SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 15, 2000
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GT INTERACTIVE SOFTWARE CORP.
(Exact name of registrant as specified in its charter)
Delaware 0-27338 13-3689915
(State or other jurisdiction of (Commission file number) (I.R.S. employer
incorporation or organization) identification no.)
417 Fifth Avenue, New York, NY 10016
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 726-6500
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Item 5. Other Events.
On February 15, 2000, Infogrames Entertainment S.A. ("Infogrames"), the
majority stockholder (through its wholly-owned subsidiary, California U.S.
Holdings, Inc.) of the Registrant, entered into an agreement with First Union
National Bank, as agent for a syndicate of banks (together, the "Banks"),
pursuant to which Infogrames assumed the Banks' interest in the Registrant's
credit facility (the "Old Credit Facility," and, as assumed by Infogrames and to
be revised by agreement between Infogrames and the Registrant, the "New Credit
Agreement"). The terms of the New Credit Agreement, which has not yet been
executed by Infogrames and the Registrant, are intended to be substantially the
same as the terms of the Old Credit Facility, except that (i) the maturity date
has been extended from March 31, 2000 to June 30, 2000, (ii) the interest rate,
which was the Prime Rate plus 1.0% or LIBOR plus 2.5% at the option of the
Registrant, is now LIBOR plus 2.5%, (iii) a $250,000 amendment fee, which would
have been payable to the Banks on March 31, 2000 unless the Old Credit Facility
was refinanced by February 16, 2000, has been reduced to $125,000 and will now
be payable to Infogrames, (iv) certain mandatory prepayment restrictions and
operational covenants have been revised to be less restrictive and (v) revisions
are expected to be made to provide alternative letter of credit facilities to
the Registrant. Warrants to acquire 225,000 shares of the Registrant's common
stock, par value $0.01 per share, issuable to the Banks on February 28, 2000 if
the Old Credit Facility was not repaid prior to such date, have been issued to
Infogrames.
With respect to the action brought against the Registrant by Scavenger,
Inc. ("Scavenger") previously described in the Registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 1999, in an amended decision and
order entered March 3, 2000, the Supreme Court, New York County granted partial
summary judgment in favor of Scavenger in the amount of $1.9 million (prior to
calculation of pre-judgment interest). The court ruled that the software
development agreement between the Registrant and Scavenger was divisible and
provided for payment for each game developed by Scavenger and accepted by the
Registrant. The court found that the Registrant had accepted the games Amok and
Scorcher and had excused the late performance by Scavenger in the delivery of
Scorcher. On March 10, 2000, the Registrant noticed an appeal from this portion
of the decision to the Appellate Division, First Department.
In the same decision, the court denied Scavenger's motion for partial
summary judgment on its claim seeking contract payments related to the games
Into the Shadows and Mudkicker, finding that this claim had triable issues of
fact. The court also denied Scavenger leave to amend its complaint to add claims
for prima facie tort and fraud seeking damages of $100 million as well as
punitive damages.
Item 7. Exhibits
None.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GT INTERACTIVE SOFTWARE CORP.
Date: March 14, 2000 By: /s/ Robert DeLaurentis
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Name: Robert DeLaurentis
Title: Chief Financial Officer (Acting)
