REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement dated as of March __, 2000, by and between
Take-Two Interactive Software, Inc., a Delaware corporation (the "Company"), and
Broadband Solutions, Inc. (f/k/a Premier Business Solutions, Inc.), a
corporation formed under the laws of the British Virgin Islands (the "Holder").
WHEREAS, the Company is simultaneously issuing to the Holder pursuant to a
Stock Purchase Agreement dated as of the date hereof, by and among the Company,
the Holder, Toga Holdings BV, a corporation formed under the laws of the
Netherlands, Pixel Broadband Studios, Ltd., an Israeli corporation, and BBS
Acquisition Corp., a Delaware corporation (the "Purchase Agreement"), 2,561,245
shares (the "Shares") of the Company's common stock, par value $.01 per share;
WHEREAS, the Company's common stock is listed on Nasdaq's National Market
System under the symbol "TTWO"; and
WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to
grant to the Holder registration rights set forth herein with respect to the
Shares any securities issued in exchange for or in replacement of the Shares,
and any securities issued by way of any stock split, reverse stock split,
recapitalization, or other similar transaction affecting the Shares or any such
other securities (collectively, the "Registrable Securities").
NOW, THEREFORE, the parties do hereby agree as follows:
1. Piggyback Registration.
(a) If, at any time after the date hereof, the Company proposes to
prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement 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 or
pursuant to a registration statement on Form S-4 or Form S-8 or any
successor form, the Company will give written notice of its intention to do
so to the Holder at least thirty (30) days prior to the filing of each such
Registration Statement. Upon the written request of the Holder, made within
fifteen (15) days after receipt of the notice, that the Company include any
of the Registrable Securities in the proposed registration statement, the
Company shall, as to the Holder, use reasonable best efforts to effect the
registration under the Securities Act of 1933, as amended (the "Act") of
such Registrable Securities which it has been so requested to register (the
"Piggyback Registration");
(b) Notwithstanding the provisions of paragraph (a) above, 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
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Registrable Securities 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 a material adverse effect on
the offering, then the Company may exclude from such offering all or a
portion of the Registrable Securities which it has been requested to
register. Notwithstanding the provisions of paragraph (a) above, the right
to Piggyback Registration shall not apply, unless Company otherwise agrees
in writing, to any registration statement: (i) to be filed on a
registration form which is unavailable for the registration of the
Registrable Securities; (ii) relating solely to Registrable Securities to
be offered pursuant to (x) an employee benefit plan, or (y) a dividend or
interest reinvestment plan (including such a plan that has an open
enrollment or cash investment feature); (iii) relating to Company
securities to be issued for a consideration other than solely cash; (iv)
relating to Company securities to be offered solely to existing security
holders of Company, through a "rights offering" or otherwise; (v) relating
solely to Company securities to be issued on the exercise of options,
warrants and similar rights, or on the conversion or exchange of other
securities, issued by Company or any other person; (vi) relating solely to
debt securities of Company, including debt securities that are convertible
or exchangeable for equity securities of Company; or (vii) that may become
effective automatically upon filing with the Commission pursuant to Rule
462 under the Act or otherwise.
(c) If securities are proposed to be offered for sale pursuant to a
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 as set forth in paragraph (b)
above, the aggregate number of Registrable Securities 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
Registrable Securities 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.
(d) Notwithstanding the preceding provisions of this Section, the
Company shall have the right 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. Demand Registration.
(a) As soon as practicable after the date hereof, the Company shall
prepare and file with the Commission, at the sole expense of the Company
(except as hereinafter provided), in respect of sixteen percent (16%) of
the Registrable Securities issued to Holder at the Closing under the
Purchase Agreement a registration statement so as to permit a public
offering and sale of such Registrable Securities for a period of ninety
(90) days.
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(b) As soon as practicable after the six-month anniversary of the date
hereof, the Company shall prepare and file with the Commission, at the sole
expense of the Company (except as hereinafter provided), in respect of
fifteen percent (15%) of the Registrable Securities issued to Holder at the
Closing under the Purchase Agreement a registration statement so as to
permit a public offering and sale of such Registrable Securities for a
period of ninety (90) days.
(c) At any time after the first anniversary of the date of this
Agreement, the Holder may on one occasion only submit to the Company a
Demand Registration Request, to have the Company prepare and file with the
Commission, at the sole expense of the Company (except as hereinafter
provided), in respect of up to the aggregate number of Registrable
Securities not previously registered pursuant to Section 1 or Section 2(a)
a registration statement so as to permit a public offering and sale of such
Registrable Securities for a period of ninety (90) days; and the Company
shall thereafter use its reasonable best efforts to cause to be registered
under the Act as soon as practicable thereafter all of the Registrable
Securities that Holder has so requested to be registered.
(d) Notwithstanding any provision of Section 2(b) to the contrary, if,
at the time a Demand Registration Request is given to the Company under
Section 2 hereof (i) the Company is engaged in negotiations with respect to
an acquisition, merger, financing or other material event which would
require the Company to file a Form 8-K in the event that such acquisition,
merger, financing or other material event is consummated or has otherwise
occurred or (ii) in the event the Company shall furnish to the Holder a
certificate signed by the chief executive officer of the Company stating
that in the good faith judgment of the Company and its investment banker
that it would be detrimental to the Company and its shareholders for the
Company to immediately proceed with a registration statement and it is
therefore essential to defer the filing of such registration statement,
then, in each such case, the Company will have the right to defer such
filing for a period not to exceed one hundred eighty (180) days; provided
that the Company shall actively employ in good faith reasonable efforts to
cause such registration statement filed pursuant to this Section to become
effective as soon as practicable, and provided further that the Company may
not delay any registration requested pursuant to this Section more than
once during any twelve-month period. For the avoidance of doubt, this
paragraph (c) of this Section shall not apply to the registration required
pursuant to paragraph (a) of this Section.
(e) Nothing herein contained shall require the Company to undergo an
audit, other than in the ordinary course of business, or as required in
connection with the delivery of a "comfort letter" for purposes of
effecting a registration statement as set forth in this Section 2.
(f) If the Holder intends to sell any Registrable Securities
registered pursuant to this section it shall give the Company written
notice thereof not fewer than five days prior to the date on which Holder
intends to execute such sale. The
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Company shall have the right, exercisable by delivery of written notice to
the Holder during such five-day period, to direct the sale of such
Registrable Securities to any NASD Member Firm which is reasonably
acceptable to the Holder in order to provide for an orderly sale of such
Registrable Securities and, in the Company's sole discretion, it may direct
such NASD Member Firm to offer and sell such Registrable Securities in,
among other things, a block trade in which the NASD Member Firm so engaged
will attempt to sell such Registrable Securities as agent but may position
and resell a portion of the block as principal to facilitate the
transaction or otherwise, as described in any registration statement filed
pursuant to this section, provided that (i) such Registrable Securities are
sold at not less than the then Market Price, (ii) the entire proceeds of
such sale, less only reasonable and customary brokerage commissions
actually paid to the executing NASD Member Firm are promptly remitted to
the Holder, and (iii) if such sale is consummated as a "block trade", the
Holder receives written confirmation from counsel (including the Company's
in-house counsel) that such trade was effected in accordance with
applicable federal securities laws.
3. Termination of Registration Rights. Notwithstanding the foregoing
provisions, Company's obligation to register the Registrable Securities under
this Agreement shall terminate as to any particular Registrable Securities (a)
on the second anniversary of the date hereof, (b) when such Registrable
Securities have been sold in an offering registered under the Act or in a sale
exempt from registration under the Act, (c) when such Registrable Securities
shall have been effectively registered under the Act for a period of at least
ninety (90) days, or (d) when a written opinion, to the effect that such
Registrable Securities may be sold without registration under the Act or
applicable state law and without restriction as to the quantity and manner of
such sales, shall have been received from counsel for Company.
4. Covenants of the Company. The Company hereby covenants and agrees as
follows:
(a) In accordance with the Act and the rules and regulations
promulgated thereunder, and subject to the terms and provisions of this
Agreement, the Company shall prepare and file with the Commission a
registration statement as expeditiously as reasonably possible, but in no
event later than seventy-five (75) days following the receipt of a Demand
Registration Request. The Company shall use its reasonable best efforts to
cause such registration statement to become and remain continuously
effective for a period of ninety (90) days; provided that if for any
portion of such ninety-day period such registration statement is not
effective, the ninety-day requirement for maintaining the effectiveness of
such registration statement shall be extended by the length of such
interruption(s); and the Company shall prepare and file with the Commission
such amendments to such registration statement and supplements to the
prospectus contained therein as may be necessary to keep such registration
statement effective and such registration statement and prospectus accurate
and complete in all material respects during such period.
(b) Following the effective date of any registration statement
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filed under Section 1 or 2, the Company shall, upon the request of the
Holder, forthwith supply such reasonable number of copies of the
registration statement and prospectus meeting the requirements of the Act
and such other documents (i.e., documents incorporated in the registration
statement by reference) as shall be reasonably requested by the Holder to
permit the Holder to make a public distribution of the Registrable
Securities. The obligations of the Company hereunder with respect to the
Registrable Securities are expressly conditioned on the Holder's furnishing
to the Company such appropriate information concerning the Holder, the
Registrable Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably request.
(c) The Company will pay all costs, fees and expenses in connection
with any registration statement filed pursuant to Sections 1 and 2 hereof,
including, without limitation, all registration and filing fees, 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
Registrable Securities sold by the Holder pursuant thereto.
(d) The Company will use reasonable best efforts to qualify or
register the Registrable Securities included in a registration statement
for offering and sale under the securities or blue sky laws of such states
as are reasonably 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 Act and
its rules and regulations.
(e) Subject to such other reasonable requirements as may be imposed by
the underwriter as a condition of inclusion of the Registrable Securities
in a Piggyback Registration, the Holder agrees, if so required by the
managing underwriter, not to sell, take any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of, any equity securities of the Company, during such
reasonable period of time requested by the underwriter; provided, however,
such period shall not exceed a period commencing one hundred eighty (180)
days following the completion of such underwritten offering and, provided
further, that a majority of the executive officers and directors of the
Company, including, the Chief Executive Officer, have also agreed not to
sell, take any short sale of, loan, grant any option for the purchase of,
effect any public sale or distribution of, or otherwise dispose of, any
equity securities of the Company, under the circumstances and pursuant to
the terms set forth in this Section.
(f) The Company shall promptly notify Holder with respect to
Registrable Securities covered by any such registration statement, at any
time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration
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statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and at the request of Holder
promptly prepare and furnish to Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under
which they were made.
(g) The Company shall enter into customary agreements (including if
the method of distribution is by means of an underwriting, an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of the
Registrable Securities to be so included in the registration statement.
(h) The Company shall use its reasonable best efforts to list the
Registrable Securities covered by such registration statement with any
securities exchange on which the common stock of the Company is then
listed.
5. 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
a registration statement or a supplement to the prospectus included therein,
shall promptly discontinue the sale of Registrable Securities until the Holder
receives a copy of a supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such notice. The Company
shall use reasonable best efforts to file and have declared effective any such
post-effective amendment as soon as possible.
6. Indemnification.
(a) The Company shall indemnify, defend and hold harmless the Holder,
each of its directors, officers, employees, and any person who controls
Holder within the meaning of Section 15 of the Act from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal fees or other fees or expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action) caused by or arising out of any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement or prospectus or any amendment or supplement thereto included
therein or caused by or arising out of any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they are
made not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue
statement or omission or alleged omission based upon information furnished
or required to be furnished in writing to the Company by the Holder
expressly for use therein; provided, however, that the indemnification in
this Section shall not inure to the benefit
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of the Holder on account of any such loss, claim, damage or liability
arising from the sale of Registrable Securities 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
sale and the subsequent prospectus was not delivered or sent by the Holder
to the purchaser prior to such sale. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
Holder, its directors, officers, participating person, or controlling
person, and shall survive the transfer of such Registrable Securities by
Holder. The Holder shall at the same time indemnify the Company, its
directors, each officer signing a registration statement and each person
who controls the Company within the meaning of the Act from and against any
and all losses, claims, damages and liabilities caused by or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus included therein, or
caused by or arising out of any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case, only insofar as such
losses, claims, damages or liabilities are caused by any untrue statement
or alleged untrue statement or omissions or alleged omission based upon
information furnished in writing to the Company by the Holder expressly for
use therein.
(b) If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless any indemnitee, then the indemnitor shall
contribute to the amount paid or payable by the indemnitee as a result of
such losses, claims, damages, liabilities, or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by
the indemnitor on the one hand and the indemnitee on the other from the
registration, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, or provides a lesser sum to the indemnitee
than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnitor on the one hand and the indemnitee on the other but also the
relative fault of the indemnitor and the indemnitee as well as any other
relevant equitable considerations. The relative fault of the Company and
the Holder shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by the Company or by the Holder and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent
such statement or omission. Notwithstanding the provisions of this Section
6(b), in no event shall the Company be required to contribute any amount of
any damages that the Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
7. 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.
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(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 of America 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 and agrees not to
plead or claim that such litigation brought in any New York Courts has been
brought in an inconvenient forum.
8. 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, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, President
with a copy of the same to:
Blank Rome Xxxxxxx & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
If to the Holder, at that address set forth under its name on the signature
page.
with a copy of the same to:
Xxxxx & Srinivasan LLP
0000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx, 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.
9. Amendment. This Agreement may only be amended by a written instrument
executed by the Company and the Holder.
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10. 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.
11. Assignment; Benefits. 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 or no reason at all, and any attempted
assignment without such consent shall be void and of no force and effect.
12. 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.
13. 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.
14. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
[REMAINDER OF TEXT INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto on the date first above written.
Company: TAKE-TWO INTERACTIVE SOFTWARE, INC.
By: __________________________________
Xxxxx X. Xxxxxxxxx
President
Holder: PREMIER BUSINESS SOLUTIONS, INC.
By: __________________________________
Name:
Title:
Address:
Attention:
Number of Registrable Securities: 2,561,245
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
EXECUTED IN CONNECTION WITH THE
STOCK PURCHASE AGREEMENT AMONG
TAKE TWO INTERACTIVE SOFTWARE, INC.,
BBS ACQUISITION CORP.,
PIXEL BROADBAND STUDIOS, LTD.
TOGA HOLDINGS BV, AND
PREMIER BUSINESS SOLUTIONS, INC.
