EXHIBIT 2
to SCHEDULE 13D
SECURITIES EXCHANGE AGREEMENT
SECURITIES EXCHANGE AGREEMENT, dated November 15, 1999 (the
"Agreement"), among GT Interactive Software Corp., a Delaware corporation (the
"Company"), General Atlantic Partners 54, L.P., a Delaware limited partnership
("GAP LP"), and GAP Coinvestment Partners II, L.P., a Delaware limited
partnership ("GAP Coinvestment" and, together with GAP LP, the "Stockholders").
WHEREAS, the Stockholders own (both beneficially and of record) the
number of shares of Series A Convertible Preferred Stock of the Company (the
"Preferred Stock") and the principal amount of the Company's Subordinated Notes
due July 29, 2000 (the "Subordinated Notes," and together with the Preferred
Stock, the "Securities") as set forth on Schedule 1 hereto;
WHEREAS, the Company, Infogrames Entertainment S.A. ("Infogrames") and
California U.S. Holdings, Inc. ("Infogrames US") are entering concurrently into
a Securities Purchase Agreement, dated as of November 15, 1999 (the "Purchase
Agreement"), pursuant to which Infogrames has agreed to make a major capital
investment in the Company; and
WHEREAS, in connection with the Purchase Agreement, and as a condition
to the willingness of Infogrames and Infogrames US to enter into the Purchase
Agreement, the Company has agreed to issue to the Stockholders, and the
Stockholders have agreed to accept, new securities in exchange for the
Securities.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"By-laws" means the by-laws of the Company in effect on the
Closing Date, as the same may be amended from time to time.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as the same may be amended from time to time.
"Closing" has the meaning set forth in Section 2.3 of this
Agreement.
"Closing Date" has the meaning set forth in Section 2.3 of
this Agreement.
"Commission" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the common stock, par value $.01 per
share, of the Company.
"Company" has the meaning set forth in the recitals to this
Agreement.
"Condition of the Company" means the assets, business,
properties, prospects, operations or financial condition of the Company and its
Subsidiaries, taken as a whole.
"Contractual Obligations" means as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"GAP Coinvestment" has the meaning set forth in the recitals
to this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP, and any successor
to such entity.
"GAP LP" has the meaning set forth in the recitals to this
Agreement.
"Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever (excluding preferred stock and equity related
preferences), including, without limitation, those created by, arising under or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease obligation, or any financing lease
having substantially the same economic effect as any of the foregoing.
"Notes" has the meaning set forth in Section 2.1 of this
Agreement,
"Orders" has the meaning set forth in Section 3.2 of this
Agreement.
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"Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Purchase Agreement" has the meaning set forth in the recitals
to this Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of February 22, 1999 among the Company and the Stockholders.
"Requirements of Law" means, as to any Person, any law,
statute, treaty, rule, regulation, right, privilege, qualification, license or
franchise or determination of an arbitrator or a court or other Governmental
Authority or stock exchange, in each case applicable or binding upon such Person
or any of its property or to which such Person or any of its property is subject
or pertaining to any or all of the transactions contemplated or referred to
herein.
"SEC Documents" means all registration statements, proxy
statements, reports and other documents required to be filed by the Company
under the Securities Act or the Exchange Act and all amendments or supplements
thereto filed by the Company with the Commission since December 31, 1997.
"Securities" has the meaning set forth in the recitals to this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
"Stockholders" has the meaning set forth in the recitals to
this Agreement.
"Subsidiary" means, as of the relevant date of determination,
with respect to any Person, a corporation or other Person of which 50% or more
of the voting power of the outstanding voting equity securities is held,
directly or indirectly, by such Person. Unless otherwise qualified, or the
context otherwise requires, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.
"Transaction Documents" means this Agreement and the Notes.
ARTICLE 2
EXCHANGE OF SECURITIES
2.1 Exchange of Securities. Subject to the terms and conditions herein
set forth, the Company agrees to issue to each of the Stockholders, and each of
the Stockholders agrees that it will acquire from the Company, on the Closing
Date, the aggregate principal amount of senior subordinated convertible notes
set forth opposite such Stockholder's name on Schedule 2.1 hereto (all of such
notes being referred to herein as the "Notes"), in exchange for the Securities,
free and clear of all Liens.
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2.2 Notes. The Notes shall be substantially in the form attached hereto
as Exhibit A. 2.3 Closing. Subject to the satisfaction or waiver of the
conditions set forth in Articles 5 and 6 below, the closing of the transactions
contemplated by Section 2.1 (the "Closing") shall take place simultaneously
with, and at the same location as, the closing under the Purchase Agreement (the
"Closing Date"). On the Closing Date, the Company shall deliver to each
Stockholder the Notes being acquired by such Stockholder, against delivery by
such Stockholder to the Company of the certificate or certificates evidencing
the Securities held by such Stockholder, each such certificate being duly
endorsed in blank and accompanied by such stock powers and such other documents
as may reasonably be necessary in the Company's judgment to transfer record
ownership of the Securities.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Stockholders as follows:
3.1 Corporate Existence and Power. Each of the Company and its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently, or is proposed to be, engaged, as described in the SEC Documents; (c)
is duly qualified as a foreign corporation, licensed and in good standing under
the laws of each jurisdiction in which its ownership, lease or operation of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the Condition of the Company; and (d) has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents to which it is a party.
3.2 Authorization; No Contravention. The execution, delivery and performance by
the Company of this Agreement and the Notes and the transactions contemplated
hereby and thereby (a) have been duly authorized by all necessary corporate
action of the Company; (b) do not contravene the terms of the Certificate of
Incorporation or the By-laws, or any certificate of incorporation or by-laws or
other organizational documents of any of its Subsidiaries, except that the
Certificate of Incorporation shall be amended to increase the number of
authorized shares of Common Stock to permit the reservation of Common Stock
issuable upon conversion of the Notes; (c) do not violate, conflict with or
result in any breach or contravention of, or the creation of any Lien under, any
Contractual Obligation of the Company or any of its Subsidiaries, or any
Requirement of Law applicable to the Company or any of its Subsidiaries; and (d)
do not violate any judgment, injunction, writ, award, decree or order of any
nature (collectively, "Orders") of any Governmental Authority against, or
binding upon, the Company or any of its Subsidiaries; except in the case of
clauses (c) and (d) for violations, conflicts, breaches, contraventions or Liens
which would not have a material adverse effect on the Condition of the Company
or the ability of the Company to perform its obligations under this Agreement
and each of the other Transaction Documents.
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3.3 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization or other action by, or notice to,
or filing with, any Governmental Authority or any other Person, and no lapse of
a waiting period under a Requirement of Law, other than customary filings with
the Commission for transactions of the type contemplated hereby, filings under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder and the filing of an amendment to
the Certificate of Incorporation with the Secretary of State of the State of
Delaware, is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Company of this Agreement and the
Notes or the transactions contemplated hereby and thereby, except where the
failure to obtain an approval, consent, compliance, exemption, authorization or
other action or to make any filing would not have a material adverse effect on
the Condition of the Company or the ability of the Company to perform its
obligations under this Agreement or the Notes.
3.4 Binding Effect. This Agreement has been duly executed and delivered
by the Company, and, assuming the due authorization, execution and delivery by
the Stockholders, constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity). Upon execution and delivery by
the Company of the Notes, the Notes will constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
3.5 Conversion. Subject to Section 7.3 of the Notes, the Company has
reserved an aggregate of 12,500,000 shares of Common Stock for issuance upon
conversion of the Notes. Subject to Section 7.3 of the Notes, the shares of
Common Stock issuable upon conversion of the Notes in accordance with the terms
of the Notes are duly authorized, and when issued to the Stockholders against
payment therefor, will be validly issued, fully paid and non-assessable, and
will be issued pursuant to an exemption from, or in compliance with the
registration and qualification requirements of all applicable federal and state
securities laws.
3.6 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
or any of its Subsidiaries in connection with the transactions contemplated
hereby based on any agreement, arrangement or understanding with the Company or
any of its Subsidiaries or any action taken by any such Person.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each of the Stockholders hereby represents and warrants (severally as
to itself and not jointly) to the Company as follows:
4.1 Existence and Power. Such Stockholder (a) is a partnership duly
organized and validly existing under the laws of the jurisdiction of its
formation and (b) has the requisite partnership power and authority to execute,
deliver and perform its obligations under this Agreement and each of the other
Transaction Documents to which it is a party.
4.2 Authorization; No Contravention. The execution, delivery and
performance by such Stockholder of this Agreement and the transactions
contemplated hereby (a) have been duly authorized by all necessary partnership
action, (b) do not contravene the terms of such Stockholder's organizational
documents, or any amendment thereof, and (c) do not violate, conflict with or
result in any breach or contravention of or the creation of any Lien under, any
Contractual Obligation of such Stockholder, or any Requirement of Law or Orders
applicable to such Stockholder.
4.3 Title. Such Stockholder is the owner (both beneficially and of
record) of the shares of Preferred Stock and holds the principal amount of the
Subordinated Notes as set forth opposite such Stockholder's name on Schedule 1.
Except to the extent resulting from the Equity Purchase and Voting Agreement
(the "Voting Agreement") among the Stockholders, certain affiliates of the
Stockholders and Infogrames, or for restrictions imposed by applicable
securities laws, such Stockholder owns all of such Securities free and clear of
all Liens. Such Stockholder has sole power of disposition with respect to all of
such Securities. Upon the acquisition of the Securities pursuant to Article 2,
the Company will receive good and valid title to the Securities, free and clear
of all Liens, except for restrictions imposed by the applicable securities laws.
4.4 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person, and no lapse of
a waiting period under any Requirement of Law, is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, such Stockholder of this Agreement and each of the other Transaction
Documents to which such Stockholder is a party or the transactions contemplated
hereby and thereby.
4.5 Binding Effect. This Agreement has been duly executed and delivered
by such Stockholder and constitutes a legal, valid and binding obligation of
such Stockholder, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability (regardless of whether considered in a
proceeding at law or in equity).
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4.6 Purchase for Own Account. The Notes to be acquired by such
Stockholder pursuant to this Agreement are being or will be acquired for its own
account and with no intention of distributing or reselling such Notes or any
part thereof in any transaction that would be in violation of the securities
laws of the United States of America, or any state, without prejudice, however,
to the rights of such Stockholder at all times to sell or otherwise dispose of
all or any part of such Notes under an effective registration statement under
the Securities Act, or under an exemption from such registration available under
the Securities Act, and subject, nevertheless, to the disposition of such
Stockholder's property being at all times within its control. If such
Stockholder should in the future decide to dispose of any of such Notes, such
Stockholder understands and agrees that it may do so only in compliance with the
Securities Act and applicable state securities laws, as then in effect. Such
Stockholder agrees to the imprinting, so long as required by law, of legends on
certificates representing all of its Notes and shares of Common Stock issuable
upon conversion of its Notes to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT AMONG GT INTERACTIVE
SOFTWARE CORP. AND THE ORIGINAL PURCHASERS OF THE NOTES REPRESENTED
HEREBY. TRANSFEREES OF SUCH SECURITIES SHOULD REVIEW SUCH AGREEMENT TO
DETERMINE THEIR RIGHTS.
4.7 Restricted Securities. Such Stockholder understands that the Notes
will not be registered at the time of their issuance under the Securities Act
for the reason that the sale provided for in this Agreement is exempt pursuant
to Section 4(2) of the Securities Act and that the reliance of the Company on
such exemption is predicated in part on such Stockholder's representations set
forth herein.
4.8 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the
Stockholders, in connection with the transactions contemplated hereby based on
any agreement, arrangement or understanding with the Stockholders or any action
taken by the Stockholders.
4.9 Accredited Investors. Such Stockholder is an accredited investor
within the meaning of Rule 501(a) under the Securities Act.
4.10 Transfer. On the date hereof, such Stockholder has no present
intention to transfer such Stockholder's Notes to any Person that is not an
affiliate of such Stockholder.
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ARTICLE 5
CONDITIONS TO THE OBLIGATION
OF THE STOCKHOLDERS TO CLOSE
The obligation of the Stockholders to exchange the Securities for the
Notes at the Closing and to perform any obligations hereunder shall be subject
to the satisfaction as determined by, or waiver by, the Stockholders of the
following conditions on or before the Closing Date.
5.1 Purchase Agreement. The consummation of the transactions
contemplated by the Purchase Agreement shall have occurred at or prior to the
Closing.
5.2 Operation of Law. Consummation by the Company of the acquisition of
the Preferred Stock in exchange for the Notes shall not violate Section 160 of
the General Corporation Law of the State of Delaware.
5.3 Notes. The Company shall be prepared to deliver to the Stockholders
the principal amount of Notes set forth opposite such Stockholder's name on
Schedule 2.1 hereto, registered in the name of such Stockholder, as applicable.
5.4 Subordination. The Stockholders, the Company and Infogrames US
shall have entered into a Subordination Agreement in form and substance
reasonably satisfactory to the Stockholders
5.5 Representations and Warranties. All of the representations and
warranties of the Company contained in Article 3 hereof shall be true and
correct in all material respects on the Closing Date, as if made by the Company
on such date.
ARTICLE 6
CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CLOSE
The obligation of the Company to issue the Notes and the obligation of
the Company to perform its other obligations hereunder, shall be subject to the
satisfaction as determined by, or waiver by, the Company of the following
conditions on or before the Closing Date:
6.1 Purchase Agreement. The consummation of the transactions
contemplated by the Purchase Agreement shall have occurred at or prior to the
Closing.
6.2 Operation of Law. Consummation by the Company of the acquisition of
the Preferred Stock in exchange for the Notes shall not violate Section 160 of
the General Corporation Law of the State of Delaware.
6.3 Payment of Purchase Price. Each Stockholder shall be prepared to
deliver the Securities.
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6.4 Representations and Warranties. All of the representations and
warranties of the Stockholders contained in Article 4 hereof shall be true and
correct in all material respects on the Closing Date, as if made by the
Stockholders on such date.
ARTICLE 7
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees with the Stockholders as
follows:
7.1 No Disposition or Encumbrance of Securities. Each Stockholder
hereby covenants and agrees that from the date hereof until the consummation of
the transactions contemplated by the Purchase Agreement, except as contemplated
by this Agreement, such Stockholder shall not, and shall not offer or agree to,
sell, transfer, tender, assign, hypothecate or otherwise dispose of, or create
or permit to exist any Lien with respect to, the Securities, except to the
extent resulting from the Voting Agreement.
7.2 Financial Statements and Other Information. The Company shall
deliver to each Stockholder at any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, upon request of such Stockholder,
information of the type that would satisfy the requirements of Rule 144(c)(2)
and Rule 144A(d)(4)(i) (or any similar successor-provisions thereof) under the
Securities Act.
7.3 Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized shares of Common Stock, solely for the
purpose of issue or delivery upon conversion of the Notes, the maximum number of
shares of Common Stock that may be issuable or deliverable upon such conversion;
provided, however, that to the extent the Company, as of the date hereof, has an
insufficient number of authorized shares of Common Stock reserved for issuance
upon conversion of the Notes, the Company shall use commercially reasonable
efforts to take all actions necessary to increase and reserve for issuance such
number of authorized shares of Common Stock as is equal to the maximum number of
shares of Common Stock that may be issuable or deliverable upon conversion of
the Notes, which actions shall include preparing, filing and mailing an
information statement on Schedule 14C under the Securities Exchange Act of 1934
as soon as practicable. The Company shall issue all such shares of Common Stock
in accordance with the terms of the Certificate of Incorporation, as amended,
and otherwise comply with the terms hereof and thereof.
7.4 Registration and Listing. If any shares of Common Stock required to
be reserved for purposes of conversion of the Notes require registration with or
approval of any Governmental Authority under any Federal or state or other
applicable law before such shares of Common Stock may be issued or delivered
upon conversion, the Company will in good faith and as expeditiously as possible
cause such shares of Common Stock to be duly registered or approved, as the case
may be. The Stockholders will cooperate with the Company, as necessary, in
preparing any documents or making any filings in connection with such
registration or approval. So long as the Common Stock is quoted on The Nasdaq
Stock Market, Inc. or listed on any national securities exchange, the Company
will, if permitted by the rules of such system
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or exchange, quote or list and keep quoted or listed on such system or exchange,
upon official notice of issuance, all shares of Common Stock issuable or
deliverable upon conversion or exchange of the Notes.
7.5 Amendment of Warrant Agreement. The Company and the Stockholders
agree that the Warrant Agreement dated as of June 29, 1999 (the "Warrant
Agreement") among the Company and the holders named therein shall be amended as
follows:
(a) Section 4.3 of the Warrant Agreement shall be amended by adding the
following sentence to the end of the first paragraph of such Section
4.3:
Notwithstanding any other provision of this Section
4.3, to the extent any adjustment would arise
pursuant to this Section 4.3 as a result of
consummation of the transactions contemplated by the
Securities Purchase Agreement dated as of November
15, 1999 by and among the Company, Infogrames
Entertainment S.A. and California U.S. Holdings,
Inc., the number of additional shares of Common Stock
purchasable upon exercise of any Warrant due to such
adjustment shall be equal to the product of 1.6610
and the increase in the number of shares of Common
Stock purchasable upon exercise of the Warrants held
by the Administrative Agent and the Lenders issued
pursuant to the Warrant Agreement dated June 29, 1999
among the Company, the Administrative Agent and the
Lenders.
(b) The third sentence of Section 4.4 of the Warrant Agreement shall be
deleted in its entirety and substituting therefor the following:
Notwithstanding any other provision of this Section
4.4, the number of shares of Common Stock purchasable
upon exercise of any Warrant shall not be adjusted
pursuant to this Section 4.4 as a result of the
issuance or sale of Common Stock in connection with:
(a) a bona fide firm commitment underwritten public
offering of Common Stock of the Company, (b) a
transaction to which Section 4.1, 4.2 or 4.3 is
applicable, (c) the exercise of the Warrants, the
exercise of any other warrants issued by the Company
prior to the date of this Agreement or the exercise
of any warrants issued in connection with the Second
Amendment, (d) a private placement of Common Stock of
the Company sold for a cash purchase price not more
than 10% below the Current Market Value of the Common
Stock so sold in such private placement, (e) the
exercise of rights or options issued to the Company's
employees under bona fide employee benefit plans
adopted by the Board and approved by the holders of
Common Stock when required by law, if such Common
Stock would otherwise be covered by this Section 4.4,
and (f) to the extent any adjustment would arise
pursuant to this Section 4.4 as a result of
consummation of the transactions contemplated by the
Securities Purchase Agreement dated as of November
15, 1999 by and among the Company, Infogrames
Entertainment S.A. and California U.S. Holdings,
Inc., the
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number of additional shares of Common Stock
purchasable upon exercise of any Warrant due to such
adjustment shall be equal to the product of 1.6610
and the increase in the number of shares of Common
Stock purchasable upon exercise of the Warrants held
by the Administrative Agent and the Lenders issued
pursuant to the Warrant Agreement dated June 29, 1999
among the Company, the Administrative Agent and the
Lenders.
(c) Except as expressly amended pursuant to this Agreement, the Warrant
Agreement is and shall continue to be in full force and effect in
accordance with its terms.
7.6 Subordination. Each Stockholder agrees that the Short-Term Note (as
defined in the Purchase Agreement) shall be deemed for all purposes of its
respective Subordinated Note to be Senior Debt (as defined in the Subordinated
Note), including without limitation with respect to rights and remedies of the
holders of Senior Debt and the obligations of the Stockholders as they relate to
Senior Debt.
ARTICLE 8
TERMINATION OF AGREEMENT
8.1 Termination. This Agreement may be terminated prior to the Closing
as follows:
(a) at any time on or prior to the Closing Date, by mutual written
consent of the Company and the Stockholders; or
(b) upon the termination of the Purchase Agreement; or
(c) at any time after September 30, 2000, by written notice of either
party.
If this Agreement so terminates, it shall become null and void and have
no further force or effect, except as provided in Section 8.2.
8.2 Survival. If this Agreement is terminated and the transactions
contemplated hereby are not consummated as described above, this Agreement shall
become void and of no further force and effect; except for the provisions of
this Section 8.2; provided, that none of the parties hereto shall have any
liability in respect of a termination of this Agreement pursuant to Section
8.1(a) or Section 8.1(b); and provided, further, that none of the parties hereto
shall have any liability for speculative, indirect, unforeseeable or
consequential damages resulting from any legal action relating to this Agreement
or any termination of this Agreement.
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ARTICLE 9
MISCELLANEOUS
9.1 Survival of Representations and Warranties. The representations and
warranties made herein shall survive the execution and delivery of this
Agreement, notwithstanding any investigation made or information obtained by the
other party but shall terminate at Closing except for those contained in
Sections 3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 4.2, 4.3, 4.4 and 4.5 hereof and this
Section 9.1 which shall survive beyond the Closing.
9.2 Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(a) if to the Company, to:
GT Interactive Software Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (212)
Attention: Chief Executive Officer
with a copy to:
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(b) if to the Stockholders, to:
c/o General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by
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commercial courier service; five (5) Business Days after being deposited in the
mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged,
if telecopied.
9.3 Successors and Assigns; Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto. Subject to applicable securities laws, each of
the Stockholders may assign any of its rights, but not its obligations, under
this Agreement to any of its affiliates. The Company may not assign any of its
rights under this Agreement without the written consent of the Stockholders. No
Person other than the parties hereto and their successors and permitted assigns
is intended to be a beneficiary of this Agreement.
9.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the Stockholders
in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies
provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or the Stockholders at
law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement, and any
consent to any departure by the Company or the Stockholders from the
terms of any provision of this Agreement, shall be effective only if it
is made or given in writing and signed by the Company and the
Stockholders. Except where notice is specifically required by this
Agreement, no notice to or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar
or other circumstances.
9.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION.
9.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the
13
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
9.9 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, and the other Transaction Documents, is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein. This Agreement, together with the exhibits and
schedules hereto and the other Transaction Documents, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
9.10 Fees. Upon the Closing, the Company shall reimburse the
Stockholders for their reasonable fees, disbursements and other charges of
counsel incurred in connection with the transactions contemplated by this
Agreement.
9.11 Publicity. Except as may be required by applicable Requirement of
Law, none of the parties hereto shall issue a publicity release or public
announcement or otherwise make any disclosure concerning this Agreement or the
transactions contemplated hereby, without prior approval by the other parties
hereto (which approval shall not be unreasonably withheld); provided, however,
that nothing in this Agreement shall restrict any Stockholder from disclosing
information (a) that is already publicly available; (b) to the prospective
transferee in connection with any contemplated transfer of any of the Notes; and
(c) to its attorneys, accountants, consultants and other advisors to the extent
necessary to obtain their services in connection with such Stockholder's
investment in the Company. GAP LLC may disclose on its worldwide web page,
xxx.xxxxxxxxxx.xxx, the name of the Company, its address, the identity of the
Chief Executive Officer, a description of the Company's business and the
aggregate dollar amount invested by the Stockholders in the Company; provided,
that GAP LLC shall not disclose any information pertaining to the transactions
contemplated under this Agreement or the Transaction Documents at any time prior
to the publication of a press release by the Company. If any announcement is
required by law to be made by any party hereto, prior to making such
announcement such party will deliver a draft of such announcement to the other
parties and shall give the other parties an opportunity to comment thereon.
9.12 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person, and otherwise fulfilling, or causing the fulfillment of, the
conditions to Closing set forth in Articles 5 and 6) as may be reasonably
required or desirable to carry out or to perform the provisions of this
Agreement and to consummate and make effective as promptly as possible the
transactions contemplated by this Agreement.
9.13 Registrable Securities. The parties hereby agree and acknowledge
that all of the shares of Common Stock issuable upon conversion of the Notes
constitute "Registrable Securities" within the meaning of the Registration
Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Exchange Agreement to be executed and delivered by their respective officers
hereunto duly authorized on the date first above written.
GT INTERACTIVE SOFTWARE CORP.
By: /s/ Xxxxxx Xxxxxxx
----------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
GENERAL ATLANTIC PARTNERS 54, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By: /s/ Xxxxxxx X. Xxxx
-----------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Member
GAP COINVESTMENT PARTNERS II, L.P.
By: /s/ Xxxxxxx X. Xxxx
-----------------------
Name: Xxxxxxx X. Xxxx
Title: General Partner
Schedule 1
Preferred Stock
---------------
Stockholder Preferred Stock Subordinated Notes
----------- --------------- ------------------
GAP LP 489,744 $16,324,800
GAP Coinvestment 110,256 $ 3,675,200
------- -----------
Total: 600,000 $20,000,000
