-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LfpP5NZ//NqtL78v2HUBTX9KoGh4bvEBvzqThIFUUJokt5IzZyByOrDYoqz4hw5g 2HGRvhFizAFllSTbk3aGTg== 0000950123-02-000161.txt : 20020413 0000950123-02-000161.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950123-02-000161 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20020108 GROUP MEMBERS: CALIFORNIA U.S. HOLDINGS, INC. FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INFOGRAMES ENTERTAINMENT SA CENTRAL INDEX KEY: 0001100953 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: CA FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 82-84, RUE DU LER MARS 1943 STREET 2: FRANCE MAIL ADDRESS: STREET 1: 82-84, RUE DU LER MARS 1943 STREET 2: FRANCE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INFOGRAMES INC CENTRAL INDEX KEY: 0001002607 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 953825313 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-47017 FILM NUMBER: 2504179 BUSINESS ADDRESS: STREET 1: 417 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2127266500 MAIL ADDRESS: STREET 1: 417 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 FORMER COMPANY: FORMER CONFORMED NAME: GT INTERACTIVE SOFTWARE CORP DATE OF NAME CHANGE: 19951023 SC 13D/A 1 y56382sc13da.txt AMENDMENT #4 TO SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549, U.S.A. SCHEDULE 13D under the Securities Exchange Act of 1934 (Amendment No. 4) INFOGRAMES, INC. ---------------- (Name of Issuer) Common Stock, par value $0.01 per share --------------------------------------- (Title of Class of Securities) 362 36E 109 ----------- (CUSIP Number) Frederic Monnereau Infogrames Entertainment SA 1 place Verrazzano 69252 Lyon Cedex 09 France +33 (0) 4 37 64 30 00 --------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 28, 2001 ------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this Schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with this statement [ ]. 1 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 2 of 10 Pages - -------------------------------------------------------------------------------- SCHEDULE 13D - --------- ---------------------------------------------------------------------------- ------------------------- 1 NAME OF REPORTING PERSON INFOGRAMES S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON ENTERTAINMENT SA - --------- ---------------------------------------------------------------------------- ------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - --------- ---------------------------------------------------------------------------- ------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------------- ------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) WC, OO - --------- ---------------------------------------------------------------------------- ------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) to 2(e) [ ] - --------- ---------------------------------------------------------------------------- ------------------------- 6 CITIZENSHIP OF PLACE OF ORGANIZATION FRANCE - ------------- ---------------------------------------------------------------------------- ------------------------- 7 SOLE VOTING POWER 2,500,000(1) Number of shares 8 SHARED VOTING POWER 69,076,760 beneficially owned by each 9 SOLE DISPOSITIVE POWER 2,500,000(1) reporting person with 10 SHARED DISPOSITIVE POWER 69,076,760 - ------------- ---------------------------------------------------------------------------- ------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 71,576,760(1) - ------------- ---------------------------------------------------------------------------- ------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - ------------- ---------------------------------------------------------------------------- ------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.4%(2) - ------------- ---------------------------------------------------------------------------- ------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ---------------------------------------------------------------------------- -------------------------
- -------- (1) Includes the right to acquire up to a maximum of 2,500,000 shares of Common Stock (as defined herein) issuable upon conversion of the Convertible Notes (as defined herein). (2) Assumes the exercise and conversion of the Convertible Notes, which has not yet occurred. 2 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 3 of 10 Pages - -------------------------------------------------------------------------------- SCHEDULE 13D - --------- ---------------------------------------------------------------------------- ------------------------- 1 NAME OF REPORTING PERSON CALIFORNIA U.S. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON HOLDINGS, INC. - --------- ---------------------------------------------------------------------------- ------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - --------- ---------------------------------------------------------------------------- ------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------------- ------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - --------- ---------------------------------------------------------------------------- ------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) to 2(e) [ ] - --------- ---------------------------------------------------------------------------- ------------------------- 6 CITIZENSHIP OF PLACE OF ORGANIZATION CALIFORNIA - ------------- ---------------------------------------------------------------------------- ------------------------- 7 SOLE VOTING POWER 0 Number of shares 8 SHARED VOTING POWER 69,076,760 beneficially owned by each 9 SOLE DISPOSITIVE POWER 0 reporting person with 10 SHARED DISPOSITIVE POWER 69,076,760 - ------------- ---------------------------------------------------------------------------- ------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 69,076,760 - ------------- ---------------------------------------------------------------------------- ------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - ------------- ---------------------------------------------------------------------------- ------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.0% - ------------- ---------------------------------------------------------------------------- ------------------------- 14 TYPE OF REPORTING PERSON CO - ------------- ---------------------------------------------------------------------------- -------------------------
3 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 4 of 10 Pages - -------------------------------------------------------------------------------- This Amendment No. 4 ("Amendment No. 4") to the Schedule 13D filed on December 14, 1999, as amended by Amendment No. 1 thereto filed with the Securities Exchange Commission (the "SEC") on January 10, 2000, by Amendment No. 2 thereto filed with the SEC filed on May 26, 2000 and by Amendment No. 3 thereto filed with the SEC on October 4, 2000 (as so amended, the "Schedule 13D"), is filed by the undersigned to further amend the Schedule 13D. The Schedule 13D is filed with respect to the common stock, par value $.01 per share (the "Common Stock") of Infogrames, Inc., a Delaware corporation (the "Company"). Capitalized terms used and not defined in this Amendment No. 4 shall have the meanings ascribed to them in the Schedule 13D. ITEM 2. IDENTITY AND BACKGROUND. This item is hereby amended and restated in its entirety to read as follows: (a) - (c), (f). This Statement is being filed by Infogrames Entertainment S.A., a corporation organized under the laws of France ("Infogrames"), and California U.S. Holdings, Inc., a California corporation and wholly owned subsidiary of Infogrames ("Purchaser", and together with Infogrames, the "Filing Persons"). The address for Infogrames is 1, place Verrazzano, 69252 Lyon Cedex 09 France. The address for Purchaser is 2230 Broadway, Santa Monica, California 90404. The principal business of the Filing Persons is the development and distribution of computer software. Attached as Exhibit 1 is a chart setting forth, with respect to each executive officer and director of the Filing Persons, his, her or its name, business address, principal occupation or employment, the name and principal business of the organization in which such employment is conducted, and citizenship. (d) During the five years prior to the date hereof, none of the Filing Persons nor, to the best knowledge of the Filing Persons, any executive officer or director of the Filing Persons has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors). (e) During the five years prior to the date hereof, none of the Filing Persons nor, to the best knowledge of the Filing Persons, any executive officer or director of the Filing Persons was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION This item is hereby amended and supplemented as follows: On December 28, 2001, Infogrames entered into the stock purchase and exchange agreement (the "Exchange Agreement") with General Atlantic Partners (Bermuda) L.P. ("GAP Bermuda"), GAP Coinvestment Partners II, L.P. ("GAP Coinvestment") and GAPCO GmbH & Co. KG ("GAP Germany" and together with GAP Bermuda and GAP Coinvestment, the "Sellers"), detailed in Item 6 below, pursuant to which it sold (i) 3,350,000 Infogrames treasury shares (the "Infogrames Treasury Shares") in exchange for two subordinated convertible notes issued by the Company in the respective principal amounts of $40,812,000 ("Convertible Note I") and $9,188,000 ("Convertible Note II" and together with Convertible Note I, the "Convertible Notes") and convertible into 2,500,000 shares of Common Stock, (ii) 3,795,516 Infogrames Treasury Shares to GAP Bermuda for an aggregate purchase price of $40,812,000, (iii) 847,080 Infogrames Treasury Shares to GAP 4 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 5 of 10 Pages - -------------------------------------------------------------------------------- Coinvestment for an aggregate purchase price of $9,108,382 and (iv) 7,404 Infogrames Treasury Shares to GAP Germany for an aggregate purchase price of $79,618. As a result of the exchange of the Infogrames Treasury Shares for the Convertible Notes pursuant to the terms of the Exchange Agreement, Infogrames may be deemed to be the beneficial owner of 2,500,000 shares of Common Stock into which the Convertible Notes are convertible, which together with the 69,076,760 shares of Common Stock Infogrames already indirectly owns, constitutes approximately 90.4% of the 79,171,232 shares of Common Stock that may be deemed outstanding pursuant to Rule 13d-3(d)(i)(D) under the Exchange Act (and assuming the conversion of the Convertible Notes).(3) References to, and descriptions of, the Exchange Agreement, the Convertible Note I and the Convertible Note II in this item 3 are qualified in their entirety to references to the copies of the Exchange Agreement, the Convertible Note I and the Convertible Note II which are attached to the Schedule 13D as Exhibit 16, Exhibit 17 and Exhibit 18, respectively and incorporated in this item 3 in their entirety where such references and descriptions appear. ITEM 4. PURPOSE OF THE TRANSACTION This item is hereby amended and supplemented as follows: On December 28, 2001, Infogrames and the Sellers entered into the Exchange Agreement. The Filing Persons believe that the purchase of the Convertible Notes in exchange for the Infogrames Treasury Shares together with the sale of an additional portion of the Infogrames Treasury Shares for cash, pursuant to the terms of the Exchange Agreement, is driven by the need to reduce the financial debt of Infogrames and provides compelling financial benefits for Infogrames including the opportunity to (i) receive an additional investment of $50,000,000 paid in cash so as to refinance certain financial operations carried out by Infogrames during the period from July to December 2001, (ii) increase its market capitalization by offering the Sellers as consideration for the exchange of the Convertible Notes and a cash amount a portion of its Infogrames Treasury Shares, (iii) restructure the consolidated balance sheet of Infogrames by converting the Convertible Notes into equity of Infogrames and (iv) comply with applicable French corporate laws by selling a portion of its Infogrames Treasury Shares. In addition, the transaction allows for the participation of a representative nominated by the Sellers to the board of directors of Infogrames. The Filing Persons from time to time intend to review their investment in the Company on the basis of various factors, including the Company's business and financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the Company's securities in particular, as well as other developments and other investment opportunities. Based upon such review, the Filing Persons will take such actions in the future as the Filing Persons may deem appropriate in light of the circumstances existing from time to time. If the Filing Persons believe that further investment in the Company is attractive, whether because of the market price of the Company's securities or otherwise, it may acquire shares of Common Stock or other securities of the Company either in the open market or in privately negotiated transactions. Similarly, depending on market and other factors, the Filing Persons may determine to dispose of some or all of the shares of Common Stock currently owned by the Filing Persons - -------- (3) For purposes of calculating the percentage of outstanding shares held by any person in accordance with Rule 13d-3(d)(1)(i) under the Exchange Act, the total amount of shares of Common Stock outstanding includes any shares that such person has the right to acquire within 60 (sixty) days or for which such person has voting power but excludes any shares of Common Stock that any other person has the right to acquire within 60 (sixty) days or for which any other person has voting power. 5 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 6 of 10 Pages - -------------------------------------------------------------------------------- or otherwise acquired by the Filing Persons either in the open market or in privately negotiated transactions. The information contained in item 6 below is hereby incorporated by reference in its entirety into this item 4. Except as set forth in this Amendment No. 4, the Filing Persons have no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of item 4 of Schedule 13D of the Exchange Act. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER This item is hereby amended and supplemented as follows: a) In accordance with Rule 13d-3 of the Exchange Act, as a result of Purchaser's acquisition of Common Stock and certain voting provisions under the Cayre Purchase Agreements, Purchaser may be deemed to be the beneficial owner of 69,076,760 shares of Common Stock as of the date of this Amendment No.4, which constitutes approximately 90.0% of the 76,671,232 shares of Common Stock that may be deemed outstanding pursuant to Rule 13d-3(d)(1)(i) under the Exchange Act. Such 69,076,760 shares of Common Stock includes 7,146,544 shares of Common Stock issuable upon the conversion of the convertible note, dated December 16, 1999, issued by the Company to Purchaser. By virtue of its ownership of 100% of the capital stock of Purchaser, Infogrames may, in accordance with Rule 13d-3 of the Exchange Act, be deemed to be the indirect beneficial owner of the 69,076,760 shares of Common Stock that are deemed beneficially owned by Purchaser as of the date of this Amendment No. 4. In addition, as a result of the exchange of the Infogrames Treasury Shares for the Convertible Notes pursuant to the terms of the Exchange Agreement, Infogrames may, in accordance with Rule 13d-3 of the Exchange Act, be deemed to be the direct beneficial owner of 2,500,000 shares of Common Stock into which the Convertible Notes are convertible, which together with the 69,076,760 shares of Common Stock it already indirectly owns, constitutes approximately 90.4% of the 79,171,232 shares of Common Stock that may be deemed outstanding pursuant to Rule 13d-3(d)(1)(i) under the Exchange Act (assuming the conversion of the Convertible Notes). To the best knowledge of the Filing Persons, none of the executive officers or directors of the Filing Persons beneficially owns any shares of Common Stock, as such term is defined in Rule 13d-3 of the Exchange Act. b) As of June 30, 2001, together with Infogrames, Purchaser is deemed to have shared dispositive and voting power with respect to 69,076,760 shares of Common Stock. By virtue of its ownership of 100% of the capital stock of Purchaser, Infogrames is 6 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 7 of 10 Pages - -------------------------------------------------------------------------------- deemed to have shared dispositive and voting power with respect to 69,076,760 shares of Common Stock. c) Except as described in this Amendment No. 4, none of the Filing Persons or, to the best knowledge of the Filing Persons, any executive officer or director of any of the Filing Persons has engaged in any transaction in the shares of Common Stock, during the past (60) sixty days prior to the date of this Amendment No. 4. d) No person other than the Filing Persons listed is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock owned by the Filing Persons. e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER On December 28, 2001, Infogrames and the Sellers entered into the Exchange Agreement. Pursuant to the Exchange Agreement, Infogrames sold (i) 3,350,000 Infogrames Treasury Shares in exchange for the Convertible Notes and convertible into an aggregate of 2,500,000 shares of Common Stock, (ii) 3,795,516 Infogrames Treasury Shares to GAP Bermuda for an aggregate purchase price of $40,812,000, (iii) 847,080 Infogrames Treasury Shares to GAP Coinvestment for an aggregate purchase price of $9,108,382 and (iv) 7,404 Infogrames Treasury Shares to GAP Germany for an aggregate purchase price of $79,618. Under the terms of the Exchange Agreement, besides customary representations and warranties, the Sellers are prohibited to sell, or otherwise dispose of, without the prior written consent of Infogrames, (i) any of the Infogrames Treasury Shares until July 2, 2002 and (ii) more than an aggregate of 4,000,000 Infogrames Treasury Shares during the period between July 2, 2002 and July 1, 2003. In addition, Infogrames (i) has represented to the Sellers that it will use its reasonable best efforts to have a representative nominated by such Sellers appointed as a director of the board of directors of Infogrames and (ii) has agreed to enter into a registration rights agreement with respect to the Infogrames Treasury Shares sold pursuant to the terms of the Exchange Agreement. Under the terms of the Convertible Notes, Infogrames may convert at any time, at its option all or any part of the unpaid principal amount of either of the Convertible Notes, into a maximum of 2,040,600 shares of Common Stock with respect to the Convertible Note I and a maximum of 459,400 shares of Common Stock with respect to the Convertible Note II. Each of the Convertible Notes has a maturity date of December 16, 2004. Each of the Convertible Notes is freely transferable, subject to applicable U.S. securities laws, upon endorsement of the subject Convertible Note. References to, and descriptions of, the Exchange Agreement, the Convertible Note I and the Convertible Note II in this item 6 are qualified in their entirety to references to the copies of the Exchange Agreement, the Convertible Note I and the Convertible Note II which are attached to the Schedule 13D as Exhibit 16, Exhibit 17 and Exhibit 18, respectively and incorporated in this item 6 in their entirety where such references and descriptions appear. 7 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 8 of 10 Pages - -------------------------------------------------------------------------------- To the knowledge of the Filing Persons, other than as described in this item 6, there are no contracts, arrangements, understandings or relationships among the persons named in item 2 and between such persons and any person with respect to any securities of the Company, including but not limited to transfer or voting of any securities, finder's fees, joint venture, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS Exhibit 1 Chart Regarding Executive Officers and Directors of Filing Persons.* Exhibit 2 Joint Filing Agreement between the Filing Persons. (Filed on 12/14/1999 as Exhibit 2 to Schedule 13D and incorporated herein by reference.) Exhibit 3 Securities Purchase Agreement, dated as of November 15, 1999, among the Company and the Filing Persons. (Filed on 12/14/1999 as Exhibit 3 to Schedule 13D and incorporated herein by reference.) Exhibit 4 Short Term Note of the Company in the Principal Amount of $25.0 million. (Filed on 12/14/1999 as Exhibit 4 to Schedule 13D and incorporated herein by reference.) Exhibit 5 Warrant to Purchase 50,000 shares of Common Stock, issued to Purchaser. (Filed on 12/14/1999 as Exhibit 5 to Schedule 13D and incorporated herein by reference.) Exhibit 6 Equity Purchase and Voting Agreement, dated as of November 15, 1999, among the Filing Persons and the GAP Entities. (Filed on 12/14/1999 as Exhibit 8 to Schedule 13D and incorporated herein by reference.) Exhibit 7 Form of GAP Warrant. (Filed on 12/14/1999 as Exhibit 9 to Schedule 13D and incorporated herein by reference.) Exhibit 8 Exchange Agreement, dated as of November 15, 1999, among the Company and the GAP Entities. (Filed on 12/14/1999 as Exhibit 10 to Schedule 13D and incorporated herein by reference.) Exhibit 9 Form of Equity Purchase and Voting Agreements, dated as of November 15, 1999, among the Filing Persons and the members of the Cayre Group. (Filed on 12/14/1999 as Exhibit 11A to Schedule 13D and incorporated herein by reference.)
8 - -------------------------------------------------------------------------------- CUSIP No. 362 36E 109 Page 9 of 10 Pages - -------------------------------------------------------------------------------- Exhibit 10 Note Purchase Agreement, dated as of November 15, 1999, between certain members of the Cayre Group and Purchaser. (Filed on 12/14/1999 as Exhibit 11B to Schedule 13D and incorporated herein by reference.) Exhibit 11 Right of First Offer Agreement, dated as of November 15, 1999, among Purchaser and the Lenders. (Filed on 12/14/1999 as Exhibit 13 to Schedule 13D and incorporated herein by reference.) Exhibit 12 Supplemental Agreement, dated May 19, 2000, between Edmondson, Ward and Infogrames. (Filed on 10/04/2000 as Exhibit 13 to Amendment No.3 and incorporated herein by reference.) Exhibit 13 Warrant Agreement, dated as of February 15, 2000, among the Company and Purchaser, and Warrant to Purchase 45,000 shares of Common Stock (225,000 shares before Reverse Stock Split), issued to Purchaser. (Filed on 10/04/2000 as Exhibit 14 to Amendment No.3 and incorporated herein by reference.) Exhibit 14 Second Amended and Restated Registration Rights Agreement, dated as of October 2, 2000, between Purchaser and the Company. (Filed on 10/04/2000 as Exhibit 15 to Amendment No. 3 and incorporated herein by reference.) Exhibit 15 Agreement and Plan of Merger, dated as of September 6, 2000, by and among 15 the Company, Merger Sub, Infogrames, Purchaser and INA. (Filed as Exhibit A to Schedule 14C filed by the Company on September 12, 2000 and incorporated herein by reference.) Exhibit 16 Stock Purchase and Exchange Agreement, dated December 28, 2001, among Infogrames and the Sellers.* Exhibit 17 Convertible Subordinated Note issued by the Company to Infogrames, on December 28, 2001, in a principal amount of $40,812,000.* Exhibit 18 Convertible Subordinated Note issued by the Company to Infogrames, on December 28, 2001, in a principal amount of $9,188,000.*
- ------------- * Filed with this Amendment. 9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: January 8, 2001 By: INFOGRAMES ENTERTAINMENT SA By: /s/ Bruno Bonnell ------------------------------------ Bruno Bonnell Chairman and Chief Executive Officer Dated: January 8, 2001 By: CALIFORNIA U.S. HOLDINGS, INC. By: /s/ Bruno Bonnell ------------------------------------ Bruno Bonnell Chairman and Chief Executive Officer 10 EX-99.1 3 y56382ex99-1.txt CHART REGARDING EXECUTIVE OFFICERS AND DIRECTORS Exhibit 1 CHART REGARDING EXECUTIVE OFFICERS AND DIRECTORS OF FILING PERSONS
NAME DIRECTOR (D) CITIZENSHIP / PRINCIPAL PRINCIPAL BUSINESS ADDRESS AND/OR JURISDICTION OCCUPATION OR EXECUTIVE OF EMPLOYMENT OFFICER (EO) OF ORGANIZATION INFOGRAMES (I) AND/OR PURCHASER (P) Bruno Bonnell I (D) (EO) France Chairman and Chief Development and Infogrames Executive Officer Distribution of Entertainment S.A. P (D) (EO) of Infogrames Computer software 1, Place Verrazzano 69252 Cedex 09 Lyon France Thomas Schmider I (D) (EO) France Managing Director Development and Infogrames of Infogrames Distribution of Entertainment S.A. P (D) (EO) Computer software 1, Place Verrazzano 69252 Cedex 09 Lyon France Christophe Sapet I (D) (EO) France Managing Director Development and Infogrames of Infogrames Distribution of Entertainment S.A. Computer software 1, Place Verrazzano 69252 Cedex 09 Lyon France Benoit Regnault I (D) France Director of Development and Infogrames de Maulmin Infogrames Distribution of Entertainment S.A. Computer software 1, Place Verrazzano 69252 Cedex 09 Lyon France David Ward I (D) England UK Director of Development and Infogrames Infogrames Distribution of Entertainment S.A. Computer software 1, Place Verrazzano 69252 Cedex 09 Lyon France
1 Jean-Claude Larue I (D) (EO) France Chairman of Development and Infogrames Infogrames Europe Distribution of Entertainment S.A. S.A. Computer software 1, Place Verrazzano 69252 Cedex 09 Lyon France Pierre Sissman I (D) France Director of Development and Infogrames Infogrames Distribution of Entertainment S.A. Computer software 1, Place Verrazzano 69252 Cedex 09 Lyon France Societe Dassault I (D) France Multimedia and Multimedia and 9 rond point des Multimedia Entertainment Entertainment Champs - Elysees, 75008 Paris, France Eurazeo (f/k/a I (D) France Financial Financial Investment 3 rue Jacques Bingen Azeo) Investment and and Commodities 75017 Paris, France Commodities Yves Legris P (D) (EO) France Director and Chief Development and California U.S. Operating Officer Distribution of Holdings, Inc. of California U.S. Computer Software c/o Infogrames Inc. Holdings, Inc. 417 Fifth Avenue, New York, NY, 10016
2 EX-99.16 4 y56382ex99-16.txt STOCK PURCHASE AND EXCHANGE AGREEMENT Exhibit 16 ================================================================================ STOCK PURCHASE AND EXCHANGE AGREEMENT among INFOGRAMES ENTERTAINMENT S.A. GENERAL ATLANTIC PARTNERS (BERMUDA), L.P. GAP COINVESTMENT PARTNERS II, L.P. and GAPCO GmbH & Co. KG --------------------------------- Dated: December 28, 2001 --------------------------------- ================================================================================ EXECUTION COPY Table of Contents
Page ARTICLE I DEFINITIONS....................................................................................1 ARTICLE II PURCHASE AND SALE OF COMMON STOCK; EXCHANGE...................................................2 2.1 Purchase and Sale of Common Stock....................................................2 2.2 Exchange of Notes....................................................................2 ARTICLE III THE CLOSING..................................................................................3 3.1 Closing..............................................................................3 3.2 Closing Deliveries...................................................................3 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................................5 4.1 Corporate Existence and Power........................................................5 4.2 Authorization; No Contravention......................................................5 4.3 Certain US Securities Law Matters....................................................5 4.4 Capitalization.......................................................................6 4.5 Stock Dividend.......................................................................6 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...............................................6 5.1 Existence and Power..................................................................6 5.2 Authorization; No Contravention......................................................6 5.3 Certain US Securities Law Matters....................................................7 5.4 Other Matters........................................................................8 ARTICLE VI AFFIRMATIVE COVENANTS.........................................................................8 6.1 Lock-Up..............................................................................8 6.2 Cooperation in Sales Effort..........................................................9 6.3 Board Representation................................................................10 6.4 Registration Rights.................................................................10 ARTICLE VII MISCELLANEOUS...............................................................................11 7.1 Representations and Warranties......................................................11 7.2 Notices.............................................................................11 7.3 Successors and Assigns; Third Party Beneficiaries...................................12 7.4 Amendment and Waiver................................................................12 7.5 Counterparts........................................................................13 7.6 Headings............................................................................13 7.7 Governing Law; Jurisdiction.........................................................13 7.8 Severability........................................................................13
i EXECUTION COPY 7.9 Rules of Construction...............................................................13 7.10 Entire Agreement....................................................................13 7.11 Fees................................................................................13 7.12 Publicity; Confidentiality..........................................................14 7.13 Further Assurances..................................................................14
ii EXECUTION COPY EXHIBITS Exhibit A Definitions Exhibit B Instruction Letter Exhibit C Bank Account Information Exhibit D Attestation d'inscription en compte Exhibit E Capitalization Table iii EXECUTION COPY STOCK PURCHASE AND EXCHANGE AGREEMENT STOCK PURCHASE AND EXCHANGE AGREEMENT, dated December 28, 2001 (this "Agreement"), among INFOGRAMES ENTERTAINMENT S.A., a French societe anonyme (the "Company"); GENERAL ATLANTIC PARTNERS (BERMUDA) L.P., a Bermuda exempted limited partnership ("GAP Bermuda"); GAP Coinvestment Partners II, L.P., a Delaware limited partnership ("GAP Coinvestment"); and GAPCO GmbH & Co. KG, a German limited partnership ("GAP Germany"); and, collectively with GAP Bermuda and GAP Coinvestment, the "Purchasers"). WHEREAS, upon the terms and conditions set forth in this Agreement, the Company proposes to sell 3,795,516 shares of common stock (actions ordinaires) of the Company (the "Common Stock") held by the Company as actions d'autodetention to GAP Bermuda for an aggregate purchase price of $40,812,000, WHEREAS upon the terms and conditions set forth in this Agreement, the Company proposes to sell 847,080 shares of Common Stock held by the Company as actions d'autodetention to GAP Coinvestment for an aggregate purchase price of $9,108,382; WHEREAS upon the terms and conditions set forth in this Agreement, the Company proposes to sell 7,404 shares of Common Stock held by the Company as actions d'autodetention to GAP Germany for an aggregate purchase price of $79,618; and WHEREAS, upon the terms and conditions set forth in this Agreement, the Company proposes to sell 2,734,404 shares of Common Stock held by the Company as actions d'autodetention to GAP Bermuda in exchange for the transfer by GAP Bermuda of the US Subsidiary Note I (as defined below), and 615,596 shares of Common Stock held by the Company as actions d'autodetention to GAP Coinvestment in exchange for the transfer by GAP Coinvestment of the US Subsidiary Note II (as defined below). 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 I DEFINITIONS As used in this Agreement, and unless the context requires a different meaning, the terms set forth on Exhibit A have the meanings indicated therein. EXECUTION COPY 2 ARTICLE II PURCHASE AND SALE OF COMMON STOCK; EXCHANGE 2.1 Purchase and Sale of Common Stock. (a) On the Closing Date, the Company shall sell to GAP Bermuda, and GAP Bermuda shall purchase from the Company, 3,795,516 shares of Common Stock held by the Company as actions d'autodetention, for an aggregate purchase price of $40,812,000 (the "GAP Bermuda Cash Purchase Price") (the shares of Common Stock transferred pursuant to this Section 2.1(a) being referred to herein as the "GAP Bermuda Cash Shares"). (b) On the Closing Date, the Company shall sell to GAP Coinvestment, and GAP Coinvestment shall purchase from the Company, 847,080 shares of Common Stock held by the Company as actions d'autodetention, for an aggregate purchase price of $9,108,382 (the "GAP Coinvestment Cash Purchase Price") (the shares of Common Stock transferred pursuant to this Section 2.1(b) being referred to herein as the "GAP Coinvestment Cash Shares," (c) On the Closing Date, the Company shall sell to GAP Germany, and GAP Germany shall purchase from the Company, 7,404 shares of Common Stock held by the Company as actions d'autodetention, for an aggregate purchase price of $79,618 (the "GAP Germany Cash Purchase Price") (the shares of Common Stock transferred pursuant to this Section 2.1(c) being referred to herein as the "GAP Germany Cash Shares," and, together with the GAP Bermuda Cash Shares and the GAP Coinvestment Cash Shares, the "Cash Shares") (d) Prior to the Closing, the Company shall have converted the Cash Shares into bearer form (au porteur) and transferred the Cash Shares to an account opened in its name in the books of the Banque de Neuflize Schlumberger Mallet Demachy (N.S.M.D.), 3, avenue Hoche, 75008 Paris, France (the "Accredited Intermediary"). 2.2 Exchange of Notes. (a) On the Closing Date, the Company shall sell to GAP Bermuda and GAP Bermuda shall purchase from the Company, 2,734,404 shares of Common Stock held by the Company as actions d'autodetention, in exchange for the transfer by GAP Bermuda to the Company of the US Subsidiary Note I (all of the shares of Common Stock being purchased pursuant to this Section 2.2(a) being referred to herein as the "Exchange Shares I"). (b) On the Closing Date, the Company shall sell to GAP Coinvestment and GAP Coinvestment shall purchase from the Company, 615,596 shares of Common Stock held by the Company as actions d'autodetention, in exchange for the transfer by GAP Coinvestment to the Company of the US Subsidiary Note II (all of the shares of Common Stock being purchased pursuant to this Section 2.2(b) being referred to herein EXECUTION COPY 3 as the "Exchange Shares II", and, together with the Cash Shares and the Exchange Shares I, the "Purchased Shares"). ARTICLE III THE CLOSING 3.1 Closing. (a) The closing (the "Closing") of the transactions referred to in Sections 2.1 and 2.2 shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, 62, rue du Faubourg St.-Honore, 75008 Paris, France at 5:00 p.m., local time, on December 28, 2001 (the "Closing Date"). (b) In connection with the closing of the sale and transfer of the Purchased Shares, the Purchasers and the Company shall have provided the Accredited Intermediary with a signed transaction execution letter in the form of Exhibit B hereof (the "Instruction Letter") sufficiently in advance of the Closing for the purpose of the immediate implementation of the sale and transfer of the Purchased Shares at the Closing as an off-market block trade in accordance with Articles 4-1-32, 4-1-32-1 and 4-1-33 of the Reglement General du Conseil des Marches Financiers. 3.2 Closing Deliveries. At the Closing: (a) GAP Bermuda shall (i) pay to the Company the GAP Bermuda Cash Purchase Price, by wire transfer of immediately available funds to the account designated in Exhibit C hereto (the "Account") (ii) deliver to the Company the US Subsidiary Note I, duly endorsed for transfer or assigned to the Company, and (iii) deliver to the Company such other agreements, instruments, certificates and other documents as may be necessary to effectuate completely the transactions contemplated hereby. (b) GAP Coinvestment shall (i) pay to the Company the GAP Coinvestment Cash Purchase Price, by wire transfer of immediately available funds to the Account, (ii) deliver to the Company the US Subsidiary Note II, duly endorsed for transfer or assigned to the Company, and (iii) deliver to the Company such other agreements, instruments, certificates and other documents as may be necessary to effectuate completely the transactions contemplated hereby. (c) GAP Germany shall (i) pay to the Company (or GAP Germany shall cause GAP Bermuda or GAP Coinvestment to pay to the Company on its behalf) the GAP Germany Cash Purchase Price, by wire transfer of immediately available funds to the Account, and (ii) deliver to the Company such other agreements, instruments, certificates and other documents as may be necessary to effectuate completely the transactions contemplated hereby. EXECUTION COPY 4 (d) The Company shall cause the Accredited Intermediary to transfer, and the Accredited Intermediary shall transfer, in accordance with the Instruction Letter, the GAP Bermuda Cash Shares and the Exchange Shares I to the account at the Accredited Intermediary in the name of GAP Bermuda, and the Company shall cause the Accredited Intermediary to deliver, and the Accredited Intermediary shall deliver, to GAP Bermuda on the Closing Date an attestation d'inscription en compte (confirmation of registration of the GAP Bermuda Cash Shares and the Exchange Shares I in the name of GAP Bermuda), in the form of Exhibit D hereto, indicating the number of GAP Bermuda Cash Shares and Exchange Shares I held by for the account of GAP Bermuda at the Accredited Intermediary. (e) The Company shall cause the Accredited Intermediary to transfer, and the Accredited Intermediary shall transfer, in accordance with the Instruction Letter, the GAP Coinvestment Cash Shares and the Exchange Shares II to the account at the Accredited Intermediary in the name of GAP Coinvestment, and the Company shall cause the Accredited Intermediary to deliver, and the Accredited Intermediary shall deliver, to GAP Coinvestment on the Closing Date an attestation d'inscription en compte (in the form of Exhibit D hereto, indicating the number of GAP Coinvestment Cash Shares and Exchange Shares II held for the account of GAP Coinvestment at the Accredited Intermediary. (f) The Company shall cause the Accredited Intermediary to transfer, and the Accredited Intermediary shall transfer, in accordance with the Instruction Letter, the GAP Germany Cash Shares to an account at the Accredited Intermediary in the name of GAP Germany and the Company shall cause the Accredited Intermediary to deliver, and the Accredited Intermediary shall deliver, to GAP Germany, on the Closing Date an attestation d'inscription en compte (in the form of Exhibit D hereto, indicating the number of the GAP Germany Cash Shares held for the account of GAP Germany at the Accredited Intermediary. (g) The Company shall deliver to the Purchasers (i) a legal opinion from Shearman & Sterling, counsel to the Company, confirming the exemption from registration under the Securities Act of the offer and sale of the Purchased Shares hereunder and (ii) such other agreements, instruments, certificates and other documents as may be necessary to effectuate completely the transactions contemplated hereby. Each of the foregoing deliveries made on the Closing Date shall be deemed to have been made simultaneously. If any such delivery shall not have been made on the Closing Date, then all of the foregoing deliveries shall be deemed not to have been made. EXECUTION COPY 5 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY As an inducement for the Purchasers to enter into this Agreement and consummate the transactions contemplated hereby, the Company represents and warrants to each of the Purchasers as follows: 4.1 Corporate Existence and Power. The Company (a) is a societe anonyme duly organized and validly existing under the laws of France; (b) has all requisite corporate 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 engaged and (c) has the corporate power and authority to execute, deliver and perform its obligations under this Agreement. 4.2 Authorization; No Contravention. (a) The execution, delivery and performance by the Company of this Agreement and the transactions contemplated hereby, including without limitation the sale and transfer of the Purchased Shares to the Purchasers in accordance herewith, (i) have been duly authorized by all necessary corporate action of the Company; (ii) do not contravene the terms of the Statuts; (iii) do not violate, conflict with or result in any breach, default or contravention of (or with due notice or lapse of time or both would result in any breach, default or contravention of) any Requirement of Law applicable to the Company or any of its Subsidiaries that would affect the validity of the transactions contemplated hereby; and (iv) 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 that would affect the validity of the transactions contemplated hereby. (b) 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, is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Company of this Agreement or the transactions contemplated hereby. (c) The Senior Debt (as such term is defined in the US Subsidiary Notes) has been repaid in full and the consent of the Administrative Agent (as such term is defined in the US Subsidiary Notes) is not required in connection with the transactions contemplated hereby. 4.3 Certain US Securities Law Matters. Neither the Company nor any authorized Person acting on its behalf has, in connection with the offer, sale or exchange or issuance of Purchased Shares, engaged in (i) any form of general solicitation or general advertising (as those terms are used within the meaning of Rule 502(c) under the Securities Act), (ii) any action involving a public offering within the meaning of Section 4(2) of the Securities Act or (iii) any action that would require the registration under the EXECUTION COPY 6 Securities Act of the offering, sale or exchange of the Purchased Shares pursuant to this Agreement or that would violate applicable state securities or "blue sky" laws. The Company has not made and will not prior to the Closing Date make, directly or indirectly, any offer or sale of the Purchased Shares if, as a result, the offer and sale contemplated hereby would fail to be entitled to exemption from the registration requirements of the Securities Act. As used herein, the terms "offer" and "sale" have the meanings specified in Section 2(3) of the Securities Act. 4.4 Capitalization. Set forth on Exhibit E hereto is the share capital and voting rights of the Company (i) as of the date hereof and (ii) pro forma as of the date hereof to give effect to the transactions contemplated hereby, in each case, on a primary and fully-diluted basis. 4.5 Stock Dividend. In accordance with and as contemplated by the press release issued by the Company on December 21, 2001, the holders of the Purchased Shares shall be entitled to receive the 1-for-20 stock dividend (attribution gratuite) referred to therein payable on or about January 16, 2002 to all holders of shares of Common Stock registered as of January 15, 2002. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS As an inducement for the Company to enter into this Agreement and consummate the transactions contemplated hereby, each of the Purchasers hereby represents and warrants, severally and not jointly, to the Company as follows: 5.1 Existence and Power. Such Purchaser (a) is a limited partnership, corporation, partnership or limited liability company duly organized and validly existing under the laws of the jurisdiction of its formation and (b) has the requisite partnership, corporate or limited liability company, as the case may be, power and authority to execute, deliver and perform its obligations under this Agreement. 5.2 Authorization; No Contravention. (a) The execution, delivery and performance by such Purchaser of this Agreement and the transactions contemplated hereby, including without limitation the payment of the Cash Purchase Price and the transfer of the US Subsidiary Notes, in each case, to the Company in accordance herewith, (i) have been duly authorized by all necessary action of such Purchaser; (ii) do not contravene the terms of such Purchaser's organizational documents; (iii) do not violate, conflict with or result in any breach, default or contravention of (or with due notice or lapse of time or both would result in any breach, default or contravention of) any Requirement of Law applicable to such Purchaser that would affect the validity of the transactions contemplated hereby; and (iv) do not violate any Order of any Governmental Authority against, or binding upon, such Purchaser that would affect the validity of the transactions contemplated hereby. EXECUTION COPY 7 (b) No approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or (assuming the accuracy of the representation and warranty made by the Company in Section 4.2(c)) any other Person, and no lapse of a waiting period under a Requirement of Law, is necessary or required to be obtained by the Purchasers in connection with the execution, delivery or performance by, or enforcement against, such Purchaser of this Agreement or the transactions contemplated hereby. 5.3 Certain US Securities Law Matters. (a) Purchase for Own Account. The Purchased Shares to be acquired by such Purchaser pursuant to this Agreement are being or will be acquired for its own account and with no intention of distributing or reselling such Purchased Shares or any part thereof in any transaction that would be in violation of the securities laws of the United States of America, any state of the United States or any foreign jurisdiction, without prejudice, however, to the rights of such Purchaser at all times to sell or otherwise dispose of all or any part of such Purchased Shares 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 Purchaser's property being at all times within its control (except as provided in Section 6.1). If such Purchaser should in the future decide to dispose of any of such Purchased Shares, such Purchaser understands and agrees that it may do so only in compliance with the Securities Act and applicable state and foreign securities laws, as then in effect. (b) Restricted Securities; Reliance. Such Purchaser understands that the Purchased Shares 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 Purchaser's representations set forth herein. (c) Accredited Investor. Such Purchaser is an "Accredited Investor" within the meaning of Rule 501 of Regulation D under the Securities Act, as presently in effect. (d) Experience. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in its Purchased Shares, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Purchased Shares and, at the present time, is able to afford a complete loss of such investment. (e) Access to Information. Such Purchaser acknowledges that it has reviewed the Company's publicly available filings and has been afforded: (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering EXECUTION COPY 8 of the Purchased Shares and the merits and risks of investing in the Purchased Shares; (ii) access to publicly available information about the Company and the Subsidiaries and the Condition of the Company sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional publicly available information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser's right to rely on the truth, accuracy and completeness as of their respective dates of the Company's publicly available filings and the Company's representations and warranties contained in this Agreement. (f) General Solicitation. Such Purchaser is not purchasing the Purchased Shares as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. 5.4 Other Matters. GAP Bermuda, GAP Coinvestment and GAP Germany are each separate "persons" as defined in Section 801.1 of the regulations promulgated under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Rules"). GAP Bermuda and GAP Germany are each a "foreign person" as defined in the HSR Rules. ARTICLE VI AFFIRMATIVE COVENANTS 6.1 Lock-Up. (a) The Purchasers agree that, except as provided in subsections (d) and (e) below, (i) until July 1, 2002 the Purchasers will not, directly or indirectly, without the prior written consent of the Company, offer to sell, pledge, contract to sell, grant any option to purchase or otherwise dispose of any of the Purchased Shares and (ii) during the period between July 2, 2002 and July 1, 2003, the Purchasers will not, directly or indirectly, without the prior written consent of the Company, offer to sell, pledge, contract to sell, grant any option to purchase or otherwise dispose of more than an aggregate of four million (4,000,000) Purchased Shares. (b) The Purchasers shall on the Closing Date convert all Purchased Shares that are not in nominative form into nominative form in the books of the Company. The Purchasers shall maintain the Purchased Shares in the nominative form in the books of the Company (i) until July 2, 2002, with respect to all of the Purchased Shares and (ii) until July 1, 2003 with respect to 4,000,000 Purchased Shares, provided, however, that, in the circumstances set forth in subsection (d) below, the Purchasers shall be entitled to the immediate conversion of the Purchased Shares affected thereby into EXECUTION COPY 9 bearer form and, upon Notice from any Purchaser requesting such conversion, the Company shall effectuate such conversion. (c) The number of Purchased Shares subject to the restrictions set forth in this Section 6.1 shall be adjusted as appropriate from time to time to reflect any stock dividend, stock split, split-up, recapitalization, reorganization or other change in the capital structure of the Company relating to the Purchased Shares. Without limiting the foregoing, upon payment of the stock dividend referred to in Section 4.5, (i) the number of Purchased Shares subject to the provisions of subsection (a) shall be 8,400,000 prior to July 2, 2002, and 4,200,000 between July 2, 2002 and July 1, 2003 and (ii) the number of Purchased Shares subject to the provisions of subsection (b) shall be 8,400,000 until July 2, 2002 and 4,200,000 until July 1, 2003. (d) The agreement of the Purchasers set forth in subsections (a) and (b) above shall not apply: (i) after March 15, 2002, if for any reason a GAP Director shall not have been appointed or elected to the Board of Directors on or before such date in accordance with the provisions of Section 6.3 or, if so appointed or elected, the GAP Director is not thereafter re-elected to the Board of Directors for any reason (other than as a result of a decision of the Purchasers not to be represented on the Board of Directors); (ii) at all times subsequent to the breach by the Company of any of the provisions of Section 6.3 in any material respect; (iii) to any sale or transfer to any third party pursuant to a public offering (including without limitation pursuant to an offre publique d'achat, an offre publique d'echange or an offre publique de retrait) by such third party through a tender of shares into, or acceptance of, such public offering during the last three days thereof; provided, that this exception shall not be available to the extent the transferring Purchaser holds Purchased Shares which are not subject to the restrictions set forth in subsection (a) above; and (iv) to any sale or transfer pursuant to an exercise of the "piggy-back" registration rights referred to in Section 6.4; provided, that this exception shall not be available to the extent the transferring Purchaser holds Purchased Shares which are not subject to the restrictions set forth in subsection (a) above. (e) The agreement of the Purchasers set forth in subsection (a) above shall not apply to any sale or transfer by any Purchaser of any of the Purchased Shares to any of its Affiliates if the transferee executes an agreement stating that the transferee is receiving and holding the Purchased Shares subject to the provisions of this Section 6.1 and shall make no further transfer of the Purchased Shares except in accordance with the provisions of this Section 6.1. 6.2 Cooperation in Sales Effort. For so long as the Purchasers hold in the aggregate shares representing 3% of the capital stock of the Company, in the event EXECUTION COPY 10 either Purchaser shall, following the expiration of the applicable lock-up period provided by Section 6.1(a) (or release therefrom in accordance with Section 6.1(d)), desire to sell all or any of the Purchased Shares to one or more third-party purchasers in any transaction exempt from registration under the Securities Act other than an ordinary market transaction over Euronext-Paris S.A., the Company shall use its best reasonable efforts to assist such Purchaser in respect of such sales effort upon the reasonable request of such Purchaser (by way of example only, through preparation of an offering memorandum and participation in "road show"), provided, that such Purchaser shall be responsible for all of the Company's out-of-pocket expenses related to such assistance. 6.3 Board Representation. The Company shall use its best reasonable efforts to have a person nominated by the Purchasers appointed as a director of the Board of Directors (the "GAP Director") in the manner set forth in this Section 6.3, provided that such person shall be reasonably acceptable to the Company (it being the present intention of the Purchasers to nominate Erik Engstrom and it being agreed that Erik Engstrom shall be acceptable to the Company). In order to discharge this obligation, the Company agrees to convene a special meeting of the Board of Directors as soon as reasonably practicable after the Closing Date. At such meeting, the Company will recommend that the Board of Directors temporarily appoint (cooptation a titre provisoire) the GAP Director, subject to applicable laws and regulations. In lieu of such a special meeting of the Board of Directors, the Company may, after consultation with the Purchasers and for good cause, call an ordinary meeting of shareholders for the purpose of electing the GAP Director. Until such time as the GAP Director is appointed or elected (as the case may be), the Company shall provide the person nominated by the Purchasers as the GAP Director with notice (including all board and related materials) of the place, date and hour of each regular or special meeting of the Board of Directors not later than the date on which notice of such meeting is given to the directors of the Company and such person shall be entitled to attend each such board meeting, it being understood and agreed that, if in the opinion of the Company's internal or external counsel, certain matters may not be considered by the Board of Directors in the presence of such representative or such person may not receive board and related materials without violating applicable law or otherwise jeopardizing a legitimate legal interest of the Company, such person may be requested to excuse himself from the board meeting or the Company may refrain from providing such board and related materials, in each case, to the extent necessary not to violate applicable law or to jeopardize a legitimate legal interest. So long as the Purchasers have a material interest in the Company, the Company agrees to use its reasonable efforts to maintain a person nominated by the Purchasers as a member of the Board of Directors. 6.4 Registration Rights. As soon as reasonably practicable, the Company shall enter into with the Purchasers a registration rights agreement governed by New York law and including customary terms and conditions (including with respect to reduction at the request of the managing underwriter, primary offering protection, pro rata reduction in relation to other selling shareholders, black-out periods, fees and expenses, and termination or non-application) pursuant to which the Company shall agree (a) to provide the Purchasers with two demand registration rights for an underwritten offering and customary "piggy-back" registration rights with respect to any primary or EXECUTION COPY 11 secondary securities offering by the Company or any stockholder of the Company requiring registration with the US Securities and Exchange Commission, such registration right to be exercisable by the Purchasers only (i) from and after any period of 90 days during which more than 40% of the equity float of the Company (including the shares to be offered upon exercise of the registration rights) is in the form of American Depository Receipts or is otherwise traded over a US securities exchange or NASDAQ or (ii) if there is "substantial US market interest" (as defined in Regulation S under the Securities Act) in the equity securities of the Company and the Purchasers are an "affiliate" of the Company within the meaning of the Securities Act, and (b) if during any period of 90 days more than 50% of the equity float of the Company is in the form of American Depository Receipts or is otherwise traded over a US securities exchange or NASDAQ, to include shares of Common Stock held by the Purchasers in a shelf registration (in the form of American Depository Receipts) upon request by the Purchasers at any time following qualification by the Company therefor in respect of a secondary offering. It is the goal of the parties to enter into such registration rights agreement by March 31, 2002, but, for the avoidance of doubt, the failure of the parties to do so, for whatever reason, shall not result in the discharge or modification of any of the obligations of the Company under this Section 6.4. For the avoidance of doubt, nothing herein is intended to create an obligation on behalf of the Company to file a registration statement under the Securities Act or under the Exchange Act or otherwise to make an offering in the US capital markets. ARTICLE VII MISCELLANEOUS 7.1 Representations and Warranties. The representations and warranties made by the parties in this Agreement shall not survive the Closing, except for Sections 4.2(c), 4.3, 4.5 and 5.3 of this Agreement, which shall survive the Closing indefinitely. 7.2 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: if to the Company: Infogrames Entertainment S.A. 1 place Verrazano 69252 Lyon Cedex 09, France Telecopy: 04.37.64.30.95 Attention: Thomas Schmider Frederic Chesnais EXECUTION COPY 12 with a copy, which shall not constitute notice, to: Shearman & Sterling 114, avenue des Champs-Elysees 75008 Paris, France Telecopy: 01.53.89.70.70 Attention: Manuel A. Orillac if to any Purchaser: c/o General Atlantic Service Corporation 3 Pickwick Plaza Greenwich, CT 06830 Telecopy: (203) 622-8818 Attention: Matthew Nimetz with a copy to, which shall not constitute notice: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064 Telecopy: (212) 757-3990 Attention: Douglas A. Cifu, Esq. All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; ten (10) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied. Any party may by notice given in accordance with this Section 7.2 designate another address or Person for receipt of notices hereunder. 7.3 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. Neither Purchaser may assign any of its rights under this Agreement without consent of the Company. The Company may not assign any of its rights under this Agreement without the written consent of the Purchasers. No Person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement. 7.4 Amendment and Waiver. (a) No failure or delay on the part of the Company or the Purchasers 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 Purchasers at law, in equity or otherwise. EXECUTION COPY 13 (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 Purchasers from the terms of any provision of this Agreement, shall be effective (i) only if it is made or given in writing and signed by the Company and the Purchasers, and (ii) only in the specific instance and for the specific purpose for which made or given. 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. 7.5 Counterparts. To the extent permitted by applicable law, 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. 7.6 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 7.7 Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE REPUBLIC OF FRANCE. All disputes arising out of or in connection with this Agreement shall be irrevocably settled before a court of competent jurisdiction in Lyons, France. 7.8 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 provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. 7.9 Rules of Construction. Unless the context otherwise requires, references to sections or subsections refer to sections or subsections of this Agreement. 7.10 Entire Agreement. This Agreement, together with the exhibits and schedules hereto, are 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, representations, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits and schedules hereto, supersede all prior agreements and understandings between the parties with respect to such subject matter. 7.11 Fees. Each party shall pay its fees and disbursements (including counsel fees) incurred in connection with the transactions contemplated by this Agreement, except that the Company shall bear all fees and charges of the Accredited EXECUTION COPY 14 Intermediary in connection with the transactions contemplated in Articles II and III hereof. 7.12 Publicity; Confidentiality. Except as may be required by applicable Requirements of Law, none of the parties hereto shall issue a publicity release or public announcement or otherwise make any disclosure concerning this Agreement, the transactions contemplated hereby, the Purchasers or the business, technology and financial affairs of the Company, without prior approval by the other parties hereto; provided, however, that nothing in this Agreement shall restrict any of the parties from disclosing information (a) that is already publicly available, (b) that was known to such party on a non-confidential basis prior to its disclosure by the other parties, (c) that may be required or appropriate in response to any summons or subpoena or in connection with any litigation, provided that such party will use reasonable efforts to notify the other parties in advance of such disclosure so as to permit the other parties to seek a protective order or otherwise contest such disclosure, and such party will use reasonable efforts to cooperate, at the expense of the other parties, with the other parties in pursuing any such protective order, (d) to the extent that such party reasonably believes it appropriate in order to comply with any Requirement of Law, (e) to such party's officers, directors, shareholders, advisors, employees, members, partners, controlling persons, auditors or counsel or (f) to Persons from whom releases, consents or approvals are required, or to whom notice is required to be provided, pursuant to the transactions contemplated by this Agreement; and provided further, that after the Closing, the Purchasers may disclose on the worldwide web page www.gapartners.com, and the Company may disclose on the worldwide web page www.infogrames.com, the name of the Company, the name of the Purchasers, the name of the Chief Executive Officer of the Company, a brief description of the business of the Company, the Company's logo and the aggregate amount of the Purchasers' investment in the Company. If any announcement is required by any Requirement of 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 reasonable opportunity to comment thereon; provided, however, that the delivering party has no obligation whatsoever to take into account any such comments. 7.13 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) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] EXECUTION COPY 15 IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Stock Purchase and Exchange Agreement on the date first written above. INFOGRAMES ENTERTAINMENT S.A. By: --------------------------------------- Name: Title: GENERAL ATLANTIC PARTNERS (BERMUDA), L.P. By: GAP (BERMUDA) Ltd., a General Partner By: --------------------------------------- Name:Matthew Nimetz Title: A Vice President GAP COINVESTMENT PARTNERS II, L.P. By: --------------------------------------- Name:Matthew Nimetz Title: A General Partner GAPCO GmbH & Co. KG By: GAPCO MANAGEMENT GmbH, its General Partner By: --------------------------------------- Name: Matthew Nimetz Title: Managing Director EXECUTION COPY EXHIBIT A DEFINITIONS "Account" has the meaning set forth in Section 3.2(a) of this Agreement. "Accredited Intermediary" has the meaning set forth in Section 2.1(d) of this Agreement. "Accredited Investor" has the meaning set forth in Section 5.3(c) of this Agreement. "Affiliate" shall mean any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "Agreement" means this Agreement as the same may be amended, supplemented or modified in accordance with the terms hereof. "Board of Directors" means the conseil d'administration of the Company. "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York or in Paris are authorized or required by law or executive order to close. "Cash Purchase Price" shall mean, collectively, the GAP Bermuda Cash Purchase Price, the GAP Coinvestment Cash Purchase Price and the GAP Germany Cash Purchase Price. "Cash Shares" has the meaning set forth in 2.1(c) of this Agreement. "Closing" has the meaning set forth in Section 3.1(a) of this Agreement. "Closing Date" has the meaning set forth in Section 3.1(a) of this Agreement. "Common Stock" has the meaning set forth in the recitals to this Agreement. "Company" has the meaning set forth in the preamble to this Agreement. "Condition of the Company" means the assets, business, properties, operations or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole. "Exchange Act" means the US Securities Exchange Act of 1934, as amended, and the rules and regulations of the US Securities and Exchange Commission thereunder. (i) EXECUTION COPY EXHIBIT A "Exchange Shares I" has the meaning set forth in Section 2.2(a) of this Agreement. "Exchange Shares II" has the meaning set forth in Section 2.2(b) of this Agreement. "GAP Bermuda" has the meaning set forth in the preamble to this Agreement. "GAP Bermuda Cash Purchase Price" has the meaning set forth in 2.1(a) of this Agreement. "GAP Bermuda Cash Shares" has the meaning set forth in 2.1(a) of this Agreement. "GAP Coinvestment" has the meaning set forth in the preamble to this Agreement. "GAP Coinvestment Cash Purchase Price" has the meaning set forth in 2.1(b) of this Agreement. "GAP Coinvestment Cash Shares" has the meaning set forth in 2.1(b) of this Agreement. "GAP Director" has the meaning set forth in Section 6.3 of this Agreement. "GAP Germany" has the meaning set forth in the preamble to this Agreement. "GAP Germany Cash Purchase Price" has the meaning set forth in 2.1(c) of this Agreement. "GAP Germany Cash Shares" has the meaning set forth in 2.1(c) of 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. "HSR Rules" has the meaning set forth in Section 5.4 of this Agreement. "Instruction Letter" has the meaning set forth in Section 3.1(b) of this Agreement. "Orders" has the meaning set forth in Section 4.2(a) of this Agreement. (ii) EXECUTION COPY EXHIBIT A "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. "Purchased Shares" has the meaning set forth in Section 2.2(b) of this Agreement. "Purchasers" has the meaning set forth in the preamble to this Agreement. "Requirements of Law" means, as to any Person, any law (including Environmental Laws), 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. "Securities Act" means the US Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. "Statuts" means the statuts of the Company in effect on the Closing Date. "Subsidiaries" 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 or 50% or more of the outstanding economic equity interest 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. "US Subsidiary Note I" means the convertible subordinated note issued by Infogrames, Inc. to GAP Bermuda, on December 24, 2001, for a principal amount of $40,812,000. "US Subsidiary Note II" means the convertible subordinated note issued by GT Interactive Software Corp. (now known as Infogrames, Inc.) to GAP Coinvestment, on December 16, 1999, for a principal amount of $9,188,000. "US Subsidiary Notes" means, collectively, the US Subsidiary Note I and the US Subsidiary Note II. (iii) EXECUTION COPY EXHIBIT B INSTRUCTION LETTER Le 28 decembre 2001, Madame Edith Martinot Banque de Neuflize Schlumberger Mallet Demachy (NSMD) 3, avenue Hoche 75008 Paris OBJET : Demande conjointe d'execution hors marche d'un bloc d'actions en application des articles 4-1-32, 4-1-32-1 et 4-1-33 du Reglement General du Conseil des Marches Financiers. Chere Madame, Nous vous donnons par la presente instruction irrevocable de proceder, ce jour, des la fermeture de la Bourse de Paris, a la cession hors marche, en application des articles 4-1-32, 4-1-32-1 et 4-1-33 du Reglement General du Conseil des Marches Financiers, au prix de 12,19 Euros (soit 10,75 US dollars) par action, d'un bloc d'actions Infogrames Entertainment S.A., code Sicovam 5257, inscrites sur le Registre des actionnaires de la Societe, selon les modalites suivantes : - - Infogrames Entertainment SA, vend 8.000.000 d'actions d'auto-controle au prix unitaire de 12,19 Euros (soit 10,75 US dollars) : - - General Atlantic Partners (Bermuda) L.P. ("GAP Bermuda") achete 6.529.920 actions au prix unitaire de 12,19 Euros (soit 10,75 US dollars) ; - - GAP Coinvestment Partners II. L.P. ("GAP Coinvestment" ) achete 1.462.676 actions au prix unitaire de 12,19 Euros (soit 10,75 US dollars) et ; - - GAPCO GmbH & Co. KG ("GAP Germany") achete 7.404 actions au prix unitaire de 12,19 Euros (soit 10,75 US dollars). Votre etablissement n'interviendra pas dans le reglement de cette transaction et votre responsabilite ne sera pas engagee a ce sujet. Nous vous demandons de bien vouloir nous transmettre, apres realisation de cette cession : - - une attestation d'inscription en compte certifiant le nombre total d'actions detenues par GAP Bermuda ; EXECUTION COPY EXHIBIT B - - une attestation d'inscription en compte certifiant le nombre total d'actions detenues par GAP Coinvestment ; - - une attestation d'inscription en compte certifiant le nombre total d'actions detenues par GAP Germany. Nous vous prions de croire, Chere Madame, a l'expression de nos salutations distinguees. INFOGRAMES ENTERTAINMENT S.A. Par: --------------------------------------- Nom: Qualite: GENERAL ATLANTIC PARTNERS (BERMUDA), L.P. Par: GAP (BERMUDA) Ltd., a General Partner Par: --------------------------------------- Nom:Matthew Nimetz Qualite: A Vice President GAP COINVESTMENT PARTNERS II, L.P. Par: --------------------------------------- Nom : Matthew Nimetz Qualite: A General Partner GAPCO GmbH & Co. KG Par: GAPCO MANAGEMENT GmbH, its General Partner Par: --------------------------------------- Nom: Matthew Nimetz Qualite: Managing Director EXECUTION COPY EXHIBIT C BANK ACCOUNT INFORMATION Citibank, NA, NY SWIFT code: CITIUS33XXX ABA code: 031 000 089 Chips: 120 400 In favor of Credit Agricole Indosuez Lyon Entreprises Account number: 10924645 Reference: Infogrames Entertainment EXECUTION COPY EXHIBIT D ATTESTATION D'INSCRIPTION EN COMPTE [EN-TETE DE LA BANQUE NSMD] ATTESTATION Nous soussignes, Banque de Neuflize, Schlumberger, Mallet, Demachy, societe anonyme a Directoire et Conseil de Surveillance au capital de 197 206 724 Euros, ayant son siege social au 3 avenue Hoche - 75008 PARIS, immatriculee au Registre du Commerce et des Societes de Paris sous le numero PARIS B 552 003 261 representee par Madame Edith MARTINOT et Monsieur Bernard GALDIN. Certifions que ___________________ situe a ________________, est inscrite sur les registres de la Societe ___________ pour ________ actions en compte nominatif pur sous l'identifiant n(degree) __________. Fait a Paris, le _________________ Edith MARTINOT Bernard GALDIN EXECUTION COPY EXHIBIT E CAPITALIZATION TABLE
As of December 28, 2001 As of December 28, 2001 (pro forma (1)) Primary Fully Diluted (2) Primary Fully Diluted (2) ------- ----------------- ------- ----------------- Outstanding Shares (3) 90,722,881 115,009,684 (4) 98,722,881 123,009,684 (4) Treasury Shares (5) 13,367,996 13,367,996 (4) 5,367,996 5,367,996 (4) Voting Rights (5) 105,498,202 129,785,005 (4) 113,498,202 137,785,005 (4)
(1) Pro forma for sale of 8,000,000 shares with one vote each to Purchasers. (2) This (i) assumes vesting of all stock options and (ii) does not take into account any shares that may be subscribed pursuant to the Company's Plan d'Epargne d'Entreprise for the period ending December 31, 2001. (3) For the purposes of this table, "outstanding shares" does not include treasury shares. The Company's capital emis (issued shares) is 104,090,877 shares. (4) Does not include 2,179,139 shares issuable upon conversion of 2,179,139 convertible bonds 2005 owned by the Company, which have or will be cancelled, or related voting rights. (5) Treasury shares have no voting rights. The resolutions adopted by the shareholders of the Company in December 2001 provide that the number of treasury shares held by the Company on June 30, 2002 may not exceed 9.5% of the Company's outstanding capital. EX-99.17 5 y56382ex99-17.txt CONVERTIBLE SUBORDINATED NOTE Exhibit 17 CONVERTIBLE SUBORDINATED NOTE $40,812,000.00 New York, New York December 28, 2001 INFOGRAMES, INC. (F/K/A GT INTERACTIVE SOFTWARE CORP.), a Delaware corporation (the "Obligor"), hereby promises to pay to the order of Infogrames Entertainment S.A. (together with any permitted transferee of this Convertible Subordinated Note, the "Holder"), on December 16, 2004 (the "Maturity Date"), the principal amount of FORTY MILLION EIGHT HUNDRED TWELVE THOUSAND DOLLARS ($40,812,000.00) in lawful money of the United States of America. 1. Interest. No interest shall accrue on the outstanding principal amount hereof. 2. Payments. Notwithstanding anything to the contrary herein, except pursuant to a conversion set forth in Section 4 hereof, no payment or prepayment of principal of this Convertible Subordinated Note (the "Note") may be made or received, directly or indirectly, prior to the Senior Debt Payment Date. On the Maturity Date, the Obligor shall make payments of all outstanding principal of this Note in immediately available funds to such account of the Holder as the Holder may designate in writing. If any payment hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day. 3. Definitions. (a) Terms defined in the Credit Agreement referred to below are used herein with the meanings set forth in such Credit Agreement unless otherwise defined herein. As used herein, the following terms shall have the following meanings: "Board of Directors" shall mean the Board of Directors of the Obligor. "Business Days" shall mean any day except 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. "Capital Stock" shall mean, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person's capital stock and any and all rights, warrants or options exchangeable for or convertible into such capital stock (but excluding any debt security whether or not it is exchangeable for or convertible into such capital stock). "Credit Agreement" shall mean the Credit Agreement dated as of September 11, 1998, between the Obligor and the Lenders parties thereto, as amended, restated, supplemented or otherwise modified from time to time. "Current Market Price" per share shall mean, as of the date of determination, the average of the daily Market Price under clause (a), (b) or (c) of the definition thereof of the Common Stock (as defined in Section 4) during the immediately preceding thirty (30) trading days ending on such date. "Market Price" shall mean as of the date of determination, (a) the closing price per share of Common Stock on such date published in The Wall Street Journal or, if no such closing price on such date is published in The Wall Street Journal, the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange (including, without limitation, the Nasdaq Stock Market, Inc.) on which the Common Stock is then listed or admitted to trading; or (b) if the Common Stock is not then listed or admitted to trading on any national securities exchange but is designated as a national market system security by the National Association of Securities Dealers, Inc., the last trading price of the Common Stock on such date; or (c) if there shall have been no trading on such date or if the Common Stock is not so designated, the average of the reported closing bid and asked prices of the Common Stock on such date as shown by the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System and reported by any member firm of the New York Stock Exchange selected by the Obligor. "Merger" shall mean a recapitalization, reorganization, merger, a sale of all or substantially all of the assets of the Obligor or other business combination transaction after the consummation of which the stockholders of the Obligor prior to such transaction do not own at least a majority of the voting power of the surviving Person or the transferee of the assets of the Obligor, as the case may be. "Person" shall mean an individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind. "Senior Creditors" shall mean the collective reference to the Lenders, the Administrative Agent, the Issuing Lender and all other holders of the Senior Debt. "Senior Debt" shall mean the obligations of the Obligor and any Subsidiary in respect of the unpaid principal of and interest on the notes made by the Obligor in favor of the Senior Creditors in connection with the Credit Agreement (the "Senior 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 the Obligor, 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 Obligor and any Subsidiary to the Administrative Agent, the Issuing 2 Lender and the Lenders in respect of the Loans, the Senior 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 Senior Notes, the other Loan Documents, the Letters of Credit, the L/C Obligations, any Hedging Agreements permitted or required under the Credit Agreement, or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent, the Issuing Lender or the Lenders that are required to be paid by the Obligor or any Subsidiary pursuant to the terms of the Credit Agreement or any other Loan Document). "Senior Debt Payment Date" shall mean the first Business Day to occur after the Senior Debt is paid in full. "Subordinated Debt" shall mean the principal amount of this Note from time to time owing hereunder. "Subsidiary" shall mean as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity is at the time, directly or indirectly, owned by or the management is otherwise controlled by such Person (irrespective of whether, at the time, capital stock or other ownership interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). (b) The expressions "prior payment in full," "paid in full," "payment in full" and any other similar terms or phrases when used in this Note shall mean payment in full in immediately available funds of the Senior Debt (or cash collateralization in full in the case of any L/C Obligations) and termination of the Aggregate Commitment. 4. Conversion of the Note. (a) Subject to and upon compliance with the provisions of this Section 4, the Holder, at the Holder's option at any time and from time to time from and after the date hereof so long as this Note is outstanding, may convert all or any part of the unpaid principal amount of this Note into shares of the common stock of the Obligor, par value $.01 per share (the "Common Stock"), at the Conversion Price in effect at the Conversion Date. Notwithstanding anything to the contrary herein, until the Obligor's certificate of incorporation has been amended to increase the Obligor's authorized capital stock, the Holder shall not convert all or any part of this Note into shares of Common Stock such that the Obligor would have more shares of Common Stock outstanding or 3 reserved for issuance upon exercise or conversion of its outstanding convertible securities than are then authorized under its certificate of incorporation as in effect on the date of such conversion. (b) In order to exercise the conversion privilege of this Note, the Holder shall deliver (i) this Note and (ii) written notice in substantially the form attached to this Note as Exhibit 1 to the Obligor during regular business hours at its address set forth in, or at such other address as the Obligor shall designate in writing in accordance with Section 13 hereof. Conversion shall be deemed to have been effected on the date when such notice is delivered to the Obligor (the "Conversion Date"). An election to convert this Note in whole or in part shall be irrevocable once made. (c) As promptly after the Conversion Date as practicable, the Obligor shall issue and deliver to the Holder at the address of the Holder set forth on the Obligor's records, without any charge to the Holder, a certificate or certificates (issued in the name of the Holder or, subject to compliance with applicable securities laws, in such other name as the Holder may designate) for the number of shares of Common Stock of the Obligor issuable upon the conversion of this Note. In case the Note is surrendered for a partial conversion, the Obligor will issue to the Holder upon conversion a new Note of like tenor (the "New Note") in an aggregate principal amount equal to the unconverted portion of the outstanding principal amount of the surrendered Note. No fractional shares of Common Stock or scrip representing fractional shares shall be issued upon the conversion of any amounts outstanding under this Note to Common Stock pursuant to Section 4(a) hereof. Notwithstanding the provisions of Section 8(a) hereof, instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion, the Obligor shall pay to the Holder a cash adjustment in respect of such fractional shares in an amount equal to the same fraction of the Market Price of the Common Stock on the date of such conversion. (d) Upon conversion, the Holder shall be deemed to have become the stockholder of record on the Conversion Date of the number of shares of Common Stock issuable upon such conversion. All rights of the Holder to amounts of principal converted shall cease upon conversion, but all other rights of the Holder hereunder, including without limitation rights to any principal not converted and to any expenses or other amounts owned hereunder, shall be unaffected by such conversion. (e) The initial Conversion Price of this Note shall be $20.00 per share of Common Stock and shall be subject to adjustment as follows: (i) Dividends, Subdivision, Combination or Reclassification of Common Stock. In the event that the Obligor shall at any time or from time to time, prior to any conversion of the Note, (v) declare, make or pay a dividend or make a distribution on the outstanding shares of Common Stock, payable in Capital Stock of the Obligor, (w) subdivide the outstanding shares of Common Stock into a large number of shares, (x) combine the outstanding shares of its Common Stock into a smaller number of shares, (y) issue any shares of its Capital Stock in a reclassification of the Common Stock or (z) change the shares of Common Stock issuable upon conversion hereunder into the 4 same or any different number of shares of any class of Capital Stock of the Obligor, whether by reclassification, exchange, cancellation, amendment of the Obligor's certificate of incorporation or otherwise (other than any such event for which an adjustment is made pursuant to another clause of this Section 4(e)), then, and in each such case, the Conversion Price in effect immediately prior to such event shall be adjusted (and any other appropriate action shall be taken by the Obligor) so that the Holder, with respect to any amounts outstanding on the Note thereafter surrendered for conversion, shall be entitled to receive the number of shares of Common Stock or other securities of the Obligor that the Holder would have owned or would have been entitled to receive upon or by reason of any of the events described above, had such amounts been converted immediately prior to the record date applicable to such event. An adjustment made pursuant to this Section 4(e)(i) shall become effective retroactively to the close of business on the day upon which such corporate action becomes effective. (ii) Certain Distributions. In case the Obligor shall at any time or from time to time prior, to conversion of all amounts outstanding under the Note, distribute to all holders of shares of Common Stock (including any such distribution made in connection with a merger or consolidation in which the Obligor is the resulting or surviving Person and the Common Stock is not changed or exchanged) cash, evidences of indebtedness of the Obligor or another Person, securities of the Obligor or another Person or other assets (excluding dividends declared in the ordinary course of business and payable in cash, dividends payable in shares of Common Stock for which adjustment is made under another paragraph of this Section 4(e)) or rights or warrants to subscribe for or purchase securities of the Obligor (excluding those distributions in respect of which an adjustment in the Conversion Price is made pursuant to another paragraph of this Section 4(e)), then, and in each such case, the Conversion Price then in effect shall be adjusted (and any other appropriate actions shall be taken by the Obligor) by multiplying the Conversion Price in effect immediately prior to the date of distribution by a fraction (x) the numerator of which shall be the Current Market Price of the Common Stock immediately prior to the date of distribution less the then fair market value (as determined in good faith by the Board of Directors) of the portion of the cash, evidences of indebtedness, securities or other assets so distributed or of such rights or warrants applicable to one share of Common Stock and (y) the denominator of which shall be the Current Market Price of the Common Stock immediately prior to the date of distribution. Such adjustment shall be made whenever any such distribution is made and shall become effective retroactively to a date immediately following the close of business on the record date for the determination of stockholders entitled to receive such distribution. (iii) Effect of Consolidation or Merger. In the case of any consolidation or merger, directly or indirectly, of the Obligor with or into another Person (any such event, a "Change of Shares"), the Holder thereafter shall have the right to convert this Note into the kind and number of shares of stock and/or other securities, cash or other property receivable upon such Change of Shares by a holder of the number of shares of Common Stock of the Obligor into which this Note might have been converted immediately before the time of determination of the stockholders of the Obligor entitled to receive such shares of stock and/or other securities or property, and the Conversion Price shall be adjusted accordingly. The Obligor shall be obligated to retain and set 5 aside, or otherwise make fair provision for exercise of the right of the Holder to receive, the shares of stock and/or other securities, cash or other property provided for in this Section 4(e)(iii). In any such case, appropriate adjustments shall be made in the application of this Section 4(e)(iii) with respect to the Holder after such merger or consolidation such that the provisions of this Section 4(e)(iii) shall be applicable after that event in a manner as nearly equivalent as may be practicable. (iv) Other Changes. In case the Obligor at any time or from time to time, prior to the conversion of all amounts outstanding under the Note, shall take any action affecting its Common Stock similar to or having an effect similar to any of the actions described in any of Sections 4(e)(i) through (iii) (but not including any action described in any such Section) and the Board of Directors in good faith determines that it would be equitable in the circumstances to adjust the Conversion Price as a result of such action, then, and in each such case, the Conversion Price shall be adjusted in such manner and at such time as the Board of Directors in good faith determines would be equitable in the circumstances (such determination to be evidenced in a resolution, a certified copy of which shall be mailed to the Holder). (v) De Minimis Adjustments. Notwithstanding anything herein to the contrary, no adjustment in the Conversion Price shall be required unless such adjustment would require a change of at least 1% in the Conversion Price; provided, however, that any adjustments which by reason of this Section 4(e)(v) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (f) Abandonment. If the Obligor shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, and shall thereafter and before the distribution to stockholders thereof legally abandon its plan to pay or deliver such dividend or distribution, then no adjustment in the Conversion Price shall be required by reason of the taking of such record. (g) Certificate as to Adjustments. Upon any increase or decrease in the Conversion Price, the Obligor shall within a reasonable period (not to exceed 20 days) following the consummation of any of the foregoing transactions deliver to the Holder a certificate, signed by (i) the President or a Vice President of the Obligor and (ii) the Chief Financial Officer of the Obligor, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the increased or decreased Conversion Price then in effect following such adjustment. (h) Notices. In case at any time or from time to time: (i) the Obligor shall declare a dividend (or any other distribution) on its shares of Common Stock; (ii) the Obligor shall authorize the granting to the holders of its Common Stock of rights or warrants to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; 6 (iii) there shall be any reorganization or reclassification of the Common Stock; or (iv) there shall occur a Merger; then the Obligor shall mail to the Holder as promptly as possible but in any event at least ten (10) days prior to the applicable date hereinafter specified, a notice in accordance with Section 13 hereof stating the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or granting of rights or warrants are to be determined, or the date on which such reorganization, reclassification or Merger is expected to become effective and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for shares of stock or other securities or property or cash delivered upon such reorganization, reclassification or Merger. (i) Reservation of Common Stock. The Obligor shall at all times reserve and keep available for issuance upon the conversion of the Note, such number of its authorized but unissued shares of Common Stock as will from time to time be sufficient to permit the conversion of all amounts outstanding under the Note. As soon as practicable after the date hereof, the Obligor shall take all actions necessary to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized but unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding amounts under the Note. (j) No Conversion Tax or Charge. The issuance or delivery of certificates for Common Stock upon the conversion of amounts under the Note shall be made without charge to the Holder for such certificates or for any documentary stamp, or similar issue or transfer tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the name of, or (subject to compliance with the applicable provisions of federal and state securities laws) in such names as may be directed by, the Holder; provided, however, that the Obligor shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the Holder, and the Obligor shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Obligor the amount of such tax or shall have established to the reasonable satisfaction of the Obligor that such tax has been paid. 5. Redemption. (a) At any time after (i) December 16, 2002, the Obligor shall have the right, at its option and upon a determination made by a majority of the members of the Board of Directors who are not affiliates of the Holder (the "Independent Directors") to redeem the Note, in whole and not in part, for cash, out of the funds legally available therefor, on not less than fifteen (15) Business Days' written notice of the date of 7 redemption (the "Optional Redemption Date") at a price equal to the outstanding principal amount of the Note, as determined on the Optional Redemption Date. (b) Notwithstanding Section 5(a) above, at any time within 10 days after the delivery of such notice from the Obligor that it intends to redeem the Note pursuant to Section 5(a) hereof, the Holder shall have the right, at its option, prior to any such redemption to convert all amounts outstanding under the Note into shares of Common Stock in accordance with the terms set forth in Section 4(a) hereof. (c) Written notice of any redemption of the Note pursuant to Section 5(a) shall be delivered by the Obligor in accordance with Section 12 hereof. 6. Transfer, Exchange and Replacement of Note. Subject to the third sentence of this Section 6, this Note shall be transferable in whole or in part by the Holder. Upon delivery of this Note duly endorsed by, or accompanied (if required by the Obligor) by proper evidence of succession, assignment or authority to transfer executed by, the Holder, in each case accompanied by any necessary transfer tax imposed upon transfer or evidence thereof, the Company shall execute a new Note to the Person or Persons entitled thereto and such Person or Persons shall be deemed the Holder hereunder. THIS NOTE MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAW IN CONNECTION WITH SUCH SALE OR TRANSFER OR SUCH SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION. The Obligor may deem and treat the person in whose name this Note is held as the absolute, true and lawful owner of this Note for all purposes. Upon receipt by the Obligor of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, the Obligor shall make and deliver a new Note of like tenor, in lieu of this Note, if (i) in case of loss, theft or destruction, the Obligor receives indemnity or security reasonably satisfactory to it, (ii) the Obligor is reimbursed for all reasonable expenses incidental to such replacement, and (iii) this Note is surrendered and canceled, if mutilated. 7. Securities Laws. By his acceptance of this Note, Holder hereby represents and warrants to the Obligor that it is an "accredited investor" as that phrase is defined in Rule 501 under the Securities Act of 1933, as amended (the "Act"), and is acquiring this Note for his own account, for investment, and not with a view to the distribution of this Note or the Common Stock issuable upon conversion hereof in a manner contrary to the provisions of the Act or any applicable state securities laws. Holder understands that the shares issuable upon conversion of this Note have not been and will not, except to the extent provided herein, be registered under the Act or any state securities laws, and that neither such shares nor any interest therein may be transferred or sold unless such registration is then effective or an exemption from such registration is then available. By conversion of this Note, Holder acknowledges that the certificates representing such shares will bear appropriate legends restricting the transferability thereof. The Obligor shall have the right to an opinion of counsel in connection with any transfer of this Note or the shares issuable upon conversion hereof. 8 8. Subordination. ------------- (a) Payment of the Subordinated Debt is and shall be expressly subordinate and junior in right of payment to the prior payment in full of the Senior Debt to the extent and in the manner set forth herein, and the Subordinated Debt is hereby so subordinated as a claim against the Obligor or any Subsidiary or any of the assets of the Obligor or such Subsidiary, whether such claim be (i) in the event of any distribution of assets of the Obligor or such Subsidiary upon any voluntary or involuntary dissolution, winding-up, total or partial liquidation or reorganization, or bankruptcy, insolvency, receivership or other statutory or common law proceedings or arrangements involving the Obligor or such Subsidiary or the readjustment of its liabilities or any assignment for the benefit of creditors or any marshaling of its assets or liabilities (collectively, a "Reorganization") or (ii) other than in connection with a Reorganization. Further, Holder agrees that this Note shall be subordinated to any and all debt of the Obligor to which the holder of the Convertible Subordinated Note, originally issued to California U.S. Holdings, Inc. on December 16, 1999 (the "Infogrames Note"), agrees that the Infogrames Note shall be subordinated, whether such debt is outstanding on the date hereof or otherwise, and which debt for all other purposes hereof shall be deemed to be included in the definition of Senior Debt. (b) Except for the conversion of the Note as set forth in Section 4 hereof and the payments to be made in connection with the Transaction (as defined in the Third Amendment, Consent, Waiver and Agreement dated November 15, 1999 (the "Third Amendment")) on the Transaction Closing Date (as defined in the Third Amendment), all of the Senior Debt shall be paid in full before any direct or indirect payment or distribution of any kind or character (including, without limitation, securities that are subordinated in right of payment to the Senior Debt) is made upon the Subordinated Debt, and in any Reorganization or other proceedings any payment or distribution of any kind or character, whether in cash or property or securities, which may be payable or deliverable in respect of this Subordinated Note and the Subordinated Debt shall be paid or delivered directly to the Administrative Agent, for payment of the Senior Debt until the Senior Debt is paid in full. If the Holder does not file a claim or proof of debt in the form required in any Reorganization or other proceedings prior to 20 days before the expiration of the time to file such claims or proofs, the Administrative Agent shall have the right to demand, sue for, collect and receive any payments and distributions in respect of the Subordinated Debt which are required to be paid or delivered to the Senior Creditors and to take such other action in the name of the Holder or of the Senior Creditors as the Administrative Agent may deem reasonably necessary or advisable for the enforcement of the provisions hereof. The Holder shall execute and deliver such other and further powers of attorney, assignments, proofs of claim or other instruments, and take such other actions, as may be reasonably requested by the Administrative Agent in order to enable the Administrative Agent to accomplish any of the foregoing. (c) In the event that, notwithstanding the foregoing, any payment or distribution of the assets of the Obligor or any Subsidiary of any kind or character, whether in cash, property or securities, and whether prior to or after the commencement 9 of any Reorganization or other proceedings, shall be received by the Holder in respect of this Note before all Senior Debt is paid in full, such payment of distribution shall be held in trust for the Senior Creditors and shall forthwith be paid over to the Administrative Agent for application to the payment of the Senior Debt until all Senior Debt shall have been paid in full. (d) Except with respect to an Event of Default occurring at maturity of this Note pursuant to Section 10(a)(i) hereof, the Holder and the Obligor each agrees that, until the Senior Debt has been paid in full (i) the Holder will not take, demand, receive or accept, or take any action to accelerate or collect (and the Obligor shall not make) any cash payment of all or any part of the Subordinated Debt and (ii) the Holder will not file or join in any petition or proceeding seeking the bankruptcy or Reorganization of the Obligor; provided, however, that if any Person (other than the Holder or any Affiliate of the Holder or any such other holder) files or initiates any petition or proceeding seeking the foregoing or takes any action to accelerate or collect any cash payment of all or any part of any debt of the Obligor, then after the filing of any such petition or the commencement of any such proceeding the Holder may join in such petition or proceeding or initiate a separate action to accelerate all or any part of the Subordinated Debt. (e) The Senior Creditors, or any of them, may, at any time and from time to time, without the consent of or notice to the Holder, without incurring any responsibility to the Holder, and without impairing or releasing any of the rights of any Senior Creditor or any of the obligations of the Holder: (i) change the amount or terms of, or renew or extend, the Senior Debt or enter into or amend in any manner any agreement relating to the Senior Debt; (ii) sell, exchange, release or otherwise deal with any property at any time pledged or mortgaged to secure the Senior Debt; (iii) release anyone liable in any manner for the payment or collection of the Senior Debt; and (iv) exercise or refrain from exercising any rights against the Obligor, any Subsidiary and any other Person (including the Holder). The Obligor shall provide prompt written notice to the Holder of the occurrence of any of the foregoing matters. (f) The Holder hereby waives notice of or proof of reliance by any Senior Creditor upon the provisions hereof, and the Senior Debt shall conclusively be deemed to have been created, contracted, incurred or maintained in reliance upon the provisions hereof. (g) The Obligor hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever. The nonexercise by the Administrative Agent or any other Senior Creditor of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance. (h) The subordination provisions contained herein are for the benefit of the Senior Creditors and their respective successors and assigns, and the rights of any present or future holder of the Senior Debt to enforce the subordination provisions contained herein, may not be rescinded, canceled, modified or impaired in any way without the prior written consent of the Administrative Agent. 10 9. Prepayments. Subject to Section 8 hereof and the prior payment in full of the Senior Debt, the Obligor may only repay this Note prior to the Maturity Date, in whole or in part, in accordance with Sections 4 and 5 hereof. 10. Defaults and Remedies. Subject to the subordination provisions contained in this Note: (a) Events of Default. An "Event of Default" shall occur if: (i) the Obligor shall default in the payment of the principal of this Note, when and as the same shall become due and payable, whether at maturity or at a date fixed for prepayment or by acceleration or otherwise; or (ii) any event or condition shall occur that results in the right of the holder of the Senior Debt to accelerate the maturity of any Senior Debt, or of any other indebtedness in a principal amount aggregating $3,000,000 or more; or (iii) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (x) relief in respect of the Obligor or any Subsidiary, or of a substantial part of its property or assets, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (y) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Obligor or any Subsidiary, or for a substantial part of its property or assets, or (z) the winding up or liquidation of the Obligor or any Subsidiary; or (iv) the Obligor or any Subsidiary shall (A) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (iii) above, (C) apply for or consent to the appointment of a receiver trustee, custodian, sequestrator, conservator or similar official for the Obligor or any Subsidiary, or for a substantial part of its property or assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors, (F) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (G) take any action for the purpose of effecting any of the foregoing; or (v) one or more judgments for the payment of money in an aggregate amount in excess of $3,000,000 (to the extent not covered by insurance) shall be rendered against the Obligor, any Subsidiary or both and the same shall remain undischarged for a period of 30 days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Obligor or any Subsidiary to enforce any such judgment; or 11 (vi) any material uninsured damage to or loss, theft or destruction of any assets of the Obligor or its Subsidiaries shall occur that has a material adverse effect on the assets, business or financial condition of the Obligor. (b) Acceleration. Subject to Section 8(d) hereof: (i) if an Event of Default occurs under subsection (a)(iv) or (v) above, then the outstanding principal of this Note shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are expressly waived, (ii) if any other Event of Default occurs and is continuing, the Holder, by written notice to the Obligor, may declare the principal of the Note to be due and payable immediately, (iii) upon such declaration, such principal shall become immediately due and payable, and (iv) the Holder of the Note may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived, except nonpayment of principal that has become due solely because of the acceleration, and if the rescission would not conflict with any judgment or decree. 11. Subrogation. After all amounts payable under or in respect of the Senior Debt are paid in full, the Holder shall be subrogated to the rights of holders of the Senior Debt to receive payments or distributions applicable to the Senior Debt to the extent that distributions otherwise payable to the Holder have been applied to the payment of the Senior Debt. A distribution made under this Section 11 to a holder of the Senior Debt which otherwise would have been made to the Holder is not, as between the Obligor and the Holder, a payment by the Obligor on the Senior Debt. 12. Notices. All notices and other communications made pursuant to the provisions of or in connection with this Note shall be in writing and shall be deemed to have been duly made when delivered personally or by express mail or courier or when sent by facsimile transmission with confirmation received (provided a writing evidencing such transmission is mailed by first class mail, postage prepaid within two (Business Days). (a) If to the Holder, to c/o General Atlantic Service Corporation, 3 Pickwick Plaza, Greenwich, Connecticut 06830, Attention: William E. Ford, telecopy: (203) 622-8818, or to such other address as the Holder may give notice of to the Obligor from time to time (with copies to Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York 10019, Attention: Mathew Nimetz, Esq., telecopy: (212) 757-3990). (b) If to the Obligor, Infogrames, Inc. (f/k/a GT Interactive Software Corp.), 417 Fifth Avenue, New York, New York 10016, Attention: Lisa Rothblum, telecopy: (212) 726-4239, or to such other address as the Obligor may give notice of to the Holder from time to time. 13. Expenses. The Obligor shall pay all fees and expenses of the Holder, including the reasonable fees and disbursements of the Holder's counsel, incurred in connection with any claim, action or proceeding relating to or arising out of this Note made by any Person (other than the Holder) against either the Holder or any 12 other Person in which the Holder is subsequently impleaded or otherwise made a party, and any other claim, action or proceeding in which the Holder exercises or enforces, or seeks to exercise or enforce, its legal and equitable rights hereunder. 14. Entire Agreement. Each of the Obligor and the Holder confirms that this Note constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. 15. Severability. Any provision of this Note that is prohibited or unenforceable in a 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. 16. Successors and Assigns. All covenants and agreement of the Obligor and the Holder under this Note shall be binding on the Obligor and the Holder and their respective successors and assigns. Neither this Note nor any interest therein shall be transferred or assigned prior to the Senior Debt Payment Date without the prior written consent of the Administrative Agent; provided, however, the Holder may transfer or assign all or any part of this Note at any time to an affiliate of the Holder without such consent. 17. Amendments. No amendment, supplement, waiver or other modification to this Note shall be effective without the prior written consent of the Obligor, the Holder and, prior to the Senior Debt Payment Date, the Administrative Agent. 13 18. Governing Law. This Note shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles regarding conflicts of law. INFOGRAMES, INC. (f/k/a GT INTERACTIVE SOFTWARE CORP.) By: /s/ David Fremed ------------------------------------- Title: Senior Vice President, Finance and Chief Financial Officer Acknowledged and Agreed: By: /s/ Bruno Bonnell Title: Chairman and Chief Executive Officer 14 EXHIBIT 1 To Infogrames, Inc. (f/k/a GT Interactive Software Corp.): The undersigned owner of this Note hereby irrevocably exercises the option to convert $______ principal amount of this Note into shares of Common Stock of GT Interactive Software Corp. in accordance with the terms of this Note, and directs that the shares issuable and deliverable upon the conversion be issued and delivered to the registered holder hereof unless a different name has been indicated below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Dated: ------------------------- [HOLDER] By: ----------------------------------- Name: Title: Fill in for registration of shares of Common Stock if to be issued otherwise than to the registered holder. Name: Address: Social Security or Taxpayer ID Number: EX-99.18 6 y56382ex99-18.txt CONVERTIBLE SUBORDINATED NOTE Exhibit 18 CONVERTIBLE SUBORDINATED NOTE $9,188,000.00 New York, New York December 28, 2001 INFOGRAMES, INC. (F/K/A GT INTERACTIVE SOFTWARE CORP.), a Delaware corporation (the "Obligor"), hereby promises to pay to the order of Infogrames Entertainment S.A. (together with any permitted transferee of this Convertible Subordinated Note, the "Holder"), on December 16, 2004 (the "Maturity Date"), the principal amount of NINE MILLION ONE HUNDRED EIGHTY EIGHT THOUSAND DOLLARS ($9,188,000.00) in lawful money of the United States of America. 1. Interest. No interest shall accrue on the outstanding principal amount hereof. 2. Payments. Notwithstanding anything to the contrary herein, except pursuant to a conversion set forth in Section 4 hereof, no payment or prepayment of principal of this Convertible Subordinated Note (the "Note") may be made or received, directly or indirectly, prior to the Senior Debt Payment Date. On the Maturity Date, the Obligor shall make payments of all outstanding principal of this Note in immediately available funds to such account of the Holder as the Holder may designate in writing. If any payment hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day. 3. Definitions. (a) Terms defined in the Credit Agreement referred to below are used herein with the meanings set forth in such Credit Agreement unless otherwise defined herein. As used herein, the following terms shall have the following meanings: "Board of Directors" shall mean the Board of Directors of the Obligor. "Business Days" shall mean any day except 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. "Capital Stock" shall mean, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person's capital stock and any and all rights, warrants or options exchangeable for or convertible into such capital stock (but excluding any debt security whether or not it is exchangeable for or convertible into such capital stock). "Credit Agreement" shall mean the Credit Agreement dated as of September 11, 1998, between the Obligor and the Lenders parties thereto, as amended, restated, supplemented or otherwise modified from time to time. "Current Market Price" per share shall mean, as of the date of determination, the average of the daily Market Price under clause (a), (b) or (c) of the definition thereof of the Common Stock (as defined in Section 4) during the immediately preceding thirty (30) trading days ending on such date. "Market Price" shall mean as of the date of determination, (a) the closing price per share of Common Stock on such date published in The Wall Street Journal or, if no such closing price on such date is published in The Wall Street Journal, the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange (including, without limitation, the Nasdaq Stock Market, Inc.) on which the Common Stock is then listed or admitted to trading; or (b) if the Common Stock is not then listed or admitted to trading on any national securities exchange but is designated as a national market system security by the National Association of Securities Dealers, Inc., the last trading price of the Common Stock on such date; or (c) if there shall have been no trading on such date or if the Common Stock is not so designated, the average of the reported closing bid and asked prices of the Common Stock on such date as shown by the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System and reported by any member firm of the New York Stock Exchange selected by the Obligor. "Merger" shall mean a recapitalization, reorganization, merger, a sale of all or substantially all of the assets of the Obligor or other business combination transaction after the consummation of which the stockholders of the Obligor prior to such transaction do not own at least a majority of the voting power of the surviving Person or the transferee of the assets of the Obligor, as the case may be. "Person" shall mean an individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind. "Senior Creditors" shall mean the collective reference to the Lenders, the Administrative Agent, the Issuing Lender and all other holders of the Senior Debt. "Senior Debt" shall mean the obligations of the Obligor and any Subsidiary in respect of the unpaid principal of and interest on the notes made by the Obligor in favor of the Senior Creditors in connection with the Credit Agreement (the "Senior 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 the Obligor, 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 Obligor and any Subsidiary to the Administrative Agent, the Issuing 2 Lender and the Lenders in respect of the Loans, the Senior 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 Senior Notes, the other Loan Documents, the Letters of Credit, the L/C Obligations, any Hedging Agreements permitted or required under the Credit Agreement, or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent, the Issuing Lender or the Lenders that are required to be paid by the Obligor or any Subsidiary pursuant to the terms of the Credit Agreement or any other Loan Document). "Senior Debt Payment Date" shall mean the first Business Day to occur after the Senior Debt is paid in full. "Subordinated Debt" shall mean the principal amount of this Note from time to time owing hereunder. "Subsidiary" shall mean as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity is at the time, directly or indirectly, owned by or the management is otherwise controlled by such Person (irrespective of whether, at the time, capital stock or other ownership interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). (b) The expressions "prior payment in full," "paid in full," "payment in full" and any other similar terms or phrases when used in this Note shall mean payment in full in immediately available funds of the Senior Debt (or cash collateralization in full in the case of any L/C Obligations) and termination of the Aggregate Commitment. 4. Conversion of the Note. (a) Subject to and upon compliance with the provisions of this Section 4, the Holder, at the Holder's option at any time and from time to time from and after the date hereof so long as this Note is outstanding, may convert all or any part of the unpaid principal amount of this Note into shares of the common stock of the Obligor, par value $.01 per share (the "Common Stock"), at the Conversion Price in effect at the Conversion Date. Notwithstanding anything to the contrary herein, until the Obligor's certificate of incorporation has been amended to increase the Obligor's authorized capital stock, the Holder shall not convert all or any part of this Note into shares of Common Stock such that the Obligor would have more shares of Common Stock outstanding or 3 reserved for issuance upon exercise or conversion of its outstanding convertible securities than are then authorized under its certificate of incorporation as in effect on the date of such conversion. (b) In order to exercise the conversion privilege of this Note, the Holder shall deliver (i) this Note and (ii) written notice in substantially the form attached to this Note as Exhibit 1 to the Obligor during regular business hours at its address set forth in, or at such other address as the Obligor shall designate in writing in accordance with Section 13 hereof. Conversion shall be deemed to have been effected on the date when such notice is delivered to the Obligor (the "Conversion Date"). An election to convert this Note in whole or in part shall be irrevocable once made. (c) As promptly after the Conversion Date as practicable, the Obligor shall issue and deliver to the Holder at the address of the Holder set forth on the Obligor's records, without any charge to the Holder, a certificate or certificates (issued in the name of the Holder or, subject to compliance with applicable securities laws, in such other name as the Holder may designate) for the number of shares of Common Stock of the Obligor issuable upon the conversion of this Note. In case the Note is surrendered for a partial conversion, the Obligor will issue to the Holder upon conversion a new Note of like tenor (the "New Note") in an aggregate principal amount equal to the unconverted portion of the outstanding principal amount of the surrendered Note. No fractional shares of Common Stock or scrip representing fractional shares shall be issued upon the conversion of any amounts outstanding under this Note to Common Stock pursuant to Section 4(a) hereof. Notwithstanding the provisions of Section 8(a) hereof, instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion, the Obligor shall pay to the Holder a cash adjustment in respect of such fractional shares in an amount equal to the same fraction of the Market Price of the Common Stock on the date of such conversion. (d) Upon conversion, the Holder shall be deemed to have become the stockholder of record on the Conversion Date of the number of shares of Common Stock issuable upon such conversion. All rights of the Holder to amounts of principal converted shall cease upon conversion, but all other rights of the Holder hereunder, including without limitation rights to any principal not converted and to any expenses or other amounts owned hereunder, shall be unaffected by such conversion. (e) The initial Conversion Price of this Note shall be $20.00 per share of Common Stock and shall be subject to adjustment as follows: (i) Dividends, Subdivision, Combination or Reclassification of Common Stock. In the event that the Obligor shall at any time or from time to time, prior to any conversion of the Note, (v) declare, make or pay a dividend or make a distribution on the outstanding shares of Common Stock, payable in Capital Stock of the Obligor, (w) subdivide the outstanding shares of Common Stock into a large number of shares, (x) combine the outstanding shares of its Common Stock into a smaller number of shares, (y) issue any shares of its Capital Stock in a reclassification of the Common Stock or (z) change the shares of Common Stock issuable upon conversion hereunder into the 4 same or any different number of shares of any class of Capital Stock of the Obligor, whether by reclassification, exchange, cancellation, amendment of the Obligor's certificate of incorporation or otherwise (other than any such event for which an adjustment is made pursuant to another clause of this Section 4(e)), then, and in each such case, the Conversion Price in effect immediately prior to such event shall be adjusted (and any other appropriate action shall be taken by the Obligor) so that the Holder, with respect to any amounts outstanding on the Note thereafter surrendered for conversion, shall be entitled to receive the number of shares of Common Stock or other securities of the Obligor that the Holder would have owned or would have been entitled to receive upon or by reason of any of the events described above, had such amounts been converted immediately prior to the record date applicable to such event. An adjustment made pursuant to this Section 4(e)(i) shall become effective retroactively to the close of business on the day upon which such corporate action becomes effective. (ii) Certain Distributions. In case the Obligor shall at any time or from time to time, prior to conversion of all amounts outstanding under the Note, distribute to all holders of shares of Common Stock (including any such distribution made in connection with a merger or consolidation in which the Obligor is the resulting or surviving Person and the Common Stock is not changed or exchanged) cash, evidences of indebtedness of the Obligor or another Person, securities of the Obligor or another Person or other assets (excluding dividends declared in the ordinary course of business and payable in cash, dividends payable in shares of Common Stock for which adjustment is made under another paragraph of this Section 4(e)) or rights or warrants to subscribe for or purchase securities of the Obligor (excluding those distributions in respect of which an adjustment in the Conversion Price is made pursuant to another paragraph of this Section 4(e)), then, and in each such case, the Conversion Price then in effect shall be adjusted (and any other appropriate actions shall be taken by the Obligor) by multiplying the Conversion Price in effect immediately prior to the date of distribution by a fraction (x) the numerator of which shall be the Current Market Price of the Common Stock immediately prior to the date of distribution less the then fair market value (as determined in good faith by the Board of Directors) of the portion of the cash, evidences of indebtedness, securities or other assets so distributed or of such rights or warrants applicable to one share of Common Stock and (y) the denominator of which shall be the Current Market Price of the Common Stock immediately prior to the date of distribution. Such adjustment shall be made whenever any such distribution is made and shall become effective retroactively to a date immediately following the close of business on the record date for the determination of stockholders entitled to receive such distribution. (iii) Effect of Consolidation or Merger. In the case of any consolidation or merger, directly or indirectly, of the Obligor with or into another Person (any such event, a "Change of Shares"), the Holder thereafter shall have the right to convert this Note into the kind and number of shares of stock and/or other securities, cash or other property receivable upon such Change of Shares by a holder of the number of shares of Common Stock of the Obligor into which this Note might have been converted immediately before the time of determination of the stockholders of the Obligor entitled to receive such shares of stock and/or other securities or property, and the Conversion Price shall be adjusted accordingly. The Obligor shall be obligated to retain and set 5 aside, or otherwise make fair provision for exercise of the right of the Holder to receive, the shares of stock and/or other securities, cash or other property provided for in this Section 4(e)(iii). In any such case, appropriate adjustments shall be made in the application of this Section 4(e)(iii) with respect to the Holder after such merger or consolidation such that the provisions of this Section 4(e)(iii) shall be applicable after that event in a manner as nearly equivalent as may be practicable. (iv) Other Changes. In case the Obligor at any time or from time to time, prior to the conversion of all amounts outstanding under the Note, shall take any action affecting its Common Stock similar to or having an effect similar to any of the actions described in any of Sections 4(e)(i) through (iii) (but not including any action described in any such Section) and the Board of Directors in good faith determines that it would be equitable in the circumstances to adjust the Conversion Price as a result of such action, then, and in each such case, the Conversion Price shall be adjusted in such manner and at such time as the Board of Directors in good faith determines would be equitable in the circumstances (such determination to be evidenced in a resolution, a certified copy of which shall be mailed to the Holder). (v) De Minimis Adjustments. Notwithstanding anything herein to the contrary, no adjustment in the Conversion Price shall be required unless such adjustment would require a change of at least 1% in the Conversion Price; provided, however, that any adjustments which by reason of this Section 4(e)(v) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (f) Abandonment. If the Obligor shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, and shall thereafter and before the distribution to stockholders thereof legally abandon its plan to pay or deliver such dividend or distribution, then no adjustment in the Conversion Price shall be required by reason of the taking of such record. (g) Certificate as to Adjustments. Upon any increase or decrease in the Conversion Price, the Obligor shall within a reasonable period (not to exceed 20 days) following the consummation of any of the foregoing transactions deliver to the Holder a certificate, signed by (i) the President or a Vice President of the Obligor and (ii) the Chief Financial Officer of the Obligor, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the increased or decreased Conversion Price then in effect following such adjustment. (h) Notices. In case at any time or from time to time: (i) the Obligor shall declare a dividend (or any other distribution) on its shares of Common Stock; (ii) the Obligor shall authorize the granting to the holders of its Common Stock of rights or warrants to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; 6 (iii) there shall be any reorganization or reclassification of the Common Stock; or (iv) there shall occur a Merger; then the Obligor shall mail to the Holder as promptly as possible but in any event at least ten (10) days prior to the applicable date hereinafter specified, a notice in accordance with Section 13 hereof stating the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or granting of rights or warrants are to be determined, or the date on which such reorganization, reclassification or Merger is expected to become effective and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for shares of stock or other securities or property or cash delivered upon such reorganization, reclassification or Merger. (i) Reservation of Common Stock. The Obligor shall at all times reserve and keep available for issuance upon the conversion of the Note, such number of its authorized but unissued shares of Common Stock as will from time to time be sufficient to permit the conversion of all amounts outstanding under the Note. As soon as practicable after the date hereof, the Obligor shall take all actions necessary to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized but unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding amounts under the Note. (j) No Conversion Tax or Charge. The issuance or delivery of certificates for Common Stock upon the conversion of amounts under the Note shall be made without charge to the Holder for such certificates or for any documentary stamp, or similar issue or transfer tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the name of, or (subject to compliance with the applicable provisions of federal and state securities laws) in such names as may be directed by, the Holder; provided, however, that the Obligor shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the Holder, and the Obligor shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Obligor the amount of such tax or shall have established to the reasonable satisfaction of the Obligor that such tax has been paid. 5. Redemption. (a) At any time after (i) December 16, 2002, the Obligor shall have the right, at its option and upon a determination made by a majority of the members of the Board of Directors who are not affiliates of the Holder (the "Independent Directors"), to redeem the Note, in whole and not in part, for cash, out of the funds legally available therefor, on not less than fifteen (15) Business Days' written notice of the date of 7 redemption (the "Optional Redemption Date") at a price equal to the outstanding principal amount of the Note, as determined on the Optional Redemption Date. (b) Notwithstanding Section 5(a) above, at any time within 10 days after the delivery of such notice from the Obligor that it intends to redeem the Note pursuant to Section 5(a) hereof, the Holder shall have the right, at its option, prior to any such redemption to convert all amounts outstanding under the Note into shares of Common Stock in accordance with the terms set forth in Section 4(a) hereof. (c) Written notice of any redemption of the Note pursuant to Section 5(a) shall be delivered by the Obligor in accordance with Section 12 hereof. 6. Transfer, Exchange and Replacement of Note. Subject to the third sentence of this Section 6, this Note shall be transferable in whole or in part by the Holder. Upon delivery of this Note duly endorsed by, or accompanied (if required by the Obligor) by proper evidence of succession, assignment or authority to transfer executed by, the Holder, in each case accompanied by any necessary transfer tax imposed upon transfer or evidence thereof, the Company shall execute a new Note to the Person or Persons entitled thereto and such Person or Persons shall be deemed the Holder hereunder. THIS NOTE MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAW IN CONNECTION WITH SUCH SALE OR TRANSFER OR SUCH SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION. The Obligor may deem and treat the person in whose name this Note is held as the absolute, true and lawful owner of this Note for all purposes. Upon receipt by the Obligor of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, the Obligor shall make and deliver a new Note of like tenor, in lieu of this Note, if (i) in case of loss, theft or destruction, the Obligor receives indemnity or security reasonably satisfactory to it, (ii) the Obligor is reimbursed for all reasonable expenses incidental to such replacement, and (iii) this Note is surrendered and canceled, if mutilated. 7. Securities Laws. By his acceptance of this Note, Holder hereby represents and warrants to the Obligor that it is an "accredited investor" as that phrase is defined in Rule 501 under the Securities Act of 1933, as amended (the "Act"), and is acquiring this Note for his own account, for investment, and not with a view to the distribution of this Note or the Common Stock issuable upon conversion hereof in a manner contrary to the provisions of the Act or any applicable state securities laws. Holder understands that the shares issuable upon conversion of this Note have not been and will not, except to the extent provided herein, be registered under the Act or any state securities laws, and that neither such shares nor any interest therein may be transferred or sold unless such registration is then effective or an exemption from such registration is then available. By conversion of this Note, Holder acknowledges that the certificates representing such shares will bear appropriate legends restricting the transferability thereof. The Obligor shall have the right to an opinion of counsel in connection with any transfer of this Note or the shares issuable upon conversion hereof. 8 8. Subordination. (a) Payment of the Subordinated Debt is and shall be expressly subordinate and junior in right of payment to the prior payment in full of the Senior Debt to the extent and in the manner set forth herein, and the Subordinated Debt is hereby so subordinated as a claim against the Obligor or any Subsidiary or any of the assets of the Obligor or such Subsidiary, whether such claim be (i) in the event of any distribution of assets of the Obligor or such Subsidiary upon any voluntary or involuntary dissolution, winding-up, total or partial liquidation or reorganization, or bankruptcy, insolvency, receivership or other statutory or common law proceedings or arrangements involving the Obligor or such Subsidiary or the readjustment of its liabilities or any assignment for the benefit of creditors or any marshaling of its assets or liabilities (collectively, a "Reorganization") or (ii) other than in connection with a Reorganization. Further, Holder agrees that this Note shall be subordinated to any and all debt of the Obligor to which the holder of the Convertible Subordinated Note, originally issued to California U.S. Holdings, Inc. on December 16, 1999 (the "Infogrames Note"), agrees that the Infogrames Note shall be subordinated, whether such debt is outstanding on the date hereof or otherwise, and which debt for all other purposes hereof shall be deemed to be included in the definition of Senior Debt. (b) Except for the conversion of the Note as set forth in Section 4 hereof and the payments to be made in connection with the Transaction (as defined in the Third Amendment, Consent, Waiver and Agreement dated November 15, 1999 (the "Third Amendment")) on the Transaction Closing Date (as defined in the Third Amendment), all of the Senior Debt shall be paid in full before any direct or indirect payment or distribution of any kind or character (including, without limitation, securities that are subordinated in right of payment to the Senior Debt) is made upon the Subordinated Debt, and in any Reorganization or other proceedings any payment or distribution of any kind or character, whether in cash or property or securities, which may be payable or deliverable in respect of this Subordinated Note and the Subordinated Debt shall be paid or delivered directly to the Administrative Agent, for payment of the Senior Debt until the Senior Debt is paid in full. If the Holder does not file a claim or proof of debt in the form required in any Reorganization or other proceedings prior to 20 days before the expiration of the time to file such claims or proofs, the Administrative Agent shall have the right to demand, sue for, collect and receive any payments and distributions in respect of the Subordinated Debt which are required to be paid or delivered to the Senior Creditors and to take such other action in the name of the Holder or of the Senior Creditors as the Administrative Agent may deem reasonably necessary or advisable for the enforcement of the provisions hereof. The Holder shall execute and deliver such other and further powers of attorney, assignments, proofs of claim or other instruments, and take such other actions, as may be reasonably requested by the Administrative Agent in order to enable the Administrative Agent to accomplish any of the foregoing. (c) In the event that, notwithstanding the foregoing, any payment or distribution of the assets of the Obligor or any Subsidiary of any kind or character, whether in cash, property or securities, and whether prior to or after the commencement 9 of any Reorganization or other proceedings, shall be received by the Holder in respect of this Note before all Senior Debt is paid in full, such payment of distribution shall be held in trust for the Senior Creditors and shall forthwith be paid over to the Administrative Agent for application to the payment of the Senior Debt until all Senior Debt shall have been paid in full. (d) Except with respect to an Event of Default occurring at maturity of this Note pursuant to Section 10(a)(i) hereof, the Holder and the Obligor each agrees that, until the Senior Debt has been paid in full (i) the Holder will not take, demand, receive or accept, or take any action to accelerate or collect (and the Obligor shall not make) any cash payment of all or any part of the Subordinated Debt and (ii) the Holder will not file or join in any petition or proceeding seeking the bankruptcy or Reorganization of the Obligor; provided, however, that if any Person (other than the Holder or any Affiliate of the Holder or any such other holder) files or initiates any petition or proceeding seeking the foregoing or takes any action to accelerate or collect any cash payment of all or any part of any debt of the Obligor, then after the filing of any such petition or the commencement of any such proceeding the Holder may join in such petition or proceeding or initiate a separate action to accelerate all or any part of the Subordinated Debt. (e) The Senior Creditors, or any of them, may, at any time and from time to time, without the consent of or notice to the Holder, without incurring any responsibility to the Holder, and without impairing or releasing any of the rights of any Senior Creditor or any of the obligations of the Holder: (i) change the amount or terms of, or renew or extend, the Senior Debt or enter into or amend in any manner any agreement relating to the Senior Debt; (ii) sell, exchange, release or otherwise deal with any property at any time pledged or mortgaged to secure the Senior Debt; (iii) release anyone liable in any manner for the payment or collection of the Senior Debt; and (iv) exercise or refrain from exercising any rights against the Obligor, any Subsidiary and any other Person (including the Holder). The Obligor shall provide prompt written notice to the Holder of the occurrence of any of the foregoing matters. (f) The Holder hereby waives notice of or proof of reliance by any Senior Creditor upon the provisions hereof, and the Senior Debt shall conclusively be deemed to have been created, contracted, incurred or maintained in reliance upon the provisions hereof. (g) The Obligor hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever. The nonexercise by the Administrative Agent or any other Senior Creditor of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance. (h) The subordination provisions contained herein are for the benefit of the Senior Creditors and their respective successors and assigns, and the rights of any present or future holder of the Senior Debt to enforce the subordination provisions contained herein, may not be rescinded, canceled, modified or impaired in any way without the prior written consent of the Administrative Agent. 10 9. Prepayments. Subject to Section 8 hereof and the prior payment in full of the Senior Debt, the Obligor may only repay this Note prior to the Maturity Date, in whole or in part, in accordance with Sections 4 and 5 hereof. 10. Defaults and Remedies. Subject to the subordination provisions contained in this Note: (a) Events of Default. An "Event of Default" shall occur if: (i) the Obligor shall default in the payment of the principal of this Note, when and as the same shall become due and payable, whether at maturity or at a date fixed for prepayment or by acceleration or otherwise; or (ii) any event or condition shall occur that results in the right of the holder of the Senior Debt to accelerate the maturity of any Senior Debt, or of any other indebtedness in a principal amount aggregating $3,000,000 or more; or (iii) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (x) relief in respect of the Obligor or any Subsidiary, or of a substantial part of its property or assets, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (y) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Obligor or any Subsidiary, or for a substantial part of its property or assets, or (z) the winding up or liquidation of the Obligor or any Subsidiary; or (iv) the Obligor or any Subsidiary shall (A) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (iii) above, (C) apply for or consent to the appointment of a receiver trustee, custodian, sequestrator, conservator or similar official for the Obligor or any Subsidiary, or for a substantial part of its property or assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors, (F) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (G) take any action for the purpose of effecting any of the foregoing; or (v) one or more judgments for the payment of money in an aggregate amount in excess of $3,000,000 (to the extent not covered by insurance) shall be rendered against the Obligor, any Subsidiary or both and the same shall remain undischarged for a period of 30 days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Obligor or any Subsidiary to enforce any such judgment; or 11 (vi) any material uninsured damage to or loss, theft or destruction of any assets of the Obligor or its Subsidiaries shall occur that has a material adverse effect on the assets, business or financial condition of the Obligor. (b) Acceleration. Subject to Section 8(d) hereof: (i) if an Event of Default occurs under subsection (a)(iv) or (v) above, then the outstanding principal of this Note shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are expressly waived, (ii) if any other Event of Default occurs and is continuing, the Holder, by written notice to the Obligor, may declare the principal of the Note to be due and payable immediately, (iii) upon such declaration, such principal shall become immediately due and payable, and (iv) the Holder of the Note may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived, except nonpayment of principal that has become due solely because of the acceleration, and if the rescission would not conflict with any judgment or decree. 11. Subrogation. After all amounts payable under or in respect of the Senior Debt are paid in full, the Holder shall be subrogated to the rights of holders of the Senior Debt to receive payments or distributions applicable to the Senior Debt to the extent that distributions otherwise payable to the Holder have been applied to the payment of the Senior Debt. A distribution made under this Section 11 to a holder of the Senior Debt which otherwise would have been made to the Holder is not, as between the Obligor and the Holder, a payment by the Obligor on the Senior Debt. 12. Notices. All notices and other communications made pursuant to the provisions of or in connection with this Note shall be in writing and shall be deemed to have been duly made when delivered personally or by express mail or courier or when sent by facsimile transmission with confirmation received (provided a writing evidencing such transmission is mailed by first class mail, postage prepaid within two ( Business Days). (a) If to the Holder, to c/o General Atlantic Service Corporation, 3 Pickwick Plaza, Greenwich, Connecticut 06830, Attention: William E. Ford, telecopy: (203) 622-8818, or to such other address as the Holder may give notice of to the Obligor from time to time (with copies to Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York 10019, Attention: Mathew Nimetz, Esq., telecopy: (212) 757-3990). (b) If to the Obligor, Infogrames, Inc. (f/k/a GT Interactive Software Corp.), 417 Fifth Avenue, New York, New York 10016, Attention: Lisa Rothblum, telecopy: (212) 726-4239, or to such other address as the Obligor may give notice of to the Holder from time to time. 13. Expenses. The Obligor shall pay all fees and expenses of the Holder, including the reasonable fees and disbursements of the Holder's counsel, incurred in connection with any claim, action or proceeding relating to or arising out of this Note made by any Person (other than the Holder) against either the Holder or any 12 other Person in which the Holder is subsequently impleaded or otherwise made a party, and any other claim, action or proceeding in which the Holder exercises or enforces, or seeks to exercise or enforce, its legal and equitable rights hereunder. 14. Entire Agreement. Each of the Obligor and the Holder confirms that this Note constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. 15. Severability. Any provision of this Note that is prohibited or unenforceable in a 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. 16. Successors and Assigns. All covenants and agreement of the Obligor and the Holder under this Note shall be binding on the Obligor and the Holder and their respective successors and assigns. Neither this Note nor any interest therein shall be transferred or assigned prior to the Senior Debt Payment Date without the prior written consent of the Administrative Agent; provided, however, the Holder may transfer or assign all or any part of this Note at any time to an affiliate of the Holder without such consent. 17. Amendments. No amendment, supplement, waiver or other modification to this Note shall be effective without the prior written consent of the Obligor, the Holder and, prior to the Senior Debt Payment Date, the Administrative Agent. 13 18. Governing Law. This Note shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles regarding conflicts of law. INFOGRAMES, INC. (f/k/a GT INTERACTIVE SOFTWARE CORP.) By: /s/ David Fremed Title: Senior Vice President, Finance and Chief Financial Officer Acknowledged and Agreed: By: /s/ Bruno Bonnell Title: Chairman and Chief Executive Officer 14 EXHIBIT 1 To Infogrames, Inc. (f/k/a GT Interactive Software Corp.): The undersigned owner of this Note hereby irrevocably exercises the option to convert $______ principal amount of this Note into shares of Common Stock of GT Interactive Software Corp. in accordance with the terms of this Note, and directs that the shares issuable and deliverable upon the conversion be issued and delivered to the registered holder hereof unless a different name has been indicated below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Dated: ------------------------------ [HOLDER] By: ------------------------------------- Name: Title: Fill in for registration of shares of Common Stock if to be issued otherwise than to the registered holder. Name: Address: Social Security or Taxpayer ID Number: -----END PRIVACY-ENHANCED MESSAGE-----