Exhibit
10.50
EXTENSION
AGREEMENT
THIS EXTENSION AGREEMENT (this
“Agreement”) is entered into this as of this 4th day of
August, 2004 by and among ACCLAIM ENTERTAINMENT, INC.
(“AEI”), ACCLAIM DISTRIBUTION INC. (“ADI”),
LJN TOYS, LTD. (“LJN”), ACCLAIM ENTERTAINMENT CANADA,
LTD. (“Canada”) and ARENA ENTERTAINMENT INC.
(“Arena”; together with AEI, ADI, LJN and Canada,
individually, a “Borrower” and collectively, the
“Borrowers”), OYSTER BAY WAREHOUSE CORP.
(“Warehouse”), ACCLAIM CORPORATE CENTER 1, INC.
(“Corporate”), IGUANA ENTERTAINMENT, INC.
(“Iguana”), ACCLAIM ENTERTAINMENT, LTD. (“Acclaim
Limited”), ACCLAIM JAPAN, LTD. (“Acclaim Japan”),
ACCLAIM ENTERTAINMENT, G.m.b.H. (“Acclaim Germany”),
ACCLAIM ENTERTAINMENT, S.A. (“Acclaim France”) and
ANNODEUS INC. (“Annodeus”; and together with Warehouse,
Corporate, Iguana, Acclaim Limited, Acclaim Japan, Acclaim Germany,
and Acclaim France, each individually, a “Corporate
Guarantor” and collectively, the “Corporate
Guarantors”), and GMAC COMMERCIAL FINANCE LLC, as successor
by merger to GMAC COMMERCIAL CREDIT LLC, formerly known as BNY
Factoring LLC, and successor by merger to BNY Financial Corporation
(“Lender”).
BACKGROUND
Reference is made to the Revolving
Credit and Security Agreement, dated as of January 1, 1993, by and
among Borrowers and Lender, as amended and restated on February 28,
1995 (as so amended and as the same may now exist or may hereafter
be amended, restated, renewed, replaced, extended, substituted,
supplemented or otherwise modified, the “Credit
Agreement”); the Restated and Amended Factoring Agreement
bearing the effective date as of February 1, 1995 (the “AEI
Factoring Agreement”) by and between AEI and Lender; the
Restated and Amended Factoring Agreement bearing the effective date
as of January 1, 1995 (the “ADI Factoring Agreement”)
by and between ADI and Lender; the Restated and Amended Factoring
Agreement bearing the effective date of January 1, 1995 (the
“LJN Factoring Agreement”) by and between LJN and
Lender; the Restated and Amended Factoring Agreement bearing the
effective date of January 1, 1995 (the “Canada Factoring
Agreement”) by and between Canada and Lender; and the
Restated and Amended Factoring Agreement bearing the effective date
as of January 1, 1995 by and between Arena and Lender (the
“Arena Factoring Agreement”; and together with the AEI
Factoring Agreement, the ADI Factoring Agreement, the LJN Factoring
Agreement and the Canada Factoring Agreement, as the same may now
exist or may hereafter be amended, restated, renewed, replaced,
extended, substituted, supplemented or otherwise modified,
collectively, the “Factoring Agreements”); and to all
of the notes, instruments, guarantees, agreements and other
documents executed and/or delivered in connection with the Credit
Agreement and the Factoring Agreements (all of the foregoing, as
the same now exist, or may hereafter be
amended, restated, renewed, extended,
supplemented, substituted, replaced or otherwise modified,
collectively, the “Other Documents”; and together with
the Credit Agreement and the Factoring Agreements, collectively,
the “Loan Documents”).
Reference is further made to that
certain (a) Waiver and Amendment Agreement dated May 4, 2004
(“Waiver and Amendment”) among the Borrowers, the
Corporate Guarantors and Lender, pursuant to which, among other
things, the Term under this Loan Document was amended to terminate
on June 20, 2004 and the Borrowers agreed to pay and satisfy in
full all of the Obligations on or before June 20, 2004 (the
“Termination Date”); and (b) Extension Agreement dated
as of June 18, 2004 among the Borrowers, the Corporate Guarantors
and Lender (the “July 18, 2004 Extension Agreement”),
pursuant to which, among other things, the Termination Date was
extended to August 4, 2004, subject to the terms and conditions
therein;
Borrowers have advised Lender that
Borrowers are in active negotiations with certain financial
institutions to obtain the financing to pay and satisfy in full all
of the Obligations. Borrowers have further advised Lender that such
negotiations and the documentation of the replacement credit
facilities will not be concluded prior to the Termination Date.
Borrowers have requested that Lender extend the Termination Date to
August 20, 2004, and as a one-time accommodation to Borrowers,
Lender has agreed to do so, subject to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of
the foregoing and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
1. Extension of Termination
Date . At the request of Borrowers, as a one-time accommodation
and subject to the terms and conditions contained herein, and
notwithstanding anything to the contrary set forth in the Loan
Documents, Lender agrees that the Termination Date shall be
extended, and is hereby amended and restated to mean, August 20,
2004. Notwithstanding anything to the contrary set forth in the
Credit Agreement or in the other Loan Documents, Borrowers shall
indefeasibly pay and satisfy in full all Obligations of Borrowers
to Lender under the Credit Agreement and the other Loan Documents
on or before August 20, 2004.
2. Conditions to Extension of
Termination Date . The extension of the Termination Date set
forth in the immediately preceding paragraph is conditioned on
compliance by Borrowers and Guarantors with the following terms and
conditions:
(a) Borrowers delivered to Lender a
draft Term Sheet - Acclaim Entertainment on August 2, 2004,
contemplating a $65 million Senior Secured Credit Facility to be
provided to the Borrowers and Guarantors (the “Replacement
Facility”) by a financial institution (the “Replacement
Lender”). Borrowers shall provide Lender with frequent
updates, but no less frequently than the Monday and Friday of each
week, as to the status of the Borrowers’ progress in the
documentation, negotiation and closing of the Replacement Facility.
Borrowers shall immediately provide Lender with notice of any
termination or suspension of active negotiations with respect to
the Replacement Facility
or if the Replacement Lender advises Borrowers
that the Replacement Lender has elected not to continue negotiation
of the Replacement Facility. Borrowers’ acknowledge, confirm
and agree that (i) any suspension or termination of active
negoti
