Take Two Interactive Software Inc – ‘8-K’ for 3/18/98 – EX-3

As of:  Wednesday, 3/25/98   ·   For:  3/18/98   ·   Accession #:  891554-98-293   ·   File #:  0-29230

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         4     14K 
 2: EX-1        Asset Purchase Agreement                              39    132K 
 3: EX-2        Certificate of Designation                            10     22K 
 4: EX-3        Registration Rights Agreement                         10     41K 

EX-3   —   Registration Rights Agreement
Exhibit Table of Contents

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 REGISTRATION RIGHTS AGREEMENT

  Registration Rights Agreement dated as of March 11, 1998, by and between
Take-Two Interactive Software, Inc., a Delaware corporation (the "Company"), and
BMG Entertainment, a division of BMG Music, a New York general partnership (the 
"Holder").                                                                      

    WHEREAS, the Company is simultaneously issuing to the Holder pursuant to a
Purchase Agreement dated as of the date hereof, by and among the Company and the
Holder (the "Purchase Agreement"), 1,850,000 shares (the "Shares") of the       
Company's Common Stock, par value $.01 per share; 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.                                                                         

NOW, THEREFORE, the parties do hereby agree as follows:               

1. Piggyback Registration.                                            

  (a) If, at any time during the period ending on the first anniversary of
the date of this Agreement, 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 (for purposes of this Section 1, a "Registration Statement"),
the Company will give written notice of its intention to do so to the Holder at 
least 20 days prior to the filing of each such Registration Statement. Upon the 
written request of the Holder, made within 10 days after receipt of the notice, 
that the Company include up to 467,500 (as hereafter adjusted as necessary to   
reflect any stock split, reverse stock split, recapitalization, or other similar
transaction affecting the Shares prior to the effective date of such            
Registration Statement) of the Shares in the proposed Registration Statement,   
the Company shall, as to the Holder, use its best efforts to effect the         
registration under the Securities Act of 1933, as amended (the "Act") of the    
Shares which it has been so requested to register (the "Piggyback               
Registration");                                                                 

(b) If, at anytime during the one-year period following the first     
anniversary of the date of this Agreement, the Company proposes to prepare and  
file a Registration Statement, the Company will give notice to the Holder least 
20 days prior to the filing of such Registration Statement. Upon the written    
request of the Holder, made within 10 days after receipt of the notice, that the
Company include up to an                                                        

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additional 467,500 (as hereafter adjusted as necessary to reflect any stock     
split, reverse stock split, recapitalization, or other similar transaction      
affecting the Shares prior to the effective date of such Registration Statement)
of the Shares in the proposed Registration Statement, the Company shall, as to  
the Holder, use its best efforts to effect the Piggyback Registration.          

    (c) Notwithstanding the provisions of paragraphs (a) and (b) 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 Shares 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 Shares which it  
has been requested to register.                                                 

(d) 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 (c) above, the aggregate number  
of Shares 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 Shares 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.                                                               

   (e) 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.  

   (f) Notwithstanding anything to the contrary contained in this Agreement,
the provisions of this Section 1 shall not apply to any Registration Statement  
to be filed by the Company on or prior to April 14, 1998 or any amendment       
thereto.                                                                        

2. Demand Registration.                                               

    (a) At any time during the one-year period following the first anniversary
of the date of this Agreement, the Holder shall have the right exercisable by   
written notice to the Company (the "Demand Registration Request"), to have the  

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Company prepare and file with the Commission, at the sole expense of the Company
(except as herein after provided), in respect of up to 250,000 (as hereafter    
adjusted as necessary to reflect any stock split, reverse stock split,          
recaptialization, or other similar transaction affecting the shares prior to the
effective date of such Registration Statement) of the Shares (less the number of
shares previously registered pursuant to Section 1 above) a Registration        
Statement so as to permit a public offering and sale of the Shares for a period 
of nine months; provided that notwithstanding the provisions of Sections 1 and 2
hereof, the Holder agrees not to sell or otherwise dispose of more than 925,000 
shares during the two-year priod following the date of this Agreement, pursuant 
to a registration statement, Rule 144 under the Act, or otherwise.              

     (b) At any time during the one-year period following the second anniversary
of the date of this Agreement, the Holder may 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 herein after provided), in respect
of up to 925,000 (as hereafter adjusted as necessary to reflect any stock split,
reverse stock split, recapitalization, or other similar transaction affecting   
the Shares prior to the effective date of such Registration Statement) of the   
Shares a Registration Statement so as to permit a public offering and sale of   
the Shares for a period of nine months; provided that if the Holder intends to  
distribute the Shares by means of a "firm commitment" underwriting, then the    
Holder shall so notify the Company pursuant to the Demand Registration Request. 
Any underwriter selected by the Holder shall be reasonably acceptable to the    
Company.                                                                        

    (c) At any time during the one-year period following the third anniversary
of the date of this Agreement, the Holder shall have the right to 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 herein after      
provided), in respect of up to the aggregate number of the Shares not previously
registered pursuant to Section 1 or Section 2(a)), a Registration Statement so  
as to permit a public offering and sale of the Shares for a period of nine      
months; provided that if the Holder intends to distribute the Shares by means of
a "firm commitment" underwriting, then the Holder shall so notify the Company   
pursuant to the Demand Registration Request. Any underwriter selected by the    
Holder shall be reasonably acceptable to the Company.                           

     (d) Notwithstanding any provision of this Section 2 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,          

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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 and eighty    
(180) days.                                                                     

     (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.                                       

 3. 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, the Company shall prepare and file with the commission a            
registration statement as expeditiously as reasonably possible, but in no event 
later than 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 nine      
months; provided that if for any portion of such nine-month period such         
registration statement is not effective, the such nine-month 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. In connection
with any underwritten Demand Registration Request, the Company will enter into  
an underwriting agreement reasonably necessary to effect such offering, provided
such underwriting agreement (i) is with an underwriter reasonably acceptable to 
the Company and (ii) contains customary underwriting provisions for offerings by
selling stockholders.                                                           

    (b) Following the effective date of any registration statement 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                                                             

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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 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 Shares sold by the Holder pursuant thereto.                              

     (d) The Company will use its reasonable best 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.                              

   (e) Notwithstanding anything contained in this Agreement to the contrary,
the Company shall not be obligated to register the Shares under the Act or      
maintain the effectiveness of any registration statement filed under Sections 1 
or 2 hereof if it receives an opinion of counsel to the Company that any of the 
Shares may be freely traded without registration under Rule 144(k) under the    
Act.                                                                            

    (f) Subject to such other reasonable requirements as may be imposed by the
underwriter as a condition of inclusion of the Shares in a registration         
statement, 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, except as part of   
such underwritten registration, 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 180 days following the         
completion of such underwritten offering.                                       

     (g) The Company shall use its reasonable best efforts to remain eligible at
all times to file registration statements of Form S-3.                          

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4. 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 practicable after such notice. The Company shall use   
its reasonable best efforts to file and have declared effective any such        
post-effective amendment as soon as possible.                                   

5. 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 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 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 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 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,                                   

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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 5(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.                                    

6. 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.                                                       

(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 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.                      

7. 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:                                                  

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If to the Company, at:                                                

Take-Two Interactive Software, Inc.                         
575 Broadway                                                
New York, New York  10022                                   
Attn: Ryan A. Brant, Chief Executive Officer                

with a copy of the same to:                                           

Tenzer Greenblatt LLP                                       
405 Lexington Avenue                                        
23rd Floor                                                  
New York, New York  10174                                   
Attn: Barry Rutcofsky, Esq.                                 

If to the Holder, at that address set forth under their name on the   
signature page.                                                       

with a copy of the same to:                                           

BMG Entertainment, a division of BMG Music                  
1540 Broadway                                               
New York, NY  10036-4098                                    
Attn: Senior Vice President and General Counsel             
Telecopier: (212) 930-4914                                  

and                                                         

Levin & Srinivasan LLP                                      
1776 Broadway, Suite 1900                                   
New York, New York 10019                                    
Attention: Notices (100/022)                                
Telecopier: (212) 957-4565                                  

   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.     

  8. Amendment. This Agreement may only be amended by a written instrument
executed by the Company and the Holder.                                         

     9. 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.                                           

 10. 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;       
provided,                                                                       

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however, that the Holder may freely assign its rights hereunder without the     
Company's consent to any person who controls the Holder within the meaning of   
the Act, to any subsidiary of the Holder or any such controlling person, and to 
any person acquiring all or substantially all of the assets of the Holder or    
with which the Holder consummates any business combination. 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. 

 11. 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.          

    12. 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.                                            

 13. 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: ______________________________
                                  Name:  _________________
                                  Title: _________________

Holder:                                 BMG ENTERTAINMENT,                      
                       a division of BMG Music

                                  By: ______________________________
               Name:
                Title:

                            Address:       1540 Broadway
                                                      New York, NY  10036-4098
                                                      Telecopy: (212) 930-4941

                                       Attention:     Executive Vice President
                                                 and Chief Financial
                                     Officer

                                    Number of Shares: __________________

 SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
 EXECUTED IN CONNECTION WITH THE
ASSET PURCHASE AGREEMENT AMONG
 BMG INTERACTIVE AND
 TAKE TWO INTERACTIVE SOFTWARE, INC.

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		4/14/98		2					S-3
Filed on:		3/25/98
For Period End:		3/18/98							8-K/A
		3/11/98		1					3
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