EXHIBIT 10.3
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY (this "GUARANTY") dated as of February 19, 2002 by
and among GameStop, Inc., a Minnesota corporation, Babbage's Etc. LLC, a
Delaware limited liability company, Sunrise Publications, Inc., a Minnesota
corporation and XxxxXxxx.xxx, Inc., a Delaware corporation (each, a "GUARANTOR"
and collectively, the "GUARANTORS"), and FLEET NATIONAL BANK, a national banking
institution having an office located at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "ADMINISTRATIVE AGENT"), as administrative agent for
itself and each other Bank (as defined below) under the terms of that certain
Revolving Credit Agreement dated as of February 19, 2002 (as it may be amended
from time to time, the "LOAN AGREEMENT") by and among GameStop Corp., a Delaware
corporation (the "BORROWER"), the lending institutions that are party thereto
(collectively, the "BANKS"), and the Administrative Agent.
WHEREAS, the Borrower is the direct legal and beneficial owner of 100%
of the issued and outstanding shares of capital stock of XxxxXxxx.xxx, Inc. and
GameStop, Inc., and GameStop, Inc. is the direct legal and beneficial owner of
100% of the issued and outstanding shares and limited liability company
interests of Babbage's Etc. LLC and Sunrise Publications, Inc.;
WHEREAS, the Borrower has requested that the Banks enter into the Loan
Agreement with the Borrower, and to make Loans to the Borrower and issue Letters
of Credit on the Borrower's behalf, upon the terms and subject to the conditions
set forth therein;
WHEREAS, it is a condition precedent to the Banks' agreement to enter
into the Loan Agreement and extend credit to the Borrower thereunder that the
Guarantors execute and deliver this Guaranty to the Administrative Agent
agreeing to be bound by the terms and conditions set forth herein.
NOW, THEREFORE, in order to induce the Banks to enter into the Loan
Agreement and extend credit to the Borrower thereunder, and in consideration
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1. DEFINITIONS; INTERPRETATION.
1.01 Generally. Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Loan Agreement. Each Guarantor
hereby acknowledges receipt of a copy of the Loan Agreement.
1.02 Terms Defined in this Guaranty. For purposes of this Guaranty, the
following terms have the meanings set forth below:
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
Preamble.
"BANKS" shall have the meaning set forth in the Preamble.
"GUARANTOR" and "GUARANTORS" shall have the respective meanings set
forth in the Preamble.
"GUARANTY" shall have the meaning set forth in the Preamble.
"LOAN AGREEMENT" shall have the meaning set forth in the Preamble.
"OBLIGOR(S)" means the Borrower and any other Person who shall at any
time and from time to time be primarily or secondarily liable for
payment and/or performance of all or any part of the Obligations.
1.03 Matters of Interpretation and Construction.
(a) The language of this Guaranty, having been negotiated by the
parties hereto, shall not be construed against any party hereto by reason of the
extent to which such party or its counsel participated in the drafting hereof or
by reason of the extent to which any such provision is inconsistent with any
prior draft hereof.
(b) Use of the singular shall be deemed to include the plural and
use of the plural shall be deemed to include the singular. Use of any gender
shall be deemed to include all other genders.
(c) A reference to any law, agreement or other document includes
any amendment or modification to such law, agreement or document.
(d) A reference to any Person includes its successors and
permitted assigns.
(e) Unless the context clearly requires otherwise, reference to a
particular "Article" or "Section" refers to the corresponding article or section
of this Guaranty.
(f) Unless the context clearly requires otherwise, use of the
word "including" shall mean "including, without limitation".
ARTICLE 2. UNLIMITED GUARANTY.
2.01 Guaranty of Obligations. The Guarantors, jointly and severally,
hereby absolutely and unconditionally guaranty to the Administrative Agent, for
the benefit of the Administrative Agent and the Banks, the prompt and complete
payment in cash when due and payable (whether at the stated or accelerated
maturity thereof, or otherwise) of all Obligations of the Borrower to the
Administrative Agent and the Banks and the performance of the Borrower's
covenants under all Loan Documents and instruments evidencing any of the
Obligations, or under which the Obligations may have been issued,
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created, assumed or guarantied, and all expenses incurred in collecting the
same, all of which shall conclusively be deemed to have been incurred in
reliance upon this Guaranty. This Guaranty is a guaranty of payment and not of
collection, and is absolute and unconditional. In the event that any part of the
Obligations shall not have been so paid in full when due and payable, the
Guarantors will, immediately upon notice from the Administrative Agent or,
without notice, immediately upon the occurrence of an Event of Default under
Section 7.1(f) or (g) of the Loan Agreement, pay or cause to be paid to the
Administrative Agent the unpaid amount of the Obligations which are then due and
payable. The obligations of each of the Guarantors hereunder shall not be
affected by the invalidity, unenforceability or irrecoverability of any of the
Obligations as against any of the other Guarantors or as against any other
Obligor. For purposes hereof, the Obligations shall be due and payable when and
as the same shall be due and payable under the terms of the Loan Agreement or
any other Loan Document notwithstanding the fact that the collection or
enforcement thereof may be stayed or enjoined under the Federal Bankruptcy Code
or other applicable law.
2.02. Continuing Obligations. The Guarantors acknowledge that the
Administrative Agent and the Banks, in determining to enter into the Loan
Agreement, have relied upon the fact that this Guaranty constitutes the
continuing and irrevocable agreement of each of the Guarantors, and each
Guarantor agrees that its obligations hereunder may not be revoked in whole or
in part. The obligations of the Guarantors hereunder shall terminate when the
commitment of the Administrative Agent and the Banks to extend credit under the
Loan Agreement shall have terminated and all of the Obligations have been paid
in full in cash and discharged; provided, however, that:
(a) if a claim is made against the Administrative Agent or the
Banks at any time for repayment or recovery of any amounts or any property
received by the Administrative Agent or the Banks from any source on account of
any of the Obligations and the Administrative Agent or the Banks repay or return
any amounts or property so received (including interest thereon to the extent
required to be paid by the Administrative Agent or the Banks) or
(b) if the Administrative Agent or the Banks become liable for
any part of such claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any settlement
or compromise of any such claim,
then the Guarantors shall remain liable under this Guaranty for the amounts so
repaid or property so returned or the amounts for which the Administrative Agent
or the Banks become liable (such amounts being deemed part of the Obligations)
to the same extent as if such amounts or property had never been received by the
Administrative Agent or the Banks, notwithstanding any termination hereof or the
cancellation of any instrument or agreement evidencing any such Obligations. Not
later than five days after receipt of notice from the Administrative Agent, the
Guarantors shall pay to the Administrative Agent an amount equal to the amount
of such repayment or return for which the Administrative Agent or the Banks have
so become liable. Payments hereunder by the Guarantors may be required by the
Administrative Agent on any number of occasions.
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ARTICLE 3. WAIVERS.
3.01 Guarantor's Waivers. Except to the extent expressly required by
any of the Loan Documents, each Guarantor waives, to the fullest extent
permitted by law, all of the following (including all defenses, counterclaims
and other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest of nonpayment of
any of the Obligations, and notice of protest, dishonor or nonperformance;
(b) notice of acceptance of this Guaranty and notice that credit
has been extended in reliance on such Guarantor's guaranty of the Obligations;
(c) notice of any Default or Event of Default, of any inability
to enforce the Obligations or any provision of the Loan Documents, or any rights
against any Collateral;
(d) demand for performance or observance of, and any enforcement
of any provision of any of the Loan Documents, or any pursuit or exhaustion of
rights or remedies with respect to the Obligations or the Collateral, and any
requirement of diligence or promptness on the part of the Administrative Agent
in connection with any of the foregoing;
(e) any act or omission on the part of the Administrative Agent
which may impair or prejudice any rights of such Guarantor, including rights to
obtain subrogation, exoneration, contribution, indemnification or any other
reimbursement from any Obligor or other Person, or otherwise operate as a deemed
release or discharge;
(f) failure or delay to perfect or continue the perfection of any
security interest in any Collateral or any other action which xxxxx or impairs
the value of, or any failure to preserve or protect the value of, any
Collateral;
(g) any statute of limitations or other rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than the obligation of the principal;
(h) any "single action" or "anti-deficiency" law which would
otherwise prevent the Administrative Agent from bringing any action, including
any claim for a deficiency, against such Guarantor before or after the
Administrative Agent's commencement or completion of any foreclosure action,
whether judicially, by exercise of power of sale or otherwise, or any other law
which would otherwise require any election of remedies by the Administrative
Agent;
(i) all demands and notices of every kind with respect to the
foregoing; and
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(j) to the extent not referred to above, all defenses (other than
payment) which the Borrower may now or hereafter have to the payment of the
Obligations, together with all suretyship defenses, which could otherwise be
asserted by such Guarantor.
Each Guarantor represents that it has obtained the advice of legal counsel as to
the availability of suretyship and other defenses with respect to its
obligations hereunder in the absence of the waivers contained in this Section
3.01.
3.02 Administrative Agent's Power to Waive, Etc. Each Guarantor grants
to the Administrative Agent full power in its sole discretion, without notice to
or consent of such Guarantor (such notice and consent being expressly waived to
the fullest extent permitted by applicable law), and without in any way
affecting the liability of such Guarantor hereunder:
(a) to waive compliance with, and any Default or Event of Default
under, and to consent to any amendment to or modification or termination of any
terms or provisions of, or to give any waiver in respect of, any of the Loan
Documents, the Collateral, the Obligations or any guaranty thereof (each as from
time to time in effect);
(b) to grant any extensions of the Obligations, and any other
indulgence with respect thereto, and to effect any total or partial release (by
operation of law or otherwise), discharge, compromise or settlement with respect
to the obligations of the Obligors or any other Person in respect of the
Obligations, whether or not rights against any Guarantor hereunder are reserved
in connection therewith;
(c) to take security in any form for the Obligations, and to
consent to the addition to or the substitution, exchange, release or other
disposition of, or to deal in any other manner with, any part of any property
contained in the Collateral whether or not the property, if any, received upon
the exercise of such power shall be of a character or value the same as or
different from the character or value of any property disposed of, and to
obtain, modify or release any present or future guaranties of the Obligations
and to proceed against any of the Collateral or such guaranties in any order;
(d) to collect or liquidate or realize upon any of the
Obligations or the Collateral in any manner or to refrain from taking any such
action; and
(e) to extend credit under any of the Loan Documents, or
otherwise, in such amount and on such terms as the Administrative Agent may
determine in its sole discretion, including increasing the amount of credit and
the interest rate and fees with respect thereto, even though the condition of
the Obligors (financial or otherwise, on an individual or Consolidated basis)
may have deteriorated since the date hereof.
3.03 Non-Waiver by Administrative Agent. No delay or omission on the
part of the Administrative Agent in exercising any right under this Guaranty or
any other Loan
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Document, or under any guaranty of the Obligations, or with respect to the
Collateral, shall operate as a waiver or relinquishment of such right. No action
which the Administrative Agent or the Borrower may take or refrain from taking
with respect to the Obligations or any Collateral, including the amendment or
modification of any document relating thereto, or any waiver with respect
thereto, shall affect the provisions of this Guaranty or the obligations of any
Guarantor hereunder. None of the Administrative Agent's rights shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
any Obligor, or by any noncompliance by the Borrower with the terms, provisions
and covenants of any Loan Document, regardless of any knowledge thereof which
the Administrative Agent may have or with which the Administrative Agent may be
charged.
ARTICLE 4. INFORMATION REGARDING THE BORROWER, ETC. Each Guarantor (a) has made
such investigation as it deems desirable of the risks undertaken by it in
entering into this Guaranty and is fully satisfied that it understands all such
risks, (b) releases the Administrative Agent and the Banks from any obligation
which may now or hereafter exist to disclose to such Guarantor (i) the risks
being undertaken by entering into this Guaranty or of any changes in such risks
or (ii) any matter related to the business, operations, character, collateral,
credit, condition (financial or otherwise), income or prospects of the Borrower
or its Affiliates or their respective properties or management, whether now or
hereafter known by the Administrative Agent. Each Guarantor represents, warrants
and agrees that it has sole responsibility for obtaining from the Borrower all
information concerning the Loan Documents and all other information as to the
Borrower and its Affiliates or their respective properties or management as such
Guarantor deems necessary or desirable, and, from and after the date hereof,
each Guarantor undertakes to keep itself so informed.
ARTICLE 5. CERTAIN GUARANTOR REPRESENTATIONS. Each Guarantor represents, as to
itself, as of the date hereof that:
(a) it is in the best interest of such Guarantor, is consistent
with the purposes for which such Guarantor was organized as an integral part of
the business conducted and proposed to be conducted by the Borrower Affiliated
Group, and is reasonably necessary and convenient to the conduct of such
business, to induce the Administrative Agent and the Banks to enter into the
Loan Agreement and to extend credit to the Borrower by undertaking the
obligations set forth in this Guaranty;
(b) the business of such Guarantor benefits from the successful
performance of the business of each other Guarantor and each other member of the
Borrower Affiliated Group, and the Borrower Affiliated Group as a whole; the
failure of any member of the Borrower Affiliated Group to cooperate with all
other members of the Borrower Affiliated Group in the conduct of their
respective businesses is reasonably likely to have an adverse impact on the
business of each other member of the Borrower Affiliated Group; and the failure
of any member of the Borrower Affiliated Group to associate or cooperate with
all other members of the Borrower Affiliated Group is reasonably likely to
impair the goodwill of the Borrower Affiliated Group as a whole;
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(c) the credit to be made available by the Banks under the Loan
Documents will directly or indirectly inure to such Guarantor's benefit;
(d) by virtue of the foregoing such Guarantor is receiving at
least reasonably equivalent value from the Administrative Agent and the Banks
for its guaranty hereunder;
(e) such Guarantor (i) has the ability to pay its debts from time
to time incurred in connection therewith as such debts mature, (ii) has, and
will have, access to adequate capital for the conduct of its business, and (iii)
will not be rendered Insolvent as a result of entering into this Guaranty;
(f) after giving effect to the transactions contemplated by this
Guaranty, such Guarantor will have assets having a fair saleable value in excess
of the amount required to pay its probable liability on its existing debts as
such debts become absolute and matured; and
(g) such Guarantor has been advised by the Administrative Agent
that the Administrative Agent and the Banks are unwilling to enter into the Loan
Agreement unless such Guarantor provides to the Administrative Agent the
guaranty contained herein.
ARTICLE 6. SUBROGATION. Each Guarantor agrees that, until the Obligations are
paid in full in cash, it will not exercise any right of reimbursement,
subrogation, contribution, offset or other claims against any Obligor arising by
contract or operation of law in connection with any payment made or required to
be made by such Guarantor under this Guaranty.
ARTICLE 7. SUBORDINATION. Each Guarantor covenants and agrees that, after the
occurrence and during the continuance of a Default or Event of Default, all
indebtedness, claims and liabilities then or thereafter owing by any Obligor to
such Guarantor whether arising hereunder or otherwise are subordinated to the
prior payment in full of the Obligations, and are so subordinated as a claim
against the Borrower or such Obligor, or any of its assets, whether such claim
be in the ordinary course of business or in the event of voluntary or
involuntary liquidation, dissolution, insolvency or bankruptcy, so that no
payment with respect to any such indebtedness, claim or liability will be made
or received while any Default or Event of Default exists.
ARTICLE 7A. LIMITATION ON GUARANTY OF OBLIGATIONS. In any action or proceeding
with respect to any Guarantor involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of such Guarantor under Section 2.01
hereof would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under said Section 2.01, then, notwithstanding
any other provision hereof to the contrary, the amount of such
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liability shall, without any further action by such Guarantor, any Bank, the
Administrative Agent or any other Person, be automatically limited and reduced
to the highest amount which is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.
ARTICLE 8. MISCELLANEOUS.
8.01 Written Notices. Any notices expressly required by this Guaranty
to be in writing shall be deemed to have been given when delivered by hand, when
sent by telecopier, when delivered to any overnight delivery service freight
pre-paid or when sent by certified or registered mail and receipt thereof has
been acknowledged (or rejected), and addressed to such party at its address set
forth below.
If to the Guarantors, at the following with a copy to:
address:
c/o GameStop Corp. Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
2250 Xxxxxxx X. Xxxx Xxxxxx Xxxxxx XXX
Xxxxxxxxx, Xxxxx 00000 1290 Avenue of the Americas
Fax No.: (000) 000-0000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx, Chief Financial Fax No.: (000) 000-0000
Officer Attn: Xxx X. Xxxxxx, Esq.
If to the Administrative Agent, to with a copy to:
Fleet National Bank Goulston & Storrs, P.C.
000 Xxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000-0000
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Director Attn: Xxxxxx X. Xxxxxx, Esq.
Unless otherwise specified, all notices required to be given hereunder shall be
given in writing. Any party may change its address for such notices to such
other address in the United States as the addressee shall have specified by
written notice given as set forth above. All periods of notice shall be measured
from the deemed date of delivery.
8.02 Successors and Assigns. This Guaranty shall be binding upon and
inure to the benefit of each Guarantor and its successors and assigns, and shall
be binding upon and inure to the benefit of and be enforceable by the
Administrative Agent and its successors and assigns permitted under the Loan
Agreement, whether or not an express assignment of rights hereunder is made;
provided that no Guarantor may assign or transfer its rights or obligations
hereunder. Without limiting the generality of the foregoing sentence, any Bank
may, in the manner and to the extent set forth in the Loan Agreement, assign or
otherwise transfer any Note or other document held by it
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evidencing, securing or otherwise executed in connection with the Obligations,
or sell participations in any interest therein, to any other Person, and such
other Person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to such Bank under the terms of the Loan
Documents.
9.03 Amendment, Etc. This Guaranty may not be amended, modified or
supplemented except by a writing signed by the parties hereto.
9.04 Multiple Counterparts. This Guaranty may be signed in any number
of counterparts with the same effect as if the signatures hereto and thereto
were upon the same instrument. All such counterparts shall together constitute
one and the same agreement.
9.05 Captions. Captions and headings in this Guaranty are for
convenience only and in no way define, limit or describe the scope or intent of
the provisions hereof.
9.06 Survival. All representations, warranties, covenants and
agreements contained in this Guaranty shall survive the execution and delivery
of the Loan Documents and shall continue for so long as this Guaranty shall
remain in effect.
9.07 Severability. If any provision of this Guaranty shall be held
invalid or unenforceable by any court of competent jurisdiction, that holding
shall not invalidate or render unenforceable any other provision hereof.
9.08 Governing Law. This Guaranty shall be governed by, and interpreted
and determined in accordance with, the laws of the State of
New York (without
regard to its principles relating to choice and conflicts of law).
9.09 CONSENT TO JURISDICTION. EACH OF THE GUARANTORS AND THE
ADMINISTRATIVE AGENT HEREBY CONSENTS TO THE JURISDICTION OF ANY OF THE COURTS OF
THE STATE OF
NEW YORK LOCATED IN
NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK SITTING IN
NEW YORK,
NEW
YORK IN CONNECTION WITH ANY ACTION TO ENFORCE THE RIGHTS OF THE ADMINISTRATIVE
AGENT OR THE BANKS UNDER THIS GUARANTY. EACH OF THE GUARANTORS AND THE
ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE EXERCISE OF JURISDICTION BY SAID COURTS IN CONNECTION WITH
ANY SUCH ACTION AND AGREES NOT TO ASSERT IN ANY SUCH ACTION THAT SUCH ACTION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
9.10 WAIVER OF JURY TRIAL. EACH OF THE GUARANTORS AND THE
ADMINISTRATIVE AGENT HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY
RIGHTS OR OBLIGATIONS
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HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS
PROHIBITED BY LAW, EACH OF THE GUARANTORS AND THE ADMINISTRATIVE AGENT HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO
IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES. EACH GUARANTOR (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR THE
BANKS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR
THE BANKS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE BANKS HAS BEEN INDUCED TO ENTER
INTO THE LOAN AGREEMENT BECAUSE OF, AMONG OTHER THINGS, EACH GUARANTOR'S WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.
9.11 Entire Agreement. This Guaranty constitutes the entire agreement
between the parties concerning the subject matter hereof, and supersedes all
written or oral agreements or understandings with respect to such subject
matter.
(signatures on next page)
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IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be
executed by their respective duly authorized officers as of the day and year
first above written.
GAMESTOP, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
Hereunto Duly Authorized
BABBAGE'S ETC. LLC
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
Hereunto Duly Authorized
SUNRISE PUBLICATIONS, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
Hereunto Duly Authorized
XXXXXXXX.XXX, INC.
By: /s/ XXXXXX X. XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer and Secretary
Hereunto Duly Authorized
Accepted as of the day and
year first above written.
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
Hereunto Duly Authorized
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