INFOGRAMES, INC.
$50 MILLION
MEDIUM-TERM LOAN
GRANTED BY
INFOGRAMES ENTERTAINMENT S.A.
APRIL 22, 2002
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Set forth below are the final and unconditional terms of Infogrames
Entertainment S.A. ("IESA") debt financing to Infogrames, Inc. in connection
with the Shiny transaction.
Loan Agreement: The present agreement.
--------------
Borrower: Infogrames, Inc. (the "Borrower").
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Lender: Infogrames Entertainment S.A. (the "Lender").
------
Amount: $50 million Senior Secured Credit (the
------ "Facility").
Use of Proceeds by Borrower: To fund the acquisition of Shiny Entertainment
--------------------------- Inc. a California company, and other tangible and
intangible assets in connection thereto, including
but not limited to the right to develop, publish
and distribute two video games based on the Matrix
2 and Matrix 3 pictures (the "Transaction"), as
this Transaction is contemplated under the Stock
Purchase Agreement dated April 22, 2002 by and
among Infogrames, Inc., Shiny Entertainment, Inc.,
Interplay Entertainment, Corp., Shiny Group, Inc.
and Xxxxx Xxxxx (the "Sale and Purchase
Agreement").
Effective Date: The date of signature of this Loan Agreement.
--------------
Final Maturity Date: June 30, 2004.
-------------------
Availability: Availability under the Facility shall be as
------------ follows:
- 3 business days before the Closing (as defined
in the Sale and Purchase Agreement): $31
million.
- An amount of $17 million shall be made
available to the Borrower three 3 business days
before payment is due by the Borrower under the
Sale and Purchase Agreement.
- Other amounts: $2 million, available on a 10
day notice.
Any amount not drawn under the present Loan
Agreement within 90 days of Closing shall be null
and void.
Any amount repaid under the Facility may be
re-borrowed until the Final Maturity Date,
subject to provisions set forth under Section
"Repayment of Facility".
Guarantee granted by
Lender in connection
with the Transaction: Xxxxxx also agrees to unconditionally guarantee
-------------------- Borrower's obligations under promissory notes or
other payments payable to Europlay 1, LLC and
Akin, Gump, Xxxxxxx, Xxxxx and Xxxx, L.L.P.,
Bioware Corp. and Interplay Entertainment Corp.
pursuant to payment guarantees in the form
attached to the Sale and Purchase Agreement. In
addition, Xxxxxx agrees to pledge Xxxxxx's
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treasury shares to secure payment obligations under
notes payable to Europlay 1, LLC and Akin, Gump,
Strauss, Xxxxx and Xxxx, L.L.P., with an aggregate
market value equal to the principal amount of such two
notes (aggregating $5,347,500), i.e. approximately
551,000 treasury shares on the basis of a stock price
of E11 a share, in accordance with the terms of such
payment guarantees.
Repayment of Facility: Schedule of repayment shall be as follows:
- 3 months after the first shipment of the "Matrix 2
game" and no later than December 31, 2003: $10
million.
- December 31, 2003: $10 million.
- March 31, 2004: $20 million.
- June 30, 2004: $10 million.
Security: The Facility shall be secured by (capitalized terms
used below and not otherwise defined shall have their
respective meanings set forth in the Sale and Purchase
Agreement):
a) a perfected first priority lien on the Shiny Shares
to be perfected on the business day following the
Closing Date, and
b) a perfected first priority lien to be perfected on
the business day following the Closing Date on all
assets and/or intellectual property rights acquired
by the Borrower or Shiny in connection with the
Transaction and which were previously secured to
the benefit of Xxxx, Xxxxx Xxxxx, Eurocapital,
Interplay, La Salle, Xxxxx, Xxxxxxx, Virgin and
Xxxxxx, and
c) a perfected first priority lien to be perfected on
10th business day following the Closing Date on all
deposit Accounts and on all Inventory (as both
defined in the Uniform Commercial Code) of Shiny
and of the Borrower, this period of 10 business
days being extended until approvals from third
party, if required, are obtained and until June 30,
2002 at the latest; should such approvals not be
obtained within this time period, then a perfected
second (or lower) rank no later than July 31, 2002.
The grant of this security is conditioned upon the
Borrower doing its reasonable efforts to negotiate
with BNP-Paribas, with the assistance of the Lender
if required, a waiver to this effect.
Evidence of the effectiveness of such security
interests shall be given to the Lender within 5 days of
each of the expiration of the above-mentioned periods,
failing which the Facility shall be redeemable in full
by the Borrower, at the option of the Lender, within 60
days of receipt of written notice sent by the Lender.
If such evidence has not been given to the Lender
within the above-mentioned timeframe, the Lender shall
be entitled to send such notice at any time until the
Final Maturity Date.
In addition, the Lender will have the right, until full
repayment of the Facility, to request a perfected first
priority lien on all or some of the tangible and
intangible, present and future assets or intellectual
property rights of the Borrower or Shiny. Evidence of
the effectiveness of such security interests shall be
given to the Lender within 30 days following the
receipt by Borrower or Shiny of a request notice issued
by the Lender to this effect, failing which the
Facility shall be redeemable in full by the Borrower,
at the option of the Lender, within 60 days of receipt
of written notice sent by the Lender. If such evidence
has not been given to the Lender within the
afore-mentioned timeframe, the Lender shall be entitled
to send such notice at any time until the Final
Maturity Date.
Interest Rate: Outstanding loan will bear interest at Libor 3 months
(determined two days before end of each quarter) plus
an applicable interest margin of 2.75%. Interests shall
be payable on a quarterly basis, in arrears.
Default Rate: The applicable interest rate plus 2% per annum.
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Unused Commitment Fee: The Unused Commitment Fee will be 0.50% per annum
based on the aggregate amount of the Facility
less outstanding loans.
Optional Prepayments: Borrowers may, upon at least three business days'
notice, prepay and reduce commitments under the
Facility in minimum amounts of $1,000,000 or
integral multiples of $550,000 in excess
thereof, without premium or penalty.
Mandatory Prepayments: The Facility shall be prepaid and reduced in
aggregate amounts equal to (1) 95% of the net
cash proceeds of any sale or disposition of any
assets of the Borrowers exceeding $2.5 million,
(2) 95% of the net proceeds from any new debt
issuance by the Borrowers, (3) 95% of the
cumulative net proceeds from equity issuances by
the Borrowers provided that the Borrower may
retain 5% of such proceeds.
Representations and Warranties
of Borrower:
Borrower represents and warrants to Lender that
the statements contained in this Section are
correct and complete as of the date of this Loan
Agreement.
Power and Authority; Enforceability. Borrower has
the corporate power and corporate authority to
execute and deliver this Loan Agreement, and to
perform and consummate its obligations
thereunder. Xxxxxxxx has taken all actions
necessary to authorize the execution and delivery
of this Loan Agreement. This Loan Agreement has
been duly authorized, executed, and delivered by,
and is enforceable against the Borrower.
No Violation. The execution and the delivery of
this Loan Agreement and the performance and
consummation of the transaction by the Borrower
will not (i) breach any law or order or other
applicable regulation to which the Borrower is
subject, (ii) breach any contract to which the
Borrower is a party of by which the Borrower is
bound or to which any of the Borrower's assets is
subject, other than any breach which will not
have a material adverse effect on the Borrower,
or (iii) require any consent, approval,
notification, waiver or other action.
Representations and Warranties
of Lender:
Lender represents and warrants to Lender that the
statements contained in this Section are correct
and complete as of the date of this Loan
Agreement:
Power and Authority; Enforceability. Xxxxxx has
the corporate power and corporate authority to
execute and deliver this Loan Agreement, and to
perform and consummate its obligations
thereunder. Xxxxxx has taken all actions
necessary to authorize the execution and delivery
of this Loan Agreement. This Loan Agreement has
been duly authorized, executed, and delivered by,
and is enforceable against the Lender.
No Violation. The execution and the delivery of
this Loan Agreement and the performance and
consummation of the transaction by the Lender
will not (i) breach any law or order or other
applicable regulation to which the Lender is
subject, (ii) breach any contract to which the
Lender is a party or by which the Lender is bound
or to which any of the Lender's assets is
subject, other than any breach which will not
have a material adverse effect on the Lender, or
(iii) require any consent, approval,
notification, waiver or other action.
Miscellaneous: The Borrower is a party to the Credit Agreement
dated as of September 11, 1998 (as heretofore
amended, restated, supplemented or otherwise
modified, the "Credit Agreement"), by and between
the Borrower and the Lender, as administrative
agent (the "Administrative Agent") and as sole
lender. Capitalized terms used in this Section
"Miscellaneous" and not otherwise defined shall
have their respective meanings set forth in the
Credit Agreement.
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The following provisions of the Credit Agreement shall be applicable Mutatis
Mutandis to the present Loan Agreement:
- Section 4.4: "Manner of Payment Loans Denominated in Dollars";
- Section 4.5: "Crediting of Payment and Proceeds";
- Section 4.8: "Changed Circumstances";
- Section 4.9: "Indemnity";
- Section 4.10: "Capital Requirements";
- Section 4.11: "Taxes";
- Article VII: "FINANCIAL INFORMATION AND NOTICES";
- Article VIII: "AFFIRMATIVE COVENANTS", save for Section 8.12: "Additional
Subsidiaries; Collateral";
- Article X: "NEGATIVE COVENANTS";
- Article XI: "DEFAULT AND REMEDIES";
- Article XIII: "MISCELLANEOUS", save for Section 13.4: "Governing Law".
Waivers under the Credit Agreement:
- Waiver of Article VII (Financial Information and Notices). Effective as of
the Effective Date, the Lender and the Administrative Agent hereby waive
any Default or Event of Default that may arise by reason of the failure of
the Borrower to comply with Sections 7.1(d), 7.1(e), 7.1(f) and 7.2(b) for
the period from the Effective Date until June 30, 2002.
- Waiver of Section 9.1 (EBITDA). Effective as of the Effective Date, the
Lender hereby waives any Default or Event of Default that may arise by
reason of the failure of the Borrower to comply with Section 9.1 of the
Credit Agreement for the period through June 30, 2002.
- Waiver of Section 9.2 (Capital Expenditure). Effective as of the Effective
Date, the Lender hereby waives any Default or Event of Default that may
arise by reason of the failure of the Borrower to comply with Section 9.2
of the Credit Agreement for the period through June 30, 2002.
- Waiver of Section 10.9 (Certain Accounting Changes). Effective as of the
Effective Date, the Lender hereby waives any Default or Event of Default
that may arise by reason of the failure of the Borrower to comply with
Section 10.9 of the Credit Agreement for the period through June 30, 2002.
Representations and Warranties: No Default.
- (a) After giving effect to this Amendment, the borrower hereby represents
and warrants that (i) all representations and warranties contained in the
Credit Agreement and the other Loan Documents are true and correct on and
as of the Effective Date (unless stated to relate to a specific earlier
date, in which case, such representations and warranties shall be true and
correct as of such earlier date) and (ii) no Default of Event of Default
shall have occurred and be continuing or would result from the execution
and delivery of this Amendment.
- (b) The Borrower hereby further represents and warrants that it is truly
and justly indebted to the Administrative Agent and the Lender in respect
of the Obligations, without defense, counterclaim or offset of any kind.
Governing Law: THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS LOAN AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
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STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES REGARDING CONFLICT
LAW.
[Signature pages to follow]
IN WITNESS WHEREOF, the Parties have executed this Loan Agreement on the date
first above written.
INFOGRAMES, INC.
By: /s/ Xxxxx X. Xxxxx
_______________________________
Name: Xxxxx X. Xxxxx
_______________________________
Title: _______________________________
INFOGRAMES ENTERTAINMENT S.A.
By: /s/ Xxxxx Xxxxxxx
_______________________________
Name: Xxxxx Xxxxxxx
_______________________________
PRESIDENT & CEO
Title: _______________________________