Exhibit 10.3
THIRD AMENDMENT, CONSENT, WAIVER AND AGREEMENT
THIS THIRD AMENDMENT, CONSENT, WAIVER AND AGREEMENT (this
"Amendment") is made and entered into as of this 15th day of November, 1999, by
and among GT Interactive Software Corp., a Delaware corporation, as Borrower,
the Lenders identified on the signature pages hereto, and First Union National
Bank, as Administrative Agent for the Lenders.
Statement of Purpose
Pursuant to the terms of the Credit Agreement dated as of
September 11, 1998 (as heretofore amended, restated, supplemented or otherwise
modified, the "Credit Agreement"), by and among the Borrower, the lenders
parties thereto (the "Lenders") and the Administrative Agent, the Lenders agreed
to make certain Extensions of Credit to the Borrower as more particularly
described therein. Capitalized terms used herein and not otherwise defined shall
have their respective meanings set forth in the Credit Agreement.
The Borrower has requested that the Lenders agree to amend,
waive and consent under certain provisions of the Credit Agreement as set forth
more fully below.
Subject to the terms and conditions hereof, the Lenders are
willing to agree to such requested amendments, consents and waivers.
NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS.
1.1 Amendments to Section 1.1 (Definitions). Section 1.1
of the Credit Agreement is hereby amended by:
(a) deleting in their entirety the definitions of the
following terms: "Acceptable Agreement", "Borrowing Base", "Guaranty Agreement",
"Pledge Agreement", "Security Agreement" and "Subordinated Debt"; and
(b) adding the following new defined terms in their
proper alphabetical order:
""Borrowing Base" means as of any date of determination, an
amount equal to the sum of (a) sixty percent (60%) of the aggregate
actual invoice amount of Eligible Accounts, plus (b) the lesser of (i)
fifty percent (50%) of the aggregate cost of Eligible Inventory and
(ii) $30,000,000, plus (c) during the
period from the Second Amendment Effective Date through and including
the earlier to occur of (i) the Transaction Closing Date and (ii) the
Transaction Closing Expiration Date, $20,000,000, plus (d) 100% of the
aggregate amount of funds on deposit in the Concentration Account on
such date, less any checks outstanding on such date to be drawn against
such funds; provided that the percentages set forth in clauses (a), (b)
and (d) above may be adjusted, and the Borrowing Base otherwise
amended, supplemented or otherwise modified, in a manner satisfactory
to the Borrower and the Administrative Agent (with the consent of all
Lenders).
"Cayre Purchase Agreement" means the Equity Purchase and
Voting Agreement, dated as of November 15, 1999, among Infogrames,
Infogrames U.S. and the Cayres.
"Cayres" means, collectively, Xxxxxx X. Xxxxx, Xxxxxxx Xxxxx,
Xxxxxxx Xxxxx, Xxxx Xxxxx and certain trusts formed by the foregoing.
"Extension Event" means any of the following events:
(a) all waiting periods applicable to the Transaction
under the HSR Act shall not have expired or shall not have
been terminated;
(b) there shall be pending or threatened against the
Borrower, any of its Subsidiaries or Infogrames, any suit,
action or proceeding before any court, arbitrator or
administrative, governmental or regulatory authority or body,
domestic or foreign which, individually or in the aggregate,
would (i) reasonably be expected to have the effect of making
illegal or otherwise restraining or prohibiting the
Transaction or (ii) have a Material Adverse Effect; or
(c) a statute, rule, regulation, executive order,
decree, ruling, injunction or other order (whether temporary,
preliminary or permanent) shall have been enacted, entered,
promulgated or enforced by any United States, foreign, federal
or state court or governmental authority and shall be in
effect which prohibits, restrains, enjoins or restricts the
consummation of the Transaction.
"GAP" means the collective reference to General Atlantic
Partners 54, L.P., a Delaware limited partnership, and GAP Coinvestment
Partners II, L.P., a Delaware limited partnership.
"GAP Purchase Agreement" means the Equity Purchase and Voting
Agreement, dated as of November 15, 1999, among Infogrames, Infogrames
U.S. and GAP.
"GAP Securities Exchange Agreement" means the Securities
Exchange Agreement, dated as of November 15, 1999, among the Borrower
and GAP, in form and substance reasonably satisfactory to the Lenders,
pursuant to which,
among other things, on the Transaction Closing Date the GAP
Subordinated Debt shall be issued in exchange for the Shareholder
Subordinated Notes in favor of GAP in the aggregate original principal
amount of $20,000,000 and the 600,000 shares of convertible preferred
stock of the Borrower held by GAP.
"GAP Subordinated Debt" means the $50,000,000 of unsecured
Subordinated Debt to be issued by the Borrower to GAP on the
Transaction Closing Date in exchange for 600,000 shares of convertible
preferred stock of the Borrower and $20,000,000 of Shareholder
Subordinated Debt, which issuance and exchange shall be in accordance
with, and subject to all of the terms and conditions contained in, the
GAP Subordinated Debt Notes and the GAP Securities Exchange Agreement.
"GAP Subordinated Debt Notes" means the promissory notes to be
executed by the Borrower on the Transaction Closing Date evidencing the
Borrower's obligations in respect of the GAP Subordinated Debt and
setting forth the terms of the subordination of the GAP Subordinated
Debt to the Obligations, all in form and substance reasonably
satisfactory to the Lenders.
"Guaranty Agreement" means the Amended and Restated
Unconditional Subsidiary Guaranty Agreement executed by the Guarantors
from time to time as required pursuant to Section 8.12, in favor of the
Administrative Agent, for the benefit of the Lenders and the
Administrative Agent, and Infogrames U.S., as amended, modified or
supplemented from time to time, substantially in the form of Exhibit I
attached hereto.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Infogrames" means Infogrames Entertainment SA, a societe
anonyme organized under the laws of France.
"Infogrames Bridge Loan" means the $25,000,000 of term Debt to
be provided to the Borrower by Infogrames U.S. on the Third Amendment
Effective Date in accordance with, and subject to all of the terms and
conditions contained in, the Infogrames Bridge Loan Note, and
guaranteed pursuant to the Guaranty Agreement and secured by Liens
pursuant to the Security Agreement and the Pledge Agreement which shall
be subordinated to the Liens securing the Obligations to the extent set
forth therein.
"Infogrames Bridge Loan Note" means the promissory note to be
executed on the Third Amendment Effective Date by the Borrower
evidencing the Borrower's obligations in respect of the Infogrames
Bridge Loan, all in form and substance reasonably satisfactory to the
Lenders.
"Infogrames Securities Purchase Agreement" means the
Securities Purchase Agreement, dated as of November 15, 1999, by and
among the Borrower, Infogrames and Infogrames U.S., in form and
substance reasonably
satisfactory to the Lenders, pursuant to which, among other things, on
the Transaction Closing Date the Infogrames Subordinated Debt and
approximately 28,600,000 shares of the Borrower's common stock will be
issued to Infogrames.
"Infogrames Subordinated Debt" means the approximately
$60,500,000 of unsecured Subordinated Debt to be provided to the
Borrower by Infogrames U.S. on the Transaction Closing Date (a portion
of the proceeds of which shall be used on the Transaction Closing Date
to repay the Borrower's obligations in respect of (a) the Infogrames
Bridge Loan and (b) approximately $10,000,000 of the Shareholder
Subordinated Debt), all in accordance with, and subject to all of the
terms and conditions contained in, the Infogrames Subordinated Debt
Note, the Infogrames Bridge Loan Note, the Cayre Purchase Agreement and
the Infogrames Securities Purchase Agreement.
"Infogrames Subordinated Debt Note" means the promissory note
to be executed by the Borrower on the Transaction Closing Date
evidencing the Borrower's obligations in respect of the Infogrames
Subordinated Debt and setting forth the terms of the subordination of
the Infogrames Subordinated Debt to the Obligations, all in form and
substance reasonably satisfactory to the Lenders.
"Infogrames U.S." means California U.S. Holdings, Inc., a
California corporation and a wholly-owned Subsidiary of Infogrames.
"Information Statement" means the Information Statement on
Schedule 14-C under the Securities Exchange Act of 1934, as amended,
with respect to the Shareholder Approval in respect of the shares of
common stock to be issued to Infogrames pursuant to the Transaction,
including any supplements or exhibits thereto and any amendments
thereof.
"Pledge Agreement" means the Second Amended and Restated
Pledge Agreement, dated as of November 15, 1999, executed by the
Borrower and the Guarantors named therein in favor of the
Administrative Agent, for the benefit of the Lenders and the
Administrative Agent, and Infogrames U.S., as amended, modified or
supplemented from time to time.
"Refinancing" means a refinancing or other transaction
pursuant to which the Obligations will be paid in full in cash (and any
outstanding Letters of Credit will be cash collateralized in the manner
set forth in Section 2.5(c)) on the date of closing of such refinancing
or other transaction pursuant to documentation in form and substance
reasonably satisfactory to the Lenders.
"Refinancing Closing Date" means the date on which a
Refinancing shall
have been consummated.
"Security Agreement" means the Second Amended and Restated
Security Agreement, dated as of November 15, 1999, executed by the
Borrower and the Guarantors in favor of the Administrative Agent, for
the benefit of the Lenders and the Administrative Agent, and Infogrames
U.S., as amended, modified or supplemented from time to time.
"Shareholder Approval" means approval of the Transaction by
the holders of the common stock of the Borrower as required by the
rules promulgated by The Nasdaq Stock Market, Inc.
"Subordinated Debt" means the collective reference to Debt on
Schedule 6.1(t) hereof designated as Subordinated Debt, the Shareholder
Subordinated Debt, the Infogrames Subordinated Debt, the GAP
Subordinated Debt and any other Debt of the Borrower or any Subsidiary
subordinated in right and time of payment to the Obligations and
containing such other terms and conditions, all as reasonably
satisfactory to the Required Lenders.
"Third Amendment" means the Third Amendment, Consent, Waiver
and Agreement, dated as of November 15, 1999, to this Agreement.
"Third Amendment Effective Date" means the Effective Date
under and as defined in the Third Amendment.
"Transaction" means the series of transactions to be
consummated on the Transaction Closing Date pursuant to which, among
other things:
(a) the Borrower shall issue approximately
28,600,000 shares of its common stock to Infogrames U.S. in
exchange for $50,000,000 in cash pursuant to the Infogrames
Securities Purchase Agreement;
(b) Infogrames U.S. shall acquire warrants to
purchase approximately 4,500,000 shares of common stock of the
Borrower from GAP pursuant to the GAP Purchase Agreement;
(c) the Borrower shall receive $50,000,000 from the
proceeds of the Infogrames Subordinated Debt pursuant to the
Infogrames Subordinated Debt Note;
(d) the Borrower's obligations in respect of the
Infogrames Bridge Loan shall be repaid in full from a portion
of the proceeds (or pursuant to an exchange in connection with
the issuance) of the Infogrames Subordinated Debt, and the
Infogrames Bridge Loan Note shall be cancelled, pursuant to
the Infogrames Securities Purchase Agreement and the Liens in
respect of the Infogrames Bridge Loan shall be released;
(e) the Shareholder Subordinated Notes in favor of
GAP in the
aggregate original principal amount of $20,000,000 and the
600,000 shares of convertible preferred stock of the Borrower
held by GAP shall be exchanged for the GAP Subordinated Notes
pursuant to the GAP Securities Exchange Agreement, and such
Shareholder Subordinated Notes shall be cancelled;
(f) Infogrames U.S. shall acquire approximately
33,500,000 shares of common stock of the Borrower from the
Cayres pursuant to the Cayre Purchase Agreement; and
(g) the Shareholder Subordinated Notes in favor of
each of Xxxxxx X. Xxxxx, Xxxxxxx Xxxxx and Xxxxxxx Xxxxx in
the aggregate original principal amount of $10,000,000 shall
be transferred to Infogrames U.S. and exchanged by Infogrames
U.S. for a portion of the Infogrames Subordinated Note
pursuant to the Cayre Purchase Agreement and the Infogrames
Securities Purchase Agreement, and such Shareholder
Subordinated Notes shall be cancelled.
"Transaction Closing Date" means the date on or prior to the
Transaction Closing Expiration Date on which (a) all of the conditions
precedent to the effectiveness of the Transaction Documentation shall
have been satisfied or waived in accordance with their respective
terms, (b) the Transaction shall have been consummated in accordance
with the terms of the Transaction Documentation and (c) the Aggregate
Commitment shall have been reduced to $75,000,000 and any outstanding
Loans or Letters of Credit in excess of the Aggregate Commitment (as so
reduced) shall be repaid or cash collateralized in accordance with
Section 2.5(c).
"Transaction Closing Expiration Date" means (a) January 1,
2000, if no Shareholder Approval is required, provided that if (x) the
Transaction Closing Date shall not have occurred on or prior to January
1, 2000 solely by reason of an Extension Event, (y) the Borrower and
its Subsidiaries shall have complied at all times with Section 8.16 and
(z) all of the conditions to the closing of the Transaction under the
Transaction Documentation shall have been satisfied or waived (other
than with respect to such Extension Event), the Transaction Closing
Expiration Date shall be automatically extended to January 31, 2000 or
(b) January 31, 2000, if Shareholder Approval is required.
"Transaction Documentation" means, collectively, the
Infogrames Securities Purchase Agreement, the Infogrames Subordinated
Note, the GAP Securities Exchange Agreement, the GAP Subordinated Note,
the GAP Purchase Agreement, the Cayre Purchase Agreement and all
schedules, exhibits and annexes to the foregoing and all side letters
and agreements affecting the terms
of the foregoing or entered into in connection with the foregoing, in
each case as amended, supplemented or otherwise modified from time to
time in accordance with Section 10.13.".
1.2 Amendment to Section 2.3 (Repayment of the Loans). Section
2.3(e) of the Credit Agreement is hereby amended by deleting in its entirety
said Section and substituting therefor a new Section 2.3(e) as follows:
"(e) Concentration Account. The outstanding principal
amount of the Loans shall be prepaid on each Business Day
prior to the occurrence of the Transaction Closing Date, to
the extent that funds on deposit in the Concentration Account
on such Business Day exceed $1,000,000. Amounts prepaid
pursuant to this paragraph (e) may be reborrowed.".
1.3 Amendment to Section 2.5 (Permanent Reduction of the
Aggregate Commitments). Section 2.5(b) of the Credit Agreement is hereby amended
by adding a new sentence at the end of said Section as follows: "On the
Transaction Closing Date, the Aggregate Commitment shall automatically be
permanently reduced to the lesser of $75,000,000 or the Aggregate Commitment on
such date.".
1.4 Amendment to Section 2.6 (Termination of Credit Facility).
Section 2.6 of the Credit Agreement is hereby amended by deleting the reference
to "June 30, 2000" contained in said Section and substituting therefor a
reference to "March 31, 2000".
1.5 Amendment to Section 4.1 (Interest). Section 4.1 of
the Credit Agreement is hereby amended by:
(a) deleting in its entirety the first sentence of
paragraph (a) of said Section and substituting therefor the following:
"Subject to the provisions of this Section 4.1, at the
election of the Borrower at any time prior to the occurrence
of the Transaction Closing Date, the aggregate principal
balance of (i) the Loans or any portion thereof denominated in
Dollars shall bear interest at (A) the Base Rate plus 2.5% or
(B) the LIBOR Rate plus 4% and (ii) the Loans or any portion
thereof denominated in an Alternative Currency shall bear
interest at the LIBOR Rate plus 4%; provided that on and after
the occurrence of the Transaction Closing Date the aggregate
principal balance of (i) the Loans or any portion thereof
denominated in Dollars shall bear interest at (A) the Base
Rate plus 1% or (B) the LIBOR Rate plus 2.5% and (ii) the
Loans or any portion thereof denominated in an Alternative
Currency shall bear interest at the LIBOR Rate plus 2.5%.";
and
(b) amending paragraph (d) of said Section by:
(i) deleting in its entirety the phrase "at the
discretion of the Administrative Agent and Required Lenders,"
contained in the first
sentence in said paragraph;
(ii) adding immediately after the phrase "rate per
annum" contained in clause (ii) of said paragraph the words
"equal to"; and
(iii) deleting each reference to "two percent (2%)"
contained in said paragraph and substituting therefor the
phrase "(A) two percent (2%), at any time prior to the
occurrence of the Transaction Closing Date, and (B) three and
one-half percent (3 1/2%), at any time on or after the
occurrence of the Transaction Closing Date,".
1.6 Amendment to Section 4.3 (Fees). Section 4.3 of the Credit
Agreement is hereby amended by adding a new paragraph (d) at the end of said
Section as follows:
"(d) On and after the Transaction Closing Date, the
Borrower shall pay to the Administrative Agent, for the
account of the Lenders, an Aggregate Commitment usage fee in
the amount of $100,000 for each month that any Loans or
Letters of Credit remain outstanding. The usage fee shall be
payable in arrears on each monthly anniversary of the
Transaction Closing Date, commencing with the first monthly
anniversary of the Transaction Closing Date, and on the
Refinancing Closing Date, provided that the usage fee payable
on the Refinancing Closing Date shall be pro rated for the
number of days elapsed from the immediately preceding
scheduled payment date of such usage fee.".
1.7 Amendment to Section 7.1 (Financial Statements and
Projections). Section 7.1(e) of the Credit Agreement is hereby amended by
deleting the phrase "to consummate a transaction pursuant to an Acceptable
Agreement" contained in clause (i)(B) of said Section and substituting therefor
the phrase "(y) to pursue and consummate the Refinancing and (z) to consummate
the Transaction pursuant to the Transaction Documentation".
1.8 Amendment to Article VIII (Affirmative Covenants). Article
VIII of the Credit Agreement is hereby amended by deleting in its entirety
Section 8.16 contained in said Article and substituting therefor new Sections
8.16 and 8.17 as follows:
"SECTION 8.16 Pursuit of Closing of Transaction. Each
of the Borrower and its Subsidiaries shall use its reasonable
best efforts to consummate expeditiously the Transaction,
including without limitation, (a) to obtain, and to expedite
the process to obtain, any permits, authorizations, consents
and approvals as may be required under the HSR Act in respect
of the Transaction, and (b) if Shareholder Approval is
necessary, to expedite the preparation and filing of the
Information Statement with the United States Securities and
Exchange Commission, and, in connection therewith, the
Borrower shall provide such information as reasonably
requested by the Administrative Agent or the Lenders to review
and discuss such efforts.
SECTION 8.17 Pursuit of Refinancing. Each of the
Borrower and its Subsidiaries shall use its reasonable best
efforts to pursue and consummate expeditiously the Refinancing
and, in connection therewith, the Borrower shall provide such
information as reasonably requested by the Administrative
Agent or the Lenders to review and discuss such efforts.".
1.9 Amendment to Article X (Negative Covenants). Article
X of the Credit Agreement is hereby amended by:
(a) deleting in its entirety the proviso contained at the
end of Section 10.1(c) of said Article; and
(b) deleting in its entirety Section 10.13 contained in
said Article and substituting therefor a new Sections 10.13 as follows:
"SECTION 10.13 Amendments; Payments and Prepayments
of Infogrames Bridge Loan. Amend or modify in any material
respect (or permit such modification or amendment of) any of
the terms or provisions of the Infogrames Bridge Loan Note, or
cancel or forgive, make any voluntary or optional payment or
prepayment on, or redeem or acquire for value the Infogrames
Bridge Loan except for payment in full on the Transaction
Closing Date or otherwise in accordance with, and subject to,
the terms of the Security Documents.".
1.10 Amendment to Section 11.1 (Events of Default).
Section 11.1 of the Credit Agreement is hereby amended by:
(a) adding immediately prior to the period at the end of
paragraph (i) of said Section the phrase ", other than any such Change
of Control resulting solely from the consummation of the Transaction on
the Transaction Closing Date"; and
(b) adding new paragraph (p) and (q) at the end of said
Section as follows:
"(p) Any term or provision of the Transaction
Documentation shall have been amended, modified, waived or
changed in any material respect.
(q) (i) On the Transaction Closing Date, the
Infogrames Bridge Loan shall not have been repaid with the
proceeds of the Infogrames Subordinated Debt and the
Infogrames Bridge Loan Note shall not have been cancelled,
(ii) the Transaction Closing Date shall not have occurred
on or prior to the Transaction Closing Expiration Date or
(iii) prior to the occurrence of the Transaction Closing Date,
any material Transaction Documentation shall be terminated.".
SECTION 2. CONSENTS.
2.1 Consent to Infogrames Bridge Loan. Effective as of the
Effective Date, the Lenders hereby consent under Sections 10.1 (Limitations on
Debt) and 10.3 (Limitations on Liens) of the Credit Agreement solely to the
extent necessary to permit (a) the Borrower (i) to incur the Infogrames Bridge
Loan and (ii) to execute and deliver the Infogrames Bridge Loan Note and (b) to
permit the Guarantors to guarantee the Infogrames Bridge Loan pursuant to the
Guaranty Agreement and to permit the Borrower and its Subsidiaries to grant
Liens in favor of Infogrames U.S. pursuant to the Pledge Agreement and the
Security Agreement; provided that such consent is conditioned upon the
following: (a) after giving effect to this Amendment, no Default or Event of
Default shall then have occurred and be continuing or would result from the
incurrence of the Infogrames Bridge Loan or the execution and delivery of the
Infogrames Bridge Loan Note and the Security Documents and (b) within one
Business Day after receipt of the Net Cash Proceeds of the Infogrames Bridge
Loan, the Borrower shall apply such Net Cash Proceeds to the repayment of the
outstanding Loans (it being understood that, notwithstanding Section 2.5(b) of
the Credit Agreement, any amounts so prepaid may be reborrowed subject to, and
in accordance with, the terms of the Credit Agreement).
2.2 Consent to Transaction. Effective as of the Effective
Date, the Lenders hereby consent under the Credit Agreement solely to the extent
necessary to permit the Borrower to consummate the Transaction in accordance
with the terms of the Transaction Documentation; provided that such consent is
conditioned upon the following: (a) after giving effect to this Amendment, no
Default or Event of Default shall then have occurred and be continuing or would
result from the consummation of the Transaction and (b) the Aggregate Commitment
shall have been reduced to $75,000,000 in accordance with the terms of Section
2.5(b) of the Credit Agreement (as amended by this Amendment) and the Borrower
shall comply on the Transaction Closing Date with the provisions of Section
2.5(c) of the Credit Agreement to the extent the aggregate outstanding
Extensions of the Credit of the Lenders on such date exceeds the Aggregate
Commitment as so reduced.
SECTION 3. WAIVERS.
3.1 Waiver of Section 2.5(b) (Mandatory Permanent Reduction).
Effective as of the Effective Date, the Lenders hereby waive application of
Section 2.5(b) of the Credit Agreement to the Net Cash Proceeds of the
Transaction, but solely to the extent of the Net Cash Proceeds of the
Transaction in excess of the amount required to be applied by the Borrower to
the repayment of the Loans on the Transaction Closing Date in accordance with
Section 2.5(c) of the Credit Agreement as a result of the reduction of the
Aggregate Commitment to $75,000,000 on the Transaction Closing
Date in accordance with Section 2.5(b) of the Credit Agreement (as amended by
this Amendment); provided that such waiver is conditioned upon the following:
(a) within one Business Day after the Borrower's receipt thereof, such Net Cash
Proceeds are deposited into the Concentration Account and (b) after giving
effect to this Amendment, no Default or Event of Default shall have occurred and
be continuing or would result from the consummation of the Transaction.
3.2 Waiver of Section 9.1 (EBITDA). Effective as of the
Effective Date, the Lenders hereby waive, through the earlier of (a) the
Transaction Closing Expiration Date and (b) the occurrence of the event
described in Section 11.1(q)(iii) of the Credit Agreement (as amended by this
Amendment), any Default or Event of Default that may arise by reason of the
failure of the Borrower to comply with Section 9.1 of the Credit Agreement for
the periods from April 1, 1999 through September 30, 1999 and from April 1, 1999
through October 31, 1999, provided that if the Transaction Closing Date shall
have occurred prior to the Transaction Closing Expiration Date, (y) the
effectiveness of the foregoing waivers shall be automatically extended to the
Revolving Credit Termination Date and (z) the Lenders hereby waive, through the
Revolving Credit Termination Date, any Default or Event of Default that may
arise by reason of the failure of the Borrower to comply with Section 9.1 of the
Credit Agreement for the period from April 1, 1999 through December 31, 1999.
SECTION 4. AGREEMENT.
If the Borrower determines that the Transaction Closing Date
shall not occur on or prior to the Transaction Closing Expiration Date, the
Lenders agree to consider and discuss in good faith any proposal that the
Borrower determines to make to amend or waive Section 11.1(q)(ii) of the Credit
Agreement. The Agreement of the Lenders to consider and discuss in good faith
any proposal set forth in the preceding sentence shall not constitute the
Lenders' consent or indicate their willingness to at any time consent to any
such proposal or any amendment or waiver of Section 11.1(q)(ii) of the Credit
Agreement regardless of whether the Borrower and its Subsidiaries may at all
times have complied with Section 8.16 of the Credit Agreement.
SECTION 5. MISCELLANEOUS.
5.1 Representations and Warranties; No Default. (a) After
giving effect to this Amendment, the Borrower hereby represents and warrants
that (i) all representations and warranties contained in the Credit Agreement
and the other Loan Documents are true and correct on and as of the Effective
Date (unless stated to relate to a specific earlier date, in which case, such
representations and warranties shall be true and correct as of such earlier
date) and (ii) no Default or Event of Default shall have occurred and be
continuing or would result from the execution and delivery of this
Amendment.
(b) The Borrower hereby further represents and warrants that
it has duly executed and delivered the Transaction Documentation and that the
representations and warranties of the Borrower and the other parties thereto
contained in the Transaction Documentation are true and correct in all material
respects as of the date hereof.
(c) The Borrower hereby further represents and warrants that
it is truly and justly indebted to the Administrative Agent and the Lenders in
respect of the Obligations, without defense, counterclaim or offset of any kind.
5.2 Payment of Fees and Expenses. (a) The Borrower shall pay
to the Administrative Agent, for the account of the Lenders, a waiver and
amendment fee equal to $500,000 (the "Amendment Fee"), which shall be fully
earned on the Effective Date and payable on the Revolving Credit Termination
Date; provided that (i) if the Transaction Closing Date shall have occurred on
or prior to the Transaction Closing Expiration Date, the Amendment Fee payable
on the Revolving Credit Termination Date shall be reduced to $250,000 and (ii)
if the Amendment Fee has been reduced pursuant to the foregoing clause (i) and
the Refinancing Closing Date shall have occurred within (A) sixty days after the
occurrence of the Transaction Closing Date, if no Shareholder Approval is
required, or (B) forty-five days after the occurrence of the Transaction Closing
Date, if Shareholder Approval is required, the Amendment Fee shall be reduced to
$0. Payment of the Amendment Fee shall be in addition to any and all other fees
and expenses required to be paid from time to time by the Borrower to the
Administrative Agent and/or the Lenders pursuant to this Amendment, the Credit
Agreement or the other Loan Documents.
(b) The Borrower hereby agrees to pay all reasonable costs,
fees and expenses of the Administrative Agent and each Lender, including the
fees and expenses of financial advisors retained by the Administrative Agent and
counsel retained by the Administrative Agent and each Lender, in each case
incurred in connection with the transactions contemplated by this Amendment.
5.3 Conditions to Effectiveness of this Amendment. This
Amendment shall become effective on the date (the " Effective Date") on which
the Administrative Agent shall have received:
(a) counterparts of this Amendment duly executed by the
Borrower and the Lenders;
(b) (i) duly executed copies of (A) the Security Agreement,
the Pledge Agreement and the Guaranty Agreement, (B) the Infogrames Bridge Loan
Note and (C) the other Transaction Documentation, in each case in form and
substance reasonably satisfactory to the Lenders and (ii) any other agreements
and documents reasonably requested by the Lenders;
(c) payment in full of all fees and other amounts due and
payable
pursuant to the Credit Agreement and this Amendment, including reimbursement or
payment of all reasonable fees and expenses of financial advisors retained by
the Administrative Agent and counsel retained by the Administrative Agent and
each Lender that, in each case, has been invoiced to the Borrower;
(d) a letter, executed by the Borrower, as to the status of
the Borrower's ongoing efforts to obtain a definitive offer for the sale of
Humongous Entertainment, Inc.; and
(e) a letter, executed by Infogrames, as to its commitment to
use its reasonable best efforts to pursue and consummate expeditiously the
Refinancing.
5.4 Continuing Effect; No Other Amendments or Waivers. Except
as expressly amended pursuant to this Amendment, the Credit Agreement is and
shall continue to be in full force and effect in accordance with its terms, and
this Amendment shall not constitute the Lenders' consent or indicate their
willingness to consent to any other amendment, modification or waiver of the
Credit Agreement or the other Loan Documents, including without limitation, any
amendment, modification or waiver of any Section amended or waived pursuant to
this Amendment for any other date or time period or in connection with any other
transaction.
5.5 Counterparts. This Amendment may be executed by the
parties hereto on one or more counterparts, and all of such counterparts shall
be deemed to constitute one and the same instrument. This Amendment may be
delivered by facsimile transmission of the relevant signature pages hereof.
5.6 Governing Law. This Amendment shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their respective duly authorized
officers as of the date first above written.
GT INTERACTIVE SOFTWARE CORP.
By: /s/ XXXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
By: /s/ XXXX XxXXXXX
--------------------------------------
Name: Xxxx XxXxxxx
Title: Senior Vice President
BANK OF AMERICA, N.A.
By: /s/ XXX X. XXXXXXX
--------------------------------------
Name: Xxx X. Xxxxxxx
Title: Managing Director
EUROPEAN AMERICAN BANK
By: /s/ XXXXXXXXX XXXXXXXXX
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Vice President
FLEET BANK, N.A.
By: /s/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
NATIONAL BANK OF CANADA
By: /s/ XXXXX X. XXXXX
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
By: /s/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Manager
THE BANK OF NOVA SCOTIA
By: /s/ X. X. XXXXX
--------------------------------------
Name: X. X. Xxxxx
Title: Managing Director
