Document:

EX-10.1

 

	 	 	 	 	 

EXHIBIT 10.1

SIXTH AMENDMENT TO

FOURTH AMENDED AND RESTATED LOAN AGREEMENT

     THIS SIXTH AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT (this “Amendment”)
is executed and entered into as of December 4, 2007, by and among ASTA FUNDING ACQUISITION I, LLC,
a Delaware limited liability company, ASTA FUNDING ACQUISITION II, LLC, a Delaware limited
liability company, PALISADES COLLECTION, L.L.C., a Delaware limited liability company, PALISADES
ACQUISITION I, LLC, a Delaware limited liability company, PALISADES ACQUISITION II, LLC, a Delaware
limited liability company, PALISADES ACQUISITION IV, LLC, a Delaware limited liability company,
PALISADES ACQUISITION V, LLC, a Delaware limited liability company, PALISADES ACQUISITION VI, LLC,
a Delaware limited liability company, PALISADES ACQUISITION VII, LLC, a Delaware limited liability
company, PALISADES ACQUISITION VIII, LLC, a Delaware limited liability company, PALISADES
ACQUISITION IX, LLC, a Delaware limited liability company, PALISADES ACQUISITION X, LLC, a Delaware
limited liability company, CLIFFS PORTFOLIO ACQUISITION I, LLC, a Delaware limited liability
company, SYLVAN ACQUISITION I, LLC, a Delaware limited liability company, and OPTION CARD, LLC, a
Colorado limited liability company (sometimes collectively referred to herein as
“Borrowers” and individually as a “Borrower”); ASTA FUNDING, INC., a Delaware
corporation, COMPUTER FINANCE, LLC, a Delaware limited liability company, ASTAFUNDING.COM, LLC, a
Delaware limited liability company, ASTA COMMERCIAL, LLC, a Delaware limited liability company, and
VATIV RECOVERY SOLUTIONS, LLC, a Texas limited liability company (collectively,
“Guarantors”); ISRAEL DISCOUNT BANK OF NEW YORK, a New York banking corporation
(“IDB”), as collateral agent for itself and the lenders signatory hereto from time to time
(together with any successor collateral agent appointed pursuant to Section 9.7, the
“Collateral Agent”), as administrative agent (together with any successor administrative
agent appointed pursuant to Section 9.7, the “Administrative Agent”, and together with the
Collateral Agent, the “Agents”), and as co-lead arranger; MIDDLE MARKET FINANCE, a division
of Merrill Lynch Business Financial Services Inc. (“Merrill Lynch”), as co-lead arranger
and as co-administrative agent; and the Lenders (as defined below).

RECITALS:

     A. Borrowers and Guarantor (collectively, the “Credit Parties”), along with
Administrative Agent and Lenders entered into a certain Fourth Amended and Restated Loan and
Security Agreement dated as of July 11, 2006 (as amended, modified, supplemented or restated from
time to time, the “Credit Agreement”). All capitalized terms used in this Amendment,
unless specifically defined herein, shall have the meanings attributed to them in the Credit
Agreement.

     B. The Credit Parties have requested that the Lenders temporarily increase the total Revolving
Loan Commitment from $175,000,000 to $185,000,000.

 

 

AGREEMENT:

     For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Credit Parties, Administrative Agent and Lenders agree as follows:

SECTION 1. ACCURACY OF RECITALS.

     The Credit Parties acknowledge, represent, warrant and agree that the Recitals stated above
are true and complete in all respects.

SECTION 2. MODIFICATION.

     2.1 Increase in Revolving Loan Commitment.

     A. The Revolving Loan Commitment is hereby increased on a temporary basis by $10,000,000 (the
“Temporary Line Increase Amount”). As of the date of this Amendment, the total Revolving
Loan Commitment shall be in an aggregate amount of $185,000,000, which amount shall be reduced by
$10,000,000, to an aggregate amount of $175,000,000, on February 29, 2008. In the event the
Temporary Line Increase Amount is not fully reduced to zero by February 29, 2008, the Revolving
Loan Commitment shall nevertheless be reduced to $175,000,000 on February 29, 2008 and the then
outstanding portion of the Temporary Line Increase Amount shall be reduced over a six (6) month
period in substantially equal monthly amounts, with such reductions being made on the first day of
each month and applied on a pro-rata basis based upon the Temporary Line Increase Amount of each
such Lender. Interest shall continue to accrue on the outstanding portion of the Temporary Line
Increase Amount until it has been reduced to zero. All references in the Credit Agreement to
“Revolving Loan Commitment” shall mean the Revolving Loan Commitment as increased by this
Amendment.

B. The definition of “Revolving Loan Commitment” as contained in Annex A attached to the Credit
Agreement is hereby amended by deleting the definition in its entirety and replacing it with the
following new definition:

     “Revolving Loan Commitment” means (a) as to any Lender, the aggregate
commitment of such Lender to make Advances as set forth on Annex J to the Agreement
or in the most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Advances which aggregate commitment
shall not exceed the following amounts: (1) ONE HUNDRED AND EIGHTY-FIVE MILLION DOLLARS
($185,000,000) FROM DECEMBER 4, 2007 THROUGH FEBRUARY 29, 2008 AND (2) ONE HUNDRED
SEVENTY-FIVE MILLION DOLLARS ($175,000,000) FROM FEBRUARY 29, 2008 AND THEREAFTER.

C. Annex J attached to the Credit Agreement is hereby deleted in its entirety and replaced
with the Replacement Annex J attached to this Amendment as Exhibit A.

D. To further evidence the increase in the Revolving Loan Commitment, the Borrowers, as obligors,
shall execute and deliver to each of BMO Capital Markets Financing, Inc. and Israel Discount Bank
of New York an Amended and Restated Revolving Note dated the date of this

 

 

Amendment to evidence the adjusted Revolving Loan Commitment of such Revolving Lender. The Amended
and Restated Revolving Note shall be in the principal amount of the adjusted Revolving Loan
Commitment of each of BMO Capital Markets Financing, Inc. and Israel Discount Bank of New York and
shall be substantially in the form of the original Revolving Notes.

     2.2 Use of Proceeds. Section 1.1(a) of the Loan Agreement is of the Credit Agreement is
amended by the addition of new subsection (vi) to read in its entirety as follows:

     (vi) Notwithstanding anything contained in this Section 1.1(a) or otherwise in this
Agreement to the contrary, use of Advances to finance any Portfolio purchase from Palisades
Acquisition XVI, LLC shall require the consent of all Lenders.

     2.3 No Other Modifications. Except as otherwise specifically modified by this Amendment, all
terms, conditions, covenants, rights, duties, obligations and liabilities of the Credit Parties
under the Credit Agreement remain in full force and effect and unmodified.

SECTION 3. REPRESENTATIONS AND WARRANTIES.

     The execution and delivery of this Amendment and the documents and instruments contemplated by
this Amendment have been duly authorized by all requisite action by or on behalf of the members of
the Credit Parties.

SECTION 4. FEES.

     The Borrowers shall pay to Administrative Agent, for the account of the Lenders, the fees
described in the fee letter of even date herewith.

SECTION 5. COVENANTS.

     5.1 This Amendment shall be governed by the terms and provisions of the Credit Agreement.

     5.2 In the event of a conflict between the terms of this Amendment and the terms of the Credit
Agreement, the terms of this Amendment shall govern and control.

     5.3 The Credit Parties hereby confirm and agree that the terms, conditions, covenants,
guaranties, assurances, promises and provisions contained in the Loan Documents to which each is a
party remain in full force and effect without amendment or modification as a result of this
Amendment and that the obligations, liabilities and duties of the Credit Parties remain unimpaired
as a result of this Amendment and are in full force and effect.

     5.4 In order for this Amendment to become effective, the following conditions must be
satisfied and the following items must be received by Administrative Agent in form and substance
satisfactory to Administrative Agent on or prior to the date that the Credit Parties shall execute
and deliver this Amendment to Lenders:

 

 

A. Amended and Restated Revolving Notes. Duly executed originals of Amended and Restated
Revolving Notes payable to the order of BMO Capital Markets Financing, Inc. and Israel Discount
Bank of New York dated the date of the Amendment.

B. Other Documents. Such other information, confirmations, certificates, documents and
agreements respecting any Credit Party as Administrative Agent may, in its reasonable discretion,
request.

C. Amendment Fee. Administrative Agent, shall have received, on behalf of Lenders, an
executed copy of the fee letter and payment of the amendment fee described therein.

SECTION 6. BINDING EFFECT.

     The Credit Agreement as modified herein shall be binding upon and shall inure to the benefit
of the members of the Credit Parties and their successors and assigns.

SECTION 7. COUNTERPART EXECUTION; FACSIMILES.

     This Amendment may be executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same document. Signature pages may
be detached from the counterparts and attached to a single copy of this Amendment to physically
form one document. Signatures may be exchanged by facsimile, with the original signature to
follow. Each party to this Amendment agrees to be bound by its own faxed signature and to accept
the faxed signature of the other parties to this Amendment.

[SIGNATURES PAGES TO FOLLOW]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above
written.

	 	 	 	 	 	 	 
	BORROWERS:	 	ASTA FUNDING ACQUISITION I, LLC	 	 
	 	 	ASTA FUNDING ACQUISITION II, LLC	 	 
	 	 	PALISADES COLLECTION, L.L.C.	 	 
	 	 	CLIFFS PORTFOLIO ACQUISITION I, LLC	 	 
	 	 	PALISADES ACQUISITION I, LLC	 	 
	 	 	PALISADES ACQUISITION II, LLC	 	 
	 	 	PALISADES ACQUISITION IV, LLC	 	 
	 	 	PALISADES ACQUISITION V, LLC	 	 
	 	 	PALISADES ACQUISITION VI, LLC	 	 
	 	 	PALISADES ACQUISITION VII, LLC	 	 
	 	 	PALISADES ACQUISITION VIII, LLC	 	 
	 	 	PALISADES ACQUISITION IX, LLC	 	 
	 	 	PALISADES ACQUISITION X, LLC	 	 
	 	 	SYLVAN ACQUISITION I, LLC	 	 
	 	 	OPTION CARD, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mitchell Cohen
 

	 	 
	 	 	Name: Mitchell Cohen	 	 
	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	GUARANTORS:	 	ASTA FUNDING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mitchell Cohen
 

	 	 
	 	 	Name: Mitchell Cohen	 	 
	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	COMPUTER FINANCE, LLC	 	 
	 	 	ASTAFUNDING.COM, LLC	 	 
	 	 	ASTA COMMERCIAL, LLC	 	 
	 	 	VATIV RECOVERY SOLUTIONS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	s/ Mitchell Cohen
 

	 	 
	 	 	Name: Mitchell Cohen	 	 
	 	 	Title: Manager	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	AGENT:	 	ISRAEL DISCOUNT BANK OF NEW YORK,	 	 
	 	 	as Administrative Agent, Collateral Agent and	 	 
	 	 	Co-Lead Arranger	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Fainelli
 

	 	 
	 	 	Name: Robert J. Fainelli	 	 
	 	 	Title: First Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James Jordan
 

	 	 
	 	 	Name: James Jordan	 	 
	 	 	Title: First Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	 	 	MIDDLE MARKET FINANCE, a division of	 	 
	 	 	MERRILL LYNCH BUSINESS FINANCIAL	 	 
	 	 	SERVICES INC., as Co-Administrative Agent and	 	 
	 	 	Co-Lead Arranger	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Leonard Maddox
 

	 	 
	 	 	Name: Leonard Maddox	 	 
	 	 	Title: Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	LENDERS:	 	ISRAEL DISCOUNT BANK OF NEW YORK,	 	 
	 	 	as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Fainelli
 

	 	 
	 	 	Name: Robert J. Fainelli	 	 
	 	 	Title: First Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James Jordan
 

	 	 
	 	 	Name: James Jordan	 	 
	 	 	Title: First Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	 	 	MIDDLE MARKET FINANCE, a division of	 	 
	 	 	MERRILL LYNCH BUSINESS FINANCIAL	 	 
	 	 	SERVICES INC., as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Leonard Maddox
 

	 	 
	 	 	Print Name: Leonard Maddox	 	 
	 	 	Print Title: Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	 	 	BMO CAPITAL MARKETS FINANCING, INC.,

as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert G. Bomben
 

	 	 
	 	 	Print Name: Robert G. Bomben	 	 
	 	 	Print Title: Director	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	 	 	BANK LEUMI USA, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mary Ellen Bianco
 

	 	 
	 	 	Print Name: Mary Ellen Bianco	 	 
	 	 	Print Title: Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	 	 	THE BERKSHIRE BANK, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ira A. Mermelstein
 

	 	 
	 	 	Print Name: Ira A. Mermelstein	 	 
	 	 	Print Title: Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	 	 	SIGNATURE BANK, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. D’Antona
 

	 	 
	 	 	Print Name: Thomas J. D’Antona	 	 
	 	 	Print Title: Senior Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

	 	 	 	 	 	 	 
	 	 	PROVIDENT BANK, as Lender	 	 
	 
	 

	 	By:
	 	/s/ Ronald Romco
 

	 	 
	 	 	Print Name: Ronald Romco	 	 
	 	 	Print Title: Vice President	 	 

Sixth Amendment to Fourth Amended and Restated Loan Agreement

 

 

EXHIBIT A

TO SIXTH AMENDMENT TO

FOURTH AMENDED AND RESTATED LOAN AGREEMENT

REPLACEMENT ANNEX J 

(from Annex A – Commitments definition)

to

FOURTH AMENDED AND RESTATED LOAN AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Temporary	 	Adjusted
	 	 	Revolving Loan	 	Line Increase	 	Revolving Loan
	Lender	 	Commitment	 	Amount	 	Commitment
	Israel Discount Bank of New York
	 	$	45,000,000	 	 	$	5,000,000	 	 	$	50,000,000	 
	Middle Market Finance, a
division of Merrill Lynch
Business Financial Services
Inc.
	 	$	30,000,000	 	 	 	 	 	 	$	30,000,000	 
	Bank Leumi USA
	 	$	20,000,000	 	 	 	 	 	 	$	20,000,000	 
	BMO Capital Markets Financing,
Inc.
	 	$	35,000,000	 	 	$	5,000,000	 	 	$	40,000,000	 
	The Berkshire Bank
	 	$	10,000,000	 	 	 	 	 	 	$	10,000,000	 
	Signature Bank
	 	$	20,000,000	 	 	 	 	 	 	$	20,000,000	 
	Provident Bank
	 	$	15,000,000	 	 	 	 	 	 	$	15,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	175,000,000	 	 	$	10,000,000	 	 	$	185,000,000EX-10.1

 

EXHIBIT 10.1

EXECUTION COPY

GLOBAL MEMORANDUM OF UNDERSTANDING 

REGARDING RESTRUCTURING OF ATARI, INC.

     This GLOBAL MEMORANDUM OF UNDERSTANDING REGARDING RESTRUCTURING OF ATARI, INC. (this “Global
MOU”) is made this ___day of December, 2007, between Infogrames Entertainment S.A., a company
organized under the laws of France (“IESA”) and Atari, Inc., a Delaware corporation (“Atari”).

     WHEREAS, IESA holds a majority interest in Atari and IESA and Atari are parties to several
agreements as further identified below concerning, among other things, the publishing and
distribution of certain interactive entertainment software (the “Products”) and the provision of
corporate and management services;

     WHEREAS, IESA and Atari are parties to that certain Distribution Agreement dated as of October
2, 2000, as amended and supplemented from time to time (the “2000 Distribution Agreement”),
pursuant to which IESA granted to Atari the right to distribute, publish and market in North
America (i.e., the United States, Canada and their territories and possessions) Products owned or
controlled by IESA in exchange for the consideration set forth therein;

     WHEREAS, IESA and Atari are parties to that certain Distribution Agreement dated as of
December 16, 1999, as amended and supplemented from time to time (the “1999 Distribution Agreement”
and together with the 2000 Distribution Agreement, the “Distribution Agreements”), pursuant to
which Atari granted to IESA the right to distribute, publish and market in all countries comprising
Europe, Products owned or controlled by Atari in exchange for the consideration set forth therein;

     WHEREAS, IESA and Atari are parties to that certain Management Services Agreement dated as of
March 31, 2006, pursuant to which IESA agreed to provide certain services to Atari in exchange for
the consideration set forth therein (the “Management Services Agreement”);

     WHEREAS, IESA and Atari are parties to that certain Services Agreement dated as of March 31,
2006, pursuant to which Atari agreed to provide certain services to IESA for the consideration set
forth therein (the “Services Agreement” and together with the Management Services Agreement, the
“Existing Intercompany Services Agreements”);

     WHEREAS, IESA and Atari are parties to that certain Production Services Agreement dated as of
March 31, 2006 (“PSA”) pursuant to which Atari agreed to furnish certain production services to
IESA as identified therein for the consideration set forth therein;

     WHEREAS, as of the date hereof, the Distribution Agreements, the Services Agreements and the
PSA remain in full force and effect;

     WHEREAS, IESA, Atari and Atari Interactive, Inc., a Delaware corporation and a wholly owned
subsidiary of IESA (“Interactive”), are parties to that certain Trademark License Agreement dated
as of September 4, 2003, as amended by Amendment No. 1 Trademark License

 

 

Agreement dated as of August 22, 2005 (the “Trademark License”), pursuant to which Interactive
licenses certain trademarks to Atari;

     WHEREAS, Atari and FUNimation Productions, Ltd., a Texas limited partnership (“FUNimation”),
are parties to that certain Sublicense Agreement dated October 27, 1999 (the “1999 FUNimation
Agreement”), and that certain Sublicense Agreement, dated December 31, 2004 (the “2004 FUNimation
Agreement”), pursuant to which FUNimation granted to Atari the right to distribute in certain
territories certain Products owned or controlled by FUNimation;

     WHEREAS, Atari derives a significant portion of its revenues from the distribution of products
under the 1999 FUNimation Agreement and 2004 FUNimation Agreement;

     WHEREAS, pursuant to a letter dated October 19, 2007 from FUNimation to Atari, FUNimation
purported to terminate each of the 1999 FUNimation Agreement and the 2004 FUNimation Agreement for
the reasons stated therein (the “Termination Letter”);

     WHEREAS, Atari and FUNimation are parties to that certain agreement dated as of April 25,
2003, as amended, pursuant to which FUNimation licenses to Atari certain rights with respect to Yu
Yu Hakusho (the “YYH Agreement”);

     WHEREAS, pursuant to an invoice dated June 18, 2007, and a corrected invoice dated July 6,
2007 (collectively, the “Invoices”), FUNimation has asserted that Atari owes FUNimation and/or Fuji
Creative Corporation certain outstanding royalty payments under the YYH Agreement with respect to
Yu Yu Hakusho (the “YYH Claims”);

     WHEREAS, following its receipt of the Termination Letter and Invoices, Atari and FUNimation
engaged in good faith negotiation in an effort to resolve the matters raised in the Termination
Letter and Invoices, which negotiations resulted in the execution by Atari and FUNimation of the
DBZ Settlement Agreement and Release dated as of the date hereof (the “DBZ Settlement Agreement”)
and the YYH Settlement Agreement and Release dated as of the date hereof (the “YYH Settlement
Agreement” and together with the DBZ Settlement Agreement, the “Settlement Agreements”) true and
correct copies of which are annexed hereto as Exhibits E and F, respectively (the “Settlement
Agreements”);

     WHEREAS, pursuant to the DBZ Settlement Agreement, among other things, Atari has agreed to pay
to FUNimation $2,706,546.52 million representing accrued and unpaid royalties and reasonable
auditor’s and attorneys’ fees incurred by FUNimation (the “DBZ Settlement Payment”), in exchange
for which, among other things, FUNimation has agreed to withdraw the Termination Letter and give
Atari the releases and other consideration set forth therein;

     WHEREAS, pursuant to the YYH Settlement Agreement, among other things, Atari has agreed to pay
to FUNimation $338,084.66 in settlement of the YYH Claims (the “YYH Settlement Payment” and
together with the DBZ Settlement Payment, the “Settlement Payments”) in exchange for which, among
other things, FUNimation has agreed to give Atari the releases and other consideration set forth
therein;

2

 

     WHEREAS, it is a condition to the effectiveness of the Settlement Agreements that IESA agree
to issue in favor of FUNimation a limited reimbursement in the event Atari becomes the subject of a
proceeding under Title 11 of the United States Code (the “Bankruptcy Code”) in which Atari, any
trustee or third party with standing seeks to avoid and recover the Settlement Payments;

     WHEREAS, Atari is engaged in a restructuring of its finances and business operations in an
effort to stabilize its business and return it to profitability (the “Restructuring”);

     WHEREAS, in connection with its Restructuring, Atari has developed a business plan under which
Atari will function primarily as a distributor of products developed by third-parties or with
respect to which, third-parties hold the exploitation rights, and will no longer be involved in the
development and production of its own Products (the “Business Plan”);

     WHEREAS, a copy of Atari’s short term budget and projections for fiscal year 2009, underlying
the Business Plan are annexed hereto as Schedule 1;

     WHEREAS, the budget and projections have been prepared by management in good faith based on
assumptions and projections believed by management to be reasonable in all material respects as of
the date hereof;

     WHEREAS, the implementation of the Business Plan requires substantial modifications and
reworking of the existing agreements between IESA and Atari, including the Distribution Agreements,
the Existing Intercompany Services Agreements and the termination of the PSA;

     WHEREAS, the consummation of the Settlement Agreement is an integral component of the Business
Plan;

     WHEREAS, to execute the Business Plan and satisfy its obligations under the Settlement
Agreement, Atari will require a waiver and amendment to the Credit Agreement (as defined below),
substantially in the form annexed hereto as Exhibit H;

     WHEREAS, Atari has requested IESA’s assistance and support with respect to the modification
and reworking of the intercompany agreements and that IESA furnish the limited reimbursement
required under the Settlement Agreement;

     WHEREAS, subject to the terms and conditions set forth herein, IESA has agreed to provide such
assistance and support and to enter into the limited reimbursement required under the Settlement
Agreement; and

     WHEREAS, IESA and Atari desire to enter into this Global MOU to set forth the parties
respective obligations in furtherance of Atari’s Restructuring and Business Plan.

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, IESA and Atari hereby agree as follows:

3

 

     1. Distribution Agreements: On or before December ___, 2007 (the “Execution
Date”), IESA and Atari shall execute and deliver the Short Form Distribution Agreement, in
substantially the form annexed hereto as Exhibit A. Among other things, the Short
Form Distribution Agreement shall, in accordance with the terms thereof, terminate, supercede
and replace the Distribution Agreements and shall provide the terms and conditions under which
Atari will act as IESA’s exclusive distributor in the United States and Canada for certain
Products developed by or on behalf of IESA, the rights to which are owned or licensed to IESA.

     2. Intercompany Services Agreement: On or before the Execution Date, IESA,
Interactive, Humongous, Inc. and Atari shall execute and deliver the Intercompany Services
Agreement, in substantially the form annexed hereto as Exhibit B. Among other things,
the Intercompany Services Agreement, shall in accordance with the terms thereof, terminate,
supersede and replace the Existing Intercompany Services Agreements.

     3. Termination and Transfer of Assets Agreement. On or before the Execution
Date, IESA, Interactive and Atari shall execute and deliver the Termination and Transfer of
Assets Agreement, in substantially the form annexed hereto as Exhibit C. Among other
things, the Termination and Transfer and Assets Agreement provides for the termination of the
PSA in accordance with the terms thereof.

     4. QA Services Agreement. On or before the Execution Date, IESA, Interactive,
Humongous, Inc. and Atari shall execute and deliver the QA Services Agreement, in
substantially the form annexed hereto as Exhibit D. Among other things, the QA
Services Agreement shall provide for the furnishing by Atari of certain quality assurance
services.

     5. Settlement Agreements. Atari represents and warrants that fully executed and
true and correct copies of the DBZ Settlement Agreement and YYH Settlement Agreement are
annexed hereto as Exhibit E and Exhibit F, respectively. Atari expressly
acknowledges, that in exchange for the Settlement Payments, it will receive equivalent and
contemporaneous value under the Settlement Agreements, including but not limited to, the
withdrawal of the Termination Letter, the resolution of the claims asserted in the Termination
Letter and Invoices, certain amendments to the 2004 FUNimation Agreement, and the releases set
forth in the Settlement Agreements. Atari further represents and warrants that upon the full
execution and delivery of the FUNimation Reimbursement (as defined below) by IESA and
FUNimation, the Settlement Agreements will be in full force and effect.

     6. FUNimation Reimbursement Agreement. On the Effective Date (as defined below),
IESA will execute the reimbursement contemplated by the Settlement Agreement in favor of
FUNimation in the form annexed hereto as Exhibit G (the “FUNimation Reimbursement”).
The FUNimation Reimbursement shall be of no force and effect, unless and until, it is executed
by FUNimation and delivered to IESA by FUNimation.

     7. Conditions to Effectiveness. IESA and Atari acknowledge and agree that none
of the transactions contemplated by this Global MOU, including the Short Form

4

 

Distribution Agreement, the Intercompany Services Agreement, the Termination and Transfer
of Assets Agreement and the QA Services Agreements, shall be effective unless and until (i)
each such agreement shall have been executed and delivered by the parties hereto and any other
parties thereto and delivered to the other party or parties, as applicable; (ii) Atari, Blue
Bay High Yield Investments (Luxembourg) S.A.R.L., as successor administrative agent under the
Credit Agreement, dated as of November 3, 2006, as amended and supplemented as of the date
hereof (as so amended and supplemented, the “Credit Agreement”), and the Lenders under the
Credit Agreement, shall have entered into a Waiver and Amendment to the Credit Agreement in
substantially the form annexed hereto as Exhibit H; and (iii) the Settlement
Agreements shall be in full force and effect. The date on which such conditions are satisfied
shall be deemed the “Effective Date” hereunder.

     8. Atari Representations and Warrantees. Atari represents and warrants to IESA
that (i) Atari is a corporation duly organized, validly existing and in good standing under
the law of Delaware and has all requisite power and authority to execute, deliver and perform
its obligations under this Global MOU and the agreements contemplated hereunder; (ii) the
execution, delivery and performance by Atari of this Global MOU have been duly authorized by
all necessary corporate action of Atari; and (iii) this Global MOU constitutes the legal,
valid and binding obligation of Atari, enforceable against Atari in accordance with its terms.
Atari further represents and warrants that it has been represented by independent and
experienced counsel and financial advisors in connection with this Global MOU and the
transactions contemplated hereunder and under the Restructuring.

     9. IESA Representations and Warrantees. IESA represents and warrants to Atari
that (i) IESA is a company duly organized, and validly existing and in good standing under the
laws of France and has all requisite power and authority to execute, deliver and perform its
obligations under this Global MOU and the agreements contemplated hereunder; (ii) the
execution, delivery and performance by IESA of this Global MOU has been duly authorized by all
necessary corporate action of IESA; and (iii) this Global MOU constitutes the legal, valid and
binding obligation of IESA, enforceable against IESA in accordance with its terms. IESA
further represents and warrants that it has been represented by independent and experienced
counsel in connection with this Global MOU and the transactions contemplated hereunder and
under the Restructuring.

     10. Trademark License. During the third fiscal quarter of 2008, IESA will meet
with Atari for the purpose of discussing an extension of the termination date of the Trademark
License. At such time, and provided Atari has stabilized its business and is meeting its
financial projections, IESA will in good faith consider a reasonable extension of the
Trademark License, but will be under no obligation to do so.

     11. Choice of Law. The validity, construction and enforceability of this Global
MOU shall be governed by and construed in accordance with the laws of New York, without
reference to the conflicts of laws provisions thereof. The transactions and agreements
contemplated by this Global MOU and the Exhibits annexed hereto shall be governed by the law
set forth therein.

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     12. Other Terms. The terms contained in this Global MOU and the Exhibits hereto
constitute the entire agreement between the parties and supersede all previous agreements and
understandings, whether oral or written, between the parties with respect to the subject
matter of this Global MOU. The recitals set forth in this Global MOU constitute an integral
part of this Global MOU. No agreement or understanding purporting to amend any provision of
this Global MOU shall be effective or binding upon either party unless set forth in a written
document which expressly refers to this Global MOU and which is signed on behalf of each
party. The parties are independent contractors, and nothing contained in this Global MOU or
done in furtherance hereof shall constitute either party as the agent of the other party for
any purpose.

     13. Parent Subsidiary Relationship. Except as otherwise set forth in this Global
MOU, or the Exhibits and other documents executed pursuant hereto or thereto, nothing set
forth herein shall, or be deemed to, affect each of IESA’s and Atari’s obligations to the
other party under their contractual obligations and under applicable law.

     14. COUNTERPARTS. This Global MOU may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such separate counterparts shall
together constitute but one and the same instrument. Any signatures delivered by a party by
facsimile transmission or by e-mail transmission shall be deemed an original signature hereto.

 [SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, IESA and Atari have caused this Global MOU to be executed and delivered by
its duly authorized officer as of the date first set forth above.

	 	 	 	 	 
	 	 	ATARI, INC.,
	 	 	a Delaware corporation,
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Curtis Solsvig
	 

	 	 	 	 
	 

	 	Name:
	 	Curtis Solsvig
	 

	 	 	 	 
	 

	 	Title:
	 	Chief Restructuring Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	INFOGRAMES ENTERTAINMENT S.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Patrick Leleu
	 

	 	 	 	 
	 

	 	Name:
	 	Patrick Leleu
	 

	 	 	 	 
	 

	 	Title:
	 	President and Chief Executive Officer
	 

	 	 	 	 

7

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