"We appreciate David's support and commitment through a difficult period in the Company's history and wish him well in his future endeavors." said Gene Davis, Chairman of the Board of Directors.
Atari has determined to focus its resources on the publishing and distribution segments of the rapidly growing video game business. The Company's operations will involve title acquisition, sales and marketing, and physical distribution of products from Infogrames Entertainment, S.A. (IESA), its 51% shareholder, and other selected partners.
In line with that goal, Atari has agreed in principle with IESA to terminate its Production Services Agreement in the near future. As a result, Atari will no longer provide production and quality assurances services to IESA. Rather, Atari plans to transfer certain employees and contract other staff on a project basis for a limited period of time.
As part of the company restructuring, Atari, Inc. will reduce its current workforce in order to re-align the Company's cost structure with its on-going business base.
Test Drive Unlimited together with the entire Test Drive franchise has been licensed to IESA under a 6-year agreement that provides for a $5 million advance royalty. The agreement allows IESA, whose Eden Studios originally developed Test Drive Unlimited for Atari, to develop and market at least two new releases of the franchise during the life of the license. It is anticipated that the deal, signed on Nov. 8, 2007, will assure the continued vitality of the franchise and will strengthen the relationship between Atari and its parent company while providing an important element in the on-going financial restructuring of Atari.
Curtis G. Solsvig III, Atari's Chief Restructuring Officer, commented "Atari continues to take important steps to stream-line operations and establish a winning business plan. We expect that the actions we are undertaking today will position us for the future as a preferred business and distribution partner."
As previously announced, Atari recently signed a deal with BlueBay High Yield Investments (Luxembourg) S.A.R.L ("BlueBay") for financial support in the form of a $10 million credit facility as part of its overall financial restructuring. Blue Bay owns in excess of 20% of IESA's stock.