REVOLVING CREDIT FACILITY

 

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                                                                    EXHIBIT 10.5

 

                                                                  April 17, 2005

 

GameStop Corp.

2250 William D. Tate Ave.

Grapevine, Texas 76501

 

Attention: Mr. David Carlson

           Chief Financial Officer

 

Dear Mr. Carlson:

 

1.     COMMITMENT

 

      We are pleased to advise you of the commitment of Bank of America, N.A.

("BOFA"), Merrill Lynch Capital, a division of Merrill Lynch Business Financial

Services Inc. ("ML") and Citigroup (as defined below), subject to the terms and

conditions hereof, to provide a senior secured revolving credit facility in the

amount of $400,000,000 (the "REVOLVING CREDIT FACILITY") in favor of (a) a

holding company that upon the consummation of the Acquisition of the Target (the

identity of which the Agents and the Arrangers have previously been advised)

will hold all of the equity interests of GameStop Corp. and the Target, (b)

GameStop Corp., (c) the Target, and (d) certain of the subsidiaries of each of

the foregoing (collectively, the "BORROWER"), all as contemplated on the Summary

of Terms and Conditions (the "TERM SHEET") annexed to this letter as EXHIBIT A.

Each of BofA, ML, and Citigroup severally commits that each such institution

will participate in thirty-three and one-third percent (33 1/3%) of the

Revolving Credit Facility. For purposes of this letter, "Citigroup" means

Citigroup Global Markets Inc. ("CGMI"), Citibank, N.A., Citicorp USA, Inc.,

Citicorp North America, Inc. and/or any of their affiliates as may be

appropriate to consummate the transactions contemplated herein.

 

2.     AGENTS

 

      BofA will act as Administrative Agent and Collateral Agent (and is

referred to herein in such capacity as the "ADMINISTRATIVE AGENT") for itself

and other lenders (the "LENDERS") which fund the Revolving Credit Facility. An

affiliate of CGMI will act as Syndication Agent (the "SYNDICATION AGENT"). ML

will act as Documentation Agent (the "DOCUMENTATION AGENT" and collectively with

the Administrative Agent and the Syndication Agent, the "AGENTS").

 

3.     SYNDICATION

 

      BofA, ML, and CGMI reserve the right to syndicate the Revolving Credit

Facility to other lenders. In such event, Banc of America Securities LLC., CGMI

and ML will act as the Joint Lead Arrangers and Joint Lead Bookrunners (in such

capacity, the "ARRANGERS") and as the exclusive syndication managers for the

Revolving Credit Facility and, in such capacity, the Arrangers will perform the

duties and exercise the authority customarily associated with such role. No

additional agents, arrangers or syndication managers will be appointed with

respect to

 

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April 17, 2005

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the syndication of the Revolving Credit Facility. The Arrangers, in their sole

discretion, but in consultation with the Borrower, will manage all aspects of

the syndication of the Revolving Credit Facility, including the selection of

lenders reasonably acceptable to the Borrower and the Arrangers, the

determination of when to approach potential lenders, the titles and roles given

various lenders, and the final allocation of the commitments among the lenders.

Subject to the preceding sentence, the Arrangers shall, in all events, have the

final say concerning all aspects of the syndication. BofA, ML, and Citigroup

shall be released from a portion of their respective commitments hereunder in an

aggregate amount equal to the commitment of those lenders which commit and

subscribe to the Revolving Credit Facility. In connection therewith, each of

BofA, ML, and Citigroup shall be reduced to a hold level reasonably satisfactory

to the Arrangers.

 

      The Borrower will be reasonably responsive in assisting the Arrangers in

achieving a successful syndication, including (a) direct contact during the

syndication between the Borrower's senior officers, representatives, and

advisors, on the one hand, and the Arrangers; and (b) providing the Arrangers

with all such financial and other information in the Borrower's possession with

respect to the Borrower and the transactions contemplated by this letter,

including but not limited to financial projections and forecasts relating to the

foregoing not presently in the possession of the Arrangers and which the

Arrangers reasonably may request from time to time.

 

      The provisions of this Paragraph 3 shall survive any closing of the

Revolving Credit Facility in the event that a successful syndication has not

been completed at the time of such closing.

 

4.     INDEMNIFICATION

 

      Whether or not the credit facility contemplated hereby is established, the

Borrower agrees to indemnify and hold harmless each Agent, BofA, ML, Citigroup,

the Arrangers, the Lenders, and their respective participants, directors,

officers, employees, affiliates, agents, attorneys, accountants, consultants and

each other entity, if any, who controls any of the foregoing, and to hold such

persons and entities (each, an "INDEMNIFIED PERSON") harmless from and against

all losses, claims, damages, liabilities and expenses, joint or several, to

which any such person or entity may become subject arising out of or in

connection with this letter, the Term Sheet, the Revolving Credit Facility, the

use of proceeds of the extensions of credit thereunder or any related

transaction or any claim, litigation, investigation or proceeding relating to

any of the foregoing, regardless of whether any of such Indemnified Persons is a

party thereto, and to reimburse each Indemnified Person upon demand for any

reasonable legal or other expenses incurred in connection with investigating or

defending any of the foregoing; provided, however, the foregoing indemnification

shall not be available, as to any Indemnified Person, on account or in respect

to any claim in which a final judgment has been entered by a court of competent

jurisdiction finding that such Indemnified Person had acted with gross

negligence, willful misconduct or in bad faith. In all such litigation, or the

preparation therefor, the Agents and such Indemnified Party shall be entitled to

select their own counsel and the Borrower agrees

 

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to pay promptly the reasonable fees and expenses of such counsel, provided that

the Indemnified Parties who are not the Agents shall be entitled to

reimbursement for no more than one counsel representing all such Indemnified

Parties (absent a conflict of interest, in which case the Indemnified Parties

may engage and be reimbursed for additional counsel).

 

      The Borrower also agrees that neither any Indemnified Person, nor any of

their respective affiliates, partners, directors, officers, agents, employees or

controlling persons, shall have any liability to the Borrower, any person

asserting claims on behalf or in right of the Borrower or any other person in

connection with or as a result of either the syndication or any matter referred

to herein or in the loan documentation except for any claim in which a final

judgment has been entered by a court of competent jurisdiction finding that such

Indemnified Person had acted with gross negligence, willful misconduct or in bad

faith.

 

      No Indemnified Person shall be liable for any indirect, special, punitive,

or consequential damages in connection with or arising out of this letter or the

transactions contemplated hereby. The indemnification contained in this Section

4 shall survive any termination of the commitments hereunder.

 

5.     REIMBURSEMENT

 

      The Borrower shall reimburse the Agents, BofA, ML, Citigroup, and the

Arrangers from time to time on demand for reasonable out-of-pocket expenses

(including, but not limited to, reasonable expenses of due diligence

investigation, reasonable syndication expenses, reasonable travel expenses and

reasonable fees, disbursements and charges of its counsel), in each instance

incurred in connection with the Revolving Credit Facility and the preparation of

this letter, the Term Sheet and the definitive documentation for the Revolving

Credit Facility, whether or not the transactions contemplated by this letter are

closed.

 

      Upon acceptance of this commitment letter, the Borrower shall pay to the

Administrative Agent the sum of $100,000 (the "EXPENSE DEPOSIT"). The Expense

Deposit shall be applied to reimburse the Agents, BofA, ML, Citigroup, the

Arrangers for any fees and expenses reasonably incurred in connection with the

transaction contemplated by this letter (including, without limitation,

reasonable legal, appraisal, and commercial finance examination fees). From time

to time, the Borrower shall furnish supplemental Expense Deposits in such

amounts as may be reasonably requested by the Agents and the Arrangers. In any

event, the Borrower shall remain obligated to reimburse the Agents, BofA, ML,

Citigroup, the Arrangers for any fees and expenses reasonably incurred in

connection with the transaction contemplated by this letter (including, without

limitation, reasonable legal, appraisal, and commercial finance examination

fees) not covered by the Expense Deposit. The provisions of this paragraph shall

survive any closing of the Revolving Credit Facility and any termination of

BofA's, ML's, or Citigroup's commitments hereunder. All amounts payable under

this Section 5 shall not be subject to counterclaim or offset for, or otherwise

be affected by, any claim or dispute relating to any other matter.

 

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April 17, 2005

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6.     CLOSING

 

      This letter shall terminate unless accepted by the Borrower on or before

5:00 p.m. (New York time) on April 18, 2005, by signing below and returning this

letter so signed to the Administrative Agent. Further, after this letter is so

accepted, this letter and the commitments herein contained may be terminated by

the Agents and the Arrangers and shall be of no further force or effect, if

either the Expense Deposit or a non-refundable deposit of $500,000 (the

"NON-REFUNDABLE DEPOSIT") shall not have been paid to the Administrative Agent

on or before 5:00 p.m. (New York time) on April 18, 2005. Time and strict

performance are of the essence with respect to all of the terms, conditions and

provisions of this letter.

 

      If the Revolving Credit Facility closes, the Non-Refundable Deposit shall

be applied by the Administrative Agent toward the Underwriting Fee (as defined

in the Fee Letter) payable by the Borrower on the Closing Date. If the Revolving

Credit Facility is not consummated, BofA, ML, and Citigroup and their respective

affiliates may retain the Non-Refundable Deposit towards compensation for their

lost opportunity costs and their efforts to establish the facility contemplated

by this letter.

 

      If this letter is so accepted, then, subject to the terms and conditions

of this letter, BofA, ML, and Citigroup would be obligated to establish the

Revolving Credit Facility if all conditions precedent thereto are satisfied (as

reasonably determined by each of the Agents) on or before October 31, 2005

provided that such date shall be automatically extended to December 31, 2005 to

the extent the Outside Date (as defined in the Merger Agreement for the

acquisition of the Target) is extended to December 31, 2005 pursuant to Section

8.1(b)(i) of the Merger Agreement (as in effect on the date of its execution).

 

      This letter does not constitute an unconditional commitment to lend. Such

a commitment will exist only following: the execution and delivery of definitive

loan documents (each in form reasonably satisfactory to each of the Agents); the

recordation of such instruments and documents as the Administrative Agent

reasonably determines to be appropriate under the circumstances; and the

satisfaction of all conditions precedent referenced herein, in the Term Sheet,

or in any of the loan documents.

 

7.     NONTRANSFERABILITY OF COMMITMENT

 

      The identity of the Borrower is of material importance to each of BofA,

ML, and Citigroup. Consequently, this commitment may not be assigned or

transferred by the Borrower. BofA, ML, and/or Citigroup may assign its

obligations (a) under this commitment to any present or future affiliate, or (b)

after the closing of the Revolving Credit Facility, in accordance with the loan

documentation.

 

8.     NON-DISCLOSURE OF COMMITMENT; EXCLUSIVE DEALINGS

 

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      The Borrower covenants that, from and after the date of this letter, and

until the consummation of the transactions contemplated herein (including

successful completion of the syndication, as determined by the Arrangers) or the

expiry of the commitment provided for herein, the Borrower (and its affiliates,

officers, directors, employees, agents and representatives) shall not directly

or indirectly solicit, initiate, encourage, facilitate, discuss, syndicate,

issue, or attempt to syndicate or issue, announce or authorize the announcement

of the syndication or issuance of, (a) any other bank financing of the Borrower,

or (b) any debt facility or debt security (including renewals thereof) (other

than the Bridge/Permanent Facility (as defined in the Term Sheet) and any

substitutions thereof or replacements therefore (subject to the provisions of

Paragraph 9 of the "Conditions Precedent" in the Term Sheet)), in each case,

without the prior written consent of the Arrangers. For purposes of

clarification, the foregoing covenant shall not be applicable to the extent that

the transactions contemplated herein are not consummated due to the condition

set forth in Paragraph 9 of the "Conditions Precedent" in the Term Sheet.

 

      Except as, and only to the extent required under applicable laws, the

Borrower shall maintain as confidential the terms or conditions of this letter,

the Term Sheet, or the Fee Letter. Without limiting the foregoing, this letter

and the Term Sheet may not be disclosed by the Borrower to any persons

(including any existing lenders of the Borrower) other than (a) the

Bridge/Permanent Agent and its officers, directors, employees and affiliates and

its accountants, financial advisors, and counsel, (b) the Target and its

officers, directors, employees and affiliates and its accountants, financial

advisors, and counsel, and (c) the officers, directors, employees and affiliates

of the Borrower and its accountants, financial advisors, and counsel. The

knowing and intentional failure to comply with the foregoing provisions shall,

at the option of BofA, ML, or Citigroup, as applicable, automatically terminate

any and all of its respective obligations with respect to the financing

contemplated hereunder; except that the confidentiality provisions of this

Section 8 shall survive any such termination.. Notwithstanding anything to the

contrary herein, the Borrower (and each of its affiliates, employees,

representative, and agents) may disclose to any and all persons, without

limitation, the structure and tax aspects of the transaction contemplated

hereby, and all materials of any kind (including opinions and other tax

analyses) that are provided to the Borrower related to such structure and tax

aspects.

 

9.     GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.

 

      This Commitment Letter and the Fee Letter accompanying this letter shall

be governed by and construed in accordance with, the laws of the State of New

York. The Borrower agrees that any legal action, proceeding, case, or

controversy against the Borrower with respect to this letter or the Revolving

Credit Facility may be brought in any New York state court or federal court

sitting in New York City, as the Administrative Agent may elect in its sole

discretion. By acceptance of this letter, the Borrower for itself and in respect

of its property, accepts, submits, and consents generally and unconditionally,

to the non-exclusive jurisdiction of the aforesaid courts. The Borrower WAIVES

any objection based on forum non conveniens and any objection to venue of any

action or proceeding instituted under or with respect to this letter or the

Revolving Credit Facility and consents to the granting of such legal or

equitable remedy as is

 

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April 17, 2005

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deemed appropriate by the relevant court. The Borrower further agrees that any

action commenced by the Borrower asserting any claim or counterclaim arising

under or in connection with this letter or the Revolving Credit Facility shall

be brought solely in any New York state court or federal court sitting in New

York City and that such courts shall have exclusive jurisdiction with respect to

any such action.

 

      The Borrower, the Agents, BofA, ML, Citigroup, the Arrangers make each of

the following waivers knowingly, voluntarily, and intentionally, and understand

that the Agents, BofA, ML, Citigroup, the Arrangers, in providing this letter,

and the Borrower, are each relying on such waivers.

 

      THE BORROWER, THE AGENTS, BOFA, ML, CITIGROUP, AND THE ARRANGERS EACH

WAIVES THE FOLLOWING:

 

      THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH THE

BORROWER, THE AGENTS, BOFA, ML, CITIGROUP, THE ARRANGERS, OR ANY LENDER TO WHICH

A PART OF THE REVOLVING CREDIT FACILITY IS PARTICIPATED, IS OR BECOMES A PARTY

(WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE BORROWER, THE

AGENTS, BOFA, ML, CITIGROUP, THE ARRANGERS, AND/OR SUCH LENDER OR PARTICIPANT OR

IN WHICH THE BORROWER, THE AGENTS, BOFA, ML, CITIGROUP, THE ARRANGERS, OR SUCH

LENDER OR PARTICIPANT, IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY

ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN THE

BORROWER OR ANY OTHER PERSON AND THE AGENTS, BOFA, ML, CITIGROUP, THE ARRANGERS,

OR SUCH LENDER.

 

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      If the foregoing is in accordance with your understanding