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EXHIBIT 10.9
REGISTRATION RIGHTS AGREEMENT
Dated as of June 15, 1999
by and between
GLOBAL RESERVATION SYSTEMS, INC.
and
PRECISION RESPONSE CORPORATION
This Registration Rights Agreement is made and entered into as of June
15, 1999, by and between Global Reservation Systems, Inc., a California
corporation (the "COMPANY"), and Precision Response Corporation, a Florida
corporation (the "INVESTOR").
This Agreement is entered into pursuant to the Securities Purchase
Agreement dated as of June [ ], 1999 between the Investor and the Company (the
"Securities Purchase Agreement").
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
AFFILIATE: As to any specified person shall mean any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control," when used with respect to any person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
AGREEMENT: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
BUSINESS DAY: With respect to any act to be performed hereunder, each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York or other applicable place where such
act is to occur are authorized or obligated by applicable law, regulation or
executive order to close.
COMMISSION: The United States Securities and Exchange Commission.
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COMMON STOCK: Common stock, no par value per share, of the Company.
COMPANY: Global Reservation Systems, Inc., a California corporation,
and any successor corporation thereto.
CONTROLLING PERSON: As defined in Section 7(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission thereunder.
HOLDER: The Investor and each other holder of the Registrable Shares
from time to time, including their transferees.
INVESTOR: As defined in the preamble.
NASD: National Association of Securities Dealers, Inc.
PERSON: An individual, partnership, corporation, limited liability
company, trust, or unincorporated organization, or government and agency or
political subdivision thereof.
PROCEEDING: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or, to the knowledge of the person subject thereto,
threatened.
PROSPECTUS: The prospectus included in any Registration Statement,
including any preliminary Prospectus, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
REGISTER, REGISTERED and REGISTRATION: Such terms shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
REGISTRABLE SHARES: The shares of Common Stock of the Company held by
the Investor on the date hereof and any shares of Common Stock issuable upon
exercise of the warrants issued to the Investor pursuant to the Securities
Purchase Agreement until, in the case of any such share, the earliest to occur
of (i) the date on which it has been registered effectively pursuant to the
Securities Act and disposed of in accordance with the Registration Statement
relating to it, (ii) the date on which it is transferred in compliance with Rule
144 (or any similar provisions then in effect) or (iii) the date on which it is
sold to the Company.
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REGISTRATION EXPENSES: Any and all expenses incident to performance of
or compliance with this Agreement, including without limitation: (i) all
Commission, stock exchange, NASD registration, listing and filing fees, (ii) all
fees and expenses incurred in connection with compliance with federal or state
securities or blue sky laws (including any registration, listing and filing fees
and reasonable fees and disbursements of counsel in connection with blue sky
qualification of any of the Registrable Shares and the preparation of a Blue Sky
Memorandum and compliance with the rules of the NASD), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, duplicating,
printing, delivering and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting agreements,
securities sales agreements, certificates and other documents relating to the
performance of and compliance with this Agreement, (iv) all fees and expenses
incurred in connection with the listing of any of the Registrable Shares on any
securities exchange or The Nasdaq Stock Market, (v) the fees and disbursements
of counsel for the Company and any counsel to the Holders and of the independent
public accountants (including without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance) of
the Company and (vi) any fees and disbursements customarily paid by issuers or
sellers of securities (including the fees and expenses of any experts retained
by the Company in connection with any Registration Statement), but excluding
brokers' commission and transfer taxes, if any, relating to the sale or
disposition of Registrable Shares by a Holder.
REGISTRATION STATEMENT: Any registration statement (including a shelf
registration statement pursuant to Rule 415) of the Company that covers the
resale of any shares of Common Stock, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
registration statement.
RULE 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
RULE 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
RULE 158: Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
RULE 415: Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
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RULE 424: Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder.
SECURITIES PURCHASE AGREEMENT: As defined in the preamble.
UNDERWRITTEN OFFERING: A sale of securities of the Company to an
underwriter or underwriters for reoffering to the public.
2. PIGGY-BACK REGISTRATION.
(a) If at any time the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the Company
for its own account or for the account of any of the holders of any class of its
Common Stock (other than (i) a Registration Statement on Form X-0, Xxxx X-0 or
any substitute form that may be adopted by the Commission, or (ii) a
Registration Statement filed in connection with an exchange offer) and the
registration form to be used may be used for any registration of Registrable
Shares, then the Company shall give written notice of such proposed filing to
the Holders as soon as practicable (but in no event fewer than 10 days before
the anticipated filing date), and such notice shall offer such Holders the
opportunity to register such number of Registrable Shares as each such Holder
may request in writing within 20 days after receipt of such written notice from
the Company (which request shall specify the Registrable Shares intended to be
disposed of by such selling Holder) (a "PIGGY-BACK REGISTRATION"). No Holder
shall be considered to be a selling Holder until such Holder has provided notice
to the Company of its intent to sell Registrable Shares, and the Company shall
not be prevented from filing a Registration Statement or taking any action
(other than going effective) prior to the expiration of the 20-day period in
which Holders are entitled to respond to the Company's notice pursuant to this
SECTION 2(a). Upon the written request of any such Holder made within 20 days
after the receipt of any such notice (which request shall specify the number of
Registrable Shares intended to be disposed of by such Holder and the intended
method of disposition thereof), the Company will, subject to the terms of this
Agreement, effect the registration under the Securities Act of all Registrable
Shares which the Company has been so requested to register by the Holders
thereof, to the extent required to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Shares so to be
registered, by inclusion of such Registrable Shares in the registration
statement that covers the securities which the Company proposes to register,
PROVIDED that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason either not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Shares in connection with such registration (but not from its obligation to pay
the Registration Expenses in connection therewith) and (ii) in the case of a
determination to delay registering, shall be
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permitted to delay registering any Registrable Shares, for the same period as
the delay in registering such other securities.
(b) The Company shall use its reasonable best efforts to cause the
managing underwriter or underwriters of such proposed offering, if any, to
permit the Registrable Shares requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company or any other security holder included therein and to
permit the sale or other disposition of such Registrable Shares in accordance
with the intended method of distribution thereof. Any selling Holder shall have
the right to withdraw its request for inclusion of its Registrable Shares in any
Registration Statement pursuant to these provisions by giving written notice to
the Company of its request to withdraw prior to the effective date of such
registration statement.
(c) The Company will pay all Registration Expenses in connection with
each registration of Registrable Shares requested pursuant to this SECTION 2.
The selling Holders shall pay the underwriting discounts, commissions, and
transfer taxes, if any, relating to the sale of such selling Holders'
Registrable Shares pursuant to this SECTION 2, such costs being allocated PRO
RATA among all selling Holders on whose behalf Registrable Shares of the Company
are included in such registration on the basis of the respective amounts of
Registrable Shares then being registered on their behalf.
(d) PRIORITY IN PIGGY-BACK REGISTRATIONS. If a registration pursuant to
this SECTION 2 involves an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company, the Company
will, if requested by any Holder and subject to the provisions of this SECTION
2, use its reasonable best efforts to arrange for such underwriters to include
all the Registrable Shares to be offered and sold by such Holder among the
securities to be distributed by such underwriters. Notwithstanding anything to
the contrary, if the managing underwriter or underwriters of such underwritten
offering shall, in writing, inform the Holders requesting such registration and
the holders of any of the Company's other securities which shall have exercised
registration rights in respect of such underwritten offering of its belief that
the number of securities requested to be included in such registration exceeds
the number which can be sold in (or during the time of) such offering, then the
Company will be required to include in such registration statement only the
amount of securities that it is so advised should be included in such
registration. In such event securities shall be registered in such offering in
the following order of priority: (i) first, the securities that the Company
proposes to register and the securities that have been requested to be included
in such registration by such Holders (PRO RATA on the amount of securities
sought to be registered by the Company and such Holders) and (ii) second, the
securities that have been requested to be included in such registration by
Persons (other than Holders) entitled to exercise "piggy-back" registration
rights pursuant to contractual commitments of the Company (PRO RATA on the
amount of securities sought to be registered by such other Persons). The Company
hereby agrees that it will not grant any registration rights to any other Person
which would give such Person priority senior to, or on parity with, the priority
of the Holders set forth above.
3. EXPENSES. As between the Company and the Holders, the Company shall pay all
Registration Expenses in connection with the registration of the shares pursuant
to this Agreement. The Holder
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or Holders shall pay all broker's commissions and transfer taxes, if any, and
any other expense not specifically allocated to the Company pursuant to this
Agreement relating to the sale or disposition of such Holder's Registrable
Shares pursuant to any Registration Statement.
4. RULES 144 AND 144A. The Company shall file the reports required to be filed
by it under the Securities Act and the Exchange Act in a timely manner in
accordance with Rule 144, and, prior to the effectiveness of the Registration
Statement, if it is not required to file such reports, will make available other
information as required by, and so long as necessary to permit sales of the
Registrable Shares pursuant to, Rule 144A.
5. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect to any
registration pursuant to this Agreement, the Company shall use its best efforts
to effect or cause to be effected the registration of the Registrable Shares
under the Securities Act to permit the sale of such Registrable Shares by the
Holder or Holders in accordance with customary methods of sale or distribution,
including through brokers' transactions and block trades, as well as any other
intended method or methods of distribution reasonably requested by any Investor
or any other Holder by notice to the Company prior to the filing of the
Registration Statement, and the Company shall:
(a) cause each such Prospectus contained therein to be supplemented by
any required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 or any similar rule that may be adopted under the Securities Act and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by each Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
selling Holder thereof;
(b) furnish to any Holder named in any Prospectus without charge, as
many copies of such Prospectus, and any amendment or supplement thereto and such
other documents as such Holder may reasonably request, in order to facilitate
the public sale or other disposition of the Registrable Shares; the Company
consents to the use of any such Prospectus by such Holder in connection with the
offering and sale of the Registrable Shares covered by any such Prospectus;
(c) use its best efforts to register or qualify, or obtain exemption
from registration or qualification for, all Registrable Shares by the time the
applicable Registration Statement is declared effective by the Commission under
all applicable state securities or "blue sky" laws of such jurisdictions as any
Investor or any other Holder shall reasonably request in writing, keep each such
registration or qualification or exemption effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts and things which may be reasonably necessary or advisable to enable each
Holder to consummate the disposition in each such jurisdiction of such
Registrable Shares owned by such Holder; PROVIDED, HOWEVER, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction or to register as a broker or dealer in such jurisdiction where it
would not be otherwise be required to qualify or register but for
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this SECTION 5(c), (ii) subject itself to taxation in any such jurisdiction, or
(iii) submit to the general service of process in any such jurisdiction;
(d) notify the Investor and each other Holder promptly and, if
requested by the Investor or any other Holder, confirm such advice in writing
(i) when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (ii) of the
issuance by the Commission or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, and (iii) of the happening of any event during
the period a Registration Statement is effective as a result of which such
Registration Statement or the related Prospectus contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading (which advice
shall be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made);
(e) during the effectiveness of any Registration Statement, use its
reasonable efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of any enjoining order suspending the use or effectiveness of such
Registration Statement or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Shares for sale in any
jurisdiction, at the earliest possible moment;
(f) upon request, furnish to each requesting Holder, without charge, at
least one conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(g) except as provided in SECTION 6 hereof, upon the occurrence of any
event contemplated by SECTION 5(d)(iii) hereof, use its best efforts to promptly
prepare a supplement or post-effective amendment to a Registration Statement or
the related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Shares, such Prospectus will not contain any 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, in the light of the
circumstances under which they were made, not misleading;
(h) if requested by the representative underwriters, if any, or any
Holders of Registrable Shares being sold in connection with an Underwritten
Offering, (i) promptly incorporate in a prospectus supplement or post-effective
amendment such information as the representative of the underwriters, if any, or
such Holders indicate relates to them or otherwise reasonably request be
included therein, and (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(i) in connection with an Underwritten Offering of Registrable Shares,
make available to inspection by representatives of the Holders and the
representative of any underwriters participating in any disposition pursuant to
a Registration Statement and any special counsel or accountant retained by such
Holders or underwriters, all financial and other records, pertinent
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corporate documents and properties of the Company and cause the respective
officers, directors and employees of the Company to supply all information
reasonably requested by any such representatives, the representative of the
underwriters, the special counsel or accountants in connection with a
Registration Statement; PROVIDED, HOWEVER, that such records, documents or
information which the Company determines, in good faith, to be confidential and
notifies such representatives, representative of the underwriters, special
counsel or accountants are confidential shall be kept confidential and shall not
be disclosed by the representatives, representative of the underwriters, special
counsel or accountants unless (i) subject to the provisions of SECTION 6 hereof,
the disclosure of such records, documents or information is necessary to avoid
or correct a misstatement or omission in a Registration Statement or Prospectus,
(ii) the release of such records, documents or information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction, or is
otherwise required by law or legal process or a regulatory body, or (iii) such
records, documents or information have been generally made available to the
public and provided, that the foregoing inspection and information gathering
shall, to the greatest extent possible, be coordinated on behalf of the Holders
and the other parties entitled thereto by one counsel designated by and on
behalf of such Holders and other parties reasonably acceptable to the Company;
(j) if the Company has listed its Common Stock on an exchange or
market, use its best efforts (including, without limitation, seeking to cure any
deficiencies (within the Company's control) cited by the exchange or market in
the Company's listing application) to list all Registrable Shares on such
exchange or market;
(k) prepare and file in a timely manner all documents and reports
pursuant to the Exchange Act which are incorporated by reference into any
Registration Statement;
(l) provide a CUSIP number for all Registrable Shares, not later than
the effective date of the Registration Statement;
(m) use its best efforts to comply with all applicable rules and
regulations of the Commission and make generally available to its
securityholders, as soon as reasonably practicable, earnings statements covering
at least 12 months which satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act) thereunder;
(n) provide and cause to be maintained a transfer agent for all
Registrable Shares covered by any Registration Statement from and after a date
not later than the effective date of such Registration Statement;
(o) in connection with any sale or transfer of the Registrable Shares
that will result in such securities no longer being restricted from resale
without registration under the Securities Act, cooperate with the Holders and
the representative of the underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing the Registrable Shares to
be sold, which certificates shall not bear any restrictive legends, and to
enable such Registrable Shares to be in such denominations and registered in
such names as the representative of the underwriters, if any, or Holders may
request at least two Business Days prior to any sale of the Registrable Shares;
and
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(p) upon effectiveness of the first Registration Statement of the
Company declared effective relating to the Common Stock, the Company will take
such actions and make such filings as are necessary to effect the registration
of the Common Stock under the Exchange Act simultaneously with or immediately
following the effectiveness of the Registration Statement.
The Company may require each Holder to furnish to the Company such
information regarding the proposed distribution by such Holder of Registrable
Shares as the Company may from time to time reasonably request in writing and no
Holder shall be entitled to be named as a selling securityholder in any
Registration Statement and no Holder shall be entitled to use the Prospectus
forming a part thereof if such Holder does not provide such information to the
Company.
Upon receipt of written notice from the Company of the happening of any
event of the kind described in SECTION 5(d)(iii) hereof, the Holders will
immediately discontinue disposition of Registrable Shares pursuant to a
Registration Statement until the Holders' receipt of the copies of a
supplemented or amended Prospectus. If so requested by the Company, the Holders
will deliver to the Company (at the expense of the Company) all copies in their
possession, other than permanent file copies then in the Holders' possession, of
the Prospectus covering such Registrable Shares current at the time of receipt
of such notice.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless (i) each Holder, including without limitation, the Investor, (ii)
each Person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any Holder (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person"), and (iii) the respective officers, directors, partners, members,
employees, representatives and agents of the Investor and each Holder or any
controlling person as follows:
(i) from and against any and all loss, claim, liability and
damage whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement (or
any amendment or supplement thereto) pursuant to which Registrable Shares were
registered under the Securities Act including all documents incorporated therein
by reference, or the omission or alleged omission to state a 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 or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto), including
all documents incorporated therein by reference, or the omission or alleged
omission to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) from and against any and all loss, liability, claim and
damage whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim
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whatsoever based upon any such untrue statement or omission, if such settlement
is effected with the prior written consent of the Company; and
(iii) from and against any and all expense reasonably incurred
(including reasonable fees and disbursements of counsel), in investigating,
preparing or defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement does not apply to any Holder
with respect any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information furnished to
the Company by such Holder expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION BY HOLDERS. Each Holder severally agrees to
indemnify and hold harmless the Company, and directors, officers, partners,
employees, representatives and agents (including each officer of the Company who
signed the Registration Statement), and each Person, if any, who controls the
Company, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, against any and all loss, liability, claim, damage and
expenses described in the indemnity contained in SECTION 7(a) hereof (PROVIDED,
HOWEVER, that any settlement described in SECTION 7(a)(ii) hereof is effected
with the written consent of such Holder), as incurred, but only with respect to
such untrue statements or omissions, or alleged untrue statements or omissions,
made in a Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for use in
such Registration Statement (or any amendment thereto) or such Prospectus (or
any amendment or supplement thereto), and PROVIDED, FURTHER, that no Holder
shall be liable for any amount in excess of the net proceeds received by such
Holder from the sale of such Holder's Registrable Shares pursuant to a
Registration Statement or a Prospectus, as the case may be.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Each indemnified party
shall give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have under this indemnity agreement except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. If the indemnifying party so elects within a reasonable time after
receipt of such notice, the indemnifying party may assume the defense of such
action or proceeding at such indemnifying party's own expense with counsel
chosen by the indemnifying party and approved by the indemnified parties
defendant in such action or proceeding, which approval shall not be unreasonably
withheld; PROVIDED, HOWEVER, that, if such indemnified party or parties
reasonably determined that a conflict of interest exists where it is advisable
for such indemnified party or parties to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to them
which
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are different from or in addition to those available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense and the
indemnified party or parties shall be entitled to one separate counsel (and any
necessary local counsel) at the indemnifying party's expense. If an indemnifying
party is not entitled to assume the defense of such action or proceeding as a
result of the proviso to the preceding sentence, such indemnifying party's
counsel shall be entitled to conduct such indemnifying party's defense and
counsel for the indemnified party or parties shall be entitled to conduct the
defense of such indemnified party or parties, it being understood that both such
counsel will cooperate with each other to conduct the defense of such action or
proceeding as efficiently as possible. If an indemnifying party is not so
entitled to assume the defense of such action or does not assume such defense,
after having received the notice referred to in the first sentence of this
paragraph, the indemnifying party or parties will pay the reasonable fees and
expenses of not more than one counsel (and any necessary local counsel) for the
indemnified party or parties. In such event, however, no indemnifying party will
be liable for any settlement effected without the written consent of such
indemnifying party. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into a 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. If an indemnifying party is entitled to
assume, and assumes, the defense of such action or proceeding in accordance with
this paragraph, such indemnifying party shall not be liable for any fees and
expenses for counsel for the indemnified parties incurred thereafter in
connection with such action or proceeding.
(d) CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this SECTION 7 is for any reason held to be unenforceable, unavailable or
insufficient although applicable in accordance with its terms; the Company and
the Holders in question shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company and such Holders in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
such Holders on the other (taking into consideration the fact that the
provisions of the registration rights hereunder are a material inducement to the
Investor to purchase the Registrable Shares), in connection with the statement
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. Relative fault
shall be determined by reference to, among other things, whether an untrue or
alleged untrue statement of a material fact or an omission or alleged omission
of a material fact relates to information supplied by or available to the
Company on the one hand, or such Holders, on the other hand, and by the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Notwithstanding the foregoing, 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. No Holder shall be liable for
any amount in excess of the net proceeds received by such Holder from the sale
of such Holder's Registrable Shares pursuant to a Registration Statement or a
Prospectus, as the case may be. For purposes of this SECTION 7, each Person, if
any, who controls a Holder within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as such Holder, and each director
of the Company, each officer of the Company who signed the Registration
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Statement and each Person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act and each
partner, employee, representative or agent of the Company shall have the same
rights to contribution as the Company. Each party entitled to contribution
agrees that upon the service of a summons or other initial legal process upon it
in any action instituted against it in respect of which contribution may be
sought, it shall promptly give written notice of such service to the party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise.
8. LOCK-UP PERIOD. Each Holder agrees, if requested (pursuant to a timely
written notice) by the managing underwriter or underwriters in the Company's
first public underwritten offering, not to effect any public sale or
distribution of any of the Registrable Shares including a sale pursuant to Rule
144 or Rule 144A, without the prior written consent of the underwriters (except
as part of such underwritten offering), during the period beginning 7 days prior
to, and ending 90 days (or such shorter lock-up period, as the managing
underwriter or underwriters shall agree) after the effective date of the
registration statement in connection with such public underwritten offering, to
the extent timely notified in writing by the Company or by the managing
underwriter or underwriters. The Holders shall not be subject to the
restrictions set forth in this Section 8 for longer than 97 days during any
12-month period.
9. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company, or by a Holder
of any of their obligations under this Agreement, each Holder or the Company, 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. It is agreed that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, the parties shall
waive the defense that a remedy at law would be adequate.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, 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 owning not less
than 50% of the then outstanding Registrable Shares and, to the extent that at
any such time it still owns at least 25% of the Registrable Securities initially
owned by it, the Investor; PROVIDED, HOWEVER, that, for the purposes of this
Agreement, Registrable Shares that are owned, directly or indirectly, by either
the Company or an Affiliate of the Company shall not be deemed to be
outstanding. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of a Holder whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of any
other Holder may be given by such Holder; PROVIDED, HOWEVER, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.
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(c) NOTICES. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy:
(i) if to the Company:
Global Reservation Systems, Inc.
0000 Xxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxx
(ii) if to the Investor:
Precision Response Corporation
0000 XX 000xx Xxxxxx
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
(iii) if to any other Holder, to the address of such Holder as
it appears in the Common Stock register of the Company.
Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when (v) delivered by hand, if
personally delivered, (w) one Business Day after being timely delivered to a
next-day air courier, (x) five Business Days after being deposited in the mail,
postage prepaid, if mailed, (y) when answered back, if telexed or (z) when
receipt is acknowledged by the recipient's telecopier machine, if telecopied.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. Each Holder shall be
deemed a third party beneficiary of this Agreement. The Company may not assign
its rights or obligations hereunder without the prior written consent of each
Holder. Notwithstanding the foregoing, no assignee of the Company shall have any
of the rights granted under this Agreement until such assignee shall acknowledge
its rights and obligations hereunder by a signed written agreement pursuant to
which such assignee accepts such rights and obligations.
(e) 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.
(f) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, as applied to contracts
made and performed within the State of California without regard to principles
of conflicts of law.
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(g) SEVERABILITY. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the provisions hereof.
All references made in this Agreement to "Section" refer to such Section of this
Agreement, unless expressly stated otherwise.
(i) ATTORNEY'S FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover its reasonable attorneys' fees in addition to any other
available remedy.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
GLOBAL RESERVATION SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: President
The foregoing Registration Rights Agreement
is hereby confirmed and accepted as of the date
first above written.
PRECISION RESPONSE CORPORATION
By: /s/ Xxxx X. X'Xxxx
---------------------------------------
Name: Xxxx X. X'Xxxx
Title: Executive Vice President
and Chief Financial Officer
