REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of October 14,
1997, among TAKE-TWO INTERACTIVE SOFTWARE, INC., a Delaware corporation (the
"Company"), and the other undersigned parties hereto, (collectively, the
"Funds").
1. Introduction. The Company and the Funds have today executed that certain
Securities Purchase Agreement (the "Note Purchase Agreement"), pursuant to which
the Company has agreed, among other things, to issue an aggregate of $4,200,000
(U.S.) principal amount of 10% Convertible Notes of the Company (the "Notes") to
the Funds or their successors, assigns or transferees (collectively, the
"Holders"). The Notes are convertible into an indeterminable number of shares
(the "Note Conversion Shares") of the Company's common stock, par value $.01 per
share (the "Common Stock"), pursuant to the terms of the Notes. In addition,
pursuant to the terms of the Note Purchase Agreement and the transactions
contemplated thereby, the Company has issued to the Funds (i) an aggregate of
50,000 shares of Common Stock (the "Grant Shares") and (ii) Common Stock
Purchase Warrants exercisable for an aggregate 250,000 shares of Common Stock
(the "Warrant Shares"). The Company has agreed to issue an indeterminable number
of additional shares of Common Stock (the "Additional Grant Shares") on or
before July 7, 1998, upon the occurrence of certain events specified in the Note
Purchase Agreement. The number of Note Conversion Shares, Grant Shares, Warrant
Shares and Additional Grant Shares (collectively, the "Securities") is subject
to adjustment upon the occurrence of stock splits, recapitalizations and similar
events occurring after the date hereof. The Company represents and warrants that
the Company's Common Stock is currently eligible for trading on the Nasdaq Stock
Market's SmallCap Market ("SmallCap Market") under the symbol "TTWO". Certain
capitalized terms used in this Agreement are defined in Section 3 hereof;
references to sections shall be to sections of this Agreement.
2. Registration under Securities Act, etc.
2.1 Registration on Request.
(a) Registration of Registrable Securities. As soon as is practicable after
the Closing Date (as defined in the Note Purchase Agreement), but in no event
later than April 14, 1998, demand for which is hereby given and acknowledged,
the Company shall prepare and file a registration statement to effect the
registration under the Securities Act of all, but not less than all, of the
Registrable Securities to the extent requisite to permit the public offer and
sale of such Registrable Securities. The Company shall use its best efforts to
cause the registration statement which is the subject of this Section 2.1(a)
(the "Registration Statement") to be declared effective by the Commission upon
the earlier to occur of (i) June 15, 1998 or (ii) five (5) business days after
receipt of a "no review" letter from the Commission (the "Required Effectiveness
Date"). Nothing contained herein shall be deemed to limit the number of
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Registrable Securities to be registered by the Company as required under the
Note Purchase Agreement. As a result, should the Registration Statement not
relate to the maximum number of Registrable Securities acquired by (or
potentially acquirable by) the holders thereof upon conversion of the Note,
exercise of the Warrant or in connection with the issuance of Grant Shares or
Additional Grant Shares, the Company shall be required to file a separate
registration statement (utilizing Rule 462 promulgated under the Exchange Act,
where applicable) relating to such Registrable Securities which then remain
unregistered. The provisions of this Agreement shall relate to such separate
registration statement as if it were an amendment to the Registration Statement.
(b) Registration Statement Form. Registrations under this Section 2.1 shall
be on Form S-3 or, in the event the Company is not then eligible to use such
Form S-3, then such other appropriate registration form of the Commission as
shall permit the disposition of such Registrable Securities in accordance with
the intended method or methods of disposition specified by the Funds; provided,
however, such intended method of disposition shall not include an underwritten
offering of the Registrable Securities.
(d) Expenses. The Company will pay all Registration Expenses in connection
with any registration required by this Section 2.1.
(e) Effective Registration Statement. The registration pursuant to Section
2.1(a) shall not be deemed to have been effected (i) unless a Registration
Statement has become effective within the time period specified herein, provided
that a registration which does not become effective after the Company has filed
the Registration Statement solely by reason of the refusal to proceed of any
holder of Registrable Securities (other than a refusal to proceed based upon the
advice of counsel in the form of a letter signed by such counsel and provided to
the Company relating to a disclosure matter unrelated to such holder) shall be
deemed to have been effected by the Company or (ii) if, after it has become
effective, the Registration Statement becomes subject to any stop order,
injunction or other order or extraordinary requirement of the Commission or
other governmental agency or court for any reason which is not removed after a
period of thirty (30) days.
(f) [Intentionally Left Blank]
(g) [Intentionally Left Blank]
(h) Plan of Distribution. The Company hereby agrees that the Registration
Statement shall include a plan of distribution section reasonably acceptable to
the Funds and substantially in the form annexed hereto; provided, however, such
plan of distribution section shall be modified by the Company so as to not
provide for the disposition of the Registrable Securities on the basis of an
underwritten offering.
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2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If (1) any principal or
interest shall be outstanding under the Notes as of April 15, 1998 (whether or
not then due and owing) and (2) the Company proposes to register any of its
securities under the Securities Act (other than by a registration in connection
with an acquisition in a manner which would not permit registration of
Registrable Securities for sale to the public, on Form S-8, or any successor
form thereto, on Form S-4, or any successor form thereto and other than pursuant
to Section 2.1), on an underwritten basis (either best-efforts or
firm-commitment at any time after April 15, 1998 but before the third (3rd)
anniversary of the date hereof), then, the Company will each such time give
thirty (30) days written notice to the Sellers' Representative of its intention
to do so. Upon the written request of the Sellers' Representative made within
twenty (20) days after the receipt of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by any such
Holder, the Company will, subject to the terms of this Agreement, effect the
registration under the Securities Act of up to that number of Registrable
Securities equal to that number of Note Conversion Shares acquirable upon
conversion of up to 75% of the original principal amount of the Notes which the
Company has been so requested to register by the Sellers' Representative, to the
extent requisite to permit the disposition of such Registrable Securities so to
be registered, by inclusion of such Registrable Securities in the registration
statement which covers the securities which the Company proposes to register,
provided that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason either not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration under this Section 2.2 (but not
from its obligation to pay the Registration Expenses in connection therewith),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities, for the same period as the
delay in registering such other securities. No registration effected under this
Section 2.2 shall relieve the Company of its obligation to effect the
registration under Section 2.1, nor shall any such registration hereunder be
deemed to have been effected pursuant to Section 2.1. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2. The right provided the
Holders of the Registrable Securities pursuant to this Section shall be
exercisable at their sole discretion and will in no way limit any of the
Company's obligations to pay the Securities according to their terms.
(b) Priority in Incidental Registrations. If the managing underwriter of
the underwritten offering contemplated by this Section 2.2 shall inform the
Company and holders of the Registrable Securities requesting such registration
by letter of its belief that the number of Registrable Securities requested to
be included in such registration exceeds the number which can be sold in such
offering, then the Company will include in such registration, to the extent of
the number which the Company is so advised can be sold in such offering, (i)
first securities proposed by the Company to be sold for its own account, and
(ii) second Registrable Securities
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and securities of other selling security holders requested to be included in
such registration pro rata on the basis of the number of shares of such
securities so proposed to be sold and so requested to be included; provided,
however, the holders of Registrable Securities shall have priority to all shares
sought to be included by officers and directors of the Company as well as
holders of ten percent (10%) or more of the Company's Common Stock; and provided
further that in the event the managing underwriter determines that the Company
register securities solely for its own account, and not for the account of any
selling shareholders, the Registrable Securities will not be included in such
registration statement.
(c) Holdback Agreements. Subject to such other reasonable requirements as
may be imposed by the underwriter as a condition of inclusion of Registrable
Securities in the registration statement, each Fund agrees by acquisition of
Registrable Securities, if so required by the managing underwriter, not to sell,
make any short sale of, loan, grant any option for the purchase of, effect any
public sale or distribution of or otherwise dispose of, except as part of such
underwritten registration, any equity securities of the Company, during such
reasonable period of time requested by the underwriter; provided however, such
period shall not exceed a period commencing 10 days prior to the commencement of
such underwritten offering and ending 180 days following the completion of such
underwritten offering.
2.3 Registration Procedures. If and whenever the Company is required to
effect the registration of any Registrable Securities under the Securities Act
as provided in Section 2.1 and, as applicable, 2.2, the Company shall, as
expeditiously as possible:
(i) prepare and file with the Commission the Registration Statement to
effect such registration (including such audited financial statements as
may be required by the Securities Act or the rules and regulations
promulgated thereunder); provided nothing contained herein shall require
the Company to undergo an audit except in the ordinary course of business
and as otherwise required to effect the registration of the Registrable
Securities and thereafter use its best efforts to cause such registration
statement to be declared effective by the Commission, as soon as
practicable, but in any event no later than the Required Effectiveness Date
in Section 2.4; provided, however, that at least two (2) Business Days
before filing such Registration Statement or any amendments thereto, the
Company will furnish to the counsel selected by the holders of Registrable
Securities which are to be included in such registration, copies of all
such documents proposed to be filed;
(ii) with respect to any Registration Statement pursuant to Section
2.1(a), prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by
such registration statement until the earlier to occur of five (5) years
after the date of this Agreement or such time as all of the securities
which are the subject of such registration statement cease to be
Registrable Securities (such period, in each case, the
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"Registration Maintenance Period"); provided, however, that if the Common
Stock Purchase Warrants have been exercised, the Registration Maintenance
Period shall be reduced to two (2) years;
(iii) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and
any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities
Act, and such other documents, as such seller may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller;
(iv) use its reasonable efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities laws or blue sky laws as any seller thereof
shall reasonably request, to keep such registrations or qualifications in
effect for so long as such registration statement remains in effect, and
take any other action which may be reasonably necessary to enable such
seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;
(v) [Intentionally Left Blank]
(vi) [Intentionally Left Blank]
(vii) notify the Sellers' Representative and its counsel promptly and
confirm such advice in writing promptly after the Company has knowledge
thereof:
(v) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when
the same has become effective;
(w) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information;
(x) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings by any Person for that purpose; and
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(y) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
(viii) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, and at the
reasonable request of any such seller promptly prepare and furnish to such
seller a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(ix) use its reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment;
(x) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(xi) use its reasonable efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which
any of the Registrable Securities are then listed.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
The Company will not file any registration statement or amendment thereto
or any prospectus or any supplement thereto (including such documents
incorporated by reference and proposed to be filed after the initial filing of
the registration statement) to which the Sellers' Representative shall
reasonably object, provided that the Company may file such document in a form
required by law or upon the advice of its counsel.
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The Company represents and warrants to each holder of Registrable
Securities that it has obtained all necessary waivers, consents and
authorizations necessary to execute this Agreement and consummate the
transactions contemplated hereby other than such waivers, consents and/or
authorizations specifically contemplated by the Note Purchase Agreement.
Each Fund agrees that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in subdivision (viii) of this
Section 2.3, such Fund will forthwith discontinue such Fund's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such Fund's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Fund's possession of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
If any such registration statement refers to any Holder of Registrable
Securities by name or otherwise as the holder of any securities of the Company,
then such holder shall have the right to require (a) the insertion therein of
language, in form and substance reasonably satisfactory to such holder, to the
effect that the holding by such holder of such securities is not to be construed
as a recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such holder
will assist in meeting any future financial requirements of the Company, or (b)
in the event that such reference to such holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force, the
deletion of the reference to such holder.
2.4 Underwritten Offerings. [Intentionally Omitted]
2.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
2.6 Registration Default Fee. If the Registration Statement contemplated in
Section 2.1 is (x) not declared effective by the Required Effectiveness Date or
(y) such effectiveness is not maintained for the Registration Maintenance
Period, then the Company shall pay to the Funds the Default Fee specified in
Section 10.1 of the Note Purchase Agreement.
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2.7 Indemnification.
(a) Indemnification by the Company. In the event of any registration of any
Registrable Securities under the Securities Act, the Company will, and hereby
does agree to, indemnify and hold harmless the holder of any Registrable
Securities covered by such registration statement, its directors and officers,
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls such holder or any
such underwriter within the meaning of the Securities Act against any losses,
claims, damages or liabilities, joint or several, to which such holder or any
such director or officer or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such holder and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
holder or underwriter stating that it is for use in the preparation thereof and,
provided further that the Company shall not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable Securities
or to any other Person, if any, who controls such underwriter within the meaning
of the Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, within the time required by the
Securities Act to the Person asserting the existence of an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such Person if
such statement or omission was corrected in such final prospectus or an
amendment or supplement thereto. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such holder or
any such director, officer, underwriter or controlling person and shall survive
the transfer of such securities by such holder.
(b) Indemnification by the Sellers. The Company may require, as a condition
to including any Registrable Securities in any registration statement filed
pursuant to this Agreement, that the Company shall have received an agreement
satisfactory to it from the prospective seller of such Registrable Securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 2.7) the Company,
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each director of the Company, each officer of the Company and each other Person,
if any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Any such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of such securities
by such seller.
(c) Notices of Claims. etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 2.7, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 2.7, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability, or a covenant not to xxx, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that specified in the
preceding subdivisions of this Section 2.7 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities (but
only if and to the extent required pursuant to the terms of 2.7(b)) with respect
to any required registration or other qualification of securities under any
Federal or state law or regulation of any governmental authority, other than the
Securities Act.
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(e) Indemnification Payments. The indemnification required by this Section
2.7 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
(f) Contribution. If the indemnification provided for in the preceding
subdivisions of this Section 2.7 is unavailable to an indemnified party in
respect of any expense, loss, claim, damage or liability referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such expense, loss, claim, damage or liability (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the holder or underwriter, as the case may be, on the other
from the distribution of the Registrable Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the holder or underwriter, as the case may be, on the other in
connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the holder or underwriter, as the case may be, on the other in connection
with the distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company to the purchasers
pursuant to the Note Purchase Agreement and the Warrants bear to the gain, if
any, realized by all selling holders participating in such offering or the
underwriting discounts and commissions received by the underwriter, as the case
may be. The relative fault of the Company on the one hand and of the holder or
underwriter, as the case may be, on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission to state a material fact relates to information
supplied by the Company, by the holder or by the underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission, provided that the foregoing contribution
agreement shall not inure to the benefit of any indemnified party if
indemnification would be unavailable to such indemnified party by reason of the
provisions contained in the first sentence of subdivision (a) of this Section
2.7, and in no event shall the obligation of any indemnifying party to
contribute under this subdivision (f) exceed the amount that such indemnifying
party would have been obligated to pay by way of indemnification if the
indemnification provided for under subdivisions (b) of this Section 2.7 had been
available under the circumstances.
The Company and the holders of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this subdivision (f) were
determined by pro rata allocation (even if the holders and any underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in the preceding
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sentence and subdivision (c) of this Section 2.7, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.
Notwithstanding the provisions of this subdivision (f), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
3. Definitions. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
"Commission": The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
"Common Stock": As defined in Section 1.
"Company": As defined in the introductory paragraph of this Agreement.
"Conversion Shares": As defined in Section 1.
"Exchange Act": The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder.
"Notes": As defined in Section 1, such term to include any securities
issued in substitution of or in addition to such Notes.
"Note Purchase Agreement": As defined in Section 1.
"Person": A corporation, association, partnership, organization, business,
individual, governmental or political subdivision thereof or a governmental
agency.
"Preferred Stock": As defined in Section 1, such term to include any
securities issued in substitution of or in addition to such Preferred Stock.
"Registrable Securities": The Securities and any securities issued or
issuable with respect to such Securities by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. Once issued, any such
securities shall cease to be Registrable Securities upon the
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(Take-Two Interactive Software, Inc.)
earlier of (a) the sale of such securities pursuant to an effective registration
statement under the Securities Act, (b) the distribution thereof to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act, (c)
a transfer pursuant to which new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, (d)
they shall have ceased to be outstanding, (e) upon completion of the applicable
Registration Maintenance Period, or (f) any and all legends restricting transfer
thereof have been removed in accordance with the provisions of Rule 144(k) (or
any successor provision) under the Securities Act; and provided that the Note
Conversion Shares shall cease to become Registrable Securities upon repayment in
full of the Notes.
"Registration Expenses": All expenses incident to the Company's performance
of or its compliance with this Agreement, including, without limitation, all
registration, filing and NASD fees, all stock exchange and SmallCap Market
listing fees, all fees and expenses of complying with securities or blue sky
laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes paid or payable by the
holders of Registrable Securities.
"Registration Maintenance Period": As defined in Section 2.3.
"Required Effectiveness Date": As defined in Section 2.1.
"Securities Act": The Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.
"Sellers' Representative": HW Partners L.P., as long as one or more of the
Funds shall be a Holder or such Person designated by HW Partners L.P. (or
subsequent Sellers' Representative) at the time of disposition of the last of
the Notes held by one or more of the Funds (or subsequent Sellers'
Representative).
4. Rule 144. The Company shall timely file the reports required to be filed
by it under the Securities Act and the Exchange Act (including but not limited
to the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, will, upon the request of any
holder of Registrable Securities, make publicly available other information) and
will take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission.
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REGISTRATION RIGHTS AGREEMENT - Page 12
(Take-Two Interactive Software, Inc.)
5. Amendments and Waivers. This Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act by the Sellers'
Representative. Each holder of Registrable Securities hereby authorizes the
Sellers' Representative to take such action relating to this Agreement and the
Registrable Securities as it shall in its good faith determination deem
appropriate. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 5, whether
or not such Registrable Securities shall have been marked to indicate such
consent.
6. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
7. Notices. Except as otherwise provided in this Agreement, all notices,
requests and other communications to any Person provided for hereunder shall be
in writing and shall be given to such Person (a) in the case of a party hereto
other than the Company, addressed to such party in the manner set forth in the
Note Purchase Agreement or at such other address as such party shall have
furnished to the Company in writing, or (b) in the case of any other holder of
Registrable Securities, at the address that such holder shall have furnished to
the Company in writing, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company, or (c) in
the case of the Company, at the address set forth on the signature page hereto,
to the attention of its President, or at such other address, or to the attention
of such other officer, as the Company shall have furnished to each holder of
Registrable Securities at the time outstanding. Each such notice, request or
other communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including, without
limitation, by fax or air courier), when delivered at the address specified
above, provided that any such notice, request or communication shall not be
effective until received.
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto. In addition, and whether or
not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the parties hereto other than the Company
shall also be for the benefit of and enforceable by any subsequent holder of any
Registrable Securities, subject to the provisions respecting the minimum numbers
or percentages of shares of Registrable Securities required in order to be
entitled to certain rights, or take certain actions. contained herein. Each of
the Holders of the Registrable Securities agrees, by accepting any portion of
the Registrable Securities after the date hereof, to the provisions of
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REGISTRATION RIGHTS AGREEMENT - Page 13
(Take-Two Interactive Software, Inc.)
this Agreement including, without limitation, appointment of the Sellers'
Representative to act on behalf of such Holder pursuant to the terms hereof
which such actions shall be made in the good faith discretion of the Sellers'
Representative and be binding on all persons for all purposes.
9. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS.
11. Counterparts. This Agreement may be executed by facsimile and may be
signed simultaneously in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument.
12. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company and each other party hereto relating to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
13. Severability. If any provision of this Agreement, or the application of
such provisions to any Person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
[Signature Page Follows]
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REGISTRATION RIGHTS AGREEMENT - Page 14
(Take-Two Interactive Software, Inc.)
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
TAKE-TWO INTERACTIVE SOFTWARE,
INC.
By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
------------------------------
Title: CEO
------------------------------
Address: 000 Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone:
Fax: (000)000-0000
Attn: Xxxx X. Xxxxx
With a copy to: HW Partners, L.P.
0000 Xxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx00000
Telephone: (000)000-0000
Fax: (000)000-0000
Attn: Xxxxxxx Xxxxxxx
INFINITY INVESTORS LIMITED
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Director
------------------------------
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XXX 0XX
Telephone: 000-00-000-000-0000
Attn: X. X. Xxxxxxxx
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REGISTRATION RIGHTS AGREEMENT - Page 15
(Take-Two Interactive Software, Inc.)
INFINITY EMERGING OPPORTUNITIES
LIMITED
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Director
------------------------------
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XXX 0XX
Telephone: 000-00-000-000-0000
Attn: X. X. Xxxxxxxx
GLACIER CAPITAL LIMITED
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XXX 0XX
Telephone: 000-00-000-000-0000
Attn: X. X. Xxxxxxxx
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REGISTRATION RIGHTS AGREEMENT - Page 16
(Take-Two Interactive Software, Inc.)
Acknowledged:
HW PARTNERS, L.P., as Sellers' Representative
By: HW Finance, L.L.C., its general partner
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxxx
------------------------------
Title: Vice-President
------------------------------
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REGISTRATION RIGHTS AGREEMENT - Page 17
(Take-Two Interactive Software, Inc.)
