AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (as amended,
restated, supplemented, or otherwise modified, this "Pledge Agreement"), dated
as of June 29, 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").
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 heretofore amended,
restated, supplemented or otherwise modified, the "Existing Pledge Agreement"),
pursuant to which the Borrower pledged to the Administrative Agent, for the
ratable benefit of the Lenders, the Collateral to secure the Obligations (as
such terms are defined in the Existing Pledge Agreement).
The Borrower, the Lenders and the Administrative Agent have
agreed to execute a Second Amendment, Waiver and Agreement, dated as of June 29,
1999 (the "Second Amendment"), under the Credit Agreement to, among other
things, amend certain provisions thereof.
The Pledgors are the record and beneficial owner of (a) 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 (b) 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 Second
Amendment and as a condition precedent thereto, the Administrative Agent and the
Lenders have requested that the Existing Pledge Agreement be amended and
restated, and that each Pledgor execute and deliver this Pledge Agreement
together with, the Pledged Stock, 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 and the Lenders, 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 the Administrative Agent and the Lenders to enter into the Second
Amendment, each Pledgor hereby agrees with the Administrative Agent, for the
ratable benefit of the Administrative Agent and the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which
are defined in the Credit Agreement and used herein are so used as so defined,
and the following terms shall have the following meanings:
"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.
"Collateral" means, with respect to each Pledgor, the Stock
Collateral and the Partnership/LLC Collateral.
"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 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 other Loan Document).
"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
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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 Partnership/LLC Interests, collections
thereon, proceeds of sale thereof or distributions with respect
thereto.
"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 ratable benefit of the Administrative Agent and the Lenders,
all of the Pledged Stock of such Pledgor, to the extent not previously
delivered to the Administrative Agent.
(b) The Borrower hereby confirms and reaffirms its grant of a
security interest in the Collateral (as defined in the Existing Pledge
Agreement) pursuant to the Existing Pledge Agreement. In order to
secure the payment when due whether at the stated maturity, by
acceleration or otherwise of the Obligations, each Pledgor (including
the Borrower) hereby grants to the Administrative Agent, for the
ratable benefit of the Lenders and the Administrative Agent, a security
interest in the Pledged Stock listed under such Pledgor's name on
Schedule I and all of such Pledgor's other Collateral.
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
deliver an undated stock power covering such certificate, duly
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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) 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 any Lender of any of its 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) neither the Administrative Agent nor any
Lender 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. To induce the
Administrative Agent and the Lenders to make Extensions of Credit and to enter
into the Second Amendment, each Pledgor hereby represents and warrants to the
Administrative Agent and the Lenders 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 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
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offering and sale of securities generally and (ii) filings under the
Uniform Commercial 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 Subsidiary, 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 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 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
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(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 and the Lenders, that, from and after the date of
this Pledge Agreement until the Obligations are paid in full and the Aggregate
Commitment is terminated:
(a) Such Pledgor agrees that 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
and the Lenders;
(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, hold the same in trust for the Administrative Agent 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 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
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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 (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 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 the
Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying
(except due to any delay caused by the gross negligence or willful
misconduct of the Administrative Agent or any Lender), 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 Distributions; 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 in
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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 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 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 Section 4.5 of the Credit Agreement 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 and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by
the Administrative Agent or any Lender 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. Neither the Administrative Agent nor any Lender 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
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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.
9. Remedies.
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(a) If an Event of Default shall occur and be continuing, upon
the request of the Required Lenders, the Administrative Agent shall
exercise, on behalf of itself and the Lenders, 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 or any Lender 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 or any Lender 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 and the Lenders hereunder, including, without 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 Section 4.5 of the Credit Agreement, 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 or any Lender 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 or any other Loan Document.
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(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 Extensions of Credit shall remain outstanding or the Aggregate
Commitment shall remain in effect.
10. Indemnity and Expenses. Each Pledgor hereby, jointly and
severally, agrees to pay to the Administrative Agent, 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 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 and the Lenders 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 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, 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, 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 applicable
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 jurisdictions which the Administrative
Agent
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shall designate and to make available to its security holders, as soon
as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(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 and the Lenders not compensable in
damages, that the Administrative Agent and the Lenders 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 under the Credit
Agreement.
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 for payment of any of the Obligations made by
the Administrative Agent or any Lender may be rescinded by the Administrative
Agent or such Lender, 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 or any Lender, 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
13
Required Lenders, as the case may be) 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 or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any other Lien at any time held by it as security for the 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 or any Lender 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 and the Lenders, 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 connection with the Collateral, or amounts realized by the
Administrative Agent in connection with the Collateral, until all amounts owing
to the Administrative Agent and the Lenders on account of the Obligations are
paid in full and the Credit Agreement is 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, 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 Section 4.5 of the Credit
Agreement.
14. 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. Neither the Administrative Agent, any Lender nor 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.
15. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral constitute irrevocable
powers coupled with an interest.
14
16. 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.
17. 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.
18. No Waiver; Cumulative Remedies. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to Paragraph 19) 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 or any Lender, 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 or any Lender 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 or such Lender 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.
19. Waivers and Amendments; 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; 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 and their respective
permitted successors and assigns.
20. Notices. All notices and communications hereunder to 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 under
its signature below.
21. 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),
15
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, "control" of the Partnership/LLC Interests within the meaning
of such term under Section 8-106(c) of the 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 has 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 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.
22. 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, but, as between the Administrative Agent and such
Pledgor, the Administrative Agent shall be conclusively presumed to be acting as
agent for itself and the Lenders 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.
23. Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
24. 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 and the other Loan
Documents to which it is a party, or for recognition and enforcement of
any judgement in respect thereof, to the non-exclusive
16
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 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 xxx 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.
25. 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 OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
26. Entire Agreement. This Pledge Agreement, together with the
other 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.
27. 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 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
Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and 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 shall promptly assign, release, transfer and
deliver to the appropriate Pledgors the
17
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 in connection
therewith, together with all monies held by the Administrative Agent or
any of its agents hereunder, free and clear of the Liens hereof and
(ii) the Administrative Agent and the Lenders 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]
18
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/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
HUMONGOUS ENTERTAINMENT, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
19
WIZARDWORKS GROUP, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SINGLETRAC ENTERTAINMENT
TECHNOLOGIES, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
20
SWAN ACQUISITION CORP.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
CANDEL INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
21
ONE ZERO MEDIA, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FORMGEN, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
22
GOLD MEDALLION SOFTWARE INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
MEDIATECHNICS LTD.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
23
LEGEND ENTERTAINMENT COMPANY LLC
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Attention: Vice President, Legal Affairs
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
24
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: /s/ XXXXX XXXXXXX
------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
