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Atari & Security Pac.natl Bank Indenture 4/29/87

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Sectors: Computer Hardware, Computer+Software+and+Services
Governing Law: New York, View New York State Laws
Effective Date: April 29, 1987
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Exhibit 4.3


ATARI CORPORATION


AND
SECURITY PACIFIC NATIONAL BANK
Trustee


INDENTURE
Dated as of
April 29, 1987


$75,000,000
5-1/4% Convertible Subordinated Debentures Due 2002 2
CROSS-REFERENCE TABLE


TIA Section Indenture Section

310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08; 7.10; 11.02
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 12.03
(c) 12.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 12.02
(d) 7.06
314(a) 4.02; 11.02
(b) N.A.
(c)(1) 12.04
(c)(2) 12.04
(c)(3) N.A.
(d) N.A.
(e) 12.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 11.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 12.01


N.A. means not applicable.


Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture. 3
TABLE OF CONTENTS


Page
ARTICLE 1 Definitions and Incorporation by Reference


SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . 4
1.03 Incorporation by Reference of Trust Indenture Act . . . . . 4
1.04 Rules of Construction . . . . . . . . . . . . . . . . . . . 4


ARTICLE 2 The Securities


SECTION 2.01 Form and Dating . . . . . . . . . . . . . . . . . . . . . . 5
2.02 Execution and Authentication . . . . . . . . . . . . . . . 5
2.03 Registrar, Paying Agent and Conversion Agent . . . . . . . 6
2.04 Paying Agent to Hold Money in Trust . . . . . . . . . . . . 7
2.05 Securityholder Lists . . . . . . . . . . . . . . . . . . . 7
2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . 7
2.07 Replacement Securities . . . . . . . . . . . . . . . . . . 9
2.08 Outstanding Securities . . . . . . . . . . . . . . . . . . 10
2.09 Treasury Securities . . . . . . . . . . . . . . . . . . 10
2.10 Temporary Global Security; Exchange, Conversion or
Redemption of Temporary Global Security . . . . . 11
2.11 Cancelation . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . 14
2.13 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


ARTICLE 3 Redemption
SECTION 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . . . 14
3.02 Selection of Securities to Be Redeemed . . . . . . . . . . 14
3.03 Notice of Redemption . . . . . . . . . . . . . . . . . . . 15
3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . 16


-a- 4
Page
3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . 16
3.06 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . 16


ARTICLE 4 Covenants


SECTION 4.01 Payment of Securities . . . . . . . . . . . . . . . . . . . . 16
4.02 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.03 Certificate as to Default . . . . . . . . . . . . . . . . . . 17


ARTICLE 5 Successors


SECTION 5.01 When Corporation May Merge, etc. . . . . . . . . . . . . . . 17


ARTICLE 6 Defaults and Remedies


SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . 18
6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . 20
6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . 21
6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . 21
6.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . 21
6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . 21
6.07 Rights of Holders to Receive Payment . . . . . . . . . . . . 22
6.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . 22
6.09 Trustee May File Proofs of Claim . . . . . . . . . . . . . . 22
6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . 23


ARTICLE 7 Trustee


SECTION 7.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . 23
7.02 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . 24
7.03 Individual Rights of Trustee, etc. . . . . . . . . . . . . . . 25
7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . 25
7.05 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . 25
7.06 Reports by Trustee to Holders . . . . . . . . . . . . . . . . 25
7.07 Compensation and Indemnity . . . . . . . . . . . . . . . . . 26
7.08 Replacement of Trustee . . . . . . . . . . . . . . . . . . . 26


-b- 5
Page
7.09 Successor Trustee by Merger, etc. . . . . . . . . . . . . . . 28
7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . 28
7.11 Preferential Collection of Claims Against Corporations . . . 28


ARTICLE 8 Repayment to Corporation


SECTION 8.01 Repayment to Corporation . . . . . . . . . . . . . . . . . . 28


ARTICLE 9 Amendments, Supplements and Waivers


SECTION 9.01 Without Consent of Holders . . . . . . . . . . . . . . . . . 28
9.02 With Consent of Holders . . . . . . . . . . . . . . . . . . . 29
9.03 Compliance with Trust Indenture Act . . . . . . . . . . . . . 30
9.04 Revocation and Effect of Consents . . . . . . . . . . . . . . 30
9.05 Notation on or Exchange of Securities . . . . . . . . . . . . 30
9.06 Trustee Protected . . . . . . . . . . . . . . . . . . . . . . 30


ARTICLE 10 Conversion


SECTION 10.01 Conversion Privilege . . . . . . . . . . . . . . . . . . . . 30
10.02 Conversion Procedure . . . . . . . . . . . . . . . . . . . . 31
10.03 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . 32
10.04 Taxes on Conversion . . . . . . . . . . . . . . . . . . . . . 32
10.05 Corporation to Provide Stock . . . . . . . . . . . . . . . . 32
10.06 Adjustment for Change in Capital Stock . . . . . . . . . . . 33
10.07 Adjustment for Rights Issue . . . . . . . . . . . . . . . . . 33
10.08 Adjustment for Other Distributions . . . . . . . . . . . . . 34
10.09 Current Market Price . . . . . . . . . . . . . . . . . . . . 35


-c- 6
Page
10.10 When Adjustment May Be Deferred . . . . . . . . . . . . . . . 35
10.11 When No Adjustment Required . . . . . . . . . . . . . . . . . 35
10.12 Notice of Adjustment . . . . . . . . . . . . . . . . . . . . 36
10.13 Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . 36
10.14 Notice of Certain Transactions . . . . . . . . . . . . . . . 36
10.15 Reorganization of Corporation . . . . . . . . . . . . . . . . 37
10.16 Corporation Determination Final . . . . . . . . . . . . . . . 37
10.17 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . 37


ARTICLE 11 Subordination


SECTION 11.01 Agreement to Subordinate . . . . . . . . . . . . . . . . . . 38
11.02 Certain Definitions . . . . . . . . . . . . . . . . . . . . . 38
11.03 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . 39
11.04 Default on Senior Debt . . . . . . . . . . . . . . . . . . . 39
11.05 Acceleration of Securities . . . . . . . . . . . . . . . . . 40
11.06 When Distribution Must Be Paid Over . . . . . . . . . . . . . 40
11.07 Notice by Corporation . . . . . . . . . . . . . . . . . . . . 40
11.08 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.09 Relative Rights . . . . . . . . . . . . . . . . . . . . . . . 40
11.10 Subordination May Not Be Impaired by Corporation . . . . . . 41
11.11 Distribution or Notice to Representative . . . . . . . . . . 41
11.12 Rights of Trustee and Paying Agent . . . . . . . . . . . . . 41


ARTICLE 12 Miscellaneous


SECTION 12.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . 42
12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.03 Communications by Holders with Other Holders . . . . . . . . 43
12.04 Certificate and Opinion as to Conditions Precedent . . . . . 43
12.05 Statements Required in Certificate or Opinion . . . . . . . . 44


-d- 7
Page

12.06 Rules by Trustee, Paying Agent, Registrar . . . . . . . . . . 44
12.07 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . 44
12.08 No Recourse Against Others . . . . . . . . . . . . . . . . . 44
12.09 Duplicate Originals . . . . . . . . . . . . . . . . . . . . . 45
12.10 Variable Provisions . . . . . . . . . . . . . . . . . . . . . 45
12.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 46


Signatures
Exhibit A -- Form of Registered Security
Exhibit B -- Form of Bearer Security
Exhibit C -- Form of Coupon
Exhibit D -- Form of Global Debenture
Exhibit E -- Form of Certificate of Non-U.S. Ownership
Exhibit F -- Form of Investment Letter
Exhibit G -- Form of Certificate of U.S. Institutional
Investor
Exhibit H-1 -- Form of Clearance System Certificate
Exhibit H-2 -- Form of Clearance System Certificate
Exhibit H-3 -- Form of Clearance System Certificate


-e- 8
INDENTURE dated as of April 29, 1987, between ATARI CORPORATION, a Nevada corporation (the "Corporation"), and SECURITY PACIFIC NATIONAL BANK, as trustee (the "Trustee").


Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Corporation's 5-1/4% Convertible Subordinated Debentures Due 2002 (the "Securities"):


ARTICLE 1


Definitions and Incorporation by Reference


SECTION 1.01. Definitions.


"Affiliate" means any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Corporation.


"Agent" means any Registrar, Paying Agent, Conversion Agent or co-registrar.


"Authorized Newspaper" means a newspaper of general circulation in the place of publication, printed in the official language of the country of publication and customarily published on each Business Day, whether or not published on Legal Holidays. Whenever successive weekly publications in an Authorized Newspaper are authorized or required by this Indenture, they may be made (unless otherwise expressly provided) on the same or different days of the week and in the same or different Authorized Newspapers.


"Bearer Security" means any Security except a Registered Security.


"Board of Directors" means the Board of Directors of the Corporation or the Executive Committee of the Board.


"CEDEL" means Centrale de Livraisons de Valeurs Mobilieres, S.A.


"Clearance Systems" means Euro-Clear and CEDEL.


"Common Depository" means Morgan Guaranty Trust Company of New York, London Office, as common depositary for Euro-Clear and CEDEL. 9
2


"Corporation" means the party named as such in this Indenture until a successor replaces it and after that means the successor.


"Coupon" means a Coupon in the form of Exhibit C.


"Default" means any event that is, or after notice or passage of time or both would be, an Event of Default.


"definitive Securities" means Registered Securities in the form of Exhibit A and Bearer Securities in the form of Exhibit B.


"Dollar", "dollar", or "$" means a dollar in the currency of the United States as at the time shall be legal tender for the payment of public and private debts.


"Euro-Clear" means the Euro-Clear System.


"Exchange Date" means the date which is the later of 90 days after the distribution of the Securities has been completed, as determined by PaineWebber International Capital Inc, and the effectiveness of registration of the Debentures for resale under the United States Securities Act of 1933 (the "Securities Act"); provided, however, that if the Company shall furnish the Trustee with an Opinion of Counsel that registration of the Debentures for resale under the Securities Act is not necessary for distribution of the Securities to comply with the requirements of the Securities Act, the Exchange Date shall be the later of the date 90 days after the distribution of the Securities has been completed, as determined by PaineWebber International Capital Inc., and the date of receipt of such Opinion of Counsel by the Trustee.


"Global Security" means a temporary Global Security in bearer form without interest coupons, portions of which may be converted, as provided in Section 2.10, for Securities of such series in definitive form.


"Holder" or "Securityholder" means a person in whose name a Registered Security is registered on the Registrar's books and the bearer of a Bearer Security.


"Indenture" means this Indenture as amended from time to time.


"Officers' Certificate" means a certificate signed by two Officers, one of whom must be the President, the 10
3


Treasurer or a Vice President of the Corporation. See Sections 12.04 and 12.05.


"Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Corporation or the Trustee. See Sections 12.04 and 12.05.


"principal" of a debt security means the principal of the security plus the premium, if any, on the security.


"Registered Holder" means the person in whose name a Registered Security is registered on the Registrar's books.


"Registered Security"' means any Security registered on the Registrar's books as to the principal and interest, if any.


"SEC" means the Securities and Exchange Commission.


"Securities" means the Securities described above issued under this Indenture, including both Bearer Securities and Registered Securities.


"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sec. 77aaa-77bbbb) as in effect on the date of this Indenture.


"Trustee" means the party named as such above until a successor replaces it and after that means the successor.


"Trust Officer" means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters.


"U.S. Institutional Investors" means certain United States institutional investors to whom sales can be made exempt from the registration requirements of the United States Securities Act of 1933. 11
4


SECTION 1.02. Other Definitions.


Defined in
Term Section

"Bankruptcy Law" 6.01
"Common Stock" 10.01
"Conversion Agent" 2.03
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 12.07
"Officer" 12.10
"Paying Agent" 2.03
"Quoted Price" 12.10
"Registrar" 2.03
"Representative" 11.02
"Senior Debt" 11.02
"U.S. Government Obligations" 8.01


SECTION 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:


"indenture securities" means the Securities.


"indenture security holder" means a Securityholder.


"indenture to be qualified" means this Indenture.


"indenture trustee" or "institutional trustee" means the
Trustee.


"obligor" on the indenture securities means the Corporation.


All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings assigned to them.


SECTION 1.04. Rules of Construction. Unless the context otherwise requires,


(1) a term has the meaning assigned to it, 12
5


(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with generally
accepted accounting principles,


(3) "or" is not exclusive,


(4) words in the singular include the plural, and
in the plural include the singular, and


(5) provisions apply to successive events and
transactions.


ARTICLE 2


The Securities


SECTION 2.01. Form and Dating. The Registered Securities will be substantially in the form of Exhibit A and the Bearer Securities and the coupons will be substantially in the form of Exhibit B and Exhibit C, respectively, all of which are part of this Indenture. The Securities and the coupons may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Registered Security will be dated the date of its authentication. Each Bearer Security and the Global Security will be dated as of the date of this Indenture.


SECTION 2.02. Execution and Authentication. An Officer will sign the Securities and the coupons for the Corporation by manual or facsimile signature. The Corporation's seal will be impressed, affixed, imprinted or reproduced on the Securities and the coupons.


If an Officer whose signature is on a Security or a coupon no longer holds that office at the time the Trustee authenticates the Security or the coupon, the Security or the coupon will nevertheless be valid.


A Security will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Security has been authenticated under this Indenture.


The Trustee will authenticate Securities for original issue up to the total principal amount of U.S. $75,000,000 on a written order of the Corporation signed by two Officers. The total principal amount of Securities outstanding at any time may not exceed that 13
6


amount except as provided in Section 2.07 (Replacement Securities).


The Trustee may appoint an authenticating agent acceptable to the Corporation to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Agent. An authenticating agent has the same rights as an Agent to deal with the Corporation or an Affiliate.


SECTION 2.03. Registrar, Paying Agent and Conversion Agent. The Corporation shall maintain an office or agency where Registered Securities may be presented for registration of transfer or for exchange ("Registrar" and "Transfer Agent"), an office or agency where Securities and coupons may be presented for payment ("Paying Agent") and an office where Securities may be presented for conversion ("Conversion Agent"). The Registrar shall keep a register of the Registered Securities and of their transfer and exchange. The Corporation may appoint one or more co-registrars, one or more additional paying agents and one or more additional conversion agents. The term "Paying Agent" includes any additional paying agent, and the term "Conversion Agent" includes any additional conversion agent. Initially, the Trustee with its corporate trust office at 127 John Street, New York, New York 10038, will act as Registrar and Transfer, Paying and Conversion Agent; Credit Suisse (France), 92, Avenue des Champs-Elysees, F-75008, Paris, France, and Credit Suisse (Luxembourg) SA, 23, Avenue Monterey, B.P. 40, Luxembourg, Grand Duchy of Luxembourg, will act as Transfer, Paying and Conversion Agents; Schweizerische Kreditanstalt (Deutschland) AG, P.O. Box 100529, D-6000 Frankfurt a/M 1, Federal Republic of Germany, and Credit Suisse, 24, Bishopsgate, London EC2N 4BQ, Great Britain, will act as Paying and Conversion Agents; and Credit Suisse, P.O. Box 590, CH-8021, Zurich, Switzerland will act as Paying Agent. The Corporation reserves the right to vary or terminate the appointment of the Registrar or any Transfer, Paying or Conversion Agent, or to appoint additional or other Registrars or Transfer, Paying or Conversion Agents, or to approve any change in the office through which the Registrar or any such agent acts, provided that there will at all times be a Transfer Agent or Registrar, and, with respect to the Registered Securities, a Paying Agent and Conversion Agent in New York, New York and, with respect to Bearer Securities and coupons, a Paying Agent and Conversion Agent in a European city which, so long as the Securities are listed on the Luxembourg Stock Exchange 14
7


and so long as the Luxembourg Stock Exchange so requires, shall be Luxembourg. If the Corporation fails to maintain a Registrar, Paying Agent or Conversion Agent within the United States, the Trustee will act as such. Except as otherwise provided in paragraph 2 of the Bearer Securities, Bearer Securities may only be paid or converted at offices outside the United States.


SECTION 2.04. Paying Agent to Hold Money in Trust. The Corporation will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for
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