Exhibit 10.2
EXECUTION COPY
WAIVER AND AMENDMENT TO CREDIT AGREEMENT
          WAIVER AND AMENDMENT TO CREDIT AGREEMENT, dated as of October 23, 2007
(this “Amendment”), among ATARI, INC., a Delaware corporation, as borrower (the
“Borrower”), the lenders party to the Credit Agreement referred to below (the
“Lenders”), and BLUEBAY HIGH YIELD INVESTMENTS (LUXEMBOURG) S.A.R.L., as
successor administrative agent (in such capacity, the “Administrative Agent”).
Capitalized terms used and not otherwise defined herein shall have the meanings
given them in the Credit Agreement referred to below.
W I T N E S S E T H:
          WHEREAS, the parties hereto are parties to that certain Credit
Agreement, dated as of November 3, 2006 (as amended, supplemented or otherwise
modified to, but not including, the date hereof, the “Credit Agreement”);
          WHEREAS, the Defaults and Events of Default specified on Schedule 1
hereto have occurred prior to and are continuing as of the date hereof
(collectively, the “Existing Defaults”); and
          WHEREAS, the Borrower has requested that the Lenders waive the
Existing Defaults and amend the Credit Agreement, and the Lenders have agreed to
such waiver and amendments on the terms and conditions set forth herein.
          NOW, THEREFORE, it is agreed:
I. Waiver. Subject to the terms and conditions of this Amendment, and in
reliance on the representations, warranties and covenants of the Borrower
contained herein, from and after the Amendment Effective Date (as defined
below), the Lenders waive all Existing Defaults. Nothing herein shall be deemed
to constitute a waiver of compliance by the Borrower with its representations,
warranties, covenants or obligations under, or compliance with any term,
provision or condition of, the Credit Agreement (as amended hereby) or any other
Loan Document from and after the Amendment Effective Date.
II. Amendments to the Credit Agreement. Subject to the terms and conditions of
this Amendment, and in reliance on the representations, warranties and covenants
of the Borrower contained herein, from and after the Amendment Effective Date,
the Credit Agreement is amended as follows:
          1. Section 1.01 is amended as follows:
          (a) the definition of “Administrative Agent” is amended by deleting
“Guggenheim Corporate Funding, LLC” and substituting therefor “BlueBay High
Yield Investments (Luxembourg) S.A.R.L.”;
          (b) the definition of “Affiliate” is amended by inserting immediately
before the period at the end thereof the following: “, provided that neither the

 

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Administrative Agent nor any Lender shall be an ‘Affiliate’ as such term is used
in this Agreement or in any other Loan Document”;
          (c) the definition of “Aggregate Revolving Commitment” is amended by
amending and restating the second sentence thereof as follows: “The Aggregate
Revolving Commitment is Ten Million Dollars ($10,000,000).”;
          (d) the definition of “Applicable Rate” is amended by amending and
restating the chart set forth therein as follows:

                  Applicable Rate   Type of Obligation   Eurodollar Borrowing  
  ABR Borrowing  
 
               
Revolving Loan
    7.00 %     6.00%;  

          (e) the definition of “Maturity Date” is amended by deleting
“November 3, 2009” and substituting therefor “December 31, 2009”;
          (f) the definition of “Obligations” is amended by amending and
restating the parenthetical in the second sentence thereof as follows:
     “(in any case, including such amounts which accrue after the commencement
by or against any Credit Party of any proceeding under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, notwithstanding the commencement of such proceeding, and the operation
of Section 502(b)(2) of the United States Bankruptcy Code (11 U.S.C. §§ 101, et
seq.))”; and
          (g) the following new defined terms are inserted in the appropriate
alphabetical order:
     ‘“Amendment Effective Date’ means the date the conditions set forth in
Part V of the Waiver and Amendment to Credit Agreement are satisfied or waived
by the Lenders.
     ‘Budget’ shall mean the Borrower’s budget delivered to the Administrative
Agent on the Amendment Effective Date pursuant to paragraph (b) of Part V of the
Waiver and Amendment to Credit Agreement, as such Budget is amended, amended and
restated, supplemented or otherwise modified from time to time with the
Administrative Agent’s prior written consent, which shall not be unreasonably
withheld or delayed.
     ‘Budget Period’ means each rolling four-week period covered by the Budget,
commencing with the week of October 1, 2007.
     ‘Material Adverse Deviation’ means, as of the date of determination, an
adverse deviation in excess of (i) 10%, in respect of the Budget line items for
(x)

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total receipts, (y) research and development, or (z) overhead plus distribution
and freight, or (ii) $1,000,000, in respect of the Budget line item for cash
flow.
     ‘Permitted Deviation’ means any deviation from any line item in the Budget
that is not a Material Adverse Deviation.
     ‘Waiver and Amendment to Credit Agreement’ means the Waiver and Amendment
to Credit Agreement, dated as of October 23, 2007, among the Borrower, the
Administrative Agent and the Lenders party thereto.”.
          2. Section 2.01(a) is amended by (i) amending and restating the first
sentence thereof as follows:
     “Subject to the terms and conditions hereof, each Lender agrees to make
Revolving Loans to the Borrower from time to time during the Availability Period
in an aggregate amount that would not result in the Revolving Credit Exposure of
such Lender exceeding the Revolving Commitment of such Lender.”; and
     (ii) deleting the second sentence thereof.
          3. Section 2.01(b) is amended and restated as follows:
     “(b) [intentionally deleted].”.
          4. Section 2.02(b) is amended by amending and restating the first
sentence thereof as follows:
     “Subject to Sections 2.07(e) and 2.14, each Borrowing shall be comprised
entirely of Eurodollar Loans and maintained as such (notwithstanding anything to
the contrary contained elsewhere in this Agreement or in any other Loan
Document).”.
          5. Section 2.05 is amended and restated as follows:
     “SECTION 2.05. Letters of Credit. The Borrower shall not request the
issuance of, and neither the Issuing Lender nor any other Lender shall have an
obligation to issue, or purchase participations in, as the case may be, Letters
of Credit, from and after the Amendment Effective Date.”.
          6. Section 2.08(b) is amended by amending and restating clause
(iii) thereof as follows:
     “(iii) [intentionally deleted].”.
          7. Section 2.11 is amended by (i) deleting “the lesser of” and “or the
Formula Amount” from paragraph (b), and (ii) deleting “clauses (a), (b) and
(c) of Section 6.10” from paragraph (e) and substituting therefor “clauses (a),
(b), (c) and (e) of Section 6.10”.

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          8. Section 2.12(a) is amended by (i) deleting “0.75%” and substituting
therefor “3.0%”, and (ii) inserting “Amendment” immediately before “Effective
Date”.
          9. Section 2.13(c) is amended and restated as follows:
     “Notwithstanding the foregoing, upon the occurrence and during the
continuance of any Event of Default, interest shall accrue at the rate per annum
equal to two percent (2%) in excess of (i) in the case of the unpaid principal
amount of any Loan, the rate otherwise applicable to such Loan as provided in
the previous paragraphs of this Section, and (ii) in the case of any other
amount, the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.”.
          10. Section 3.04(c) is amended by (i) deleting “March 31, 2006” in
each place it appears and substituting therefor “the Amendment Effective Date”,
(ii) deleting “and prior to the Effective Date”, and (iii) inserting “10-K,”
immediately before “10-Q”.
          11. Section 3.16 is amended and restated as follows:
     “ SECTION 3.16. [Intentionally Deleted].”.
          12. Section 4.02 is amended by (i) adding the following new paragraph
(d) thereto:
     “(d) The aggregate amount of cash and cash equivalents owned or held by the
Borrower and its Subsidiaries (determined after giving pro forma effect to the
making of each Revolving Loan and the application of proceeds therefrom and from
any other cash on hand (to the extent such proceeds and/or other cash are
actually utilized by the Borrower and/or its Subsidiaries on the date of the
incurrence of such Revolving Loan for a permitted purpose under this Agreement
other than an investment in cash equivalents or other Permitted Investments))
shall not exceed $5,000,000 (for purposes of cash denominated in a currency
other than Dollars, taking the Dollar equivalent of such cash as determined on
the date of the incurrence of the Revolving Loan), exclusive of proceeds of any
license of intellectual property permitted by Section 6.10(e).”;
               (ii) deleting “paragraphs (a), (b) and (c)” from the last
sentence thereof and substituting therefor “paragraphs (a), (b), (c) and (d)”;
and
               (iii) inserting immediately before the period at the end of the
last sentence thereof the following: “and a reaffirmation by the Borrower of the
release set forth in Part VI of the Waiver and Amendment to Credit Agreement”.
          13. Section 5.01 is amended as follows:
               (i) paragraph (b) is amended by inserting the following
immediately before the first comma:

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          “(or, in the case of the fiscal quarter of the Borrower ended June 30,
2007, by November 30, 2007)”;
               (ii) paragraph (d) is amended by deleting “and” from the end
thereof;
               (iii) the following new paragraph (e) is inserted immediately
after paragraph (d):
     “(e) weekly, on or before the third Business Day of each week, in form and
substance, and in line item detail, satisfactory to the Administrative Agent, a
report specifying the variances, if any, between the results of operations for
the immediately preceding Budget Period (including actual cash receipts and
expenditures) and the projections for such Budget Period in the Budget, which
shall be accompanied by a certificate of a Financial Officer of the Borrower
certifying the Borrower’s compliance with the Budget (including the absence of
any Material Adverse Deviation) and that the variance report fairly presents the
results of operations of the Borrower and its Subsidiaries for the Budget Period
covered thereby; and”; and
               (iv) paragraph (e) is re-lettered as paragraph (f).
          14. Section 5.02 is amended and restated as follows:
          “SECTION 5.02. [Intentionally Deleted].”.
          15. Section 5.09 is amended by inserting the following immediately
before the period at the end of the first sentence thereof:
     “, provided that proceeds of Revolving Loans, and any of the Borrower’s
cash on hand, may be used by the Borrower in any Budget Period only in the
amounts and for the expenditures set forth in the Budget for such Budget Period,
subject to any Permitted Deviation”.
          16. Section 5.12 is amended and restated as follows:
     “SECTION 5.12. Right of First Refusal.” The Borrower shall cause the right
of first refusal granted by the Borrower to Infogrames Entertainment, S.A. on
the terms set forth in Exhibit A to the Waiver and Amendment to Credit Agreement
to remain in full force and effect through and including the 90th day after the
effectiveness thereof.”.
          17. Section 5.13 is amended and restated as follows:
          “SECTION 5.13. [Intentionally Deleted].”.
          18. Section 6.01 is amended by amending and restating paragraphs (e),
(f) and (h), respectively, as follows:

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     “(e) [intentionally deleted];”;
     “(f) [intentionally deleted];”; and
     “(h) [intentionally deleted].”.
          19. Section 6.02 is amended by amending and restating paragraphs
(c) and (d), respectively, as follows:
     “(c) [intentionally deleted]; and”; and
     “(d) Liens created by the Collateral Documents.”.
          20. Section 6.04 is amended by amending and restating paragraphs (e),
(g) and (i), respectively, as follows:
     “(e) [intentionally deleted];”;
     “(g) [intentionally deleted];”; and
     “(i) [intentionally deleted].”.
          21. Section 6.07(e) is amended and restated as follows:
     “(e) [intentionally deleted].”.
          22. Section 6.10 is amended by (i) amending and restating paragraph
(d) as follows:
     “(d) [intentionally deleted]; and”; and
     (ii) amending paragraph (e) by deleting “in the ordinary course of its
business”, and inserting the following immediately before the semicolon at the
end thereof:
     “, so long as the aggregate value of all such licensed intellectual
property does not exceed $8,500,000 at any time, and that all such licenses are
on terms and subject to documentation in form and substance reasonably
satisfactory to the Administrative Agent”.
          23. Section 6.12 is amended and restated as follows:
     “SECTION 6.12. [Intentionally Deleted].”.
          24. Section 6.13 is amended and restated as follows:
     “SECTION 6.13. [Intentionally Deleted].”.
          25. Section 6.14 is amended by deleting “$750,000” and substituting
therefor the following: “the amount set forth in the Budget”.

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          26. Section 6.15 is amended and restated as follows:
     “ SECTION 6.15. [Intentionally Deleted].”.
          27. Article VII is amended by (i) deleting from paragraph (d) “or
5.11” and substituting therefor “, 5.11 or 5.12”, and (ii) inserting in
paragraph (m) immediately before the semicolon at the end thereof the following:
     “, or a Material Adverse Deviation shall occur, or Curtis G. Solsvig
resigns, is terminated or otherwise ceases to function as the Borrower’s Chief
Restructuring Officer, and is not replaced within five Business Days by a Chief
Restructuring Officer reasonably satisfactory to the Administrative Agent on
employment terms reasonably satisfactory to the Administrative Agent, or either
(x) all disputes between FUNimation Productions, Ltd. and the Borrower relating
to those certain the Sublicense Agreements dated, respectively, October 27, 1999
and December 31, 2004, in each case between FUNimation Productions, Ltd. and the
Borrower, have not been resolved on terms satisfactory to the Administrative
Agent on or before November 5, 2007, or alternatively, (y) by such date, that
certain letter dated October 18, 2007 to the Borrower by counsel to FUNimation
Productions, Ltd., terminating such sublicense agreements, shall not have been
rescinded, in writing (in form and substance reasonably acceptable to the
Administrative Agent)”.
          28. Section 9.01 is amended (i) by amending and restating clause
(i) as follows:
     “(i) if to the Borrower, to it at 417 Fifth Avenue, New York, New York
10016, Attention: Arturo Rodriguez, (Facsimile No.: 212-726-6590, email address:
arturo.rodriguez@atari.com), with a copy to Milbank, Tweed, Hadley & McCloy, One
Chase Manhattan Plaza, New York, New York 10005, Attention Thomas C. Janson
(Facsimile No.: (212) 822-5899, email: tjanson@milbank.com); and”; and
     (ii) by amending and restating clauses (ii), (iii) and (iv) as follows:
     “(ii) if to the Administrative Agent or any Lender, then to BlueBay High
Yield Investments (Luxembourg) S.A.R.L. c/o BlueBay Asset Management, Times
Place, 45 Pall Mall, London SW1Y 5JG, Attention Gina Germano (Facsimile +44(0)20
7930 7404, email: ggermano@bluebayinvest.com), with a copy to White & Case LLP,
1155 Avenue of the Americas, New York New York, 10036, Attention Sandy Qusba
(Facsimile No.: 212-354-8113, email: squsba@whitecase.com.)”.

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          III. Acknowledgments and Agreements.
          1. The Borrower acknowledges and agrees that each of the Loan
Documents to which it is a party (i) constitutes its legal, valid and binding
obligation, and is enforceable against it in accordance with its terms, except
to the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting
creditors’ rights and by equitable principals (regardless of whether enforcement
is sought in equity or at law), and (ii) is hereby reaffirmed and ratified,
including without limitation, each of the waiver of claims and defenses granted
by the Borrower under the Loan Documents. Without limiting the generality of the
foregoing, the Borrower unconditionally and irrevocably waives any claim or
defense in respect of the Obligations, including, without limitation, any claim
or defense based on any right of setoff or counterclaim.
          2. As of the date hereof, the Borrower acknowledges and agrees that it
is indebted to the Lenders in the aggregate principal amount of $3,000,000,
which is the outstanding principal amount of the Revolving Loans (there are no
outstanding Term Loans or LC Exposure as of the date hereof), plus accrued and
unpaid and accruing interest and fees. Nothing contained herein shall alter,
amend, modify or extinguish the obligation of the Borrower to repay the
Obligations, and neither this Amendment nor any of the other documents,
agreements or instruments executed or delivered in connection herewith or
related hereto constitutes a novation or, except as expressly provided herein,
modification of any of the Loan Documents.
          3. The Borrower acknowledges and agrees that all of its assets
pledged, assigned, conveyed, mortgaged, hypothecated or transferred to the
Administrative Agent for the benefit of the Lenders pursuant to the Collateral
Documents including, without limitation, the Collateral, are (and shall continue
to be) subject to the fully perfected liens and security interests of the
Administrative Agent for the benefit of the Lenders (subject only to Permitted
Encumbrances), as collateral security for all of the Obligations. Without
limiting the other provisions of the Loan Documents, the Borrower will, and will
cause its Subsidiaries to, promptly take all actions and execute or deliver all
documents, agreements and instruments, including any Uniform Commercial Code
financing statement amendments, U.S. Patent and Trademark filings and/or
amendments to or new control agreements in respect of any of the Borrower’s
Deposit Accounts (defined below), required by the Administrative Agent to
implement the transactions contemplated by the Amendment and the documents,
agreements and/or instruments executed or delivered in connection herewith. The
Borrower hereby respectively reaffirms and ratifies its prior conveyance to the
Administrative Agent for the benefit of the Lenders of a continuing security
interest in and lien on the Collateral described in the instrument conveying
such security interest.
          4. The Borrower acknowledges and agrees that immediately prior to
giving effect hereto, no Lender has any commitment or obligation to make any
Revolving Loans or any Term Loans, or to issue Letters of Credit, or to purchase
participations in Letters of Credit or to make any other financial
accommodations to the Borrower or any of its Subsidiaries. For the avoidance of
doubt, no Lender shall have any commitment or be obligated to make Term Loans or
purchase participations in Letters of Credit after the Amendment Effective Date.

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          5. The Borrower shall deliver to the Administrative Agent promptly
after the date hereof and in any event on or prior to the fourteenth (14th) day
after the date hereof, in form and substance reasonably satisfactory to the
Administrative Agent, a completed perfection certificate which shall be
certified by a Financial Officer of the Borrower certifying that such completed
perfection certificate is true, accurate and complete to the best of his or her
knowledge and that the Borrower has granted to the Administrative Agent valid,
enforceable and perfected first priority security interests in now or hereafter
acquired Collateral and all proceeds thereof.
          6. The Borrower shall not and shall not permit its Subsidiaries to
open any Deposit Account or securities account other than as described on
Schedule 2 annexed hereto without the prior consent of the Administrative Agent.
          7. The Borrower shall pay to the Administrative Agent, for the ratable
benefit of the Lenders, a fee of $300,000, which shall be fully earned on the
Amendment Effective Date and which shall be payable on the earliest to occur of
(i) March 31, 2008, (ii) the payment in full of all Obligations and the
termination of the Commitments, and (iii) the acceleration of the Obligations,
including any automatic acceleration resulting from the occurrence of an Event
of Default described in paragraphs (h) or (i) of Article VII of the Credit
Agreement.
     IV. Representations and Warranties. In order to induce the Lenders to enter
into this Amendment, the Borrower hereby represents and warrants as follows:
          1. After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing, and all of the representations and
warranties contained in the Credit Agreement and in the other Loan Documents are
true and correct in all material respects on and as of the Amendment Effective
Date, it being understood and agreed that any representation or warranty which
by its terms is made as of a specified date shall be true and correct in all
material respects only as of such specified date.
          2. It has the power, and has been duly authorized by all requisite
action, to execute and deliver this Amendment and the other documents,
agreements and instruments executed or delivered in connection herewith to which
it is a party, and to perform its obligations hereunder and thereunder. This
Amendment and the other documents, agreements and instruments executed and
delivered in connection herewith have been duly executed and delivered by it.
This Amendment and the other documents, agreements and instruments executed and
delivered in connection herewith are its legal, valid and binding obligations,
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors’ rights generally
(regardless of whether enforcement is sought at equity or at law).
          3. Neither the execution, delivery or performance by the Borrower of
this Amendment or of the other documents, agreements or instruments executed and
delivered in connection herewith to which it is a party, nor compliance by it
with the terms and provisions hereof or thereof, will (i) contravene any
provision of any law, statute, rule or regulation or any order, writ, injunction
or decree of any court or governmental instrumentality, except for immaterial
such contraventions arising as a result of the execution, delivery or
performance of

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this Amendment or the other documents, agreements or instruments executed and
delivered in connection herewith, (ii) conflict with or result in any breach of
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except pursuant to the Loan Documents) upon any of
the property or assets of the Borrower or any of its Subsidiaries pursuant to
the terms of any indenture, mortgage, deed of trust, deed to secure debt, credit
agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which the Borrower or any of its Subsidiaries is a
party or by which it or any of its property or assets is bound or to which it
may be subject, or (iii) violate any provision of the certificate or articles of
incorporation, certificate of formation, limited liability company agreement or
by-laws (or equivalent organizational documents), as applicable, of the Borrower
or any of its Subsidiaries.
          4. No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except for (x) those that have
otherwise been obtained or made on or prior to the Amendment Effective Date and
which remain in full force and effect on the Amendment Effective Date, (y) those
filings which are necessary to perfect the security interests created under the
Collateral Documents, and (z) those disclosure filings to be made with the
Securities and Exchange Commission or any successor thereto (the “SEC”),
provided that such filings are made within the required time periods (as
specified by applicable laws)), or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to be obtained or made by,
or on behalf of, the Borrower to authorize, or is required to be obtained or
made by, or on behalf of, the Borrower in connection with, (i) the execution,
delivery and performance of this Amendment or any document, agreement or
instrument executed or delivered in connection herewith to which it is a party,
or (ii) the legality, validity, binding effect or enforceability of this
Amendment or any document, agreement or instrument executed or delivered in
connection herewith to which it is a party.
          5. There are no pending or, to the best knowledge of the Borrower
after due inquiry, threatened, actions suits or proceedings (i) with respect to
this Amendment or any document, agreement or instrument executed or delivered in
connection herewith, or (ii) other than those previously disclosed to the
Administrative Agent in writing, that would reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.
          6. Schedule 2 annexed hereto sets forth a true, accurate and complete
list of each Deposit Account or securities account maintained by the Borrower or
in which the Borrower has an interest and the balance maintained in each such
account as of the date hereof and the name of each such depository institution.
Except as set forth on Schedule 2, each of the accounts identified thereon is
subject to a control agreement granting the Administrative Agent a valid,
enforceable and duly perfected security interest in such accounts. For purposes
hereof, “Deposit Accounts” shall have the meaning set forth in Article 9 of the
New York Uniform Commercial Code as in effect on the date hereof and as
hereafter modified and shall include, without limitation, all demand, time,
savings, passbook or like accounts with a bank, savings and loan association,
credit union or like organization.
          7. The Borrower has no Domestic Subsidiaries.

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V. Conditions to Effectiveness. This Amendment shall become effective on the
date (the “Amendment Effective Date”) when (i) the Borrower and the Lenders
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Administrative Agent; and (ii) the Administrative
Agent shall have received the following:
          (a) from the Borrower, in immediately available funds, the unpaid fees
and expenses of White & Case LLP incurred in connection with this Amendment;
          (b) a budget of the Borrower’s projected cash receipts and
disbursements for the period of thirteen continuous weeks commencing with the
week immediately following the Amendment Effective Date, which shall be in form
and substance, and in line item detail, satisfactory to the Administrative
Agent;
          (c) updated Credit Agreement Schedules 3.03, 3.05, 3.06, 3.17, 6.01,
6.02, 6.07 and 6.08, and updated Pledge and Security Agreement Exhibits A, B, C,
and E, which shall all be certified by a Financial Officer of the Borrower as
accurate and complete;
          (d) a fully executed copy (by Guggenheim Corporate Funding, LLC, and
the Borrower) of the Agency Resignation and Appointment Agreement, in form and
substance satisfactory to the parties thereto (and each Lender hereby consents
to the execution and delivery of such agreement by the parties thereto, and to
the terms thereof, including the transfer to BlueBay High Yield Investments
(Luxembourg) S.A.R.L. of the administrative agency thereunder, and the
obligation of the Borrower to execute and/or deliver all documents, agreements
and instruments, and to take all further action, required by BlueBay High Yield
Investments (Luxembourg) S.A.R.L to fully implement such transfer);
          (e) copies, certified by the secretary or assistant secretary of the
Borrower, of (i) its certificate of incorporation and by-laws, or similar
organizational documents, and (ii) the resolutions of its board of directors or
similar governing body, approving this Amendment and, as the case may be, the
documents, agreements and instruments executed or delivered in connection
herewith to which it is a party, and the transactions contemplated hereby and
thereby;
          (f) a certificate of the Borrower’s secretary or assistant secretary
certifying the names and the signatures of its officers who are authorized to
execute this Amendment and, as the case may be, the other documents, agreements
and instruments executed or delivered in connection herewith to which it is a
party;
          (g) a good standing certificate (including, as applicable, as to the
payment of franchise taxes), for the Borrower, from the secretary of state of
the state of its organization, and of each other state where it conducts
business as a foreign limited liability company;

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          (h) an opinion of counsel to the Borrower addressed to each of the
Administrative Agent and Lenders, dated as of the Amendment Effective Date, in
form and substance satisfactory to the Administrative Agent;
          (i) an Assignment and Assumption Agreement, effective as of the
Amendment Effective Date, in form and substance satisfactory to the parties
thereto;
          (j) an agreement pursuant to which the Borrower grants Infogrames
Entertainment, S.A. a right of first refusal with respect to the video game
title “Test Drive Unlimited” in accordance with the terms set forth in Exhibit A
hereto; and
          (k) such other documents, instruments, and agreements reasonably
requested by the Administrative Agent.
VI. RELEASE. IN CONSIDERATION OF THE ADMINISTRATIVE AGENT’S AND EACH LENDER’S
EXECUTION OF THIS AMENDMENT, AND OF EACH BORROWING FROM TIME TO TIME AFTER THE
AMENDMENT EFFECTIVE DATE, THE BORROWER UNCONDITIONALLY AND IRREVOCABLY ACQUITS
AND FULLY FOREVER RELEASES AND DISCHARGES THE ADMINISTRATIVE AGENT AND EACH
LENDER, AND THEIR MANAGEMENT COMPANY AND ALL AFFILIATED FUNDS UNDER THE
MANAGEMENT OF SUCH MANAGEMENT COMPANY, AND EACH OF THEIR RESPECTIVE PARTNERS,
SUBSIDIARIES, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, FINANCIAL ADVISORS,
PRINCIPALS, DIRECTORS AND SHAREHOLDERS OF SUCH PERSONS, AND THEIR RESPECTIVE
HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE
“RELEASEES”), FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, OBLIGATIONS,
REMEDIES, SUITS, DAMAGES AND LIABILITIES OF ANY NATURE WHATSOEVER, WHETHER OR
NOT NOW KNOWN, SUSPECTED OR CLAIMED, WHETHER ARISING UNDER COMMON LAW, IN EQUITY
OR UNDER STATUTE, WHICH THE BORROWER EVER HAD OR NOW HAS AGAINST ANY OF THE
RELEASEES AND WHICH MAY HAVE ARISEN AT ANY TIME PRIOR TO THE DATE HEREOF (AND
PRIOR TO THE DATE OF EACH SUBSEQUENT BORROWING) AND WHICH WERE IN ANY MANNER
RELATED TO THIS AMENDMENT, THE CREDIT AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
RELATED DOCUMENTS, INSTRUMENTS OR AGREEMENTS, OR THE ENFORCEMENT OR ATTEMPTED OR
THREATENED ENFORCEMENTS BY ANY OF THE RELEASEES OF ANY OF THEIR RESPECTIVE
RIGHTS, REMEDIES OR RECOURSE RELATED THERETO.
     VII. Miscellaneous.
          1. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

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          2. This Amendment is limited as specified and, except as expressly set
forth herein, shall not constitute a modification, acceptance or waiver of any
other provision of the Credit Agreement or any Loan Document.
          3. THIS AMENDMENT, AND THE DOCUMENTS, AGREEMENTS AND INSTRUMENTS
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES THEREOF. Each of the parties hereto agrees that the provisions of
Section 9.09 of the Credit Agreement shall apply to any action with respect to
this Amendment, and the documents, agreements and the instruments, executed or
delivered in connection herewith.
          4. All notices and other communications provided for hereunder shall
be made or given to the parties hereto in the manner and at the address and
telecopier numbers specified in Section 9.01 of the Credit Agreement and shall
be deemed made or given, and effective, as set forth in such section.
          5. From and after the Amendment Effective Date, all references in the
Credit Agreement and each of the other Loan Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.
This Amendment shall constitute a Loan Document for all purposes under the
Credit Agreement and the other Loan Documents.
* * *

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     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.

                  ATARI, INC., as Borrower    
 
           
 
  By:     /s/ Curtis G. Solsvig III    
 
           
 
      Name: Curtis G. Solsvig III    
 
      Title: Chief Restructuring Officer    
 
           
 
           
 
  By:        
 
           
 
      Name:    
 
      Title:    
 
                BLUEBAY HIGH YIELD INVESTMENTS
(LUXEMBOURG) S.A.R.L., as administrative
agent and lender    
 
                By: BlueBay Asset Management PLC,
acting as agent for BlueBay High Yield Investments
(Luxembourg) S.a.r.l.    
 
           
 
  By:     /s/ Gina J. Germano    
 
           
 
      Name: Gina J. Germano    
 
      Title: Portfolio Manager