REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement ("Agreement") dated as of July 31, 1997,
among Take-Two Interactive Software, Inc., a Delaware corporation (the
"Company"), and the stockholders listed on the signature pages (each a "Holder"
and collectively, the "Holders").
RECITALS
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree as follows:
WHEREAS, the Company issued to the Holders on the date hereof pursuant to
the merger of Inventory Management Systems, Inc. and Creative Alliance Group,
Inc. with and into a wholly-owned subsidiary of the Company (the "Merger") an
aggregate of 900,000 shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), as more particularly provided for in certain
Agreements and Plans of Merger dated July 10, 1997 and July 30, 1997,
respectively, among the Company, its subsidiary and each of the Holders (the
"Merger Agreements"); and
WHEREAS, it is a condition to the performance of the Holders' obligations
under the Merger Agreements that the Company enter into this Agreement with the
Holders with respect of up to an aggregate of 250,000 shares of the Common Stock
held by the Holders (the "Shares").
NOW, THEREFORE, in consideration of the foregoing recitals and mutual
covenants herein contained, the parties hereto do hereby agree as follows:
1. Piggyback Registration.
(a) If, at any time after the Company becomes eligible to file a
registration statement on Form S-3, the Company proposes to prepare and
file with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 covering equity or debt securities of
the Company, or any such securities of the Company held by its
shareholders, other than in connection with a merger, acquisition, pursuant
to a registration statement on Form S-4 or Form S-8 or any successor form
or any registration statement which convers securities previously issued in
connection with any acquisition or merger (including in connection with the
acquisition of the capital stock of Gametek (UK) Limited and Alternative
Reality Technologies, Inc. and certain assets of Gametek (FL), Inc.) (for
purposes of this Article 1, a "Registration Statement"), the Company will
give written notice of its intention to do so by certified mail ("Notice"),
at least 15 days prior to the filing of each such Registration Statement,
to the Holder. Upon the written request of the Holder, made within ten days
after receipt of the Notice, that the Company include any of the Holder's
Shares in the proposed Registration Statement, the Company shall,
as to the Holder, use reasonable efforts to effect the registration under
the Securities Act of the Shares which it has been so requested to register
("Piggyback Registration"), at the Company's sole cost and expense and at
no cost or expense to the Holder (other than any commission, discounts or
counsel fees payable by the Holder, as further provided in Section 3(c)
hereof); provided, however, that if, the Piggyback Registration is in
connection with an underwritten public offering and in the written opinion
of the Company's underwriter or managing underwriter of the underwriting
group, if any, for such offering, the inclusion of all or a portion of the
Shares requested to be registered, when added to the securities being
registered by the Company or the selling shareholder(s), if any, will
exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or
(ii) without otherwise having an adverse effect on the offering, then the
Company may, subject to the allocation priority set forth in the next
paragraph, exclude from such offering all or a portion of the Shares which
it has been requested to register.
(b) If securities are proposed to be offered for sale pursuant to such
Registration Statement by other security holders of the Company and the
total number of securities to be offered by the Holder and such other
selling security holders is required to be reduced pursuant to a request
from the underwriter or managing underwriter (which request shall be made
only for the reasons and in the manner set forth above), the aggregate
number of Shares to be offered by the Holder pursuant to such Registration
Statement shall equal the number which bears the same ratio to the maximum
number of securities that the underwriter or managing underwriter believes
may be included for all the selling security holders (including the Holder)
as the original number of Shares proposed to be sold by the Holder bears to
the total original number of securities proposed to be offered by the
Holder and the other selling security holders.
(c) Notwithstanding the preceding provisions of this Section, the
Company shall have the right at any time after it shall have given written
notice pursuant to this Section (irrespective of whether any written
request for inclusion of such securities shall have already been made) to
elect not to file any proposed Registration Statement, or to withdraw the
same after the filing but prior to the effective date thereof.
2. Covenants of the Company With Respect to Registration. The Company
hereby covenants and agrees as follows; provided, however, that any Registration
Statement for the Company filed subsequent to the consummation of the Merger
will not be declared effective by the Commission without the required
presentation under the Commission's Regulation S-B of an audited balance sheet
as at the end of the most recent fiscal year of the business acquired and
audited statements of income, cash flows and changes in stockholders' equity for
such business
-2-
for each of the two fiscal years preceding the date of such balance sheet:
(a) The Company shall use reasonable efforts to cause the Registration
Statement to become effective as promptly as possible under the
circumstances at the time prevailing and, if any stop order shall be issued
by the Commission in connection therewith, to use its reasonable efforts to
obtain the removal of such order.
(b) Following the effective date of a Registration Statement, the
Company shall, upon the request of the Holder, forthwith supply such
reasonable number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the Securities Act,
and other documents necessary or incidental to the public offering of the
Shares as shall be reasonably requested by the Holder to permit the Holder
to make a public distribution of the Holder's Shares. The obligations of
the Company hereunder with respect to the Holder's Shares are expressly
conditioned on the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Shares and the terms of the
Holder's offering of such shares as the Company may request.
(c) The Company will pay all costs, fees and expenses in connection
with all Registration Statements filed pursuant to Section 1 hereof,
including, without limitation, the Company's legal and accounting fees,
printing expenses and blue sky fees and expenses; provided, however, that
the Holder shall be solely responsible for the fees of any counsel retained
by the Holder in connection with such registration and any transfer taxes
or underwriting discounts, selling commissions or selling fees applicable
to the Shares sold by the Holder pursuant thereto.
(d) The Company will use reasonable efforts to qualify or register the
Shares included in a Registration Statement for offering and sale under the
securities or blue sky laws of such states as are requested by the Holder,
provided that the Company shall not be obligated to execute or file any
general consent to service of process (unless the Company is already then
subject to service in such jurisdiction) or to qualify as a foreign
corporation to do business under the laws of any such jurisdiction, except
as may be required by the Securities Act and its rules and regulations.
3. Covenant of the Holder.
The Holder, upon receipt of notice from the Company that an event has
occurred which requires a post-effective amendment to the Registration Statement
or a supplement to the prospectus included therein, shall promptly discontinue
the sale of Shares until the Holder receives a copy of a
-3-
supplemented or amended prospectus from the Company, which the Company shall
provide as soon as practicable after such notice.
4. Indemnification.
(a) The Company shall indemnify, defend and hold harmless the Holder
and such person who controls such Holder within the meaning of Section 15
of the Securities Act or Section 20(a) of the Securities Exchange Act of
1934, as amended, from and against any and all losses, claims, damages and
liabilities caused by or arising out of any untrue statement of a material
fact contained in the Registration Statement, or caused by or arising out
of any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission based upon information furnished or
required to be furnished in writing to the Company by the Holder or the
trustees thereof expressly for use therein; provided, however, that the
indemnification in this Section shall not inure to the benefit of the
Holder on account of any such loss, claim, damage or liability arising from
the sale of Shares by the Holder, if a copy of a subsequent prospectus
correcting the untrue statement or omission in such earlier prospectus was
provided to the Holder by the Company prior to the subject sale and the
subsequent prospectus was not delivered or sent by the Holder to the
purchaser prior to such sale. The Holder(s) and their successors and
assigns shall at the same time, severally and jointly, indemnify the
Company, its directors, each officer signing the Registration Statement and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained in
the Registration Statement, or any prospectus included therein, or caused
by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading.
5. Governing Law.
(a) This Agreement shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal substantive
laws of the State of New York, without giving effect to the choice of law
rules thereof.
(b) Each of the Company and the Holder hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of New York and of the United States located in the
County of New York, State of New York (the "New York Courts") for any
litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts), waives any objection to the laying
of venue of any such litigation in the New York Courts
-4-
and agrees not to plead or claim that such litigation brought in any New
York Courts has been brought in an inconvenient forum.
6. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand or mailed by express, registered or certified mail, postage prepaid, return
receipt requested, as follows:
If to the Company, at:
Take-Two Interactive Software, Inc.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx, Chairman
with a copy of the same to:
Xxxxxx Xxxxxxxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 1074
Attn: Xxxxxxx Xxxxxxxxx, Esq.
If to the Holder(s), at that address set forth under their name on the
signature page.
with a copy of the same to:
Xxxxx & Xxxx, P.C.
0000 Xxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Or such other address as has been indicated by either party in accordance
with a notice duly given in accordance with the provisions of this Section.
7. Amendment. This Agreement may only be amended by a written instrument
executed by the Company and the Holders.
8. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
9. Assignment; Binding Effect; Benefits. Except as otherwise provided
below, the Holder may not assign the Holder's rights hereunder without the prior
written consent of the Company, which consent may be given or withheld for any
reason and any attempted assignment without having obtained such prior written
notice shall be void and of no force and effect. This
-5-
Agreement shall inure to the benefit of, and be binding upon, the parties hereto
and the permitted assigns, heirs and legal representatives of the Holder and the
Company and its successors. Nothing herein contained, express or implied, is
intended to confer upon any person other than the parties hereto and their
respective heirs, legal representatives and successors, any rights or remedies
under or by reason of this Agreement.
10. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
11. Severability. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
12. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be
-6-
deemed an original, but all of which together shall constitute one and the same
document.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
Company: TAKE-TWO INTERACTIVE SOFTWARE, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman
Holders: /s/ Xxxxx Xxxxx
---------------------------------------
XXXXX XXXXX
Address: 00000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xx 00000
______________________________
Number of Shares: _____________________
/s/ Xxxxx X. Xxxxx
---------------------------------------
XXXXX XXXXX
Address: 00000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xx 00000
______________________________
Number of Shares: _____________________
/s/ Xxxxx Xxxxxxxx
---------------------------------------
XXXXX XXXXXXXX
Address: ______________________________
______________________________
______________________________
Number of Shares: _____________________
/s/ Xxxxx Xxxxxxxx
---------------------------------------
XXXXX XXXXXXXX
Address: ______________________________
______________________________
______________________________
Number of Shares: _____________________
/s/ Xxxxxxx Xxxxxx
---------------------------------------
XXXXXXX XXXXXX
Address: ______________________________
______________________________
______________________________
Number of Shares: _____________________
-7-
