-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, VMcZe8rCExNy8ffMez8tb2yPTNpkHS5j2UBtl8lyEw2+Au5KfaENeLQ753OAovox 5D6AzSnNPzCXEOyrjTYjmQ== 0000736157-94-000002.txt : 19940330 0000736157-94-000002.hdr.sgml : 19940330 ACCESSION NUMBER: 0000736157-94-000002 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19940329 GROUP MEMBERS: TIME WARNER INC GROUP MEMBERS: WARNER COMMUNICATIONS INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ATARI CORP CENTRAL INDEX KEY: 0000802019 STANDARD INDUSTRIAL CLASSIFICATION: 3571 IRS NUMBER: 770034553 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 34 SEC FILE NUMBER: 005-37823 FILM NUMBER: 94518702 BUSINESS ADDRESS: STREET 1: 1196 BORREGAS AVE CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4087452000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TIME WARNER INC CENTRAL INDEX KEY: 0000736157 STANDARD INDUSTRIAL CLASSIFICATION: 2721 IRS NUMBER: 131388520 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: TIME & LIFE BLDG ROCKFELLER CENTER STREET 2: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2124848000 FORMER COMPANY: FORMER CONFORMED NAME: TIME INC /DE/ DATE OF NAME CHANGE: 19890801 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 3 ATARI CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 3)* ATARI CORPORATION (Name of Issuer) Common Stock, par value $.01 per share (Title of Class of Securities) 046515102 (CUSIP Number) Peter R. Haje, Esq., General Counsel Time Warner Inc. 75 Rockefeller Plaza New York, New York 10019 (212) 484-8000 (Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications) March 24, 1994 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Check the following box if a fee is being paid with the statement &. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for the other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TIME WARNER INC. IRS NO. 13-1388520 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a / / b / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER SHARES 1,500,000 BENEFICIALLY OWNED BY 8 SHARED VOTING POWER EACH 14,270,000 (See Item 5) REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 1,500,000 10 SHARED DISPOSITIVE POWER 14,270,000 (See Item 5) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 15,770,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 26.8% 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON WARNER COMMUNICATIONS INC. IRS NO. 13-2696809 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a / / b / / 3 SEC USE ONLY 4 SOURCE OF FUNDS* NOT APPLICABLE 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / / PURSUANT TO ITEMS 2(d) or 2(e) 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 14,720,000 (See Item 5) EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 10 SHARED DISPOSITIVE POWER 14,270,000 (See Item 5) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 14,270,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 24.3% 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. The Schedule 13D of Time Warner Inc., a Delaware corporation ("Time Warner") and Warner Communications Inc., a Delaware corporation ("WCI") (collectively, the "Reporting Persons"), relating to the Common Stock of Atari Corporation is hereby amended and restated in its entirely as set forth below. Pursuant to Rule 13D-1(f) under the Securities Exchange Act of 1934, the Reporting Persons have agreed to file one statement with respect to their ownership of Common Stock of the Issuer. The joint Schedule 13D of the Reporting Persons, as amended and restated, is hereinafter referred to as the "Statement". Item 1. Security and Issuer. The Statement relates to the Common Stock, $.01 par value ("Atari Common Stock"), of Atari Corporation ("Atari"), a Nevada corporation, whose principal executive offices are located at 1196 Borregas Avenue, Sunnyvale, California 94086. Item 2. Identity and Background. This Statement is being filed by Time Warner Inc. ("Time Warner"), a Delaware corporation, having its principal executive offices at 75 Rockefeller Plaza, New York, New York 10019 and Warner Communications Inc. ("WCI"), a Delaware corporation, having its principal office at 75 Rockefeller Plaza, New York, New York 10019. WCI is a direct wholly owned subsidiary of Time Warner. Time Warner is the largest media and entertainment company in the world. Its businesses are carried on in three principal groups: Publishing, Music and Entertainment. The Publishing group consists principally of the publication and distribution of magazines and books; the Music group consists principally of the production and distribution of recorded music and the ownership and administration of music copyrights; and the Entertainment group consists principally of the production and distribution of motion pictures and television programming, the distribution of video cassettes, the ownership and operation of retail stores and theme parks, the production and distribution of pay television and cable programming, and the operation of cable television systems. These businesses are conducted throughout the world through numerous wholly owned, and in certain cases less than wholly owned, subsidiaries and affiliates. Time Warner Entertainment Company, L.P. ("TWE"), a limited partnership conducts substantially all of the Entertainment businesses of Time Warner. Subsidiaries of Time Warner are the general partners of TWE (the "TW Partners") and collectively own a 63.27% pro rata priority capital and residual equity interest in TWE, a subsidiary of US WEST holds 25.51%, and subsidiaries of ITOCHU Corporation and Toshiba Corporation hold the remainder. The business of WCI (other than its interest in TWE) primarily consists of substantially all of the vertically-integrated worldwide recorded music and music publishing business of Time Warner under the umbrella name Warner Music Group. The name, business address, present principal occupation or employment (and the name, principal business and address of any corporation or other organization in which such employment is conducted) of each director and executive officer of Time Warner and WCI is set forth in Annexes A and B hereto and is incorporated herein by reference. None of the Reporting Persons nor, to the best knowledge of the Reporting Persons, any of the persons listed in Annexes A or B, has been convicted during the last five years in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which any such corporation or person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. Each of the persons listed in Annexes A and B hereto is a United States citizen. Item 3. Source and Amount or Funds or Other Consideration. In July 1984, Atari acquired from WCI and certain associated entities of WCI (collectively sometimes referred to hereinafter as "WCI"), certain assets comprising the home computer and home video game business of WCI, and assumed certain related obligations and liabilities. Between July 1984 and June 30, 1986, WCI advanced or otherwise funded to Atari approximately $24.7 million that, to WCI's knowledge, was used to satisfy certain liabilities assumed in the 1984 asset acquisition. The consideration given by Atari in the 1984 asset acquisition was subject to adjustment based upon Atari's and WCI's subsequent evaluation of the assets acquired and the related obligations and liabilities. In August 1986, Atari and WCI completed that evaluation and, pursuant to a Memorandum of Agreement dated as of August 29, 1986 (the "1986 Agreement"), agreed that, in consideration for: the net assets Atari acquired in the 1984 transaction; accrued interest on the purchase obligation at 17%; and the repayment of WCI's $24.7 million advanced to Atari, including accrued interest thereon at 10.5%, Atari would issue to WCI 7,100,000 shares of Atari Common Stock, and would pay to WCI approximately $36.1 million, upon consummation of a public offering of Atari Common Stock (the "Public Offering"). In addition, all other securities held by WCI, on the one hand, and Atari, on the other hand, were canceled in connection with this transaction. The Atari Public Offering was consummated on November 17, 1986, and WCI thereupon beneficially acquired 7,100,000 shares of Atari Common Stock and received approximately $36.1 million. On June 19, 1987, a 2-for-1 split of Atari Common Stock was effected in the form of a 100% common stock dividend distributed to all Atari shareholders. On October 17, 1988 and October 18, 1988, the associated entities of WCI (comprised of AIL Holdings Limited, AIL Ireland Limited, Atari International Hong Kong Ltd. ("AIHK"), WEA Musik Neue Medien and Elektronik GmbH ("WEA Musik") and Atari Holdings, Inc., formerly known as Atari, Inc.) declared a dividend to WCI of 14,200,000 shares of Atari Common Stock, which shares were to be transferred as soon as practicable. Thereafter, on December 13, 1988, WCI contributed the 14,200,000 shares of Common Stock of Atari held by it to Warner Communications Investors, Inc., a Delaware corporation and wholly owned subsidiary ("Investors"). Subsequently said shares held by Investors were contributed to TW Investment Corp., a Delaware corporation and a wholly-owned indirect subsidiary of WCI. As a result of the merger of TW Investment Corp. with and into WCI on June 29, 1992, the 14,200,000 shares of Atari Common Stock are now held by WCI. On March 24, 1994 Time Warner and Atari entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which Time Warner or a wholly-owned subsidiary of Time Warner will acquire 1,500,000 shares of Atari Common Stock at $8.50 per share for an aggregate of $12,750,000, subject to certain conditions. Under the Stock Purchase Agreement, Atari has agreed to issue Time Warner up to an additional 150,000 shares of Atari Common Stock upon the occurrence of certain events. In addition, the Stock Purchase Agreement grants Time Warner an option to purchase up to 1,500,000 shares of Atari Common Stock upon the occurrence of certain events prior to October 1, 1994. The consideration for all the purchases will be from working capital of Time Warner or in the event the shares are acquired by a wholly-owned subsidiary, from the working capital of such subsidiary. Concurrently with the execution and delivery of the Stock Purchase Agreement, Atari and Atari Games Corporation, a Delaware corporation and majority-owned indirect subsidiary of Time Warner ("Games") entered into a Stock Purchase Agreement (the "Games Stock Purchase Agreement") pursuant to which Games will acquire 70,000 shares of Atari Common Stock in exchange for the forgiveness of certain royalty obligations owed by Atari to Games pursuant to certain software license agreements. Concurrently with the execution of Stock Purchase Agreement and the Games Stock Purchase Agreement, Atari Games and Atari Corporation settled certain pending patent, copyright and antitrust litigation with Nintendo of America Inc. The Stock Purchase Agreement and the Games Stock Purchase Agreement are hereinafter referred to as the "Transactions". Item 4. Purpose of Transaction. Upon the consummation of the Transactions, Time Warner will beneficially hold an aggregate of 15,770,000 shares of Atari Common Stock. 14,200,000 of the shares beneficially held by Time Warner are held in the name of WCI. Games will hold 70,000 shares and Time Warner or a wholly-owned subsidiary will have direct ownership of 1,500,000 shares. All of such shares are to be held for the purpose of investment. Time Warner, WCI and Games intend to review and evaluate their investment in Atari from time to time. On the basis of such review and evaluation, Time Warner, WCI and Games may acquire additional Atari securities from time to time in market transactions or otherwise or may dispose of some or all of their holdings of Atari securities from time to time in market transactions or otherwise. Neither Time Warner, WCI or Games has any current plans or proposals that relate to or would result in (i) the acquisition or disposition of securities of Atari (except as provided in the Stock Purchase Agreement as described in Items 3 and 6 herein); (ii) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Atari or any of its subsidiaries; (iii) a sale or transfer of a material amount of assets of Atari or any of its subsidiaries; (iv) any change in the present board of directors or management of Atari, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (v) any material change in the present capitalization or dividend policy of Atari; (vi) any other material change in Atari's business or corporate structure; (vii) changes in Atari's charter, by- laws or instruments corresponding thereto or other actions which may impede the acquisition of control of Atari by any person; (viii) causing a class of securities of Atari to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) causing a class of equity securities of Atari to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (x) any action similar to any of those enumerated in clauses (i) through (ix) of this sentence. Item 5. Interest in Securities of the Issuer. On October 17, 1988, each of AIHK, AIL Ireland Limited, AIL Holdings Limited and WEA Musik approved the transfer of the 14,200,000 shares of Atari Common Stock to Atari Holdings, Inc. On October 18, 1988, Atari Holdings, Inc. declared a dividend of the 14,200,000 shares of Atari Common Stock to its parent WCI. On December 13, 1988, WCI contributed the 14,200,000 shares of Atari Common Stock held by it to Investors, a Delaware corporation and wholly owned subsidiary of WCI. The subsequent transfer of ownership of the shares of Atari Common Stock is fully set forth in Item 3 herein. On July 24, 1989, pursuant to a tender offer, Time Warner acquired a majority of the outstanding stock of WCI. On January 10, 1990, a wholly owned subsidiary of Time Warner merged with and into WCI, which thereby become a wholly owned subsidiary of Time Warner. As a result Time Warner is deemed to have shared power to direct the voting and the disposition of the 14,200,000 shares of Atari Common Stock held by WCI. According to Atari, at December 31, 1993, there were outstanding on such date 57,214,587 shares of Atari Common Stock. Upon the issuance of 1,500,000 and 70,000 shares of Atari Common Stock to Time Warner and Games, respectively, there will be approximately 58,784,587 shares of Atari Common Stock outstanding. The 15,770,000 shares of Atari Common Stock beneficially owned by Time Warner will constitute approximately 26.8% of the outstanding Atari Common Stock. The 14,200,000 and 70,000 shares of Atari Common Stock held by WCI and Games will constitute, respectively, 24.1% and 0.12% of the outstanding Atari Common Stock. Time Warner or a wholly-owned subsidiary will have the sole power to vote and subject to the restrictions as set forth in Item 6 hereto, the sole power to dispose of the 1,500,000 shares of Atari Common Stock to be acquired pursuant to the Stock Purchase Agreement. Time Warner and WCI have the sole power to vote and, subject to the restrictions described in Item 6, the sole power to dispose of the 14,200,000 shares of Atari Common Stock registered in the name of WCI and owned beneficially by Time Warner. Time Warner, WCI and Games have the sole power to vote and subject to the restrictions as set forth in Item 6 hereto, the power to dispose of the 70,000 shares of Atari Common Stock to be acquired by Games pursuant to the Games Stock Purchase Agreement and owned beneficially by WCI and Time Warner. Neither Time Warner, WCI or Games is aware of any beneficial ownership of, or any transaction within 60 days before the filing of this Statement on Schedule 13D in, any shares of Atari Common Stock by Time Warner, WCI, Games or any person listed on Annex A or Annex B hereto. Items (d) and (e) are not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. In connection with the 1984 asset acquisition, Atari (then known as Tramel Technology, Ltd.), Atari, Inc. (then a subsidiary of WCI) and Jack Tramiel, Chairman of the Board and Chief Executive Officer of Atari, entered into an Agreement dated July 1, 1984, which agreement, as modified by the Memorandum of Agreement dated as of August 29, 1986 (hereinafter referred to as the "Securityholders Agreement"). Pursuant to the Securityholders Agreement, WCI, Atari, Inc. and/or their transferees were granted certain rights and are subject to certain obligations with respect to the securities of Atari. Pursuant to a Letter Agreement dated March 24, 1994 (the "Letter Agreement"), Time Warner, Games and Atari agreed that the shares of Atari Common Stock to be acquired by Time Warner and Games shall have the same registration rights afforded to WCI under the Securityholders Agreement (referred to in the Letter Agreement as the "Tramel Agreement"). Furthermore, Atari shall have the same obligations to Time Warner and Games as Atari has to WCI under the Securityholders Agreement. The principal terms of the Securityholders Agreement as it relates to registration rights of the shares of Atari Common Stock held by Time Warner, WCI or Games (hereinafter referred to as the "Parties") are set forth below. The following discussion is qualified in its entirety by reference to the Securityholders Agreement and the 1986 Memorandum of Agreement previously filed as Exhibits to the original Schedule 13D. At their own expense, the Parties may from time to time request Atari to register under the Securities Act of 1933 the proposed sale by it of the 15,770,000 shares of Atari Common Stock pursuant to an underwritten public offering subject to the following conditions: (i) requests for registration shall not be made more frequently than once every twelve months; and (ii) no more than five such requests in the aggregate shall be made; (iii) no such request shall be made without the consent of Atari unless the shares of Atari Common Stock to which it applies represents either 5% or more of the total outstanding voting power of Atari or all of the shares of Atari Common Stock beneficially owned by the Parties (and all persons who may have acquired shares of Atari Common Stock from the Parties). The Parties are also entitled to include the shares of Atari Common Stock beneficially owned in any registration statement filed by Atari subsequent to the Public Offering, unless such registration statement is (a) a registration of any employee stock ownership, stock option, stock purchase or other employee incentive plan or arrangement adopted in the ordinary course of business, or (b) a registration of securities to be issued in exchange for securities or assets of, or in connection with a merger or consolidation with, another corporation. All costs and expenses incurred in connection with such registration statements (except underwriting commissions and discounts and fees and disbursements of any separate counsel and any other expenses directly attributable to such shares) shall be borne by Atari. Pursuant to the terms of the Transactions, consummation of the acquisition of the shares of Atari Common Stock is subject to the expiration of the waiting period under the Hart Scott Rodino Antitrust Notification Act, including any extension thereof and the approval from the American Stock Exchange for the listing of the 1,570,000 shares of Atari Common Stock to be issued pursuant to these agreements. Except as described in this Item 6, there are no contracts, arrangements, understandings or relationships (legal or otherwise) on the part of Time Warner, WCI or Games, or the best of their knowledge, on the part of their respective officers or directors or between such persons and any persons with respect to the securities of Atari. Item 7. Materials to be filed as Exhibits. Exhibit 1. Agreement between Time Warner Inc. and Warner Communications Inc. with respect to joint filing of the Restated Statement on Schedule 13D. Exhibit 2. Stock Purchase Agreement as of March 24, 1994 between Atari Corporation and Time Warner Inc. Exhibit 3. Stock Purchase Agreement as of March 24, 1994 between Atari Corporation and Atari Games Corporation Exhibit 4. Registration Rights Letter Agreement dated March 24, 1994 among Time Warner Inc., Atari Games SIGNATURE After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certify that the information set forth in this statement is true, complete and correct. Date: March 28, 1994 TIME WARNER INC. By /s/ Peter R. Haje Name: Peter R. Haje Title: Executive Vice Preside WARNER COMMUNICATIONS INC. By /s/ Peter R. Haje Name: Peter R. Haje Title: Executive Vice President EXHIBIT INDEX Exhibit No. Description Page No. Exhibit 1. Agreement between Time Warner Inc. and Warner * Communications Inc. with respect to joint filing of the Restated Statement on Schedule 13D. Exhibit 2. Stock Purchase Agreement as of March 24, 1994 between * Atari Corporation and Time Warner Inc. Exhibit 3. Stock Purchase Agreement as of March 24, 1994 between * Atari Corporation and Atari Games Corporation Exhibit 4. Registration Rights Letter Agreement dated * March 24, 1994 among Time Warner Inc., Atari Games Corporation and Atari Corporation. *Incorporated by Reference EXHIBIT 1 JOINT FILING AGREEMENT Time Warner Inc. and Warner Communications Inc. each hereby agrees in accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended, that the Restated Statement on Schedule 13D filed herewith and any amendments thereto relating to the acquisition of shares of Common Stock, par value $0.01 per share of Atari Corporation, is filed jointly on behalf of each such person. Dated: March 28, 1994 TIME WARNER INC. By /s/ Peter R. Haje Name: Peter R. Haje Title: Executive Vice President WARNER COMMUNICATIONS INC. By /s/ Peter R. Haje Name: Peter R. Haje Title: Executive Vice President ANNEX A The following is a list of the directors and executive officers of Time Warner Inc. ("Time Warner"), setting forth the business address and present principal occupation or employment (and the name, principal business and address of any corporation or organization in which such employment is conducted) of each such person. To the best knowledge of Time Warner, each person is a citizen of the United States of America. Principal Occupation or Name Office Employment and Address Merv Adelson Director Chairman, East-West Capital Associates 1111 Santa Monica Blvd. Los Angeles, CA 90025 (private investment company) Timothy A. Boggs Senior Vice Senior Vice President President Time Warner* 800 Connecticut Avenue, NW Suite 800 Washington, DC 20006 Lawrence B. Director Partner, Buttenwieser Rosenman & Colin 575 Madison Avenue New York, NY 10022 (attorney) Hugh F. Director Partner, Culverhouse Culverhouse, Botts & Story 1408 North West Shore Blvd. Tampa, FL 33607 (attorney) Edward S. Director Chairman, Finkelstein Finkelstein Associates Inc. 712 Fifth Avenue New York, NY 10019 (consulting) Beverly Sills Director Chairman-Elect, Lincoln Greenough Center for the Performing Arts 211 Central Park West New York, NY 10024 (entertainment) David R. Haas Senior Vice Senior Vice President President and and Controller, Time Warner* Controller Peter R. Haje Executive Vice Executive Vice President, President, Secretary and General Counsel, Secretary and Time Warner* General Counsel Carla A. Hills Director Chairman and Chief Executive Officer, Hills & Company 1200 Nineteenth Street, NW Washington, D.C. 20036 (international trade consultants) Geoffrey W. Holmes Senior Vice Senior Vice President, President Time Warner* Tod R. Hullin Senior Vice Senior Vice President, President Time Warner* David T. Kearns Director Senior University Fellow, Harvard University, Graduate School of Education Appian Way Gutman Library Cambridge, MA 02138 Gerald M. Levin Director, Chairman, Chief Executive Chairman, Officer and President, Chief Executive Time Warner* Officer and President Philip R. Senior Vice Senior Vice President, Lochner, Jr. President Time Warner* Henry Luce, III Director Chairman and Chief Executive Officer, The Henry Luce Foundation, Inc. 720 Fifth Avenue New York, NY 10019 (private foundation) Reuben Mark Director Chairman and Chief Executive Officer, Colgate-Palmolive Company 300 Park Avenue New York, NY 10022 J. Richard Munro Director Chairman of the Executive Committee, Time Warner* Richard D. Parsons Director Chairman and Chief Executive Officer, Dime Savings Bank 589 Fifth Avenue New York, NY 10017 (banking) Donald S. Perkins Director Former Chairman, Jewel Companies Inc. Suite 2700 One First National Plaza Chicago, IL 60603 (retailing) Raymond S. Troubh Director Financial Consultant and Director of Various Companies, 10 Rockefeller Plaza New York, NY 10020 (financial consultant) Bert W. Wasserman Executive Executive Vice President Vice and Chief Financial Officer, President Time Warner* and Chief Financial Officer Francis T. Director Former Commissioner of Vincent, Jr. Major League Baseball, Culbro Corporation 387 Park Avenue South New York, NY 10016 * The business address of Time Warner is 75 Rockefeller Plaza, New York, New York 10019 ANNEX B Directors and Executive Officers of Warner Communications Inc. Name Office Principal Occupation or Employment and Address David R. Haas Senior Vice Senior Vice President and President Controller, Time Warner* Peter R. Haje Director and Executive Vice President, Executive Vice Secretary and General Counsel, President Time Warner* Geoffrey W. Holmes Director Senior Vice President, Time Warner* Tod R. Hullin Director Senior Vice President, Time Warner* Deane F. Johnson Office of the Office of the President, President Warner Communications Inc., 1271 Avenue of the Americas New York, NY 10020 Gerald M. Levin Director, Chairman, President and Chief President and Executive Officer, Chief Executive Time Warner* Officer Bert W. Wasserman Director and Executive Vice President and Executive Vice Chief Financial Officer, President Time Warner* * The business address of Time Warner is 75 Rockefeller Plaza, New York New York 10019 EX-2 2 EXHIBIT 2 STOCK PURCHASE AGMT ATARI/TWI STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT (the "Agreement") made and entered into as of the 24th day of March, 1994, by and between ATARI CORPORATION, a Nevada corporation (the "Company"), and TIME WARNER INC., a Delaware corporation (the "Purchaser"). The Company desires to sell and Purchaser desires to purchase an aggregate of 1,500,000 shares (the "Shares") of the Common Stock, par e "Purchaser"). The Company desires to sell and Purchaser desires to purchase an aggregate of 1,500,000 shares (the "Shares") of the Common Stock, par value $.01 per share (the "Common Stock") of the Company, subject to the conditions and for the consideration set forth herein. NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual promises, agreements and covenants hereinafter set forth, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Purchase and Sale of the Shares. Subject to the terms and conditions of this Agreement, at the Closing (as hereinafter defined), the Company shall sell and deliver the Shares to the Purchaser, and the Purchaser shall purchase the Shares from the Company at a purchase price of $8.50 per Share (the aggregate consideration for the Shares hereinafter referred to as the "Share Purchase Price"). 2. The Closing. (a) The closing of the sale of the Shares (the "Closing") will, subject to the satisfaction or waiver of all conditions to the parties' obligations hereunder, take place on such date (the "Closing Date") as shall be five business days following the expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder (the "HSR Act"), or such other date as the parties shall mutually agree. (b) At the Closing, the Company will deliver to the Purchaser or its assignee(s) a certificate or certificates evidencing the Shares in form and substance reasonably acceptable to the Purchaser or its assignee(s), against payment of the Share Purchase Price to the Company as specified below. (c) At the Closing, the Purchaser shall pay the Share Purchase Price to the Company in immediately available funds, such funds to be delivered by wire transfer to an account specified by the Company to the Purchaser on the Closing Date. 3. Representations, Warranties and Agreements of the Purchaser. The Purchaser hereby represents and warrants to the Company and agrees with the Company as follows: (a) Due Authorization. This Agreement, and the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser, and constitutes the legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms. (b) No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, by the Purchaser will (i) violate or result in any violation of or be in conflict with or constitute a default under any term of the Certificate of Incorporation or By-laws of the Purchaser or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to the Purchaser, or (ii) require that the Purchaser obtain the consent or authorization of or waiver by or make a filing with any governmental, administrative or self-regulatory body or agency or any other person or entity, other than any such consent, authorization, waiver or filing which has been duly and validly obtained or made prior to the date hereof, other than a filing under the HSR Act or (iii) require the satisfaction or termination of any waiting period under any statute, rule or governmental regulation applicable to the Purchaser, other than compliance with the HSR Act. (c) Investment Representation. The purchase of the Shares and any "Additional Shares" (as defined in Section 5 hereof) by the Purchaser, will be for investment purposes only and for the sole account of the Purchaser and not with a view to the redistribution or resale of any or all of the Shares or Additional Shares. None of the Shares or Additional Shares acquired pursuant to this Agreement will be transferred except in a transaction registered or exempt from registration under the Securities Act of 1933, as amended (the "'33 Act"). The Purchaser acknowledges that the certificates for the Shares, and the Additional Shares shall bear a legend with respect to the transfer or resale of such securities substantially as follows: "The shares represented by this certificate have not been registered under the Securities Act of 1933 and such shares may not be sold or transferred unless such sale or transfer will be effected in accordance with the registration requirements of the Securities Act of 1933, as at the time amended, or in conformity with the limitations of Rule 144 promulgated under such Act or in conformity with any other exemption from the registration requirements of such Act which may then be available with respect thereto". 4. Representations, Warranties and Agreements of the Company. The Company hereby represents and warrants to the Purchaser and agrees with the Purchaser as follows: (a) Organization. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and is duly qualified to do business and in good standing as a foreign corporation in the jurisdictions where it is required to qualify to conduct its business as presently conducted. The Company has the requisite corporate power and authority to own its property and to carry on its business as now conducted. (b) Due Authorization. The Company has full power and authority to execute and deliver this Agreement and, as of the Closing, will have full power and authority to perform this Agreement and the transactions contemplated hereby including, without limitation, the power and authority to issue and sell the Shares, and the Additional Shares. The Company has duly taken all corporate and other actions necessary to authorize the execution and delivery of this Agreement and, as of the Closing, will have duly taken all corporate and other actions necessary to authorize the performance of this Agreement, including, without limitation, all actions necessary to authorize the issuance and sale of the Shares and the Additional Shares. This Agreement has been duly executed and delivered by the Company and this Agreement constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms. (c) No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, by the Company will (i) violate or result in any violation of or be in conflict with or constitute a default under any term of the Certificate of Incorporation or By-laws of the Company or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to the Company, (ii) require that the Company obtain the consent or authorization of or waiver by or make a filing with any governmental, administrative or self-regulatory body or agency or any other person or entity, other than any such consent, authorization, waiver or filing which has been duly and validly obtained or made prior to the date hereof, other than a filing under the HSR Act or (iii) require the satisfaction or termination of any waiting period under any statute, rule or governmental regulation applicable to the Company, other than compliance with the HSR Act. (d) Capitalization, Issuance of Shares. As of December 31, 1993, the Company's authorized capital stock consists of 100,000,000 shares of Common Stock, par value $.01 per share, of which 57,214,587 shares were issued and outstanding, all of which are duly authorized and have been validly issued and are fully paid and non- assessable. Except as shown on Exhibit 4(d), the Company has not issued any options, warrants or convertible or exchangeable securities and is not a party to any other agreements, which require, or upon the passage of time, the payment of money or the occurrence of any other event may require, the Company to issue or sell any of its Common Stock. Upon delivery to the Purchaser of the certificates evidencing the Shares against receipt of the Share Purchase Price, the Shares will have been duly authorized, validly issued, fully paid and nonassessable and will be free of preemptive or similar rights and no personal liability will attach to the ownership thereof. The Additional Shares when issued by the Company, pursuant to Section 5 hereof, will have been duly authorized, validly issued, fully paid and nonassessable and will be free of preemptive or similar rights and no personal liability will attach to the ownership thereof. (e) On or before the Closing Date, the Company will arrange for the listing or supplemental listing, as appropriate, on the American Stock Exchange of (i) the Shares to be issued to the Purchaser hereunder and (ii) all of the Additional Shares issuable pursuant to Section 5 hereof, subject to official notification from the Company's transfer agent regarding such issuance. (f) SEC Reports and Financial Statements. The Company has furnished to Purchaser copies of the following reports and financial statements: (i) the Annual Reports on Form 10-K of the Company for the fiscal years ended December 31, 1991 and 1992; (ii) the Quarterly Reports on Form 10-Q of the Company for each of the three fiscal quarters ended during 1993; and (iii) any Current Reports of the Company on Form 8-K filed after January 1, 1993. The Company has filed with the Securities and Exchange Commission ("SEC") all reports ("SEC Reports") required to be filed by it under the Securities Exchange Act of 1934, as amended (the "'34 Act"). All of the SEC Reports filed by the Company comply in all material respects with the requirements of the '34 Act. None of the SEC Reports contains, as of the respective dates thereof, any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made. The financial statements referred to above and all financial statements contained in the SEC Reports have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods indicated ("GAAP"). Each balance sheet presents fairly in accordance with GAAP the consolidated financial position of the Company as at the date of such balance sheet, and each statement of operations and of cash flows presents fairly in accordance with GAAP the consolidated results of operations and the consolidated cash flows of the Company for the fiscal periods then ended. (g) Additional Reports. No event has occurred requiring, or which with the passage of time will require, the filing of an SEC Report that has not heretofore been filed and furnished to the Purchaser. 5. Contingent Issuance of Additional Shares. (a) If, after the date hereof, and prior to October 1, 1994, the Company shall issue or enter into a definitive agreement to issue any shares of Common Stock, at a price of less than $7.50 per share, or any Securities convertible into or exercisable for shares of Common Stock, at a conversion or exercise price of less than $7.50 per share, in a "Qualified Issuance" (as defined below), it shall issue to the Purchaser (or its assignee), provided that, the Closing hereunder shall have been completed, that number of additional shares of Common Stock that shall be equal to the amount by which (i) the quotient of dividing the Share Purchase Price by the lowest per share sale price (the "Low Price") in any Qualified Issuance (treating the conversion or exercise price of any security convertible into or exercisable for Common Stock as the sale price thereof for this purpose), exceeds (ii) 1,700,000 (such number being the number of shares issuable for the Share Purchase Price, if the purchase price per share had been $7.50); provided, however, that the number of shares issuable under this Section 5 shall not exceed 150,000 shares. All of the foregoing amounts, other than the Share Purchase Price, shall be subject to proportionate adjustment if, at any time after the date hereof, and prior to the issuance of shares under this Section 5, the Company shall have fixed a record date for the payment of a dividend in shares of its Common Stock or for the subdivision or combination of its outstanding Common Stock into a greater or smaller number of shares or for the reclassification or other change in the outstanding shares of Common Stock. The number of additional shares of Common Stock, if any, that shall become issuable pursuant to this Section 5 are referred to in this Agreement as the "Additional Shares." As used in this Agreement, the term "Qualified Issuance" means any issuance, after the date hereof and prior to October 1, 1994 (or prior to January 1, 1995 if pursuant to a definitive agreement entered into after the date hereof but before October 1, 1994), of shares of Common Stock or securities exchangeable for or convertible into Common Stock other than (x) shares of Common Stock issued to current or former employees of the Company pursuant to a bona fide employee benefit plan approved or adopted by the Board of Directors of the Company prior to January 1, 1994 or issued pursuant to the exercise of conversion or exchange rights of convertible or exchangeable securities of the Company outstanding prior to January 1, 1994 and disclosed to the Purchaser pursuant to Schedules to this Agreement and (y) any issuance in a single transaction or series of related transactions, of less than 150,000 shares of Common Stock. The Company shall, not later than five business days after the Low Price shall be determinable, deliver to the Purchaser a certificate signed by the Chief Executive Officer or a Senior Vice President of the Company, disclosing the Low Price and its computation and the computation of the number of Additional Shares based thereon. (b) Any Additional Shares that shall become issuable pursuant to Section 5(a) shall be issued to the Purchaser or its assignee not later than ten business days after October 1, 1994, if the Low Price shall be determinable by such date and, otherwise, not later than January 6, 1995. (c) If after the date hereof and prior to October 1, 1994, the Company shall enter into a definitive agreement to issue any shares of its Common Stock (a "Definitive Agreement") in any transaction other than one within the scope of clause (x) or clause (y) of Section 5(a), the Company will promptly notify the Purchaser of such event in writing and provide the Purchaser with a copy of such Definitive Agreement. The Purchaser will then have the irrevocable option (the "Purchase Option") to purchase up to 1,500,000 shares of the Common Stock at the same per share price as provided in such Definitive Agreement. Such Purchaser's Option shall be exercisable by written notice (a "Purchaser's Notice") to the Company given at any time within three months after the date of the Company's Notice. Such Purchaser's Option shall expire if such Purchaser's Notice is not timely given. If the Purchaser shall timely exercise such Purchaser's Option, the closing of such purchase shall be concurrent with the closing of the Definitive Agreement, provided, however, that if such Definitive Agreement closing shall occur less than ten business days after the date of the Purchaser's Notice or before the Purchaser's Notice is exercised, the closing hereunder shall occur on the tenth business day following the date of the Purchaser's Notice; and provided further that such closing date shall be appropriately extended for such additional time, if any, as may reasonably be required for compliance with the HSR Act. Such sale to the Purchaser shall be on all the same terms and conditions (including any registration rights) contained in such Definitive Agreement, except for the number of shares and the total purchase price and except as provided below if the consideration in such Definitive Agreement is other than cash. Until the Purchaser has exercised one or more Purchaser's Options for an aggregate of 1,500,000 shares, the Company shall give the Purchaser a Company Notice for each Definitive Agreement entered into before October 1, 1994, and the Purchaser shall have a Purchaser's Option with respect to each such Definitive Agreement; provided, however, that the Purchaser shall not be entitled to purchase pursuant to this Section 5(c) more than an aggregate of 1,500,000 shares of Common Stock. If the consideration to be paid for any shares of Common Stock under any Definitive Agreement shall be other than cash, the Company's Notice shall set forth the Company's good faith estimate of the per share cash value of such consideration and, subject to the following procedures, such amount shall be the Purchaser's per share purchase price under this Section 5(c). Upon request, the Company shall promptly provide the Purchaser with all information the Purchaser may reasonably require to make its own evaluation of the per share cash value of such consideration. If the Purchaser shall disagree with the Company's estimate, it shall so notify the Company in writing within 15 business days after receiving all requested information, stating the Purchaser's estimate of such per share cash value. If the Purchaser fails to notify the Company of any disagreement within such 15 days, the Company's estimate shall become final. If the Purchaser does so notify the Company of disagreement with the Company's estimate and the Company and the Purchaser fail to agree upon the per share cash value of such consideration within 15 days after the date of the Purchaser's estimate, either party may refer such dispute to ENDISPUTE to arbitrate the dispute pursuant to its procedures for single person arbitration (or by such other alternative dispute resolution organization and procedure as the parties may approve). The determination by such arbitration proceeding shall be final and binding. In the event of any such dispute, notwithstanding any other provision of this Section 5(c), the Purchaser's Option with respect to such Definitive Agreement shall not expire until 10 business days after such determination of the per share cash value. All share numbers and per share price provisions contained in this Section 5(c) shall be subject to anti-dilution adjustment corresponding to those set forth in Section 5(a) above. 6. Pre-merger Notification. Promptly, and in any event not later than 5 days after execution of this Agreement, the Company and Purchaser shall file or cause to be filed notification and report forms with the Federal Trade Commission and the U.S. Department of Justice under the HSR Act with respect to the Purchaser's purchase of the Shares and the Additional Shares, if any. 7. Conditions to Closing. (a) The obligation of the Company to sell, and the obligation of the Purchaser to purchase, the Shares are subject to the satisfaction or (to the extent permitted by law) waiver at or prior to the Closing Date of the conditions that, on the Closing Date: (i) the waiting period under the HSR Act, including any extensions thereof, shall have expired or terminated; (ii) there shall be no effective injunction, writ or preliminary restraining order or any order of any nature issued by a court or governmental agency of competent jurisdiction directing that the transactions contemplated hereby or any of them not be consummated as herein provided, and immediately prior to the Closing Date, no proceeding or lawsuit with respect to the transactions contemplated hereby shall have been commenced and be pending, or be threatened, by any governmental or regulatory agency; (iii) the Company shall have received approval from the American Stock Exchange for the listing or supplemental listing of the Shares to be issued hereunder and all of the Additional Shares; and (iv) Purchaser, the Company and Atari Games Corporation shall have entered a Letter Agreement relating to registration rights in the form attached hereto as Exhibit A. (b) The obligation of the Purchaser to purchase the Shares on the Closing Date is subject to the satisfaction or waiver at or prior to the Closing Date of each of the following conditions: (i) each of the representations and warranties of the Company contained in Section 4 hereof shall be true and correct in all respects as of the date hereof and as of the Closing, with the same effect as if made at and as of the time of Closing and the Company shall have performed all obligations to be performed by it hereunder as of such date and the Company shall deliver a certificate dated that date and signed by the Chief Executive Officer or a Senior Vice President of the Company to that effect; and (ii) Purchaser shall have been furnished with an opinion of General Counsel of the Company, dated the day of the Closing, addressed to Purchaser in such customary form and with such customary provisions as Purchaser and the Company shall agree to prior to the Closing. (c) The obligation of the Company to sell the Shares on the Closing Date is subject to the condition that each of the representations and warranties of the Purchaser contained in Section 3 hereof shall be true and correct in all respects as of the date and as of the Closing Date, with the same effect as if made at and as of the time of Closing and the Purchaser shall have performed all obligations to be performed by it hereunder as of such date and shall deliver a certificate dated that date signed by a Senior Vice President or Vice President of the Purchaser to that effect. 8. Parties in Interest. (a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, assigns and legal representatives. (b) Except as provided in clause (c) of this Section 8, this Agreement may not be assigned by either party hereto without the prior written consent of the other party. (c) The Purchaser may, at any time prior to the Closing, assign any or all of its rights hereunder to one or more of the Purchaser's wholly owned subsidiaries (which may be organized subsequent to the date hereof) and any of such subsidiaries may assume any or all of the Purchaser's obligations hereunder; provided that in the event of such assumption, (i) the representations and warranties contained in Section 3 hereof shall be deemed to be given with respect to such subsidiary and (ii) the Purchaser shall remain jointly and severally liable for such obligations. 9. Specific Performance. The parties hereto acknowledge that the benefits to them under this Agreement are unique, that they are willing to enter into this Agreement only upon strict performance by each other of all of their obligations hereunder and that monetary damage above would not afford adequate remedy for failure to perform any such obligations hereunder. Accordingly, the parties hereby consent to specific performance of their obligations hereunder and waive any requirement for securing or posting of any bond in connection with the obtaining of any injunctive or other equitable relief to enforce their rights hereunder. 10. Further Assurances. The parties shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. The parties, in connection with entering into this Agreement, performing their obligations hereunder and taking any and all actions relating hereto, shall comply with all applicable laws, obtain all required consents and approvals and make all required filings with any government and promptly provide the other with all such information as the other may reasonably request in order to be able to comply with the provisions of this sentence. 11. Termination. (a) This Agreement may be terminated at any time prior to the Closing Date, (i) by mutual written agreement of the Company and the Purchaser; (ii) by either party hereto (A) if a preliminary or permanent injunction or other order, decree or ruling shall have been issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, that would enjoin, prohibit or materially interfere with the consummation of this Agreement or the transactions contemplated herein; or (B) if the Closing Date shall not have occurred on or before May 31, 1994, unless such party is in breach of the Agreement at such time; (iii) by the Company, if there shall have been a breach of the obligations, representations or warranties of the Purchaser hereunder; or (iv) by the Purchaser, if there shall have been a breach of the obligations, representations or warranties of the Company hereunder. (b) In the event of termination of this Agreement by either or both of the parties pursuant to clause (a) of this Section 11, written notice thereof shall forthwith be given to the other party hereto, this Agreement and the transactions contemplated hereby shall be abandoned, and this Agreement, except for the provisions of this Section and Section 11(d), shall forthwith become void and have no effect. (c) Notwithstanding anything to the contrary in clause (b) above, no termination of this Agreement shall release any party hereto from any claim arising or derived from its breach of this Agreement. 12. Miscellaneous. (a) Amendments and Waivers. This Agreement cannot be changed or terminated orally and no waiver of compliance with any provision or condition hereof and no consent provided for herein shall be effective unless evidenced by an instrument in writing duly executed by the party hereto sought to be charged with such waiver or consent. No waiver of any term or provision hereof shall be construed as a further or continuing waiver of such term or provision or any other term or provision. (b) Governing Law; Severability. This Agreement, together with the rights and obligations of the parties hereunder, shall be governed by, construed and enforced in accordance with the internal laws of the State of California. In the event any provision of this Agreement or the application of any such provision to any party shall be held by a court of competent jurisdiction to be contrary to law, the remaining provisions of this Agreement shall remain in full force and effect. (c) Notices.All notices, requests, consents, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed effectively given upon (x) personal delivery, (y) twenty-four hours after delivery to a courier service which guarantees overnight delivery or (z) upon receipt of confirmation after such notice is telecopied, addressed as follows: (i) if to the Purchaser: Time Warner Inc. 75 Rockefeller Plaza New York, NY 10019 Attention: General Counsel Telecopy No.: (212) 397-0657 (ii) if to the Company: Atari Corporation 1196 Borregas Ave. Sunnyvale, CA 94089 Attention: General Counsel Telecopy No.: (408) 745-8800 or such other addresses as any party hereto shall have designated by notice in writing to the other party hereto. (d) Expenses. Each party hereto shall bear its own expenses in connection with the entry into and effectuation of this Agreement. (e) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (f) Captions. The captions and headings of this Agreement are for convenience only and are not to be construed as defining or limiting the scope or intent of any of the provisions hereof. (g) Entire Agreement. This Agreement, constitutes the entire agreement and understanding between the Company and the Purchaser relating to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written relating to the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. ATARI CORPORATION By:/s/Leonard Schrieber Title: General Counsel, Director and Authorized Signatory TIME WARNER INC. By:/s/Peter R. Haje Title: Executive Vice President EXHIBIT A SEE EXHIBIT 4 TO SCHEDULE 13-D/A EX-3 3 EXHIBIT 3 STOCK PURCHASE AGMT ATARI CORP/GAMES STOCK PURCHASE AGREEMENT (the "Agreement") made and entered into this 24th day of March, 1994 between ATARI CORPORATION, a Nevada corporation ("Atari") and ATARI GAMES CORPORATION, a Delaware Corporation ("Atari Games"). Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Stock Purchase Agreement by and between Atari and Time Warner Inc. ("TWI"), dated as of the date hereof (the "Stock Purchase Agreement"). W I T N E S S E T H WHEREAS, Atari desires to issue to Atari Games an aggregate of 70,000 shares (the "Shares") of its Common Stock, par value $.01 per share (the "Common Stock"), in settlement of certain amounts owing by Atari to Atari Games and Atari Games is willing to accept the same, subject to the terms and conditions and for the consideration set forth herein. NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual promises, agreements and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: Section 1. The Shares. Subject to the terms and conditions of this Agreement, at the Closing, Atari shall issue and sell to Atari Games and Atari Games shall purchase from Atari, the Shares, represented by one or more stock certificates, issued in the name of Atari Games. Section 2. Consideration. In consideration of the Shares, Atari Games shall deem the royalty payments (the "Royalty Payments") owing to Atari Games from Atari through December 31, 1993, under the software license agreements listed on Schedule I hereto (the "License Agreements"), satisfied and fully paid. The parties acknowledge and agree that the Shares are being issued to Atari Games in settlement of amounts owing under the License Agreements through December 31, 1993 and that from and after the Closing Date, Atari shall have no further obligation or liability with respect to the Royalty Payments for the period ending December 31, 1993. Notwithstanding any provision contained herein to the contrary, the parties agree that Atari shall continue to be liable to Atari Games for royalty payments accuring under the License Agreements after December 31, 1993. The parties acknowledge and agree that the minimum guarantee requirements under the License Agreements shall have no further force or effect. Section 3. Representations, Warranties and Agreements of Atari Games. Atari Games hereby represents and warrants to Atari and agrees with Atari as follows: (a) Due Authorization. This Agreement has been duly authorized by all necessary corporate action on the part of Atari Games, has been duly executed and delivered by Atari Games, and constitutes the legal, valid and binding obligation of Atari Games, enforceable in accordance with its terms. (b) No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby by Atari Games will (i) violate or result in any violation of or be in conflict with or constitute a default under any term of the Certificate of Incorporation or By-laws of Atari Games or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to Atari Games, or (ii) require that Atari Games obtain the consent or authorization of or waiver or filing by or make a filing with any governmental, administrative or self-regulatory body or agency or any other person or entity, other than any such consent, authorization, waiver which has been duly and validly obtained or made prior to the date hereof, other than a filing under the Hart- Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder (the "HSR Act") or (iii) require the satisfaction or termination of any waiting period under any application statute, rule or governmental regulation applicable to Atari Games, other than compliance with the HSR Act. (c) Investment Representation. The acquisition of the Shares by Atari Games will be for investment purposes only and for the sole account of Atari Games and not with a view to the redistribution or resale of any or all of the Shares. None of the Shares acquired pursuant to this Agreement will be transferred except in a transaction registered or exempt from registration under the Securities Act of 1933, as amended. Atari Games acknowledges that any certificate for the Shares shall bear a legend with respect to the transfer or resale of the Shares substantially as follows: "The shares represented by this certificate have not been registered under the Securities Act of 1933 and such shares may not be sold or transferred unless such sale or transfer will be effected in accordance with the registration requirements of the Securities Act of 1933, as at the time amended, or in conformity with the limitations of Rule 144 promulgated under such Act or in conformity with any other exemption from the registration requirements of such Act which may then be available with respect thereto." 4. Representations, Warranties and Agreements of Atari. Atari hereby represents and warrants to Atari Games and agrees with Atari Games as follows: (a) Organization. Atari is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and is duly qualified to do business and in good standing as a foreign cor poration in the jurisdiction where it is required to qualify to conduct its business as presently conducted. Atari has the requisite corporate power and authority to own its property and to carry on its business as now conducted. (b) Due Authorization. Atari has full power and authority to execute and deliver this Agreement and, as of the Closing Date, has full power and authority to perform this Agreement, including, without limitation, the power and authority to issue the Shares. Atari has duly taken all corporate and other actions necessary to authorize the execution and delivery of this Agreement and, as of the Closing Date, has duly taken all corporate and other actions necessary to authorize the performance of this Agreement, including, without limitation, all actions necessary to authorize the issuance of the Shares. This Agreement has been duly executed and delivered by Atari and this Agreement constitutes the legal, valid and binding obligation of Atari enforceable in accordance with its terms. (c) No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby by Atari will (i) violate or result in any violation of or be in conflict with or constitute a default under any term of the Certificate of Incorporation or By-laws of Atari or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to Atari, (ii) require that Atari obtain the consent or authorization of or waiver by or make a filing with any governmental, administrative or self-regulatory body or agency or any other person or entity, other than any such consent, authorization, waiver or filing which has been duly and validly obtained or made prior to the date hereof, other than a filing under the HSR Act or (iii) require the satisfaction or termination of any waiting period under any statute, rule or governmental regulation applicable to Atari, other than compliance with the HSR Act. (d) Capitalization, Issuance of Shares. As of December 31, 1993, Atari's authorized capital stock consists of 100,000,000 shares of Common Stock, par value $.01 per share, of which 57,214,587 shares were issued and outstanding, all of which are duly authorized and have been validly issued and are fully paid and non- assessable. Except as shown on Exhibit 4(d), Atari has not issued any options, warrants or convertible or exchangeable securities and is not a party to any other agreements, which require, or upon the passage of time, the payment of money or the occurrence of any other event, may require, Atari to issue or sell any of its Common Stock. Upon delivery to Atari Games of the certificate or certificates evidencing the Shares against the execution and delivery of this Agreement, the Shares will have been duly authorized, validly issued, fully paid and nonassessable and will be free of preemptive or similar rights and no personal liability will attach to the ownership thereof. (e) On or before the Closing Date, Atari will arrange for the listing or supplemental listing of the Shares to be issued to Atari Games hereunder, as appropriate, on the American Stock Exchange. (f) SEC Reports and Financial Statements. Atari has furnished to Atari Games copies of the following reports and financial statements: (i) the Annual Reports on Form 10-K of Atari for the fiscal years ended December 31, 1991 and 1992; (ii) the Quarterly Reports on Form 10-Q of Atari for each of the three fiscal quarters ended during 1993; and (iii) the Current Reports of Atari on Form 8-K filed after January 1, 1993. Atari has filed with the Securities and Exchange Commission ("SEC") all reports ("SEC Reports") required to be filed by it under the Securities Exchange Act of 1934, as amended (the "'34 Act"). None of the SEC Reports contains, as of the respective dates thereof, any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made. All financial statements contained in the SEC Reports have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods indicated ("GAAP"). Each balance sheet presents fairly in accordance with GAAP the consolidated financial position of Atari as of the date of such balance sheet, and each statement of operations and of cash flows presents fairly in accordance with GAAP the consolidated results of operations and the consolidated cash flows of Atari for the fiscal periods then ended. (g) Additional Reports. No event has occurred requiring, or which with the passage of time will require, the filing of an SEC Report that has not heretofore been filed and furnished to Atari Games. 5. Pre-merger Notification. Promptly, and in any event not later than 5 days after execution of this Agreement, Atari and Atari Games shall file or cause to be filed notification and report forms with the Federal Trade Commission and the U.S. Department of Justice under the HSR Act with respect to Atari Games' acquisition of the Shares. 6. Conditions to Closing. (a) The obligation of Atari to issue and sell and Atari Games to purchase the Shares, are subject to the satisfaction or (to the extent permitted by law) waiver at or prior to the Closing Date of the condition that, on the Closing Date: (i) the waiting period under the HSR Act, including any extensions thereof, shall have expired or terminated; (ii) there shall be no effective injunction, writ or preliminary restraining order or any order of any nature issued by a court or governmental agency of competent jurisdiction directing that the transactions contemplated hereby or any of them not be consummated as herein provided, and immediately prior to the Closing Date, no proceeding or lawsuit with respect to the transactions contemplated hereby shall have been commenced and be pending, or be threatened, by any governmental or regulatory agency; (iii) the Company shall have received approval from the American Stock Exchange for the listing or supplemental listing of the Shares to be issued hereunder; and (iv) Atari, TWI and Atari Games shall have executed and delivered the Letter Agreement relating to registration rights dated as of even date herewith in the form attached hereto as Exhibit A. (b) The obligation of Atari Games to purchase, on the Closing Date, is subject to the satisfaction or waiver at or prior to the Closing Date of each of the following conditions: (i) Each of the representations and warranties of Atari contained in Section 4 hereof shall be true and correct in all respects as of the date hereof and as of the Closing Date and Atari shall have performed all obligations to be performed by it hereunder as of such date and Atari shall deliver a certificate dated that date and signed by the Chief Executive Officer or a Senior Vice President of Atari, to that effect; (ii) Atari Games shall have been furnished with an opinion of General Counsel of Atari, dated the Closing Date addressed to Atari Games in such customary form and with such customary provisions as Atari Games and Atari shall agree to prior to the closing of the transactions contemplated hereby. (c) The obligation of Atari to issue the Shares on the Closing Date is subject to the condition that each of the representations and warranties of Atari Games contained in Section 3 hereof shall be true and correct in all respects as of the date hereof and as of the Closing Date, with the same effect as if made at and as of the time of the Closing and Atari Games shall have performed all obligations to be performed by it hereunder as of such date and shall deliver a certificate dated that date signed by a Senior Vice President or Vice President of Atari Games to that effect. 7. Parties in Interest. (a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, assigns and legal representatives. (b) Except as provided in clause (c) of this Section 7, this Agreement may not be assigned by either party hereto without the prior written consent of the other party. (c) Atari Games may, if it has assigned its rights under the Stock Purchase Agreement, at any time prior to the Closing, assign any or all of its rights hereunder to one or more of its wholly owned subsidiaries (which may be organized subsequent to the date hereof) and any such subsidiaries may assume any or all of Atari Games' obligations hereunder; provided that in the event of such assumption, (i) the representations and warranties contained in Section 3 shall be deemed to be given with respect to such subsidiary and (ii) Atari Games shall remain jointly and severally liable for such obligations. 8. Specific Performance. The parties hereto acknowledge that the benefits to them under this Agreement are unique, that they are willing to enter into this Agreement only upon strict performance by each other of all of their obligations hereunder and that monetary damage above would not afford adequate remedy for failure to perform any such obligations hereunder. Accordingly, the parties hereby consent to specific performance of their obligations hereunder and waive any requirement for securing or posting of any bond in connection with the obtaining of any injunctive or other equitable relief to enforce their rights hereunder. 9. Termination. (a) This Agreement may be terminated at any time prior to the Closing Date, (i) by mutual written agreement of Atari and Atari Games; (ii) by either party hereto (A) if a preliminary or permanent injunction or other order, decree or ruling shall have been issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, that would enjoin, prohibit or materially interfere with the consummation of this Agreement or the transactions contemplated herein; or (B) if the Closing Date shall not have occurred on or before April 30, 1994, unless such party is in breach of the Agreement at such time; (iii) by Atari if there shall have been a breach of the obligations, representations or warranties of Atari Games hereunder; or (iv) by Atari Games if there shall have been a breach of the obligations, representations or warranties of Atari hereunder. (b) In the event of termination of this Agreement by either or both of the parties pursuant to clause (a) of this Section 9, written notice thereof of shall forthwith be given to the other party hereto, this Agreement and the transactions contemplated hereby shall be abandoned, and this Agreement, except for the provisions of this Section and Section 12(d), shall forthwith become void and have no effect. (c) Notwithstanding anything to the contrary in clause (b) above, no termination of this Agreement shall release any party hereto from any claim arising or derived from its breach of this Agreement. 10. Further Assurances. The parties shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. The parties, in connection with entering into this Agreement, performing their obligations hereunder and taking any and all actions relating hereto, shall comply with all applicable laws, obtain all required consents and approvals and make all required filings with any government and promptly provide the other with all such information as the other may reasonably request in order to be able to comply with the provisions of this sentence. 11. Miscellaneous. (a) Amendments and Waivers. This Agreement cannot be changed or terminated orally and no waiver of compliance with any provision or condition hereof and no consent provided for herein shall be effective unless evidenced by an instrument in writing duly executed by the party hereto sought to be charged with such waiver or consent. No waiver of any term or provision hereof shall be construed as a further or continuing waiver of such term or provision or any other term or provision. (b) Governing Law; Severability. This Agreement, together with the rights and obligations of the parties hereunder, shall be governed by, construed and enforced in accordance with the internal laws of the State of California. In the event any provision of this Agreement or the application of any such provision to any party shall be held by a court of competent jurisdiction to be contrary to law, the remaining provisions of this Agreement shall remain in full force and effect. (c) Notices.All notices, requests, consents, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed effectively given upon (x) personal delivery, (y) twenty-four hours after delivery to a courier service which guarantees overnight delivery or (z) upon receipt of confirmation after such notice is telecopied, addressed as follows: (i) if to Atari Games: Atari Games Corporataion 675 Sycamore Drive Milpitas, California 95035 Attention: General Counsel Telecopy No.: with a copy to: Time Warner Inc. 75 Rockefeller Plaza New York, NY 10019 Attention: General Counsel Telecopy No.: (212) 397-0657 (ii) if to Atari: Atari Corporation 1196 Borregas Ave. Sunnyvale, CA 94089 Attention: General Counsel Telecopy No.: (408) 745-8800 or such other addresses as any party hereto shall have designated by notice in writing to the other party hereto. (d) Expenses. Each party hereto shall bear its own expenses in connection with the entry into and effectuation of this Agreement. (e) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (f) Captions. The captions and headings of this Agreement are for convenience only and are not to be construed as defining or limiting the scope or intent of any of the provisions hereof. (g) Entire Agreement. This Agreement constitutes the entire agreement and understanding between Atari and Atari Games relating to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written relating to the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. ATARI CORPORATION By:/s/Leonard Schrieber Name: Leonard Schrieber Title: General Counsel, Director and Authorized Signatory ATARI GAMES CORPORATION By:/s/Dennis Wood Name: Dennis Wood Title: Senior Vice President Atari Games Corporation - Atari Corporation License Agreements LYNX TITLES DATE EXECUTED MARKETING DATE Gauntlet 1/5/90 7/4/92 APB 2/8/90 8/8/91 Cyberball 2072 2/8/90 8/8/91 Klax 2/8/90 8/8/91 RoadBlasters 2/8/90 8/8/91 Vindicators 2/8/90 8/8/91 720 2/8/90 8/8/91 Paperboy 4/24/90 10/24/91 S.T.U.N. Runner 6/7/90 12/6/91 Xybots 6/11/90 12/10/91 Hydra 7/9/90 1/9/92 Pit-Fighter 8/28/90 2/28/92 Hard Drivin' 10/19/90 4/18/92 Rampart 7/24/91 1/23/93 Road Riot 4WD 8/19/91 2/19/93 Steel Talons 8/19/91 2/19/93 Relief Pitcher 3/31/92 9/30/93 Escape from the Planet 4/15/92 10/14/93 of Robot Monsters ST TITLES DATE EXECUTED MARKETING DATE Steel Talons 8/19/91 2/19/93 Road Riot 4WD 8/19/91 2/19/93 Relief Pitcher UNSIGNED 7800 TITLES DATE EXECUTED MARKETING DATE Klax 2/8/90 8/8/91 Pit-Fighter 9/11/90 3/10/92 Rampart 7/24/91 1/23/93 Steel Talons 8/20/91 2/20/93 Road Riot 4WD 8/21/91 2/21/93 2600 TITLES DATE EXECUTED MARKETING DATE Klax 3/8/90 9/8/91 EXHIBIT A SEE EXHIBIT 4 TO SCHEDULE 13-D/A EX-4 4 EXHIBIT 4 REGISTRATION RIGHTS LTR/EXB 4D March 24, 1994 Time Warner Inc. 75 Rockefeller Plaza New York, New York 10019 Atari Games Corporation 675 Sycamore Drive Milpitas, California 95035 Re: Registration Rights Greetings: This letter sets forth the agreement between our companies regarding registration rights relating to shares of Common Stock of Atari Corporation ("Atari Corp."), par value $.01 per share (the "Common Stock") sold pursuant to: (i) the Stock Purchase Agreement of even date herewith by and between Time Warner Inc. ("Time Warner") and Atari Corp. (the "Time Warner Stock Purchase Agreement"); and (ii) the Stock Purchase Agreement of even date herewith by and between Atari Games Corporation ("Atari Games") and Atari Corp. (the "Atari Games Stock Purchase Agreement"). Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Agreement among Tramel Technology, Ltd. (now re-named Atari Corporation), Atari Inc. (then a subsidiary of Warner Communications Inc.) and Jack Tramiel dated July 1, 1984 (the "Tramel Agreement"). The parties hereto acknowledge and agree that all shares of Common Stock of Atari Corp. that Time Warner and Atari Games (or their permitted assignees) shall acquire pursuant to the Time Warner Stock Purchase Agreement or the Atari Games Stock Purchase Agreement (or by permitted assignment thereunder), shall be deemed to be included in the Newco Shares covered by the registration rights provisions contained in Section 3 of the Tramel Agreement and Time Warner and Atari Games and their permitted assignees shall be entitled to exercise such rights as provided therein. All matters relating to any such registration, including without limitation, allocation of expenses and indemnification, shall be governed by the provisions of Section 3 of the Tramel Agreement and Atari Corp. acknowledges and agrees that it shall be subject to all obligations of Newco under such Section 3 with respect to all such Atari Corp. shares of Common Stock. IN WITNESS WHEREOF, the parties hereto have caused this Letter Agreement to be executed as of March 24, 1994. ATARI CORPORATION By:/s/Leonard Schrieber Name: Leonard Schrieber Title: General Counsel, Director and Authorized Signatory TIME WARNER INC. By:/s/Peter R. Haje Name: Peter R. Haje Title: Executive Vice President ATARI GAMES CORPORATION By:/s/Dennis Wood Name: Dennis Wood Title: Senior Vice President EXHIBIT 4(D) 1. The Company has issued a 5-1/4% Convertible Subordinated Debenture due 2002. $43,454,000 of the bonds are outstanding and 2,666,846 shares of Common Stock are issuable upon conversion under the terms of the Indenture. The Company is currently considering the conversion of the outstanding debentures into Common Stock which may require the issuance of additional Common Shares as a result of lower conversion price. 2. The Company has outstanding as of December 31, 1993 1,193,120 Stock Options under its Amended 1986 Stock Option Plan. -----END PRIVACY-ENHANCED MESSAGE-----