EXHIBIT 10.6
EXECUTION COPY
WAIVER, CONSENT AND THIRD AMENDMENT TO CREDIT
AGREEMENT
WAIVER, CONSENT AND THIRD AMENDMENT
TO CREDIT AGREEMENT, dated as of December 4, 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 Event of Default
specified on Schedule 1 hereto has occurred prior to and is
continuing as of the date hereof (the “ Existing
Default ”); and
WHEREAS, the Borrower has requested
that the Lenders (i) waive the Existing Default, (ii) consent
to the Borrower entering into with IESA that certain Global
Memorandum of Understanding dated as of December 4, 2007 (the
“ MOU ”), as well as the Short
Form Distribution Agreement, the Intercompany Services
Agreement, the Termination and Transfer of Assets Agreement, the QA
Services Agreement, the DBZ Settlement Agreement and the YYH
Settlement Agreement, which are each attached to the MOU as
Exhibits A through F, respectively (collectively, the “
Specified Agreements ”), and to the Borrower
consummating the transactions contemplated thereby, and (iii) amend
the Credit Agreement, and the Lenders have agreed to such waiver,
consents 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
Third Amendment Effective Date (as defined below), the Lenders
waive the Existing Default. 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 Third Amendment Effective Date.
II.
Consent . 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
Third Amendment Effective Date, and notwithstanding anything to the
contrary contained in any Loan Document, the Lenders hereby consent
to the Borrower entering into the Specified Agreements and to the
consummation by the Borrower of all transactions contemplated
thereby. For avoidance of doubt, the foregoing consent is not, and
shall not be construed to be, a consent by the Lenders to any
amendment to, or modification of, the Specified Agreements, or to
the Borrower entering into the “Long Form Distribution
Agreement” referred to in the Short Form Distribution
Agreement (which is attached to the MOU as Exhibit A) or the
“Long Form
Intercompany Services Agreement” referred to in the
Intercompany Services Agreement (which is attached to the MOU as
Exhibit B), it being understood and agreed that the Lenders
shall consent to such Long Form Distribution Agreement and
such Long Form Intercompany Services Agreement (if required to
be entered into pursuant to the Intercompany Services Agreement) so
long as the terms of such agreements are, in each case, not
materially less favorable than the terms of the Short
Form Distribution Agreement and the Intercompany Services
Agreement, respectively, and, in each case, any new terms are
either fair and customary for transactions of the nature
contemplated thereby or reasonably satisfactory to the Lenders, in
their capacity as such.
III.
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 Third Amendment Effective Date, the
Credit Agreement is amended as follows:
1. Section 1.01 is amended
by amending and restating the second sentence of the definition of
“Aggregate Revolving Commitment” as follows:
“The Aggregate Revolving
Commitment is Fourteen Million Dollars ($14,000,000).”.
2. Section 5.13 is amended
and restated as follows:
“SECTION 5.13. Internal
Restructuring . By January 10, 2008, the Borrower shall
deliver to the Administrative Agent an internal restructuring plan,
approved by the Borrower’s board of directors, which provides
for, among other things, overhead and cost reductions satisfactory
to the Administrative Agent.”.
3. Article VII is amended
by amending and restating paragraph (m) thereof as
follows:
“(m) a Change in Control 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 Executive Officer or a Chief
Restructuring Officer reasonably satisfactory to the Administrative
Agent on employment terms reasonably satisfactory to the
Administrative Agent, or the Borrower shall not have entered into a
Long Form Distribution Agreement with IESA to which the Lenders
have consented in accordance with the terms of the Waiver, Consent
and Third Amendment to Credit Agreement, dated as of
December 4, 2007, among the Borrower, the Administrative Agent
and the Lenders;”.
4. Section 9.01(a)(ii) is
amended by deleting “Times Place, 45 Pall Mall, London SW1Y
5JG” and substituting therefor “77 Grosvenor Street,
London, W1K 3JR”.
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IV.
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
principles (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 Third Amendment
Effective Date, the Borrower acknowledges and agrees that it is
indebted to the Lenders in the aggregate principal amount of
$10,000,000, 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
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