EXHIBIT 10.4
LLOYDS TSB
COMMERCIAL
24th October 2001
The Directors
Take-Two Interactive Software Europe Limited
Saxon House
2-4 Victoria Street
Windsor
Berks
SL4 1EN
Dear Sirs:
OVERDRAFT AND OTHER FACILITIES
We Lloyds TSB Bank plc (the "Bank") are pleased to offer to Take Two
Interactive Software Europe Limited (the "Company") and to each of Jack of All
Games (UK) Limited, Take Two Interactive France SA, and Joytech Europe Limited
an overdraft facility in sterling and/or in US dollars and Euro on the following
terms and conditions.
Amount
The Gross Borrowing shall not at any time exceed (pound)19,100,000 and
the Net Borrowing shall not at any time exceed (pound)13,100,000. For the
purposes of this letter "Gross Borrowing" means the aggregate of all amounts
outstanding under the facility (calculated on the basis of cleared funds) and
"Net Borrowing" means Gross Borrowing less the aggregate of all cleared credit
balances that may in the Bank's opinion be legally set off against the Gross
Borrowing (such credit balances that may in the Bank's opinion be legally set
off against the Gross Borrowing less the aggregate of all cleared balances that
may in the Bank's opinion be legally set off against the Gross Borrowing (such
credit balances being referred to below as the "credit balances").
For the purposes of determining whether the total amount owing is at
any particular time within or in excess of the agreed limit, credit balances in
a currency other than sterling shall be nationally converted into sterling on
the basis of the rate at which the Bank would sell sterling for that currency at
that time and amounts owing in a currency other than sterling shall be
notionally converted into sterling on the basis of the rate at which the Bank
would sell that currency for sterling at that time.
You should note that the above limit applies collectively to the
overdraft facility and to the indemnity line, and the documentary credit
facility included in the other facilities referred to below. Because of this,
utilizations of each such facility will be taken into account to determine the
amount available for utilization by the other facilities.
Utilizations of the indemnity line, and the documentary credit facility
are also subject to the lower limit set out in the Schedule of Other Facilities.
Availability
The Bank's present intention is to make the facility available until
31st March 2002 and all moneys from time to time owing to the Bank under the
facility shall be repaid no later than this date or such later date as may from
time to time be advised in writing by the Bank. The Bank may, nevertheless,
terminate the facility at any time and may, at such time or at any time
thereafter, demand immediate payment of all amounts owing under or in connection
with the facility. The amounts owing at any time may include interest or charges
which have been debited to one or more of the accounts in accordance with the
terms of this letter.
The Bank shall have the right at the time of making demand or at any
time thereafter to convert all amounts then due and payable in a currency other
than sterling into sterling at the Bank's exchange rate for selling that
currency against sterling at that time. The Bank shall as soon as possible after
such conversion advise you of the sterling amount then owing.
Interest
Interest shall be calculated on a daily basis and will be payable on
amounts owing as follows:
(a) if the sterling credit balances are equivalent to or greater
than the total owing under the facility in that currency
(being the aggregate cleared daily overdrawn balance of the
relevant sterling account or accounts), at 1% per annum on the
total amount owing in that currency, or
(b) if the sterling credit balances are less than the total amount
owing under the facility in that currency, at (i) 1.25% per
annum over the Bank's Base Rate from time to time (currently
5.75% per annum in total) on the net overdraft, and (ii) 1%
per annum on an amount equivalent to the credit balances in
that currency,
and, in each case, at 1.25% per annum over the Bank's relevant short term
offered rate from time to time in the case of amounts owing in any other
currency on the total amount owing in that currency.
For the purposes of the above, the net overdraft on any day is the
total amount owing under the facility in sterling less the credit balances in
that currency and the "credit balances" are the aggregate of all non-interest
bearing cleared credit balances in the same currency that may in the Bank's
opinion be legally set off against amounts owing under the facility.
Interest will be debited to the relevant account monthly in arrears
(normally on the 10th of each month or on the next working day) in the case of
sterling and quarterly in arrears (normally on the 10th of each of March, June,
September and December or on the next working day) in the case of any other
currency, interest may also be debited on the date upon which the facility
ceases to be available.
The Bank's Base Rate may be varied (either up or down) by the Bank at
any time. Notice of changes will be displayed in branches of the Bank, although
the Bank's short term offered rate for each currency may vary from day to day
and upon request the Bank will advise you of the rates then applicable.
Interest will be calculated on the basis of the actual number of days
elapsed and a 360 day year or a 365 day year as is in the Bank's reasonable
opinion usual market practice for the relevant currency.
Costs and Charges
Charges will be payable on each sterling account monthly in accordance
with the itemised tariff detailed on the enclosed factsheet.
In addition further charges will be payable for other services
provided, as shown in the enclosed tariff leaflet or as otherwise advised by the
Bank from time to time.
Letters of Credit fees
Opening Fee: 8.5 pence per (pound)100
Acceptance: 10 pence per (pound)100
Extension/Increase: 8.5 pence per (pound)100 (min (pound)40)
Payment: 12.5 pence per (pound)100 (min (pound)40; max (pound)110)
Amendment: (pound)30 per amendment
Cancellation: (pound)30 per Letter of Credit
These charges will be debited to the relevant account and may be varied
by the Bank at any time and notice of changes will be advised to you. All costs
and expenses incurred by the Bank in creating, preserving or enforcing the
security referred to below shall be debited to account number 0208105 of the
Company under advice.
An arrangement fee of (pound)5,000 is payable. This will be debited to
the account number 0208125 of the Company in the next few days.
All costs and expenses incurred by the Bank in creating, preserving, or
enforcing the security referred to below shall be debited to account number
0208125 of the Company under advice.
Security
It is a condition of the facility (and of the other facilities referred
to below) that amounts owing shall be secured by the following. Any security
which is not already in place is to be provided to the Bank in a form acceptable
to the Bank and, if so requested by the Bank, shall be accompanied by evidence
of the value of the security.
(a) an all moneys guarantee dated 5th January 2001 from Take Two
Interactive Software Inc. for a principal amount of
(pound)15,788,000 plus interest and other costs as detailed in
the guarantee and in respect of the debts and liabilities to
the Bank of Take Two Interactive Software Europe Limited,
respect of the debts and liabilities to the Bank of Take Two
Interactive Software Europe Limited,
(b) an unlimited debenture from Take Two Interactive France SA,
(c) an assignment of the proceeds of COFACE debtor insurance
policies number 66925/00 GBI, 68923/000 GBI, 68899/00 GBI and
7338/02 taken out in respect of Take Two Interactive Software
Europe Limited, Jack of All Games UK Limited, Joytech Europe
Limited, Take Two Interactive France SA and Take Two
Interactive Germany GmbH with assurers acceptable to the Bank,
(d) an unlimited debenture from Take Two Interactive Germany GmbH
(e) an omnibus guarantee and set off agreement dated 7th February
2001 among the Bank, Take Two Interactive Software Europe
Limited, Jack of All Games UK Limited, Take Two Interactive
France SA, Take Two International Germany GmbH and Joytech
Europe Limited,
(f) an unlimited debenture dated 24th January 2001 from Take Two
Interactive Software Europe Limited,
(g) an unlimited debenture dated 24th January 2001 from Jack of
All Games UK Limited, and
(h) an unlimited debenture date 24th January 2001 from Joytech
Europe Limited.
Financial Information
Whilst the facility and/or any of the other facilities remain available
each of you should provide to the Bank as soon as possible after the end of the
period to which they relate copies of any financial information that the Bank
may from time to time reasonably request, including:
a) your audited annual accounts within 90 days of the end of your
financial year, and
b) your monthly management accounts together with or including an
age analysis of debtors, and within 30 days of the end of each
month, and
c) our rolling monthly forecast balance sheet to be revised
quarterly within 30 days of the end of each quarter.
The figures so provided should demonstrate that the group's good book
debts (over which a charge or security interest has been given to the Bank and
after taking into account any charges or security interests that rank in
priority to the Bank, any inter group debts, and any credit notes) are not less
than 170% of the group's utilization of all overdraft facilities, the
documentary credit facility, and the indemnity line provided by the Bank with
any breach identified to be corrected by means of a cash injection by Take Two
Interactive Software Inc.
Other Facilities
In addition to the overdraft facility we are pleased to offer the
facilities detailed in the Schedule of other Facilities. Except when reference
is made to another agreement, each additional facility will be available upon
such terms and conditions as shall from time to time be specified by the Bank.
The facilities may be cancelled by the Bank at any time, but it is the Bank's
present intention to keep the facilities in place for the period of availability
of the overdraft facility and the liability in respect of any utilization may
extend beyond such period of availability.
Amounts outstanding in connection with the foreign exchange facility,
the indemnity line, and the documentary credit facility may be in sterling
and/or any other currency. For the purpose of determining whether there is
sufficient availability within the specified limit for any particular
utilization, amounts outstanding in a currency other than sterling shall be
notionally converted into sterling on the date of the proposed utilisation on
the basis of the rate at which the Bank would sell the relevant currency for
sterling at that time.
If upon termination of the overdraft facility there are any foreign
exchange contracts outstanding or any contingent liabilities existing under
these additional facilities (or any of them) the Bank shall have the right at
any time to close out any such foreign exchange contracts and upon any request
from the Bank:
(a) an amount sufficient to indemnify the Bank for all costs and
losses incurred by the Bank in or in connection with closing
out such foreign exchange contracts shall be paid to the Bank,
and
(b) an amount equal to the value of any such contingent
liabilities existing at such time shall be deposited with the
Bank with the intent that such deposit shall be held by the
Bank as security for those liabilities and that such
documentation and other things (including the payment of any
associated costs) as the Bank may require in order to perfect
such security shall be completed.
For the purposes of the above, the Bank shall have the right at the
time of making demand or at any time thereafter to convert all amounts then due
and payable in connection with any of those additional facilities in a currency
other than sterling at the Bank's exchange rate for selling that currency
against sterling at that time. The Bank shall as soon as possible after such
conversion advise the sterling amount then owing.
The Bank may debit any amount owing in connection with these additional
facilities to the account of the relevant company with the Bank whether or not
that would cause the account to become overdrawn or the agreed overdraft limit
on the account to be breached.
Other Terms of Offer
This letter is for the benefit of the contracting parties only and
shall not confer any benefit on or be enforceable by a third party.
Please confirm your acceptance of the facilities offered by returning
the attached duplicate of this letter with the acknowledgement signed in
accordance with the bank mandate currently held by the Bank. If such
confirmation is not received by the Bank (at the address given at the heading of
this letter) by 24th November 2001 the offer will lapse.
Yours faithfully,
For and on behalf of Lloyds TSB Bank plc
/s/ Paul Notarbartolo
Paul Notarbartolo
Senior Manager
Lloyds TSB Commercial
We hereby acknowledge and accept the terms of your offer dated 24th October 2001
of which this is a duplicate and agree all the terms and conditions therein
contained. In accepting this letter we all confirm (as regards ourselves) that
neither the execution by us of this letter nor the utilization by us of the
facilities being made available will conflict with or breach any requirement or
limitation set out in our Memorandum and Articles of Association.
For and on behalf of Take Two Interactive Software Europe Limited (company
registered under 2739756)
Signed by (name) (name)
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(signature) (signature)
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2001 (date) 2001 (date)
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For and on behalf of Jack of All Games (UK) Limited (company registered number
2981108)
Signed by (name)
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(signature)
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2001 (date)
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For and on behalf of Take Two Interactive France SA
Signed by (name)
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(signature)
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2001 (date)
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For and on behalf of Joytech Europe Limited (company registered number 3376299)
Signed by (name)
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(signature)
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2001 (date)
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This letter creates legal obligations. Before signing you may wish to take
independent advice