EXHIBIT 10.2
FIFTH AMENDMENT TO
CREDIT AGREEMENT
FIFTH AMENDMENT, dated as of October 13, 2003 (this
"Amendment"), to the Credit Agreement referred to below among ATARI, INC.,
successor in interest by merger to INFOGRAMES, INC., a Delaware corporation
("Borrower"), the other parties signatory thereto as Credit Parties, the Lenders
party thereto (the "Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation, for itself, as a Lender, and as agent for the Lenders (in
such capacity, "Agent").
W I T N E S S E T H
WHEREAS, Borrower and Agent are parties to that certain Credit
Agreement, dated as of November 12, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"); and
WHEREAS, Borrower and Agent have agreed to amend the Credit
Agreement, and to waive certain violations of the Credit Agreement, all in the
manner, and on the terms and conditions, provided for herein;
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Credit Agreement.
2. Amendment to Annex G of the Credit Agreement. As of the
Amendment Effective Date, Annex G of the Credit Agreement is amended by amending
and restating clauses (b), (c) and (e) in their entirety to read as follows:
"(b) Minimum Fixed Charge Coverage Ratio. Borrower and Guarantors shall
have on a combined basis at the end of each Fiscal Quarter beginning
with the Fiscal Quarter ending March 31, 2003, a Fixed Charge Coverage
Ratio for the 12-month period then ended of not less than the
following:
Fixed Charge
Fiscal Quarter Ending Coverage Ratio
--------------------- --------------
March 31, 2003 1.5:1.00
June 30, 2003 1.5:1.00
September 30, 2003 0.5:1.00
and for each Fiscal Quarter thereafter 1.5:1.00
1
provided, however, that if (i) the Production Fund Closing occurs on or
prior to August 22, 2003, or (ii) the Offering Transactions occur
before September 30, 2003, there shall be no minimum Fixed Charge
Coverage Ratio requirement for the Fiscal Quarter ending September 30,
2003.
(c) Minimum EBITDA. Borrower and Guarantors on a combined basis
shall have, at the end of each Fiscal Quarter set forth below, EBITDA
for the 12-month period then ended of not less than the following:
Period EBITDA
------ ------
Fiscal Quarter ending December 31, 2002 $(7,000,000)
Fiscal Quarter ending March 31, 2003 $20,000,000
Fiscal Quarter ending June 30, 2003 $20,000,000
Fiscal Quarter ending September 30, 2003 $10,500,000
for each Fiscal Quarter ending thereafter $20,000,000
provided, however, that if (i) the Production Fund Closing occurs on or
prior to August 22, 2003, or (ii) the Offering Transactions occur
before September 30, 2003, the EBITDA for the 12 - month period ending
September 30, 2003 shall be no less than ($500,000).
(e) Minimum Borrowing Availability. Borrower shall at all times,
other than during the Matrix Release Period and during the period
beginning on October 15, 2003 and ending on December 15, 2003, maintain
Borrowing Availability of no less than $5,000,000."
3. Amendment Fee. To induce Agent and Lenders to enter into
this Amendment, Borrower hereby agrees to pay Agent, for the ratable benefit of
Lenders, an amendment fee in the amount of $50,000 in immediately available
funds, payable on the Amendment Effective Date.
4. Representations and Warranties. To induce Agent to enter
into this Amendment, each Credit Party hereby represents and warrants that:
(a) The execution, delivery and performance of this
Amendment and the performance of the Credit Agreement as amended by
this Amendment (the "Amended Credit Agreement") by Borrower and the
other Credit Parties: (i) are within their respective organizational
powers; (ii) have been duly authorized by all necessary corporate and
shareholder action; (iii) are not in contravention of any provision of
their respective certificates or articles of incorporation or by-laws
or other organizational documents; (iv) do not violate any law or
regulation, or any order or decree of any court or Governmental
Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any
2
indenture, mortgage, deed of trust, lease, agreement or other
instrument to which any Borrower or any Credit Party is a party or by
which Borrower or any Credit Party or any of its property is bound;
(vi) do not result in the creation or imposition of any Lien upon any
of the property of Borrower or any Credit Party other than those in
favor of Agent pursuant to the Loan Documents; and (vii) do not require
the consent or approval of any Governmental Authority or any other
Person.
(b) This Amendment has been duly executed and delivered
by or on behalf of each Credit Party.
(c) Each of this Amendment and the Amended Credit
Agreement constitutes a legal, valid and binding obligation of each
Credit Party enforceable against each Credit Party in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or
at law).
(d) No Default or Event of Default has occurred and is
continuing both before and after giving effect to this Amendment.
(e) No action, claim or proceeding is now pending or, to
the knowledge of Borrower and the other Credit Parties, threatened
against Borrower or the other Credit Parties, at law, in equity or
otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any
agency or subdivision thereof, or before any arbitrator or panel of
arbitrators, (i) which challenges Borrower's or the other Credit
Parties' right, power, or competence to enter into this Amendment or,
to the extent applicable, perform any of its obligations under this
Amendment, the Amended Credit Agreement or any other Loan Document, or
the validity or enforceability of this Amendment, the Amended Credit
Agreement or any other Loan Document or any action taken under this
Amendment, the Amended Credit Agreement or any other Loan Document or
(ii) which, if determined adversely, is reasonably likely to have or
result in a Material Adverse Effect. To the knowledge of Borrower and
each Credit Party, there does not exist a state of facts which is
reasonably likely to give rise to such proceedings.
(f) The representations and warranties of Borrower and
the other Credit Parties contained in the Credit Agreement and each
other Loan Document shall be true and correct on and as of the date
hereof and the Amendment Effective Date with the same effect as if such
representations and warranties had been made on and as of each such
date, except that any such representation or warranty which is
expressly made only as of a specified date need be true only as of such
date.
5. Ratification of Credit Agreement; Remedies.
3
(a) Except as expressly provided for, and on the terms
and conditions set forth, herein, the Credit Agreement and the other Loan
Documents shall continue to be in full force and effect in accordance with their
respective terms and shall be unmodified. In addition, this Amendment shall not
be deemed a waiver of any term or condition of any Loan Document by the Agent or
the Lenders with respect to any right or remedy which the Agent or the Lenders
may now or in the future have under the Loan Documents, at law or in equity or
otherwise or be deemed to prejudice any rights or remedies which the Agent or
the Lenders may now have or may have in the future under or in connection with
any Loan Document or under or in connection with any Default or Event of Default
which may now exist or which may occur after the date hereof. The Credit
Agreement and all other Loan Documents are hereby in all respects ratified and
confirmed.
(b) This Amendment shall constitute a Loan Document. The
breach by any Credit Party of any representation, warranty, covenant or
agreement in this Amendment shall constitute an immediate Event of Default
hereunder and under the other Loan Documents.
6. Outstanding Indebtedness; Waiver of Claims. Each of
Borrower and the other Credit Parties hereby acknowledges and agrees that as of
October 3, 2003 the aggregate outstanding principal amount of the Revolving Loan
is $12,283,630 and such principal amount is payable pursuant to the Credit
Agreement without defense, offset, withholding, counterclaim or deduction of any
kind. Borrower and each other Credit Party hereby waives, releases, remises and
forever discharges Agent, Lenders and each other Indemnified Person from any and
all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys' fees) and disbursements and other
costs of investigation or defense, including those incurred upon any appeal of
any kind or character, known or unknown, which Borrower or any other Credit
Party ever had, now has or might hereafter have against Agent or any Lender
which relates, directly or indirectly, to any acts or omissions of Agent or such
Lender or any other Indemnified Person on or prior to the Amendment Effective
Date.
7. Expenses. Each of Borrower and the other Credit Parties
hereby reconfirms its respective obligations pursuant to Section 11.3 of the
Credit Agreement to pay and reimburse Agent for all reasonable out-of-pocket
expenses (including, without limitation, reasonable fees of counsel) incurred in
connection with the negotiation, preparation, execution and delivery of this
Amendment and all other documents and instruments delivered in connection
herewith.
8. Effectiveness. This Amendment shall become effective as of
September 30, 2003 (the "Amendment Effective Date") only upon satisfaction in
full in the judgment of the Agent of each of the following conditions on or
prior to October 15, 2003:
(a) Amendment. Agent shall have received three (3)
original copies of this Amendment duly executed and delivered by
Agent, Requisite
4
Lenders and Borrower and acknowledged and agreed to by each of the
Guarantors and Reflections.
(b) Payment of Expenses. Borrower shall have
paid to Agent all costs and expenses billed and owing in connection
with this Amendment and the other Loan Documents and due to Agent
(including reasonable legal fees and expenses).
(c) Representations and Warranties. All
representations and warranties contained in this Amendment shall be
true and correct on and as of the Amendment Effective Date.
(d) Payment of Amendment Fee. Agent, for the
ratable benefit of Lenders, shall have received the $50,000 amendment
fee referred to in Section 3 hereof.
9. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT
PARTIES, AGENT AND LENDERS PERTAINING TO THIS AMENDMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY
OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE NEW YORK COUNTY AND; PROVIDED, FURTHER THAT NOTHING IN
THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH
5
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT
PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THE CREDIT
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3 BUSINESS DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
10. Counterparts. This Amendment may be executed by the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
6
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed and delivered as of the day and year first
above written.
ATARI, INC.
By: /s/ Denis Guyennot
----------------------------------
Name: Denis Guyennot
Title: President/COO
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By: /s/ Xxxxxxxxxxx Xxx
----------------------------------
Name: Xxxxxxxxxxx Xxx
Its: Duly Authorized Signatory
[SIGNATURES CONTINUED ON NEXT PAGE]
7
The undersigned Credit Parties hereby (i) acknowledge, agree and consent to the
amendment to the Credit Agreement effected by this Amendment and (ii) other than
with respect to Reflections Interactive Limited, confirm and agree that their
obligations under the Guaranty shall continue without any diminution thereof and
shall remain in full force and effect on and after the effectiveness of this
Amendment.
ACKNOWLEDGED, CONSENTED and AGREED to as of the date first written above.
ATARI INTERACTIVE, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Asst. Sec.
PARADIGM ENTERTAINMENT, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Asst. Sec.
REFLECTIONS INTERACTIVE LIMITED
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, Finance and Chief Financial Officer
8
