Exhibit 2
EXCHANGE AGREEMENT
AGREEMENT (this "Agreement"), dated as of June 21, 2001, by and
among Cendant Membership Services Holdings, Inc., a Delaware corporation
("Buyer") and X.X. Xxxxxxxxx and Sons Company, a Delaware corporation
("Seller").
WHEREAS, Seller and Buyer are parties to a Stock Purchase
Agreement, dated as of May 12, 2000 (the "Stock Purchase Agreement"),
pursuant to which 159,795 shares (the "Tracking Stock Shares") of Cendant
Corporation common stock designated as Xxxx.xxx Tracking Stock, par value
$0.01 per share, were issued and sold to Seller;
WHEREAS, on June 14, 2001, the parties entered into an exchange
agreement, pursuant to which Seller transferred to Buyer 79,898 shares of
the Tracking Stock Shares in exchange for 58,197 shares of common stock,
par value $.001 per share ("Homestore Common Stock"), of Xxxxxxxxx.xxx,
Inc. ("Homestore") in partial satisfaction of the parties obligations under
Section 4.8 of the Stock Purchase Agreement;
WHEREAS, pursuant to Section 4.8 of the Stock Purchase Agreement,
Seller has the right to require Buyer to purchase the remaining 79,897
shares of the Tracking Stock Shares held by Buyer (the "Remaining Tracking
Stock Shares") for $2.5 million;
WHEREAS, the parties desire to exchange the Remaining Tracking
Stock Shares for 58,197 shares (the "Homestore Shares") of common stock,
par value $.001 per share ("Homestore Common Stock"), of Xxxxxxxxx.xxx,
Inc. ("Homestore"), on the terms and conditions provided for herein, in
complete satisfaction of Buyer's remaining obligations pursuant to the
terms of the Stock Purchase Agreement; and
WHEREAS, pursuant to a Registration Rights Agreement, dated as of
October 26, 2000 and effective as of February 16, 2000, by and between
Homestore and Cendant Corporation, Homestore filed a registration statement
on Form S-3 on May 22, 2001 for a public offering of certain shares of
Homestore Common Stock, including the Homestore Shares and such
registration statement was declared effective by the Securities and
Exchange Commission on June 4, 2001.
NOW, THEREFORE, in consideration of the provisions and the mutual
consents contained herein, the parties hereto agree as follows:
1. SALE OF TRANSFERRED SECURITIES. (a) At the Closing, (i) Seller
shall sell, assign, transfer and convey to Buyer, without representation or
warranty (other than as expressly provided herein), all of its right, title
and interest in and to the Remaining Tracking Stock Shares, free and clear
of all Liens (as defined herein), other than Liens imposed as a result of
actions by Buyer or its affiliates (as the term "affiliates" is defined in
Rule 12b-2 under the Exchange Act) and (ii) Buyer shall sell, assign,
transfer and convey to Seller, without representation or warranty (other
than as expressly provided herein), all of its right, title and interest in
and to 58,197 Homestore Shares, free and clear of all Liens other than
Liens imposed as a result of actions by Seller or its affiliates. The
consideration to Seller for the sale of the Remaining Tracking Stock Shares
shall include Buyer's obligation to pay to Seller the Adjustment Amount (as
defined herein) under the circumstances set forth in Section 1(c). The
parties acknowledge and agree that the exchange of (x) the Remaining
Tracking Stock Shares for (y) the Homestore Shares, together with Seller's
payment of the Adjustment Amount, if required, shall constitute
satisfaction of the parties' respective obligations under the Stock
Purchase Agreement.
(b) Prior to the Closing, Seller shall open a brokerage account
(the "Seller Account") with Credit Suisse First Boston (the "Bank"). At the
Closing, Buyer shall transfer the Homestore Shares to Seller and such
shares shall be deposited in the Seller Account. Seller agrees to instruct
the Bank to sell all Homestore Shares delivered to the Seller Account on or
before the close of trading on the third (3rd) trading day following (but
not including) the Closing Date (which third (3rd) trading day will be
extended by the number of days, if any, that sales of Homestore Common
Stock are suspended from trading on the Nasdaq Stock Market) in accordance
with written instructions mutually agreed upon by the parties. Seller shall
instruct Bank to deliver on the Determination Date to Seller and Buyer a
written report setting forth the Proceeds of the sale of the Homestore
Shares. As used in this Agreement, the "Proceeds" shall be equal to the
gross cash proceeds received by Seller from the sale of the Homestore
Shares, without deduction of any sales or brokers' commissions, fees and
discounts. The "Determination Date" shall be the date on which all
Homestore Shares delivered to Seller as provided herein have been sold or
otherwise disposed of by Seller. For purposes of this Agreement, all of the
Homestore Shares shall be deemed to have been sold or otherwise disposed of
upon the broker's execution of the trade relating to the last Homestore
Share held in the Seller Account, and not the date of settlement of such
trade. Seller shall cause the Bank to provide notice to Seller and Buyer as
to the occurrence of the Determination Date. For purposes of this
Agreement, the term "business day" shall mean any day other than Saturday,
Sunday, a holiday, a bank holiday or a day in which the New York Stock
Exchange is closed for business, and shall consist of the time period from
12:00 a.m. through 12:00 midnight Eastern time and the term "close of
business" shall mean the close of business in New York City.
(c) In the event the Proceeds from the sale of the Homestore
Shares are less than $2.5 million, Buyer shall, subject to the terms of
this Agreement, pay and deliver to Seller the Adjustment Amount in
accordance with the terms of this Agreement. The "Adjustment Amount" will
be equal to $2.5 million less the aggregate Proceeds of the sale of all of
the Homestore Shares.
(d) In the event Buyer is required to pay the Adjustment Amount,
Buyer shall pay to Seller, within two (2) business days of the
Determination Date, such amount by wire transfer of immediately available
funds to an account designated by Seller.
2. THE CLOSING. Upon the terms and subject to the conditions of
this Agreement, it is intended that the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place on the date
of execution of this Agreement (the "Closing Date") at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 10:00 a.m. (local time).
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Buyer as follows:
3.1 ORGANIZATION. Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to carry on
its business substantially as it is now being conducted.
3.2 CORPORATE AUTHORIZATION. Seller has all requisite power and
authority to execute, deliver and perform this Agreement and the
transactions contemplated hereby, and the execution, delivery and
performance by Seller of this Agreement have been duly authorized by all
requisite corporate action by Seller.
3.3 BINDING AGREEMENT. This Agreement has been duly and validly
executed and delivered on behalf of Seller and, assuming due authorization,
execution and delivery by Buyer, constitutes the legal and binding
obligation of Seller enforceable against Seller in accordance with its
terms subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, to general equity principles
(whether considered in a proceeding in equity or at law).
3.4 REQUIRED APPROVALS, NOTICES AND CONSENTS. Except as
described herein, no consent or approval of, other action by, or any notice
to, any governmental body or agency, domestic or foreign, or any third
party is required in connection with the execution and delivery by the
Seller of this Agreement or the consummation of the transaction
contemplated hereby.
3.5 VALID TITLE. The Remaining Tracking Stock Shares are owned by
Seller free and clear of any liens, claims, security interests,
encumbrances, restrictions or transfer (other than restrictions imposed
under federal or state securities laws) or voting (collectively, "Liens"),
other than Liens imposed as a result of actions by Buyer or its affiliates.
Upon delivery by Seller, Buyer will receive good title to the Remaining
Tracking Stock Shares.
3.6 FEES AND COMMISSIONS. No agent, broker, investment banker,
person or firm acting on behalf of or under the authority of Seller is or
will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated
herein. Seller agrees to indemnify and hold harmless Buyer from liability
for any compensation to any intermediary retained or otherwise authorized
to act by, or on behalf of, Seller and the fees and expenses of defending
against such liability or alleged liability.
3.7 NO ADDITIONAL REPRESENTATIONS. THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN THIS SECTION 3 ARE THE ONLY REPRESENTATIONS AND
WARRANTIES MADE BY SELLER. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, ALL
WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED AND EXCLUDED,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. IN NO EVENT SHALL SELLER BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
4.1 ORGANIZATION. Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to carry on
its business substantially as it is now being conducted.
4.2 CORPORATE AUTHORIZATION. Buyer has all requisite power and
authority to execute, deliver and perform this Agreement and the
transactions contemplated hereby, and the execution, delivery and
performance by Buyer of this Agreement have been duly authorized by all
requisite corporate action by Buyer.
4.3 BINDING AGREEMENT. Buyer has all requisite corporate power
and authority to enter into, execute and deliver this Agreement, to carry
out its obligations hereunder and to consummate the transaction
contemplated hereby. This Agreement has been duly and validly authorized,
executed and delivered by Buyer and, assuming due authorization, execution
and delivery by Seller, constitutes the legal and binding obligation of
Buyer enforceable against Buyer in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally, to general equity principles (whether
considered in a proceeding in equity or at law).
4.4 FEES AND COMMISSIONS. No agent, broker, investment banker,
person or firm acting on behalf of or under the authority of Buyer is or
will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated
herein.
4.5 REQUIRED APPROVALS, NOTICES AND CONSENTS. Except as described
herein, no consent or approval of, other action by, or any notice to, any
governmental body or agency, domestic or foreign, or any third party is
required in connection with the execution and delivery by the Buyer of this
Agreement or the consummation of the transaction contemplated hereby.
4.6 VALID TITLE. Upon delivery to Buyer, Seller will pass valid
title to the Homestore Shares and there are no Liens in respect of the
Homestore Shares, other than Liens imposed as a result of actions of Seller
or its affiliates.
4.7 NO ADDITIONAL REPRESENTATIONS. THE REPRESENTATIONS
AND WARRANTIES SET FORTH IN THIS SECTION 4 ARE THE ONLY REPRESENTATIONS AND
WARRANTIES MADE BY BUYER. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, ALL
WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED AND EXCLUDED,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. IN NO EVENT SHALL BUYER BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
5. MISCELLANEOUS.
5.1 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior agreements, arrangements and
undertakings, whether written or oral, relating to matters provided for
herein. There are no provisions, undertakings, representations or
warranties relative to the subject matter of this Agreement not expressly
set forth herein.
5.2 EXPENSES. Except as otherwise specifically provided in this
Agreement, all costs and expenses, including, without limitation,
fees and disbursements of counsel, financial advisors and accountants,
incurred in connection with this Agreement and the transaction contemplated
hereby shall be paid by the party incurring such costs and expenses,
whether or not the Closing shall have occurred.
5.3 NOTICES. Any notice, demand, claim, notice of claim, request
or communication required or permitted to be given under the provisions of
this Agreement shall be in writing and shall be deemed to have been duly
given if delivered personally by facsimile transmission or sent by first
class or certified mail, postage prepaid to the following addresses,
If to the Seller:
X.X. Xxxxxxxxx & Sons Company
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
If to Buyer:
c/o Cendant Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxx, Esq.
Facsimile: (000) 000-0000
or to such other address as any party may request by notifying in writing
all of the other parties to this Agreement in accordance with this Section
5.3.
Any such notice shall be deemed to have been received on the date
of personal delivery, the date set forth on the postal service return
receipt, the date of delivery shown on the records of the overnight courier
or the date shown on the facsimile confirmation, as applicable.
5.4 benefit and assignment. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. There shall be no assignment of any
interest under this Agreement by any party except that Buyer may assign its
rights hereunder to any wholly owned subsidiary of Buyer; provided,
however, that no such assignment shall relieve the assignor of its
obligations under this Agreement. Nothing herein, express or implied, is
intended to or shall confer upon any other person any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
5.5 waiver. Any waiver of any provision of this Agreement shall
be valid only if set forth in an instrument in writing signed by the party
to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of
the same term or condition, or a waiver of any other term or condition, of
this Agreement. The failure of any party to assert any of its rights
hereunder shall not constitute a waiver of any such rights.
5.6 AMENDMENT. This Agreement may not be amended or modified
except by an instrument in writing signed by, or on behalf of, Seller and
Buyer.
5.7 RELEASE OF CLAIMS. Seller hereby fully and unconditionally
releases from any and all claims, actions, causes of actions, lawsuits,
damages, liabilities, costs, losses, expenses, assessments, sums of money,
promises and demands of any nature whatsoever of Seller against Buyer and
each of its respective officers, directors, employees or agents which are
related to or arise out of (a) any act taken or omitted to be taken in
connection with or in anticipation of the transactions contemplated hereby
or (b) any act taken or omitted to be taken by Buyer in connection with the
transactions contemplated hereby.
5.8 SEVERABILITY. Any provision of this Agreement that is held by
a court of competent jurisdiction to violate applicable law shall be
limited or nullified only to the extent necessary to bring the Agreement
within the requirements of such law.
5.9 DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and shall in no way be construed
to define, limit, describe, explain, modify, amplify, or add to the
interpretation, construction or meaning of any provision of, or scope or
intent of, this Agreement nor in any way affect this Agreement.
5.10 COUNTERPARTS. This Agreement may be signed in counterparts
and all signed copies of this Agreement will together constitute one
original of this Agreement. This Agreement shall become effective when each
party hereto shall have received counterparts thereof signed by all the
other parties hereto.
5.11 GOVERNING LAW. This Agreement shall be governed by, enforced
under and construed in accordance with, the laws of the State of New York,
without giving effect to any choice of law provision or rule thereof. The
parties submit to the exclusive jurisdiction of the courts of the State of
New York and of the United States of America in each case located in the
County of New York for any litigation arising out of or relating to the
Agreement and the transactions contemplated hereby.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
CENDANT MEMBERSHIP SERVICES
HOLDINGS, INC.
/s/ Xxxx X. Xxxx
---------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
X.X. XXXXXXXXX AND SONS COMPANY
/s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: EVP Strategy & Planning
