TRANSFER AGENT AGREEMENT
THIS TRANSFER AGENT AGREEMENT (this "Agreement"), dated October 14, 1997,
between TAKE-TWO INTERACTIVE SOFTWARE, INC., a Delaware corporation (the
"Company"), and INFINITY INVESTORS LIMITED, a Nevis, West Indies corporation,
INFINITY EMERGING OPPORTUNITIES LIMITED, a Nevis, West Indies corporation, and
GLACIER CAPITAL LIMITED, a Nevis, West Indies corporation (being collectively
referred to herein as the "Holders") and American Stock Transfer & Trust
Company, the transfer agent for the Company's common stock (the "Transfer
Agent").
R E C I T A L S:
WHEREAS, pursuant to that certain Securities Purchase Agreement dated the
date hereof (the "Purchase Agreement") by and among the Company and the Holders,
the Company agreed to issue to the Holders (1) $4,200,000 aggregate principal
amount of 10% senior, secured convertible notes (the "Convertible Notes"), which
are convertible, at the option of the Holders, into shares of common stock, $.01
par value per share, of the Company (the "Common Stock") (such shares issuable
upon such conversion being referred to as the "Shares"); (2) 50,000 shares of
Common Stock (the "Grant Shares"); and (3) Common Stock Purchase Warrants (the
"Warrants") exercisable for 250,000 additional shares of Common Stock; and
WHEREAS, the Company and the Holders have agreed to enter into this
Agreement with the Transfer Agent to (i) facilitate the closing of the Purchase
Agreement (the "Closing" or "Closing Date", as applicable), (iii) provide for a
system of accounting for the Convertible Notes and (iv) facilitate the
conversion of the Convertible Notes and issuance of the Shares associated
therewith.
NOW, THEREFORE, in consideration of the foregoing, the parties hereby agree
as follows:
1. Closing. The Transfer Agent hereby agrees to act as an escrow agent to
facilitate the Closing as follows:
(a) On the Closing Date, the Holders shall wire transfer to an account
designated by the Transfer Agent (x) $4,032,000, representing the purchase price
applicable to the Convertible Notes (the "Purchase Price"), less (y) $25,000
(minus any portion thereof previously paid) (the "Reimbursement Fee") and the
Company shall deliver to the Transfer Agent the Convertible Notes, the Grant
Shares and the Warrants to be issued in the names of the Holders and in the
amounts as set forth on ---- Schedule I hereto. The Transfer Agent may, at its
discretion, confirm the authenticity of the Convertible Notes and the Warrants
by transmitting a copy of same in the form received from the Company to HW
Partners, L.P., on behalf of the Holders or its counsel, for written or oral
verification as to the form thereof.
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TRANSFER AGENT AGREEMENT - Page 1
(Take-Two Interactive Software, Inc.)
(b) Immediately following such deliveries the Transfer Agent shall wire
transfer to the Company such funds less the Whale Fee, which shall be paid
directly to Whale.
(c) Contemporaneous with the transfer of funds as described in Subsection
(b) above, the Transfer Agent shall (i) hold the Convertible Notes for the
benefit of the respective Holders, as hereafter described and (ii) deliver the
Grant Shares and Warrants to the Holders at the address(es) set forth herein.
(d) Notwithstanding the foregoing, by joint written agreement the Holders
and the Company may agree to effect the Closing (either partially or entirely)
without using the services of the Transfer Agent. In such event, (i) the Holders
shall wire the Purchase Price, less the Reimbursement Fee to the Company, (ii)
the Company shall deliver the original Grant Shares and Warrants to the Holders
or their designee, and (iii) the Company shall deliver the Convertible Notes to
the Transfer Agent to be held for the benefit of the Holders pursuant to the
terms of this Agreement.
2. Ownership of Convertible Notes. Record and beneficial ownership of the
Convertible Notes shall remain in the name of the Holders (unless and until
transferred pursuant to the terms thereof, with written notice thereof to the
Transfer Agent). Any transfer or purported transfer of the Convertible Notes (a)
not made pursuant to the terms of the Convertible Notes and (b) not properly
noticed to the Transfer Agent shall be null and void ab initio and shall not be
given effect thereto by the Transfer Agent. The Transfer Agent shall not be
required to acknowledge any transfer of the Convertible Notes unless accompanied
by written confirmation thereof from the Holders. The wire transfer account of
each Holder is as set forth on Schedule 2 attached hereto. The address of each
Holder is as set forth in Section 8 hereof.
3. Paying Agent. The Transfer Agent shall act as paying agent for the
Convertible Notes. Accordingly, all payments of interest or principal amounts
required of the Company related to the Convertible Notes shall be made to the
Transfer Agent for the account and benefit of the holders of such Convertible
Notes as registered on the books of the Transfer Agent (each, a "Registered
Holder"). Upon the receipt of any such payment of interest or principal amounts,
in cash, the Transfer Agent shall promptly wire transfer such sum to the account
of the Registered Holders as reflected on the books of the Transfer Agent.
Notwithstanding the foregoing, the Holders may, at their option, authorize the
Company to directly pay to the Holders all sums due and owing on the Convertible
Notes. If the Holders so elect, the Company shall notify the Transfer Agent
(with a copy thereof to the Holders) of the amount of such payment. Upon receipt
of such notice, which has been confirmed in writing by the Holders, the Transfer
Agent shall make all appropriate entries on the Accounting Ledger (as hereafter
defined).
4. Accounting Agent. The Transfer Agent shall act as the accounting agent
of the Company and the Registered Holders and shall establish and maintain an
accounting ledger for the Convertible Notes (the "Accounting Ledger"). The
Transfer Agent shall credit (reduce) the outstanding balance of the Convertible
Notes by all (i) payments of principal and interest made by the Company to the
Transfer Agent as paying agent as required pursuant to Section 3 above, and (ii)
by the appropriate amount upon delivery of Shares to the applicable Registered
Holder following receipt of a Notice of Conversion (as defined in Section 5
below). At such time as the
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TRANSFER AGENT AGREEMENT - Page 2
(Take-Two Interactive Software, Inc.)
balance of the Convertible Notes, as reflected on the Account Ledger is zero
following the procedures described in this Agreement, the Transfer Agent shall
return such convertible Notes to the Company marked "paid in full" or
"cancelled."
5. Issuance of Converted Shares.
(a) Consistent with each Convertible Note, in order to convert all or a
portion of a Convertible Note into Shares, a Registered Holder shall deliver
written notice (each, a "Notice of Conversion"), in the form prescribed by the
Convertible Notes, to the Transfer Agent for the portion of the Convertible Note
that it elects to so convert and a calculation of the number of Shares to be
issued upon such conversion. Upon receipt by the Transfer Agent of any such
Notice of Conversion (including receipt via facsimile) from any Registered
Holder, the Transfer Agent shall immediately deliver a copy thereof to the
Company, via facsimile, requesting the Company to confirm the number of Shares
to be issued to Registered Holder in connection therewith. The Company shall,
within two (2) Business Days (as defined in the Purchase Agreement) of the
receipt thereof, in good faith confirm or dispute the number of Shares to be
issued to the Registered Holder, providing written notice (with supporting
calculations and related information) thereof via facsimile to the Transfer
Agent and the Registered Holder (the "Company Notice"). In any event, the
Company shall include in the Company Notice that number of Shares which it
believes, in good faith, are in fact issuable upon conversion of the Convertible
Note (the "Minimum Number"). In the event the Company confirms the number of
Shares to be so issued, it shall, as part of the Company Notice, direct the
Transfer Agent to issue such Shares. In the event the Company fails to deliver a
Company Notice or disputes the number of Shares to be so issued, the Company and
the Registered Holder shall immediately, in good faith, seek to resolve such
dispute.
(b) The Transfer Agent shall not be required to issue any shares unless and
until receipt (including via facsimile) of (i) written notice from either (x)
the Company, confirming the number of Shares to be issued or (y) the Registered
Holder and the Company, setting forth the number of Shares to be issued, or (ii)
a final nonappealable order of a court of competent jurisdiction directing the
Transfer Agent to issue a specified number of Shares. Notwithstanding the
foregoing, each Holder expressly reserves all rights and remedies against the
Company for the failure of the Company to confirm to the Transfer Agent in any
applicable Company Notice the number of Shares issuable as set forth in a
properly completed and accurate Notice of Conversion.
(c) Reference is hereby made to that certain Registration Rights Agreement
appended to the Purchase Agreement. At such time as the Registration Statement
as contemplated therein has been declared effective by the Securities and
Exchange Commission covering the resale of the Shares held by a particular
Registered Holder, the Company shall cause its legal counsel to deliver to the
Transfer Agent an opinion to the effect that Shares may be sold by such
Registered Holder pursuant to such Registration Statement with the purchaser
thereof receiving share certificates, without restrictive legend, provided the
Transfer Agent has received confirmation associated therewith, in a form
customarily utilized by the applicable registered broker/dealer substantially to
the effect that the prospectus delivery requirements have been satisfied. In the
event that, at any time, the Registration Statement ceases to be effective, the
Company or its legal counsel shall immediately deliver written notice thereof to
the Transfer Agent and the Registered Holders stating that the opinion of the
Company's legal counsel may no longer be relied upon by
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TRANSFER AGENT AGREEMENT - Page 3
(Take-Two Interactive Software, Inc.)
the Transfer Agent (unless and until an additional or amended, as applicable,
Registration Statement is so declared effective with an accompanying opinion
from the Company's legal counsel). Upon the receipt of any Notice of Conversion
while the Registration Statement is effective, the share certificates
representing the Shares described above shall be bear a restrictive legend
unless the Registered Holder, either in connection with the delivery of the
Notice of Conversion or thereafter, delivers written notice to the Transfer
Agent, the Company and its counsel (including notice via telecopy) that the
Shares have been sold by the Registered Holder pursuant to such Registration
Statement, whereupon the Transfer Agent shall issue share certificates to the
purchaser thereof without restrictive legend.
(d) Each time a payment of principal is recorded in the Accounting Ledger
(whether by virtue of a cash payment or by virtue of a conversion into Shares),
the Transfer Agent may, at its option, deliver the Convertible Notes to the
Company requiring the Company to reissue Convertible Notes in the names of the
Registered Holders with new principal balances reflecting such payment.
6. Termination. This Agreement shall terminate promptly upon the earlier to
occur of (i) written demand by the Company and all Registered Holders or (ii) no
unpaid balance remains with respect to any of the Convertible Notes.
Notwithstanding the foregoing, the Transfer Agent may terminate its obligations
under this Agreement at such time as the Transfer Agent no longer serves as the
Transfer Agent for the Company's Common Stock, by delivery of written notice
thereof to the Registered Holders and the Company. Upon delivery of such notice,
the Transfer Agent shall deliver the original Convertible Notes to HW Partners,
L.P., on behalf of all Registered Holders, together with a copy of the
Accounting Ledger (with corresponding copies delivered to the Company).
Immediately thereafter, HW Partners, L.P., as representative of the Holders, and
the Company shall, in good faith, attempt to establish an agreement similar to
this Agreement with the Company's new stock transfer agent.
7. Fees. The Company hereby agrees to pay the Transfer Agent for customary
fees charged for all services rendered hereunder.
8. Notices. Any notice or demand to be given or that may be given under
this Agreement shall be in writing and shall be (a) delivered by hand, or (b)
delivered through or by expedited mail or package service, or (c) transmitted by
telecopy, in each case with personal delivery acknowledged, addressed to the
parties as follows. Each such notice or demand shall be effective (i) if given
by telecopy, when such telecopy is transmitted to the telecopier number
specified in this Agreement, (ii) if given by any other means, when delivered at
the addressed as specified herein.
As to the Company: Take-Two Interactive Software, Inc.
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax:
Attn: Xx. Xxxx X. Xxxxx
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TRANSFER AGENT AGREEMENT - Page 4
(Take-Two Interactive Software, Inc.)
With a copy to: HW Partners, L.P.
0000 Xxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx00000
Fax: 214/000-0000
Attn: Xxxxxx Xxxxxxxxx, Esq.
As to the Holders: At a registered address which the Holders
shall provide from time to time.
With a copy to: HW Partners, L.P.
0000Xxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx, Esq.
As to the Transfer
Agent: American Stock Transfer & Trust Company
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: 718/000-0000
Attn: Xxxxxxx X. Xxxxxx
9. Noncontravention. The Company agrees that it will not at any time take
any action or undertake any activity that would in any way impede, restrict or
limit the right and ability of the Registered Holders to convert the Convertible
Notes and receive Shares pursuant to the terms and provisions of this Agreement.
10. Indemnification. The Company agrees to indemnify and hold harmless the
Transfer Agent, each officer, director, employee and agent of the Transfer
Agent, and each person, if any, who controls the Transfer Agent within the
meaning of the Securities Act of 1933, as amended (the "Act") or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") against any losses,
claims, damages, or liabilities, joint or several, to which it, they or any of
them, or such controlling person, may become subject, under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon the
performance by the Transfer Agent of its duties pursuant to the Agreement; and
will reimburse the Transfer Agent, and each officer, director, employee and
agent of the Transfer Agent, and each such controlling person for any reasonable
legal or other expenses reasonably incurred by it or any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any case if
such loss, claim, damage or liability arises out of or is based upon any action
not taken in good faith, or any action or omission that constitutes gross
negligence or willful misconduct.
Promptly after receipt by an indemnified party under this Section of notice
of the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the Company under this Section, notify in
writing the Company of the
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TRANSFER AGENT AGREEMENT - Page 5
(Take-Two Interactive Software, Inc.)
commencement thereof, and failure so to notify the Company will relieve the
Company from any liability under this Section as to the particular item for
which indemnification is then being sought but not from any other liability
which it may have to any indemnified party. In case any such action is brought
against any indemnified party, and it notifies the Company of the commencement
thereof, the Company will be entitled to assume the defense thereof, with
counsel selected by the Company, who shall be to the reasonable satisfaction of
such indemnified party. The Company shall not be liable to any such indemnified
party on account of any settlement of any claim of action effected without the
consent of the Company.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of law rules of such jurisdiction. Any action brought to enforce, or
otherwise arising out of, this Agreement, shall be heard and determined in
either a federal or state court sitting in the State of New York.
12. Entire Agreement; Amendments. This Agreement, constitutes the full and
entire understanding of the parties with respect to the subject matter hereof.
Neither this Agreement nor any term hereof may be amended, waived, discharged,
or terminated other than by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge or termination is
sought.
13. Counterparts. This Agreement may be executed in one or more
counterparts and by facsimile signature.
[Signature page follows]
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TRANSFER AGENT AGREEMENT - Page 6
(Take-Two Interactive Software, Inc.)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers, as of the date first
above written.
Take-Two Interactive Software, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
------------------------------
Title: CEO
------------------------------
Address: 000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
INFINITY INVESTORS LIMITED
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Director
------------------------------
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XXX 0XX
Telephone: 000-00-000-000-0000
Attention: X. X. Xxxxxxxx
INFINITY EMERGING OPPORTUNITIES
LIMITED
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Director
------------------------------
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XXX 0XX
11-44-171-355-4975
X. X. Xxxxxxxx
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TRANSFER AGENT AGREEMENT - Page 7
(Take-Two Interactive Software, Inc.)
GLACIER CAPITAL LIMITED
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XXX 0XX
Fax: 000-00-000-000-0000
Attn: X. X. Xxxxxxxx
With a copy to: HW Partners, L.P.
0000Xxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx, Esq.
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Vice President
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TRANSFER AGENT AGREEMENT - Page 8
(Take-Two Interactive Software, Inc.)
