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Exhibit 12
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of November 15, 1999, by and among GT INTERACTIVE SOFTWARE
CORP., a Delaware corporation (the "Company"), and CALIFORNIA U.S. HOLDINGS,
INC., a Delaware corporation (the "Securityholder").
WHEREAS, pursuant to the terms and conditions of a Securities
Purchase Agreement, dated as of November 15, 1999 (the "Company Purchase
Agreement"), between the Company and the Securityholder, the Company has agreed,
among other things, to issue to the Securityholder an aggregate of 28,571,429
shares of common stock of the Company, par value $0.01 per share ("Common
Stock"), and a 5% Subordinated Convertible Note in the aggregate principal
amount of approximately $60,500,000 (the "Note"), with a conversion price of
$1.85 per share;
WHEREAS, concurrent with the execution and delivery of the
Company Purchase Agreement, the Company will issue to the Securityholder a
Short-Term Senior Secured Note of the Company in the principal amount of
$25,000,000 (the "Short-Term Note");
WHEREAS, concurrent with the execution and delivery of the
Company Purchase Agreement and in consideration of the Securityholder's purchase
of the Short-Term Note, the Company will issue to the Securityholder warrants to
purchase 50,000 shares of Common Stock, having an exercise price of $0.01 per
share (the "Short-Term Note Warrants");
WHEREAS, concurrently therewith, the Securityholder has agreed to
acquire from certain principal stockholders of the Company an aggregate of
approximately 33.4 million shares of Common Stock (the "Cayre Shares") and
warrants to acquire an aggregate of 4,500,000 shares of Common Stock at an
exercise price of $.01 per share (the "GAP Warrants");
WHEREAS, the Company and the Securityholder deem it to be in
their respective best interests to set forth the rights of the Securityholder 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.
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"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 Securityholder and any of its 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.
"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.
"Registrable Securities" shall mean (i) the shares of Common
Stock acquired by the Securityholder pursuant to the Company Purchase Agreement
and the Cayre Shares, (ii) any shares of Common Stock issuable upon conversion
of the Note, (iii) any shares of Common Stock issuable upon exercise of the
Short-Term Note Warrants and the GAP Warrants, and (iv) 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.
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"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.
"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 one
demand may be made pursuant to this Section 3(a) during any six month period;
provided, further, that an aggregate of only three demands may be made pursuant
to this Section 3(a), unless the Company is eligible to use Form S-3 (or any
successor
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form) in which case the foregoing limitation shall not apply. 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 its 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 (such date of effectiveness, the "Effective
Time"), 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 clause (3) of the last sentence of
Section 6(b) hereof, on the earlier of (A) one year following 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"), 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
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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.
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
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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 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
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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 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. If the Company shall have given any such
notice during a period when a Demand Registration is in
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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.
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
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6(b): (1) 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 twenty (120) days in
any consecutive three hundred sixty-five (365) day period; (2) 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 twenty (120)
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 (3) 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 five
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 (including, without limitation, any
fees payable to the NASD or the relevant securities exchange if the Company's
shares are listed on such exchange), 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 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-
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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.
(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
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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 either of
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.
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 Xxxxxxx
- 00 -
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0 xxxxx xx 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 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 Pillsbury Madison & Sutro LLP, 00 Xxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxxxx X. Xxxxxxxx III, Esq.
and Xxxxxx X. Xxxxxxxxx, Esq.
(b) If to the Company, initially at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention: Director of Legal Services; telecopier
no. (000) 000-0000; 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.
(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.
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13
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; SERVICE OF PROCESS. Any action
or proceeding arising under or relating to this letter or any of the
transactions contemplated hereby may only be brought in the United States
District Court for the Southern District of New York or the courts of the State
of New York located in the County of New York. Each party hereto submits to
personal jurisdiction of each such court with respect to any action or
proceeding arising under or relating to this Agreement or any of the
transactions contemplated hereby and waives any objection to the laying of venue
in such courts and any claim that any such action or proceeding has been brought
in an inconvenient forum. To the extent permitted by law, any judgment in
respect of a dispute arising under 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. The Securityholder hereby irrevocably appoints
the person listed on the signature page hereof as its agent for service of
process in connection with any action or proceeding arising under or relating to
this Agreement and any of the transactions contemplated hereby. 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.
SECTION 19. ENTIRE AGREEMENT. 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.
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14
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:
CALIFORNIA U.S. HOLDINGS, INC.
By:_________________________________
Name:
Title:
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15
SCHEDULE 1
California U.S. Holdings, Inc.
c/o Infogrames Entertainment S.A.
00, xxx xx 0xx Xxxx 0000
Xxxxxxxxxxxx, 00000
Xxxxxx
Attention: Xxxxxx Xxxxxxxx
Telecopy: (000 00) 000 000000
Confirm: (000 00) 000 000000
and
Attention: Xxxxxxxx Xxxxxxx
Telecopy: (000 00) 000 000000
Confirm: (000 00) 000 000000
