Exhibit 26
California U.S. Holdings, Inc.
c/o ATARI, Inc.
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Nexgen Capital Limited,
Ormonde House
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New York, June 11, 2004
Dear Sirs,
We are writing in connection with the Share Purchase Agreement between
you and our company dated June 11, 2004 for at least 10,600,000 shares of common
stock (the "Shares") of Atari, Inc. ("Atari"). As you know, the Shares are
currently restricted securities subject to restrictions in accordance with
applicable stock market regulations. In order for you to freely trade the
Shares, we hereby undertake to cause Atari to file no later than July 5, 2004
with the Securities and Exchange Commission (the "SEC") a registration statement
on Form S-3 (the "Registration Statement") providing for the sale of all of the
Shares. We shall cause Atari to use its reasonable efforts to cause such
Registration Statement to be declared effective by the SEC as soon thereafter as
is practicable and to keep the Registration Statement continuously effective for
a period expiring on the earlier of (i) the date on which all of the Shares
covered by the Registration Statement have been sold pursuant thereto (or
pursuant to private sale transactions) and (ii) two years from the date of
effectiveness of the Registration Statement. We further agree to cause Atari to
amend the Shelf Registration Statement if and as required by applicable laws,
rules, regulations or instructions.
We undertake to bear all costs associated with or incidental to the
registration of the Shares, including without limitation, (i) all registration
and filing fees imposed by the SEC or Nasdaq, (ii) all fees and expenses
incurred in connection with compliance with state securities or "blue sky" laws
(including reasonable fees and disbursements of counsel) and compliance with the
rules of the NASD, (iii) all expenses of any persons associated with preparation
of the Registration Statement, any prospectus or supplement thereto,
certificates and other documents relating to the performance of and compliance
with this agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Shares on any securities exchange or exchanges,
(v) the fees and disbursements of counsel for Atari and of its independent
public accountants, and (v) the fees and disbursements, if any, of your counsel
in connection with this letter, the preparation and review of the Registration
Statement and the sale of the Shares pursuant to such Registration Statement.
In connection with the obligations of Atari with respect to the
Registration Statement contemplated by this agreement, we undertake to cooperate
with Atari to facilitate the sale of the Shares and, without limiting the
foregoing, we shall cause Atari to:
(a) amend the Registration Statement as may be necessary to keep the
Registration Statement effective for the applicable period as set
out above; (ii) cause the prospectus to the Registration Statement
to be amended or supplemented as required and to be filed as
required by Rule 424 or any similar rule that may be adopted under
the Securities Act of 1934, as amended (the "Securities Act");
(iii) respond as promptly as practicable to any comments received
from the SEC with respect to the Registration Statement or any
amendment thereto; and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such Registration Statement;
(b) furnish to each holder of Shares, without charge, as many copies
of each prospectus to the Registration Statement, and any
amendment or supplement thereto, as such holder may reasonably
request in order to facilitate the public sale or other
disposition of the Shares;
(d) use its reasonable efforts to register or qualify the Shares by
the time the Registration Statement is declared effective by the
SEC under all applicable state securities or blue sky laws of such
jurisdictions in the United States and its territories and
possessions as any holder of Shares shall reasonably request in
writing and to keep each such registration or qualification
effective during the period the Registration Statement is required
to be kept effective; provided, however, that in connection
therewith, Atari shall not be required to (i) qualify as a foreign
corporation to do business or to register as a broker or dealer in
any such jurisdiction where it would not otherwise be required to
qualify or register but for this paragraph, (ii) subject itself to
taxation in any such jurisdiction, or (iii) file a general consent
to service of process in any such jurisdiction;
(e) notify each holder of Shares promptly and, if requested by such
holder, confirm in writing, (i) if Atari receives any notification
with respect to the suspension of the qualification of the Shares,
and (ii) of the happening of any event as a result of which such
Registration Statement, or the prospectus thereto, contains any
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; and Atari shall take all
reasonable actions necessary to correct any such untrue statement
of a material fact or omission of a material fact;
(f) use its reasonable efforts to cause all Shares to be listed on any
securities exchange on which similar securities issued by Atari
are then listed;
(g) cooperate fully with all and any public sales of the Shares,
including but not limited to using its reasonable efforts to
obtain opinions of counsel necessary to obtain the removal of
restrictive legends from the certificates representing the Shares.
We agree to indemnify and hold harmless each holder of Shares and any
officers and directors of each holder, as well as any person, if any, who
controls any holder within the meaning of Section 15 of the Securities Act,
against all losses, liabilities, claims, damages and expenses, as incurred,
arising out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
prospectus or amendment thereto), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the indemnity
provided pursuant to this paragraph shall not apply to any holder with respect
to any loss, liability, claim, damage or expense that arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written information
furnished to Atari by such holder expressly for use in the Registration
Statement (including any prospectus or amendment thereto).
In connection with any sale, transfer or other disposition by any
holder of any Shares pursuant to Rule 144 under the Securities Act, we shall
cause Atari to cooperate with such holder to facilitate such sales.
This agreement shall inure to the benefit of and be binding upon the
successors, assigns and transferees of each of the parties, including, without
limitation and without the need for an express assignment, subsequent holders of
Shares (other than holders who acquired their Shares pursuant to a sale under
the Registration Statement). This agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
This agreement shall be governed by and construed in accordance with the laws of
the State of New York without giving effect to the conflicts of law provisions
thereof. The parties hereto acknowledge that there would be no adequate remedy
at law if any party fails to perform any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this agreement in any
court of the United States or any State thereof having jurisdiction.
Yours, truly
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Director