EXHIBIT 10.1
FOURTH AMENDMENT AND CONSENT TO
CREDIT AGREEMENT
FOURTH AMENDMENT AND CONSENT, dated as of September 12, 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 consent to certain transactions described herein, 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. Consent. As of the Fourth Amendment Effective Date (as
hereinafter defined), Agent and Lenders hereby consent to the transactions
contemplated by that certain draft term sheet dated August 7, 2003 and attached
hereto as Exhibit A (the "Term Sheet"), pursuant to which (a) Parent agrees to
the satisfaction of all Parent Subordinated Debt owed to Parent by Borrower and
outstanding as of the date of the Public Offering (as hereinafter defined) in
exchange for certain amounts of Borrower's common Stock and Borrower's transfer
of certain intercompany loans owed to it by the Parent's Subsidiaries (the "Debt
Satisfaction") and (b) Borrower agrees to include certain shares of its common
Stock that are owned by Parent in an underwritten public offering (the "Public
Offering"; together with the Debt Satisfaction and the other transactions
contemplated by the Term Sheet, the "Offering Transactions"), and Agent and
Lenders acknowledge that no defaults arising directly out of the Offering
Transactions shall occur under Sections 1.3(b)(ii), 1.3(b)(iii), 6.3(b), 6.4,
6.8, 6.14 or 6.18(b) of the Credit Agreement, provided that all such Offering
Transactions are consummated on the terms set forth in the Term Sheet.
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3. Consent and Acknowledgment under Parent Subordination
Agreement. Agent, Lenders and the Credit Parties hereby acknowledge and agree
that (i) notwithstanding the Parent Subordination Agreement, no default or
breach shall occur under Section 3.1 thereof as a result of the Debt
Satisfaction, (ii) following the Offering Transactions, the Parent Subordination
Agreement shall continue to govern any remaining or future Parent Subordinated
Debt and (iii) no future Parent Subordinated Debt shall be considered
Subordinated Secured Notes or Subordinated Convertible Notes (as such terms are
defined under the Parent Subordination Agreement).
4. Amendment to Section 6.3 of the Credit Agreement. As of the
Fourth Amendment Effective Date, clause (iii) of Section 6.3 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"(iii) Parent Subordinated Debt, (excluding, after the completion of
the Offering Transactions, the Parent Subordinated Debt identified in
paragraphs 1, 2, 3, 4 and 5 of Disclosure Schedule (3.24)."
5. Amendment to Section 6.7 of the Credit Agreement. As of the
Fourth Amendment Effective Date, clause (d) of Section 6.7 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"(d) at any time prior to the completion of the Offering Transactions,
the Parent Second Lien."
6. Amendment to Annex A of the Credit Agreement. As of the
Fourth Amendment Effective Date, Annex A of the Credit Agreement is hereby
amended by:
(a) amending and restating clause (d) of the definition
of "Change of Control" to read as follows:
"(d) (i) at any time prior to the completion of the Offering
Transactions, Holdings ceases to own and control at least seventy-five
percent (75%) of the economic and voting rights associated with all of
the outstanding capital Stock of Borrower; or (ii) following the
completion of the Offering Transactions, Holdings ceases to own and
control at least sixty-five percent (65%) of the economic and voting
rights associated with all of the outstanding capital Stock of
Borrower;"; and
(b) inserting the following new definitions to read as
follows:
""Fourth Amendment" means the Fourth Amendment and Consent to this
Agreement, dated as of September 12, 2003.
"Fourth Amendment Effective Date" has the meaning assigned to it in the
Fourth Amendment.
"Offering Transactions" has the meaning assigned to it in the Fourth
Amendment."
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7. 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 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
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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 Fourth 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.
8. Ratification of Credit Agreement; Remedies.
(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.
9. Outstanding Indebtedness; Waiver of Claims. Each of
Borrower and the other Credit Parties hereby acknowledges and agrees that as of
September 12, 2003 the aggregate outstanding principal amount of the Revolving
Credit Loan is $5,846,000 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 Fourth Amendment Effective Date.
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10. 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.
11. Effectiveness. This Amendment shall become effective only
upon satisfaction in full in the judgment of the Agent of each of the following
conditions on or prior to December 31, 2003( the date such conditions are
satisfied by, the "Fourth Amendment Effective Date"):
(a) Amendment. Agent shall have received on or
prior to September 8, 2003 three (3) original copies of this Amendment
duly executed and delivered by Agent, Lenders and Borrower and
acknowledged and agreed to by each of the Guarantors and Reflections.
(b) Board Resolutions. Agent shall have received
a certificate of the Secretary or Assistant Secretary of Borrower
certifying as to the resolutions adopted by the Board of Directors of
Borrower approving this amendment and the Offering Transactions.
(c) Offering Transactions. The Offering
Transactions shall be completed no later than December 31, 2003.
(d) Aggregate Offering Price. The aggregate
offering price of the Public Offering shall be no less than
$115,000,000.
(e) Release of Parent Subordinated Debt. All
documentation relating to the Subordinated Secured Notes and the
Subordinated Convertible Notes (as such terms are defined in the Parent
Subordination Agreement) is terminated (and Borrower shall have no
further right to incur additional Indebtedness thereunder) and all
Liens held by Parent securing the Subordinated Secured Notes are
released and terminated, in each case, on terms and pursuant to
documentation satisfactory to Agent.
(f) Proceeds of Public Offering. Borrower has
received aggregate proceeds from the Public Offering (less all legal
fees, underwriting expenses and other related costs) in an amount not
less than $35,000,000.
(g) Certificate. Agent has received a
certificate from Borrower and Parent making certain representations
relating to the Offering Transactions as Agent shall require.
(h) License Agreement. Agent shall have received
of a copy of an amendment to that certain Trademark License Agreement
dated as of May 1, 2003 between Borrower and Interactive, on the terms
as set forth in the Term
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Sheet and otherwise as satisfactory to Agent, certified as true,
complete and correct by an authorized officer of Borrower.
(i) Indebtedness. After giving effect to the
Offering Transactions, none of the Credit Parties shall have any
outstanding Indebtedness to Parent except the Indebtedness owed by
Interactive to Parent (1) referred to in paragraph 1(a) of the Term
Sheet, and (2) the loan referred to in paragraph 6 of Disclosure
Schedule (3.24) to the Credit Agreement in an amount not exceeding
$47,900,000.
(j) Acknowledgment. Agent shall have received an
acknowledgment from each of Parent and Holdings confirming the matters
set forth in clauses (ii) and (iii) of Section 3 hereof and Section
11(e) and (f) hereof.
(k) Representations and Warranties. All
representations and warranties contained in this Amendment shall be
true and correct on and as of the date hereof and the Fourth Amendment
Effective Date.
12. 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
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OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH 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.
13. 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.
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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: Guyennot, Denis
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]
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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 Xxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxx
Title: Asst. Sec.
PARADIGM ENTERTAINMENT, INC.
By: /s/ Xxxx Xxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxx
Title: Asst. Sec.
REFLECTIONS INTERACTIVE LIMITED
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Director
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