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Exhibit 10.26
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made as of this 1st
day of September, 1997, by and between 800 Travel Systems, Inc., a Delaware
corporation (the "Company"), and each of the parties which are signatories
hereto (collectively, the "Holders").
W I T N E S S E T H:
The Company has requested that the Holders enter into a Lock-up
Agreement with the representative of the underwriters of the Company's proposed
public offering whereby the Holders shall be prevented from selling their
shares of common stock in the Company for up to two years. As a condition to
the execution and delivery of the Lock-up Agreements the Holders have requested
and the Company has agreed to enter into this agreement providing for the
registration of the shares of common stock of the Company held by the Holders.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission
or any other Federal agency at the time administering the Securities Act.
"Holder" or "Holders" shall mean any holder of the Registrable
Securities.
The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
"Registrable Securities" shall mean the shares of common stock
of the Company held by each Holder as indicated on the signature page hereto
(the "Shares") and any securities issued in respect of the Shares upon any
stock split, stock dividend, merger, consolidation, recapitalization or similar
event.
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"Registration Expenses" shall mean all expenses incurred by
the Company in compliance with Sections 2 or 3 hereof, including, without
limitation, any registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
reasonable fees and expenses (not to exceed $5,000) of one counsel for all the
selling Holders and other holders of the Company's securities and the expense
of any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included under Registration Expenses).
2. REGISTRATION. If at any time after the second anniversary of
the closing of the Company's contemplated public offering, the Company shall
receive a request from the Holders of Shares representing more than 3% of the
common stock then outstanding and having a fair market in excess of $500,000,
the Company shall give prompt notice of such request to the Holders of all of
the Shares and thereupon use reasonable efforts to register for sale under the
Securities Act of 1933, as amended, all Shares which the Company is requested
to register. The Company shall keep the registration statement with respect to
the Shares (the "Registration Statement") effective, or shall file such post-
effective amendments or subsequent Registration Statements as are necessary to
enable the Holders to distribute the Registrable Securities, until nine months
years from the effective date thereof. The Company will be entitled to impose
limited blackout periods during which the Holders will not be able to sell
pursuant to Registration Statements, if it determines, in its reasonable
judgment after consultation with Company's counsel, that such sales would
require the premature announcement of any material financing, acquisition,
corporate reorganization or other material corporate transaction or development
involving the Company if, in the Company's reasonable determination, such
announcement would be materially detrimental to the interests of the Company
and its stockholders. The postponement or interruption will be for the minimum
period reasonably required to avoid such premature disclosure and the aforesaid
nine months shall be extended for a period equal to such blackout periods.
3. "PIGGYBACK" REGISTRATION; UNDERWRITING.
(a) If two years after the closing of the Company's initial
public offering, the Company shall determine to register any of its securities
either for its own account or the account of a securityholder or
securityholders exercising their respective demand registration rights (other
than a registration relating solely to employee benefit plans, a registration
relating solely to a Commission Rule 145 transaction or a registration on any
registration form which does not permit secondary sales), then the Company
will:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
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(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by any Holder within
thirty (30) days after receipt of the written notice from the Company
described in clause (i) above, except as set forth in Section 3(b)
below. Such written request may specify all or a part of a Holder's
Registrable Securities.
(b) If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company
shall so advise the Holders by written notice. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company distributing its securities for its own account through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected by the Company. Notwithstanding any other
provision of this Section 3, if the representative of the underwriters advises
the Company in writing that, in its opinion, inclusion of the Registrable
Securities in the underwriting would materially and adversely affect the
underwriting, the representative may (subject to the allocation priority set
forth below), limit the number of Registrable Securities to be included in the
registration and underwriting. The Company shall so advise all holders of
securities requesting registration, and the number of shares that are entitled
to be included in the registration and underwriting shall be allocated first to
the Company for securities being sold for its account and then in the following
manner:
(i) the securities requested to be registered by
other persons (other than the Holders as defined herein who by virtue
of agreements with the Company are entitled to include their
securities in any such registration (collectively, "Other
Stockholders") shall be excluded from such registration and
underwriting to the extent required by such limitation in proportion,
as nearly as practicable, to the respective amounts of securities
which they had requested to be registered, and
(ii) if a limitation on the number of shares is still
required, the securities being sold for the account of the Holders
shall be excluded from such registration and underwriting to the
extent required by such limitation in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities and
other securities which they had requested to be included in such
registration.
If any Holder of Registrable Securities or Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice
to the Company, the underwriter and the other Holders. The securities so
withdrawn shall also be withdrawn from registration.
(c) Notwithstanding the foregoing, in the event that the
Company gives the notice provided for in Section 3(a)(i) above and any Holder
elects not to participate in the offering described in such notice, or fails to
provide the notice of intent to participate within the time prescribed
therefor, then such Holder shall not sell, assign, mortgage, transfer, pledge,
create a security interest in or lien upon, encumber, give, place in trust,
hypothecate or otherwise in any manner dispose of any of the Registrable
Securities then held by such Holder for a period commencing on the date of the
aforesaid notice from the Company until thirty (30) days following the
effectiveness of the registration statement relating to the offering.
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4. EXPENSES AND PROCEDURE OF REGISTRATION.
(a) The Company shall bear all Registration Expenses and
the selling securityholders shall bear all Selling Expenses (in proportion, as
nearly as practicable, to the securities of each securityholder being
registered) incurred in connection with any registration, qualification or
compliance pursuant to the provisions of Section 2 or 3.
(b) In the case of each registration effected by the
Company pursuant to this Agreement (other than those effected pursuant to
Section 2), the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense, the Company will:
(i) Keep such registration effective for a period
of six months or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto,
whichever first occurs;
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may
be necessary to comply with the provisions of the Securities Act with
respect to the disposition of securities covered by such registration
statement;
(iii) Furnish such number of prospectuses and other
documents incident thereto, including any term sheet or any amendment
of or supplement to the prospectus, as a Holder from time to time may
reasonably request;
(iv) Cause all such Registrable Securities to be
listed on each, if any, securities exchange on which similar
securities issued by the Company are then listed; and
(v) Otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission.
5. INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its
officers, directors and partners, and each person controlling such Holder, with
respect to which registration, qualification or compliance has been effected
pursuant to this Section 5, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions, proceedings or settlements in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on 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, or any violation by
the Company of the Securities Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or
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compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal
and any other expenses as they are reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein.
(b) Each Holder will, if Registrable Securities held by
it are included in the securities as to which such registration, qualification
or compliance is being effected, indemnify the Company, each of its directors
and officers and each underwriter, if any, of the Company's securities covered
by such a registration statement, each person who controls the Company or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other Holder and each of their officers, directors
and partners, and each person controlling such Holder, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering
circular or other document, or 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, and will reimburse the Company and such
Holders, directors, officers, partners, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this
Section 5 (the "Indemnified Party") shall give notice in writing to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
5. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, 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 to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with defense of
such claim and litigation resulting therefrom.
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(d) If the indemnification provided for in this Section 5
is unavailable to an Indemnified Party in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the shareholders offering
securities in the offering (the "Selling Shareholders") on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and the
Selling Shareholders on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Selling Shareholders and the
parties' relevant intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Selling
Shareholders agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were based solely upon the number of entities
from whom contribution was requested or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 5(d). The amount paid or payable by an Indemnified Party as a result
of the losses, claims, damages and liabilities referred to above in this
Section 5(d) shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
6. INFORMATION BY HOLDER. Each Holder of Registrable Securities
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may request in writing and
as shall be necessary or desirable in connection with any registration,
qualification or compliance referred to in this Agreement.
7. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause the Company to register securities granted to the Holders by the Company
under Sections 2 or 3 may be transferred or assigned, provided that the Company
is given written notice at the time of or within a reasonable time after said
transfer or assignment, stating the name and address of said transferee or
assignee and identifying the Registrable Securities with respect to which such
registration rights are being transferred or assigned, and provided further
that the transferee or assignee of such rights assumes the obligations of the
Holders under this Agreement.
8. TERMINATION. The Company's obligations under Sections 2 and 3
of this Agreement shall terminate on the third anniversary of the date hereof.
9. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof. No amendment, alteration or modification of this
Agreement shall be valid unless in each instance such amendment, alteration or
modification is expressed in a written instrument executed by the Company and
the Holders of at least majority of the Registrable Securities. No waiver of
any provision of this Agreement shall be valid unless it is expressed in a
written instrument duly executed by the party or parties making such waiver.
The failure of any party to insist, in any
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one or more instances, on performance of any of the terms and conditions of
this Agreement shall not be construed as a waiver or relinquishment of any
rights granted hereunder or of the future performance of any such term,
covenant or condition but the obligation of any party with respect thereto
shall continue in full force and effect.
10. SPECIFIC PERFORMANCE. The parties hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
by reason of a failure to perform any of the obligations under this Agreement.
Therefore, all parties hereto shall have the right to specific performance of
the obligations of the other parties under this Agreement, and if any party
hereto shall institute an action or proceeding to enforce the provisions
hereof, any person (including the Company) against whom such action or
proceeding is brought hereby waives the claim or defense therein that such
party has an adequate remedy at law, and such person shall not urge in any such
action or proceeding the claim or defense that such remedy at law exists.
11. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class
mail, postage prepaid, return receipt requested, or transmitted by facsimile
(receipt confirmed by telephone) or delivered either by hand, by messenger or
by nationally recognized overnight courier, addressed:
(a) if to the holders of the Registrable Securities, to
such other address as they shall have furnished to the Company in
writing,
and
(b) if to the Company, to the following address, or at
such other address as the Company shall have furnished to the holders
of the Registrable Securities and each such other holder in writing,
800 Travel Systems, Inc.
0000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attn: President
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxx, Esq.
Fax: (000) 000-0000
Alternatively, to such other address as a party hereto supplies to
each other party in writing.
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12. SUCCESSORS AND ASSIGNS. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective transferees, successors and assigns of the parties hereto,
whether so expressed or not.
13. GOVERNING LAW. This Agreement is to be governed by and
interpreted under the laws of the State of New York giving effect to the
principles of conflicts of laws thereof.
14. TITLES AND SUBTITLES. The titles of the sections of this
Agreement are for the convenience of reference only and are not to be
considered in construing this Agreement.
15. SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement shall not be deemed to affect the validity or
enforceability of any other provision of this Agreement.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
17. TERMINATION. This Agreement shall terminate six years from
the date hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
800 TRAVEL SYSTEMS, INC.
By:___________________________________
Xxxx Xxxxxxxx, President
HOLDERS
______________________________________
Name:
No. of Shares:__________________________
______________________________________
Name:
No. of Shares:__________________________
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