A Registration Rights Agreement has been executed by and between Travel Services
International, Inc. and the following:
Alpine Consolidated, LLC
Capstone Partners
Xxxxxxx Xxxx
Xxxxxx Xxxxxxxx
Xxxx Xxxxx
Xxxx Xxxxxxx
Xxxxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx Xxxxxxxx
RESTRICTION AND REGISTRATION RIGHTS AGREEMENT
RESTRICTION AND REGISTRATION RIGHTS AGREEMENT, dated as of July 28,
1997 (the "Agreement"), between Travel Services International, Inc., a Delaware
corporation ("TSII") and _______ (the "Stockholder").
WHEREAS, Stockholder has made and will make significant contributions to
TSII and currently owns a large portion of the issued and outstanding shares of
common stock, $.01 par value, of TSII (the "Common Stock"); and
WHEREAS, in connection with the proposed initial public offering (the
"Initial Public Offering") of the Common Stock, TSII wishes to grant to the
Stockholder certain registration rights with respect to the shares of Common
Stock that the Stockholder currently owns or may acquire in the future, as
provided further herein.
NOW THEREFORE, in consideration of the capital contributions made by the
Stockholder to TSII and of the promises herein contained, the parties hereto
agree as follows:
1. Definitions.
As used in this Agreement:
(i) the terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act (and any post-effective amendments filed or required to
be filed) and the declaration or ordering of effectiveness of such registration
statement;
(ii) the term "Registrable Securities" means (A) all shares of Common Stock
owned by the Stockholder as of the date hereof, (B) any additional shares of
Common Stock acquired by the Stockholder and (C) any capital stock of TSII
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, the shares of Common Stock referred to in clause (A) or
(B) above;
(iii) the term "Holder" shall mean the Stockholder or any other holder of
Registrable Securities to whom the rights under this Agreement have been
assigned and the term "Holders" shall mean all such Holders collectively;
(iv) the term "Initiating Holders" shall mean any Holder or Holders who in
the aggregate are Holders of a majority of the Registrable Securities issued to
the Founding Stockholders;
(v) "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Act;
(vi) "Registration Expenses" shall mean all third-party expenses incurred
by TSII in compliance with Sections 3 and 4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for TSII and the underwriters, if any, blue sky fees
and expenses and the third-party expenses of any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of TSII, which shall be paid in any event by TSII);
(vii) "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders;
(viii) "Act" shall mean the Securities Act of 1933, as amended; and
(ix) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2. Restrictions. Except for transfers to affiliates of the Stockholder, who
agree to be bound by the restrictions set forth in this Section 2, for a period
of one year from the completion of the Initial Public Offering, except pursuant
to this Agreement, the Stockholder shall not sell, assign, exchange, transfer,
distribute or otherwise dispose of any shares of Registrable Securities received
by the Stockholder.
3. Requested Registration.
(i) Request for Registration. If TSII shall receive from an Initiating
Holder, no sooner that two years following the completion of the Initial Public
Offering, a written request that TSII effect any registration with respect to
all or a part of the Registrable Securities, TSII will:
(A) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(B) as soon as practicable, use its diligent best efforts to effect
such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Act) as may be so
requested and as would permit or facilitate the sale and distribution as
soon as is practicable
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of all or such portion of such Registrable Securities as are specified in
such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are
specified in a written request received by TSII within 10 business days
after written notice from TSII is given under Section 3(i) (A) above;
provided that TSII shall not be obligated to effect, or take any action to
effect, any such registration pursuant to this Section 3:
(x) In any particular jurisdiction in which TSII would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless TSII
is already subject to service in such jurisdiction and except as may
be required by the Act or applicable rules or regulations thereunder;
(y) After TSII has effected three (3) such registrations pursuant
to this Section 3 and such registrations have been declared or ordered
effective and the sales of such Registrable Securities shall have
closed; or
(z) If the Registrable Securities requested by all Holders to be
registered pursuant to such request do not have an anticipated
aggregate public offering price (before any underwriting discounts and
commissions) of not less than $10,000,000.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 3(ii) below, include other
securities of TSII which are held by officers or directors of TSII, or which are
held by persons who, by virtue of agreements with TSII are entitled to include
their securities in any such registration, but TSII shall have no absolute right
to include any of its securities in any such registration.
The registration rights set forth in this Section 3 shall be assignable, in
whole or in part, to any transferee of Common Stock (who shall be bound by all
obligations of this Section 3).
(ii) Underwriting. If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise TSII as a part of their request made pursuant to Section 3.
If officers or directors of TSII holding other securities of TSII shall
request inclusion in any registration pursuant to Section 3, or if holders of
securities of TSII other than Registrable Securities who are entitled, by
contract with TSII or otherwise, to have securities included in such a
registration (the "Other Stockholders") request such inclusion, the Holders
shall
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offer to include the securities of such officers, directors and Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. The Holders
whose shares are to be included in such registration and TSII shall (together
with all officers, directors and Other Stockholders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the representative of the underwriter or underwriters
selected for such underwriting by the initiating Holders and reasonably
acceptable to TSII. Notwithstanding any other provision of this Section 3, if
the representative advises the Holders in writing that marketing factors require
a limitation on the number of shares to be underwritten, the securities of TSII
held by officers or directors of TSII and the securities held by Other
Stockholders shall be excluded from such registration to the extent so required
by such limitation. If, after the exclusion of such shares, further reductions
are still required, the number of shares included in the registration by each
Holder shall be reduced on a pro rata basis (based on the number of shares
proposed to be sold by such Holder), by such minimum number of shares as is
necessary to comply with such request. No Registrable Securities or any other
securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration. If any officer,
director or Other Stockholder who has requested inclusion in such registration
as provided above disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to TSII, the underwriter and the
Initiating Holders. The securities so withdrawn shall also be withdrawn from
registration. If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, TSII may include its
securities for its own account in such registration if the representative so
agrees and if the number of Registrable Securities and other securities which
would otherwise have been included in such registration and underwriting will
not thereby be limited.
(iii) Notwithstanding the foregoing, if TSII shall furnish to Holders
requesting the filing of a registration statement pursuant to Section 3 (i), a
certificate signed by the president or Chief Executive Officer of TSII stating
that in the good faith judgment of the Board of Directors of TSII, it would be
seriously detrimental to TSII and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, then TSII shall have the right to defer such filing for
a period of not more than 60 days after receipt of the request of the Initiating
Holders; provided, however, that TSII may not utilize this right more than once
in any twelve (12) month period.
4. TSII Registration.
(i) If TSII shall determine to register any of its equity
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securities either for its own account or for the account of a security holder or
holders exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, or a registration on any
registration form which does not permit secondary sales or does not include
substantiallY the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, TSII will:
(A) promptly give to each of the Holders a written notice thereof
(which shall include a list of the jurisdictions in which TSII intends to
attempt to qualify such securities under the applicable blue sky or other
state securities laws); and
(B) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by the Holders within fifteen (15) days after receipt of the
written notice from TSII described in clause (i) above, except as set forth
in section 3(ii) below. Such written request may specify all or a part of
the Holders' Registrable Securities.
(ii) Underwriting. If the registration of which TSII gives notice is for a
registered public offering involving an underwriting, TSII shall so advise each
of the Holders as a part of the written notice given pursuant to Section
4(i)(A). In such event, the right of each of the Holders to registration
pursuant to this Section 4 shall be conditioned upon such Holders' participation
in such underwriting and the inclusion of such Holders' Registrable Securities
in the underwriting to the extent provided herein. The Holders whose shares are
to be included in such registration shall (together with TSII and the Other
Stockholders distributing their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for underwriting by TSII. Notwithstanding
any other provision of this Section 4, if the representative determines that
marketing factors require a limitation on the number of shares to be
underwritten, the representative may (subject to the allocation priority set
forth below) limit the number of Registrable Securities to be included in the
registration and underwriting. TSII shall so advise all holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner: The securities of TSII held by officers, directors and
Other Stockholders of TSII (other than securities held by holders who by
contractual right initiated the demand for such registration ("Demanding
Holders")) shall be excluded from such registration and underwriting to the
extent
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required by such limitation, and, if a limitation on the number of shares is
still required, the number of shares that may be included in the registration
and underwriting by each of the Holders and Demanding Holders shall be reduced,
on a pro rata basis (based on the number of shares proposed to be sold by such
Holder or Demanding Holder), by such minimum number of shares as is necessary to
comply with such limitation. If any of the Holders or Demanding Holders or any
officer, director or Other Stockholder disapproves of the terms of any such
underwriting, he may elect to withdraw there from by written notice to TSII and
the underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(iii) Number and Transferability. Each of the Holders shall be entitled to
have its shares included in an unlimited number of registrations pursuant to
this Section 4. The registration rights granted pursuant to this Section 4 shall
be assignable, in whole or in part, to any transferee of the Common Stock (who
shall be bound by all obligations of this Section 4).
5. Expenses of Registration. All Registration Expenses and Selling Expenses
incurred in connection with any registration, qualification or compliance
pursuant to Section 3 of this Agreement shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of shares so
registered. Without limiting the generality of the foregoing, in the event TSII
includes shares in any registration, qualification or compliance pursuant to
Section 3 of this Agreement, TSII shall pay the Registration Expenses in
proportion to TSII's share of the total number of shares included in such
registration. All Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Section 4 of this
Agreement shall be borne by TSII, and all Selling Expenses incurred in
connection with any such registration, qualification or compliance shall be
borne by the Holders of securities so registered pro rata on the basis of the
number of shares so registered.
6. Registration procedures. In the case of each registration effected by
TSII pursuant to this Agreement, TSII will keep the Holders, as applicable,
advised in writing as to the initiation of each registration and as to the
completion thereof. TSII will:
(i) keep such registration effective for a period of one hundred
eighty (180) days or until the Holders, as applicable, have completed the
distribution described in the registration statement relating thereto,
whichever first occurs; provided, however, that (A) such 180-day period
shall be extended for a period of time equal to the period during which the
Holders, as applicable, refrain from selling any securities included in
such registration in accordance with provisions in Section 10 hereof; and
(B) in the case of any registration of Registrable
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Securities on Form S-3 which are intended to be offered on a continuous or
delayed basis, such 180-day period shall be extended until all such
Registrable Securities are sold, provided that Rule 418, or any successor
rule under the Act, permits an offering on a continuous or delayed basis,
and provided further that applicable rules under the Act governing the
obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (y) includes any prospectus required by
Section 10(a) of the Act or reflects facts or events representing a
material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information
required to be included in (y) and (z) above to be contained in periodic
reports filed pursuant to Section 12 or 15(d) of the Exchange Act in the
registration statement; and
(ii) furnish such number of prospectuses and other documents incident
thereto as each of the Holders, as applicable, from time to time may
reasonably request;
provided, however, that the Holders, pro rata on the basis of the number of
their shares so included in such registration, reimburse TSII for expenses
incurred in performing its obligations under this Section 6
7. Indemnification.
(i) TSII will indemnify each of the Holders, as applicable, each of its
officers, directors and partners, and each person controlling each of the
Holders, with respect to each registration which has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by TSII of the Act or any rule or
regulation thereunder applicable to TSII and relating to action or inaction
required of TSII in connection with any such registration, qualification or
compliance, and will reimburse each of the Holders, each of its officers,
directors and partners, and each person controlling each of the Holders, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that TSII will not be liable in any such case to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on any
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untrue statement or omission based upon written information furnished to TSII by
the Holders or underwriter and stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify TSII, each of its directors and officers
and each underwriter, if any, of TSII's securities covered by such a
registration statement, each person who controls TSII or such underwriter within
the meaning of the Act and the rules and regulations thereunder, each Other
Stockholder and each of their officers, directors, and partners, and each person
controlling such Other Stockholder against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other document
made by such Holder, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
by such Holder therein not misleading, and will reimburse TSII and such Other
Stockholders, directors, officers, partners, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to TSII by such Holder and stated to be specifically for use therein; provided,
however, that the obligations of each of the Holders hereunder shall be limited
to an amount equal to the net proceeds to such Holder of securities sold as
contemplated herein.
(iii) Each party entitled to indemnification under this Section 7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided
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herein shall not relieve the Indemnifying Party of its obligations under this
Section 7 unless the Indemnifying Party is materially prejudiced thereby. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 7 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with any underwritten public offering contemplated by this
Agreement are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of TSII and Holders is subject to
the condition that, insofar as they relate to any loss, claim, liability or
damage made in a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the registration
statement in question becomes effective or the amended prospectus filed with the
Commission pursuant to Commission Rule 424(b) (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any underwriter if a copy
of the Final Prospectus was furnished to the underwriter and was not furnished
to the person asserting the loss, liability, claim or damage at or prior to the
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time such action is required by the Act.
8. Information by the Holders. Each of the Holders and each Other
Stockholder holding securities included in any registration, shall furnish to
TSII such information regarding such Holder or Other Stockholder and the
distribution opposed by such Holder or Other Stockholder as TSII may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
9. Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, TSII agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144, at all times from and after ninety (90)
days following the effective date of the first registration under the Act
filed by TSII for an offering of its securities to the general public;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of TSII under the Act and
the Exchange Act at any time after it has become subject to such reporting
requirements; and
(iii) so long as the Holder owns any Registrable Securities, furnish
to the Holder upon request, a written statement by TSII as to its
compliance with the reporting requirements of Rule 144 (at any time from
and after ninety (90) days following the effective date of the first
registration statement filed by TSII for an offering of its securities to
the general public), and of the Act and the Exchange Act (at any time after
it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of TSII, and such other reports and
documents so filed as the Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing the Holder to sell any
such securities without registration.
10. "Market Stand-off" Agreement. The Stockholder agrees, if requested by
TSII and an underwriter of Common Stock (or other securities) of TSII, not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of TSII held by such Holder during the 180 day period following the effective
date of the initial registration statement of TSII filed under the Act and
during the 90 day period following any subsequent registration statement filed
under the Act, provided that all executive officers and directors of TSII enter
into similar agreements.
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If requested by the underwriters, the Holders shall execute a separate
agreement to the foregoing effect. TSII may impose stop-transfer instructions
with respect to the shares (or securities) subject to the foregoing restriction
until the end of such period. The provisions of this Section 10 shall be binding
upon any transferee who acquires Registrable Securities, whether or not such
transferee is entitled to the registration rights provided hereunder.
11. Termination. The registration rights set forth in this Agreement shall
not be available to any Holder if, in the opinion of counsel to TSII, all of the
Registrable Securities then owned by such Holder could be sold in any 90-day
period pursuant to Rule 144 under the Act (without giving effect to the
provisions of Rule 144 (k)).
12. Notices. All communications provided for hereunder shall be sent by
first-class mail and (a) if addressed to the Stockholder, addressed to the
Stockholder, at 000 Xx. Xxxxxxx Xxxxx, Xxxxx 000-Xxxxxxxx, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000, Attention: Xxxx Xxxxxxx, or at such other address as such party
shall have furnished to TSII in writing, or if addressed to any other Holder of
Registrable Securities, at the address that such Holder shall have furnished to
TSII in writing, or, until any such other Holder so furnishes to the company an
address, then to and at the address of the last Holder of such Registrable
Securities who has furnished an address to TSII, or (c) if addressed to TSII, at
000 X. Xxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000, Attention:
President, or at such other address, or to the attention of such other officer,
as TSII shall have furnished to each Holder of Registrable Securities at the
time outstanding.
13. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and, with respect to TSII,
its respective successors and assigns and, with respect to the Stockholder, any
Holder of any Registrable Securities, subject to the provisions respecting the
minimum numbers or percentages of shares of Registrable Securities required in
order to be entitled to certain rights, or take certain actions, contained
herein.
14. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
15. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.
16. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall
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be deemed an original, but all such counterparts shall together constitute one
and the same instrument.
17. Other Registration Rights. For so long as the Stockholder
holds at least 20% of the Registrable Shares, TSII shall not, without the prior
written consent of the Stockholder, enter into any agreement, understanding or
arrangement pursuant to which TSII grants registration or other similar rights
to any shareholder unless the Holders shall be entitled to have included in any
registration effected pursuant to Section 4 hereof all Registrable Shares
requested by them to be so included prior to the inclusion of any securities
requested to be registered by the shareholders entitled to any such other
registration or other similar rights.
IN WITNESS WHEREOF, the parties have caused this agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
TRAVEL SERVICES INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
By:
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