Securities Exchange Agreement - GT Interactive Software Corp., General Atlantic Partners 54 LP and GAP Coinvestment Partners II LP
SECURITIES EXCHANGE AGREEMENT
SECURITIES EXCHANGE AGREEMENT, dated November 15, 1999 (the
"Agreement"), among GT Interactive Software Corp., a Delaware corporation (the
"Company"), General Atlantic Partners 54, L.P., a Delaware limited partnership
("GAP LP"), and GAP Coinvestment Partners II, L.P., a Delaware limited
partnership ("GAP Coinvestment" and, together with GAP LP, the "Stockholders").
WHEREAS, the Stockholders own (both beneficially and of record) the
number of shares of Series A Convertible Preferred Stock of the Company (the
"Preferred Stock") and the principal amount of the Company's Subordinated Notes
due July 29, 2000 (the "Subordinated Notes," and together with the Preferred
Stock, the "Securities") as set forth on Schedule 1 hereto;
WHEREAS, the Company, Infogrames Entertainment S.A. ("Infogrames") and
California U.S. Holdings, Inc. ("Infogrames US") are entering concurrently into
a Securities Purchase Agreement, dated as of November 15, 1999 (the "Purchase
Agreement"), pursuant to which Infogrames has agreed to make a major capital
investment in the Company; and
WHEREAS, in connection with the Purchase Agreement, and as a condition
to the willingness of Infogrames and Infogrames US to enter into the Purchase
Agreement, the Company has agreed to issue to the Stockholders, and the
Stockholders have agreed to accept, new securities in exchange for the
Securities.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"By-laws" means the by-laws of the Company in effect on the
Closing Date, as the same may be amended from time to time.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as the same may be amended from time to time.
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"Closing" has the meaning set forth in Section 2.3 of this
Agreement.
"Closing Date" has the meaning set forth in Section 2.3 of
this Agreement.
"Commission" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the common stock, par value $.01 per
share, of the Company.
"Company" has the meaning set forth in the recitals to this
Agreement.
"Condition of the Company" means the assets, business,
properties, prospects, operations or financial condition of the Company and its
Subsidiaries, taken as a whole.
"Contractual Obligations" means as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"GAP Coinvestment" has the meaning set forth in the recitals
to this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP, and any successor
to such entity.
"GAP LP" has the meaning set forth in the recitals to this
Agreement.
"Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever (excluding preferred stock and equity related
preferences), including, without limitation, those created by, arising under or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease obligation, or any financing lease
having substantially the same economic effect as any of the foregoing.
"Notes" has the meaning set forth in Section 2.1 of this
Agreement,
"Orders" has the meaning set forth in Section 3.2 of this
Agreement.
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"Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Purchase Agreement" has the meaning set forth in the recitals
to this Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of February 22, 1999 among the Company and the Stockholders.
"Requirements of Law" means, as to any Person, any law,
statute, treaty, rule, regulation, right, privilege, qualification, license or
franchise or determination of an arbitrator or a court or other Governmental
Authority or stock exchange, in each case applicable or binding upon such Person
or any of its property or to which such Person or any of its property is subject
or pertaining to any or all of the transactions contemplated or referred to
herein.
"SEC Documents" means all registration statements, proxy
statements, reports and other documents required to be filed by the Company
under the Securities Act or the Exchange Act and all amendments or supplements
thereto filed by the Company with the Commission since December 31, 1997.
"Securities" has the meaning set forth in the recitals to this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
"Stockholders" has the meaning set forth in the recitals to
this Agreement.
"Subsidiary" means, as of the relevant date of determination,
with respect to any Person, a corporation or other Person of which 50% or more
of the voting power of the outstanding voting equity securities is held,
directly or indirectly, by such Person. Unless otherwise qualified, or the
context otherwise requires, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.
"Transaction Documents" means this Agreement and the Notes.
ARTICLE 2
EXCHANGE OF SECURITIES
2.1 Exchange of Securities. Subject to the terms and
conditions herein set forth, the Company agrees to issue to each of the
Stockholders, and each of the Stockholders agrees that it will acquire from the
Company, on the Closing Date, the aggregate principal amount of senior
subordinated convertible notes set forth opposite such Stockholder's name on
Schedule 2.1 hereto (all of such notes being referred to herein as the "Notes"),
in exchange for the Securities, free and clear of all Liens.
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2.2 Notes. The Notes shall be substantially in the form
attached hereto as Exhibit A.
2.3 Closing. Subject to the satisfaction or waiver of the
conditions set forth in Articles 5 and 6 below, the closing of the transactions
contemplated by Section 2.1 (the "Closing") shall take place simultaneously
with, and at the same location as, the closing under the Purchase Agreement (the
"Closing Date"). On the Closing Date, the Company shall deliver to each
Stockholder the Notes being acquired by such Stockholder, against delivery by
such Stockholder to the Company of the certificate or certificates evidencing
the Securities held by such Stockholder, each such certificate being duly
endorsed in blank and accompanied by such stock powers and such other documents
as may reasonably be necessary in the Company's judgment to transfer record
ownership of the Securities.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Stockholders as
follows:
3.1 Corporate Existence and Power. Each of the Company and its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently, or is proposed to be, engaged, as described in the SEC Documents; (c)
is duly qualified as a foreign corporation, licensed and in good standing under
the laws of each jurisdiction in which its ownership, lease or operation of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the Condition of the Company; and (d) has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents to which it is a party.
3.2 Authorization; No Contravention. The execution, delivery
and performance by the Company of this Agreement and the Notes and the
transactions contemplated hereby and thereby (a) have been duly authorized by
all necessary corporate action of the Company; (b) do not contravene the terms
of the Certificate of Incorporation or the By-laws, or any certificate of
incorporation or by-laws or other organizational documents of any of its
Subsidiaries, except that the Certificate of Incorporation shall be amended to
increase the number of authorized shares of Common Stock to permit the
reservation of Common Stock issuable upon conversion of the Notes; (c) do not
violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation of the Company or any of
its Subsidiaries, or any Requirement of Law applicable to the Company or any of
its Subsidiaries; and (d) do not violate any judgment, injunction, writ, award,
decree or order of any nature (collectively, "Orders") of any Governmental
Authority against, or binding upon, the Company or any of its Subsidiaries;
except in the case of clauses (c) and (d) for violations, conflicts, breaches,
contraventions or Liens which would not have a material adverse effect on the
Condition of the Company or the ability of the Company to perform its
obligations under this Agreement and each of the other Transaction Documents.
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3.3 Governmental Authorization; Third Party Consents. No
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under a Requirement of Law, other than customary
filings with the Commission for transactions of the type contemplated hereby,
filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder and the filing of
an amendment to the Certificate of Incorporation with the Secretary of State of
the State of Delaware, is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company of
this Agreement and the Notes or the transactions contemplated hereby and
thereby, except where the failure to obtain an approval, consent, compliance,
exemption, authorization or other action or to make any filing would not have a
material adverse effect on the Condition of the Company or the ability of the
Company to perform its obligations under this Agreement or the Notes.
3.4 Binding Effect. This Agreement has been duly executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery by the Stockholders, constitutes a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity). Upon execution and delivery by
the Company of the Notes, the Notes will constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
3.5 Conversion. Subject to Section 7.3 of the Notes, the
Company has reserved an aggregate of 12,500,000 shares of Common Stock for
issuance upon conversion of the Notes. Subject to Section 7.3 of the Notes, the
shares of Common Stock issuable upon conversion of the Notes in accordance with
the terms of the Notes are duly authorized, and when issued to the Stockholders
against payment therefor, will be validly issued, fully paid and non-assessable,
and will be issued pursuant to an exemption from, or in compliance with the
registration and qualification requirements of all applicable federal and state
securities laws.
3.6 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
or any of its Subsidiaries in connection with the transactions contemplated
hereby based on any agreement, arrangement or understanding with the Company or
any of its Subsidiaries or any action taken by any such Person.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each of the Stockholders hereby represents and warrants
(severally as to itself and not jointly) to the Company as follows:
4.1 Existence and Power. Such Stockholder (a) is a partnership
duly organized and validly existing under the laws of the jurisdiction of its
formation and (b) has the requisite partnership power and authority to execute,
deliver and perform its obligations under this Agreement and each of the other
Transaction Documents to which it is a party.
4.2 Authorization; No Contravention. The execution, delivery
and performance by such Stockholder of this Agreement and the transactions
contemplated hereby (a) have been duly authorized by all necessary partnership
action, (b) do not contravene the terms of such Stockholder's organizational
documents, or any amendment thereof, and (c) do not violate, conflict with or
result in any breach or contravention of or the creation of any Lien under, any
Contractual Obligation of such Stockholder, or any Requirement of Law or Orders
applicable to such Stockholder.
4.3 Title. Such Stockholder is the owner (both beneficially
and of record) of the shares of Preferred Stock and holds the principal amount
of the Subordinated Notes as set forth opposite such Stockholder's name on
Schedule 1. Except to the extent resulting from the Equity Purchase and Voting
Agreement (the "Voting Agreement") among the Stockholders, certain affiliates of
the Stockholders and Infogrames, or for restrictions imposed by applicable
securities laws, such Stockholder owns all of such Securities free and clear of
all Liens. Such Stockholder has sole power of disposition with respect to all of
such Securities. Upon the acquisition of the Securities pursuant to Article 2,
the Company will receive good and valid title to the Securities, free and clear
of all Liens, except for restrictions imposed by the applicable securities laws.
4.4 Governmental Authorization; Third Party Consents. No
approval, consent, compliance, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under any Requirement of Law, is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, such Stockholder of this Agreement and each of the other
Transaction Documents to which such Stockholder is a party or the transactions
contemplated hereby and thereby.
4.5 Binding Effect. This Agreement has been duly executed and
delivered by such Stockholder and constitutes a legal, valid and binding
obligation of such Stockholder, enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
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4.6 Purchase for Own Account. The Notes to be acquired by such
Stockholder pursuant to this Agreement are being or will be acquired for its own
account and with no intention of distributing or reselling such Notes or any
part thereof in any transaction that would be in violation of the securities
laws of the United States of America, or any state, without prejudice, however,
to the rights of such Stockholder at all times to sell or otherwise dispose of
all or any part of such Notes under an effective registration statement under
the Securities Act, or under an exemption from such registration available under
the Securities Act, and subject, nevertheless, to the disposition of such
Stockholder's property being at all times within its control. If such
Stockholder should in the future decide to dispose of any of such Notes, such
Stockholder understands and agrees that it may do so only in compliance with the
Securities Act and applicable state securities laws, as then in effect. Such
Stockholder agrees to the imprinting, so long as required by law, of legends on
certificates representing all of its Notes and shares of Common Stock issuable
upon conversion of its Notes to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT AMONG GT INTERACTIVE
SOFTWARE CORP. AND THE ORIGINAL PURCHASERS OF THE NOTES REPRESENTED
HEREBY. TRANSFEREES OF SUCH SECURITIES SHOULD REVIEW SUCH AGREEMENT TO
DETERMINE THEIR RIGHTS.
4.7 Restricted Securities. Such Stockholder understands that
the Notes will not be registered at the time of their issuance under the
Securities Act for the reason that the sale provided for in this Agreement is
exempt pursuant to Section 4(2) of the Securities Act and that the reliance of
the Company on such exemption is predicated in part on such Stockholder's
representations set forth herein.
4.8 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the
Stockholders, in connection with the transactions contemplated hereby based on
any agreement, arrangement or understanding with the Stockholders or any action
taken by the Stockholders.
4.9 Accredited Investors. Such Stockholder is an accredited
investor within the meaning of Rule 501(a) under the Securities Act.
4.10 Transfer. On the date hereof, such Stockholder has no
present intention to transfer such Stockholder's Notes to any Person that is not
an affiliate of such Stockholder.
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ARTICLE 5
CONDITIONS TO THE OBLIGATION
OF THE STOCKHOLDERS TO CLOSE
The obligation of the Stockholders to exchange the Securities
for the Notes at the Closing and to perform any obligations hereunder shall be
subject to the satisfaction as determined by, or waiver by, the Stockholders of
the following conditions on or before the Closing Date.
5.1 Purchase Agreement. The consummation of the transactions
contemplated by the Purchase Agreement shall have occurred at or prior to the
Closing.
5.2 Operation of Law. Consummation by the Company of the
acquisition of the Preferred Stock in exchange for the Notes shall not violate
Section 160 of the General Corporation Law of the State of Delaware.
5.3 Notes. The Company shall be prepared to deliver to the
Stockholders the principal amount of Notes set forth opposite such Stockholder's
name on Schedule 2.1 hereto, registered in the name of such Stockholder, as
applicable.
5.4 Subordination. The Stockholders, the Company and
Infogrames US shall have entered into a Subordination Agreement in form and
substance reasonably satisfactory to the Stockholders
5.5 Representations and Warranties. All of the representations
and warranties of the Company contained in Article 3 hereof shall be true and
correct in all material respects on the Closing Date, as if made by the Company
on such date.
ARTICLE 6
CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CLOSE
The obligation of the Company to issue the Notes and the
obligation of the Company to perform its other obligations hereunder, shall be
subject to the satisfaction as determined by, or waiver by, the Company of the
following conditions on or before the Closing Date:
6.1 Purchase Agreement. The consummation of the transactions
contemplated by the Purchase Agreement shall have occurred at or prior to the
Closing.
6.2 Operation of Law. Consummation by the Company of the
acquisition of the Preferred Stock in exchange for the Notes shall not violate
Section 160 of the General Corporation Law of the State of Delaware.
6.3 Payment of Purchase Price. Each Stockholder shall be
prepared to deliver the Securities.
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6.4 Representations and Warranties. All of the representations
and warranties of the Stockholders contained in Article 4 hereof shall be true
and correct in all material respects on the Closing Date, as if made by the
Stockholders on such date.
ARTICLE 7
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees with the Stockholders
as follows:
7.1 No Disposition or Encumbrance of Securities. Each
Stockholder hereby covenants and agrees that from the date hereof until the
consummation of the transactions contemplated by the Purchase Agreement, except
as contemplated by this Agreement, such Stockholder shall not, and shall not
offer or agree to, sell, transfer, tender, assign, hypothecate or otherwise
dispose of, or create or permit to exist any Lien with respect to, the
Securities, except to the extent resulting from the Voting Agreement.
7.2 Financial Statements and Other Information. The Company
shall deliver to each Stockholder at any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, upon request of such Stockholder,
information of the type that would satisfy the requirements of Rule 144(c)(2)
and Rule 144A(d)(4)(i) (or any similar successor-provisions thereof) under the
Securities Act.
7.3 Reservation of Common Stock. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issue or delivery upon conversion of the Notes, the
maximum number of shares of Common Stock that may be issuable or deliverable
upon such conversion; provided, however, that to the extent the Company, as of
the date hereof, has an insufficient number of authorized shares of Common Stock
reserved for issuance upon conversion of the Notes, the Company shall use
commercially reasonable efforts to take all actions necessary to increase and
reserve for issuance such number of authorized shares of Common Stock as is
equal to the maximum number of shares of Common Stock that may be issuable or
deliverable upon conversion of the Notes, which actions shall include preparing,
filing and mailing an information statement on Schedule 14C under the Securities
Exchange Act of 1934 as soon as practicable. The Company shall issue all such
shares of Common Stock in accordance with the terms of the Certificate of
Incorporation, as amended, and otherwise comply with the terms hereof and
thereof.
7.4 Registration and Listing. If any shares of Common Stock
required to be reserved for purposes of conversion of the Notes require
registration with or approval of any Governmental Authority under any Federal or
state or other applicable law before such shares of Common Stock may be issued
or delivered upon conversion, the Company will in good faith and as
expeditiously as possible cause such shares of Common Stock to be duly
registered or approved, as the case may be. The Stockholders will cooperate with
the Company, as necessary, in preparing any documents or making any filings in
connection with such registration or approval. So long as the Common Stock is
quoted on The Nasdaq Stock Market, Inc. or listed on any national securities
exchange, the Company will, if permitted by the rules of such system
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or exchange, quote or list and keep quoted or listed on such system or exchange,
upon official notice of issuance, all shares of Common Stock issuable or
deliverable upon conversion or exchange of the Notes.
7.5 Amendment of Warrant Agreement. The Company and the
Stockholders agree that the Warrant Agreement dated as of June 29, 1999 (the
"Warrant Agreement") among the Company and the holders named therein shall be
amended as follows:
(a) Section 4.3 of the Warrant Agreement shall be amended by
adding the following sentence to the end of the first
paragraph of such Section 4.3:
Notwithstanding any other provision of this Section 4.3,
to the extent any adjustment would arise pursuant to this
Section 4.3 as a result of consummation of the
transactions contemplated by the Securities Purchase
Agreement dated as of November 15, 1999 by and among the
Company, Infogrames Entertainment S.A. and California
U.S. Holdings, Inc., the number of additional shares of
Common Stock purchasable upon exercise of any Warrant due
to such adjustment shall be equal to the product of
1.6610 and the increase in the number of shares of Common
Stock purchasable upon exercise of the Warrants held by
the Administrative Agent and the Lenders issued pursuant
to the Warrant Agreement dated June 29, 1999 among the
Company, the Administrative Agent and the Lenders.
(b) The third sentence of Section 4.4 of the Warrant
Agreement shall be deleted in its entirety and substituting
therefor the following:
Notwithstanding any other provision of this Section 4.4,
the number of shares of Common Stock purchasable upon
exercise of any Warrant shall not be adjusted pursuant to
this Section 4.4 as a result of the issuance or sale of
Common Stock in connection with: (a) a bona fide firm
commitment underwritten public offering of Common Stock
of the Company, (b) a transaction to which Section 4.1,
4.2 or 4.3 is applicable, (c) the exercise of the
Warrants, the exercise of any other warrants issued by
the Company prior to the date of this Agreement or the
exercise of any warrants issued in connection with the
Second Amendment, (d) a private placement of Common Stock
of the Company sold for a cash purchase price not more
than 10% below the Current Market Value of the Common
Stock so sold in such private placement, (e) the exercise
of rights or options issued to the Company's employees
under bona fide employee benefit plans adopted by the
Board and approved by the holders of Common Stock when
required by law, if such Common Stock would otherwise be
covered by this Section 4.4, and (f) to the extent any
adjustment would arise pursuant to this Section 4.4 as a
result of consummation of the transactions contemplated
by the Securities Purchase Agreement dated as of November
15, 1999 by and among the Company, Infogrames
Entertainment S.A. and California U.S. Holdings, Inc.,
the
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number of additional shares of Common Stock purchasable
upon exercise of any Warrant due to such adjustment shall
be equal to the product of 1.6610 and the increase in the
number of shares of Common Stock purchasable upon
exercise of the Warrants held by the Administrative Agent
and the Lenders issued pursuant to the Warrant Agreement
dated June 29, 1999 among the Company, the Administrative
Agent and the Lenders.
(c) Except as expressly amended pursuant to this Agreement,
the Warrant Agreement is and shall continue to be in full
force and effect in accordance with its terms.
7.6 Subordination. Each Stockholder agrees that the Short-Term
Note (as defined in the Purchase Agreement) shall be deemed for all purposes of
its respective Subordinated Note to be Senior Debt (as defined in the
Subordinated Note), including without limitation with respect to rights and
remedies of the holders of Senior Debt and the obligations of the Stockholders
as they relate to Senior Debt.
ARTICLE 8
TERMINATION OF AGREEMENT
8.1 Termination. This Agreement may be terminated prior to the
Closing as follows:
(a) at any time on or prior to the Closing Date, by mutual
written consent of the Company and the Stockholders; or
(b) upon the termination of the Purchase Agreement; or
(c) at any time after September 30, 2000, by written notice
of either party.
If this Agreement so terminates, it shall become null and void
and have no further force or effect, except as provided in Section 8.2.
8.2 Survival. If this Agreement is terminated and the
transactions contemplated hereby are not consummated as described above, this
Agreement shall become void and of no further force and effect; except for the
provisions of this Section 8.2; provided, that none of the parties hereto shall
have any liability in respect of a termination of this Agreement pursuant to
Section 8.1(a) or Section 8.1(b); and provided, further, that none of the
parties hereto shall have any liability for speculative, indirect, unforeseeable
or consequential damages resulting from any legal action relating to this
Agreement or any termination of this Agreement.
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ARTICLE 9
MISCELLANEOUS
9.1 Survival of Representations and Warranties. The
representations and warranties made herein shall survive the execution and
delivery of this Agreement, notwithstanding any investigation made or
information obtained by the other party but shall terminate at Closing except
for those contained in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 4.2, 4.3, 4.4 and
4.5 hereof and this Section 9.1 which shall survive beyond the Closing.
9.2 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
(a) if to the Company, to:
GT Interactive Software Corp.
417 Fifth Avenue
New York, NY 10016
Telecopy: (212)
Attention: Chief Executive Officer
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Telecopy: (212) 715-8000
Attention: David P. Levin, Esq.
(b) if to the Stockholders, to:
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, Connecticut 06830
Telecopy: (203) 622-8818
Attention: William E. Ford
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Matthew Nimetz, Esq.
All such notices and communications shall be deemed to have
been duly given when delivered by hand, if personally delivered; when delivered
by
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courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.
9.3 Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. Subject to applicable securities laws,
each of the Stockholders may assign any of its rights, but not its obligations,
under this Agreement to any of its affiliates. The Company may not assign any of
its rights under this Agreement without the written consent of the Stockholders.
No Person other than the parties hereto and their successors and permitted
assigns is intended to be a beneficiary of this Agreement.
9.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the
Stockholders in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not
exclusive of any remedies that may be available to the
Company or the Stockholders at law, in equity or
otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision
of this Agreement, and any consent to any departure by the
Company or the Stockholders from the terms of any
provision of this Agreement, shall be effective only if it
is made or given in writing and signed by the Company and
the Stockholders. Except where notice is specifically
required by this Agreement, no notice to or demand on the
Company in any case shall entitle the Company to any other
or further notice or demand in similar or other
circumstances.
9.5 Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.6 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION.
9.8 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
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provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
9.9 Entire Agreement. This Agreement, together with the
exhibits and schedules hereto, and the other Transaction Documents, is intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, together with
the exhibits and schedules hereto and the other Transaction Documents,
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
9.10 Fees. Upon the Closing, the Company shall reimburse the
Stockholders for their reasonable fees, disbursements and other charges of
counsel incurred in connection with the transactions contemplated by this
Agreement.
9.11 Publicity. Except as may be required by applicable
Requirement of Law, none of the parties hereto shall issue a publicity release
or public announcement or otherwise make any disclosure concerning this
Agreement or the transactions contemplated hereby, without prior approval by the
other parties hereto (which approval shall not be unreasonably withheld);
provided, however, that nothing in this Agreement shall restrict any Stockholder
from disclosing information (a) that is already publicly available; (b) to the
prospective transferee in connection with any contemplated transfer of any of
the Notes; and (c) to its attorneys, accountants, consultants and other advisors
to the extent necessary to obtain their services in connection with such
Stockholder's investment in the Company. GAP LLC may disclose on its worldwide
web page, www.gapartners.com, the name of the Company, its address, the identity
of the Chief Executive Officer, a description of the Company's business and the
aggregate dollar amount invested by the Stockholders in the Company; provided,
that GAP LLC shall not disclose any information pertaining to the transactions
contemplated under this Agreement or the Transaction Documents at any time prior
to the publication of a press release by the Company. If any announcement is
required by law to be made by any party hereto, prior to making such
announcement such party will deliver a draft of such announcement to the other
parties and shall give the other parties an opportunity to comment thereon.
9.12 Further Assurances. Each of the parties shall execute
such documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person, and otherwise fulfilling, or causing the fulfillment of, the
conditions to Closing set forth in Articles 5 and 6) as may be reasonably
required or desirable to carry out or to perform the provisions of this
Agreement and to consummate and make effective as promptly as possible the
transactions contemplated by this Agreement.
9.13 Registrable Securities. The parties hereby agree and
acknowledge that all of the shares of Common Stock issuable upon conversion of
the Notes constitute "Registrable Securities" within the meaning of the
Registration Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Securities Exchange Agreement to be executed and delivered by their respective
officers hereunto duly authorized on the date first above written.
GT INTERACTIVE SOFTWARE CORP.
By: /s/ THOMAS A. HEYMANN
---------------------------------
Name: Thomas A. Heymann
Title: Chief Executive Officer
GENERAL ATLANTIC PARTNERS 54, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By: /s/ WILLIAM E. FORD
---------------------------------
Name: William E. Ford
Title: Managing Member
GAP COINVESTMENT PARTNERS II, L.P.
By: /s/ WILLIAM E. FORD
---------------------------------
Name: William E. Ford
Title: General Partner
15