EXECUTION VERSION
Exhibit 10.1
WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT
          WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of
November 6, 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 Second 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 other term,
provision or condition of, the Credit Agreement (as amended hereby) or any other
Loan Document from and after the Second 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 Second Amendment Effective
Date, the Credit Agreement is amended as follows:
          1. Section 1.01 is amended as follows:
          (a) The definition of “Loan Documents” is amended by amending and
restating it as follows:
     “‘Loan Documents’ means this Agreement, any promissory notes executed and
delivered pursuant to Section 2.09(e), the Collateral Documents, the Credit
Parties Guaranty, the Intercreditor Agreement and any and all other

 

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instruments and documents executed and delivered in connection with any of the
foregoing.”; and
          (b) the following new defined terms are inserted in the appropriate
alphabetical order:
     “‘IESA’ shall mean Infogrames Entertainment, S.A., a French corporation.
     ‘Intercreditor Agreement’ shall mean, from and after the execution and
delivery thereof, an intercreditor agreement (if any) among the Administrative
Agent, IESA and the Borrower.
     ‘Second Amendment Effective Date’ means the date the conditions set forth
in Part V of the Waiver and Second Amendment to Credit Agreement are satisfied
or waived by the Lenders.
     ‘TDU License Agreements’ shall mean the TDU Trademark License Agreement and
the TDU Other IP License Agreement, collectively.
     ‘TDU Other IP License Agreement’ shall mean that certain General
Intellectual Property and Proprietary Rights (Other Than Trademark Rights)
License of the Test Drive Franchise, dated as of November 8, 2007 between the
Borrower, as licensor, and IESA, as licensee, in respect of the video game
called “Test Drive Unlimited” and the intellectual property and proprietary
rights associated therewith, as amended, amended and restated, supplemented or
otherwise modified from time to time with the prior consent of the
Administrative Agent.
     ‘TDU Trademark License Agreement’ means that certain Trademark License of
the Test Drive Franchise, dated as of November 8, 2007 between the Borrower, as
licensor, and IESA, as licensee, in respect of the video game called “Test Drive
Unlimited” and the trademarks associated therewith, as amended, amended and
restated, supplemented or otherwise modified from time to time with the prior
consent of the Administrative Agent.
     ‘Waiver and Second Amendment to Credit Agreement’ means the Waiver and
Second Amendment to Credit Agreement, dated as of November 6, 2007, among the
Borrower, the Administrative Agent and the Lenders party thereto.”.
          2. Section 6.01 is amended by amending and restating paragraph (e) as
follows:
     “(e) Indebtedness of the Borrower arising under TDU License Agreements;”.
          3. Section 6.02 is amended by amending and restating paragraph (c) as
follows:

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     “(c) Liens created to secure obligations arising under the TDU License
Agreements; provided that such Liens shall at all times be junior in priority
and right to the Liens under the Collateral Documents and shall be subject to
the terms of the Intercreditor Agreement; and”
          4. Section 6.07 is amended by amending and restating paragraph (e) as
follows:
     “(e) transactions pursuant to the TDU License Agreements.”.
          5. Section 6.08(b)(iv) is amended by amending and restating it as
follows:
     “(iv) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed under the TDU License Agreements or by any other agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, and”
          6. Article VII is amended by (i) deleting from paragraph (m)
“November 5, 2007” and substituting therefor “November 12, 2007”; and
(ii) inserting in paragraph (n) immediately before the semicolon at the end
thereof the following:
     “, or the Intercreditor Agreement or any provision thereof shall cease to
be in full force or effect (except in accordance with its terms), any of the
parties thereto (other than the Administrative Agent) shall deny or disaffirm
their respective obligations thereunder or any of the parties thereto (other
than the Administrative Agent) shall default in the due performance or
observance of any term, covenant or agreement on their part to be performed or
observed pursuant to the terms thereof”.
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.

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          2. As of November 6, 2007, the Borrower acknowledges and agrees that
it is indebted to the Lenders in the aggregate principal amount of
$10,343,439.95, which is the outstanding principal amount of the Revolving Loans
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 shall enter into an Intercreditor Agreement, in form
and substance satisfactory to the Administrative Agent, with IESA and the
Administrative Agent on or prior to the 5th Business Day following the date
hereof, or, if later, promptly, but no later than on or prior to the 1st
Business Day, following the execution and delivery thereof by the Administrative
Agent and IESA.
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 Second 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

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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 those set
forth on Schedule 3.03 to the Credit Agreement or for immaterial such
contraventions arising as a result of the execution, delivery or performance of
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 and the TDU
License Agreements) 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 (other than those set forth on
Schedule 3.03 of the Credit Agreement), 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. Except as set forth on Schedule 3.06 of the Credit Agreement, 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 Second Amendment Effective Date and which
remain in full force and effect on the Second 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 or are
waived (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.

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V. Conditions to Effectiveness. This Amendment shall become effective on the
date (the “Second 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 fully executed copy of the TDU License Agreements in the
form of Exhibit A annexed hereto and all other documents, agreements and
instruments executed or delivered in connection therewith, in each case, the
agreements shall be in full force and effect;
               (c) satisfactory evidence from the Borrower that it has received
not less than $5,000,000 pursuant to the TDU License Agreements;
               (d) 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;
               (e) copies, certified by the secretary or assistant secretary of
the Borrower, of 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) an opinion of counsel to the Borrower addressed to each of
the Administrative Agent and Lenders, dated as of the Second Amendment Effective
Date, in form and substance satisfactory to the Administrative Agent; and
               (g) 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
SECOND 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,

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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 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.
          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 Second 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    
 
           
 
      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:    
 
      Title: