Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), is made and
entered into as of March 30, 1998, between Activision, Inc., a Delaware
corporation ("Activision"), and Id Software, Inc., a
Texas corporation ("id Software").
R E C I T A L S
A. Activision and id Software have entered into that certain Quake III
License Agreement of even date herewith, which provides in part that
Activision will issue the Warrant (as defined below) and register for public
sale the 150,000 shares of Activision Common Stock issuable to id Software
upon the exercise of the Warrant.
B. This Agreement sets forth the agreement of the parties with respect
to such registration.
NOW THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereby agree as follows:
1. Definitions. The following terms shall have the following
respective meanings for purposes of this Agreement:
"Commission" means the United States Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect from time to time.
"Holder" means id Software and any other person who holds Shares
registered or required to be registered pursuant to this Agreement.
"License Agreement" means that certain Quake III License Agreement dated
as of March 30, 1998, between Activision, Inc. and id Software.
"Registration Date" shall mean the date on which the final prospectus
covering the Shares (or any portion thereof) is transmitted for filing with
the Commission pursuant to Rule 424(b) under the Securities Act.
"Registration Statement" shall mean the Registration Statement on Form
S-3 covering the Shares to bc filed by Activision in accordance with this
Agreement.
Rule 144 means Rule 144 promulgated by the Commission under the
Securities Act, which Rule provides in part that, under certain
circumstances, "restricted securities" may be sold pursuant to the exemption
from registration contained in Section 4(1) of the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall
be in effect from time to time.
"Shares" shall mean the 150,000 shares, $.000001 par value, of
Activision Common Stock purchasable from Activision pursuant to the exercise
of the Warrant.
"Warrant" shall mean that certain Warrant (exercisable to purchase the
Shares) issued by Activision to id Software as of March 30, 1998, pursuant to
the terms of the License Agreement.
2. Registration Statement. The parties agree that the Warrant and the
Shares are "restricted securities" as that term is defined in Rule 144. So
that id Software may exercise the Warrant and sell the Shares to the public,
should it desire to do so in its sole and absolute discretion, Activision
covenants and agrees that it shall prepare and file the Registration
Statement with the Commission no later than May 31, 1998, and use its
commercially reasonable best efforts to cause the Registration Statement to
become effective.
The prospectus forming part of the Registration Statement will state
that id Software intends to sell Shares under Rule 144 to the extent the
Shares become eligible for sale under such Rule after the date of the
prospectus, and/or will contain such other disclosures as may be required by
the Commission in order to permit id Software to discontinue using the
prospectus and make any sales thereafter under Rule 144, to the extent the
Shares become eligible for sale under Rule 144 after the date of the
prospectus.
Activision may require each selling Holder to furnish to it such
information regarding the distribution of such Holder's Shares as is required
by law to be disclosed in a registration statement and Activision may exclude
from any registration the Shares of any such Holder who unreasonably fails to
furnish such information within a reasonable time after receiving such
request.
Id Software and each Holder covenants and agrees that (i) it will not
offer or sell any Shares under the Registration Statement until it has
received copies of the final prospectus included therein as amended or
supplemented and notice from Activision that the Registration Statement and
any post-effective amendments thereto have become effective, and (ii) id
Software, each Holder and their respective officers, directors and affiliates
will comply with the prospectus delivery requirements of the Securities Act
as applicable to them in connection with the sale of Shares pursuant to the
Registration Statement.
After the Registration Statement has been declared effective by the
Commission, Activision shall keep the Registration Statement effective until
the earlier to occur of the following:
(a) the Warrant has been exercised in full and 100% of the Shares
have, in one or more separate transactions, (i) been sold, transferred
or otherwise disposed of (or could have been sold, transferred or
otherwise disposed of) under the exemption from registration contained
in Section 4(1) of the Securities Act (including Rule 144), or (ii)
could at the time be sold under Rule 144 by the person or persons who
are at the time the holder or holders of the Shares;
(b) the Warrant has not been exercised, but if it were to be
exercised, 100% of the Shares could at the time be sold under the
exemption from registration contained in Section 4(1) of the Securities
Act (including Rule 144) by such holder or holders;
(c) id Software has given notice to Activision in accordance with
the notice provisions of the License Agreement that Activision need not
continue to maintain the effectiveness of the Registration Statement;
(d) the Warrant has expired unexercised; or
(e) the fourth anniversary of the date on which the Registration
Statement was declared effective by the Commission.
In furtherance thereof Activision shall use its best efforts to amend or
supplement the Registration Statement and prospectus used in connection
therewith from time to time, during such period and to the extent necessary
in order to comply with applicable laws and regulations.
3. Registration Procedures. Activision further covenants and agrees
that it will, as expeditiously as reasonably possible:
(a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration
Statement effective and to comply with the provisions of the Securities
Act and the Exchange Act with respect to the sale or other disposition
of the Shares;
(b) as soon as available, furnish to id Software such number of
copies of the Registration Statement and of each amendment or supplement
thereto, and of each prospectus (including each preliminary prospectus
or summary prospectus) included therein, in conformity with the
requirements of the Securities Act, and such other documents, as id
Software may reasonably request;
(c) use its best efforts to list the Shares on any securities
exchange on which the Activision Common Stock is then listed;
(d) otherwise use irs 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, but no later than
18 months after the Registration Date, an earnings statement which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder.
4. Notification to id Software. After the effective date of the
Registration Statement:
(a) Activision will notify id Software of the issuance of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for such purpose.
Immediately upon receipt of any such notice, id Software shall cease to
offer or sell any Shares pursuant to the Registration Statement.
Activision will use its best efforts to prevent the issuance of any such
stop order and, if any such stop order is issued, obtain as soon as
possible the withdrawal or revocation thereof, and will notify id
Software at the earliest practicable date of the date on which id
Software may offer and sell Shares pursuant to the Registration
Statement.
(b) Activision will notify id Software promptly if any event shall
occur or if any state of facts shall exist that, in the judgment of
Activision, should be set forth in any preliminary or final prospectus
then being used by id Software in connection with the sale of any
Shares. Immediately upon receipt of such notice, id Software shall
cease to offer or sell any Shares pursuant to such preliminary or final
prospectus, cease to deliver or use such preliminary or final prospectus
and, if so requested by Activision, use its best efforts to return to
Activision, at Activision's expense, all copies (other than permanent
file copies) of such preliminary or final prospectus. Activision will,
as promptly as practicable, take such action as may be necessary to
amend or supplement such preliminary or final prospectus in order to set
forth or reflect such event or state of facts.
(c) If Activision determines in its good faith judgment that the
filing of the Registration Statement in accordance with Section 2 or the
use of any prospectus would require the disclosure of material
information which Activision has a bona fide business purpose for
preserving as confidential or the disclosure of which would impede
Activision's ability to consummate a significant transaction, upon
written notice of such determination by Activision, the rights of id
Software or any other Holder to offer, sell or distribute any Shares
pursuant to the Registration Statement or to require Activision to take
action with respect to the registration or sale of Shares pursuant to
the Registration Statement will, for a period of up to 60 days in
respect of a single such notice or event or series of related events in
any 12 month period, be suspended until the date upon which Activision
notifies id Software and all other Holders in writing that suspension of
such rights for the grounds set forth in this Section 4(c) is no longer
necessary.
5. Demand Registration. At any time following the fourth anniversary
of the date on which the Registration Statement was declared effective by the
Commission, if (a) Activision has withdrawn or abandoned the Registration
Statement pursuant to Section 2(e) of this Agreement, and (b) the Holder has
not sold, transferred or otherwise disposed of all the Shares, the Holder
may, at its election, give notice to Activision that the Holder demands a
registration of all or part of the remaining Shares under the Securities Act
and agrees to pay for the expense of such registration.
Upon receipt of such notice Activision shall use its commercially
reasonable best efforts to effect registration of such of the remaining
Shares as are covered by the notice on a registration statement on such Form
as may be required under the circumstances (such registration statement will
also be deemed to be the Registration Statement unless the context otherwise
requires).
The terms and provisions of Sections 2, 3, 4, 7 and 8 of this Agreement
shall also apply to such registration and Registration Statement unless the
context otherwise requires.
6. Expenses. All expenses incident to performance of or compliance
with this Agreement, including, without limitation, all registration and
filing fees (including all filing fees incident to any filing, if any, with
the National Association of Securities Dealers, Inc.), listing fees, if any,
and expenses, printing expenses, fees and disbursements of counsel and
accountants for Activision, expenses of any audits incident to or required by
the registration and expenses of complying with securities laws, shall be
paid by Activision, provided, that Activision shall not be liable for the
fees and disbursements of counsel for id Software or any transfer taxes,
fees, discounts or commissions in respect of the Shares sold by id Software.
7. Indemnification.
(a) In the event of the registration of the Shares under the
Securities Act pursuant to this Agreement, Activision shall indemnify
and hold harmless id Software and each other person (including each
underwriter) who participated in the offering of such Shares and each
other person, if any, who controls such participating person within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which id Software or any such
participating person or controlling person may become subject under the
Securities Act or any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any alleged untrue statement of any
material fact contained, as of the Registration Date, in any
Registration Statement under which such securities were registered under
the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, or (ii) any
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse id Software or any such participating person or
controlling person for any legal or any other expenses reasonably
incurred by id Software or any such participating person or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that Activision
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any alleged
untrue statement or alleged omission made in the Registration Statement,
preliminary prospectus, prospectus or amendment or supplement in
reliance upon and in conformity with written information furnished to
Activision by id Software specifically for use therein or (in the case
of any registration if Activision is not a party to the underwriting
agreement) so furnished for such purpose by any underwriter. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of id Software or any such
participating person or controlling person, and shall survive the
transfer of such Shares by id Software.
(b) In the event of any registration of any Shares under the
Securities Act pursuant to this Agreement, id Software agrees to
indemnify and hold harmless Activision, its directors and officers and
each other person, if any, who controls Activision within the meaning of
the Securities Act against any losses, claims, damages or liabilities,
joint or several, to which Activision or any such director or officer or
any such person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon information provided in writing to Activision by id Software for
use in connection with such registration and which is contained, on the
Registration Date, in any Registration Statement under which Shares were
registered under the Securities Act at the request of id Software, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto; provided, that id Software shall not be
required pursuant to this Section 7(b) to contribute any amount in
excess of the aggregate proceeds to id Software of the Shares being
offered by id Software pursuant to the Registration Statement.
8. State Securities Laws. The parties understand and acknowledge
that: (a) Section 18 of the Securities Act provides that state securities or
blue sky laws requiring the registration or qualification of securities shall
not apply to "covered securities," as that term is defined in Section 18; and
(b) the Common Stock of Activision is a "covered security" by virtue of being
listed on the NASDAQ National Market System. The parties agree that should
the Common Stock cease to be a covered security for any reason, all the
provisions of this Agreement, including, without limitation, the
indemnification provisions of Section 6 hereof, shall also extend and apply
to any necessary state securities registration or qualification of the
Shares.
9. Miscellaneous.
(a) Assignment. This Agreement may be assigned by id Software only
as part of a sale, transfer or other disposition of the Warrant (or of
the Shares, if they have been purchased in a transaction exempt from
registration under the Securities Act). They may be assigned by
Activision only as part of a transaction to which Section 11 of the
Warrant applies and then only if the assignee expressly assumes and
agrees to perform the obligations of Activision under this Agreement.
(b) No Inconsistent Agreements. Activision has not and will not
hereafter enter into any agreement with respect to its securities which
is inconsistent with the rights granted to id Software in this
Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or
supplemented, and waiver or consents to departure from the provisions
hereof may not be given unless in writing signed by the party sought to
be charged.
(d) Notice Generally. Any notice, demand, request, consent,
approval declaration, delivery or other communication hereunder to be
made pursuant to the provisions of this Agreement shall be sufficiently
given or made if in writing and either delivered in person with receipt
acknowledged, sent by overnight courier with receipt acknowledged, or
facsimile transmission with receipt acknowledged, or sent by registered
or certified mail, return receipt requested, postage prepaid, addressed
as follows:
If to Activision, to:
Activision, Inc.
0000 Xxxxx Xxxx Xxxx.
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: President and Chief Operating Officer
If to id Software, to:
Id Software, Inc.
00000 XXX Xxxxxxx #000
Xxxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxxxx
Chief Executive Officer
With copy to: X. Xxxx Cloud, Jr.
Hiersche, Martens, Hayward, Xxxxxxxx & Xxxxxx,
P.C.
00000 Xxxxxx Xxxxxxx
Xxxxx 000, XX 00
Xxxxxx, Xxxxx 00000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice,
demand, request, consent, approval, declaration, delivery or other
communication hereunder shall be deemed to have been duly given or
served on the date of personal delivery thereof (with receipt
acknowledged), or upon receipt if sent by overnight courier or by mail.
Failure or delay in delivering copies of any notice, demand, request,
approval, declaration, delivery or other communication to the person
designated above to receive a copy shall in no way adversely affect the
effectiveness of such notice, demand, request, approval, declaration,
delivery or other communication.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(g) Governing Law. This Agreement shall be governed by the laws
of the State of California, without regard to the conflicts of laws
principles thereof.
(h) Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall
be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
(i) Entire Agreement. This Agreement represents the entire
agreement and understanding of the parties hereto in respect of the
subject matter hereof.
(j) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
ACTIVISION, INC.
By:____________________________________________
Name: Xxxxx Xxxxx
Title: President and Chief Operating Officer
ID SOFTWARE, INC.
By:____________________________________________
Name: Xxxx Xxxxxxxxxxx
Title: Chief Executive Officer
