Exhibit 10.5
SECOND AMENDED AND RESTATED PLEDGE AGREEMENT
THIS SECOND AMENDED AND RESTATED PLEDGE AGREEMENT (as amended,
restated, supplemented, or otherwise modified, this "Pledge Agreement"), dated
as of November 15, 1999, is made by GT Interactive Software Corp. (the
"Borrower") and certain of its subsidiaries identified on the signature pages
attached hereto (together with the Borrower and each additional subsidiary who
becomes party hereto pursuant to a Joinder Agreement, the "Pledgors", each
individually, a "Pledgor") 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 Credit
Agreement, the Borrower executed and delivered in favor of the Administrative
Agent a Pledge Agreement, dated as of September 11, 1998 (as amended, restated,
supplemented or otherwise modified prior to June 29, 1999, the "Existing Pledge
Agreement"), pursuant to which the Borrower pledged to the Administrative Agent,
for the ratable benefit of the Lenders and the Administrative Agent, security
interests in the Collateral to secure the Obligations (as such terms are defined
in the Existing Pledge Agreement).
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 Borrower executed and delivered in favor of the Administrative
Agent, for the ratable benefit of the Lenders and the Administrative Agent, an
Amended and Restated Pledge Agreement, dated as of June 29, 1999 (as heretofore
amended, restated, supplemented or otherwise modified, the "Amended and Restated
Pledge Agreement"), pursuant to which the Borrower (i) reaffirmed its previous
grant to the
Administrative Agent, for the ratable benefit of the Lenders and the
Administrative Agent, of security interests in the Collateral under, and as
defined in, the Existing Pledge Agreement and (ii) granted to the Administrative
Agent, for the ratable benefit of the Lenders and the Administrative Agent,
security interests in the Collateral to secure the Obligations (as such terms
are defined in the Amended and Restated Pledge Agreement).
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. 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 extent set forth herein to the security interests
granted to the Administrative Agent, for the ratable benefit of the Lenders and
the Administrative Agent, in the Existing Pledge Agreement, the Amended and
Restated Pledge Agreement and this Pledge Agreement.
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 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 more fully set forth below.
The Pledgors are the record and beneficial owner of (i) the
shares of Pledged Stock (as hereinafter defined) issued by certain corporations
as specified on Schedule I attached hereto and incorporated herein by reference
(collectively, the "Issuers") and (ii) the Partnership/LLC Interests (as
hereinafter defined) in the partnerships and limited liability companies listed
on Schedule I hereto (collectively, the "Partnerships/LLCs").
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 Amended and
Restated Pledge Agreement be further amended and restated, and that each Pledgor
execute and deliver this Pledge Agreement together with, the Pledged Stock,
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to the extent not previously delivered to the Administrative Agent, and the
Partnership/LLC Interests to the Administrative Agent, for the ratable benefit
of the Administrative Agent, the Lenders, and Infogrames U.S., and each of the
Pledgors 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:
1. Defined Terms. Unless otherwise defined herein, terms which
are defined in the Credit Agreement and used herein are used as so defined, and
the following terms shall have the following meanings:
"Bank Obligations" means the Pledgors' obligations under the
Loan Documents in respect of the unpaid principal of and interest on
the Notes (including, without limitation, interest accruing at the then
applicable rate provided 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 any Pledgor, 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 Pledgors 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 Letters of Credit, the L/C Obligations, any Hedging Agreements
permitted or required under the Credit Agreement, this Pledge
Agreement, the other Loan Documents 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, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent, the Issuing Lender or the
Lenders that are required to be paid by any Pledgor pursuant to the
terms of the Credit Agreement, this Pledge Agreement or any
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other Loan Document).
"Bridge Obligations" means the Pledgors' 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 any Pledgor, 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 Pledgors 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, 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 any Pledgor pursuant to the terms of the Infogrames Bridge Loan
Note or any other Infogrames Bridge Loan Document).
"Code" means the Uniform Commercial Code as in effect in the
State of New York; provided that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection of
the security interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York,
"Code" means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
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"Collateral" means, with respect to each Pledgor, the Stock
Collateral and the Partnership/LLC Collateral.
"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 Guaranty Agreement, the Security Agreement and this
Pledge Agreement.
"Obligations" means, collectively, the Bank Obligations and
the Bridge Obligations.
"Partnership/LLC Collateral" means, with respect to each
Pledgor, all of the Partnership/LLC Interests of such Pledgor in the
Partnerships/LLCs and all Proceeds therefrom.
"Partnership/LLC Interests" means, with respect to each
Pledgor, the entire partnership or membership interest of such Pledgor
in each Partnership/LLC listed under such Pledgor's name on Schedule I
hereto, including, without limitation, such Pledgor's capital account,
such Pledgor's interest as a partner or member in the net cash flow,
net profit and net loss, and items of income, gain, loss, deduction and
credit of the Partnerships/LLCs, such Pledgor's interest in all
distributions made or to be made by the Partnerships/LLCs to such
Pledgor and all of the other economic rights, titles and interests of
such Pledgor as a partner or member of the Partnerships/LLCs, whether
set forth in the partnership agreement or membership agreement of the
Partnerships/LLCs, by separate agreement or otherwise.
"Permitted Liens" means all Liens respecting the Collateral
permitted pursuant to Section 10.3 of the Credit Agreement.
"Pledged Stock" means, with respect to each Pledgor, the
shares of capital stock of each Issuer listed under such Pledgor's name
on Schedule I hereto, together with all stock certificates, options or
rights of any nature whatsoever that may be issued or granted by any
Issuer to such Pledgor while this Pledge Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any event,
shall include, without limitation, all dividends or other income from
the Pledged Stock and the
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Partnership/LLC Interests, collections thereon, proceeds of sale
thereof or distributions with respect thereto.
"Standstill Expiration Date" shall have the meaning assigned
thereto in Paragraph 16.
"Stock Collateral" means, with respect to each Pledgor, the
Pledged Stock owned by such Pledgor and all Proceeds therefrom.
2. Pledge and Grant of Security Interest.
(a) Each Pledgor hereby delivers to the Administrative Agent,
for the benefit of the Administrative Agent, the Lenders and Infogrames
U.S., all of the Pledged Stock of such Pledgor, to the extent not
previously delivered to the Administrative Agent.
(b) Each Pledgor hereby confirms and reaffirms its grant of a
security interest in the Collateral (as defined in the Amended and
Restated Pledge Agreement) pursuant to the Amended and Restated Pledge
Agreement. In order to secure the payment when due whether at the
stated maturity, by acceleration or otherwise of the Bank Obligations,
each Pledgor hereby grants to the Administrative Agent, for the ratable
benefit of the Lenders and the Administrative Agent, a first priority
security interest in the Pledged Stock listed under such Pledgor's name
on Schedule I and all of such Pledgor's other Collateral.
(c) In order to secure the payment when due whether at the
stated maturity, by acceleration or otherwise of the Bridge
Obligations, each Pledgor hereby grants to Infogrames U.S. a security
interest in the Pledged Stock listed under such Pledgor's name on
Schedule I and all of such Pledgor's other Collateral junior only to
the security interests granted to the Administrative Agent, for the
ratable benefit of the Lenders and the Administrative Agent, and other
Permitted Liens, in each case to the extent provided herein.
(d) As set forth in the separate granting clauses contained in
subsections (b) and (c) above, it is the intent of the Pledgor, the
Administrative Agent, the Lenders and Infogrames U.S. that this Pledge
Agreement shall create two separate and distinct Liens, a senior Lien
in favor of the Administrative Agent, for the benefit of the Lenders
and the
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Administrative Agent, and a separate junior Lien in favor of Infogrames
U.S.
3. Stock Powers; Register of Pledge. Concurrently with the
delivery to the Administrative Agent of each certificate representing one or
more shares of Pledged Stock (with respect to each Domestic Subsidiary, and,
where applicable, with respect to each Foreign Subsidiary), each Pledgor shall
have delivered, or to the extent not previously delivered to the Administrative
Agent shall deliver, an undated stock power covering such certificate, duly
executed in blank by such Pledgor with, if the Administrative Agent so requests,
signature guaranteed.
4. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) none of each Pledgor shall remain liable to perform all of
its duties and obligations as a partner or member of the Partnerships/LLCs to
the same extent as if this Pledge Agreement had not been executed, (b) the
exercise by the Administrative Agent or, of any of the rights hereunder shall
not release any Pledgor from any of its duties or obligations as a partner or
member of the Partnerships/LLCs and (c) none of the Administrative Agent, any
Lender or Infogrames U.S. shall have any obligation or liability as a partner or
member of the Partnerships/LLCs by reason of this Pledge Agreement.
5. Representations and Warranties. Each Pledgor hereby
represents and warrants to the Administrative Agent, each Lender and Infogrames
U.S. that:
(a) such Pledgor 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 and
deliver, to perform its obligations under, and to grant the Lien on its
Collateral pursuant to, this Pledge Agreement and has taken all
necessary corporate action to authorize its execution, delivery and
performance of, and grant of the Lien on its Collateral pursuant to,
this Pledge Agreement;
(b) this Pledge Agreement constitutes a legal, valid and
binding obligation of such Pledgor enforceable against such Pledgor 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 by such Pledgor of
this Pledge Agreement will not violate any
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provision of any (i) Applicable Law relating to such Pledgor or (ii)
material contractual obligation of the Pledgor, 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 on any of the
properties or the revenues of such Pledgor pursuant to any Applicable
Law or such contractual obligation, except as contemplated hereby and
by the Credit Agreement;
(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 Pledgor or any Issuer or any general or
limited partner or member of any Partnership/LLC), is required in
connection with the execution, delivery or performance by, or validity
or enforceability against, such Pledgor of this Pledge Agreement,
except (i) as may be required in connection with the disposition of the
Pledged Stock and the Partnership/LLC Interests by laws affecting the
offering and sale of securities generally and (ii) filings under the
Code;
(e) no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the
knowledge of such Pledgor, threatened by or against such Pledgor or
against any of its properties or revenues, in each case with respect to
this Pledge Agreement or any of the transactions contemplated hereby;
(f) the shares of Pledged Stock listed under such Pledgor's
name on Schedule I constitute all of the issued and outstanding shares
of all classes of the capital stock of each Issuer that is a Domestic
Subsidiary and constitute sixty-five percent (65%) of all of the issued
and outstanding shares of all classes of capital stock of each Issuer
that is a Foreign Sub-sidiary, in each case owned by such Pledgor, and
Schedule I accurately reflects such Pledgor's Partnership/LLC Interest
in each of the Partnerships/LLCs listed under such Pledgor's name on
Schedule I and the Partnership/LLC Interests pledged by such Pledgor
constitute all of the outstanding ownership interests in which such
Pledgor has any right, title or interest in each Partnership/LLC which
is a Domestic Subsidiary and constitutes sixty-five percent (65%) of
the outstanding ownership interests in which such Pledgor has
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any right, title and interest in each Partnership/LLC which is a
Foreign Subsidiary;
(g) the shares of Pledged Stock listed under such Pledgor's
name on Schedule I have been duly and validly issued and are fully paid
and nonassessable and all of the Partnership/LLC Interests listed under
such Pledgor's name on Schedule I have been duly and validly issued;
(h) such Pledgor is the record and beneficial owner of, and
has good and marketable title to the Pledged Stock and Partnership/LLC
Interests listed under such Pledgor's name on Schedule I, free of any
and all Liens or options in favor of, or claims of, any other Person,
except the Liens created by this Pledge Agreement or Permitted Liens;
(i) the jurisdiction in which such Pledgor is located for
purposes of Section 9-103 and Section 9-401 of the Code is listed
opposite such Pledgor's name on Schedule II hereto;
(j) upon delivery to the Administrative Agent of the stock
certificates evidencing such Pledgor's Pledged Stock and the filing of
appropriate financing statements (or, with respect to any Foreign
Subsidiary, any filing required by the applicable foreign jurisdiction)
in the jurisdictions listed opposite such Pledgor's name on Schedule II
, the Liens granted by such Pledgor pursuant to this Pledge Agreement
will constitute valid, perfected first priority Liens in respect of the
Bank Obligations and Liens in respect of the Bridge Obligations, which
are junior only to the security interests in respect of the Bank
Obligations and the Permitted Liens, on the Collateral, enforceable as
such against all creditors of such Pledgor and any Persons purporting
to purchase any of such Collateral from such Pledgor; and
(k) such Pledgor has delivered to the Administrative Agent
true and complete copies of the partnership agreements and operating
agreements, as applicable, for each of the Partnerships/LLCs listed
under such Pledgor's name on Schedule I, which partnership agreements
and operating agreements are currently in full force and effect and
have not been amended or modified except as disclosed to the
Administrative Agent in writing.
6. Certain Covenants. Each Pledgor hereby covenants and agrees
with the Administrative Agent, the Lenders and Infogrames U.S., that, from and
after the date of this Pledge
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Agreement until the Obligations are paid in full and the Aggregate Commitment is
terminated:
(a) As a partner or member in the Partnerships/LLCs listed
under such Pledgor's name on Schedule I, it will abide by, perform and
discharge each and every material obligation, covenant and agreement to
be abided by, performed or discharged by such Pledgor as and when
required under the terms of the partnership agreements and operating
agreements, as applicable, of such Partnerships/LLCs, at no cost or
expense to the Administrative Agent, the Lenders or Infogrames U.S.
(b) If such Pledgor shall, as a result of its ownership of the
Collateral, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in
exchange for any of the Collateral, or otherwise in respect thereof,
such Pledgor shall accept the same as the agent of the Administrative
Agent and Infogrames U.S., hold the same in trust for the
Administrative Agent and Infogrames U.S. and deliver the same forthwith
to the Administrative Agent in the exact form received, duly indorsed
by such Pledgor to the Administrative Agent, if required, together with
an undated stock power covering such certificate duly executed in blank
by such Pledgor and with, if the Administrative Agent so requests,
signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the
Obligations; provided, that at no time shall the Pledged Stock or
Partnership/LLC Interests of any Issuer or Partnership/LLC that is a
Foreign Subsidiary exceed sixty-five percent (65%) of the issued and
outstanding shares of all classes of capital stock of such Subsidiary
or Partnership/LLC Interests of such Subsidiary owned by such Pledgor.
In addition, any sums paid to such Pledgor upon or in respect of such
Collateral upon the liquidation or dissolution of any Issuer or
Partnership/LLC shall be held by the Administrative Agent as additional
collateral security for the Obligations.
(c) Without the prior written consent of the Administrative
Agent, such Pledgor will not (i) vote to
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enable, or take any other action to permit, any Issuer or
Partnership/LLC listed under such Pledgor's name on Schedule I to issue
any stock, partnership interests, limited liability company interests
or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or
exchange for any stock, partnership interests, limited liability
company interests or other equity securities of any nature of such
Issuer or Partnership/LLC, (ii) except as expressly provided to the
contrary herein, consent to any modification, extension or alteration
of the material terms of any partnership agreement or operating
agreement of any such Partnerships/LLCs, (iii) accept a surrender of
any partnership agreement or operating agreement of any such
Partnerships/LLCs or waive any material breach of or default under any
partnership agreement or operating agreement of any such
Partnerships/LLCs by any other party thereto, (iv) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with
respect to the Collateral, except as permitted by the Loan Documents or
the Infogrames Bridge Loan Documents, or (v) create, incur or permit to
exist any Lien on or option in favor of, or any claim of any Person
with respect to, any of the Collateral, or any interest therein, except
for the Liens provided for by this Pledge Agreement or Permitted Liens.
Such Pledgor will defend the right, title and interest of the
Administrative Agent and Infogrames U.S. in and to the Collateral
against the claims and demands of all Persons whomsoever.
(d) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such
Pledgor, such Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced
by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner reasonably satisfactory
to the Administrative Agent, to be held as Collateral pursuant to this
Pledge Agreement.
(e) Such Pledgor agrees to pay when due, and to save each of
the Administrative Agent, the Lenders and Infogrames U.S. harmless
from, any and all liabilities with respect to, or resulting from any
delay in paying (except due to any
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delay caused by the gross negligence or willful misconduct of the
Administrative Agent, any such Lender or Infogrames U.S.,
respectively), any and all applicable stamp, excise, sales or other
similar taxes which may be payable or determined to be payable with
respect to the Collateral or in connection with any of the transactions
contemplated by this Pledge Agreement.
(f) On or prior to the formation or acquisition of any
Subsidiary by such Pledgor, such Pledgor agrees to execute the Joinder
Agreement, attached to the Credit Agreement (which among other things,
supplements this Pledge Agreement), and such other documents and
instruments as required pursuant to Section 8.12 of the Credit
Agreement.
7. Cash Dividends and Distributons; Voting Rights. Unless an
Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given notice to the Pledgors of the Administrative Agent's
intent to exercise its rights pursuant to Paragraph 8 below, the Pledgor shall
be permitted to receive all cash dividends and shareholder, partnership and
membership distributions paid in accordance with the terms of the Credit
Agreement and the Infogrames Bridge Loan Note in respect of the Collateral and
to exercise all voting and corporate, partnership or membership rights, as
applicable, with respect to the Collateral; provided, that no vote shall be cast
or corporate, partnership or membership right exercised or other action taken
which, in the Administrative Agent's reasonable judgment, would impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, the Notes, any other Loan Document, the
Infogrames Bridge Loan Note, any other Infogrames Bridge Loan Document or this
Pledge Agreement. The Administrative Agent shall execute and deliver all proxies
and other instruments as any Pledgor may reasonably request from time to time
for the purpose of enabling such Pledgor to exercise the voting and other rights
that it is entitled to exercise and to receive the dividends and distributions
that it is authorized to receive and retain pursuant to this Paragraph 7, in
each case at the sole cost and expense of such Pledgor.
8. Rights of the Administrative Agent.
(a) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise
such rights to the Pledgors, (i) the Administrative Agent shall have
the right to receive any and
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all cash dividends paid in respect of the Pledged Stock or partnership
and membership distributions in respect of the Partnership/LLC
Interests and make application thereof to the Obligations in accordance
with Paragraph 15 hereof and (ii) all shares of the Pledged Stock and
the Partnership/LLC Interests represented by instruments shall be
registered in the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (A) all
voting, corporate, partnership, membership and other rights pertaining
to such Collateral at any meeting of shareholders, partners or members
of the applicable entity or otherwise and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or
options pertaining to such Collateral as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its
discretion any and all of the Collateral upon the merger,
consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of the applicable entity, or upon the
exercise by the relevant Pledgor or the Administrative Agent of any
right, privilege or option pertaining to such Collateral, and in
connection therewith, the right to deposit and deliver any and all of
the Collateral with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as
it may determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have no
duty to any Pledgor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent, the Lenders and
Infogrames U.S. hereunder shall not be conditioned or contingent upon
the pursuit by the Administrative Agent, any Lender or Infogrames U.S.
of any right or remedy against any Pledgor or against any other Person
which may be or become liable in respect of all or any part of the
Obligations, or against any collateral security therefor, guarantee
thereof or right of offset with respect thereto. None of the
Administrative Agent, any Lender or Infogrames U.S. shall be liable for
any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall the Administrative
Agent be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Pledgor or any other Person or to
take any other action whatsoever with regard to the Collateral or any
part thereof.
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9. Remedies.
(a) If an Event of Default shall occur and be continuing, the
Administrative Agent may, upon the request of the Required Lenders or
Infogrames U.S., as the case may be, exercise, on behalf of itself, the
Lenders and Infogrames U.S. all rights and remedies granted in this
Pledge Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, and in addition thereto, all
rights and remedies of a secured party under the Code. Without limiting
the generality of the foregoing with regard to the scope of the
Administrative Agent's remedies, the Administrative Agent without
demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by
Applicable Law referred to below) to or upon any Pledgor, any Issuer,
any Partnership/LLC or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, assign,
give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales,
in the over-the-counter market, at any exchange, broker's board or
office of the Administrative Agent, any Lender or Infogrames U.S. or
elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative
Agent, any Lender, Infogrames U.S. or any Affiliate of any thereof
shall have the right upon any such public sale or sales, and, to the
extent permitted by Applicable Law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold,
free of any right or equity of redemption in any Pledgor, which right
or equity is hereby waived or released. The Administrative Agent shall
apply any Proceeds from time to time held by it and the net proceeds of
any such collection, recovery, receipt, appropriation, realization or
sale, after deducting all reasonable costs and expenses of every kind
incurred in respect thereof or incidental to the care or safekeeping of
any of the Collateral or in any way relating to the Collateral or the
rights of the Administrative Agent, the Lenders and Infogrames U.S.
hereunder, including, without
14
limitation, reasonable attorneys' fees and disbursements of counsel
thereto, to the payment in whole or in part of the Obligations then
outstanding, in accordance with Paragraph 15 hereof, and only after
such application and after the payment by the Administrative Agent of
any other amount required by any provision of Applicable Law,
including, without limitation, Section 9-504(1)(c) of the Code, need
the Administrative Agent account for the surplus, if any, to the
relevant Pledgor. To the extent permitted by Applicable Law, the
Pledgors waive all claims, damages and demands they may acquire against
the Administrative Agent, any Lender or Infogrames U.S. arising out of
the exercise by them of any rights hereunder. Written notice of a
proposed sale or other disposition of Collateral shall be given to the
appropriate Pledgors at least ten (10) Business Days before such sale
or other disposition and shall be deemed reasonable and proper if so
given. To the extent permitted by applicable law, the Pledgors further
waive and agree not to assert any rights or privileges which they may
acquire under Section 9-112 of the Code. Nothing in this Paragraph 9 or
otherwise in this Pledge Agreement shall be construed to require the
Administrative Agent to give any notice of an action not otherwise
required by Applicable Law and the express provisions of this Pledge
Agreement, the Credit Agreement, any other Loan Document, the
Infogrames Bridge Loan Note or any other Infogrames Bridge Loan
Document.
(b) Effective upon the occurrence and during the continuance
of an Event of Default, each Pledgor hereby constitutes and appoints
the Administrative Agent as its true and lawful attorney-in-fact, with
full power of substitution and full power to do any and all things
which the Administrative Agent deems advisable or necessary to be done
hereunder as fully and effectively as such Pledgor might or could do
but for this appointment and hereby ratifies all that said
attorney-in-fact shall lawfully do or cause to be done by virtue
hereof. Neither the Administrative Agent nor any of its agents shall be
liable for any acts or omissions or for any error in judgment or
mistake of fact or law in its capacity as such attorney-in-fact, except
due to its gross negligence or willful misconduct. This power of
attorney is coupled with an interest and shall be irrevocable so long
as any Obligations shall remain outstanding or the Aggregate Commitment
shall remain in effect.
10. Indemnity and Expenses. Each Pledgor hereby,
15
jointly and severally, agrees to pay to the Administrative Agent or Infogrames
U.S., as the case may be, upon demand, the amount of any and all reasonable
out-of-pocket expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which the Administrative Agent or
Infogrames U.S., as the case may be may incur in connection with (i) the
administration of this Pledge Agreement, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon the Collateral, (iii)
the exercise or enforcement of any of the rights of the Administrative Agent,
the Lenders and Infogrames U.S. hereunder or (iv) the failure by any Pledgor to
perform or observe any of the provisions hereof.
11. Registration Rights: Private Sales.
(a) If the Administrative Agent shall determine to exercise
its right to sell any or all of the Pledged Stock pursuant to Paragraph
8, and if in the opinion of the Administrative Agent or Infogrames U.S.
it is necessary or advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities
Act of 1933, as amended (the "Securities Act"), each relevant Pledgor
will use its best efforts to cause the applicable Issuer to (i) execute
and deliver, and cause the directors and officers of the applicable
Issuer to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts as may be, in the reasonable
opinion of the Administrative Agent or Infogrames U.S., necessary or
advisable to register the Pledged Stock, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii) to use its best
efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the
date of the first public offering of the Pledged Stock, or that portion
thereof to be sold, or until all such Pledged Stock is sold and (iii)
to make all amendments thereto and/or to the related prospectus which,
in the reasonable opinion of the Administrative Agent or Infogrames
U.S., are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission appli-cable thereto. Each Pledgor
agrees to use its best efforts to cause the applicable Issuer to comply
with the provisions of the securities or "Blue Sky" laws of any and all
jurisdic-tions which the Administrative Agent or Infogrames U.S. shall
designate and to make available to its security holders, as soon as
prac-ticable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
16
(b) Each Pledgor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers which will be obliged to agree, among other things, to
acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Pledgor
acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay
a sale of any of the Pledged Stock for the period of time necessary to
permit the applicable Issuer to register such securities for public
sale under the Securities Act, or under applicable state securities
laws, even if the applicable Issuer would agree to do so.
(c) Each Pledgor further agrees to use its best efforts to do
or cause to be done all such other acts as may be necessary to make
such sale or sales of all or any portion of the Collateral pursuant to
this Paragraph 11 valid and binding and in compliance with any and all
other Applicable Laws. Each Pledgor further agrees that a breach of any
of the covenants contained in this Paragraph 11 will cause irreparable
injury to the Administrative Agent, the Lenders and Infogrames U.S. not
compensable in damages, that the Administrative Agent, the Lenders and
Infogrames U.S. have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in
this Paragraph 11 shall be specifically enforceable against such
Pledgor, and such Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred and is
continuing.
12. Amendments, etc. With Respect to the Obligations. Each
Pledgor shall remain obligated hereunder, and the Collateral shall remain
subject to the Liens granted hereby, notwithstanding that, without any
reservation of rights against such Pledgor, and without notice to or further
assent by such Pledgor, any demand
17
for payment of any of the Obligations made by the Administrative Agent, any
Lender or Infogrames U.S., as the case may be, may be rescinded by the
Administrative Agent, such Lender or Infogrames U.S., as the case may be, and
any of the Obligations continued, and the Obligations, or the liability of such
Pledgor or any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered, or released by the Administrative
Agent, any Lender or Infogrames U.S., as the case may be, and the Credit
Agreement, the Notes, any other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or part, as the Lenders (or the Required Lenders, as the
case may be), or, with respect to the Infogrames Bridge Loan Note and Infogrames
Bridge Loan Documents, as Infogrames U.S., may deem advisable from time to time,
and any guarantee, right of offset or other collateral security at any time held
by the Administrative Agent, any Lender or Infogrames U.S. for the payment of
the Obligations may be sold, exchanged, waived, surrendered or released. None of
the Administrative Agent, any Lender or Infogrames U.S. shall have any
obligation to protect, secure, perfect or insure any other Lien at any time held
by it as security for their respective Obligations or any property subject
thereto. Each Pledgor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by the Administrative Agent, any Lender or Infogrames U.S. upon this
Pledge Agreement; the Obligations, and any of them, shall conclusively be deemed
to have been created, contracted or incurred in reliance upon this Pledge
Agreement; and all dealings between any Pledgor, on the one hand, and the
Administrative Agent, the Lenders and Infogrames U.S., on the other, shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Pledge Agreement. To the extent permitted by Applicable Law, each
Pledgor waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon such Pledgor with respect to the Obligations.
13. No Subrogation. Notwithstanding any payment or payments
made by any Pledgor hereunder, or any setoff or application of funds of any
Pledgor by the Administrative Agent, or the receipt of any amounts by the
Administrative Agent with respect to any of the Collateral, no Pledgor shall be
entitled to be subrogated to any of the rights of the Administrative Agent
against any guarantor or against any other collateral security held by the
Administrative Agent for the payment of the Obligations, nor shall any Pledgor
seek any reimbursement from any guarantor in respect of payments made by any
Pledgor in
18
connection with the Collateral, or amounts realized by the Administrative Agent
in connection with the Collateral, until all amounts owing to the Administrative
Agent, the Lenders and Infogrames U.S. on account of the Obligations are paid in
full and the Credit Agreement and the Infogrames Bridge Loan Note are
terminated. If any amount shall be paid to a Pledgor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Pledgor in trust for the
Administrative Agent and Infogrames U.S., segregated from other funds of such
Pledgor, and shall, forthwith upon receipt by such Pledgor, be turned over to
the Administrative Agent in the exact form received by such Pledgor (duly
endorsed by such Pledgor, if required) to be applied against the Obligations,
whether matured or unmatured, in accordance with Paragraph 14 hereof.
14. Priorities Regarding Collateral. (a) Notwithstanding any
statement or provision to the contrary contained in any Loan Document or any
Infogrames Bridge Loan Document, any failure to file or record any financing
statement or any continuations thereof under the Code or other law of any
applicable jurisdiction with respect to the Collateral, and irrespective of the
time, place, order or method of attachment or perfection of any Lien granted to
the Administrative Agent, for the ratable benefit of the Lenders and the
Administrative Agent, under this Pledge Agreement or any other Loan Document or
any Lien granted to Infogrames U.S. under this Pledge Agreement or any other
Infogrames Bridge Loan Document, or the time or order of filing or recording of
financing statements or other notices of Liens granted pursuant hereto or
thereto, and irrespective of anything contained in any filing or agreement to
which the Borrower, any other Pledgor, the Administrative Agent, the Lenders or
Infogrames U.S. may now or hereafter be a party, and irrespective of the
ordinary rules of priority under the Code or under any other law governing the
relative priorities of secured creditors, any Lien in the Collateral granted by
the Borrower or any other Pledgor to the Administrative Agent, for the ratable
benefit of the Lenders and the Administrative Agent, pursuant to this Pledge
Agreement or any other Loan Document shall at all times (whether before, after
or during the pendency of any bankruptcy, reorganization or other insolvency
proceedings) have priority over and be senior to any Lien in the Collateral
granted by the Borrower or any other Pledgor to Infogrames U.S. pursuant to this
Pledge Agreement or any other Infogrames Bridge Loan Document.
(b) Without notice to or further assent by Infogrames U.S. and
without modifying or limiting in any way the
19
subordination of the Liens granted in the Collateral to Infogrames U.S. to
secure the Bridge Obligations to the Liens granted in the Collateral to the
Administrative Agent, for the ratable benefit of the Lenders and the
Administrative Agent, to secure the Bank Obligations:
(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
Pledgor 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 Pledgor 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.
(c) The terms of this Paragraph 14 and the subordination of
the Liens granted in the Collateral to Infogrames U.S. pursuant to this Pledge
Agreement to secure the Bridge Obligations to the Liens granted in the
Collateral to the Administrative Agent, for the ratable benefit of the Lenders
and the Administrative Agent, to secure the Bank Obligations in the manner and
to the extent set forth herein, 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 Pledge Agreement, the other Loan
Documents, the Bridge Obligations, the other Infogrames Bridge Loan Documents or
the Collateral. The Bank Obligations shall be deemed conclusively to have been
created, contracted or incurred in reliance upon this Pledge Agreement, 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 Pledge Agreement.
15. Application of Proceeds. In order to implement the
subordination established pursuant to this Pledge Agreement
20
of the Liens securing the Bridge Obligations to the Liens securing the Bank
Obligations, and 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 the proceeds of the Collateral, the
Administrative Agent, Infogrames U.S. and each Pledgor agree that upon the
occurrence and during the continuance of an Event of Default on or after the
date of termination of the Transaction Documentation, any money, property,
securities or other distributions received by any Pledgor, the Administrative
Agent, any Lender or Infogrames U.S. from the sale, disposition or other
realization upon all or any part of the Collateral 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 realization on the
Collateral or the protection of the rights and interests of the
Administrative Agent, the Lenders or Infogrames U.S. therein, 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 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
21
(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 Pledgor, or its
representative or as a court of competent jurisdiction may direct, any
surplus then remaining.
16. Standstill Period in Respect of Bridge Obligations. (a)
Notwithstanding anything to the contrary contained in this Pledge Agreement, 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 Paragraph 15 (and the corresponding provisions of the
other Loan Documents and Infogrames Bridge Loan Documents), Infogrames
U.S. shall not, nor shall it seek to, exercise or enforce any right or
remedy under this Pledge Agreement, any other Infogrames Bridge Loan
Document or applicable law with respect to the Collateral or the Bridge
Obligations, including without limitation, any of the following: (1)
exercise any rights or remedies with respect to any Collateral; or (2)
seek to notify obligors of any security interest in all or any of the
Collateral; or (3) institute any action or proceeding with respect to
such rights or remedies with respect to any Collateral, including
without limitation, any action of foreclosure; or (4) 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 Pledge Agreement or any other Loan
Document or applicable law with respect to the Collateral, including
without limitation, to pursue foreclosure or to seek to lift the
automatic stay in any bankruptcy, reorganization or other insolvency
proceedings
22
involving the Borrower or any other Pledgor;
(iii) the Lenders shall have the sole right to
consent to any proposed sale or other disposition of the Collateral and
to release any or all of the Collateral from any Lien granted herein,
whether such sale or disposition is made by the Borrower or any other
Pledgor, whether at private sale or pursuant to foreclosure, bankruptcy
or other judicial or non-judicial proceedings and regardless of whether
the proceeds of any such disposition would be sufficient to pay in full
the Bank Obligations and the Bridge Obligations, and upon any such sale
or other disposition, Infogrames U.S.'s junior Lien on the portion of
the Collateral sold or disposed of shall, subject to clause (i) above,
be automatically extinguished and discharged; and
(iv) in exercising rights and remedies with respect
to the Collateral, the Administrative Agent and the Lenders may enforce
the provisions of this Pledge Agreement 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
with respect to the Collateral shall include, without limitation, the
rights to collect, sell, dispose of or otherwise realize upon all or
any part of the Collateral, to incur expenses in connection with such
collection, sale, disposition or other realization and to exercise all
the rights and remedies of a secured lender under the Code of any
applicable jurisdiction.
(b) On and after the Standstill Expiration Date, the
provisions of Paragraph 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 Paragraph 15
with respect to the application of payments and proceeds in respect of the
Collateral, (a) exercise or enforce any right or remedy under applicable law in
respect of the Bridge Obligations and (b) instruct the Administrative Agent to
immediately commence the exercise of rights and remedies under this Pledge
Agreement in respect of the Collateral (and the manner in which to commence such
exercise of rights and remedies) unless the Administrative Agent has already
commenced the exercise thereof, provided that, subject to Infogrames U.S.'s
right to exercise any other rights and remedies under applicable law in respect
of the Bridge Obligations, and subject to Paragraph 15 with respect to the
application of payments and proceeds in respect of the Collateral, the exercise
of rights and remedies with respect to the Collateral shall be exercised solely
by the Administrative Agent (acting at the direction of Infogrames U.S. if such
rights and remedies were not already exercised or being exercised by the
Administrative Agent as of the Standstill Expiration Date).
17. Appointment of Administrative Agent as Agent for
Infogrames U.S. In order to further perfect and protect the Liens on the
Collateral granted to Infogrames U.S. pursuant to this Pledge Agreement to
secure the Bridge Obligations, Infogrames U.S. hereby authorizes and appoints
the Administrative Agent to hold on Infogrames U.S.'s behalf and as its agent
all Collateral granted hereunder for purposes of possession and control under
the Code or other
23
applicable law and to act on its behalf as otherwise set forth herein. The
Administrative Agent, for itself and its successors, hereby accepts such
authorization and appointment and Infogrames U.S. hereby releases the
Administrative Agent from any liability whatsoever (other than liability
resulting from the Administrative Agent's willful misconduct or gross
negligence) in connection with such authorization and appointment. This
authorization and appointment are a power coupled with an interest and are
irrevocable. It is understood and agreed that the Administrative Agent may also
hold Collateral for the benefit of the Lenders and the Administrative Agent.
18. Termination of Bridge Obligations. Upon payment in full of
the Bridge Obligations on the Transaction Closing Date, all of the Liens on the
Collateral granted by the Borrower and any other Pledgor to Infogrames U.S.
pursuant to this Pledge Agreement and the other Infogrames Bridge Loan Documents
to secure the Bridge Obligations shall be automatically terminated and released,
Infogrames U.S. shall cease to be a party to this Pledge Agreement 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 the termination
and release of all such Liens on the Collateral.
19. Limitation on Duties Regarding Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. None of the Administrative Agent, any Lender, Infogrames U.S. or any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Pledgor or otherwise.
20. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral constitute irrevocable
powers coupled with an interest.
21. Severability. Any provision of this Pledge Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
22. Paragraph Headings. The paragraph headings used in this
Pledge Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
23. No Waiver; Cumulative Remedies. None the Administrative
Agent, any
24
Lender, or Infogrames U.S. shall by any act (except by a written instrument
pursuant to Paragraph 24) be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, any Lender or Infogrames
U.S., any right, power or privilege hereunder shall operate as a waiver thereof.
No single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent, any Lender or
Infogrames U.S. of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent,
such Lender or Infogrames U.S. would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.
24. Waivers and Amnendments; Successors and Assigns. None of
the terms or provisions of this Pledge Agreement may be amended, supplemented or
otherwise modified except by a written instrument executed by the Pledgors and
the Administrative Agent and, to the extent affecting the security interests in
favor of Infogrames U.S., Infogrames U.S.; provided that any consent by the
Administrative Agent to any waiver, amendment, supplement or modification hereto
shall be subject to approval thereof by the Lenders or Required Lenders, as
applicable, in accordance with Section 13.11 of the Credit Agreement. This
Pledge Agreement shall be binding upon the successors and assigns of the
Pledgors and shall inure to the benefit of the Administrative Agent, the
Lenders, Infogrames U.S. and their respective permitted successors and assigns.
25. Notices. All notices and communications to the
Administrative Agent, a Lender or a Pledgor 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
Pledgor. 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.
26. Control Agreement; Acknowledgment by Issuers and
Partnership/LLC.
(a) Each Pledgor hereby authorizes and instructs each
applicable Issuer and Partnership/LLC to comply, and each Issuer and
Partnership/LLC hereby agrees to so comply, with any instruction
received thereby from the Administrative Agent in accordance with the
terms of this Pledge Agreement with respect to the Collateral, without
any consent or further instructions from such Pledgor (or other
registered owner), and such Pledgor agrees that such Issuer and
Partnership/LLC shall be fully protected in so complying. Each
Partnership/LLC agrees that its agreement set forth in the preceding
sentence shall be sufficient to create in favor of the Administrative
Agent, for the benefit of the Lenders, the Administrative Agent and
Infogrames U.S. "control" of the Partnership/LLC Interests within the
meaning of such term under Section 8-106(c) of the
25
Code. Notwithstanding the foregoing, nothing in this Pledge Agreement
is intended or shall be construed to mean or imply that the
Partnership/LLC Interests constitute "securities" within the meaning of
such term under Section 8-102(a)(15) of the Code or otherwise to limit
or modify the application of Section 8-103(c) of the Code. Rather, the
Administrative Agent and Infogrames U.S. have requested that this
provision be included in this Pledge Agreement solely out of an
abundance of caution in the event the Partnership/LLC Interests are,
nevertheless, deemed to constitute "securities" under the Code.
(b) Each Issuer and Partnership/LLC acknowledges receipt of a
copy of this Pledge Agreement and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to
it. Each Issuer and Partnership/LLC agrees to notify the Administrative
Agent and Infogrames U.S. promptly in writing of the occurrence of any
of the events described in Paragraph 6(c). Each Issuer and
Partnership/LLC further agrees that the terms of Paragraph 11 shall
apply to it with respect to all actions that may be required of it
under or pursuant to or arising out of Paragraph 9.
27. Authority of Administrative Agent. Each Pledgor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Pledge Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Pledge Agreement shall, as
between the Administrative Agent and the Lenders, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, and as between the Administrative Agent and Infogrames
U.S. be governed by Paragraph 17 herein, but, as between the Administrative
Agent and such Pledgor, the Administrative Agent shall be conclusively presumed
to be acting as agent for itself, the Lenders and Infogrames U.S., with full and
valid authority so to act or refrain from acting, and neither such Pledgor nor
any Issuer or Partnership/LLC shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.
28. Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
29. Consent to Jurisdiction. Each Pledgor hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Pledge Agreement, 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,
▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 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 Pledgor 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.
30. Waiver of Jury Trial. EACH PLEDGOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS PLEDGE AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER INFOGRAMES BRIDGE
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
31. Entire Agreement. This Pledge Agreement, together with the
other Loan Documents and the other Infogrames Bridge Loan Documents, constitutes
the entire agreement with respect to the subject matter hereof and supersedes
all prior agreements with respect to the subject matter hereof.
32. Release and Termination.
(a) Upon any sale, lease, transfer or other disposition of any
item of Collateral permitted in accordance with the terms of the Loan
Documents, the Administrative Agent and Infogrames U.S. will, at the
relevant Pledgor's expense, execute and deliver to such Pledgor such
documents as such Pledgor shall reasonably request to evidence the
release of such item of Collateral from the assignment and security
interest granted hereby.
(b) This Pledge Agreement shall remain in effect from the date
hereof through and including the date upon which all Obligations shall
have been indefeasibly and
27
irrevocably paid and satisfied in full and the Aggregate Commitment is
terminated and upon such date the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the
Pledgors. Upon any such termination, (i) the Administrative Agent and
Infogrames U.S. shall promptly assign, release, transfer and deliver to
the appropriate Pledgors the Collateral pledged hereunder, all
instruments of assignment executed in connection therewith, and all
stock certificates or other certificates or instruments held by the
Administrative Agent or Infogrames U.S. in connection therewith,
together with all monies held by the Administrative Agent, Infogrames
U.S. or any of their respective agents hereunder, free and clear of the
Liens hereof and (ii) the Administrative Agent, the Lenders and
Infogrames U.S. will promptly execute and deliver to the appropriate
Pledgors such documents and instruments (including but not limited to
appropriate UCC termination statements) as such Pledgors shall
reasonably request to evidence such termination in each such case at
the cost and expense of such Pledgors.
[Signature Pages Follow]
28
IN WITNESS WHEREOF, each Pledgor has caused this Pledge Agreement to be
duly executed and delivered by its duly authorized officer as of the date first
above written.
GT INTERACTIVE SOFTWARE CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
HUMONGOUS ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
WIZARDWORKS GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
29
SINGLETRAC ENTERTAINMENT TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
President
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
SWAN ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
President
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
CANDEL INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
FORMGEN, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
30
GOLD MEDALLION SOFTWARE INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
MEDIATECHNICS LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software
Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
LEGEND ENTERTAINMENT COMPANY LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman & CEO of GT
Interactive Software Corp.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
CALIFORNIA U.S. HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
31