SECOND AMENDMENT, WAIVER AND AGREEMENT
THIS SECOND AMENDMENT, WAIVER AND AGREEMENT (this "Amendment") is
made and entered into as of this 29th day of June, 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 and waive
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 and waiver.
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: "Applicable Margin", "Borrowing Base",
"EBIT", "Investment Account", "Leverage Ratio", "Material Subsidiary",
"Obligations", "Pledge Agreement", "Security Agreement", "Subordinated Debt",
"Tangible Net Worth" and "UCC" and (b) adding the following new defined terms in
their proper alphabetical order:
"Acceptable Agreement" means a fully executed definitive
agreement with respect to a sale or recapitalization of, or a merger
transaction involving, the Borrower and its Subsidiaries pursuant to
which the Obligations will be repaid in full at the closing of such
sale, recapitalization or merger.
"Borrowing Base" means as of any date of determination, an
amount equal to the sum of (a) fifty percent (50%) of the aggregate
actual invoice amount of Eligible Accounts, plus (b) the lesser of (i)
twenty-five percent (25%) of the aggregate cost of Eligible Inventory
and (ii) $30,000,000, plus (c) during the period from the Second
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Amendment Effective Date through and including March 31, 2000,
$20,000,000; provided that the percentages set forth in clauses (a) and
(b) 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).
"Business Plan" means the three (3) year business plan
prepared by the Borrower and delivered to the Administrative Agent and
the Lenders on or about June 22, 1999, as such Business Plan is
modified within thirty (30) days after the Second Amendment Effective
Date solely to provide a monthly statement of income and cash flows for
each fiscal month to occur after the Second Amendment Effective Date
during Fiscal Year 2000.
"Capital Expenditures" means for any period, all amounts which
would, in accordance with GAAP, be set forth as capital expenditures
(exclusive of any amount attributable to capitalized interest) on the
consolidated statement of cash flows or other similar statement of the
Borrower and its Consolidated Subsidiaries for such period.
"Concentration Account" means the account to be established by
the Borrower and maintained at the office of the Administrative Agent
at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, that shall be
used for the daily concentration of funds received by the Borrower or
any of its Subsidiaries (a) from the domestic operation of their
respective businesses or (b) in the United States from the foreign
operation of their respective businesses.
"Obligations" means the Borrower's obligations under the Loan
Documents in respect of the unpaid principal of and interest on the
Notes (including, without limitation, interest accruing at the then
applicable rate provided herein after the maturity of the Loans and
interest accruing at the then applicable rate provided herein after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) and all other obligations and
liabilities of the Borrower to the Administrative Agent, the Issuing
Lender and the Lenders in respect of the Loans, the Notes, the Letters
of Credit, the L/C Obligations, any Hedging Agreements permitted or
required hereunder, the Concentration Account or any cash management
arrangements with any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, the Notes, the other Loan Documents, the Letters of Credit,
the L/C Obligations, any Hedging Agreements permitted or required
hereunder, or any other document made, delivered or given in connection
herewith or therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent, the Issuing Lender or the
Lenders that are required to be paid by the Borrower pursuant to the
terms of this Agreement or any other Loan Document).
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"Pledge Agreement" means the Amended and Restated Pledge
Agreement, dated as of June 29, 1999, executed by the Borrower and the
Guarantors named therein in favor of the Administrative Agent, for the
ratable benefit of the Lenders and the Administrative Agent, as
amended, modified or supplemented from time to time.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 29, 1999, executed by the Borrower and the
Lenders, as amended, modified or supplemented from time to time.
"Second Amendment" means the Second Amendment, Waiver and
Agreement, dated as of June 29, 1999, to this Agreement.
"Second Amendment Effective Date" means the Effective Date
under and as defined in the Second Amendment.
"Security Agreement" means the Amended and Restated Security
Agreement, dated as of June 29, 1999, executed by the Borrower and the
Guarantors in favor of the Administrative Agent, for the ratable
benefit of the Lenders and the Administrative Agent, as amended,
modified or supplemented from time to time.
"Shareholder Subordinated Debt" means the $30,000,000 of
unsecured Subordinated Debt to be provided to the Borrower by certain
shareholders of the Borrower on or before July 30, 1999 in accordance
with, and subject to all of the terms and conditions contained in, the
Shareholder Subordinated Debt Commitment Letter and the Shareholder
Subordinated Debt Notes.
"Shareholder Subordinated Debt Commitment Letter" means the
fully executed commitment letter dated the Second Amendment Effective
Date and attached as Exhibit A to the Second Amendment which, together
with the Shareholder Subordinated Debt Notes, sets forth the terms and
conditions on which certain shareholders of the Borrower have
unconditionally agreed to provide the Shareholder Subordinated Debt to
the Borrower on or before July 30, 1999 unless, on or before July 29,
1999, the Obligations have been indefeasibly paid in full in cash (or
cash collateralized in the case of L/C Obligations) and the Aggregate
Commitment terminated.
"Shareholder Subordinated Debt Notes" means the promissory
notes, each in the form attached as Exhibit A to the Shareholder
Subordinated Debt Commitment Letter, executed by the Borrower
evidencing the Borrower's obligations in respect of the Shareholder
Subordinated Debt and setting forth the terms of the subordination of
the Shareholder Subordinated Debt to the Obligations.
"Subordinated Debt" means the collective reference to Debt on
Schedule 6.1(t) hereof designated as Subordinated Debt, the Shareholder
Subordinated Debt and any other Debt of the Borrower or any Subsidiary
subordinated in right and time of payment to the
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Obligations and containing such other terms and conditions, all as
reasonably satisfactory to the Required Lenders.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York, as amended, modified or supplemented from time to
time.
"Warrant Agreement" means the Warrant Agreement, dated as of
June 29, 1999, executed by the Borrower and the Lenders, as amended,
modified or supplemented from time to time.
"Warrants" means the warrants to be issued on the Second
Amendment Effective Date by the Borrower to the Lenders pursuant to the
Warrant Agreement, together with the warrant certificates evidencing
such warrants.
1.2 Amendment to Section 2.3 (Repayment of Loans). Section 2.3
of the Credit Agreement is hereby amended by adding new paragraphs (e) and (f)
at the end of said Section as follows:
"(e) Concentration Account. The outstanding principal amount
of the Loans shall be prepaid on each Business Day on or after July 30,
1999 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.
(f) Shareholder Subordinated Debt. On or before July 30, 1999,
the Borrower shall apply the $30,000,000 of proceeds of the Shareholder
Subordinated Debt to the repayment of the outstanding Loans.
Notwithstanding Section 2.5(b)(i), amounts prepaid pursuant to this
Section 2.3(f) may be reborrowed.".
1.3 Amendment to Section 2.5 (Permanent Reduction of Aggregate
Commitment). Section 2.5(b) is hereby amended by adding the following phrase at
the end of clause (i) contained in said Section: "or any issuance of any class
of capital stock of the Borrower or any Subsidiary (other than (A) in connection
with the exercise of employee stock options or the sale to employees of such
capital stock pursuant to their employment arrangements, (B) the issuance of
capital stock by a Subsidiary to the Borrower to the extent permitted by Section
10.4 and (C) up to $30,000,000 of Net Cash Proceeds from any other such issuance
of capital stock)".
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 "September 11, 2001" contained in said Section and by substituting therefor a
reference to "June 30, 2000".
1.5 Amendment to Section 3.1 (L/C Commitment). Section 3.1 of
the Credit Agreement is hereby amended by deleting the reference to "North
Carolina" contained in said Section and by substituting therefor a reference to
"New York".
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1.6 Amendment to Section 3.3 (Commissions and Other Charges).
Section 3.3(a) of the Credit Agreement is hereby amended by deleting the
reference to "the Applicable Margin" contained in such Section and by
substituting therefor a reference to "4%".
1.7 Amendment to Section 4.1 (Interest). (a) Section 4.1(a) of
the Credit Agreement is hereby amended by (i) deleting the phrase "(A) the Base
Rate plus for the period commencing 4/1/99 and continuing through and including
12/31/99 a margin of 0.500%" in the first sentence of said Section and by
substituting therefor the phrase "(A) the Base Rate plus 2.5%" and (ii) deleting
the phrase "LIBOR Rate plus the Applicable Margin as set forth in Section
4.1(c)" contained in clauses (i)(B) and (ii) of said Section and by substituting
therefor the phrase "LIBOR Rate plus 4%".
(b) Section 4.1(c) of the Credit Agreement is hereby amended
by deleting said Section in its entirety and by substituting therefor the
following:
"(c) Intentionally Omitted.".
1.8 Amendment to Section 4.3 (Fees). Section 4.3(a) of the
Credit Agreement is hereby amended by deleting said Section in its entirety and
by substituting therefor the following:
"(a) Commitment Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate of .50% per annum on the average daily unused
portion of the Aggregate Commitment. The commitment fee shall be
payable in arrears on the last Business Day of each calendar quarter
during the term of this Agreement and on the Revolving Credit
Termination Date. Such commitment fee shall be distributed by the
Administrative Agent to the Lenders pro rata in accordance with the
Lenders' respective Commitment Percentages.".
1.9 Amendment to Section 7.1 (Financial Statements and
Projections). Section 7.1 of the Credit Agreement is hereby amended by adding
new paragraphs (e) and (f) at the end of said Section as follows:
"(e) Monthly Financial Statements. As soon as practicable and
in any event within (i) thirty (30) days after the end of each fiscal
month of the Borrower (and within 45 days after the end of the third,
sixth, ninth and twelfth such fiscal month), (A) an unaudited
Consolidated balance sheet of the Borrower and its Subsidiaries as of
the close of such fiscal month and unaudited Consolidated statements of
income, retained earnings and cash flows for the fiscal month then
ended, all in reasonable detail setting forth in comparative form the
corresponding figures for such fiscal month set forth in the Business
Plan, prepared by the Borrower in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of
accounting principles and practices during the period, and certified by
a Responsible Officer to present fairly in all material respects the
financial condition of the Borrower and its Subsidiaries as of their
respective dates and the results of operations of
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the Borrower and its Subsidiaries for the respective periods then
ended, subject to normal year end adjustments and (B) commencing July
30, 1999, a written report certified by a Responsible Officer setting
forth the current status of the Borrower's efforts, and an update of
developments since the date of delivery of the most recent such report,
to consummate a transaction pursuant to an Acceptable Agreement and
(ii) thirty (30) days after the end of each fiscal month of the
Borrower, other reports and financial and operational information
pursuant to a monthly monitoring package to be agreed upon by the
Borrower and the Administrative Agent.
(f) Weekly Cash Flow. On each Wednesday, commencing on July
14, 1999, a forecast of the consolidated receipts and disbursements for
the Borrower and its Subsidiaries (and separately for their U.K. and
Australian operations) for the period of eight consecutive calendar
weeks beginning in the week in which the applicable Wednesday occurs,
together with a comparison of the actual receipts and disbursements for
the immediately preceding week to the most recently forecasted receipts
and disbursements for the week in which such Wednesday occurs, together
with a certificate of a Responsible Officer that the proceeds of the
Extensions of Credit have been used solely for expenditures of the type
and in the approximate amounts set forth in the Business Plan.".
1.10 Amendment to Section 7.2 (Financial Statements and
Projections). Section 7.2(b) of the Credit Agreement is hereby amended by adding
the following phrase immediately before the period at the end of said Section:
", together with an updated accounts aging report and an updated schedule of
inventory, each in form and substance reasonably acceptable to the
Administrative Agent".
1.11 Amendment to Section 8.12 (Additional Subsidiaries;
Collateral). (a) Section 8.12(b) of the Credit Agreement is hereby amended by
deleting said Section in its entirety and by substituting therefor the
following:
"(b) Intentionally Omitted.".
(b) Section 8.12(c) of the Credit Agreement is hereby amended
by deleting each reference to "Material Subsidiary" contained in said Section
and by substituting therefor a reference to "Domestic Subsidiary".
1.12 Amendment to Article VIII (Affirmative Covenants).
Article VIII of the Credit Agreement is hereby amended by adding the following
new Section 8.16 at the end of said Article:
"SECTION 8.16 Pursuit of Transaction. Each of the Borrower and
its Subsidiaries shall use its reasonable best efforts to pursue and
consummate a transaction pursuant to an Acceptable Agreement and, in
connection therewith, the Borrower shall provide such information and
attend such meetings (and cause Bear, Xxxxxxx and Co. Inc. to
participate
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in such meetings) as reasonably requested by the Administrative Agent
or the Lenders to review and discuss such efforts.".
1.13 Amendment to Article IX (Financial Covenants). Article IX
of the Credit Agreement is hereby amended by deleting said Article in its
entirety and by substituting therefor the following:
"ARTICLE IX
Financial Covenants
Until all of the Obligations have been paid and
satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 13.11 hereof, the
Borrower and its Subsidiaries on a Consolidated basis will not:
SECTION 9.1 EBITDA: Permit EBITDA for any period from April 1,
1999 through the dates set forth below to be less than the
corresponding amount set forth below for such period:
Period Amount
------ ------
June 30, 1999 $ 0
September 30, 1999 $10,200,000
October 31, 1999 $14,300,000
December 31,1999 $33,900,000
March 31, 2000 $44,200,000
In the case of the period ending on October 31, 1999, as soon as
practicable and in any event no later than November 30, 1999, the
Borrower will furnish to the Administrative Agent (with sufficient
copies for each Lender) a certificate of a Responsible Officer
certifying as to the Borrowers' compliance with this Section 9.1 for
such period.
SECTION 9.2 Capital Expenditures: Permit Capital Expenditures
for any fiscal quarter of the Borrower set forth below to be more than
the corresponding amount (the "Base Amount") set forth below for such
fiscal quarter:
Period Amount
------ ------
April 1, 1999 through June 30, 1999 $ 5,600,000
July 1, 1999 through September 30, 1999 $ 4,200,000
October 1, 1999 through December 31,1999 $ 4,300,000
January 1, 2000 through March 31, 2000 $ 4,500,000
April 1, 2000 through June 30, 2000 $ 4,700,000
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provided, however, that for any fiscal quarter of the Borrower, the
Base Amount for such fiscal quarter may be increased by carrying over
any portion of the Base Amount not spent in the immediately preceding
fiscal quarter (but not in any fiscal quarter prior thereto).".
1.14 Amendment to Section 10.4 (Limitations on Loans,
Advances, Investments and Acquisitions). (a) Sections 10.4(c) and (h) of the
Credit Agreement are hereby amended by deleting of said Sections in their
entirety and by substituting therefor the following:
"(c) Intentionally Omitted."; and
"(h) Intentionally Omitted.".
(b) Section 10.4(g) of the Credit Agreement is hereby amended
by adding the following phrase immediately before the semi-colon at the end of
said Section: ", provided that any such investment shall not exceed $500,000 and
the aggregate amount of all such investments shall not exceed $2,000,000".
1.15 Amendment to Section 10.5 (Limitations on Mergers and
Liquidation). Section 10.5(c) of the Credit Agreement is hereby amended by
adding the following phrase immediately before the semi-colon at the end of said
Section: "prior to giving effect to the Second Amendment".
1.16 Amendment to Section 10.6 (Limitations on Sale of
Assets). Section 10.6(f) the Credit Agreement is hereby amended by deleting said
Section in its entirety and by substituting therefor the following:
"(f) Intentionally Omitted.".
1.17 Amendment to Article X (Negative Covenants). Article X of
the Credit Agreement is hereby amended by adding the following new Sections
10.12 and 10.13 at the end of said Article:
"SECTION 10.12 Cash Management. Fail to maintain on and after
July 30, 1999 a system of cash management that concentrates in the
Concentration Account on a daily basis all available funds (a) from the
domestic operations of the Borrower and its Subsidiaries and (b)
received by the Borrower and its Subsidiaries in the United States from
the foreign operations of the Borrower and its Subsidiaries .
SECTION 10.13 Acceptable Agreement. Fail to deliver a fully
executed Acceptable Agreement to the Administrative Agent on or before
December 31, 1999.".
1.18 Amendment to Section 11.1 (Events of Default). (a)
Section 11.1(b) of the Credit Agreement is hereby amended by deleting the
reference to "five (5) Business Days" contained in said Section and by
substituting therefor a reference to "three (3) Business Days".
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(b) Section 11.1 of the Credit Agreement is hereby amended by
adding a new paragraph (o) at the end of said Section as follows:
"(o) Shareholder Subordinated Debt. Unless all of the Lenders
otherwise consent, (i) the Loans shall not have been reduced by
$30,000,000 on July 30, 1999 with the proceeds of the Shareholder
Subordinated Debt as required by Section 2.3(f), (ii) any material term
or provision of any Shareholder Subordinated Debt Note, or any material
term of the Shareholder Subordinated Debt, is amended, restated,
supplemented (including without limitation, as a result of the
execution of any documents with respect thereto that are not acceptable
to the Lenders), waived or otherwise modified or (iii) the Borrower or
any Subsidiary makes any direct or indirect cash payment on account of
the principal of, interest on or fees with respect to, the Shareholder
Subordinated Debt, or redeems or acquires (including without
limitation, by way of depositing with any trustee or other Person any
money, securities or other property for the purpose of paying any
thereof), or grants any collateral security for or guaranty of, the
Shareholder Subordinated Debt.".
1.19 Amendment to Section 13.4 (Governing Law). Section 13.4
of the Credit Agreement is hereby amended by deleting said Section in its
entirety and by substituting therefor the following:
"SECTION 13.4 Governing Law. This Agreement and the other Loan
Documents and the rights and obligations of the parties hereunder and
under the other Loan Documents shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.".
1.20 Amendment to Section 13.5 (Consent to Jurisdiction).
Section 13.5 of the Credit Agreement is hereby amended by deleting said Section
in its entirety and by substituting therefor the following:
"SECTION 13.5 Submission to Jurisdiction; Waivers. The
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other
Loan Documents to which it is a party, or for recognition and
enforcement of any judgement in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead
or claim the same;
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(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the Borrower at its address
set forth in Section 13.1 or at such other address of which
the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by
Applicable Law or shall limit the right to xxx in any other
jurisdiction; and
(e) waives, to the maximum extent not prohibited by
Applicable Law, any right it may have to claim or recover in
any legal action or proceeding referred to in this Section
13.5 any special, exemplary, punitive or consequential
damages.".
1.21 Amendment to Section 13.6 (Binding Arbitration; Waiver of
Jury Trial). Section 13.6 of the Credit Agreement is hereby amended by deleting
said Section in its entirety and by substituting therefor the following:
"SECTION 13.6 Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE
AGENT, THE LENDERS AND THE BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.".
1.22 Amendment to Section 13.10 (Successors and Assigns;
Participations) and Definition of Eligible Assignee. (a) Section 13.10(b) of the
Credit Agreement is hereby amended by deleting the phrase "the consent of the
Borrower (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents"
contained in said Section and by substituting therefor the phrase "the consent
of the Administrative Agent, which consent".
(b) The definition of Eligible Assignee contained in Section
1.1 of the Credit Agreement is hereby amended by deleting the phrase "by the
Borrower and" in clause (f) of said definition.
SECTION 2. WAIVER.
2.1 Waiver of Section 10.6 (Limitations on Sale of Assets).
The Lenders hereby waive application of Section 10.6 of the Credit Agreement
solely to the extent necessary to permit the Borrower to consummate the proposed
sale of all of the common stock of One Zero Media, Inc., a Wholly-Owned
Subsidiary of the Borrower, provided that the foregoing waiver is conditioned
upon (a) within one Business Day after the receipt of the Net Cash Proceeds of
such sale, the Borrower shall apply an amount equal to such Net Cash Proceeds to
prepay the Loans
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and (b) no Default or Event of Default shall then have occurred and be
continuing or would result from consummation of such sale. The Lenders hereby
waive the requirement set forth in Section 2.5(b)(ii) that the Aggregate
Commitment shall be permanently reduced by an amount equal to the Net Cash
Proceeds received by the Borrower in connection with the sale of One Zero Media,
Inc., provided that the $2,000,000 basket contained in clause (ii) of Section
2.5(b) shall be deemed fully utilized as a result of the receipt of such Net
Cash Proceeds.
SECTION 3. MISCELLANEOUS.
3.1 Representations and Warranties; No Default. (a) After
giving effect to this Amendment, the Borrower hereby represents and warrants
that 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 that 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
each Domestic Subsidiary has duly executed and delivered the Security Agreement,
the Guaranty Agreement and, to the extent named as a party therein, the Pledge
Agreement.
(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.
3.2 Payment of Fees and Expenses. (a) The Borrower shall pay
to the Administrative Agent, for the account of the Lenders, an amendment fee
equal to $2,187,500 (the "Amendment Fee"), which shall be fully earned on the
Effective Date and payable as follows: (i) $1,093,750 on the Effective Date and
(ii) $1,093,750 on the earlier of (A) July 30, 1999 and (B) the date on which
the Obligations are repaid in full. 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.
3.3 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 the following:
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(a) counterparts of this Amendment duly executed by the
Borrower and the Lenders;
(b) duly executed copies of the Security Agreement, the Pledge
Agreement, the Guaranty Agreement, the Registration Rights Agreement and the
Warrant Agreement;
(c) for the account of each Lender based upon such Lender's
Commitment Percentage thereof, (i) $1,093,750 of the Amendment Fee and (ii) the
$781,250 balance of the amendment fee payable pursuant to the First Waiver and
Agreement, dated as of April 8, 1999, under the Credit Agreement;
(d) 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;
(e) the fully executed Shareholder Subordinated Debt
Commitment Letter, attached as Exhibit A hereto;
(f) for the account of each Lender based upon such Lender's
Commitment Percentage thereof, Warrants to acquire 750,000 shares of the common
stock of the Borrower in accordance with the terms of the Warrant Agreement; and
(g) evidence reasonably satisfactory to the Administrative
Agent as to compliance by the Borrower with Section 7.1(b) of the Credit
Agreement with respect to the Borrower's Fiscal Year ended March 31, 1999.
3.4 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.
3.5 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.
3.6 Governing Law. This Amendment shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
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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 XXXXX
-----------------------------
Name: Xxxxxx Xxxxx
Title: Vice President and Chief Financial
Officer
FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
By: /s/ XXXXX XXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
EUROPEAN AMERICAN BANK
By: /s/ XXXXXXX XXXXX
-----------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
FLEET BANK, N.A.
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
00
XXXXXXXX XXXX XX XXXXXX
By: /s/ XXXXX X. XXXXX
----------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
By: /s/ XXXXXXX X. XXXXX
----------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Manager
NATIONSBANK, N.A.
By: /s/ Xxx X. Xxxxxxx
----------------------
Name: Xxx X. Xxxxxxx
Title: Managing Director
THE BANK OF NOVA SCOTIA
By: /s/ X.X. XXXXXXXX
----------------------
Name: X.X. Xxxxxxxx
Title: Senior Relationship Manager
