EXHIBIT 10.15
REGISTRATION RIGHTS AGREEMENT
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Registration Rights Agreement (the "AGREEMENT"), dated as of November 12,
1996, by and between Interactive Flight Technologies, Inc., a Delaware
corporation (the "COMPANY"), and the Persons whose signatures appear on the
signature pages hereto as of the date hereof or hereafter.
R E C I T A L S:
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A. This Agreement is made pursuant to the Strategic Alliance Agreement
dated as of November 12, 1996 (the "ALLIANCE AGREEMENT") between the Company and
Hyatt Ventures, Inc. ("HYATT"). Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Alliance Agreement.
B. The Alliance Agreement provides, among other things, for (i) the
issuance to Hyatt or members of the Hyatt Group of the Warrants exercisable for
shares of Class A Common Stock and (ii) the conversion or exchange of Equity
Interests by the JV Holders into Shares of Class A Common Stock. The shares of
Class A Common Stock (x) in respect of which the Warrants are exercisable, (y)
into which the Equity Interests are convertible or exchangeable and (z) which
are otherwise acquired by Hyatt or members of the Hyatt Group pursuant to the
Alliance Agreement (other than through open market purchases), are referred to
herein as the "Shares". The execution of this Agreement is a condition to the
closing of the transactions contemplated by the Alliance Agreement.
C. In order to induce the Hyatt to enter into and perform its obligations
under the Alliance Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions.
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As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Common Stock" means the Class A Common Stock.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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or any similar or successor federal statute and the rules and regulations of the
SEC promulgated thereunder, all as the same shall be in effect at the time.
"Holder" means any Person who executes a counterpart of this Agreement
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on or after the date hereof and any Person who becomes a Holder after the date
of this Agreement pursuant to Paragraph 13(a).
"Indemnified Party" has the meaning set forth in Paragraph 7(c).
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"Indemnifying Party" has the meaning set forth in Paragraph 7(c).
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"Initiating Group" means one or more holders of Registerable
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Securities which represent in the aggregate 10% or more Registrable Securities
then issued and outstanding.
"Market Value" for any security on any given date means (i) the
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average closing price for the prior ten trading days for such security on the
principal stock exchange on which such security is traded or (ii) if not so
traded, the closing price (or, if no closing price is available, the average of
the bid and asked prices) for such period on the NASDAQ if such security is
listed on the NASDAQ or (iii) if not listed on any exchange or quoted on the
NASDAQ, such value as may be determined in good faith by the Company's Board of
Directors, which determination shall be conclusively binding on the parties.
"NASD" means the National Association of Securities Dealers, Inc.
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"Person" means an individual, partnership, corporation, limited
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liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof, or any other entity of any kind.
"Registered Securities" means Registrable Securities which have been
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registered under the Securities Act pursuant to a registration statement filed
with and declared effective by the SEC.
"Registrable Securities" means (i) the Shares; (ii) the shares of
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Common Stock issued or issuable as dividends on, or other distributions with
respect to the Shares; and (iii) any other security issued or issuable in
exchange for, or in replacement of, any of the Shares, in each case until any
such security ceases to be a Registrable Security in accordance with Paragraph 2
hereof.
"Registration Expenses" means all expenses (excluding Selling
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Expenses) incident to the Company's performance of or compliance with Paragraphs
3 and 4 of this Agreement, including without limitation all registration and
filing fees, including fees with respect to filings required to be made with any
stock exchange or the NASD, fees and expenses of compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), messenger, telephone and delivery expenses, and the fees and
expenses of counsel for the underwriter, costs of printing prospectuses, and
fees and disbursements of counsel for the Company and of all independent
certified public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance).
"Registration Statement" means any registration statement of the
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Company which includes any of the Registrable Securities pursuant to the
provisions of this Agreement, including the prospectus included or deemed
included in the Registration Statement and all amendments
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and supplements to the Registration Statement or the prospectus, including post-
effective amendments, and all exhibits to, and all materials incorporated by
reference in, the Registration Statement.
"SEC" means the United States Securities and Exchange Commission or
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any similar agency then having the authority to enforce the Exchange Act or the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
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similar or successor statute, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means (i) all fees and expenses of counsel for the
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Holder(s), (ii) all discounts, commissions or fees of underwriters, selling
brokers, dealer managers or similar securities industry professionals relating
to the distribution of the Registrable Securities and (iii) any other costs that
the Selling Holders elect to pay in order to comply with state securities laws
and regulations; provided, however, that in the event that the Selling Holders
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elect not to make payment of such costs with respect to any state, the Company
shall not be required to register the relevant Registrable Securities for sale
in such state.
"Selling Holders" has the meaning set forth in Paragraph 5(b).
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"Shares" has the meaning set forth in the Recitals.
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2. Securities Subject to this Agreement. The securities entitled to the
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benefits of this Agreement are the Registrable Securities, but such benefits
shall continue with respect to each such security only so long as such security
continues to be a Registrable Security. A security ceases to be a Registrable
Security when (a) a Registration Statement covering the sale of such Registrable
Security has been declared effective under the Securities Act and the
Registrable Security has been sold in accordance with the Registration
Statement; (b) it is distributed to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act; (c) a new certificate
representing such security has been delivered (to the original Holder or any
subsequent transferee) by the Company free from any restrictive legend and
without issuance of stop transfer or other instructions to the Company's
transfer agent and the Holder of such security has been advised by counsel
reasonably acceptable to it that subsequent disposition of such security will
not require registration or qualification under the Securities Act then in
effect; or (d) the security has ceased to be outstanding.
3. Registration under Securities Act; Demand Registration.
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(a) Demand for Registration. At any time following the date hereof
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any Initiating Group may by written notice request that the Company effect the
registration under the Securities Act of all or any portion of the Registrable
Securities having an aggregate Market Value greater than $1,000,000, in which
case the Company will (i) within 45 days of such request, file with the SEC all
documentation necessary to effect such registration and (ii) thereafter use its
best efforts to effect such registration. Each notice given pursuant to the
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immediately preceding sentence shall set forth (x) the aggregate number of
Shares to be included, (y) the names of the Selling Holders and the number of
Shares to be sold by each such Selling Holder and (z) the proposed manner of
sale.
(b) Limitations on Company's Obligation. The Company is obligated to
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effect four registrations pursuant to this Paragraph 3; and thereafter the
Company shall have no obligation to include any Registrable Securities in any
registration pursuant to this Paragraph 3. In the event that a registration
requested pursuant to this Paragraph 3 fails to become effective or if a stop
order shall have been issued or the registration shall have been terminated
prior to the sale of the Registrable Securities (other than as a result of
actions or inactions by the Initiating Group), a request for registration shall
be deemed not to have been made for the purposes of this Paragraph 3.
(c) Underwritten Offer. If an Initiating Group desires to distribute
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Registrable Securities covered by its request by means of an underwriting, it
shall so advise the Company as a part of its request made pursuant to this
Paragraph 3. The Initiating Group shall select an underwriter (which shall be
reasonably acceptable to the Company) for such underwriting and shall together
with the Company enter into an underwriting agreement in customary form with the
underwriter.
(d) Holdback. In the event that a registration is demanded pursuant
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to this Section 3 and the Company is advised in writing by its investment
banking firm that the shares for which registration is requested cannot be sold
without serious injury to the Company or its existing stockholders (the grounds
for which decision shall be confidentially disclosed to any requesting Holder),
the Company shall have the option to require the Initiating Group to withdraw
such registration demand and not make any other demand so long as such facts
continue to exist; provided, however, that the Company shall ensure that there
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exists at least one contiguous six month period during the ensuing 15 months
during which such registration may be effected.
4. Registration under the Securities Act: Piggy-Back Registration.
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(a) Piggy-Back Registration. If at any time the Company proposes to
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register for itself or any of its stockholders any of its capital stock (except
to the extent prohibited by such stockholders' demand registration rights) under
the Securities Act in connection with the public offering of such securities on
a form and in a manner that would permit registration of Registrable Securities
for sale to the public under the Securities Act, then:
(i) the Company in each case will notify in writing each Holder of its
intention to effect such a registration at least 45 days prior to the proposed
effective date of a Registration Statement in connection therewith;
(ii) the Company will offer each Holder the opportunity to include in
such registration all or such lesser amount of Registrable Securities as each
Holder may request. Upon the request of one or more Holders given in writing
within 20 days after receipt of the
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notice described under clause (i) above, the Company, subject to the provisions
of Paragraph 4(b), shall cause any of the Registrable Securities specified by
such Holder to be included in the Registration Statement; and
(iii) if the registration of which the Company gives written notice
under clause (i) above involves an underwriting, the Company shall use its best
commercially reasonable efforts to cause the managing underwriter(s) of the
proposed underwritten offering to permit Holders to include their Registrable
Securities in the underwriting on the same terms and conditions as similar terms
of the Company included therein.
(b) Limitations on Company's Obligations to Effect Piggy-Back
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Registration. Notwithstanding the provisions of Paragraph 4(a) above:
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(i) if and to the extent that the managing underwriter(s) advise the
Company in writing that, in its good faith determination, inclusion of the
number of Registrable Securities held by Holders requesting inclusion in the
Registration Statement would materially interfere with the underwriter's ability
to effectuate the registration and sale of securities proposed to be offered and
sold pursuant to the Registration Statement, the managing underwriter(s) shall
select the permissible quantity of Registrable Securities to be sold by the
Holders (which may be none) by reducing the total number of securities to be
sold by the holders of securities other than Registrable Securities and the
Holders (but not the number of securities to be sold by the Company or by any
other selling stockholder who has exercised demand registration rights in
connection with such registration) on a pro rata basis. For purposes of
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apportionment pursuant to this Paragraph 4(b), for any selling holder that is a
partnership or a corporation, the affiliates of such partnership or corporation
shall collectively, with such holder be deemed to be one "selling holder," and
any pro rata reduction with respect to such "selling holder" shall be based upon
the aggregate amount of shares carrying registration rights owned by entities
and individuals included in such "selling holder;" and
(ii) if, at any time after giving such written notice of its
intention to register any of its securities and prior to the effective date of
the applicable Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to register such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and thereupon shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration.
(c) Underwritten Offer. If the registration of which the Company
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gives written notice under Paragraph 4(a)(i) above involves an underwriting, the
Company shall so advise in such written notice. In such event the right of any
Holder to registration pursuant to Paragraph 4(a) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in such underwriting. All Holders proposing to
distribute their Registrable Securities through such underwriting shall
(together with the Company and the other holders distributing their Registrable
Securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. If any Holder disapproves of the
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terms of any such underwriting, such Holder may elect to withdraw from the
underwriting by prompt written notice to the Company and the underwriter.
5. Registration Obligations of the Company. In connection with the
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filing of a Registration Statement pursuant to Paragraphs 3 or 4, the Company
shall:
(a) Use its best efforts to cause such Registration Statement to
remain in effect until the earlier of (i) the completion of the distribution of
the Registrable Securities included in the Registration Statement, and (ii) six
months after the date on which the Registration Statement is declared effective;
provided, however, that the Company may suspend such effectiveness at any time
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under the circumstances, and subject to the constraints, described in Paragraph
3(d) hereof (except that the determination of potential injury to the Company or
its stockholders shall be made in good faith by the Company's Board of Directors
if no investment banking firm is then involved).
(b) Notify the Holders whose Registrable Securities are included in
such Registration Statement (the "SELLING HOLDERS") as to the filing of the
Registration Statement and of all amendments or supplements thereto filed prior
to the effective date of such Registration Statement;
(c) Notify the Selling Holders, promptly after the Company shall
receive notice thereof, of the time when such Registration Statement became
effective or when any amendment or supplement to any prospectus forming a part
of said Registration Statement has been filed;
(d) Notify the Selling Holders promptly of any request by the SEC for
the amending or supplementing of such Registration Statement or prospectus or
for additional information;
(e) During the period in which the Company is obligated to use its
reasonable best efforts to keep a Registration Statement effective pursuant to
this Paragraph 5, prepare and promptly file with the SEC and promptly notify the
Selling Holders of the filing of any amendments or supplements to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the Securities Act, any
event with respect to the Company shall have occurred as a result of which any
such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading; and, in addition, during such
period, prepare and file with the SEC, promptly upon the Selling Holders'
written request, any amendments or supplements to such Registration Statement or
prospectus which may be reasonably necessary or advisable in connection with the
distribution of the Registrable Securities;
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(f) Prepare, promptly upon request of the Selling Holders or any
underwriters for the Selling Holders made during the period in which the Company
is obligated to use its best efforts to keep a Registration Statement effective,
such amendment or amendments to such Registration Statement and such prospectus
or prospectuses as may be reasonably necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act;
(g) Advise the Selling Holders promptly after the Company shall
receive notice or obtain knowledge of the issuance of any stop order by the SEC
suspending the effectiveness of any such Registration Statement or amendment
thereto or of the initiation or threatening of any proceeding for that purpose,
and promptly use its reasonable best efforts to prevent the issue of any stop
order or obtain its withdrawal promptly if such stop order should be issued;
(h) Use its best efforts to qualify as soon as reasonably practicable
the Registrable Securities for sale under the securities or blue sky laws of
such states and jurisdictions within the United States as shall be reasonably
requested by the Selling Holders; provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business, to become subject to taxation or to file a consent to service of
process generally in any of the aforesaid states or jurisdictions;
(i) Furnish the Selling Holders, as soon as available, copies of any
Registration Statement and each preliminary or final prospectus, or supplement
or amendment required to be prepared pursuant hereto, all in such quantities as
the Selling Holders may from time to time reasonably request;
(j) Furnish each Selling Holder with copies of such opinions of
counsel and accountants' "comfort" letters as it reasonably may request with
respect to the registration of its Registrable Securities, the Registration
Statement covering such Registrable Securities and the financial statements
included therein;
(k) Apply for listing and use its best efforts to list the Registrable
Securities, if any, being registered on any national securities exchange on
which a class of the Company's equity securities is listed (and to maintain such
listing during the pendency of the relevant registration period) or, if the
Company does not have a class of equity securities listed on a national
securities exchange, apply for qualification and use its reasonable best efforts
to qualify the Registrable Securities, if any, being registered for inclusion on
the automated quotation system of the NASD (and to maintain such qualification
during the pendency of the relevant registration period);
(l) In connection with the preparation and filing of each Registration
Statement registering Registrable Securities under the Securities Act, give the
holders of Registrable Securities on whose behalf such Registrable Securities
are to be so registered and their underwriters, if any, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such Registration Statement, each prospectus included therein or filed with the
SEC, and each amendment thereof or supplement thereto, and will give each of
them such
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access to its books and records and such opportunities to discuss the business
of the Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of such
holders and such underwriters, or their respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act; and
(m) Make senior executives of the Company reasonably available to
assist the underwriters with respect to, and accompanying the underwriters on
so-called the "road show", in connection with marketing efforts for, and the
distribution and sale of Registrable Securities pursuant to a Registration
Statement.
6. Expenses. The Company will pay all Registration Expenses in
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connection with registrations of Registrable Securities effected pursuant to
Paragraphs 3 and 4. All Selling Expenses in connection with any registration
effected pursuant to this Agreement shall be borne by the Company, the holders
of securities included in such registration other than Registrable Securities
and the holders of the Registrable Securities so registered, pro rata on the
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basis of the number of shares of common stock included in the registration for
the account of the Company and each such holder.
7. Indemnification.
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(a) To the extent permitted by applicable law, the Company will
indemnify each Holder of the Registrable Securities requesting or joining in a
registration, each Person who controls such Holder within the meaning of Section
15 of the Securities Act, and each underwriter of the securities so registered
and each Person who controls such underwriter, and their respective officers,
directors, partners, agents, employees and successors (each a "SECTION 7(a)
INDEMNITEE"), against all costs, expenses, demands, claims, losses, damages,
liabilities, fines and penalties (or actions in respect thereof), to which such
Section 7(a) Indemnitee may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such claims, losses, damages, liabilities,
fines and penalties arise out of or are based on any untrue statement (or
alleged untrue statement) of a material fact contained in any Registration
Statement or prospectus, or arise out of or are based upon any omission (or
alleged omission) to state therein a fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law and will reimburse each such
Section 7(a) Indemnitee for (and will make periodic advances to cover) any legal
and any other expenses reasonably incurred in connection with investigating or
defending any such demand, claim, loss, damage, liability or action promptly
after submission of supporting materials with respect to such expenses;
provided, however, that the Company shall not be required to indemnify any
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Section 7(a) Indemnitee for any cost, expense, demand, claim, loss, damage,
liability, fine or penalty which arises out of or is based upon (i) any written
information provided by any such Section 7(a) Indemnitee, respectively,
expressly for inclusion in the Registration Statement or (ii) the circumstances
set forth in clause (y) of paragraph (b) below.
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(b) To the extent permitted by applicable law, each Holder requesting
or joining in a registration, severally and not jointly, will indemnify the
Company, each of its officers, directors, employees, agents, successors and
controlling persons (within the meaning of Section 15 of the Exchange Act)
(each, a "SECTION 7(b) INDEMNITEE"), against all costs, expenses, demands,
claims, losses, damages, liabilities, fines and penalties (or actions in respect
thereof) to which such Section 7(b) Indemnitee may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon an untrue statement (or
alleged untrue statement) of a material fact contained in any Registration
Statement or prospectus, or arise out of or are based upon (x) the omission (or
alleged omission) to state therein a fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) was made in any Registration
Statement or prospectus in reliance upon and in conformity with information
furnished to the Company by such Holder requesting or joining in a
registration specifically for use in the preparation thereof, or (y) any untrue
statement or alleged untrue statement of a material fact contained in, or any
omission or alleged omission of a material fact from, a prospectus if (i) a
later prospectus corrected the untrue statement or alleged untrue statement, or
omission or alleged omission, (ii) at such time the Company had advised the
Holder of the availability of the revised prospectus, and (iii) there would have
been no such liability had such later prospectus actually been delivered to the
purchaser at or prior to confirmation of sale; provided, however, that the
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obligations of such Holders hereunder shall be limited to an amount equal to the
proceeds to each Holder of the Registrable Securities sold in connection with
such registration.
(c) Each party entitled to indemnification under this Paragraph 7 (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has received written notice 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 such counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld or delayed). The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall bear the expense of such defense of the Indemnified Party if (i) the
Indemnifying Party has agreed in writing to pay such expenses, (ii) the
Indemnifying Party shall have failed to assume the defense of such claim or
employ counsel reasonably satisfactory to the Indemnified Party, or (iii) in the
reasonable judgment of the Indemnified Party, based upon the written advice of
such Indemnified Party's counsel, representation of both parties by the same
counsel would be inappropriate due to actual or potential conflicts of interest.
In the event that the Indemnifying Party properly does not assume such defense,
the Indemnifying Party shall not be subject to any liability for any settlement
made without its prior written consent, which consent shall not be unreasonably
withheld or delayed. The failure of any Indemnified Party to give notice as
provided herein shall relieve the Indemnifying Party of its obligations under
this Paragraph 7 only to the extent that such failure to give notice shall
materially adversely prejudice the Indemnifying Party in the defense of any such
claim or any such litigation. No Indemnifying Party, in the defense of any
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such claim or litigation, shall, except with the prior written 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 in form and substance reasonably
satisfactory to such Indemnified Party.
8. Contribution.
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(a) If the indemnification provided for in Paragraph 7 from the
Indemnifying Party is unavailable to or unenforceable by the Indemnified Party
in respect to any losses, claims, damages, liabilities or expenses referred to
herein, then the 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, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Paragraph 7, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(b) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Paragraph 8 were determined by pro
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rata allocation or by any other method of allocation which does not take into
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account the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(c) If indemnification is available under Paragraph 7, the
Indemnifying Parties shall indemnify each Indemnified Party to the full extent
provided in Paragraph 7 without regard to the relative fault of the Indemnifying
Party or Indemnified Party or any other equitable consideration provided for in
this Paragraph 8.
9. Delay of Registration. No Holder shall have any right to take any
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action to restrain, enjoin or otherwise delay the filing or effectiveness of any
Registration Statement on the basis of any controversy which might arise with
respect to the interpretation or implementation of this Agreement.
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10. Holdback Agreements.
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(a) Restrictions on Public Sale by Holder of Registrable Securities.
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To the extent requested by the Company and the managing underwriter with respect
to the applicable Registration Statement, each Holder whose Registrable
Securities are included in a Registration Statement filed pursuant to Paragraphs
3 and 4 hereof agrees not to effect any public sale or distribution of the issue
being registered or any similar security of the Company, including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act, during the seven
(7)-day period prior to, and during the 90-day period beginning on, the
effective date of such Registration Statement, to the extent such sales may
prevent the Company from being in compliance with the Exchange Act;
provided, however, that all Holders holding not less than the number of shares
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of common stock held by such Holder (including, shares of common stock issuable
upon exercise of the Warrants and the Conversion Options, or other convertible
securities, or upon the exercise of options, warrants or rights) and all
officers and directors of the Company enter into similar agreements. Such
agreement shall be in writing reasonably satisfactory to the Company and such
managing underwriter.
(b) Restrictions on Public Sale by the Company and Others. The
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Company shall not make any public or nonpublic sale or distribution of any
securities of the same class as those being registered, or any securities
convertible into or exchangeable or exercisable for any such securities, during
the seven day period prior to, and during the 90-day period beginning on, the
effective date of any Registration Statement in which holders of Registrable
Securities are participating or the commencement of a public distribution of
Registrable Securities pursuant to any such Registration Statement (except (i)
as part of such registration or pursuant to registrations on XXX Xxxxx X-0 or S-
8 or any similar or successor form, or on any form filed in connection with an
exchange offer or an offering of securities solely to the existing stockholders
or employees of the Company or (ii) for sales or other issuances of securities
pursuant to outstanding options, warrants, rights or similar obligations).
11. Rule 144 and Stock Exchange Listings.
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To the extent that the Company is subject to the filing and reporting
requirements of the Securities Act and the Exchange Act, and so long as there
are Registrable Securities outstanding:
(a) The Company will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 or Rule
144A under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
information and requirements.
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(b) The Company will use its best efforts to avoid taking any action
which would cause the Common Stock to cease to be eligible for inclusion on
either of the NASD Automated Quotation System or for listing on any securities
exchange on which it may become listed.
12. Obligations of Holder.
---------------------
(a) Each Holder of Registrable Securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder, and shall otherwise use reasonable best
efforts to cooperate with the Company and any underwriter(s), as the Company may
reasonably request and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
Failure to comply with the Company's reasonable requests for information
pursuant to this Paragraph 12(a) shall excuse the Company from any further
obligation to a Selling Holder to include his or her shares in that Registration
Statement.
(b) Each Holder of the Registrable Securities agrees by acquisition of
such Registered Securities that upon receipt of any notice from the Company
pursuant to Paragraph 5(g), such Holder will forthwith discontinue such Holder's
disposition of Registered Securities pursuant to the Registration Statement
relating to such Registered Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Paragraph 5(g) and if
so directed by the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the prospectus relating to such Registered Securities at the time
of receipt of such notice.
13. Mergers, etc..
-------------
The Company shall not, directly or indirectly, enter into any merger,
consolidation or reorganization in which the Company shall not be the surviving
corporation unless the surviving corporation shall, prior to such merger,
consolidation or reorganization, agree in writing to assume the obligations of
the Company under this Agreement, and for that purpose references hereunder to
"Registrable Securities" shall be deemed to include the securities which the
Holders would be entitled to receive in exchange for Common Stock under any such
merger, consolidation or reorganization, provided that to the extent such
securities to be received are convertible into shares of common stock of the
issuer thereof, then any such shares of common stock or other securities as are
issued or issuable upon conversion of said convertible securities shall also be
included within the definition of "Registrable Securities."
14. Miscellaneous.
-------------
(a) Transfer of Certain Rights. The rights granted to the Holders
--------------------------
under this Agreement may be transferred only to a transferee who delivers to the
Company, within a reasonable time after such transfer, a written instrument by
which such transferee agrees to be bound by the applicable terms of this
Agreement. Notwithstanding the foregoing, nothing herein
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shall prohibit: (i) any Holder from transferring any of its rights under this
Agreement to any wholly-owned subsidiary of such Holder or to any entity which
merges or consolidates with or acquires all or substantially all of the equity
securities or assets of such Holder, (ii) any Holder which is a partnership from
transferring any of its rights under this Agreement to a partner of such
partnership where such partner receives Registrable Securities in a distribution
from such partnership, (iii) any Holder who is an individual from transferring
any of its rights under this Agreement to such Holder's spouse or to other
relatives, or to a trust for the benefit of the Holder, or his or her spouse or
other relatives; or (iv) any trustee of a trust which holds Registerable
Securities from distributing such Registrable Securities to the beneficiaries of
such trusts; provided that any such transferee under subparagraphs (i), (ii),
--------
(iii) or (iv) above will hold the Registrable Securities subject to the terms
and conditions of this Agreement. Upon any transfer of the rights of a Holder
permitted by and completed in compliance with the terms of this Agreement, the
transferee shall become a "Holder" for purposes of this Agreement.
(b) Remedies. In the event of a breach by the Company of its
--------
obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(c) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written consent of the
Company and Holders of at least a majority of the Registrable Securities
affected by such amendment, modification, supplementation, waiver or consent.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter which relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and which does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by the
Holders of a majority of the Registrable Securities being sold by such Holders,
provided that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing and shall be delivered by hand,
overnight courier service, registered or certified first-class mail, return
receipt requested, or telecopier; if to a Holder, at the address set forth
opposite such Holder's name on the signature pages attached hereto or such other
address as may have been furnished to the Company in writing; if to the Company,
at 0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention:
President and thereafter at such other address, notice of which is given in
accordance with the provisions of this Paragraph 13(d).
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All such notices and communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; one business day
after sent if sent by courier service.
(e) No Inconsistent Agreements. The Company shall not on or after the
--------------------------
date of this Agreement enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
To the extent the Company on or after the date of this Agreement grants any
superior or more favorable rights or terms to any Person with respect to its
securities, any such superior or more favorable rights or terms shall also be
deemed to have been granted simultaneously to the holders of Registrable
Securities. The Company has delivered to representatives of the initial Holders
hereunder copies of all agreements which it has previously entered into or
become a party to, or by which it is bound, with respect to its securities
granting any registration rights to any Person which is inconsistent with the
rights granted hereunder. The rights granted to the holders of Registrable
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the securities of the Company under
any other agreements.
(f) Governing Law; Forum. This Agreement shall be governed by and
--------------------
construed in accordance with the laws of the State of Delaware without regard to
the conflict of laws provisions thereof. The parties irrevocably agree that all
actions arising directly or indirectly as a result or in consequence of this
Agreement and the transactions contemplated hereby, shall be instituted and
litigated only in federal, state or local courts sitting in the City of
Wilmington, Delaware and each of the parties hereby consents to the exclusive
jurisdiction and venue of any such court, and waives any objection based on
forum nonconveniens.
----- -------------
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement and the Alliance Agreement (and
----------------
all exhibits and/or schedules attached hereto and thereto) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set
14
forth or referred to herein with respect to the registration rights granted by
the Company with respect to the securities now or hereafter owned by the
Holders.
(k) Attorneys' Fees. If any legal action or other proceeding is
---------------
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it may be entitled.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as
of the date first above written.
THE COMPANY:
-----------
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
By:
_________________________________
Title:
THE HOLDER(S):
-------------
HYATT VENTURES, INC.
By:
_________________________________
Title:
000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopy: 312/750-8545
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
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