EXECUTION COPY
AGREEMENT REGARDING ISSUANCE OF SHARES
September 15, 2005
Atari, Inc.
000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000
U.S.A.
Ladies and Gentlemen:
This is to set forth the agreement between Atari, Inc. ("Atari"), a
Delaware corporation, and Infogrames Entertainment S.A. ("IESA"), a French
societe anonyme, regarding the issuance by Atari of shares of common stock, par
value $0.01 per share, of Atari ("Common Stock") in satisfaction of obligations
of Atari to IESA and/or its subsidiaries, which agreement is as follows:
1. At the closing described below, Atari will issue to IESA 4,881,533
shares (the "Shares") of Common Stock, to be applied at the rate of
$1.30 per Share as follows:
(a) 3,626,154 Shares will be applied in full satisfaction of a total of
$4,714,000 due from Atari to subsidiaries of IESA for work
performed and to be performed relating to the development of the
Test Drive Unlimited and Stuntman 2 games, as reflected on the
attached schedule.
(b) 1,255,379 Shares will be applied to reduce month end net balances
due from Atari and its subsidiaries (the "Atari Companies") to IESA
and its direct or indirect wholly-owned subsidiaries (the "IESA
Companies"), as provided in Section 2.
2. (a) If at the end of September 2005 or any subsequent calendar
month through and including March 2006, the amount due from the
Atari Companies to the IESA Companies exceeds the amount due from
the IESA Companies to the Atari Companies, the $1.30 per share
issue price of the Shares described in Section 1(b) will be applied
in satisfaction of the net amount due from the Atari Companies to
the IESA Companies until the entire issue price has been applied.
(b) If at March 31, 2006, after applying the issue price of the Shares
described in Section 1(b) as provided in Section 2(a) in
satisfaction of net amounts, if any, due from the Atari Companies
to the IESA Companies at the end of each month from September 2005
to and including March 31, 2006, any portion of that issue price
has not been applied in satisfaction of net amounts due from the
Atari Companies to the IESA companies, not later than April 10,
2006, IESA will pay the unapplied balance of that issue price to
Atari in cash.
3. The closing of the issuance of the Shares to IESA (the "Closing") will
take place on September 15, 2005, at Atari's offices, 000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000, at 10:00 a.m., New York City time. At the Closing:
(a) Atari will deliver to IESA the certificates representing the
Shares, registered in IESA's name. Each certificate shall bear a
legend stating that the shares it represents were issued in a
transaction that was not registered under the Securities Act of
1933, as amended, and those shares may be sold or otherwise
transferred only in a transaction that is registered
under that Act or is exempt from the registration requirements of that
Act and any securities laws.
(b) IESA will deliver to Atari a document stating that (i) all
obligations of Atari set forth on the schedule to this Agreement
relating to the development of the Test Drive Unlimited and
Stuntman 2 games have been paid in full and (ii) acknowledging that
the issue price of the Shares described in Section 1(b) will be
applied in satisfaction of net month end balances due from the
Atari Companies to the IESA Companies, or paid, as provided in
Section 2.
4. IESA hereby acknowledges and agrees that all of the services rendered
and expenses incurred by the subsidiaries of IESA in connection with
Test Drive Unlimited and Stuntman 2 and all of the results and proceeds
thereof (sometimes severally and collectively called "Elements"
herein), were and shall continue to be performed in accordance with,
and are subject to the terms of, Atari's standard developer agreement,
including (a) with respect to Atari's ownership from inception and in
perpetuity of all intellectual property rights or interests resulting
from or arising in connection with such services such that, among other
things, Atari is and shall be the sole and exclusive owner of all
right, title and interest, including without limitation all copyrights,
trademarks, and patent rights (and all extensions and renewals thereof
throughout the world), in and to all such Elements, including all
so-called engines, designs, game play, narrative, characters, textures,
and processes created, adapted, commissioned or used by such
subsidiaries in performing the Test Drive Unlimited and Stuntman 2
development work at any time, it being expressly acknowledged by IESA
that all such work has been commissioned by Atari and rendered by the
IESA subsidiaries on a "work-for-hire" basis from inception (and, to
the extent that it is ever legally determined that such work or any
Elements were not rendered or created on a work-for-hire basis, IESA
hereby irrevocably grants to Atari a gratis, perpetual, exclusive,
world-wide license with respect to any such Elements), and (b) standard
warranties and representations from the IESA subsidiaries in favor or
Atari that all Elements are delivered to Atari on an unencumbered,
liability-free, fully paid-up basis such that Atari's exploitation
thereof and of the games shall never (i) violate the laws or
requirements of any jurisdiction, union or other entity, (ii) infringe
the rights of any person or entity or (iii) require Atari to pay any
sums or other consideration to any person or entity in respect of the
Elements (other than those licensors identified on Exhibit 4 attached
hereto and such other ordinary course license payments which Atari may
hereafter agree in writing to accept).
5. Atari represents and warrants to IESA as follows:
(a) Atari is a corporation duly incorporated and in good standing under
the laws of the State of Delaware.
(b) Atari has all corporate power that is necessary to enable it to
enter into this Agreement and to carry out the transactions
contemplated by it. All corporate actions necessary to authorize
Atari to enter into this Agreement and carry out the transactions
contemplated by it have been taken. This Agreement has been duly
executed by Atari and is a valid and binding agreement of Atari,
enforceable against Atari in accordance with its terms.
(c) When the Shares are issued at the Closing as contemplated by this
Agreement, the Shares will be duly authorized and issued, fully
paid and non-assessable shares of Common Stock, and IESA will own
the Shares free and clear of any liens, encumbrances or claims of
other persons, other than liens or encumbrances imposed by reason
of acts of IESA and restrictions imposed by U.S. Federal and state
securities laws.
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6. IESA represents arid warrants to Atari as follows:
(a) IESA is societe anonyme duly formed and currently existing under
the laws of the Republic of France,
(b) IESA has all corporate power that is necessary to enable it to
enter into this Agreement and to carry out the transactions
contemplated by it. All actions necessary to authorize IESA to
enter into this Agreement and carry out the transactions
contemplated by it have been taken. This Agreement has been duly
executed by IESA and is a valid and binding agreement of IESA,
enforceable against IESA in accordance with its terms.
(c) IESA is aware that the Shares will be issued to it in a transaction
that will not be registered under the U.S. Securities Act of 1933,
as amended, and that IESA may sell or transfer the Shares only in
a transaction that is registered under that Act or is exempt from
the registration requirements of that Act and any applicable U.S.
state securities laws.
(d) IESA will be acquiring the Shares at the Closing for investment,
and not with a current view to the sale or distribution of the
Shares.
7. This Agreement will be governed by the laws of the State of New York in
the United States of America, without regard to principles of
conflicts of laws that would apply the laws of any other jurisdiction.
IESA and Atari each (i) agrees that any action or proceeding relating
to this Agreement may be brought in, but only in, a state or Federal
court sitting in the Borough of Manhattan in the State of New York,
(ii) consents to the personal jurisdiction of any such court in any
such action or proceeding, (iii) agrees not to seek to change the venue
of any such action or proceeding brought in any such court, whether on
the basis of convenience of the parties or for any other reason, and
(iv) agrees that process in any such action or proceeding may be served
by registered mail or in any other manner permitted by the rules of the
court in which the action or proceeding is brought.
8. Any notice or other communication under this Agreement must be in
writing, and will be deemed given when it is delivered in person or
sent by email or facsimile communication, or on the tenth day after the
day on which it is sent by mail, to the other of them at its principal
office.
9. This Agreement and the documents to be delivered in accordance with
this Agreement contain the entire agreement between Atari and IESA
relating to the transactions that are the subject of this Agreement and
those other documents, all prior negotiations, understandings and
agreements between Atari and IESA with regard to those transactions
are superseded by this Agreement and those other documents, and there
are no representations, warranties, understandings or agreements
concerning the transactions that are the subject of this Agreement or
those other documents other than those expressly set forth in this
Agreement or those other documents.
10. This Agreement may be amended by, but only by, a document in writing
signed by both Atari and IESA.
11. This Agreement may be executed in two or more counterparts, some of
which may contain the signatures of fewer than all the parties or may
contain facsimile copies of pages signed by some of the parties. Each
of those counterparts will be deemed to be an original copy of this
Agreement, but all of them together will constitute one and the same
agreement.
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Please execute a copy of this document which, when it is executed by
Atari, will constitute a legally binding agreement between IESA and Atari.
Very truly yours,
INFOGRAMES ENTERTAINMENT S.A. (for itself and each of its wholly-owned
subsidiaries)
By:_____________________________________
Title:
Agreed to:
ATARI, INC. (for itself and each of its wholly-owned subsidiaries)
By:_____________________________________
Title:
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SCHEDULE OF AMOUNTS DUE
FOR DEVELOPMENT SERVICES
Atari, Inc.
R&D Financing
(000's)
Costs Actual/Projection Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05
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actual actual actual projection
Paradigm Stuntman2 Xbox2 130 440 426 995
Paradigm Stuntman2 Xbox 49 16 16 -26 54
Paradigm Stuntman2 PS2 29 50 -10 69
actual actual actual actual
Eden Test Drive Unlimited Xbox2 551 623 481 555 2,209
actuel actual actual
Melbourne House Test Drive Unlimited PS2 459 470 457 1,386
---------------------------------------------------------------------------------------------------------------------------------
551 1,082 1,000 1,187 505 390 4,714
Cash Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05
---------------------------------------------------------------------------------------------------------------------------------
Paradigm Stuntman2 Xbox 130 440 426 995
Paradigm Stuntman2 Xbox 65 16 -26 54
Paradigm Stuntman2 PS2 29 50 -10 69
Eden Test Drive Unlimited Xbox2 1,174 481 555 2,209
Melbourne House Test Drive Unlimited PS2 459 470 457 1,386
---------------------------------------------------------------------------------------------------------------------------------
1,857 1,456 1,402 4,714
ACKNOWLEDGEMENT LETTER
September 15, 2005
VIA OVERNIGHT MAIL
------------------
AND FACSIMILE (000) 000-0000
----------------------------
Atari, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Re: Acknowledgement in connection with sale of shares of Common
Stock of Atari, Inc. (the "Company") pursuant to an Agreement
Regarding Issuance of Shares (the "Agreement")
Dear Xx. Xxxxx:
Infogrames Entertainment S.A. ("IESA"), on behalf of itself and its
direct or indirect wholly-owned subsidiaries, in connection with the sale by the
Company to IESA of 4,881,533 shares of common stock, par value $.01 per share,
pursuant to Paragraph 3(b) of the Agreement acknowledges and agrees that: (i)
all obligations of the Company set forth on the schedule to the Agreement
relating to the development of the Test Drive Unlimited and Stuntman 2 games
have been paid in full; and (ii) the issue price of the Shares described in
Section 1(b) of the Agreement will be applied in satisfaction of net month end
balances due from the Company and its subsidiaries to IESA and its direct or
indirect wholly-owned subsidiaries, or paid, as provided in Section 2 of the
Agreement.
Very truly yours,
INFOGRAMES ENTERTAINMENT S.A. (for
itself and each of its wholly-owned
subsidiaries)
By:________________________________
Name:______________________________
Title:_____________________________
Please execute a copy of this document which, when it is executed by
Atari, will constitute a legally binding agreement between IESA and Atari.
Very truly yours,
INFOGRAMES ENTERTAINMENT S.A.(for itself and each of its wholly-owned
subsidiaries)
By:________________________
Title:
Agreed to:
ATARI, INC. (for itself and each of its wholly-owned subsidiaries)
By:________________________
Title:
