Exhibit 10.2
FIRST AMENDMENT TO
INTERCREDITOR AND SUBORDINATION AGREEMENT
FIRST AMENDMENT, dated as of December 23, 2003 (this
"Amendment"), to the Intercreditor and Subordination Agreement referred to below
among INFOGRAMES ENTERTAINMENT SA, a company organized under the laws of France
("Parent"), CALIFORNIA US HOLDINGS, INC., a California corporation ("CUSH",
together with Parent and any other holder of the Subordinated Obligations, from
time to time, collectively, the "Subordinated Noteholder"), ATARI INTERACTIVE,
INC., formerly known as INFOGRAMES INTERACTIVE, INC., a Delaware corporation
("Interactive"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as agent (in such capacity, the "Senior Agent") for the lenders
from time to time party to the Senior Credit Agreement (the "Senior Lenders" and
together with the Senior Agent and their respective successors and assigns, the
"Senior Creditors"), and the CREDIT PARTIES SIGNATORY HERETO.
W I T N E S S E T H
WHEREAS, Parent, CUSH, Senior Agent and the Credit Parties are
parties to that certain Intercreditor and Subordination Agreement, dated as of
November 12, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Intercreditor Agreement");
WHEREAS, the Senior Credit Agreement is being amended
simultaneously herewith to release Interactive and Paradigm as Credit Parties
thereto;
WHEREAS, pursuant to the Senior Credit Agreement, Interactive
and Paradigm are required to become parties to the Intercreditor Agreement;
WHEREAS, pursuant to an Agreement, dated as of September 24,
2003, among Parent, CUSH, Borrower and the Senior Agent, each of Parent and
Holdings, among other things, (i) agreed and acknowledged that all outstanding
Subordinated Obligations pursuant to the Subordinated Credit Agreement, the
Subordinated Secured Notes and the Subordinated Convertible Notes, together with
any other documents or instruments relating thereto (as amended, restated,
modified or supplemented, the "Terminated Parent Subordinated Debt Agreements")
have been paid and satisfied in full and were terminated (the "Satisfied
Subordinated Obligations"); (ii) terminated and released the Parent Second Lien
and any other security interest or liens on any property or assets of any Credit
Party or any other Person securing the Satisfied Subordinated Obligations; and
(iii) covenanted and agreed that neither the Borrower nor any other Credit Party
has any right to incur any additional Indebtedness under the Terminated Parent
Subordinated Debt Agreements nor any further liability or obligation under the
Terminated Parent Subordinated Debt Agreements; and
WHEREAS, Subordinated Noteholder, Interactive, Paradigm,
Senior Agent and the Credit Parties have agreed to amend the Intercreditor
Agreement in the manner, and on the terms and conditions, provided for herein;
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Intercreditor Agreement.
2. Amendment to Section 1 of the Intercreditor Agreement.
Section 1 of the Intercreditor Agreement is hereby amended by (a) deleting the
definitions of "Shiny Notes", "Subordinated Convertible Notes" and "Subordinated
Secured Notes", and (b) deleting the definition of "Subordinated Credit
Agreement" and the references to such term in the definitions of "Subordinated
Note Documents" and "Subordinated Obligations."
3. Amendment to Section 1 of the Intercreditor Agreement.
Section 1 of the Intercreditor Agreement is hereby amended by amending and
restating the following definitions in their entirety as follows:
"`Distribution Agreement' shall mean, collectively, the Distribution
Agreement dated as of October 2, 2000 between Borrower (as successor
in interest to GT Interactive Software Corp.) and the Parent and
Infogrames Europe SA, as supplemented by that certain side letter
among Parent, Borrower and Interactive dated as of November 12, 2002.
`Guarantors' shall mean each Person, if any, that executes a guaranty
or other similar agreement on or after the Sixth Amendment Effective
Date in favor of Senior Creditors, in connection with the
transactions contemplated by the Senior Loan Documents, and their
respective successors and assigns.
`Minimum Availability Requirement' shall mean, with respect to any
proposed payments under Section 3.1(ii), satisfaction of each of the
following conditions: (i) Availability at any time during the
ninety-day period immediately preceding the date of such payment
shall not be less than $30,000,000 for any three consecutive days,
(ii) on the date of such payment and after giving effect thereto,
Availability shall not be less than $30,000,000, and (iii)
Availability at any time during the four-month period immediately
succeeding the date of such payment shall be projected to be no less
than $30,000,000, as set forth in projections prepared by Borrower
and reasonably acceptable to Senior Agent.
`Subordinated Intercompany Loan' means any loan from Subordinated
Noteholder to any Credit Party.
`Subordinated Noteholder' shall mean Parent, CUSH, Interactive,
Paradigm, and any other holder of the Subordinated Obligations, from
time to time.
`Subordinated Notes' shall mean the Subordinated Intercompany Notes.
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`Trademark License Agreement' shall mean that certain Trademark
License Agreement dated September 4, 2003 between ATARI Interactive,
Inc., Parent and Atari, Inc.."
4. Amendment to Section 3.1 of the Intercreditor Agreement.
Clauses (iii), (iv) and (v) of Section 3.1 of the Intercreditor Agreement are
hereby deleted in their entirety, and clauses (i) through (ii) of Section 3.1 of
the Intercreditor Agreement are amended and restated in their entirety to read
as follows:
"(i) payments in respect of Ordinary Course Intercompany
Obligations made in the ordinary course of business and without
acceleration of the due date thereof or prepayment; and
(ii) other payments in respect of the Subordinated Obligations (in
addition to those payments permitted under the foregoing clause (i)),
quarterly, on a date that is not prior to ten Business Days after, nor
later than 15 Business Days after, the date on which the Financial
Statements for the immediately preceding Fiscal Quarter are delivered
to the Senior Lenders in accordance with Annex E of the Senior Credit
Agreement, provided, that either:
(1) in the case of any payment made on a date on which the Minimum
Availability Requirement is not satisfied, then (a) the amount of such
payment does not exceed the Maximum Excess Cash Flow Amount for the
immediately preceding four Fiscal Quarters less the amount of any
payments made under clause (ii) of this Section 3.1 for the immediately
preceding four Fiscal Quarters, (b) no Default or Event of Default
shall have occurred and be continuing or would result after giving
effect to any such payment, (c) at any time during the thirty-day
period immediately preceding the date of such payment, Availability
shall not be less than $20,000,000 for any five consecutive days, (d)
on the date of such payment and after giving effect thereto
Availability shall not be less than $20,000,000, (e) Availability at
any time during the three-month period immediately succeeding the date
of such payment shall be projected to be no less than $20,000,000, as
set forth in projections prepared by Borrower and reasonably acceptable
to Senior Agent, (f) Borrower and Guarantors shall have on a combined
basis at the end of such Fiscal Quarter, a Fixed Charge Coverage Ratio
for the 12-month period then ended of not less than 1.75:1.00,
calculated on a pro forma basis as if such payment were made during
such period, and (g) at least 10 Business Days prior to the date of
such payment, Senior Agent shall have received a certificate signed by
Borrower's chief financial officer certifying compliance with the
foregoing conditions and the manner in which such payment has been
calculated, including projections required under the foregoing clause
(e), and a calculation of the applicable Fixed Charge Coverage Ratio
and a calculation of Excess Cash Flow, which certificate shall be in
form and substance reasonably satisfactory to Senior Agent; or
(2) in the case of any payment made on a date on which the Minimum
Availability Requirement is satisfied, then (a) no Default or Event of
Default
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shall have occurred and be continuing or would result after giving
effect to any such payment (including any breach of any Financial
Covenant set forth in Annex G to the Senior Credit Agreement that would
have resulted if such payment had been made during the previous Fiscal
Quarter), and (b) at least 10 Business Days prior to the date of such
payment, Senior Agent shall have received a certificate signed by
Borrower's chief financial officer certifying compliance with the
foregoing conditions and the manner in which such payment has been
calculated, which certificate shall be in form and substance reasonably
satisfactory to Senior Agent."
5. Amendment to Section 6.3 of the Intercreditor Agreement.
(a) Section 6.3(a) of the Intercreditor Agreement is
hereby amended and restated in its entirety to read as follows:
"(a) permit to exist any Lien on any property or assets of any
Credit Party to secure or provide for payment or performance of the
Subordinated Obligations;"
(b) Section 6.3 of the Intercreditor Agreement is hereby
further amended by deleting the "or" at the end of subsection
(b), deleting the period at the end of subsection (c) and
replacing it with a semicolon followed by the word "or", and
adding the following as subsection (d):
"(d) permit the Trademark License Agreement to be amended,
modified, waived or supplemented."
6. Joinder of Interactive and Paradigm. Each of
Interactive and Paradigm hereby join the Intercreditor Agreement and agree to
become a Subordinated Noteholder under the Intercreditor Agreement and to comply
with and be bound by all of the terms, conditions and covenants of the
Intercreditor Agreement as applicable to it as a Subordinated Noteholder.
7. Representations and Warranties of Subordinated
Noteholder. Subordinated Noteholder hereby represents and warrants that:
(a) Subordinated Noteholder has the power and authority
and the legal right to execute and deliver and to perform its
obligations under this Amendment and to perform its obligations under
the Intercreditor Agreement as amended by this Amendment (the "Amended
Intercreditor Agreement"); and
(b) this Amendment constitutes a legal, valid and binding
obligation of Subordinated Noteholder.
8. Representations and Warranties of Senior Agent.
Senior Agent hereby represents and warrants that:
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(a) Senior Agent has the power and authority and the
legal right to execute and deliver and to perform its obligations under
this Amendment and to perform its obligations under the Amended
Intercreditor Agreement;
(b) this Amendment constitutes a legal, valid and binding
obligation of the Senior Agent.
9. Ratification of Intercreditor Agreement; Remedies.
Except as expressly provided for, and on the terms and conditions set forth,
herein, the Intercreditor Agreement shall continue to be in full force and
effect in accordance with their respective terms and shall be unmodified. In
addition, this Amendment shall not be deemed a waiver of any term or condition
of the Intercreditor Agreement by any party thereto with respect to any right or
remedy which any party may now or in the future have under the Intercreditor
Agreement, at law or in equity or otherwise or be deemed to prejudice any rights
or remedies which any party may now have or may have in the future under or in
connection with the Intercreditor Agreement. The Intercreditor Agreement is
hereby in all respects ratified and confirmed.
10. Guaranty. Each of parties hereto agrees and
acknowledges that as of the date hereof, after giving effect to the Sixth
Amendment, the Guaranty has been terminated and is of no further force or
effect.
11. GOVERNING LAW. THIS AMENDMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
12. Counterparts. This Amendment may be executed by the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
Senior Agent:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Title: Duly Authorized Signatory
Subordinated Noteholder:
INFOGRAMES ENTERTAINMENT SA,
for itself and each Subsidiary thereof
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: F. Chesnais
Title: Directeur General Delegue
CALIFORNIA US HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: F. Chesnais
Title: Attorney-in-Fact
ATARI INTERACTIVE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
PARADIGM ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
Credit Parties:
ATARI, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President, Finance
Chief Financial Officer
REFLECTIONS INTERACTIVE LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director