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Exhibit 15
AMENDED AND RESTATED UNCONDITIONAL
SUBSIDIARY GUARANTY AGREEMENT
THIS AMENDED AND RESTATED UNCONDITIONAL SUBSIDIARY GUARANTY
AGREEMENT (as amended, restated, supplemented or otherwise modified, this
"Guaranty"), dated as of November 15, 1999, is made by the subsidiaries of GT
Interactive Software Corp. (the "Borrower") identified on the signature pages
attached hereto (together with each additional subsidiary who becomes party
hereto pursuant to a Joinder Agreement, the "Guarantors", each individually, a
"Guarantor"), in favor of First Union National Bank, a national banking
association, as administrative agent (the "Administrative Agent"), for the
ratable benefit of the Administrative Agent and the financial institutions who
are or may from time to time become parties to the Credit Agreement referred to
below (the "Lenders"), and California U.S. Holdings, Inc. ("Infogrames U.S.") a
wholly-owned Subsidiary of Infogrames Entertainment, SA, a societe anonyme
organized under the laws of France.
STATEMENT OF PURPOSE
Pursuant to the terms of the Credit Agreement, dated as of
September 11, 1998 (as amended, restated, supplemented or otherwise modified,
the "Credit Agreement"), by and among the Borrower, the Lenders and the
Administrative Agent, the Lenders agreed to make certain Extensions of Credit to
the Borrower as more particularly described therein.
In connection with the execution and delivery of the Second
Amendment, Waiver and Agreement, dated as of June 29, 1999, under the Credit
Agreement, the Guarantors executed and delivered in favor of the Administrative
Agent, for the benefit of the Lenders and the Administrative Agent, an
Unconditional Subsidiary Guaranty Agreement, dated as of June 29, 1999 (as
heretofore amended, restated, supplemented or otherwise modified, the "Existing
Guaranty Agreement"), pursuant to which the Guarantors guaranteed the
Obligations (as defined in the Existing Guaranty Agreement) of the Borrower
under the Credit Agreement and the other Loan Documents.
The Borrower has advised the Administrative Agent and the
Lenders that Infogrames U.S. has agreed to provide a term loan to the Borrower
in the original principal amount of $25,000,000 (the "Infogrames Bridge Loan"),
as evidenced by, and pursuant to the provisions of, a term note, dated November
15, 1999 (the "Infogrames Bridge Loan Note"), by the Borrower in favor of
Infogrames U.S., to be guaranteed by the Guarantors and secured by security
interests in substantially all of the assets of the Borrower and the Guarantors,
which security interests shall be junior and subordinate to the security
interests granted in the Collateral (as defined in the Security Agreement and
the Pledge Agreement) to the Administrative Agent, for the ratable benefit of
the Lenders and the Administrative Agent.
In connection with, among other things, the incurrence of the
Infogrames Bridge Loan and the execution and delivery of the Infogrames Bridge
Loan Note, the Borrower, the Lenders and the Administrative Agent have agreed to
execute a Third Amendment, Consent, Waiver and Agreement, dated as of November
15, 1999 (the "Third Amendment"), under the
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Credit Agreement to, among other things, amend and waive certain provisions
thereof and consent to the incurrence of the Infogrames Bridge Loan and the
grant of the security interests in favor of Infogrames U.S. as set forth above.
The Borrower and each of the Guarantors are members of an
affiliated group of corporations and are engaged in related businesses. The
proceeds of the Loans and the Infogrames Bridge Loan will be used in part to
make valuable transfers to each Guarantor and will inure, directly or
indirectly, to the benefit of each of the Guarantors.
In connection with the transactions contemplated by the Third
Amendment and the Infogrames Bridge Loan Note and as a condition precedent
thereto, the Borrower and Infogrames U.S. have requested that the Existing
Guaranty Agreement be amended and restated and that each Guarantor execute and
deliver this Guaranty to the Administrative Agent, for the ratable benefit of
the Administrative Agent and the Lenders, and to Infogrames U.S., and each of
the Guarantors has agreed to do so pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the foregoing premises,
and to induce (i) the Administrative Agent and the Lenders to enter into the
Third Amendment and (ii) Infogrames U.S. to make the Infogrames Bridge Loan,
each of the parties hereto hereby agrees as follows:
SECTION 1. Definitions. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as so
defined, and the following term shall have the following meaning:
"Bank 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 rates provided in the Credit Agreement after the maturity of
the Loans and interest accruing at the then applicable rate provided in
the Credit Agreement 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 under the Credit Agreement, 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, the Credit Agreement, the Notes,
the other Loan Documents, the Letters of Credit, the L/C Obligations,
any Hedging Agreements permitted or required under the Credit
Agreement, or any other document made, delivered or given in connection
herewith in respect of the Bank Obligations or therewith, in each case
whether on account of principal, interest, 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 the Credit Agreement or any other Loan
Document).
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"Borrower Obligations" means, collectively the Bank
Obligations and the Bridge Obligations.
"Bridge Obligations" means the Borrower's obligations under
the Infogrames Bridge Loan Documents in respect of the unpaid principal
of and interest on the Infogrames Bridge Loan Note (including, without
limitation, interest accruing at the then applicable rate provided in
the Infogrames Bridge Loan Note after the maturity of the Infogrames
Bridge Loan and interest accruing at the then applicable rate provided
in the Infogrames Bridge Loan Note 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 Infogrames
U.S. in respect of the Infogrames Bridge Loan or the Infogrames Bridge
Loan Note, 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, the Infogrames Bridge Loan Note
or the other Infogrames Bridge Loan Documents, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, (a) the obligations of the Borrower under the Infogrames
Securities Purchase Agreement to pay or reimburse Infogrames or
Infogrames U.S. for costs and expenses (including without limitation,
reasonable fees and disbursements of counsel to Infogrames or
Infogrames U.S.) incurred or paid by Infogrames or Infogrames U.S. in
connection with the Infogrames Securities Purchase Agreement and (b)
all reasonable fees and disbursements of counsel to Infogrames U.S.
that are required to be paid by the Borrower pursuant to the terms of
the Infogrames Bridge Loan Note or any other Infogrames Bridge Loan
Document).
"Event of Default" means an Event of Default under, and as
defined in, the Credit Agreement or the Infogrames Bridge Loan Note.
"Infogrames Bridge Loan Documents" means the Infogrames Bridge
Loan Note, the Pledge Agreement, the Security Agreement and this
Guaranty.
"Standstill Expiration Date" shall have the meaning assigned
thereto in Section 16.
SECTION 2. Guaranty of Obligations of Borrower. Each Guarantor
hereby, jointly and severally with the other Guarantors, unconditionally
guarantees to the Administrative Agent, for the ratable benefit of the
Administrative Agent and the Lenders, and to Infogrames U.S. and their
respective permitted successors, endorsees, transferees and assigns, the prompt
payment of all Borrower Obligations when due, whether primary or secondary
(whether by way of endorsement or otherwise), whether now existing or hereafter
arising, whether or not from time to time reduced or extinguished (except by
payment thereof) or hereafter increased or incurred, whether enforceable or
unenforceable as against the Borrower, whether or not discharged, stayed or
otherwise affected by any bankruptcy, insolvency or other similar law or
proceeding, whether created directly with Infogrames U.S., the Administrative
Agent or any Lender or acquired by Infogrames U.S., the Administrative Agent or
any Lender through assignment or endorsement, whether matured or unmatured,
whether joint or several, as and when the same become due and payable (whether
at maturity or earlier, by reason of acceleration,
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mandatory repayment or otherwise), in accordance with the terms of any such
instruments evidencing any such obligations, including all renewals, extensions
or modifications thereof (all Borrower Obligations, including all of the
foregoing, being hereinafter collectively referred to as the "Guaranteed
Obligations"); provided, that notwithstanding anything to the contrary contained
herein, it is the intention of each Guarantor, the Lenders and Infogrames U.S.
that in any proceeding involving the bankruptcy, reorganization, arrangement,
adjustment of debts, relief of debtors, dissolution or insolvency or any similar
proceeding with respect to any Guarantor or its assets, the amount of such
Guarantor's obligations with respect to the Guaranteed Obligations shall be in,
but not in excess of, the maximum amount thereof not subject to avoidance or
recovery by operation of applicable law governing bankruptcy, reorganization,
arrangement, adjustment of debts, relief of debtors, dissolution, insolvency,
fraudulent transfers or conveyances or other similar laws (including, without
limitation, 11 U.S.C. Section 547, Section 548, Section 550 and other
"avoidance" provisions of Title 11 of the United States Code) applicable in any
such proceeding to such Guarantor and this Guaranty (collectively, "Applicable
Insolvency Laws"). To that end, but only in the event and to the extent that
such Guarantor's obligations with respect to the Guaranteed Obligations or any
payment made pursuant to the Guaranteed Obligations would, but for the operation
of the foregoing proviso, be subject to avoidance or recovery in any such
proceeding under Applicable Insolvency Laws, the amount of such Guarantor's
obligations with respect to the Guaranteed Obligations shall be limited to the
largest amount which, after giving effect thereto, would not, under Applicable
Insolvency Laws, render such Guarantor's obligations with respect to such
Guaranteed Obligations unenforceable or avoidable or otherwise subject to
recovery under Applicable Insolvency Laws. To the extent any payment actually
made pursuant to the Guaranteed Obligations exceeds the limitation of the
foregoing proviso and is otherwise subject to avoidance and recovery in any such
proceeding under Applicable Insolvency Laws, the amount subject to avoidance
shall in all events be limited to the amount by which such actual payment
exceeds such limitation and the Guaranteed Obligations as limited by the
foregoing proviso shall in all events remain in full force and effect and be
fully enforceable against such Guarantor. The foregoing proviso is intended
solely to preserve the rights of the Administrative Agent, the Lenders and
Infogrames U.S. hereunder against such Guarantor in such proceeding to the
maximum extent permitted by Applicable Insolvency Laws, and the foregoing
proviso does not constitute nor shall it be construed as an acknowledgment that
such Guarantor, any other Loan Party, or any other guarantor or any other Person
has or shall have any right or claim under Applicable Insolvency Laws in such
proceeding.
SECTION 3. Nature of Guaranty. Each Guarantor agrees that this
Guaranty is a continuing, unconditional guaranty of payment and performance and
not of collection, and that its obligations under this Guaranty shall be
primary, absolute and unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, the Credit Agreement, any other
Loan Document, the Infogrames Bridge Loan Note, any other Infogrames
Bridge Loan Document or any other agreement, document or instrument to
which the Borrower or any Subsidiary thereof is or may become a party;
(b) the absence of any action to enforce this Guaranty, the
Credit Agreement, any other Loan Document, the Infogrames Bridge Loan
Note, any other Infogrames Bridge
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Loan Document or the waiver or consent by the Administrative Agent, any
Lender or Infogrames U.S. with respect to any of the provisions of this
Guaranty, the Credit Agreement, any other Loan Document, the Infogrames
Bridge Loan Note or any other Infogrames Bridge Loan Document, as
applicable;
(c) the existence, value or condition of, or failure to
perfect any Lien against, any security for or other guaranty of the
Guaranteed Obligations or any action, or the absence of any action, by
the Administrative Agent, any Lender or Infogrames U.S. in respect of
such security or guaranty (including, without limitation, the release
of any such security or guaranty); or
(d) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor;
it being agreed by each Guarantor that, subject to the proviso in Section 2
hereof, its obligations under this Guaranty shall not be discharged until the
final indefeasible payment and performance, in full, of the Guaranteed
Obligations owing hereunder and the termination of the Aggregate Commitment. To
the extent permitted by law, each Guarantor expressly waives all rights it may
now or in the future have under any statute, or at law or in equity, or
otherwise, to compel the Administrative Agent, any Lender or Infogrames U.S. to
proceed in respect of the Guaranteed Obligations against the Borrower or any
other party or against any security for or other guaranty of the payment and
performance of the Guaranteed Obligations before proceeding against, or as a
condition to proceeding against, such Guarantor. To the extent permitted by law,
each Guarantor further expressly waives and agrees not to assert or take
advantage of any defense based upon the failure of the Administrative Agent, any
Lender or Infogrames U.S. to commence an action in respect of the Guaranteed
Obligations against the Borrower, such Guarantor, any other guarantor or any
other party or any security for the payment and performance of the Guaranteed
Obligations. Each Guarantor agrees that any notice or directive given at any
time to the Administrative Agent, any Lender or Infogrames U.S. which is
inconsistent with the waivers in the preceding two sentences shall be null and
void and may be ignored by the Administrative Agent, such Lender or Infogrames
U.S., and, in addition, may not be pleaded or introduced as evidence in any
litigation relating to this Guaranty for the reason that such pleading or
introduction would be at variance with the written terms of this Guaranty,
unless the Administrative Agent, and the Required Lenders (in the case of
Guaranteed Obligations in respect of the Bank Obligations) and Infogrames U.S.
(in the case of Guaranteed Obligations in respect of the Bridge Obligations)
have specifically agreed otherwise in writing. The foregoing waivers are of the
essence of the transactions contemplated by the Loan Documents and the
Infogrames Bridge Loan Documents and, but for this Guaranty and such waivers,
the Administrative Agent and the Lenders would decline to enter into the Loan
Documents and Infogrames U.S. would decline to enter into the Infogrames Bridge
Loan Documents.
SECTION 4. Demand by the Administrative Agent or Infogrames
U.S. In addition to the terms set forth in Section 3, and in no manner imposing
any limitation on such terms, if all or any portion of the then outstanding
Guaranteed Obligations under the Loan Documents or the Infogrames Bridge Loan
Documents become, or are declared to be immediately, due and payable in
accordance therewith, then the Guarantors shall, upon demand in writing therefor
by the Administrative Agent (in the case of Guaranteed Obligations in respect of
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the Bank Obligations) or, subject to Section 15, Infogrames U.S. (in the
case of Guaranteed Obligations in respect of the Bridge Obligations), to the
Guarantors pay, the outstanding Guaranteed Obligations then due and payable (or
declared due and payable) in accordance therewith. Payment by the Guarantors
shall be made to the Administrative Agent, to be credited and applied upon the
Guaranteed Obligations in accordance with Section 14, in immediately available
funds to an account designated by the Administrative Agent or at the address
referenced herein for the giving of notice to the Administrative Agent or at any
other address that may be specified in writing from time to time by the
Administrative Agent.
SECTION 5. Waivers. In addition to the waivers contained in
Section 3, each Guarantor, to the extent permitted by law, waives and agrees
that it shall not at any time insist upon, plead or in any manner whatever claim
or take the benefit or advantage of, any appraisal, valuation, stay, extension,
marshalling of assets or redemption laws, or exemption, whether now or at any
time hereafter in force, which may delay, prevent or otherwise affect the
performance by such Guarantor of its obligations under, or the enforcement by
the Administrative Agent, the Lenders or Infogrames U.S. of, this Guaranty. Each
Guarantor further hereby waives, to the extent permitted by Applicable Law,
diligence, presentment, demand, protest and notice (except as specifically
required herein) of whatever kind or nature with respect to any of the
Guaranteed Obligations and waives, to the extent permitted by Applicable Law,
the benefit of all provisions of law which are or might be in conflict with the
terms of this Guaranty. Each Guarantor represents, warrants and agrees that its
obligations under this Guaranty are not and shall not be subject to any
counterclaims, offsets or defenses of any kind against the Administrative Agent,
the Lenders, Infogrames U.S. (subject to Section 15) or the Borrower whether now
existing or which may arise in the future.
SECTION 6. Benefits of Guaranty. The provisions of this
Guaranty are for the benefit of the Administrative Agent, the Lenders and
Infogrames U.S. and their respective permitted successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between the
Borrower, the Administrative Agent, the Lenders and Infogrames U.S., the
obligations of the Borrower under the Loan Documents or the Infogrames Bridge
Loan Documents, as applicable. In the event all or any part of the Guaranteed
Obligations are transferred, endorsed or assigned by the Administrative Agent or
any Lender (in the case of Guaranteed Obligations in respect of the Bank
Obligations) or Infogrames U.S. (in the case of Guaranteed Obligations in
respect of the Bridge Obligations) to any Person or Persons as permitted under
the Loan Documents or the Infogrames Bridge Loan Documents, as applicable, any
reference to an "Administrative Agent" or "Lender" or to "Infogrames U.S."
herein shall be deemed to refer equally to such Person or Persons.
SECTION 7. Modification of Loan Documents etc. If the
Administrative Agent, the Lenders or Infogrames U.S. shall at any time or from
time to time, with or without the consent of, or notice to, the Guarantors:
(a) change or extend the manner, place or terms of payment of,
or renew or alter all or any portion of, the Guaranteed Obligations, as
applicable;
(b) take any action under or in respect of the Loan Documents
or the Infogrames Bridge Loan Documents, as applicable, in the exercise
of any remedy, power or privilege
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contained therein or available to it at law, in equity or otherwise, or
waive or refrain from exercising any such remedies, powers or
privileges;
(c) amend or modify, in any manner whatsoever, the Loan
Documents or the Infogrames Bridge Loan Documents, as applicable;
(d) extend or waive the time for performance by any Guarantor,
any other guarantor, the Borrower or any other Person of, or compliance
with, any term, covenant or agreement on its part to be performed or
observed under a Loan Document or a Infogrames Bridge Loan Document, as
applicable or waive such performance or compliance or consent to a
failure of, or departure from, such performance or compliance;
(e) take and hold security or collateral for the payment of
the Guaranteed Obligations, as applicable, or sell, exchange, release,
dispose of, or otherwise deal with, any property pledged, mortgaged or
conveyed, or in which the Administrative Agent, the Lenders or
Infogrames U.S. have been granted a Lien, to secure any Debt of any
Guarantor, any other guarantor or the Borrower to the Administrative
Agent, the Lenders or Infogrames U.S.;
(f) release anyone who may be liable in any manner for the
payment of any amounts owed by any Guarantor, any other guarantor or
the Borrower to the Administrative Agent, any Lender or Infogrames
U.S.;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of
any Guarantor, any other guarantor or the Borrower are subordinated to
the claims of the Administrative Agent, any Lender or Infogrames U.S.;
or
(h) apply any sums by whomever paid or however realized to any
Guaranteed Obligations owing by any Guarantor, any other guarantor or
the Borrower to the Administrative Agent, any Lender or Infogrames
U.S., as applicable, in such manner as the Administrative Agent, any
Lender or Infogrames U.S. shall determine in its reasonable discretion;
then none of the Administrative Agent, any Lender or Infogrames U.S. shall incur
any liability to any Guarantor as a result thereof, and no such action shall
impair or release the obligations of any Guarantor under this Guaranty.
SECTION 8. Reinstatement. Each Guarantor agrees that, if any
payment made by the Borrower or any other Person and applied to the Borrower
Obligations is at any time annulled, set aside, rescinded, invalidated, declared
to be fraudulent or preferential or otherwise required to be refunded or repaid
or the proceeds of any collateral are required to be refunded by the
Administrative Agent, any Lender or Infogrames U.S. to the Borrower, its estate,
trustee, receiver or any other party, including, without limitation, any
Guarantor, under any Applicable Law or equitable cause, then, to the extent of
such payment or repayment, each Guarantor's liability hereunder (and any Liens
securing such liability) shall be and remain in full force and effect, as fully
as if such payment had never been made, and, if prior thereto, this Guaranty
shall
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have been canceled or surrendered (and if any Liens securing such Guarantor's
liability hereunder shall have been released or terminated by virtue of such
cancellation or surrender), this Guaranty (and such Liens) shall be reinstated
in full force and effect, and such prior cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect the obligations of such
Guarantor (and such Liens) in respect of the amount of such payment.
SECTION 9. Representations and Warranties. To induce the
Administrative Agent and the Lenders to make Extensions of Credit and to enter
into the Third Amendment, and to induce Infogrames U.S. to extend credit
pursuant to the Infogrames Bridge Loan Note, each Guarantor hereby represents
and warrants to the Administrative Agent, the Lenders and Infogrames U.S. that:
(a) such Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to execute,
deliver and perform this Guaranty and has taken all necessary corporate
action to authorize its execution, delivery and performance of this
Guaranty;
(b) this Guaranty constitutes the legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(c) the execution, delivery and performance of this Guaranty
will not violate any material provision of any Applicable Law relating
to the Guarantor or any provision of any Material Contract to which
such Guarantor is a party, the violation of which could reasonably be
expected to have a Material Adverse Effect, and will not result in the
creation or imposition of any Lien upon or with respect to any property
or revenues of such Guarantor;
(d) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any
stockholder or creditor of such Guarantor), is required in connection
with the execution, delivery, performance, validity or enforceability
of this Guaranty except where its failure to obtain or make such
consent, authorization or filing would not be expected to have a
Material Adverse Effect;
(e) no actions, suits or proceedings before any arbitrator or
Governmental Authority are pending or, to the knowledge of such
Guarantor, threatened by or against such Guarantor or against any of
its properties in each case with respect to this Guaranty or any of the
transactions contemplated hereby;
(f) such Guarantor has good and valid title to the real
property owned by it and a valid leasehold interest in the real
property leased by it, and has good and valid title to all of its
personal property sufficient to carry on its business as currently
conducted free of any and all Liens of any type whatsoever, except
those permitted by Section 10.3 of the Credit Agreement; and
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(g) as of the date hereof, such Guarantor (i) has capital
sufficient to carry on its business as currently conducted and is able
to pay its debts as they mature and become due, and (ii) owns property
having a value, both at fair valuation and at present fair saleable
value greater than the amount required to pay its probable liabilities
(including contingencies).
SECTION 10. Covenants. Each Guarantor hereby covenants and
agrees with the Administrative Agent, the Lenders and Infogrames U.S. that until
payment in full of the Borrower Obligations and termination of the Aggregate
Commitment, each Guarantor shall not take, and shall refrain from taking, any
action that would result in a violation of any of the covenants contained in
Articles VIII, IX and X of the Credit Agreement.
SECTION 11. Remedies. Upon the occurrence and during the
continuance of any Event of Default (a) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall and (b) Infogrames U.S. may, subject to
Section 15, enforce against the Guarantors their respective obligations and
liabilities hereunder and exercise such other rights and remedies as may be
available to the Administrative Agent or Infogrames U.S. hereunder, under the
Loan Documents or the Infogrames Bridge Loan Documents, as applicable, or
Applicable Law.
SECTION 12. Right of Set Off. Each Guarantor hereby
irrevocably authorizes the Administrative Agent, each Lender and, subject to
Section 15, Infogrames U.S. at any time and from time to time without notice to
such Guarantor or any other Guarantor, any such notice being expressly waived by
each Guarantor, upon the occurrence and continuance of an Event of Default, to
set off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent, such Lender or Infogrames U.S. to or for the
credit or the account of such Guarantor, or any part thereof in such amounts as
the Administrative Agent, such Lender or Infogrames U.S., as the case may be,
may elect, against or on account of the obligations and liabilities of such
Guarantor to the Administrative Agent, the Lenders or Infogrames U.S. hereunder
and claims of every nature and description of the Administrative Agent, the
Lenders and Infogrames U.S. against such Guarantor, in any currency, whether
arising hereunder, under the Credit Agreement, any other Loan Document, the
Infogrames Bridge Loan Note or any other Infogrames Bridge Loan Document, as the
Administrative Agent, any such Lender or Infogrames U.S., as the case may be,
may elect, whether or not the Administrative Agent, such Lender or Infogrames
U.S., as the case may be, has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The
Administrative Agent, each Lender and Infogrames U.S. shall notify such
Guarantor promptly of any such set-off and the application made by the
Administrative Agent, such Lender or Infogrames U.S., as the case may be, of the
proceeds thereof; provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Administrative
Agent, each Lender and Infogrames U.S. under this Section 12 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Administrative Agent, such Lender or Infogrames U.S. may
have. The
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proceeds of any such exercise of any such right of set off shall be turned over
to the Administrative Agent to be applied to the Guaranteed Obligations pursuant
to Section 14.
SECTION 13. No Subrogation. Notwithstanding any payment or
payments by any of the Guarantors hereunder, or any set off or application of
funds of any of the Guarantors, by the Administrative Agent, any Lender or
Infogrames U.S., or the receipt of any amounts by the Administrative Agent, any
Lender or Infogrames U.S. with respect to any of the Guaranteed Obligations,
none of the Guarantors shall be entitled to be subrogated to any of the rights
the Administrative Agent, any Lender or Infogrames U.S. against the Borrower or
the other Guarantors or against any collateral security held by the
Administrative Agent, any Lender or Infogrames U.S. for the payment of the
Guaranteed Obligations nor shall any of the Guarantors seek any reimbursement
from the Borrower or any of the other Guarantors in respect of payments made by
such Guarantor in connection with the Guaranteed Obligations, until all amounts
owing to the Administrative Agent, the Lenders and Infogrames U.S. on account of
the Guaranteed Obligations are paid in full and the Aggregate Commitment is
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Guaranteed Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Administrative Agent, the Lenders and Infogrames U.S., segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Administrative Agent in the exact form received by such
Guarantor (duly endorsed by such Guarantor to the Administrative Agent, if
required) to be applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with Section 14.
SECTION 14. Application of Payments. In order to implement the
agreement of the Administrative Agent, on behalf of the Lenders and the
Administrative Agent, and Infogrames U.S. with respect to the application of any
payments under this Guaranty on account of the Guaranteed Obligations, any
payments received shall be delivered to the Administrative Agent in the form
received, duly indorsed to the Administrative Agent, if required, and applied as
follows:
(a) First, to the payment in full of all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements) paid or incurred by the Administrative Agent or any
Lender, or paid or incurred by Infogrames U.S. at any time after the
Standstill Expiration Date, in connection with the collection of
payments under this Guaranty or the protection of the rights and
interests of the Administrative Agent, the Lenders or Infogrames U.S.
hereunder, as the case may be;
(b) Second, to the Administrative Agent, for the ratable
benefit of the Lenders and the Administrative Agent, until an aggregate
of $75,000,000 of the Bank Obligations have been paid in full, such
amounts to be applied to the Bank Obligations in accordance with
Section 4.5 of the Credit Agreement;
(c) Third, on a pro rata basis (based upon the then
outstanding aggregate amount of the Bank Obligations and the then
outstanding aggregate amount of the Bridge Obligations other than the
Bridge Obligations referenced in clause (d) below) to the
Administrative Agent, for the ratable benefit of the Lenders and the
Administrative Agent (such amounts to be applied to the Bank
Obligations in accordance with Section 4.5 of the
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Credit Agreement), and to Infogrames U.S. (for application to the
Bridge Obligations) until all of the Bank Obligations and all such
Bridge Obligations have been paid in full;
(d) Fourth, to Infogrames U.S., all Bridge Obligations
constituting obligations of the Borrower under the Infogrames
Securities Purchase Agreement to pay or reimburse Infogrames or
Infogrames U.S. for costs and expenses (including without limitation,
reasonable fees and disbursements of counsel to Infogrames or
Infogrames U.S.) incurred or paid by Infogrames or Infogrames U.S. in
connection with the Infogrames Securities Purchase Agreement other than
any such costs and expenses relating to the Infogrames Bridge Loan; and
(e) Fifth, after the indefeasible payment in full of the
Obligations, to the Borrower or the applicable Guarantor, or its
representative or as a court of competent jurisdiction may direct, any
surplus then remaining.
SECTION 15. Priorities Regarding Guaranteed Obligations. (a)
Without notice to or further assent by Infogrames U.S. and without modifying or
limiting in any way the application of any payments under this Guaranty on
account of the Guaranteed Obligations in accordance with Section 14:
(i) any demand for payment of any Bank Obligations made by the
Administrative Agent or the Lenders may be rescinded in whole or in
part by such Lenders, and any Bank Obligations may be continued, and
the Bank Obligations, or the liability of the Borrower or any other
Grantor for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, or any obligation or
liability of the Borrower or any other Grantor with respect to such
Bank Obligations under the Credit Agreement or any other Loan Document
may, from time to time, in whole or in part, be renewed, extended,
modified, accelerated, compromised, waived, surrendered, or released by
the Administrative Agent, acting at the direction of the Lenders
pursuant to the Credit Agreement; and
(ii) the Credit Agreement and any other Loan Document may be
amended, modified, supplemented or terminated, in whole or in part, in
each case in respect of the Bank Obligations, and any Collateral may be
exchanged, waived, surrendered or released, in each case in respect of
the Bank Obligations.
(b) The terms of this Section 15 and the application of any
payments under this Guaranty on account of the Guaranteed Obligations in
accordance with Section 14 shall not be affected by any exercise of, or failure
to exercise, any right, power or remedy, or any waiver, consent release,
increase, extension, renewal, modification, delay or non-perfection under or in
respect of the Bank Obligations, this Guaranty, the other Loan Documents, the
Bridge Obligations or the other Infogrames Bridge Loan Documents. The Bank
Obligations shall be deemed conclusively to have been created, contracted or
incurred in reliance upon this Guaranty, and all dealings among the
Administrative Agent and the Lenders on the one hand, and Infogrames U.S. on the
other hand, shall be deemed to have been consummated in reliance upon this
Guaranty.
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SECTION 16. Standstill Period in Respect of Bridge
Obligations. (a) Notwithstanding anything to the contrary contained in this
Guaranty, any other Loan Document or any other Infogrames Bridge Loan Document,
Infogrames U.S. agrees and acknowledges that prior to the earlier of September
30, 2000 or the nine (9) month anniversary of the date upon which the
Transaction Documentation is terminated (such earlier date, the "Standstill
Expiration Date"):
(i) other than (A) the right to receive payment in full of the
Bridge Obligations on the Transaction Closing Date and (B) any right to
receive payments on account of the Bridge Obligations in accordance
with Section 14 (and the corresponding provisions of the other Loan
Documents and Infogrames Bridge Loan Documents), Infogrames U.S. shall
not, nor shall it seek to make demand or otherwise, exercise or enforce
any right or remedy under this Guaranty, any other Infogrames Bridge
Loan Document or applicable law with respect to the Bridge Obligations,
including without limitation, to institute any action or proceeding
with respect to such rights or remedies or to contest, protest or
object to any exercise of rights or enforcement of remedies by the
Administrative Agent;
(ii) Infogrames U.S. will not interfere with, seek to enjoin
or invoke or utilize any provision of any document, law or equitable
principle which might prevent, delay or impede the enforcement (in the
discretion of the Administrative Agent, acting at the direction of the
Required Lenders) of the rights of the Administrative Agent under this
Guaranty or any other Loan Document or applicable law;
(iii) in exercising rights and remedies under this Guaranty,
the Administrative Agent and the Lenders may enforce the provisions of
this Guaranty and exercise remedies hereunder and under any other Loan
Document or applicable law (or refrain from enforcing such rights and
exercising such remedies), all in such order and in such manner as they
may determine in the exercise of their sole discretion, and such
exercise and enforcement of rights and remedies shall include incurring
expenses in connection with such exercise of rights and remedies.
(b) On and after the Standstill Expiration Date the provisions
of Section 16(a) above shall no longer apply and Infogrames U.S. may at any time
after the occurrence and during the continuance of an Event of Default under the
Infogrames Bridge Loan Documents, but subject to Section 14 with respect to the
application of payments in respect of the Guaranteed Obligations, exercise or
enforce any right or remedy under applicable law in respect of the Bridge
Obligations.
SECTION 17. Termination of Bridge Obligations. Upon payment in
full of the Bridge Obligations on the Transaction Closing Date, the Guaranteed
Obligations in respect of the Bridge Obligations shall be automatically
terminated and released, Infogrames U.S. shall cease to be a party to this
Guaranty and Infogrames U.S. will, at the Administrative Agent's request and at
the expense of the Borrower, execute and deliver to the Administrative Agent
such documents as the Administrative Agent shall reasonably request to evidence
such termination and release.
SECTION 18. Expenses. All reasonable costs and expenses
(including reasonable attorneys' fees, legal expenses and court costs) incurred
by the Administrative Agent, any Lender
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or Infogrames U.S. in enforcing or protecting their rights or remedies hereunder
shall be payable by the Guarantors on demand and shall bear interest (after as
well as before judgment) until paid at the rate then applicable to Base Rate
Loans (as defined in the Credit Agreement) and shall be additional Guaranteed
Obligations hereunder.
SECTION 19. Notices. All notices and communications to the
Administrative Agent, a Lender or a Guarantor shall be made in accordance with
Section 13.1 of the Credit Agreement and given to the addresses or transmission
numbers for notices set forth in the Credit Agreement, in the case of the
Administrative Agent or a Lender, or under its signature below, in the case of a
Guarantor. All notices and communications to Infogrames U.S. shall be made in
accordance with the Infogrames Bridge Loan Note and given to the address or
transmission number for notices set forth therein
SECTION 20. Successors and Assigns. This Guaranty is for the
benefit of the Administrative Agent, the Lenders and Infogrames U.S. and their
permitted successors and assigns, and in the event of an assignment of all or
any of the Guaranteed Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Guaranty shall be binding on each Guarantor and its
successors and assigns; provided that no Guarantor may assign any of its rights
or obligations hereunder without the prior written consent of the Administrative
Agent, the Lenders and Infogrames U.S..
SECTION 21. Amendments, Waivers and Consents. No term,
covenant, agreement or condition of this Guaranty may be amended or waived, nor
may any consent be given, except in the manner set forth in Section 13.11 of the
Credit Agreement, except that any such amendment, waiver or consent affecting
the Guaranteed Obligations in respect of the Bridge Obligations may not be made
without the consent of Infogrames U.S.
SECTION 22. Powers Coupled with an Interest. All
authorizations and agencies herein contained with respect to the Guaranteed
Obligations are irrevocable and powers coupled with an interest.
SECTION 23. Governing Law. THIS GUARANTY SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 24. Consent to Jurisdiction. Each Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guaranty, the other Loan Documents and the
other Infogrames Bridge 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 of America 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
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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;
(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 such Guarantor at its address set forth under its signature
below;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
SECTION 25. Waiver of Jury Trial. EACH OF THE GUARANTORS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY OTHER
INFOGRAMES BRIDGE LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 26. Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the
Administrative Agent, the Lenders and Infogrames U.S. in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (b) the
invalidity or unenforceability of any provisions hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 27. Headings. The various headings of this Guaranty
are inserted for convenience only and shall not affect the meaning or
interpretation of this Guaranty or any provisions hereof.
SECTION 28. Counterparts. This Guaranty may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Guarantors has caused this
Guaranty to be duly executed and delivered by its duly authorized officer as of
the date first above written.
HUMONGOUS ENTERTAINMENT, INC.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
WIZARDWORKS GROUP, INC.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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SINGLETRAC ENTERTAINMENT TECHNOLOGIES, INC.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
SWAN ACQUISITION CORP.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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CANDEL INC.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
FORMGEN, INC.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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GOLD MEDALLION SOFTWARE INC.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
MEDIATECHNICS, LTD.
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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LEGEND ENTERTAINMENT COMPANY LLC
By:________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT Interactive
Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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FIRST UNION NATIONAL BANK,
as Administrative Agent
By:____________________________________
Name:
Title:
CALIFORNIA U.S. HOLDINGS, INC.
By:_____________________________________
Name:
Title:
