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                                                                    Exhibit 10.1

                               As of June 30, 1997




GT Interactive Software Corp.
16 East 40th Street
New York, New York 10016
Attention:  Chief Financial Officer


Ladies and Gentlemen:

                  Reference is made to that certain Credit Agreement (the
"Credit Agreement") dated as of January 21, 1997 among GT Interactive Software
Corp., Republic National Bank of New York, individually and as agent, and The
First National Bank of Chicago as successor in interest to NBD Bank. Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings ascribed to them in the Credit Agreement.

1.                By signing this Letter Agreement, European American Bank and 
         First Union National Bank (collectively, the "New Banks") shall become
         signatories to the Credit Agreement and a "Bank" for all purposes of
         the Credit Agreement as of the First Amendment Effective Date (as
         defined in Section 6 hereof) with (a) the Commitment set forth opposite
         the name of such New Bank on the signature pages hereof, as such amount
         may be reduced from time to time pursuant to Section 2.07 of the Credit
         Agreement, and (b) the address, facsimile number or telex number set
         forth on the signature pages hereof.

2.                The parties hereto agree that the Credit Agreement is
         modified by:

         (a)      inserting immediately after the definition of "Borrowing"
                  contained in Section 1.01 of the Credit Agreement a definition
                  of "Borrowing Base" reading in its entirety as follows:

                  "'BORROWING BASE' means the lesser of (a) the aggregate amount
                  of Commitments of the Banks or (b) 50% of Consolidated
                  Accounts Receivable.";

         (b)      inserting immediately after the definition of "Commitments"
                  contained in Section 1.01 of the Credit Agreement a definition
                  of "Consolidated Accounts
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                  Receivable" reading in its entirety as follows:

                  "'CONSOLIDATED ACCOUNTS RECEIVABLE' means at any date the
                  total accounts receivable of the Borrower and its Consolidated
                  Subsidiaries for goods sold in the ordinary course of their
                  respective businesses to third parties that are not
                  Subsidiaries of the Borrower, determined on a consolidated
                  basis as of such date.";

         (c)      restating the definition of "Financing Documents" contained in
                  Section 1.01 of the Credit Agreement to read in its entirety
                  as follows:

                  "'FINANCING DOCUMENTS' means this Agreement, the Notes and the
                  Security Agreements.";

         (d)      inserting immediately after the definition of "Sale-Leaseback
                  Transaction" contained in Section 1.01 of the Credit Agreement
                  a definition of "Security Agreements" reading as follows:

                  "'SECURITY AGREEMENTS' means, collectively, the Security
                  Agreement between each of the Borrower, Humongous
                  Entertainment, Inc., WizardWorks Group, Inc., Formgen Inc., GT
                  Interactive Software Germany GmbH, Renegade Interactive France
                  S.A., G.T. Interactive Software (Europe) Limited and One Stop
                  Direct Limited, and the Agent, respectively, for the benefit
                  of the Banks, as at any time amended, pursuant to which the
                  Borrower and each such Subsidiary granted the Agent a security
                  interest in its accounts receivables and related collateral as
                  described therein to secure the obligations of the Borrower
                  hereunder and under the Notes as described therein.";

         (e)      inserting immediately before the period at the end of the
                  first sentence of Section 2.01 of the Credit Agreement a
                  proviso reading in its entirety as follows:

                  "; and the aggregate principal amount of the Loans plus the
                  Standby Letter of Credit Liabilities at any time outstanding
                  shall not exceed the Borrowing Base.";

         (f)      adding new subsections (c) and (d) to Section 2.10 of the
                  Credit Agreement reading in their entireties as follows:

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                  "(c) If at any time the aggregate principal amount of all
                  Loans and Standby Letter of Credit Liabilities outstanding
                  hereunder shall exceed the Borrowing Base, the Borrower shall
                  promptly prepay the portion of the aggregate principal amount
                  of the Loans then outstanding, if any, equal to such excess at
                  such time.";

                  (g) deleting the reference to "$15,000,000" in Section 2.13(b)
of the Credit Agreement and by substituting "$35,000,000 (of which Standby
Letter of Credit Liabilities shall not exceed $10,000,000)" therefor and by
inserting immediately before the period at the end of such sentence the
following:

                  "provided further that after each Letter of Credit is issued,
                  the aggregate amount of the Standby Letters of Credit
                  Liabilities plus the aggregate outstanding amount of all Loans
                  shall not exceed the Borrowing Base";


                  (h) inserting immediately after reference to "(c)" in Section
3.02(c) of the Credit Agreement the following:

                  "The Agent shall have received the most recent Receivables
                  Statement deliverable pursuant to Section 5.01(l) and other
                  information necessary to permit the computation of the
                  Borrowing Base and";

                  (i)  inserting before the semicolon in Section 3.02(c)
of the Credit Agreement the following:

                  "and the sum of the aggregate outstanding principal amount of
                  the Loans and the aggregate principal amount of the Standby
                  Letter of Credit Liabilities shall not exceed the Borrowing
                  Base";

                  (j) deleting reference to "and" at the end of Section 5.01(j)
of the Credit Agreement, deleting the reference to "." at the end of Section
5.01(k) of the Credit Agreement and by substituting "; and" therefor and by
adding a new clause (l) to Section 5.01 reading in its entirety as follows:

                  "(l) Before the 25th day of each month Borrower shall deliver
                  to the Agent a statement (a 'Receivables Statement'), in the
                  form attached hereto as Exhibit C, certified by a duly
                  authorized officer of the Borrower and setting forth, on a
                  consolidating basis,

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                  the (i) Consolidated Accounts Receivable of the Borrower and
                  (ii) the sales made in the prior month of the Borrower and
                  each Consolidated Subsidiary, as at and as of the last
                  Domestic Business Day of the prior month, which Receivables
                  Statement shall set forth the age of each account receivable
                  and the respective owner thereof.";

                  (k) deleting the reference to "and" at the end of Section 5.09
(l) of the Credit Agreement, by deleting reference to "1,000,000" contained in
Section 5.09(m) of the Credit Agreement and by substituting "$2,000,000"
therefor, by deleting the "." at the end of Section 5.09(m) of the Credit
Agreement and by substituting "; and" therefor and by adding a new subsection
(n) to Section 5.09 of the Credit Agreement reading in its entirety as follows:

                  "(n) Liens under the Security Agreements in favor of the Agent
                  for the benefit of the Banks.";

                  (l) restating Sections 5.11 and 5.12 of the Credit Agreement
to read in their entireties as follows:

                  "SECTION 5.11. Minimum Tangible Net Worth. The Borrower will
                  not permit Consolidated Tangible Net Worth as at December 31,
                  1996 to be less than $106,500,000, as at June 30, 1997 to be
                  less than $106,500,000 plus 25% of Consolidated Net Income for
                  the six-month period ending on June 30, 1997, as at December
                  31, 1997 to be less than $106,500,000 plus 25% of Consolidated
                  Net Income for the 12-month period ending on December 31,
                  1997, as at June 30, 1998 to be less than such December 31,
                  1997 required minimum amount plus 25% of Consolidated Net
                  Income for the six-month period ending on June 30, 1998 and as
                  at December 31, 1998 such December 31, 1997 required minimum
                  amount plus 25% of the Consolidated Net Income for the
                  12-month period ending on December 31, 1998.

                  "SECTION 5.12. Debt: Tangible Net Worth. The Borrower will not
                  permit the ratio of Consolidated Total Liabilities to
                  Consolidated Tangible Net Worth at the end of (a) any fiscal
                  quarter in 1997 (other than its first fiscal quarter) to
                  exceed 2.3 to 1.0 and (b) any fiscal quarter in 1998 to

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                  exceed 2.0 to 1.0.";

                  (m) restating Sections 5.14 and 5.15 of the Credit Agreement
to read in their entireties as follows:

                  "SECTION 5.14. Working Capital. The Borrower will not permit
                  Consolidated Working Capital (which term for the purpose of
                  this Section 5.14 shall be computed on a basis which excludes
                  the current portion of all outstanding Loans from Consolidated
                  Current Liabilities) at June 30, 1997 to be less than
                  $5,000,000, at September 30, 1997 to be less than $25,000,000,
                  at December 31, 1997 to be less than $50,000,000, at March 31,
                  1998 to be less than $15,000,000, at June 30, 1998 to be less
                  than $10,000,000, at September 30, 1998 to be less than
                  $25,000,000, and at December 31, 1998 to be less than
                  $50,000,000.

                  "SECTION 5.15. Current Ratio. The Borrower will not permit the
                  ratio of Consolidated Current Assets to Consolidated Current
                  Liabilities (which term, Consolidated Current Liabilities, for
                  the purposes of the computation of such ratio in clause (a)
                  below, shall exclude the current portion of all outstanding
                  Loans and which term, for the purposes of the computation of
                  such ratio in clause (b) below, shall include the amount of
                  all outstanding Loans and Standby Letter of Credit
                  Liabilities) (a) as at June 30, 1997 to be less than 1.0 to
                  1.0, as at September 30, 1997 and as at December 31, 1997 to
                  be less than 1.1 to 1.0, as at March 31, 1998 and June 30,
                  1998 to be less than 1.05 to 1.0, as at September 30, 1998 and
                  as at December 31, 1998 to be less than 1.1 to 1.0 and (b) as
                  at December 31, 1997 and as at December 31, 1998 to be less
                  than 1.0 to 1.0.";

                  (n) restating Section 5.17 of the Credit Agreement to read in
its entirety as follows:

                  "SECTION 5.17. Minimum Net Income. The Borrower will not
                  permit its Consolidated Net Income (which term for the
                  purposes of this Section shall be increased by the amount of
                  any deductions received by the Borrower and/or its
                  Subsidiaries which arise from the

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                  acquisition of research and development and all other
                  intangibles) for its fiscal years ending December 31, 1997 and
                  December 31, 1998 to be less than $25,000,000, and will not
                  permit its Consolidated Net Income for any two consecutive
                  quarters (whether or not in the same fiscal year) to be less
                  than $5,000,000.";

                  (o) inserting "except under the Security Agreements or"
immediately after the penultimate reference to "Affiliate" contained in Section
5.19 of the Credit Agreement;

                  (p) restating Sections 7.01 through 7.09 of the Credit
Agreement to read in their entireties as follows:

                  "SECTION 7.01. Appointment and Authorization. Each Bank
                  irrevocably appoints and authorizes the Agent to take such
                  action as agent on its behalf and to exercise such powers
                  under this Agreement, the Notes and the Security Agreements as
                  are delegated to the Agent by the terms hereof or thereof
                  together with all such powers as are reasonably incidental
                  thereto.

                  SECTION 7.02. Agent and Affiliates. RNB shall have the same
                  rights and powers under this Agreement as any other Bank and
                  may exercise or refrain from exercising the same as though it
                  were not the Agent, and RNB and its affiliates may accept
                  deposits from, lend money to, and generally engage in any kind
                  of business with the Borrower or any Subsidiary or affiliate
                  of the Borrower as if it were not the Agent.

                  SECTION 7.03. Action by Agent. The obligations of the Agent
                  hereunder and under the Security Agreements are only those
                  expressly set forth herein or therein. Without limiting the
                  generality of the foregoing, the Agent shall not be required
                  to take any action with respect to any Default hereunder,
                  except as expressly provided in Article 6, or with respect to
                  any Event of Default under any of the Security Agreements.

                  SECTION 7.04. Consultation with Experts. The Agent may consult
                  with legal counsel (who may be counsel for the Borrower),
                  independent public accountants and other experts selected

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                  by it and shall not be liable for any action taken or omitted
                  to be taken by it hereunder or under the Security Agreements
                  in good faith in accordance with the advice of such counsel,
                  accountants or experts.

                  SECTION 7.05. Liability of Agent. Neither the Agent nor any of
                  its affiliates nor any of their respective directors,
                  officers, agents or employees shall be liable for any action
                  taken or not taken by it as Agent in connection herewith or
                  the Security Agreements (i) with the consent or at the request
                  of the Required Banks or (ii) in the absence of its own gross
                  negligence or willful misconduct. Neither the Agent nor any of
                  its affiliates nor any of their respective directors,
                  officers, agents or employees shall be responsible for or have
                  any duty to ascertain, inquire into or verify (i) any
                  statement, warranty or representation made in connection with
                  this Agreement or the Security Agreements or any borrowing
                  hereunder; (ii) the performance or observance of any of the
                  covenants or agreements of the Borrower hereunder or of the
                  Borrower or any Subsidiary under the Security Agreement to
                  which it is a party; (iii) the satisfaction of any condition
                  specified in Article 3, except receipt of items required to be
                  delivered to the Agent; or (iv) the validity, effectiveness or
                  genuineness of this Agreement, the Notes, the Security
                  Agreements or any other instrument or writing furnished in
                  connection herewith or therewith. The Agent shall not incur
                  any liability hereunder or under the Security Agreements by
                  acting in reliance upon any notice, consent, certificate,
                  statement, or other writing (which may be a bank wire, telex,
                  facsimile transmission or similar writing) believed by it to
                  be genuine or to be signed by the proper party or parties.

                  SECTION 7.06. Indemnification. Each Bank shall, ratably in
                  accordance with its Commitment, indemnify the Agent, its
                  affiliates and their respective directors, officers, agents
                  and employees (to the extent not reimbursed by the Borrower)
                  against any cost, expense (including counsel fees and
                  disbursements incurred by such indemnitees in

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                  any action; suit or proceeding between such indemnitees and
                  such indemnifying Bank or between such indemnitees and any
                  third party or otherwise), claim, demand, action, loss or
                  liability (except such as result from such indemnitees' gross
                  negligence or willful misconduct) that such indemnitees may
                  suffer or incur in connection with this Agreement or the
                  Security Agreements or any action taken or omitted by such
                  indemnitees hereunder or thereunder.


                  SECTION 7.07. Credit Decision. Each Bank acknowledges that it
                  has, independently and without reliance upon the Agent or any
                  other Bank, and based on such documents and information as it
                  has deemed appropriate, made its own credit analysis and
                  decision to enter into this Agreement. Each Bank also
                  acknowledges that it will, independently and without reliance
                  upon the Agent or any other Bank, and based on such documents
                  and information as it shall deem appropriate at the time,
                  continue to make its own credit decisions in taking or not
                  taking any action under this Agreement or the Security
                  Agreements.

                  SECTION 7.08. Successor Agent. The Agent may resign as agent
                  hereunder or under the Security Agreements at any time by
                  giving notice thereof to the Banks and the Borrower. Upon any
                  such resignation, the Required Banks shall have the right to
                  appoint a successor Agent reasonably acceptable to Borrower.
                  If no successor Agent shall have been so appointed by the
                  Required Banks, and shall have accepted such appointment,
                  within 30 days after the retiring Agent gives notice of
                  resignation, then the retiring Agent may, on behalf of the
                  Banks, appoint a successor Agent reasonably acceptable to
                  Borrower, which shall be a commercial bank organized or
                  licensed under the laws of the United States of America or of
                  any State thereof and having a combined capital and surplus of
                  at least $100,000,000. Upon the acceptance of its appointment
                  as Agent hereunder or under the Security Agreements by a
                  successor Agent, such successor Agent shall thereupon succeed
                  to and become vested with all the rights and

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                  duties of the retiring Agent, and the retiring Agent shall be
                  discharged from its duties and obligations hereunder and
                  thereunder. After any retiring Agent's resignation hereunder
                  or under the Security Agreements as Agent, the provisions of
                  this Article shall inure to its benefit as to any actions
                  taken or omitted to be taken by it while it was Agent.

                  SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent
                  for its own account fees in the amounts and at the times
                  previously agreed upon between the Borrower and the Agent.";

                  (q) deleting "or" at the end of Section 9.05(iii) of the
Credit Agreement and by deleting the "." at the end of Section 9.05(iv) of the
Credit Agreement and by substituting the following therefor:

                  "or (v) release any security interest created under the
                  Security Agreements.";

                  (r) adding a new Section 9.13 to the Credit Agreement
reading in its entirety as follows:

                  "SECTION 9.13. Further Actions. Although the Agent may not
                  initially have a perfected security interest pursuant to the
                  Security Agreements in and to accounts receivable of any
                  Subsidiary of the Borrower organized in a jurisdiction outside
                  of the United States of America (a "Foreign Subsidiary"), upon
                  the request of the Agent (which request the Agent shall make
                  upon the written demand of the Required Banks), the Borrower
                  shall, and shall cause each of the Foreign Subsidiaries to, at
                  its sole cost and expense, make execute, endorse, acknowledge,
                  file or refile and/or deliver to the Agent from time to time
                  such lists, descriptions and designations of the collateral
                  covered by the Security Agreement to which such Foreign
                  Subsidiary is a party, vouchers, invoices, schedules,
                  confirmatory assignments, supplements, additional security
                  agreements, conveyances, financing statements, transfer
                  endorsements, powers of attorney, certificates, reports and
                  other assurances or instruments and take such further steps
                  relating to the collateral covered by such Security Agreement
                  and other

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                  property or rights covered by the security interest thereby
                  granted, which the Agent deems appropriate or advisable to
                  exercise and enforce its rights and remedies thereunder with
                  respect to any collateral subject thereto and to perfect,
                  preserve or protect the security interest in the collateral
                  created and granted by such Security Agreement, including such
                  opinion of counsel of such Foreign Subsidiary regarding such
                  matters as the Agent may request (at the sole cost and expense
                  of the Borrower)."; and

                  (s) deleting the reference to "$25,000,000" contained on the
signature page of the Credit Agreement opposite the name of RNB and substituting
"$22,500,000" therefor; and

                  (t) adding Exhibit C hereto as Exhibit C to the Credit
Agreement.

3.       The Borrower shall pay to the Agent, for the account of the New Banks,
         ratably in proportion to their Commitments, on the First Amendment
         Effective Date, a non-refundable facility fee in an amount equal to 1/4
         of 1% of the aggregate amount of the Commitments of the New Banks.
         There will be no adjustment in respect of facility fees heretofore
         paid.

         (a)      The New Banks shall participate in fees payable under Sections
                  2.06(a), (b) and (d) of the Credit Agreement from and after
                  the First Amendment Effective Date.

         (b)      The Borrower shall pay to the Agent on the First Amendment
                  Effective Date a completion fee in accordance with a letter
                  agreement between the Borrower and the Agent.

4.       Except as modified hereby, the Credit Agreement remains unmodified and
         in full force and effect.

5.       In addition to its obligations under the Credit Agreement the Borrower
         agrees to pay all reasonable out-of-pocket expenses of the Banks and
         the Agent, including the reasonable fees and disbursements of Kronish,
         Lieb, Weiner & Hellman, LLP, special counsel to the Banks and the
         Agent, in connection with the preparation of this letter agreement, the
         Security Agreements, the UCC Financing Statements and the filing
         thereof and any additional legal fees of such firm or any foreign
         counsel to the Agent in connection with matters referred to in Section
         9.13 to the Credit Agreement, as herein amended.

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6.       This letter agreement shall become effective (the "First Amendment
         Effective Date") upon the execution and delivery to the Agent by the
         Borrower of a copy of this letter agreement, countersigned by the
         Borrower as indicated below, the Security Agreements, the Notes payable
         to each New Bank dated the First Amendment Effective Date and an
         opinion of Messrs. Kramer, Levin, Naftalis & Frankel, counsel to the
         Borrower and its Subsidiaries and local counsel satisfactory to the
         Agent, dated the First Amendment Effective Date in form and substance
         satisfactory to the Agent.

7.       On the First Amendment Effective Date, (a) the Borrower shall be deemed
         to have prepaid the Loans made by the Banks (other than the New Banks),
         without any prepayment penalty or premium or cost under Section 2.11 of
         the Credit Agreement, and the New Banks shall be deemed to have made
         Loans, in such amount that after giving effect to such deemed
         transactions the Loans by the Banks shall be proportionate to their
         Commitments and (b) the Banks (other than the New Banks) shall be
         deemed, without further action by any party hereto, to have sold to the
         New Banks, and the New Banks shall be deemed, without further action by
         any party hereto, to have purchased from the Banks (other than the New
         Banks), a participation in the Letters of Credit and the related Letter
         of Credit Liabilities in such amount that after giving effect to such
         deemed transactions the participations of the Banks in such Letters of
         Credit and the related Letter of Credit Liabilities shall be
         proportionate to their Commitments.

8.       This letter agreement may be executed in two or more counterparts, each
         of which shall constitute an original, but all of which, when taken
         together, shall constitute but one agreement.

9.       This letter agreement shall be governed in all respects by the laws of
         the State of New York.

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                                       REPUBLIC NATIONAL BANK OF NEW YORK
                                       as a Lender and as Issuing Bank


                                       By: /s/ Estelle Dichazi
                                          -------------------------------------
                                       Name:  Estelle Dichazi
                                              Title:  Senior Vice President



                                       THE FIRST NATIONAL BANK OF CHICAGO
                                       (as successor in interest to NBD BANK)
                                       as Authorized Agent 
                                        

                                       By: /s/ Robert E. O'Connell
                                          -------------------------------------
                                       Name:  Robert E. O'Connell
                                              Title:  Vice President



                                       REPUBLIC NATIONAL BANK OF NEW YORK, as 
                                           Agent



                                       By: /s/ Estelle Dichazi
                                          -------------------------------------
                                       Name:  Estelle Dichazi
                                              Title: Senior Vice President

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$15,000,000                            FIRST UNION NATIONAL BANK


                                       By: /s/ David Ring
                                          -------------------------------------
                                          Name:  David Ring
                                          Title: Vice President

                                          Domestic Lending Office:
                                          50 Main Street
                                          11th Floor
                                          White Plains, New York 10606
                                          Attention: Middle Market Lending
                                          Attn: David Ring, Vice President
                                          Facsimile: (914) 286-5001

                                          EuroDollar Lending Office
                                          London, England


$12,500,000                            EUROPEAN AMERICAN BANK


                                       By: /s/ Peter J. McGovern
                                          ----------------------------------
                                          Name:   Peter J. McGovern
                                          Title: Vice President

                                          Domestic Lending Office:
                                          335 Madison Avenue
                                          New York, New York 10017
                                          Attention: NYC Corporate Division
                                          Attn: Peter J. McGovern, Vice 
                                                       President
                                          Facsimile:  (212) 503-2667

                                             


ACCEPTED AND AGREED TO:

GT INTERACTIVE SOFTWARE CORP.




BY: /s/ Andrew Gregor
   -------------------------------------
         Name:  Andrew Gregor
         Title: Chief Financial Officer