This REGISTRATION RIGHTS AGREEMENT is made and entered into as of
February 23, 1999, by and among GT INTERACTIVE SOFTWARE CORP., a Delaware
corporation (the "Company"), and the persons and entities listed on Schedule 1
attached hereto (the "Securityholders").
WHEREAS, the Company, General Atlantic Partners 16, L.P. ("GAP LP"),
GAP Coinvestment Partners, L.P. ("GAP Coinvestment"), General Atlantic Partners
II, L.P. ("GAP II"), and the stockholders named therein are party to the
Stockholders Agreement, dated February 28, 1995 (the "Stockholders Agreement");
WHEREAS, the Company, General Atlantic Partners 19, L.P. ("GAP 19") and
GAP Coinvestment are party to a Stock Purchase Agreement dated June 30, 1995
pursuant to which the Company granted GAP 19 and GAP Coinvestment certain rights
under the Stockholders Agreement;
WHEREAS, prior to the transactions contemplated by the Purchase
Agreement (as defined below), the Securityholders beneficially own an aggregate
of 7,428,525 shares of common stock of the Company, par value $0.01 per share
("Common Stock").
WHEREAS, pursuant to the terms and conditions of that certain Stock
Purchase Agreement, dated February 8, 1999 (the "Purchase Agreement"), among the
Company, General Atlantic Partners 54, L.P. ("GAP 54") and GAP Coinvestment
Partners II, L.P. ("GAP Coinvestment II"), the Company on the date hereof has,
among other things, issued to GAP 54 and GAP Coinvestment II an aggregate of
600,000 shares of the Series A Convertible Preferred Stock of the Company, par
value $0.01 per share (the "Series A Preferred Stock");
WHEREAS, by their terms each share of Series A Preferred Stock is
convertible into ten shares of Common Stock, subject to adjustment, following
the closing of the Purchase Agreement;
WHEREAS, as of the closing under the Purchase Agreement, each of the
Securityholders owns shares of Common Stock and/or shares of Series A Preferred
Stock in the respective amounts indicated on Schedule 1 attached hereto;
WHEREAS, the Company and the Securityholders deem it to be in their
respective best interests to amend and restate in their entirety the
registration rights provisions of the Stockholders Agreement and to set forth
the rights of the Securityholders in connection with public offerings and sales
of the Registrable Securities (as defined below).
NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations hereinafter set forth, and for other good and valuable
consideration, the sufficiency and adequacy of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Business Day" shall mean any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in New York City are
authorized by law, regulation or executive order to close.
"Common Stock" shall mean the common stock, par value $0.01 per share,
of the Company.
"Delay Notice" shall have the meaning set forth in Section 6(b) hereof.
"Demand Participation Notice" shall have the meaning set forth in
Section 3(a) hereof.
"Demand Registration" shall have the meaning set forth in Section 3(a)
hereof.
"Demand Registration Notice" shall have the meaning set forth in
Section 3(a) hereof.
"Holder" shall mean the Securityholders and any of their transferees
that owns Registrable Securities. For purposes of this Agreement, the Company
may deem the registered holder of a Registrable Security as the Holder thereof.
"Material Development Condition" shall have the meaning set forth in
Section 6(b) hereof.
"Other Registration Statement" shall have the definition set forth in
Section 5(b) hereof.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by a prospectus supplement with respect to
the terms of the offering of any portion of the Registrable Securities covered
by such Registration Statement and by all other amendments and supplements to
the prospectus, including post-effective amendments and all materials
incorporated by reference in such prospectus.
"Purchase Agreement" shall mean that certain Stock Purchase Agreement,
dated February 8, 1999, by and among the Company, GAP 54 and GAP Coinvestment
II.
"Registrable Securities" shall mean (i) the shares of Common Stock
owned by the Securityholders on the date hereof or acquired by any
Securityholders after the date hereof, (ii) any shares of Common Stock issuable
upon conversion of the Series A Preferred
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Stock, and (iii) any other securities issued or issuable as a result of or in
connection with any stock dividend, stock split or reverse stock split,
combination, recapitalization, reclassification, merger or consolidation,
exchange or distribution in respect of such Common Stock.
"Registration Expenses" shall have the definition set forth in Section
7 hereof.
"Registration Period" shall have the definition set forth in Section
3(b) hereof.
"Registration Statement" shall mean any registration statement which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus included therein, all amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits and all materials incorporated by reference in such registration
statement.
"Requesting Securityholder" shall have the meaning set forth in Section
4 hereof.
"Restricted Securities" shall have the meaning set forth in Section 2
hereof.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.
"Rule 415" shall mean Rule 415 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.
"Rule 903" shall mean Rule 903 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.
"Rule 904" shall mean Rule 904 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.
"SEC" shall mean the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended (or
any similar successor federal statute), and the rules and regulations
thereunder, as the same are in effect from time to time.
"Series A Preferred Stock" shall mean the Series A Convertible
Preferred Stock, par value $0.01 per share, of the Company.
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"Underwritten Offering" shall mean a registered offering in which
securities of the Company are sold to an underwriter for reoffering to the
public.
Section 2. Securities Subject to this Agreement. The securities
entitled to the benefits of this Agreement are the Registrable Securities but,
with respect to any particular Registrable Security, only so long as such
security continues to be a Restricted Security. A Registrable Security that has
ceased to be a Registrable Security cannot thereafter become a Registrable
Security. As used herein, a "Restricted Security" is a Registrable Security
which has not been effectively registered under the Securities Act and
distributed in accordance with an effective Registration Statement and which has
not been sold by a Holder pursuant to Rule 144 (except pursuant to a transfer to
any affiliate of such Holder), Rule 903 or Rule 904, unless, in the case of a
Registrable Security distributed pursuant to Rule 903 or 904, any applicable
restricted period has not expired or the SEC or its staff has taken the position
in a published release, ruling or no-action letter that securities distributed
under Rule 903 or 904 are ineligible for resale in the United States under
Section 4(1) of the Securities Act notwithstanding expiration of the applicable
restricted period.
Section 3. Demand Registration.
(a) Demand. At any time during the term of this Agreement, a Holder or
Holders may request the Company, in writing (a "Demand Registration Notice"), to
effect the registration of all or such portion of the Registrable Securities as
such Holder or Holders shall specify; provided, that only two demands may be
made pursuant to this Section 3(a). Upon receipt of any such Demand Registration
Notice, the Company shall promptly give written notice of such proposed
registration to all other Holders. Such Holders shall have the right, by giving
written notice (the "Demand Participation Notice") to the Company within fifteen
(15) days after the Company provides its notice, to elect to have included in
such registration such number of their Registrable Securities as such Holders
may request in such Demand Participation Notice. A Holder or Holders may, at any
time up to five (5) Business Days before the filing date of the applicable
Registration Statement relating to the Demand Registration, request that his or
her Registrable Securities not be included therein by providing a written notice
to that effect to the Company.
Upon receipt of a Demand Registration Notice, the Company shall use its
commercially reasonable efforts to file, as expeditiously as possible, but in
any event no later than forty-five (45) days after such Demand Registration
Notice, a Registration Statement on Form S-3 (or any successor form), or any
other form available to the Company under the Securities Act, covering all
Registrable Securities which the Company has been so requested to register (the
"Demand Registration").
(b) Effectiveness of Registration Statement. Subject to the provisions
of Sections 6(b) and (c) hereof, the Company agrees to use its commercially
reasonable efforts to (i) cause the Registration Statement(s) relating to the
Demand Registration described in Section 3(a) to become effective as promptly as
practicable, and (ii) thereafter keep each such Registration Statement effective
continuously for the period (the "Registration Period") ending, subject to the
second sentence of Section 5(b) hereof and clauses (3) and (4) of the
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last sentence of Section 6(b) hereof, on the earlier of (A) the first
anniversary of the Effective Time, and (B) the date on which all Registrable
Securities covered by each such Registration Statement have been sold and the
distribution contemplated thereby has been completed.
(c) Inclusion of Other Securities. Any other holder of the Company's
securities who has registration rights may include its securities in the Demand
Registration effected pursuant to this Section 3.
Section 4. Piggyback Registration. If, during the term of this
Agreement, the Company at any time proposes to file a registration statement
with respect to any class of equity securities, whether (i) for its own account
(other than in connection with the Registration Statement contemplated by
Section 3 or a registration statement on Form S-4 or S-8 (or any successor or
substantially similar form), and other than in connection with (A) an employee
stock option, stock purchase or compensation plan or of securities issued or
issuable pursuant to any such plan, or (B) a dividend reinvestment plan) or (ii)
for the account of a holder of securities of the Company pursuant to demand
registration rights granted by the Company (a "Requesting Securityholder"),
other than for the registration of securities for sale on a continuous or
delayed basis pursuant to Rule 415, then the Company shall in each case give
written notice of such proposed filing to all Holders of Registrable Securities
at least fifteen (15) days before the anticipated filing date of any such
registration statement by the Company, and such notice shall offer to all
Holders the opportunity to have any or all of the Registrable Securities held by
such Holders included in such registration statement. Each Holder of Registrable
Securities desiring to have its Registrable Securities registered under this
Section 4 shall so advise the Company in writing within ten (10) days after the
date of receipt of such notice (which request shall set forth the amount of
Registrable Securities for which registration is requested), and the Company
shall use its commercially reasonable efforts to include in such registration
statement all such Registrable Securities so requested to be included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters of
any such proposed public offering advises the Company that the total amount of
securities which the Holders of Registrable Securities, the Company and any
other Persons intended to be included in such proposed public offering is
sufficiently large to adversely affect the success of such proposed public
offering, then the amount of securities to be offered for the accounts of
Holders of Registrable Securities shall be reduced pro rata, based upon the
aggregate number of securities to be offered for the accounts of all of the
Holders of Registrable Securities and all other holders (except the Company and
the Requesting Securityholder) of securities intended to be included in such
offering and the number of securities to be offered for the account of each such
Holder, to the extent necessary to reduce the total amount of securities to be
included in such proposed public offering to the amount recommended by such
managing underwriter or underwriters before the securities offered by the
Company or any Requesting Securityholder are so reduced. Anything to the
contrary in this Agreement notwithstanding, the Company may withdraw or postpone
a registration statement referred to in this Section 4 at any time before it
becomes effective or withdraw, postpone or terminate the offering after it
becomes effective without obligation to the Holder or Holders of the Registrable
Securities; provided that the Company's obligations pursuant to Section
5(a)(ii), 7 and 8 shall remain effective.
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Section 5. Registration Procedures.
(a) General. In connection with the Company's registration obligations
pursuant to Section 3 and, to the extent applicable, Section 4 hereof, the
Company will:
(i) prepare and file with the SEC a new Registration Statement
or such amendments and post-effective amendments to an existing
Registration Statement as may be necessary to keep such Registration
Statement effective for the time periods set forth in Section 3(b),
provided that no Registration Statement shall be required to remain in
effect after all Registrable Securities covered by such Registration
Statement have been sold and distributed as contemplated by such
Registration Statement, and, provided, further, that as soon as
practicable, but in no event later than five (5) Business Days before
filing such Registration Statement, any related Prospectus or any
amendment or supplement thereto, other than any amendment or supplement
made solely as a result of incorporation by reference of documents
filed with the SEC subsequent to the filing of such Registration
Statement, the Company shall furnish to the Holders of the Registrable
Securities covered by such Registration Statement and the underwriters,
if any, copies of all such documents proposed to be filed, which
documents shall be subject to the review of such Holders and
underwriters;
(ii) notify the selling Holders of Registrable Securities and
the managing underwriters, if any, promptly (1) when a new Registration
Statement, Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to any new Registration
Statement or post-effective amendment, when it has become effective,
(2) of any request by the SEC for amendments or supplements to any
Registration Statement or Prospectus or for additional information, (3)
of the issuance by the SEC of any comments with respect to any filing,
(4) of any stop order suspending the effectiveness of any Registration
Statement or the initiation of any proceedings for that purpose, (5) of
any suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (6) if there is a misstatement or
omission of a material fact in any Registration Statement, Prospectus
or any document incorporated therein by reference or if any event
occurs which requires the making of any changes in any Registration
Statement, Prospectus or any document incorporated therein by reference
in order to make the statements therein (in the case of any Prospectus,
in the light of the circumstances under which they were made) not
misleading;
(iii) if reasonably requested by the managing underwriter or
underwriters or a Holder of Registrable Securities being sold in
connection with an Underwritten Offering, promptly incorporate in a
Prospectus supplement or post-effective amendment such information as
the managing underwriters and the Holders of a majority of the
Registrable Securities being sold in such Underwritten Offering agree
should be included therein relating to the sale of the Registrable
Securities, including, without limitation, information with respect to
the aggregate number of shares of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the
6
Underwritten Offering of the Registrable Securities to be sold in such
offering; and promptly make all required filings of such Prospectus
supplement or post-effective amendment;
(iv) furnish to each selling Holder of Registrable Securities
and each managing underwriter, if any, without charge, as many
conformed copies as may reasonably be requested of the then effective
Registration Statement and any post-effective amendments thereto,
including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(v) deliver to each selling Holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the
then effective Prospectus (including each prospectus subject to
completion) and any amendments or supplements thereto as such Persons
may reasonably request;
(vi) use commercially reasonable efforts to register or
qualify or cooperate with the selling Holders of Registrable
Securities, the underwriters, if any, and their respective counsel in
connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "blue sky" laws
of such jurisdictions as any selling Holder of Registrable Securities
or underwriter reasonably requests in writing; provided, however, that
the Company will not be required to (1) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify, but
for this paragraph (vi), (2) subject itself to general taxation in any
such jurisdiction or (3) file a general consent to service of process
in any such jurisdiction;
(vii) cooperate with the selling Holders of Registrable
Securities and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters
may request at least two (2) Business Days prior to any sale of
Registrable Securities to the underwriters;
(viii) cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange (or
quotation system operated by a national securities association) on
which identical securities issued by the Company are then listed if
requested by the Holders of a majority of the Registrable Securities
covered by such Registration Statement or the managing underwriters, if
any, and enter into customary agreements including, if necessary, a
listing application and indemnification agreement in customary form,
and provide a transfer agent for such Registrable Securities no later
than the effective date of such Registration Statement;
(ix) otherwise use its commercially reasonable efforts to
comply in all material respects with all applicable rules and
regulations of the SEC relating to such registration and the
distribution of the securities being offered and make
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generally available to its securities holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act;
(x) cooperate and assist in any filings required to be made
with the National Association of Securities Dealers, Inc.; and
(xi) subject to the proviso in paragraph (vi) above, cause the
Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriters, if any, to consummate the disposition of such
Registrable Securities (other than as may be required by the
governmental agencies or authorities of any foreign jurisdiction and
other than as may be required by a law applicable to a selling Holder
by reason of its own activities or business other than the sale of
Registrable Securities).
As a condition precedent to the participation in any registration
hereunder, the Company may require each seller of Registrable Securities as to
which any such registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request to comply with the applicable
provisions of the Securities Act.
(b) Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(a)(ii)(4), (5) or (6)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the then current Prospectus until (1) such Holder is
advised in writing by the Company that a new Registration Statement covering the
offer of Registrable Securities has become effective under the Securities Act or
(2) such Holder receives copies of any required supplemented or amended
Prospectus, or until such Holder is advised in writing by the Company that the
use of the Prospectus may be resumed; provided, however, that such Holder shall
not be required to discontinue disposition of Registrable Securities pursuant to
this Section 5(b) if any other registration statement of the Company is then in
effect under the Securities Act (the "Other Registration Statement") and the
Company has a contractual right to cause selling stockholders to discontinue
disposition of securities pursuant thereto and fails to do so, unless the
Company gives such notice pursuant to clause (6) of Section 5(a)(ii) hereof as a
result of a misstatement, omission or event that is applicable to the
Registration Statement and is not applicable to the Other Registration
Statement. If the Company shall have given any such notice during a period when
a Demand Registration is in effect, the Company shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement by the number of days during which any such disposition of Registrable
Securities is discontinued pursuant to this Section 5(b). If so directed by the
Company, on the happening of such event, the Holder will deliver to the Company
(at the Company's expense) all copies, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
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Section 6. Holdback Agreements.
(a) Hold-Back Election. In the case of the registration of any
underwritten primary offering initiated by the Company (other than any
registration by the Company on Form S-4 or Form S-8 (or any successor or
substantially similar form), and other than in connection with (A) an employee
stock option, stock purchase or compensation plan or of securities issued or
issuable pursuant to any such plan, or (B) a dividend reinvestment plan) or any
underwritten secondary offering initiated at the request of a holder of
securities of the Company pursuant to registration rights granted by the
Company, each Holder agrees that if he or it is (x) then a 5% or greater
stockholder, a director or an officer of the Company and (y) reasonably
requested to do so by the managing underwriter or the underwriters, then such
Holder shall not effect any public sale or distribution of securities of the
Company, except as part of such underwritten registration, during the period
beginning twenty-five (25) days prior to the closing date of such underwritten
offering and ending ninety (90) days after such closing date (or such longer
period as may be reasonably requested by the managing underwriter or
underwriters).
(b) Material Development Condition. With respect to any Registration
Statement filed or to be filed pursuant to Section 3, if the Company determines
that, in its good faith judgment, (i) it would (because of the existence of, or
in reasonable anticipation of, any acquisition or corporate reorganization or
other transaction, financing activity, stock repurchase or other development
involving the Company or any subsidiary, or the unavailability for reasons
substantially beyond the Company's control of any required financial statements,
or any other event or condition of similar significance to the Company or any
subsidiary for purposes of disclosure to the stockholders or potential investors
of the Company) be materially disadvantageous (a "Material Development
Condition") to the Company or any subsidiary or its stockholders for such a
Material Development Condition to be publicly disclosed, and (ii) the Company
reasonably believes it would be required under the Securities Act to disclose
such Material Development Condition in such Registration Statement, then the
Company shall, notwithstanding any other provisions of this Agreement, be
entitled, upon the giving of a written notice that a Material Development
Condition has occurred (a "Delay Notice") from an officer of the Company to any
Holder of Registrable Securities included or to be included in such Registration
Statement, (i) to cause sales of Registrable Securities by such Holder pursuant
to such Registration Statement to cease, (ii) to cause such Registration
Statement to be withdrawn and the effectiveness of such Registration Statement
terminated, or (iii) in the event no such Registration Statement has yet been
filed or declared effective, to delay filing or effectiveness of any such
Registration Statement until, in the good faith judgment of the Company, such
Material Development Condition shall be disclosed or no longer exists (notice of
which the Company shall promptly deliver to any Holder of Registrable Securities
with respect to which any such Registration Statement has been filed).
Notwithstanding the foregoing provisions of this Section 6(b): (1) the Company
shall not be entitled to cause sales of Registrable Securities to cease or to
delay any registration of Registrable Securities required pursuant to Section 3
by reason of any existing or anticipated Material Development Condition if at
the time any Other Registration Statement of the Company is then in effect and
the Company has a contractual right to cause selling stockholders to cease sales
pursuant thereto or to withdraw the effectiveness of the
9
Other Registration Statement and fails to do so, unless either such right arises
out of a misstatement, omission or event that is applicable only to the
Registration Statement and not to the Other Registration Statement; (2) in no
event may such cessation or delay (i) be, for each such Registration Statement,
for a period of more than ninety (90) consecutive days from the giving of its
Delay Notice to a Holder or Holders with respect to such Material Development
Condition, as above provided, or (ii) for each such Registration Statement,
exceed in the aggregate one hundred fifty (150) days in any consecutive three
hundred sixty-five (365) day period; (3) in the event a Registration Statement
is filed and subsequently withdrawn by reason of any existing or anticipated
Material Development Condition as hereinbefore provided, the Company shall cause
a new Registration Statement covering the Registrable Securities to be filed
with the SEC as soon as practicable after such Material Development Condition
expires or, if sooner, as soon as practicable after the expiration of the
earlier of such ninety (90) day or one hundred fifty (150) day period, and the
Registration Period for such new Registration Statement shall be the greater of
thirty (30) days or the number of days that remained in such Registration Period
with respect to the withdrawn Registration Statement at the time it was
withdrawn; and (4) in the event the Company elects not to withdraw or terminate
the effectiveness of any such Registration Statement but to cause a Holder or
Holders to refrain from selling Registrable Securities for any period during the
Registration Period, the Registration Period with respect to such Holders shall
be extended by the number of days during the Registration Period that such
Holders are required to refrain from selling Registrable Securities.
(c) Limitation on Demand and Piggyback Registration Rights. Anything to
the contrary contained in this Agreement notwithstanding, when (i) in the
opinion of counsel for the Company (which counsel shall be experienced in
securities law matters), registration of the Registrable Securities is not
required by the Securities Act and other applicable securities laws in
connection with a proposed sale of such Registrable Securities and (ii) the
amount of Registrable Securities held by such Holders does not exceed one
percent of the outstanding shares of Common Stock, on a fully diluted basis, the
Holders shall have no rights pursuant to Sections 3 and 4 hereof to request a
Demand Registration or a piggyback registration in connection with such proposed
sale and the Company shall promptly provide to the transfer agent and the
Holders' broker in connection with any sale transaction an opinion to the effect
set forth above, reasonably sufficient in form and substance to permit the
transfer agent to issue stock certificates for such Registrable Securities
without any legend restricting transfer thereof.
Section 7. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance
with securities or "blue sky" laws (including reasonable fees and disbursements
of counsel in connection with "blue sky" qualifications or registrations (or the
obtaining of exemptions therefrom) of the Registrable Securities), printing
expenses (including expenses of printing Prospectuses), messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
fees and disbursements of its counsel and its independent certified public
accountants, securities acts liability insurance (if the Company elects to
obtain such insurance), fees and expenses of any special
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experts retained by the Company in connection with any registration hereunder
and fees and expenses of other Persons retained by the Company (all such
expenses being referred to as "Registration Expenses"), shall be borne by the
Company; provided, that Registration Expenses shall not include any fees and
expenses of counsel for the Holders, out-of-pocket expenses incurred by the
Holders and underwriting discounts, commissions or fees attributable to the sale
of the Registrable Securities.
Section 8. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, but without duplication,
each Holder of Registrable Securities, and each Person who controls such Holder
(within the meaning of the Securities Act), against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
reasonable legal fees and expenses) resulting from any untrue statement of a
material fact in, or any omission of a material fact required to be stated in,
any Registration Statement or Prospectus or necessary to make the statements
therein (in the case of a Prospectus in light of the circumstances under which
they were made) not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to the Company by any Holder
or any underwriters expressly for use therein. The Company will also indemnify
underwriters participating in the distribution, their officers, directors,
employees, partners and agents, and each Person who controls such underwriters
(within the meaning of the Securities Act), to the same extent as provided above
with respect to the indemnification of the Holders of Registrable Securities, if
so requested.
(b) Indemnification by Holders of Registrable Securities. In connection
with any Registration Statement in which a Holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing such
information and affidavits relating to such Holder as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and agrees to indemnify and hold harmless, to the full extent
permitted by law, but without duplication, the Company, its officers, directors,
stockholders, employees, advisors and agents, and each Person who controls the
Company (within the meaning of the Securities Act), against all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation
and reasonable legal fees and expenses) resulting from any untrue statement of
material fact in, or any omission of a material fact required to be stated in,
the Registration Statement or Prospectus or necessary to make the statements
therein (in the case of a Prospectus in light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information or affidavit
relating to such Holder so furnished in writing by such Holder to the Company
specifically for inclusion therein. The Company and the other Persons described
above shall be entitled to receive indemnities from underwriters participating
in the distribution, to the same extent as provided above with respect to
information so furnished in writing by such Persons specifically for inclusion
in any Prospectus or Registration Statement. In no event shall any participating
Holder have an obligation to indemnify any Person pursuant to this Section 8(b)
for any amount in excess of the net proceeds received by such Holder from the
Registrable Securities offered and sold by such Holder pursuant to such
Registration Statement.
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(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel of such
indemnifying party's choice and reasonably satisfactory to the indemnified
party; provided, however, that the failure to notify the indemnifying party
shall not relieve the indemnifying party of any liability that it may have to
the indemnified party hereunder, except to the extent that the indemnifying
party forfeits substantive rights or defenses by reason of such failure;
provided, further, that any Person entitled to indemnification hereunder shall
have the right to employ separate counsel and to participate in (but not
control) the defense of such claim, but the fees and expenses of such counsel
shall be at the expense of such indemnified Person unless (A) the indemnifying
party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to the indemnified party in a timely manner or (B) in
the reasonable judgment of any such Person, based upon a written opinion of its
counsel, a conflict of interest may exist between such Person and the
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person). The indemnifying party will not be subject to any liability for
any settlement made without its consent. No indemnified party will be required
to consent to entry of any judgment or enter into any settlement 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 in respect of such
claim or litigation. An indemnifying party who is not entitled to, or elects not
to, assume the defense of the claim will not be obligated to pay the fees and
expenses of more than one counsel (except one (1) local counsel if required in a
specific instance) for all parties indemnified by such indemnifying party with
respect to such claim.
(d) Contribution. If for any reason the indemnification provided for in
Section 8(a) or Section 8(b) is unavailable to an indemnified party or
insufficient to hold it harmless as contemplated by Section 8(a) and Section
8(b), then the indemnifying party shall contribute to the amount paid or payable
by the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect not only the relative benefits
received by the indemnifying party and the indemnified party, but also the
relative fault of the indemnifying party and the indemnified party, as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement or the omission or alleged omission relates to information
supplied by the indemnifying party or parties on the one hand, or the
indemnified party or parties on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such 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 misrepresentations. In no event shall any participating Holder be
required to contribute any amount in excess of the net proceeds received by such
Holder from the Registrable Securities offered and sold by such Holder pursuant
to such Registration Statement.
12
Section 9. Participation in Underwritten Registrations. No Person may
participate in any Underwritten Offering hereunder unless such Person (i) agrees
to sell such Person's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements. Nothing in this Section 9
shall be construed to create any additional rights regarding the registration of
Registrable Securities in any Person otherwise than as set forth herein.
Section 10. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this Section 10, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of a majority of the Registrable Securities then outstanding. Whenever the
consent or approval of Holders of a specified number of Registrable Securities
is required hereunder, Registrable Securities held by the Company or any of its
controlled affiliates (other than Holders of Registrable Securities if such
subsequent Holders are deemed to be affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
number.
Section 11. Term of Agreement. This Agreement may be terminated at any
time by a written instrument signed by Holders of all of the Registrable
Securities then outstanding. Unless sooner terminated in accordance with the
preceding sentence, this Agreement shall terminate in its entirety on such date
as there shall be no Registrable Securities outstanding; provided that any
shares of Common Stock previously subject to this Agreement shall not be
Registrable Securities following the sale of such shares in an offering
registered pursuant to this Agreement.
Section 12. Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or air-courier guaranteeing overnight delivery:
(a) If to a Holder of Registrable Securities, at the most
current address given by such Holder to the Company, in accordance with
the provisions of this Section 12, which address initially is, with
respect to each Holder, listed on Schedule 1 attached hereto, with a
copy to Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention: Xxxxxxx Xxxxxx,
Esq.
(b) If to the Company, initially at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention: Director of Legal Services; telecopier
no. (212) 679- 6850; confirm no. (000) 000-0000, and thereafter at such
other address as may be designated from time to time by notice given in
accordance with the provisions of this Section 12, with a copy to
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention: Xxxxx X. Xxxxx, Esq.
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(c) All such notices and other communications shall be deemed
to have been delivered and received (i) in the case of personal
delivery, telecopier or telegram, on the date of such delivery, (ii) in
the case of air courier, on the Business Day after the date when sent
and (iii) in the case of mailing, on the third Business Day following
such mailing.
Section 13. Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 14. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF THE CONFLICT OF LAWS THEREOF.
Section 16. Jurisdiction; Forum. Each party hereto consents and submits
to the jurisdiction of any state court sitting in the County of New York or
federal court sitting in the Southern District of the State of New York in
connection with any dispute arising out of or relating to this Agreement. Each
party hereto waives any objection to the laying of venue in such courts and any
claim that any such action has been brought in an inconvenient forum. To the
extent permitted by law, any judgment in respect of a dispute arising out of or
relating to this Agreement may be enforced in any other jurisdiction within or
outside the United States by suit on the judgment, a certified copy of such
judgment being conclusive evidence of the fact and amount of such judgment. Each
party hereto agrees that personal service of process may be effected by any of
the means specified in Section 12 hereof, addressed to such party. The foregoing
shall not limit the rights of any party to serve process in any other manner
permitted by law.
Section 17. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
Section 18. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, including without limitation and without the need for an express
assignment to, any subsequent Holder of the Registrable Securities.
14
Section 19. Entire Agreement. (a) This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(b) This Agreement supersedes the registration rights provisions of
Section 9 of the Stockholders Agreement. By executing this Agreement, the
Securityholders agree that the Stockholders Agreement is null and void and they
no longer have any rights, obligations or remedies thereunder.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
GT INTERACTIVE SOFTWARE CORP.
By:__________________________
Name:
Title:
GENERAL ATLANTIC PARTNERS 16, L.P.
By: General Atlantic Partners, LLC, its
General Partner
By:__________________________
Name:
Title:
GENERAL ATLANTIC PARTNERS II, L.P.
By: General Atlantic Partners, LLC, its
General Partner
By:__________________________
Name:
Title:
GENERAL ATLANTIC PARTNERS 54, L.P.
By: General Atlantic Partners, LLC, its
General Partner
By:__________________________
Name:
Title:
16
GENERAL ATLANTIC PARTNERS 19, L.P.
By: General Atlantic Partners, LLC, its
General Partner
By:__________________________
Name:
Title:
GAP COINVESTMENT PARTNERS, L.P.
By:__________________________
Name:
Title:
GAP COINVESTMENT PARTNERS II, L.P.
By:__________________________
Name:
Title:
17
