EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
August 5, 2003, by and among Homestore, Inc. (formerly known as Xxxxxxxxx.xxx,
Inc.), a Delaware corporation (the "Company"), Cendant Corporation, a Delaware
corporation ("Cendant"), and Cendant Membership Services Holdings, Inc., a
Delaware corporation ("Stockholder") and wholly owned subsidiary of Cendant.
WHEREAS, the Company, Cendant and the Shelf Stockholders (as defined
in the Original Registration Rights Agreement (as defined below)) entered into
a registration rights agreement, dated as of October 26, 2000, which became
effective as of February 14, 2001 (the "Original Registration Rights
Agreement");
WHEREAS, upon the effectiveness of the Original Registration Rights
Agreement, Stockholder became the registered owner of all the Stockholder
Shares;
WHEREAS, Cendant and the Company desire to settle their dispute
relating to the Company restating its financial statements for the year ended
December 31, 2000 and for the quarterly periods ended March 31, 2001, June 31,
2001 and September 30, 2001 pursuant to the terms of the Settlement Agreement,
dated as of August 5, 2003 (the "Settlement Agreement'); and
WHEREAS, the Settlement Agreement provides for (i) termination of the
Original Registration Rights Agreement as between Cendant, on one hand, and
the Company, on the other hand, provided that such termination shall not
affect the rights and obligations between the Company and the Shelf
Stockholders (as such term is defined in the Original Registration Rights
Agreement) and (ii) the Company to grant certain registration rights to
Stockholder as set forth herein.
NOW, THEREFORE, in consideration of the promises, mutual covenants
and conditions herein contained, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the following respective meanings:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the 1934 Act.
"Business Day" shall mean any day that the Nasdaq SmallCap Market
System is normally open for trading for a full day and that is not a Saturday,
a Sunday or a day on which banks in the City of New York are authorized or
required to close for regular banking business.
"Existing Registration Rights Agreements" means any written agreement
dated as of a date prior to the date of the Reorganization Agreement
obligating the Company to register shares of any of the Company's securities
for its stockholders, including, without limitation, the Original Registration
Rights Agreement and the Second Amended and Restated Stockholders Agreement,
dated January 28, 1999, by and among the Company and certain of its
stockholders, as amended by Amendment No. 1 thereto dated April 9, 1999.
"Existing Stockholders" shall have the meaning ascribed to the terms
"Stockholders" and "Shelf Stockholders" in the Existing Registration Rights
Agreements, and any other stockholder or holder of any security convertible
into or exchangeable for any of the Company's securities.
"Person" means a corporation, an association, a partnership, a
limited liability company, an organization, a business, an individual, a joint
venture, a trust, other legal or governmental entity or political subdivision
thereof.
"Register," "registered," and "registration" refers to a registration
effected by preparing and filing a registration statement or similar document
in compliance with the 1933 Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"Registration Statement" means the registration statement described
in Section 2.1 of this Agreement.
"Reorganization Agreement" means the Agreement and Plan of
Reorganization, dated as of October 26, 2000, by and among the Company, Metal
Acquisition Corp., WW Acquisition Corp., Xxxx.xxx, Inc., Welcome Wagon
International Inc., Stockholder and Cendant Corporation.
"Rule 144" means Rule 144 promulgated under the 1933 Act, or any
successor rule thereto.
"SEC" means the Securities and Exchange Commission.
"Stockholder" shall have the meaning set forth in the preamble
hereto.
"Stockholder Shares" means the shares of common stock of the Company
issued to Stockholder in accordance with the terms and conditions of the
Reorganization Agreement, including such shares of common stock of the Company
transferred from Stockholder to The Cendant Charitable Foundation, and any
securities of the Company issued as a dividend on or other distribution with
respect to, or in exchange for or replacement of, such common stock.
2. Registration Rights
2.1 Shelf Registration.
(a) Following the date hereof, the Company shall promptly file with
the SEC a registration statement under the 1933 Act to provide for a public
offering and sale of all of the Stockholder Shares from time to time. The
Company shall use its reasonable best efforts to cause the Registration
Statement to be declared effective as soon thereafter as reasonably
practicable and in any event, on or before October 14, 2003 (the
"Effectiveness Target Date"). The Company shall use its reasonable best
efforts to keep the Registration Statement continuously effective until the
earlier of (i) the date on which Stockholder notifies the Company in writing
that the Company is no longer required to keep the Registration Statement
effective, (ii) the date on which all of the Stockholder Shares are disposed
of in accordance with the Registration Statement or (iii) the date on which
Stockholder receives an opinion of counsel of national repute and experience
in securities law matters (which opinion and counsel shall be satisfactory to
Stockholder) to the effect that all the Stockholder Shares may be sold
immediately in the public market without registration under the 1933 Act.
(b) The Company shall be deemed not to have used its reasonable best
efforts to cause the Registration Statement to become, or to remain, effective
if it voluntarily takes any action that would result in the Registration
Statement not being declared effective unless (i) such action is required by
applicable law, including, but not limited to, reasonable periods necessary to
prepare appropriate disclosure, or (ii) such action is taken by the Company in
good faith and for business reasons, including, without limitation, the
acquisition or divestiture of assets or the offering or sale of securities, so
long as the Company promptly thereafter prepares a pre-or post-effective
amendment, as applicable, to the Registration Statement or an amendment or a
supplement to the related prospectus so that the prospectus will not contain
an untrue statement of a material fact necessary to make the statements
therein not misleading; it being understood that in any event the Company
shall be subject to the provisions of Section 3.5 whether or not in compliance
with this Section 2.1(b).
2.2 Underwriting; Requirements. Following the effectiveness of the
Registration Statement, Stockholder may elect to conduct an underwritten
takedown under the Registration Statement to sell the Stockholder Shares
covered by such Registration Statement. In any such underwritten offering, the
underwriter or underwriters and manager or managers that will administer the
offering will be investment bankers of recognized national standing, selected
by Stockholder and reasonably acceptable to the Company. In conjunction with
any underwritten public offering pursuant to this Section 2.2, the Company
shall not be required to include any of the Stockholder Shares in such
underwriting unless Stockholder agrees to execute and deliver an underwriting
agreement containing terms and provisions that are (a) customary for similar
transactions and (b) consistent with prevailing market practices at the time
of such offering and the terms of Section 3.6 hereof. Neither the Company nor
any of the Existing Stockholders shall be permitted to include any securities
of the Company in any underwritten offering pursuant to this Section 2.2,
except to the extent any Existing Stockholders have as set forth on Schedule
2.2 hereof contractual rights existing as of December 31, 2002 to include
shares in such an underwritten offering.
3. Further Obligations of the Company After Registration.
3.1 Blue Sky Compliance. The Company shall, in connection with a
Registration Statement covering Stockholder Shares, use its reasonable best
efforts to register and qualify the Stockholder Shares covered by the
Registration Statement under such other securities or "blue sky" laws of such
jurisdictions as shall be reasonably requested by the Stockholder, provided
that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions unless the Company is
already subject to service in such jurisdiction and except as may be required
by the 1933 Act.
3.2 Furnishing of Prospectus. With respect to a Registration
Statement filed pursuant to Section 2.1, the Company shall use reasonable best
efforts to furnish to Stockholder copies of any preliminary prospectus and, as
expeditiously as reasonably possible after the effectiveness of the
Registration Statement, furnish to Stockholder such numbers of copies of a
final prospectus in conformity with the requirements of the 1933 Act, and such
other documents as Stockholder may reasonably request, in order to facilitate
the resale or other disposition of Stockholder Shares owned by the
Stockholder.
3.3 Amendments. With respect to the Registration Statement filed
pursuant to Section 2.1 of this Agreement, the Company shall prepare and file
with the SEC such amendments to the Registration Statement and amendments or
supplements to the prospectus contained therein as may be necessary to keep
the Registration Statement effective and the Registration Statement and
prospectus free from material misstatements or omissions for the entire period
for which the Registration Statement remains effective.
3.4 Notices. The Company shall provide written notification to the
Stockholder:
(a) promptly after it shall receive notice, of the date and time when
the Registration Statement and each post-effective amendment thereto has
become effective covering the Stockholder Shares;
(b) promptly of any request by the SEC for the amending the
Registration Statement or amending or supplementing the related prospectus or
for additional information covering Stockholder Shares held by the
Stockholder;
(c) at any time when a prospectus relating to Stockholder Shares is
required to be delivered under the 1933 Act, of any event which would cause
any such prospectus to include an 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 promptly prepare and file with the SEC, and promptly
notify Stockholder of the filing of, such amendments to any Registration
Statement or amendments or supplements to any prospectus as may be necessary
to correct any such statements or omissions;
(d) promptly after it shall receive notice of the issuance of any
stop order by the SEC suspending the effectiveness of any Registration
Statement covering Stockholder Shares or the initiation or threatening of any
proceeding for that purpose and promptly use reasonable best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued; or
(e) promptly after it shall receive notice that shares of the common
stock of the Company have been delisted from the Nasdaq SmallCap Market
System.
3.5 Liquidated Damages.
(a) In the event that (i) the Registration Statement is not declared
effective by the SEC on or prior to the Effectiveness Target Date, (ii) a
filed and effective Registration Statement ceases to be effective at any time
after having been declared effective by the SEC or (iii) the Company provides
Stockholder with the written notification pursuant to Sections 3.4(c) or
3.4(e), the Company shall pay liquidated damages (the "Liquidated Damages") to
Stockholder as follows:
(A) if the Registration Statement is not declared effective
by the SEC on or prior to the Effectiveness Target Date, then
commencing on the day after such Effectiveness Target Date and
accruing each day thereafter, additional Liquidated Damages shall be
payable in an amount equal to the product of (x) $0.001 per Business
Day multiplied by (y) the number of Stockholder Shares that have not
been sold, transferred or otherwise disposed of, by Stockholder or
The Cendant Charitable Foundation, as the case may be; or
(B) if the Registration Statement has been declared
effective and such Registration Statement ceases to be effective at
any time (other than after such time as all Stockholder Shares have
been disposed of thereunder), then additional Liquidated Damages
shall be payable in an amount equal to the product of (x) $0.001 per
Business Day multiplied by (y) the number of Stockholder Shares that
have not been sold, transferred or otherwise disposed of, by
Stockholder or The Cendant Charitable Foundation, as the case may be,
commencing on the date such Registration Statement ceases to be
effective and accruing each Business Day thereafter; or
(C) if the Company has provided written notification to
Stockholder pursuant to Section 3.4(c) or exceeded the thirty (30)
day threshold specified in Section 8 hereof, additional Liquidated
Damages shall be payable in an amount equal to the product of (x)
$0.001 per Business Day multiplied by (y) the number of Stockholder
Shares that have not been sold, transferred or otherwise disposed of
by Stockholder or The Cendant Charitable Foundation, as the case may
be, commencing on the date the Company provides such written
notification and accruing each Business Day thereafter; or
(D) if the Company has provided written notification to
Stockholder pursuant to Section 3.4(e), additional Liquidated Damages
shall be payable in an amount equal to the product of (x) $0.001 per
Business Day multiplied by (y) the number of Stockholder Shares that
have not been sold, transferred or otherwise disposed of by
Stockholder or The Cendant Charitable Foundation, as the case may be,
commencing on the date the shares of common stock of the Company were
delisted from the Nasdaq SmallCap Market System and accruing each
Business Day thereafter;
provided, however, that (1) upon effectiveness of the Registration Statement
(in the case of clause (A) above), (2) upon the effectiveness of the
Registration Statement which had ceased to remain effective (in the case of
clause (B) above), (3) upon receipt (or notification of the filing) of an
amended or supplemented Registration Statement or prospectus that corrects any
untrue statement of a material fact or omission (in the case of clause C
above) or (4) following notification that shares of common stock of the
Company have been relisted on the Nasdaq SmallCap Market System (in the case
of clause D above), the obligation to pay Liquidated Damages as a result of
such clause, as the case may be, shall cease to accrue upon payment of the
Liquidated Damages accrued to date. The obligation of the Company to pay
Liquidated Damages to Stockholder shall terminate (i) once all outstanding
Liquidated Damage payments have been paid to Stockholder and (ii) in the event
the Registration Statement remains effective for a period of six consecutive
months and during such six month period the Company has not provided
Stockholder with any of the written notices contemplated in Sections 3.4(c),
3.4(d) or 3.4(e) or suspended or delayed effectiveness of the Registration
Statement pursuant to Section 8 for more than thirty (30) days; provided,
however, that the six month period shall be extended for the same amount of
time that the Registration Statement was suspended or delayed pursuant to
Section 8.
(b) Payment of Liquidated Damages. Any amounts of Liquidated Damages
due pursuant to Section 3.5(a) (A), (B), (C) or (D) above shall be payable in
cash to Stockholder on the last day of each month in which Liquidated Damages
are incurred by the Company. The aggregate amount of Liquidated Damages
payable to the Stockholder by the Company pursuant to this Agreement shall not
exceed $7.5 million. Liquidated Damages shall not accrue pursuant to Section
3.5(a) (A), (B), (C) or (D) during any period of suspended or delayed
effectiveness of the Registration Statement pursuant to Section 8, provided
that Liquidated Damages shall accrue for any suspension or delay of the
effectiveness of the Registration Statement that exceeds the thirty (30) day
period provided for in Section 8. Liquidated Damages shall not accrue pursuant
to more than one of Section 3.5(a) (A), (B), (C) or (D) in respect of the same
Business Day nor shall Liquidated Damages accrue with respect to any Business
Day after the period set forth in Section 10 hereof for providing information
following a request for information made by the Company to the Stockholder
pursuant to Section 10 hereof and ending on the date that the Stockholder
provides such information to the Company.
(c) Acceleration of Liquidated Damages. In the event (i) the
Registration Statement has not been declared effective by the SEC as of the
first anniversary of the date hereof, or (ii) shares of common stock of the
Company cease to be listed on the Nasdaq SmallCap Market System at any time
prior to the date on which any Registration Statement has been continuously
effective for six (6) months and during such six month period, the Company has
not provided Stockholder with any of the written notices contemplated in
Sections 3.4(c), 3.4(d) or 3.4(e) or suspended or delayed effectiveness of the
Registration Statement pursuant to Section 8 for more than thirty (30) days
(provided, however, that the consecutive six month period shall be extended
for the same amount of time that the Registration Statement was suspended or
delayed pursuant to Section 8), the Company shall pay to Stockholder an amount
equal to (x)(A) the quotient of the number of Stockholder Shares held by
Stockholder on the first anniversary of the date hereof divided by the number
of Stockholder Shares held by Stockholder as of the date hereof multiplied by
(B) $7.5 million minus (y) the aggregate amount of any Liquidated Damages paid
to Stockholder pursuant to Section 3.5 during such one year period.
(d) Stock Split, Reclassification, etc. In the event of any stock
split, stock dividend, reverse stock split, reclassification, share exchange
or similar transaction with respect to the Stockholder Shares such that an
adjustment to the amount of Liquidated Damages payable in respect of each
Stockholder Shares is appropriate as an equitable matter, then the Company
shall in good faith make such equitable adjustment to the amount of Liquidated
Damages per share as it deems necessary or appropriate to achieve such
equitable result.
(e) Specific Enforcement. Without limiting the remedies available to
Stockholder, the Company acknowledges that any failure by the Company to
comply with its obligations under Section 3.5 hereof may result in material
irreparable injury to Stockholder for which there is no adequate remedy at
law, that it would not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, Stockholder may obtain
such relief as may be required to specifically enforce the company's
obligations under Section 2.1 (a) hereof.
3.6 Cooperation by the Company. The Company shall, in the case of a
secondary underwritten public offering, enter into such customary agreements
(including underwriting agreements in customary form) and take all such other
actions as Stockholder or the underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of the Stockholder Shares
(including, without limitation, making members of senior management of the
Company available to participate in, and cause them to cooperate with the
underwriters in connection with, "road-show" and other customary marketing
activities (including one-on-one meetings with prospective purchasers of the
Stockholder Shares)) and cause to be delivered to the underwriters and the
Stockholder, if any, opinions of counsel to the Company in customary form,
covering such matters as are customarily covered by opinions for an
underwritten public offering as the underwriters may request and addressed to
the underwriters and the Stockholder.
3.7 Inspection of Books and Records. The Company shall make
available, for inspection by any underwriter participating in any disposition
pursuant to the Registration Statement, and any attorney, accountant or other
agent retained by Stockholder or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to supply
all information reasonably requested by the Stockholder, underwriter,
attorney, accountant or agent in connection with the Registration Statement.
3.8 Accountant Letters. In the case of a secondary public
underwritten offering pursuant to Section 2.2, the Company shall cause to be
delivered, at the time of delivery of the Stockholder Shares sold pursuant
thereto, letters from the Company's independent certified public accountants
addressed to Stockholder (unless such Stockholder does not provide to such
accountants the appropriate representation letter required by rules governing
the accounting profession) and each underwriter stating that such accountants
are independent public accountants within the meaning of the 1933 Act and the
applicable rules and regulations adopted by the SEC thereunder, and otherwise
in customary form and covering such financial and accounting matters as are
customarily covered by letters of the independent certified public accountants
delivered in connection with secondary underwritten public offerings.
3.9 SEC Filings. At all times after the Company has filed a
registration statement with the SEC pursuant to the requirements of either the
1933 Act or the 1934 Act, the Company shall file all reports required to be
filed by it under the 1933 Act and the 1934 Act and the rules and regulations
adopted by the SEC thereunder, and take such further action as Stockholder may
reasonably request, all to the extent required to enable Stockholder to be
eligible to sell the Stockholder Shares pursuant to Rule 144.
4. Amended or Supplemented Prospectus. The Stockholder agrees that
upon receipt of any written notice from the Company contemplated by Section
3.4(c) Stockholder shall forthwith discontinue disposition of Stockholder
Shares until Stockholder receives copies of a supplemented or amended
prospectus from the Company, or until it is advised in writing by the Company
that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
prospectus; provided that the Company shall pay any Liquidated Damages set
forth in Section 3.5 above. If so directed by the Company, Stockholder will
deliver to the Company all copies of the prospectus covering such Stockholder
Shares at the time of receipt of such notice of suspension.
5. Indemnification.
5.1 Indemnification by the Company. The Company will, and hereby
does, indemnify and hold harmless, Stockholder and its directors, officers,
partners, agents and Affiliates and each other Person who participates as an
underwriter in the offering or sale of the Stockholder Shares and each other
Person, if any, who controls Stockholder or any such underwriter within the
meaning of the 1933 Act, insofar as losses, claims, damages or liabilities (or
actions 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 any registration statement under
which Stockholder Shares held by Stockholder were registered under the 1933
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company will
reimburse Stockholder and each such director, officer, partner, agent or
Affiliate, underwriter and controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information famished to the Company through an instrument
executed by or on behalf of Stockholder or such underwriter, as the case may
be, specifically stating that it is for use in the preparation thereof; and
provided, further, that the Company shall not be liable to any Person who
participates as an underwriter in the offering or sale of Stockholder Shares
or any other Person, if any, who controls such underwriter within the meaning
of the 1933 Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Stockholder Shares to such Person if such statement or omission was corrected
in such final prospectus so long as such final prospectus, and any amendments
or supplements thereto, have been furnished to such underwriter. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of Stockholder or any such underwriter,
director, officer, partner, agent or Affiliate or controlling Person and shall
survive the transfer of such securities by Stockholder.
5.2 Indemnification by Stockholders. Stockholder will, and hereby
does, severally indemnify and hold harmless (in the same manner and to the
same extent as set forth in Section 5.1) the Company, and each director,
officer, agent and Affiliate of the Company and each other Person, if any, who
controls the Company within the meaning of the 1933 Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by Stockholder specifically
stating that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; provided, however that the liability of any stockholder under this
Section 5.2 shall be limited to the amount of proceeds received by such
stockholder in the offering giving rise to such liability. Such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling
Person and shall survive the transfer of such securities by such stockholder,
agent, Affiliate.
5.3 Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subdivisions of this Section 5 such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 5, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties is reasonably likely to
exist in respect of such claim (in which case the indemnified party shall
notify in writing the indemnifying party of such indemnified party's judgment
and the basis therefor), the indemnifying party shall be entitled to
participate in and, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties arises in respect of such claim after the assumption
of the defense thereof and the indemnified party notifies the indemnifying
party in writing of such indemnified party's judgment and the basis therefor.
No indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No indemnifying party shall, without the
written consent of the 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 of such claim or litigation.
5.4 Contribution. If the indemnification provided for in this Section
5 shall be judicially determined (by the entry of final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) to be unavailable to a party seeking
indemnification under Section 5.1 or 5.2 hereof in respect of any loss, claim,
damage or liability, or any action in respect thereof, then, in lieu of the
amount paid or payable under Section 5.1 or Section 5.2 hereof, the
indemnified party and the indemnifying party under Section 5.1 or Section 5.2
hereof shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating the same), (i) in such proportion as is
appropriate to reflect the relative fault of the Company, on the one hand, and
Stockholder, on the other hand, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and Stockholder, on the other hand,
from the offering of the securities covered by such registration statement. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent,
which consent shall not be unreasonably withheld or delayed.
5.5 Other Indemnification. Indemnification and contribution similar
to that specified in the preceding subdivisions of this Section 5 (with
appropriate modifications) shall be given by the Company, on the one hand, and
Stockholder, on the other hand, with respect to any required registration or
other qualification of securities under any federal or state law or regulation
of any governmental authority other than the 1933 Act.
6. Expenses of Registration. The Company shall pay all registration,
filing and qualification fees (including SEC filing fees and, if applicable,
the listing fees of the Nasdaq SmallCap Market System or any stock exchange on
which the Company securities are traded) attributable to the Stockholder
Shares registered under this Agreement, and any legal, accounting or other
professional fees or expenses incurred by the Company or the Stockholder
(collectively, "Registration Expenses"). Stockholder shall pay all
underwriting discounts, selling commissions and stock transfer taxes, if any,
attributable to the sale of such Stockholder Shares registered by the
Stockholder.
7. Representations and Warranties. The Company hereby represents and
warrants to Stockholder as follows:
7.1 SEC Documents.
(a) The Company has filed all required forms, reports and documents
with the SEC since March 31, 2002 (the "Prior SEC Documents"), each of which
has complied in all material respects with all applicable requirements of the
1934 Act, and the rules and regulations of the SEC thereunder. None of the
Prior SEC Documents (or any documents, forms or reports incorporated therein)
contained when filed an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(b) The Registration Statement and any prospectus contained therein,
when it becomes effective or is filed with the SEC, as the case may be, will
conform in all material respects to the applicable requirements of the 1933
Act and the rules and regulations of the SEC thereunder. The Registration
Statement and any prospectus contained therein (including all materials
incorporated therein by reference) will not contain 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; at all times
subsequent to the date when the Registration Statement is declared effective
when a prospectus would be required to be delivered under the 1933 Act.
(c) Any documents incorporated by reference in any prospectus when it
becomes or became effective or are or were filed with the SEC, as the case may
be, will conform or conformed in all material respects to the requirements of
the 1933 Act or the 1934 Act, as applicable, and none of such documents will
contain or contained an untrue statement of a material fact or will omit or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
7.2 Financial Statements. The consolidated financial statements of
the Company included or incorporated by reference in the Registration
Statement and any prospectus contained therein, together with the related
schedules and notes thereto, do and will fairly present the financial position
of the Company and its consolidated subsidiaries as at the dates indicated and
the results of their operations for the periods specified. The consolidated
financial statements included or incorporated by reference in the Prior SEC
Documents fairly presented the financial position of the Company and its
consolidated subsidiaries as at the dates indicated and the results of their
operations for the periods specified. Except as otherwise stated therein, all
of the foregoing financial statements have been and will be prepared in
conformity with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting schedules, if
any, included or incorporated by reference in the Prior SEC Documents and the
Registration Statement and the prospectus fairly present and will when filed
fairly present in accordance with GAAP the information required to be stated
therein.
7.3 Consents and Notices. The Company has secured all permits,
consents, authorizations and notices that are necessary or required to
consummate the transaction contemplated by this Agreement, including any
consents, authorization or notices in connection with filing of the
Registration Statement with the SEC.
7.4 Survival. All of the foregoing representations and warranties
shall survive the completion of the transactions contemplated hereby. It is
understood and agreed that Stockholder is entering into this Agreement and the
Settlement Agreement and performing its obligations hereunder in reliance upon
the foregoing representations and warranties and subject to the accuracy
thereof and subject thereto and Stockholder would not enter into this
Agreement or the Settlement Agreement but for the truth and accuracy of such
representations and warranties.
8. Delays and Suspensions. The Company may suspend or delay the
effectiveness of the Registration Statement for one or more reasonable periods
of time (but not exceeding thirty (30) days in the aggregate during any twelve
(12) month period), if (a) the Company determines, in its reasonable judgment,
that such registration or offering would interfere with any financing,
acquisition, corporate reorganization or other material transaction involving
the Company or any of its Affiliates or would require premature disclosure
thereof and (b) gives Stockholder at least two (2) Business Days prior written
notice of such delay or suspension. Nothing contained in this Section 8,
however, affects the Company's obligations under Section 3.5, except as
provided herein.
9. Rule 144. In the event Stockholder receives an opinion of counsel
of national repute and experience in securities law matters (which opinion and
counsel shall be satisfactory to Stockholder) to the effect that all the
Stockholder Shares may be sold immediately in the public market without
registration under the 1933 Act, the registration rights granted under this
Agreement to Stockholder and the obligations of the Company under Section 2 to
the Stockholder, shall be of no further force and effect whatsoever without
any further action on the part of the Company or the Stockholder.
10. Information from Stockholder. Upon the request of the Company,
the Stockholder shall, within three (3) Business Days, provide the Company
with such information regarding the Stockholder, the Stockholder Shares, and
the intended method of disposition of such securities as may be required
pursuant to the 1933 Act to effect the registration of the Stockholder Shares.
Until the Stockholder has furnished such information to the Company, the
Company shall not be obligated to request the SEC to declare the Registration
Statement effective.
11. Miscellaneous.
11.1 Notices. All notices and other communications required or
permitted hereunder shall be made in the manner and to addresses set forth
below.
if to Stockholder or Cendant:
Cendant Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Company:
Homestore, Inc.
00000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000)000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Bird LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: H. Xxxxx Xxxx III, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11.2 Interpretation. The words "include," "includes" and "including"
when used herein shall be deemed in each case to be followed by the words
"without limitation." The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
11.4 Entire Agreement. This Agreement and the documents and
instruments and other agreements among the parties hereto referenced herein:
(a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and (b) are not intended to confer upon any other Person any rights,
remedies, obligations or liabilities hereunder.
11.5 Assignment. Except as set forth herein, neither this Agreement,
nor any of the rights and obligations hereunder, may be assigned by
Stockholder without the prior written consent of the Company, which consent
shall not be unreasonably withheld, provided that Stockholder may, without the
consent of the Company, assign its rights under this Agreement, in whole or in
part, to (a) any direct or indirect subsidiary of Stockholder, (b) any Person
to whom Stockholder sells, transfers, assigns or pledges Stockholder Shares,
provided that in the event of such sale, transfer, assignment or pledge,
Stockholder shall be appointed as representative of any such assignees for the
purpose of exercising the registration rights provided herein and the Company
shall not be required to give any Person, other than Stockholder, any notice
pursuant to this Agreement or be obligated to take instruction from any Person
other than Stockholder, or (c) any Person to whom Stockholder sells,
transfers, assigns or pledges an amount of Stockholder Shares exceeding three
(3) percent of the outstanding shares of the Company's common stock This
Agreement shall be binding upon and inure to the benefit of the Company and
its respective successors and assigns.
11.6 Severability. In the event that any provision of this Agreement
or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
11.7 Attorneys' Fees. In any action at law or suit in equity in
relation to this Agreement, the prevailing party in such action or suit shall
be entitled to receive a reasonable sum for its attorneys' fees and all other
reasonable costs and expenses incurred in such action or suit.
11.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof. Each of the parties hereto agrees that process may be served upon
them in any manner authorized by the laws of the State of Delaware for such
persons and waives and covenants not to assert or plead any objection which
they might otherwise have to such jurisdiction and such process.
11.9 Term. Except as expressly provided herein, the rights and
obligations hereunder shall terminate ten (10) years from the date of this
Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
HOMESTORE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: EVP and General Counsel
CENDANT CORPORATION
By: /s/ X. Xxxxxxxx Xxxxxxxx IV
----------------------------------
Name: X. Xxxxxxxx Xxxxxxxx IV
Title: Senior Vice President - Legal
CENDANT MEMBERSHIP SERVICES HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Executive Vice President - Tax
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
