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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of the ___
day of _____, 1997, among Galileo International, Inc., a Delaware corporation
(the "Company"), and Covia Corp., USAM Corp., Resnet Holdings, Inc.,
Distribution Systems Inc., Roscor A.G., Travel Industry Systems B.V., Retford
Limited, Racom Teledata S.p.A., Travidata Inc., Olynet Inc. and Coporga, Inc.
(the "Original Stockholders").
R E C I T A L S
WHEREAS, on the date hereof, the Original Stockholders are the owners of
the number of shares of the Company's Common Stock, par value $.__ per share
(the "Common Stock") set forth on Schedule A hereto;
WHEREAS, the Original Stockholders have approved various actions in
connection with a proposed initial public offering (the "IPO") of shares of the
Company's Common Stock, including the approval of a Restated Certificate of
Incorporation;
WHEREAS, the parties hereto desire to provide for the registration under
the Securities Act of 1933, as amended (the "Securities Act"), of the shares of
Registrable Stock (as defined herein) held by Holders (as defined herein), on
the terms and conditions set forth herein; and
WHEREAS, the Board of Directors of the Company has authorized the officers
of the Company to execute and deliver this Agreement in the name of and on
behalf of the Company.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions.
For purposes of this Agreement, in addition to the definitions set forth
above and elsewhere herein, the following terms shall have the following
respective meanings:
"affiliate" shall have the meaning given in Rule 405 under the Securities Act;
"Commission" shall mean the United States Securities and Exchange Commission;
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended;
"Holder" shall mean each Original Stockholder or any transferee or
assignee to whom the rights under this Agreement are transferred or
assigned in accordance with the provisions of Section 9 hereof;
"Registrable Stock" shall mean: (i) the Common Stock beneficially owned
by each Original Stockholder immediately after the IPO; (ii) any Common
Stock acquired in the public market or otherwise by a Holder of
Registrable Stock to increase its holdings in order to maintain such
Holder's right to elect a director of the Company pursuant to the terms
of any series of the Company's Special Voting Preferred Stock, par value
$.01 per share (the "Special Voting Preferred Stock"), then held by such
Holder (but only to the extent required to maintain such right); (iii)
any other Common Stock acquired in the public market or otherwise by a
Holder of Registrable Stock; (iv) any Common Stock issued as (or issuable
upon the conversion or exercise of any warrant, right, option or other
convertible security which is issued as) a dividend or other distribution
with respect to, or in exchange for, or in replacement of, the Common
Stock referred to in clauses (i), (ii) or (iii) above or in clause (v)
below; and (v) any Common Stock issued by way of a stock split of the
Common Stock referred to in clauses (i), (ii), (iii) or (iv) above. For
purposes of this Agreement, any Registrable Stock shall cease to be
Registrable Stock when (x) a registration statement covering such
Registrable Stock has been declared effective and such Registrable Stock
has been disposed of pursuant to such effective registration statement or
(y) such Registrable Stock is sold or distributed pursuant to Rule 144
(or any similar or successor provision (but not Rule 144A)) under the
Securities Act; and
"Rule 144" shall mean Rule 144, as from time to time amended, of the
Commission promulgated under the Securities Act, or any rule of the
Commission promulgated as a successor thereto.
2. Demand Registration.
(a) At any time 180 days after the date of this Agreement and (i)
for the period terminating on the first anniversary of the date of this
Agreement, the Holders holding at least 5% of the then outstanding Common
Stock which is Registrable Stock and (ii) thereafter Holders holding at
least 2% of the outstanding Common Stock which is Registrable Stock (or
Holders holding less than 2% of the outstanding Common Stock which is
Registrable Stock who, using their reasonable efforts, during the six
month period following notice by them to the Company of their desire to
register shares of such Stock held by them, have been unable to increase
such shares to be registered to 2%, in the aggregate) (the "Requesting
Holders") may request, in a written notice to the Company, that the
Company file a registration statement under
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the Securities Act covering the registration of such percentage of shares
(at least 5%, 2% or less, as the case may be) of the Common Stock which
is Registrable Stock then outstanding in the manner (e.g, underwritten)
specified in such notice (a "Demand Notice"); provided, however, that
shares of Registrable Stock referred to in clause (iii) of the definition
thereof, together with shares issued with respect thereto pursuant to
clauses (iv) and (v) of the definition thereof, shall not be counted for
purposes of determining if a Holder has satisfied the applicable
threshold for making a Demand Notice. A registration effected pursuant
to this Section 2 is referred to herein as a "Demand Registration".
Following receipt of any Demand Notice under this Section 2, the Company
shall (i) give, within 10 business days of receipt of such Demand Notice,
each other Holder written notice that it will be filing a registration
statement and advise such Holders that they may participate in such
registration by promptly so notifying the Company and (ii) file as
promptly as practicable (but in any event within 60 days after receiving
such Demand Notice) a registration statement and use its best efforts to
cause to be declared effective as soon as reasonably practicable (but in
any event within 120 days of receiving such Demand Notice) a registration
statement providing for the offer and sale of the Registrable Stock that
the Requesting Holders and the other Holders have requested be registered
in accordance with the manner of disposition specified in the Demand
Notice of the Requesting Holders; provided, however, that the
participation of a Holder (other than a Requesting Holder) in a Demand
Registration pursuant to clause (i) of this sentence shall not be deemed
to be a Demand Registration of such participating Holder.
(b) If the Requesting Holders intend to have the Registrable Stock
distributed by means of an underwritten offering, the underwriter or
underwriters shall be selected by Requesting Holders holding a majority
of the shares of Registrable Stock to be sold by such Requesting Holders
after consultation with all Requesting Holders, subject to approval by
the Company, which approval shall not be unreasonably withheld.
(c) Notwithstanding any provision of this Agreement to the
contrary,
(i) the Company shall not be required to effect a Demand
Registration if the Demand Notice related thereto is
delivered during the period commencing 45 days prior to the
estimated date of filing by the Company of a registration
statement pertaining to a public offering of equity
securities of the Company (a "Company Registration
Statement") which are the same as or similar to, or
convertible into or exchangeable for, Common Stock of the
Company (other than a registration statement on Form S-8 or
successor form) and ending on the date of the effectiveness
of such Company Registration Statement; provided, however,
that in no event shall the Company be required to
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file a registration statement pertaining to a Demand
Registration at any time prior to 90 days after the date of
the effectiveness of any Company Registration Statement;
(ii) the Company shall not be required to effect more than
one Demand Registration in any six-month period; and
(iii) if the Company shall furnish to the Requesting Holders
a certificate signed by the chief executive officer of the
Company stating that in the good faith opinion of a majority
of the board of directors of the Company such registration
would require the Company to disclose a material financing,
acquisition or other corporate development and that such
disclosure at such time is not in the best interests of the
Company and its stockholders, then the Company may postpone
the filing or effectiveness of a registration statement for
such period (the "Delay Period") as the board of directors
shall approve; provided, however, that (i) no single Delay
Period may exceed 90 consecutive days; (ii) the Delay Periods
in any twelve consecutive months may not exceed, in the
aggregate, 180 days; and (iii) no Delay Period may commence
fewer than 60 days following the end of a prior Delay Period.
(d) Each Original Stockholder will be entitled to two Demand
Registrations with respect to the Registrable Stock held by such Original
Stockholder; upon transfer or assignment of any or all of such
Registrable Stock in accordance with Section 9 hereof, the Original
Stockholder shall notify the Company, in accordance with Section 9, as to
whether or not the Original Stockholder is assigning Demand Registration
rights under this Agreement. As a result, the Company shall not be
obligated to effect more than two Demand Registrations in respect of the
Registrable Stock of each Original Stockholder (including for this
purpose any Demand Registration rights in respect of such Registrable
Stock which have been assigned in accordance with the provisions of
Section 9 hereof); provided, however, that a Demand Registration shall
not be deemed to have been effected for a particular Holder for purposes
of this Section 2(d) unless (i) the Registration Statement filed in
connection with such Demand Registration shall have been declared
effective by the Commission; (ii) such Registration Statement shall have
remained effective for the period set forth in Section 4; and (iii) the
offering of Registrable Stock pursuant to such registration shall not be
subject to any stop order, injunction or other order or requirement of
the Commission that is not lifted or released (other than any such stop
order, injunction or other requirement of the Commission prompted by any
act or omission of a Requesting Holder).
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(e) If the Registrable Stock registered pursuant to a Demand
Registration is to be sold in one or more firm commitment underwritten
offerings, and the sole or managing underwriter, as the case may be, of
such underwritten offering advises the Holders of such securities that,
in its opinion, the total amount of Registrable Stock requested to be
included in such registration will exceed the maximum amount (the
"Maximum Demand Offering Size") of the Company's securities that can be
marketed (1) at a price reasonably related to the then current market
value of such securities or (2) without otherwise materially and
adversely affecting the entire offering, then the Company shall include
in such registration, in the following priority up to the Maximum Demand
Offering Size: (x) first, all of the Registrable Stock requested to be
included in such registration by the Requesting Holders pursuant to this
Section 2, allocated, if necessary, for such offering not to exceed the
Maximum Demand Offering Size, pro rata among the Requesting Holders on
the basis of the relative number of shares of Registrable Stock each such
Requesting Holder has requested to be included in such registration; and
(y) second, all of the Registrable Stock requested to be included in such
registration by Holders other than the Requesting Holders pursuant to
this Section 2, allocated, if necessary, for such offering not to exceed
the Maximum Demand Offering Size, pro rata among such non-Requesting
Holders on the basis of the relative number of shares of Registrable
Stock each such Holder has requested to be included in such registration.
(f) The Company agrees not to effect any public or private sale,
distribution or purchase of any of its equity securities which are the
same as or similar to, or convertible into or exchangeable or exercisable
for, Common Stock of the Company during the 30-day period prior to, and
the 90-day period beginning on, the effective date of any registration
statement filed pursuant to a Demand Registration. The foregoing
sentence shall not apply to: (x) any such equity securities registered
pursuant to a registration statement on Form S-4 (or successor form) in
respect of a business combination, acquisition or similar transaction;
(y) any shares of Common Stock issued by the Company upon the exercise of
an option or the conversion of a security outstanding on the filing date
of any registration statement; and (z) any shares of Common Stock issued
or options to purchase Common Stock granted pursuant to employee benefit
plans of the Company, including, without limitation, the Company's
[Equity Incentive Plan].
3. Incidental Registration.
(a) Subject to Section 7 and the other terms and conditions set
forth in this Section 3, if at any time 180 days after this Agreement the
Company determines that it shall file a registration statement under the
Securities Act (other than a registration statement on Form S-4 or S-8
(or successor forms thereto) or filed in connection with an exchange
offer or an offering of securities solely to the Company's existing
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stockholders) for the sale of shares of Common Stock for its own account
or for the account of any third party (a "Selling Securityholder"), the
Company shall each such time promptly give each Holder written notice of
such determination setting forth the date on which the Company proposes
to file such registration statement, which date shall be no earlier than
30 days from the date of such notice, and advising such Holders of their
right to have any Registrable Stock beneficially owned by them included
in such registration. Upon the written request of any Holder received by
the Company no later than 15 business days after the date of the
Company's notice, the Company shall use its best efforts to cause to be
registered under the Securities Act all of the Registrable Stock that
each such Holder has so requested to be registered. The Company, in its
sole discretion shall appoint the underwriters, if any, for any
registration covered by this Section 3 in the case of a sale by the
Company of shares of Common Stock for its own account.
(b) The Company's obligation to include Registrable Stock in a
registration statement pursuant to Section 3(a) above is subject to the
following limitations:
(i) If, at any time after giving written notice of its
determination to register shares of Common Stock for its own
account or for the account of a Selling Securityholder and
prior to the effective date of any registration statement
filed in connection with such registration, the Company or
such Selling Securityholder shall determine for any reason
not to register such securities, the Company may, at its
election, give written notice of such determination to the
Holders and thereupon the Company shall be relieved of its
obligation to use any efforts to register any Registrable
Stock in connection with such aborted registration.
(ii) If the Registrable Stock registered in accordance with
this Section 3 is to be sold in one or more firm commitment
underwritten offerings, and the sole or managing underwriter,
as the case may be, of such underwritten offering advises the
Company, the Selling Securityholder and the Holders of
Registrable Stock to be included in such registration that,
in its opinion, the total amount of such securities to be so
registered, including such Registrable Stock, will exceed the
maximum amount (the "Maximum Offering Size") of the Company's
securities that can be marketed (1) at a price reasonably
related to the then current market value of such securities
or (2) without otherwise materially and adversely affecting
the entire offering, then the Company shall include in such
registration, in the following priority up to the Maximum
Offering Size: (x) first, all of the securities proposed to
be registered for offer and sale by the Company or the
Selling Securityholder, as the case may be, and (y) second,
all of the
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Registrable Stock requested to be included in such
registration by the Holders pursuant to this Section 3,
allocated, if necessary, for such offering not to exceed the
Maximum Offering Size, pro rata among the Holders requesting
registration of such Registrable Stock on the basis of the
relative number of shares of Registrable Stock each such
Holder has requested to be included in such registration.
(c) In connection with any registration of the Company's Common
Stock, under Section 2 or 3 hereof, and upon the written request of the
underwriters managing any underwritten offering of the Common Stock, each
Holder agrees not to effect any sale, disposition or distribution of any
Common Stock (other than that included in any such registration or other
than a private sale to another Original Owner or, subject to Section 9 of
this Agreement, a third party in a transaction that involves the transfer
of one or more shares of Special Voting Preferred Stock) or securities
exercisable for or convertible or exchangeable into Common Stock without
the prior written consent of such underwriters during the 30-day period
prior to, and the 90-day period beginning on, the effective date of any
registration statement to which Section 2(a) or 3(a) applies.
4. Registration Procedures. Whenever required under Section 2 or
Section 3 of this Agreement to use its best efforts to effect the registration
of any Registrable Stock, the Company shall, as soon as reasonably practicable:
(a) prepare and file with the Commission a registration statement on
Form S-1 or such other form available for the sale of the Registrable
Stock by the Holders thereof in accordance with the intended method of
distribution thereof and use its best efforts to cause such registration
statement to become and remain effective for the period of distribution
as provided herein; provided, however, that before filing any
registration statement or prospectus or any amendments or supplements
thereto (not including documents that would be incorporated or deemed to
be incorporated therein by reference), the Company shall afford the
Holders of the Registrable Stock covered by such registration statement,
their counsel and the managing or sole underwriter, if any, an
opportunity to review copies of all such documents proposed to be filed;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to comply with the provisions of
the Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder applicable to it with respect to the disposition
of all Registrable Stock covered by such registration statement;
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(c) furnish to each Holder such numbers of copies of the
registration statement and the prospectus included therein (including
each preliminary prospectus and any amendments or supplements thereto) as
such Holder may reasonably request in writing and, in the case of Demand
Registration, furnish each Requesting Holder with copies of any and all
correspondence with the Commission or any other governmental entity
relating to the registration statement and the prospectus included
therein;
(d) use its best efforts to register or qualify the Registrable
Stock covered by such registration statement under the securities or blue
sky laws of such jurisdictions within the United States and its
possessions and territories as shall be reasonably appropriate for the
distribution of the Registrable Stock covered by the registration
statement; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business
in or to file a general consent to service of process in any jurisdiction
wherein it would not but for the requirements of this paragraph (d) be
obligated to do so;
(e) promptly (but in any event within 5 business days) notify each
Holder for whom such Registrable Stock is covered by such registration
statement and confirm such notice in writing, (i) when a registration
statement, prospectus or any prospectus supplement or post-effective
amendment has been filed, and, with respect to a registration statement
or any post-effective amendment, when the same has become effective, (ii)
of the issuance of any order suspending the effectiveness of a
registration statement or of any order preventing or suspending the use
of any prospectus or the initiation of any proceedings for that purpose,
(iii) of the happening of any event that makes any statement made in such
registration statement or related prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in such registration
statement, prospectus or documents so that, in the case of such
registration statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
and at the written request of any such Holder promptly prepare and
furnish to such Holder a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances under which they were made;
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(f) furnish, at the written request of any Holder requesting
registration pursuant to Section 2, if the method of distribution is by
means of an underwriting, on the date that the shares of Registrable
Stock are delivered to the underwriters for sale pursuant to such
registration, or if such Registrable Stock is not being sold through
underwriters, on the date that the registration statement with respect to
such shares of Registrable Stock becomes effective: (i) a signed opinion,
dated such date, of the legal counsel for the Company for the purpose of
such registration, addressed to the underwriters, if any, and if such
Registrable Stock is not being sold through underwriters, then to the
Holders making such request, as to such matters as such underwriters or
the Holders holding a majority of the Registrable Stock included in such
registration, as the case may be, may reasonably request and as would be
customary in such a transaction and (ii) letters dated such date and the
date the offering is priced from the independent certified public
accountants of the Company, addressed to the underwriters, if any, and if
such Registrable Stock is not being sold through underwriters, then to
the Holders making such request (1) stating that they are independent
certified public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements and
other financial data of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereto,
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and (2) covering such other financial
matters (including information as to the period ending not more than 5
business days prior to the date of such letters) as such underwriters or
the Holders holding a majority of the Registrable Stock included in such
registration, as the case may be, may reasonably request and as would be
customary in such a transaction;
(g) provide reasonable cooperation to the selling Holders of
Registrable Stock and the managing or sole underwriter, if any, to
facilitate the timely preparation and delivery of certificates
representing shares of Registrable Stock to be sold, which certificates
shall not bear any restrictive legends and shall be in a form eligible
for deposit with The Depository Trust Company; and enable such
Registrable Stock to be in such denominations and registered in such
names as the managing or sole underwriter, if any, or Holders may
reasonably request in writing at least two business days prior to any
sale of Registrable Stock in a firm commitment underwritten public
offering, or at least ten business days prior to any other such sale;
(h) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form and containing customary provisions regarding
indemnification of the underwriters by the Holders joining in such
registration), in conformity with Section 6, and take such other actions
as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Stock to be so included in the
registration statement,
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including, without limitation, in the case of an underwritten Demand
Registration, providing the underwriters and their counsel reasonable
access to the Company's records and officers for purposes of customary
due diligence examinations and participating in good faith in meetings
with potential investors or security analysts (including "road shows");
provided, however, that in no event will the Company be required to
participate in more than one series of meetings or road show in respect
of all shares of Registrable Stock of all Holders in any 12 calendar
months;
(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission; and
(j) use its best efforts to list the Registrable Stock covered by
such registration statement with any securities exchange on which the
Common Stock of the Company is then listed.
For purposes of this Section 4, the period of distribution of Registrable Stock
covered by any registration statement shall be deemed to extend until the
earlier of (i) the sale of all such Registrable Stock or, in the case of an
underwritten public offering, until each underwriter has completed the
distribution of all Registrable Stock included in such offering; and (ii) three
months after the effective date of such registration statement.
5. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Holders shall furnish to the Company such information regarding themselves,
the Registrable Stock held by them, and the intended method of disposition of
the Registrable Stock as the Company shall reasonably request and as shall be
required in connection with any action to be taken by the Company; provided,
however, that such information shall only be used in connection with such
registration.
6. Expenses of Registration. All reasonable expenses incurred in
connection with each registration pursuant to Section 2 or 3 of this Agreement,
including without limitation all registration, filing and qualification fees,
word processing, duplicating, printers' and accounting fees (including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance), fees of the National Association
of Securities Dealers, Inc. or listing fees, messenger and delivery expenses,
all fees and expenses of complying with state securities or blue sky laws and
fees and disbursements of counsel for the Company shall be paid by the Company.
Notwithstanding the foregoing, (i) the selling Holders shall bear and pay or
be responsible for the underwriters' discounts and commissions, and fees and
disbursements of counsel for the selling Holders, applicable to securities
offered for their account in connection with any such registrations, filings
and qualifications made pursuant to Section 2 or 3 of this Agreement; and (ii)
in no event shall the Company pay or be responsible for the fees and
disbursements
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of counsel for the underwriters in connection with any such registrations,
filings and qualifications.
7. Underwriting Requirements. In connection with any underwritten
offering pursuant to Section 3, the Company shall not be required to include
shares of Registrable Stock in such underwritten offering unless the Holders of
such Registrable Stock accept the terms of the underwriting of such offering
that have been reasonably agreed upon between the Company and the Selling
Securityholder, on the one hand, and the underwriters selected by the Company
or the Selling Securityholder, on the other hand.
8. Indemnification. In the event any Registrable Stock is included
in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless each Holder and
its directors, officers, agents and employees, each person who
participates in the offering of such Registrable Stock, including
underwriters (as defined in the Securities Act), each person, if any, who
controls such Holder or participating person within the meaning of the
Securities Act and the directors, officers, agents and employees of each
such controlling person (each, an "Indemnified Party"), against any
losses, claims, damages or liabilities, joint or several, to which they
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based on any
untrue or alleged untrue statement of any material fact contained in such
registration statement on the effective date thereof (including any
prospectus filed under Rule 424 under the Securities Act or any
amendments or supplements thereto) or arise out of or are based upon any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse on a quarterly basis each such Indemnified Party for any
reasonable legal or other reasonable expenses incurred by them (but not
in excess of expenses incurred in respect of one counsel (plus one local
counsel) for all of them unless there is an actual conflict of interest
between any Indemnified Parties, which Indemnified Parties may be
represented by separate counsel) in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 8(a)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
written consent of the Company; provided, further, that the Company shall
not be liable to any Indemnified Party in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Indemnified Party. Such indemnity shall remain
in full
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force and effect regardless of any investigation made by or on behalf of
any such Indemnified Party, and shall survive the transfer of such
securities by the applicable Holder.
(b) Each Holder requesting or joining in a registration severally
and not jointly shall indemnify and hold harmless the Company, each other
Holder joining in such registration, each of the Company's and such other
Holders' respective directors, officers, agents and employees, each
person, if any, who controls the Company and each other Holder within the
meaning of the Securities Act and the directors, officers, agents and
employees of each such controlling person (each, an "Indemnified Party")
against any losses, claims, damages or liabilities, joint or several, to
which the Company or any such Indemnified Party may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement on the effective date thereof (including any
prospectus filed under Rule 424 under the Securities Act or any
amendments or supplements thereto) or arise out of or are based upon any
omission or alleged omission of a material 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 reliance upon and in conformity with written information
furnished by or on behalf of such Holder expressly for use in connection
with such registration; and each such Holder shall reimburse on a
quarterly basis any reasonable legal or other reasonable expenses
incurred by each such Indemnified Party (but not in excess of expenses
incurred in respect of one counsel (plus one local counsel) for all of
them unless there is an actual conflict of interest between any
Indemnified Parties, which Indemnified Parties may be represented by
separate counsel) in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the written consent of such
Holder, and provided, further, that the liability of any Holder hereunder
shall be limited to the proportion of any such loss, claim, damage,
liability or expense which is equal to the proportion that the net
proceeds from the sale of the Registrable Stock sold by such Holder under
such registration statement bears to the total net proceeds from the sale
of all securities sold thereunder, but not in any event to exceed the net
proceeds received by such Holder from the sale of Registrable Stock
covered by such registration statement.
(c) Promptly after receipt by an Indemnified Party (as defined in
Section 8(a) or 8(b), as the case may be) under this Section 8 of notice
of the commencement
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of any action, such Indemnified Party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section
8, notify the indemnifying party in writing of the commencement thereof
and the indemnifying party shall have the right to participate in and
assume the defense thereof with counsel selected by the indemnifying
party and reasonably satisfactory to the Indemnified Party; provided,
however, that an Indemnified Party shall have the right to retain its own
counsel, with all fees and expenses thereof to be paid by such
Indemnified Party, and to be apprised of all progress in any proceeding
the defense of which has been assumed by the indemnifying party. The
failure to notify an indemnifying party promptly of the commencement of
any such action shall not relieve such indemnifying party of any
liability to the Indemnified Party under this Section 8, except to the
extent that such indemnifying party was or is actually prejudiced
thereby, and in no event shall such failure relieve the indemnifying
party of any other liability that it may have to any Indemnified Party
otherwise than under this Section 8. If such indemnifying party so
assumes the defense thereof, it may not agree to any settlement of any
such action as the result of which any material remedy or relief, other
than monetary damages for which such indemnifying party shall be
responsible hereunder, shall be applied to or against such Indemnified
Party, without the prior written consent of such Indemnified Party. An
indemnifying party may not assume or jointly assume the defense of an
action if in the reasonable judgment of counsel for the Indemnified Party
a conflict of interest may exist between such indemnifying party and such
Indemnified Party with respect to such action. An indemnifying party who
is precluded from assuming or jointly assuming the defense of an action
pursuant to the immediately preceding sentence, or who elects not to, or
who has not appointed counsel reasonably satisfactory to the Indemnified
Party within a reasonable time to, assume the defense of an action shall
be obligated to pay the fees and expenses of one counsel (plus one local
counsel) for all Indemnified Parties, as selected by a majority in
interest of the Indemnified Parties. If the indemnifying party does not
assume the defense of an action, such indemnifying party shall be bound
by any settlement to which the Indemnified Party agrees and to which such
indemnifying party consents.
(d) To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the Indemnifying Party, in lieu of or in
addition to 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 indemnifying party and
Indemnified Party in connection with the actions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party
and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information
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supplied by, such indemnifying party or Indemnified Party, 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 or
liabilities referred to above shall be deemed to include any reasonable
legal or other reasonable fees or reasonable expenses incurred by such
party in connection with any investigation or proceeding.
Notwithstanding the provisions of this Section 8(d), no Holder shall be
required to contribute any amount in excess of the amount by which the
net proceeds from the sale of the Registrable Stock sold by such Holder
exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take
account of 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.
9. Termination; Transfer of Registration Rights; Successors and Assigns.
The registration rights of (i) any Original Stockholder will terminate at any
time two years (or such shorter "holding period" as may from time to time be
prescribed by Rule 144(k)) or more after the date hereof if at such time such
Original Stockholder is not an affiliate of the Company and has not been an
affiliate of the Company for at least three months, (ii) any such Original
Stockholder who is not an affiliate of the Company and who beneficially owns
less than 1% (or such greater percentage as may from time to time be prescribed
by Rule 144(e)) of the Company's Common Stock will terminate one year (or such
shorter "holding period" as may from time to time be prescribed by Rule
144(d)(1)) after the date hereof and (iii) any transferee of an Original
Stockholder will terminate (x) one year (or such shorter "holding period" as
may from time to time be prescribed by Rule 144(d)(1)) after such transferee
acquires Registrable Stock if such transferee beneficially owns less than 1%
(or such greater percentage as may from time to time be prescribed by Rule
144(e)) of the Company's Common Stock or (y) so long as such transferee
beneficially owns more than 1% (or such greater percentage as may from time to
time be prescribed by Rule 144(d)) of the Company's Common Stock, at any time
as is two years (or such shorter period as may from time to time be prescribed
by Rule 144(k)) or more after such transferee acquires Registrable Stock if at
such time such transferee (or subsequent transferee) is not an affiliate of the
Company and has not been an affiliate of the Company for at least 3 months;
provided, however, that, in the case of any such Original Stockholder who, at
the time it would otherwise lose its registration rights pursuant to this
Section 9, (A) beneficially owns at least 2% of the Company's Common Stock and
(B) would otherwise continue to have the right to
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cause the Company to effect a Demand Registration pursuant to Section 2, such
Original Stockholder or transferee shall, for a period of eighteen months after
such time, retain the right to cause the Company to effect one Demand
Registration in respect of such Common Stock pursuant to Section 2 and to
participate in a Demand Registration pursuant to clause (ii) of the last
sentence of Section 2(a) or any other registration pursuant to Section 3.
The registration rights of any Holder under this Agreement with respect to
any Registrable Stock (other than the right to cause the Company to effect one
Demand Registration pursuant to the proviso in the immediately preceding
paragraph) may be transferred, subject to Section 2(d) hereof, provided that:
(i) the transferring Holder shall give the Company written notice at or prior
to the time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this
Agreement are being transferred and (ii) such transferee shall agree in
writing, in form and substance reasonably satisfactory to the Company, to be
bound as a Holder by the provisions of this Agreement. Except as provided in
this Section 9, the registration rights of any Holder under this Agreement may
not be transferred.
Subject to the foregoing, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto. Except as expressly provided in this Agreement,
nothing in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement.
10. Rule 144. The Company shall file, in a timely manner, the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder.
11. Arbitration. Subject to the final sentence of this Section 11, any
dispute arising between or among the parties hereto or any of them involving
the subject matters covered by this Agreement shall be submitted to arbitration
under this Section 11. Any party asserting a breach of this Agreement by any
other party or parties shall notify all other parties of such alleged breach (a
"Dispute Notice") and the parties shall attempt to resolve such dispute
amicably and if they shall fail to resolve it within thirty (30) days of the
date of the Dispute Notice, any party may notify any of the other parties that
it wishes to commence an arbitration proceeding under this Section 10 (an
"Arbitration Request"). In any arbitration proceeding the party or parties
commencing the arbitration (alone or together, if more than one, the
"Petitioner") shall include in the Arbitration Request (a) a statement of the
facts constituting the alleged breach or dispute, (b) a written statement of
position ("Statement") regarding the dispute and (c) the name of an elector
designated by it. The Statement shall state the facts and arguments in support
of the position taken by the party submitting such Statement and shall detail
that party's proposed solution and relief sought (if
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any). Copies of any Arbitration Request shall be furnished at the same
time to the other parties hereto. The party or parties with whom the
Petitioner has its dispute (alone or together, if more than one, the
"Respondent") shall within five (5) business days after the date of the
Arbitration Request designate a second elector by notice to the Petitioner
(copies of which shall be furnished to the other parties), but if it or they
shall fail to do so within such period the Petitioner may designate an elector
on Respondent's behalf. The electors chosen by the Petitioner and the
Respondent shall attempt to agree upon an arbitrator (the "Arbitrator"), but if
they are unable to do so within twenty (20) business days after the designation
of the second elector, then either elector thereafter may apply to the American
Arbitration Association (the "Association") for the selection of the Arbitrator
in accordance with the Commercial Arbitration Rules of such Association. The
Arbitrator so selected shall have full power to decide any dispute referred to
in this Section 11. The arbitration proceedings shall be conducted in the
English language, and the place of arbitration and the making of the Award (as
defined below) shall be the City of New York. The UNCITRAL rules of commercial
arbitration shall apply to any arbitration commenced pursuant to this Section
11, as modified by the following procedure:
(i) Within five (5) business days of the selection of the Arbitrator
(the "Commencement Date"), the Respondent shall deliver its Statement
regarding the dispute to the Arbitrator and to the Petitioner.
(ii) Within fifteen (15) business days from the Commencement Date,
each of the Petitioner and the Respondent shall deliver to the Arbitrator
and to the other party, a response ("Response") to the other party's
Statement setting forth opposing facts and arguments and limited in
length to ten (10) typed, single spaced pages (excluding evidentiary
exhibits included therein).
(iii) Within twenty (20) business days from the Commencement Date,
each of the Petitioner and the Respondent may deliver to the Arbitrator
and to the other party, a reply to the Response limited to setting forth
facts and arguments in rebuttal to the Statement and Response of the
other party and limited in length to five (5) typed, single spaced pages
(excluding evidentiary exhibits included therein).
(iv) Within twenty-five (25) business days from the Commencement
Date, each of the Petitioner and Respondent shall present an oral
summation of its position to the Arbitrator in the presence of the other
party in accordance with such rules of procedure including, without
limitation, length of presentation and right of cross-examination, as the
Arbitrator shall determine in writing and deliver to the parties not less
than three (3) business days prior to such hearing; provided, however,
that such hearing shall not exceed eight (8) hours in total and may not
be adjourned except for extraordinary circumstances beyond the control of
the parties.
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(v) The Arbitrator shall either issue his decision and award ("Award")
or request a further meeting of the parties within fifteen (15) days of the
hearing.
(vi) Any such further meeting of the parties shall take place within
five (5) business days of the request therefor and shall be conducted as
determined by the Arbitrator. The Arbitrator shall issue his Award no
later than fifteen (15) days after any such further meeting of the parties.
(vii) The Award shall be in writing and shall be limited to a decision
either completely in favor of Petitioner's request for relief or completely
in favor of Respondent's request for relief. The Award shall be final and
binding upon the parties hereto and judgment may be entered thereon in any
court of competent jurisdiction and the costs and expenses of such
arbitration shall be borne by the party losing such arbitration.
This Section 11 shall in no way affect the right of any party to seek
such interim relief, and only such relief, as may be required to maintain the
status quo in aid of the arbitration in any court of competent jurisdiction. In
addition, to the extent there is an existing litigation to which any party
hereto is a party, this Section 11 shall not preclude such party from
participating in such litigation.
12. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
13. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
14. Titles. The titles of the Sections of this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
15. Notices. Any notice required or permitted under this Agreement
shall be in writing and shall be delivered in person or mailed by certified or
registered mail, return receipt requested, or faxed to (a) the Company at the
address set forth below its signature hereof, (b) to the Original Stockholders
at the address set forth below each of their signatures hereof or (c) to a
Holder at the address therefor as set forth in the Company's records or, in any
such case, at such other address or addresses as shall have been furnished in
writing by such party to the others. The giving of any notice required
hereunder may be waived in writing by the parties hereto. Every notice or other
communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered, or on the date actually received, if sent by
mail or fax, with receipt acknowledged.
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16. Amendments and Waivers. This Agreement may be amended or waived only
upon the written consent of the Company and each of the holders of Registrable
Stock; provided, however, that if a holder of Registrable Stock shall have
ceased to have any registration rights hereunder, the consent of such holder
shall not be required.
17. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provisions shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if
such provisions were so excluded and shall be enforceable in accordance with
its terms.
18. Entire Agreement. All prior agreements of the parties concerning the
subject matter of this Agreement are expressly superseded by this Agreement.
This Agreement contains the entire Agreement of the parties concerning the
subject matter hereof. Any oral representations or modifications of this
Agreement shall be of no effect.
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IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be executed as of the date first above written above by their respective
officers thereunto duly authorized.
COVIA CORPORATION
By________________________
Name:
Title:
USAM CORPORATION
By________________________
Name:
Title:
RESNET HOLDINGS, INC.
By________________________
Name:
Title:
DISTRIBUTION SYSTEM, INC.
By________________________
Name:
Title:
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ROSCOR A.G.
By________________________
Name:
Title:
TRAVEL INDUSTRY SYSTEMS B.V.
By________________________
Name:
Title:
RETFORD LIMITED
By________________________
Name:
Title:
RACOM TELEDATA S.p.A.
By________________________
Name:
Title:
TRAVIDATA INC.
By________________________
Name:
Title:
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OLYNET, INC.
By________________________
Name:
Title:
COPORGA, INC.
By________________________
Name:
Title:
GALILEO INTERNATIONAL, INC.
By________________________
Name:
Title:
