REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement dated as of August 31, 1998, by and between
Take-Two Interactive Software, Inc., a Delaware corporation (the "Company"), and
the persons whose names and addresses appear on the signature page attached
hereto (each a "Holder" and collectively, the "Holders").
WHEREAS, the Company issued to the Holders pursuant to the merger of a
wholly-owned subsidiary of the Company with and into Xxxx of All Games, Inc.
("Xxxx"), an aggregate of 2,750,000 shares (the "Shares") of the Company's
Common Stock, par value $.01 per share, as described in the Agreement and Plan
of Merger dated August 22, 1998 by and among the Company and its subsidiary,
Xxxx and each of the Holders (the "Merger Agreement"); and
WHEREAS, pursuant to the Merger Agreement, the Company has agreed to grant
to the Holders registration rights set forth herein with respect to the Shares.
NOW, THEREFORE, the parties do hereby agree as follows:
1. Registration. (a) The Company shall include a number of Shares
having a market value of $1,500,000 (as measured by the average of the
closing bid price of the Common Stock on the five trading days immediately
preceding the filing of a registration statement) in the next registration
statement, if any, for an underwritten public offering for gross proceeds
to the Company of greater than $12,000,000 (the "Company Offering");
provided, however, that if in the opinion of the Company's underwriter or
managing underwriter of the underwriting group for such offering, the
inclusion of all or a portion of the Shares, when added to the securities
being registered by the Company or selling shareholder(s), if any, will
exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or
(ii) without otherwise having an adverse effect on the offering, then the
Company may exclude from such offering all or a portion of the Shares which
it has sought to register.
(b) The Company shall include a number of Shares having a market value
of $3,500,000 (as measured by the average of the closing bid price of the
Common Stock on the five trading days immediately preceding the filing of a
registration statement) in a registration statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act") as soon
as reasonably practicable following the date the Company first publishes at
least thirty (30) days of combined
results of operations of the Company and Xxxx in accordance with applicable
accounting rules relating to a "pooling of interests" (which is anticipated
to be on or before November 15, 1998) and use its reasonable efforts to
cause such Registration Statement to become effective under the Act in the
event the Company Offering is not consummated on or before December 15,
1998 (and such Secondary Offering is not, subject to the good faith mutual
determination of the Holder and the Company, still pending at such time);
provided that in the event a Company Offering is in process, the Holder
agrees not to sell or otherwise dispose of the Shares in accordance with
Section 3 hereof.
(c) The Company shall include a number of Shares having a market value
of up to $5,000,000 less the market value of any Shares registered pursuant
to paragraph (a) above in a Registration Statement 180 days following the
effective date of a Company Offering and shall use reasonable efforts to
cause the Registration Statement to become effective under the Act so as to
permit a public offering and sale of the Shares for a period of nine (9)
months.
(d) The Company shall use reasonable efforts to include a number of
Shares having a market value of $2,000,000 (as measured by the average of
the closing bid price of the Common Stock on the five trading days
immediately preceding the filing of a registration statement) in a
registration statement, if any, for any underwritten public offering
subsequent to the Company Offering for gross proceeds to the Company of
greater than $12,000,000 having an effective date on or before the first
anniversary of the date of this Agreement (a "Subsequent Offering");
provided, however, that if in the opinion of the Company's underwriter or
managing underwriter of the underwriting group for such offering, the
inclusion of all or a portion of the Shares, when added to the securities
being registered by the Company or selling shareholder(s), if any, will
exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or
(ii) without otherwise having an adverse effect on the offering, then the
Company may exclude from such offering all or a portion of the Shares which
it has sought to register.
(e) The rights granted herein shall be pro rata with respect to the
Holders.
2. Covenants of the Company With Respect to Registration. The Company
hereby covenants and agrees as follows:
(a) Following the effective date of any registration statement, the
Company shall, upon the request of the Holder, forthwith supply such
reasonable number of copies of the registration statement and prospectus as
shall be reasonably requested by the Holder to permit the Holder to make a
public
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distribution of the Shares. The obligations of the Company hereunder with
respect to the Shares are expressly conditioned on the Holder's furnishing
to the Company such appropriate information concerning the Holder, the
Shares and the terms of the Holder's offering of such shares as the Company
may request.
(b) The Company will pay all costs, fees and expenses in connection
with any Registration Statement filed; provided, that the Holder shall be
solely responsible for the fees of any counsel retained by the Holder in
connection with such registration and any transfer taxes or underwriting
discounts, selling commissions or selling fees applicable to the Shares
sold by the Holder pursuant thereto.
(c) The Company will use reasonable efforts to qualify or register the
Shares included in a registration statement for offering and sale under the
securities or blue sky laws of such states as are 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.
(d) Notwithstanding anything contained herein to the contrary, the
Company will have no obligation to register the Shares if it receives a
written opinion of counsel that the Shares are eligible for sale under Rule
144.
3. Covenant of the Holder. The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-effective amendment to
a registration statement or a supplement to the prospectus included therein,
shall promptly discontinue the sale of Shares until the Holder receives a copy
of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as reasonably practicable after such notice. The Holder
hereby agrees that if requested by an underwriter, it will agree not to sell or
otherwise dispose of the Shares on the same terms as management of the Company,
except for the Shares sold, if any, pursuant to Section 1(a).
4. Indemnification. The Company agrees to indemnify, defend and hold
harmless the Holder from and against any and all losses, claims, damages and
liabilities caused by or arising out of any untrue statement of a material fact
contained in a registration statement or prospectus included therein or caused
by or arising out of any omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
circumstances which they are made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission based upon information furnished or required to be
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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 of the Holder on account of any such loss, claim, damage or
liability arising from the sale of Shares by the Holder, if a copy of a
subsequent prospectus correcting the untrue statement or omission in such
earlier prospectus was provided to the Holder by the Company prior to the sale
and the subsequent prospectus was not delivered or sent by the Holder to the
purchaser prior to such sale. The Holder agrees to indemnify the Company, its
directors, each officer signing a registration statement, each person who
controls the Company within the meaning of the Act, any underwriter and any
person who controls any underwriter 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 of a material fact contained in a registration
statement or prospectus included therein, or caused by or arising out of any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case, only
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omissions based upon information furnished in writing to the
Company by the Holder expressly for use therein.
5. Governing Law.
(a) This Agreement shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal substantive
laws of the State of New York, without giving effect to the choice of law
rules thereof.
(b) Each of the Company and the Holder hereby irrevocably and
unconditionally consents to submit to the jurisdiction of the courts of the
State of New York and of the United States located in the County of New
York, State of New York (the "New York Courts") for any litigation arising
out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except
in such courts), waives any objection to the laying of venue of any such
litigation in the New York Courts and agrees not to plead or claim that
such litigation brought in any New York Courts has been brought in an
inconvenient forum.
6. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand or mailed by express, registered or certified mail, postage prepaid, return
receipt requested, as follows:
If to the Company, at:
Take-Two Interactive Software, Inc.
000 Xxxxxxxx
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Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx, Chairman
with a copy of the same to:
Xxxxxx Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
If to the Holder(s), at that address set forth under their name on the
signature page.
with a copy of the same to:
Xxxxxxx Meuthing & Xxxxxxx, P.L.L.
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Or such other address as has been indicated by either party in accordance
with a notice duly given in accordance with the provisions of this Section.
7. Amendment. This Agreement may only be amended by a written instrument
executed by the Company and the Holders.
8. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
9. Assignment; Benefits. This Agreement and the rights granted hereunder
may not be assigned by any Holder and any purported assignment shall be void ab
initio; provided that the Holders may assign the rights granted herewith to (i)
immediate family members (including in connection with estate planning and
family trusts) (ii) the other Holders and (iii) Xxxxxxxx X. Xxxxxxxxx. Nothing
herein contained, express or implied, is intended to confer upon any person
other than the parties hereto any rights or remedies under or by reason of this
Agreement.
10. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
11. Severability. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as
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to such jurisdiction(s), ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
12. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
Company: TAKE-TWO INTERACTIVE SOFTWARE, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman
Holders:
/s/ Xxxxx Xxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxx
Address: 000 Xxxxxx Xxx Xxxx
Xxxxxxxxxx, XX 00000
Number of Shares: 1,237,500
/s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxxx
Address: 000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Number of Shares: 137,500
/s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxxx
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Number of Shares: 1,375,000
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