months. Spread: 4.00 per cent. per annum. Floating Rate Day Count Fraction: 30/360. Reset Dates: The second London Banking Day preceding each Payment Date. Linear Interpolation: Applicable. Additional Provisions: Credit Cushion, Initial Notional Adjustment and Equity Reset Terms: Credit Cushion Payments: On the Effective Date, the Counterparty shall pay to the Equity Amount Payer an amount equal to 25% multiplied by the Number of Shares multiplied by the Initial Price. On the Termination Date, and subject to netting against all other payments owing on such day by the Counterparty, Nexgen shall pay to the Counterparty an amount equal to 25% multiplied by the Number of Shares multiplied by the Initial Price. Equity Reset Payments: On the second Currency Business Day following each Equity Reset Date in respect of which the Equity Reset Amount is a positive figure, the Counterparty shall pay the Equity Reset Amount to Nexgen. On the second Currency Business Day following each Equity Reset Date in respect of which the Equity Reset Amount is a negative figure, Nexgen shall pay the absolute value of the Equity Reset Amount to the Counterparty. Equity Reset Date: Any Exchange Business Day on which the corresponding Equity Reset Price either (i) crosses the level (in either direction) of 90% of the Initial Price and where the resulting Equity Reset Amount would be greater than USD 50,000, or (ii) crosses the level (in a downwards direction) of 90% or (in an upwards direction) of 110% of the Equity Reset Price in respect of the preceding Equity Reset Date. 4 Equity Reset Price: In respect of an Equity Reset Date, the arithmetical average of Relevant Prices on the five Exchange Business days preceding (and including) such Equity Reset Date. Equity Reset Amount: (a) In respect of an Equity Reset Date arising where the Equity Reset Price crosses the level (in a downwards direction) of 90% of the Initial Price, the Equity Reset Amount shall be the Number of Shares multiplied by (90% of the Initial Share Price minus the Equity Reset Price in respect of that Equity Reset Date). For the avoidance of doubt, such amount shall be a positive number (and therefore payable by the Counterparty). (b) In respect of an Equity Reset Date arising where the Equity Reset Price crosses the level (in an upwards direction) of 90% of the Initial Share Price, the Equity Reset Amount shall be the Number of Shares multiplied by (the Equity Reset Price in respect of the preceding Equity Reset Date minus 90% of the Initial Share Price). For the avoidance of doubt, such amount shall be a negative number (and its absolute value therefore payable by Nexgen). (c) in respect of any other Equity Reset Date, the Equity Reset Amount shall be the Number of Shares multiplied by (the Equity Reset Price in respect of the preceding Equity Reset Date minus the Equity Reset Price in respect of that Equity Reset Date). For the avoidance of doubt, such amount may be either a positive or negative number (and its absolute value therefore payable by either the Counterparty or Nexgen accordingly). Equity Reset Floating Amount Payments: On the Payment Date next following a day on which an Equity Reset Amount was paid, the party who received such Equity Reset Amount shall pay to the other party the Equity Reset Floating Amount relating to such Equity Reset Amount. Equity Reset Floating Amount: In respect of each Equity Reset Amount paid during a given Calculation Period, such Equity Reset Amount x Equity Reset Floating Rate x Floating Rate Day Count Fraction; for the period from and including the day on which such Equity Reset Amount is paid to and including the last day of the relevant Calculation Period and adjusted in accordance with Linear Interpolation. Equity Reset Floating 5 Rate: In respect of each Equity Reset Floating Amount, Floating Rate Option upon the second London Banking Day prior to the day upon which the corresponding Equity Reset Amount is paid, plus the Spread. Additional Provisions: Call Option Terms: Additional Counterparty Payment: On the Termination Date, the Counterparty shall pay to Nexgen the Number of Shares multiplied by the Appreciation Percentage multiplied by the difference, if positive, between the Final Call Price minus the Strike Price. Appreciation Percentage: 25%. Strike Price: 120% of the Initial Price. Settlement Terms: Cash Settlement: Applicable, subject to Physical Settlement Election. Settlement Currency: United States Dollars. Cash Settlement Payment Date: The Termination Date. Settlement Method Election: Not applicable. Physical Settlement Election: The Counterparty may, by giving written notice to Nexgen not later than the fifth Business Day preceding the first Averaging Date, elect to settle the swap physically rather than in cash. If the Counterparty so elects then: (i) The Equity Amount payable by either Nexgen or the Counterparty (as the case may be) shall not be payable; (ii) On the Termination Date, Nexgen shall deliver the Number of Shares to the Counterparty; and (iii) On the Termination Date, the Counterparty shall pay to Nexgen an amount calculated as (a) the Number of Shares multiplied by the Initial Price, minus (b) the sum of all the Equity Reset Amounts. 6 For the avoidance of doubt, each of (i) the repayment of the Cash Cushion Amount by Nexgen to the Counterparty, (ii) the payment of the Additional Counterparty Payment (if any) and (iii) the Floating Amount by the Counterparty to Nexgen shall each still be payable on the Termination Date as set out above. Dividends Dividend Amount: The Paid Amount multiplied by the Number of Shares, plus interest accrued thereon at a rate equal to the Floating Rate (as at the second London Banking Day preceding the relevant date) plus the Spread for the period from and including the date on which a holder of record of a Share receives the relevant dividend to but excluding the next following Payment Date; such amount to be paid by the Equity Amount Payer on the Dividend Payment Date. Dividend Payment Date: The first Payment Date following the day on which holders of record of a Share receive the relevant dividend. Re-investment of Dividends: Not Applicable. Additional Provisions: Knock-Out: Knock-Out: Following the occurrence of a Knock-Out Trigger, Nexgen shall be entitled (but not obliged) to trigger the early termination of this Transaction by written notification to the Counterparty (a "Knock-Out Notice"). The Counterparty may, not later than the end of business (Dublin time) on the Business Day following the date on which such Knock-Out Notice was sent, notify Nexgen in writing that the Counterparty wishes such early termination to by physical settlement, in which case Physical Knock-Out shall apply. If the Counterparty does not so notify, within such period, that it wishes Physical Knock-Out to apply, then Cash Knock-Out shall automatically apply. Knock-Out Trigger: Either: (i) the occurrence of five successive Scheduled Trading Days in respect of which the arithmetic average of the Relevant Price is less than USD 1.50; (ii) The Counterparty (or any Affiliate (as defined in the ISDA Master Agreement) of the Counterparty of the Counterparty) entering into 7 any transaction in relation to Shares which, in the reasonable opinion of Nexgen, has a similar economic effect to this Transaction; or (iii) The Issuer has not filed a registration statement on Form S-3 with the Securities and Exchange Commission ("SEC") in respect of the Shares purchased by Nexgen pursuant to the Share Purchase on or before 5th July 2004 (the "Registration Statement"); or (iv) The Registration Statement has not been declared effective on or before 31st August 2004; or (v) The Registration Statement, once declared effective, ceases to remain effective at any time prior to the Termination Date. Physical Knock-Out: Where Physical Knock-Out applies, the Termination Date shall be the date falling One Settlement Cycle after the second Business Day following the date of Nexgen's Knock-Out Notice, and the parties shall make the same payments and deliveries on such date as if the Counterparty had elected Physical Settlement Election, noting that the Calculation Agent shall calculate the Floating Amount in respect of the final Calculation Period on a pro rata basis and including any applicable broken funding costs. Cash Knock-Out: Where Cash Knock-Out applies, the Termination Date shall be the date falling One Settlement Cycle following the 25th Scheduled Trading Day after the second Business Day following the date of Nexgen's Knock-Out Notice, and the parties shall make the same payments and deliveries on such date as set out in this Confirmation (i.e. and assuming that the Counterparty had not elected Physical Settlement Election), noting that the Calculation Agent shall calculate the Floating Amount in respect of the final Calculation Period on a pro rata basis and including any applicable broken funding costs. Adjustments: Method of Adjustment: Calculation Agent Adjustment. Extraordinary Events: Consequences of Merger Events: 8 (a) Share-for-Share: Modified Calculation Agent Adjustment. (b) Share-for-Other: Modified Calculation Agent Adjustment. (c) Share-for-Combined: Modified Calculation Agent Adjustment. Determining Party: Nexgen. Tender Offer: Applicable. Consequences of Tender Offers: (a) Share-for-Share: Modified Calculation Agent Adjustment. (b) Share-for-Other: Modified Calculation Agent Adjustment. (c) Share-for-Combined: Modified Calculation Agent Adjustment. Determining Party: Nexgen. Composition of Combined Consideration: Not Applicable. Nationalization, Insolvency or Cancellation and Payment. Delisting: Determining Party: Nexgen. Additional Disruption Events: Change in Law: Applicable. Failure to Deliver: Applicable. Insolvency Filing: Applicable. Hedging Disruption: Applicable. Hedging Party: Nexgen. Increased Cost of Hedging: Applicable. Hedging Party: Nexgen. 9 Non-Reliance: Applicable; provided however the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by: (1) deleting the remainder of clause (i) after the word "encumbrance" in the fourth line thereof, (2) deleting clause (iii), (3) deleting clause (v) and (4) deleting the last sentence thereof, provided that such certificated Shares must be transferable to Counterparty without any restriction, limitation or requirement described in Section 9.11. Agreements and Acknowledgments Applicable. Regarding Hedging Activities: Additional Acknowledgements: Applicable. 3. Additional Provisions: Additional Representations, Warranties and Covenants of Nexgen. Nexgen represents, warrants and covenants to the Counterparty (which representations, warranties and covenants will be deemed to be repeated by Nexgen at all times until the latter of the termination of the Transaction and the date on which Nexgen purchases or sells any Shares in connection with this Transaction) that it will not purchase or sell Shares (including Shares that Nexgen deems necessary to hedge the risk of entering into and performing its obligations with respect to this Transaction) in violation of the U.S. Securities Laws. Eligible Contract Participant. Each of Nexgen and the Counterparty agrees and represents that it is an "eligible contract participant" as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended ("CEA"), and that the Transaction hereunder was subject to individual negotiation by the parties and has not been executed or traded on a "trading facility" as defined in Section 1a(33) of the CEA. 4. Calculation Agent: Nexgen Financial Solutions Limited. 5. Account Details: Account for payments to The Bank of New York Nexgen: ABA# 021-000-018 Beneficiary: Pershing LLC Beneficiary A/C No: 890-051238-5 F/C: Nexgen Capital Ltd A/C No: 55Y- 660354 10 Account for payments to the The Bank of New York Counterparty: ABA# 021-000-018 Beneficiary: Pershing LLC Beneficiary a/c No: 890-051238-5 F/C California U.S. Holdings, Inc. A/C No: 55Y-663465 6. Offices: The Office for Nexgen is: Nexgen Capital Limited, c/o York Stockbrokers, Inc. 610 Fifth Avenue, 6th Floor, New York, N.Y. 10019 Telephone: +1 212 218 8888 Facsimile: +1 212 218 8899 Attention: Mr Stephen N. Walker / Mr Felipe Aransaenz With a copy to: Nexgen Capital Limited, Ormonde House, 12 Lower Leeson Street, Dublin 2, Ireland Telephone: +353 1 439 4900 Facsimile: +353 1 439 4930 Attention: Transaction Administration The Office for the Address: c/o ATARI, Inc., Counterparty is: 417 Fifth Avenue, New York, NY 10016, USA Telephone: +1 212 726 6500 Facsimile: +1 212 726 4239 Attention: General Counsel With a copy to: Infogrames Entertainment S.A., 1 Place Verrazzano, 69252 Lyon Cedex 09, FRANCE Telephone: +33 4 3764 3000 Facsimile: +33 4 3764 3095 Attention: Mr. Frederic CHESNAIS, Mr Frederic MONNEREAU / Legal Department [the rest of this page is deliberately left blank] 11 Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us. Yours sincerely, NEXGEN CAPITAL LIMITED By : Name: Mr Frank Monks Title: Managing Director Confirmed as of the date first written above: CALIFORNIA U.S. HOLDINGS, INC. By: Name: Mr Frederic Chesnais Title: Secretary Countersigned, solely in its capacity as U.S. registered broker-dealer and in accordance with the provisions of Rule 15(a)(6) pursuant to the US Securities Exchange Act of 1934, by: YORK STOCKBROKERS, INC. By: Name: Title: 12 EX-25 4 ex25_061704.txt AMENDMENT TO TRANSACTION CONFIRMATION EXHIBIT 25 [NEXGEN FINANCIAL SOLUTIONS LOGO] [GRAPHIC OMITTED] - -------------------------------------------------------------------------------- Nexgen Capital Limited Ormonde House 12 Lower Leeson Street Dublin 2, Ireland Tel: +353 1 439 4900 Fax: +353 1 439 4926 California U.S. Holdings, Inc C/o Atari, Inc. 417 Fifth Avenue New York, NY 10016 United States of America For the attention of : Mr Frederic Chesnais 15th June 2004 Dear Sirs, Share Purchase and Equity Swap Transaction - Amendment Letter We write to confirm our agreement relating to the amendment of certain terms of (i) the share purchase agreement relating to the sale and purchase of 10,600,000 shares in Atari, Inc. by California U.S. Holdings, Inc. ("CUSH"") to Nexgen Capital Limited ("NCL") and dated 11th June 2004 (the "Share Purchase Agreement"), and a Confirmation relating to an Equity Swap Transaction on 12,000,000 shares in Atari, Inc. between CUSH and NCL and dated 11th June 2004 (the "Equity Swap Confirmation"). We hereby agree that: (i) The definition of the Initial Price in the Equity Swap Confirmation shall be amended to read "the Relevant Price as of 15th June 2004"; (ii) the Purchase Price defined in Clause 2.1 of the Share Purchase Agreement shall be amended to read "a purchase price per Share of the volume-weighted average price ("VWAP") of a Share on the Exchange on 15th June 2004, as published by Bloomberg"; (iii) the Settlement Date defined in the Share Purchase Agreement shall be amended to read "means 17th June 2004, or such later date as the Seller and Buyer mutually agree"; and (iv) notwithstanding any provision of the Share Purchase Agreement (in particular Clause 3 thereof), the parties agree that settlement of the share purchase shall occur by the delivery by the Seller to York Stockbrokers, Inc. (as broker) on the Settlement Date (as amended above) of share certificates in respect of Peter Blessing (Chairman), Frank Monks (Managing), Ravi Viswanathan (French), Luc Giraud (French), Francois Robey (French) North Wall Quay, Dublin 1, Ireland Nexgen Capital Limited is authorised by Irish Financial Services Regulatory Authority under the Investment Intermediaries Act, 1995 10,600,000 shares of common stock of Atari, Inc. fully executed by Atari, Inc. and/or its transfer agent and in the name of Nexgen Capital Limited (and for the avoidance of doubt, not merely endorsed or accompanied by a stock power in favour of Nexgen). Upon the confirmed receipt of such certificates and their examination to the satisfaction of York Stockbrokers, Inc. and Nexgen, Nexgen shall release the purchase monies to the designated account of CUSH. This letter is governed by English law and the parties hereto submit to the non-exclusive jurisdiction of the English courts. Please sign and return to us a copy of this letter to indicate your agreement to its terms. NEXGEN CAPITAL LIMITED By: - --------------------------------------- Name: Mr Frank Monks Title: Managing Director, Nexgen Capital Limited We agree to the terms of this letter as set out above above. CALIFORNIA U.S. HOLDINGS, INC By: - ---------------------------------------- Name: Mr Frederic Chesnais Title: Secretary Countersigned, solely in its capacity as U.S. registered broker-dealer and in accordance with the provisions of Rule 15(a)(6) pursuant to the US Securities Exchange Act of 1934, by: YORK STOCKBROKERS, INC. By: - ---------------------------------------- Name: Title: - -------------------------------------------------------------------------------- Nexgen Capital Limited is authorised by the Irish Financial Services Regulatory Authority under the Investment Intermediaries Act, 1995 Page 2 of 2 EX-26 5 ex26_061704.txt REGISTRATION RIGHTS AGREEMENT Exhibit 26 California U.S. Holdings, Inc. c/o ATARI, Inc. 417 Fifth Avenue New York, NY 10016 United States of America - -------------------------------------------------------------------------------- Nexgen Capital Limited, Ormonde House 12 Lower Leeson Street Dublin 2, Ireland New York, June 11, 2004 Dear Sirs, We are writing in connection with the Share Purchase Agreement between you and our company dated June 11, 2004 for at least 10,600,000 shares of common stock (the "Shares") of Atari, Inc. ("Atari"). As you know, the Shares are currently restricted securities subject to restrictions in accordance with applicable stock market regulations. In order for you to freely trade the Shares, we hereby undertake to cause Atari to file no later than July 5, 2004 with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-3 (the "Registration Statement") providing for the sale of all of the Shares. We shall cause Atari to use its reasonable efforts to cause such Registration Statement to be declared effective by the SEC as soon thereafter as is practicable and to keep the Registration Statement continuously effective for a period expiring on the earlier of (i) the date on which all of the Shares covered by the Registration Statement have been sold pursuant thereto (or pursuant to private sale transactions) and (ii) two years from the date of effectiveness of the Registration Statement. We further agree to cause Atari to amend the Shelf Registration Statement if and as required by applicable laws, rules, regulations or instructions. We undertake to bear all costs associated with or incidental to the registration of the Shares, including without limitation, (i) all registration and filing fees imposed by the SEC or Nasdaq, (ii) all fees and expenses incurred in connection with compliance with state securities or "blue sky" laws (including reasonable fees and disbursements of counsel) and compliance with the rules of the NASD, (iii) all expenses of any persons associated with preparation of the Registration Statement, any prospectus or supplement thereto, certificates and other documents relating to the performance of and compliance with this agreement, (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Shares on any securities exchange or exchanges, (v) the fees and disbursements of counsel for Atari and of its independent public accountants, and (v) the fees and disbursements, if any, of your counsel in connection with this letter, the preparation and review of the Registration Statement and the sale of the Shares pursuant to such Registration Statement. In connection with the obligations of Atari with respect to the Registration Statement contemplated by this agreement, we undertake to cooperate with Atari to facilitate the sale of the Shares and, without limiting the foregoing, we shall cause Atari to: (a) amend the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period as set out above; (ii) cause the prospectus to the Registration Statement to be amended or supplemented as required and to be filed as required by Rule 424 or any similar rule that may be adopted under the Securities Act of 1934, as amended (the "Securities Act"); (iii) respond as promptly as practicable to any comments received from the SEC with respect to the Registration Statement or any amendment thereto; and (iv) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement; (b) furnish to each holder of Shares, without charge, as many copies of each prospectus to the Registration Statement, and any amendment or supplement thereto, as such holder may reasonably request in order to facilitate the public sale or other disposition of the Shares; (d) use its reasonable efforts to register or qualify the Shares by the time the Registration Statement is declared effective by the SEC under all applicable state securities or blue sky laws of such jurisdictions in the United States and its territories and possessions as any holder of Shares shall reasonably request in writing and to keep each such registration or qualification effective during the period the Registration Statement is required to be kept effective; provided, however, that in connection therewith, Atari shall not be required to (i) qualify as a foreign corporation to do business or to register as a broker or dealer in any such jurisdiction where it would not otherwise be required to qualify or register but for this paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii) file a general consent to service of process in any such jurisdiction; (e) notify each holder of Shares promptly and, if requested by such holder, confirm in writing, (i) if Atari receives any notification with respect to the suspension of the qualification of the Shares, and (ii) of the happening of any event as a result of which such Registration Statement, or the prospectus thereto, contains 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; and Atari shall take all reasonable actions necessary to correct any such untrue statement of a material fact or omission of a material fact; (f) use its reasonable efforts to cause all Shares to be listed on any securities exchange on which similar securities issued by Atari are then listed; (g) cooperate fully with all and any public sales of the Shares, including but not limited to using its reasonable efforts to obtain opinions of counsel necessary to obtain the removal of restrictive legends from the certificates representing the Shares. We agree to indemnify and hold harmless each holder of Shares and any officers and directors of each holder, as well as any person, if any, who controls any holder within the meaning of Section 15 of the Securities Act, against all losses, liabilities, claims, damages and expenses, as incurred, arising out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any prospectus or amendment thereto), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the indemnity provided pursuant to this paragraph shall not apply to any holder with respect to any loss, liability, claim, damage or expense that arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to Atari by such holder expressly for use in the Registration Statement (including any prospectus or amendment thereto). In connection with any sale, transfer or other disposition by any holder of any Shares pursuant to Rule 144 under the Securities Act, we shall cause Atari to cooperate with such holder to facilitate such sales. This agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent holders of Shares (other than holders who acquired their Shares pursuant to a sale under the Registration Statement). This agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. This agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the conflicts of law provisions thereof. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this agreement in any court of the United States or any State thereof having jurisdiction. Yours, truly Bruno Bonnell Director -----END PRIVACY-ENHANCED MESSAGE-----