Exhibit 10.13
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 29, 2000, among Cendant
Corporation, a Delaware corporation (the "Company"), and Chatham Street
Holdings, LLC (the "Investor").
1. INTRODUCTION. The Company is a party to a Subscription Agreement
(the "Subscription Agreement") with the Investor, pursuant to which the Company
has agreed, among other things, to issue to the Investor shares of a tracking
stock associated with the Company's real estate internet businesses (the "Common
Stock"). This Agreement shall become effective upon the issuance of such shares
to the Investor pursuant to the Subscription Agreement. Certain capitalized
terms used in this Agreement are defined in Section 3 hereof; references to
Sections shall be to sections of this Agreement.
2. REGISTRATION UNDER SECURITIES ACT, ETC.
2.1 REGISTRATION ON REQUEST.
(a) REQUEST. At any time or from time to time after the
180th day following the date of the closing (the "Offering Closing Date") of the
initial public offering (the "Offering") of the Common Stock until the fourth
anniversary of the Offering Closing Date, upon the written request of one or
more Initiating Holders requesting that the Company effect the registration
under the Securities Act of all or part of such Initiating Holders' Registrable
Securities and specifying the intended method of disposition thereof, the
Company will promptly give written notice of such requested registration to all
registered holders of Registrable Securities, and thereupon the Company will,
subject to the terms of this Agreement, use reasonable efforts to effect the
registration under the Securities Act of:
(i) the Registrable Securities which the Company has
been so requested to register by such Initiating Holders for disposition
in accordance with the intended method of disposition stated in such
request; and
(ii) all other Registrable Securities the holders of
which shall have made a written request to the Company for registration
thereof within 30 days after the giving of such written notice by the
Company (which request shall specify the intended method of disposition
of such Registrable Securities); and
(iii) all securities which the Company may elect to
register in connection with the offering of Registrable Securities
pursuant to this Section 2.1,
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional securities, if any, so to be registered, PROVIDED that the Company
shall not be required to effect any registration of Registrable Securities
pursuant to this Section 2.1 unless the aggregate value of the Registrable
Securities requested to be registered by the Initiating Holders is equal to or
greater than $10 million. Once the Company is eligible to register securities on
Form S-3 under the Securities Act (or any successor or similar form then in
effect), the Company shall, at the request of the Initiating Holders, use its
reasonable efforts to file and cause to be effective, if available, a
registration statement on Form S-3 (a "Shelf Registration Statement") for an
offering of Registrable Securities to be made on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act (a "Shelf Registration") and shall
use its reasonable efforts to keep the Shelf Registration Statement effective
and usable for the resale of Registrable Securities until the earlier of (i) the
date on which all Registrable Securities so registered have been sold pursuant
to the Shelf Registration Statement or (ii) the 180th day following the date on
which the Shelf Registration Statement is initially declared effective by the
Commission. Notwithstanding the foregoing, the Company shall not be required to
effect (i) more than one registration pursuant to this Section 2.1(a) prior to
the first anniversary of the Offering Closing Date, (ii) more than three
registrations pursuant to this Section 2.1(a), or (iii) more than one
registration pursuant to this Section 2.1(a) in any period of nine consecutive
calendar months.
(b) REGISTRATION STATEMENT FORM. Registrations under Section
2.1(a) shall be on such appropriate registration form of the Commission (i) as
shall be selected by the Company and (ii) as shall permit the disposition of
such Registrable Securities in accor dance with the intended method or methods
of disposition specified in their request for such registration.
(c) EXPENSES. The Company shall pay any Registration
Expenses (excluding underwriting discounts and commissions and transfer taxes,
if any) in connection with each registration requested under Section 2.1(a).
Underwriting discounts and commissions and transfer taxes (if any) in connection
with each such registration shall be allocated PRO rata among all Persons on
whose behalf securities of the Company are included in such registration, on the
basis of the respective amounts of the securities then being registered on their
behalf.
(d) EFFECTIVE REGISTRATION STATEMENT. A registration
requested pursuant to Section 2.1(a) shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has become effective,
PROVIDED that a registration which does not become effective after the Company
has filed a registration statement with respect thereto solely by reason of the
refusal to proceed of the Initiating Holders (other than a refusal to proceed
based upon the advice of counsel relating to a matter with respect to the
Company) shall be deemed to have been effected by the Company at the request of
such Initiating Holders, (ii) if, after it has become effective, such
registration becomes subject to, for longer than 60 days, any stop order,
injunction or other order or requirement of the Commission or other
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governmental agency or court for any reason or (iii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied, other than by reason of an
act or omission by such Initiating Holders. If a requested registration pursuant
to this Section 2.1 is to be a Shelf Registration, the Company shall not be
required to keep the registration statement effective during any period or
periods (up to a total of 180 days in any 12-month period) if the continued
effectiveness of the registration statement would require the Company to
disclose a material financing, acquisition or other corporate development and
the Company shall have determined that such disclosure is not in the best
interests of the Company; PROVIDED, FURTHER, that the requirement to use
reasonable efforts to keep the registration statement effective shall be
extended one day for each day that the Company allows the effectiveness of the
registration statement to lapse in reliance on the preceding proviso.
(e) SELECTION OF UNDERWRITERS. If a registration pursuant to
Section 2.1(a) involves an underwritten offering, the underwriter or
underwriters thereof shall be selected by the Company, provided that if the
holders of a majority of the Registrable Securities reasonably object to the
qualifications of such underwriter or underwriters, the Company shall select one
or more underwriters other than the underwriter or underwriters to which
objection was so made.
(f) PRIORITY IN REQUESTED REGISTRATIONS. If a registration
pursuant to Section 2.1(a) involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that, in its opinion, the number
of securities requested to be included in such registration (including
securities of the Company which are not Registrable Securities) exceeds the
number which can be sold in such offering, the Company will include in such
registration, to the extent of the number which the Company is so advised can be
sold in such offering, (i) first, Registrable Securities requested to be
included in such registration by the holder or holders of Registrable
Securities, PRO RATA among such holders requesting such registration on the
basis of the number of such securities requested to be included by such holders
and (ii) second, securities the Company proposes to sell and other securities of
the Company included in such registration by the holders thereof.
2.2 INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company
at any time proposes to register any of its securities under the Securities Act
(other than on Form S-4 or S-8 or any successor or similar forms and other than
pursuant to Section 2.1), whether or not for sale for its own account, it will
each such time give prompt written notice to all holders of Registrable
Securities of its intention to do so and of such holders' rights under this
Section 2.2. Upon the written request of any such holder made within 10 business
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed
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of by such holder and the intended method of disposition thereof), the Company
will, subject to the terms of this Agreement, use its reasonable efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by the holders thereof, to
the extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered,
by inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register (whether or not for
sale for its own account), 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 of Registrable Securities and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any holder
or holders of Registrable Securities entitled to do so to request that such
registration be effected as a registration under Section 2.1, and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section
2.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 2.1, nor shall any such registration hereunder be deemed
to have been effected pursuant to Section 2.1. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2.
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. If (i) a
registration pursuant to this Section 2.2 involves an underwritten offering of
the securities so being regis tered, whether or not for sale for the account of
the Company, to be distributed (on a firm commitment basis) by or through one or
more underwriters of recognized standing under underwriting terms appropriate
for such a transaction, (ii) the Registrable Securities so requested to be
registered for sale for the account of holders of Registrable Securities are not
also to be included in such underwritten offering (either because the Company
has not been requested so to include such Registrable Securities pursuant to
Section 2.4(b) or, if requested to do so, is not obligated to do so under
Section 2.4(b)), and (iii) the managing underwriter of such underwritten
offering shall inform the Company and holders of the Registrable Securities
requesting such registration by letter of its belief that the distribution of
all or a specified number of such Registrable Securities concurrently with the
securities being distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters
(such writing to state the basis of such belief and the approximate number of
such Registrable Securities which may be distributed without such effect), then
the Company may, upon written notice to all holders of such Registrable
Securities, reduce PRO RATA (if and to the extent stated by such managing
underwriter to be necessary to eliminate such effect) the number of such
Registrable Securities the registration of which shall have been requested by
each holder of Registrable
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Securities so that the resultant aggregate number of such Registrable Securities
so included in such registration shall be equal to the number of shares stated
in such managing underwriter's letter.
2.3 REGISTRATION PROCEDURES. If and whenever the Company is required
to use its reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company shall, as expeditiously as possible:
(i) prepare and (in the case of a registration
pursuant to Section 2.1, such filing to be made within 90 days after the
initial request of one or more Initiating Holders of Registrable
Securities or in any event as soon thereafter as possible) file with the
Commission the requisite registration statement to effect such
registration and thereafter use its reasonable efforts to cause such
registration statement to become and remain effective, PROVIDED,
HOWEVER, that the Company may postpone the filing or effectiveness of
any registration statement otherwise required to be filed by the Company
pursuant to this Agreement or suspend the use of any registration
statement for a period of time, not to exceed 180 days in any 12-month
period, if the Company determines that the filing or continued use of
such registration statement would require the Company to disclose a
material financing, acquisition or other corporate development and the
Company shall have determined that such disclosure is not in the best
interests of the Company; provided, FURTHER, that the Company may
discontinue any registration of its securities which are not Registrable
Securities (and, under the circumstances specified in Section 2.2(a),
its securities which are Registrable Securities) at any time prior to
the effective date of the registration statement relating thereto;
(ii) subject to Section 2.1(d), prepare and file with
the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
until the earlier of (A) such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such registra tion statement
or (B) the expiration of 90 days after such registration statement
becomes effective (or, in the case of a Shelf Registration, the
expiration of 180 days after such Shelf Registration Statement becomes
effective);
(iii) furnish to each seller of Registrable Securities
covered by such registration statement such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any
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other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, as such seller may reasonably request in order to facilitate
the public sale or other disposition of the Registrable Securities owned
by such seller; () use its reasonable efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as any seller thereof shall reasonably request, to keep
such registrations or qualifications in effect for so long as such
registration statement remains in effect, and take any other action
which may be reasonably necessary or advisable to enable such seller to
consummate the disposi tion in such jurisdictions of the securities
owned by such seller, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the require
ments of this subdivision (iv) be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;
(iv) use its reasonable efforts to cause all
Registrable Secu rities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
to consummate the disposition of such Registrable Securities;
(v) furnish to each underwriter, if an underwritten
offering, customary "cold comfort" letters from its independent
auditors, legal opinions from counsel to the Company on customary
matters, and such other certificates or other instruments reasonably
requested by such underwriters;
(vi) notify the holders of Registrable Securities and
the managing underwriter or underwriters, if any, promptly and confirm
such advice in writing promptly thereafter:
(A) when the registration statement, the
prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been
filed, and, with respect to the registration statement or any
post-effective amendment thereto, when the same has become
effective;
(B) of any request by the Commission for
amendments or supplements to the registration statement or the
prospectus or for additional information;
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(C) of the issuance by the Commission of any
stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings by any Person for
that purpose;
(D) if at any time the representations and
warran ties of the Company made as contemplated by Section 2.4
below cease to be true and correct; and
(E) of the receipt by the Company of any
notifica tion with respect to the suspension of the
qualification of any Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction or the
initiation or threat of any proceeding for such purpose;
(viii) notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
upon the Company's discovery that, or upon the happening of any event as
a result of which, the prospectus included in such registration
statement, as then in effect, includes an 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 in the light
of the circumstances under which they were made, and at the request of
any such seller promptly prepare and furnish to such seller and each
underwriter, if any, a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances under which they were made;
(ix) use its reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement at the earliest possible moment;
(x) otherwise use its reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but
not more than eighteen months, beginning with the Company's first full
calendar quarter after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder, and will
furnish to each such seller prior to the filing thereof a copy of any
amendment or supplement to such registration statement or prospectus and
shall not file any thereof to which any such seller shall have
reasonably objected on the grounds that such amendment or supplement
does not comply in all
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material respects with the requirements of the Securities Act or of the
rules or regulations thereunder; and
(xi) take such other action that may be requested by
a seller of Registrable Securities that are customary and reasonably
required in connection with the sale of Registrable Securities.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
The Company will not file any registration statement or amendment
thereto or any prospectus or any supplement thereto (including such documents
incorporated by reference and proposed to be filed after the initial filing of
the registration statement) to which the holders of at least a majority of the
Registrable Securities covered by such registration statement or the underwriter
or underwriters, if any, shall reasonably object, PROVIDED that the Company may
file such document in a form required by law or upon the advice of its counsel.
Each holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the occurrence
of any event of the kind de scribed in subdivision (vii) of this Section 2.3,
such holder will forthwith discontinue such holder's disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by subdivision (vii) of this Section 2.3 and, if
so directed by the Company, will deliver to the Company (at the Company's
reasonable expense) all copies, other than permanent file copies, then in such
holder's possession of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
2.4 UNDERWRITTEN OFFERINGS.
(a) REQUESTED UNDERWRITTEN OFFERINGS. If requested by the
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 2.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to the Company, each such
holder and the underwriters, and to contain such representa tions and warranties
by the Company and such other terms as are generally prevailing in agreements of
such type, including, without limitation, indemnities substantially the same as
those provided in Section 2.6. The holders of the Registrable Securities will
cooperate with the Company in the negotiation of the underwriting agreement and
will give consideration to the reasonable suggestions of the Company regarding
the form thereof. The holders of Registrable Securities to be distributed by
such underwriters shall be parties to such underwriting agree ment. Any such
holder of Registrable Securities shall not be required to make any
representations or
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warranties to or agreements with the Company or the underwriters other than
representations and warranties or agreements regarding such holder, such
holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any
time proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Registrable Securities as provided in Section 2.2 and subject to the
provisions of Section 2.2(b), use its reasonable efforts to arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
such holder among the securities to be distributed by such underwriters,
PROVIDED that if the managing underwriter of such underwritten offering shall
inform the holders of the Registrable Securities requesting such registration
and the holders of any other securities which shall have exercised, in respect
of such underwritten offering, registration rights comparable to the rights
under Section 2.2 by letter of its belief that inclusion in such underwritten
distribution of all or a specified number of such Registrable Securities or of
such other securities so requested to be included would interfere with the
successful marketing of the securities by the underwriters (such writing to
state the basis of such belief and the approximate number of such Registrable
Securities and shares of other securities so requested to be included which may
be included in such underwritten offering without such effect), then the Company
may, upon written notice to all holders of such Registrable Securities and of
such other securities so requested to be included, exclude PRO RATA from such
underwritten offering (if and to the extent stated by such managing underwriter
to be necessary to eliminate such effect) the number of such Registrable
Securities and shares of such other securities so requested to be included the
registration of which shall have been requested by each holder of Registrable
Securities and by the holders of such other securities so that the resultant
aggregate number of such Registrable Securities and of such other shares of
securities so requested to be included which are included in such underwritten
offering shall be equal to the approximate number of shares stated in such
managing underwriter's letter. The holders of Registrable Securities to be
distributed by such underwriters shall be parties to the underwriting agreement
between the Company. Any such holder of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such holder, such holder's Registrable Securities and such holder's
intended method of distribution and any other representation required by law.
(c) HOLDBACK AGREEMENT. Each holder of Registrable
Securities agrees by acquisition of such Registrable Securities, if so required
by the managing underwriter, not to sell, make any short sale of, loan, grant
any option for the purchase of, effect any public sale or distribution of or
otherwise dispose of any securities of the Company, in violation of Regulation M
under the Securities Act or during the 120 days (or such longer time as
reasonably requested by the managing underwriter up to 180 days) after any
underwritten registration pursuant to Section 2.1 or 2.2 has become effective,
except as part of such underwritten
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registration, whether or not such holder participates in such registration;
provided that the restrictions contained in this sentence shall not apply to the
holders of Registrable Securities in any registration following the Offering
Closing Date if such holders and their affiliates collectively beneficially own
(within the meaning of Rule 13d-3 under the Exchange Act) less than 5% of the
outstanding Common Stock and none of such holders nor any of their respective
affiliates is participating in such registration. Each holder of Registrable
Securities agrees that the Company may instruct its transfer agent to place stop
transfer notations in its records to enforce this Section 2.4(c).
(d) PARTICIPATION IN UNDERWRITTEN OFFERINGS. No Person may
participate in any underwritten offering hereunder unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved, subject to the terms and conditions hereof, by the
Company and the holders of a majority of Registrable Securities to be included
in such underwritten offering and (ii) completes and executes all
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) required under the terms of such underwriting
arrangements. Notwithstanding the foregoing, no underwriting agreement (or other
agreement in connection with such offering) shall require any holder of
Registrable Securities to make any representations or warranties to or
agreements with the Company or the underwriters other than representations and
warranties or agreements regarding such holder, such holder's Registrable
Securities and such holder's intended method of distribution and any other
representation required by law.
2.5 REGISTRATION CONCURRENTLY WITH CLOSING OF OFFERING. Without
limiting the foregoing, the Company agrees that to the extent that the Investor
purchases Registrable Securities concurrently with the closing of the Offering,
the Company will use its reasonable best efforts to register such Registrable
Securities concurrently with or immediately prior to the closing of the
Offering; provided that any sales of such Registrable Securities shall be
subject to any restrictions on sale required by the underwriters in connection
with such Offering. Notwithstanding the foregoing, if the Company is advised by
the managing underwriter in the Offering that registering the Registrable
Securities concurrently with the closing of the Offering would be detrimental to
the Offering, the Company will not be required to register the Registrable
Securities concurrently with the closing of the Offering.
2.6 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Securities Act, the
Company will, and hereby agrees to, indemnify and hold harmless the holder of
any Registrable Securities covered by such registration statement, its directors
and officers, each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls
such holder or any such underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such holder or any such
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director or officer or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such 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 such securities were registered under the Securities 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 not misleading, and the Company will
reimburse such holder and each such director, officer, under writer 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 furnished to the Company through an
instrument duly executed by such holder 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 Registrable Securities or to any other Person, if any, who controls such
underwriter within the meaning of the Securities 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,
within the time required by the Securities Act to the Person asserting the
existence of an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such holder
or any such director, officer, underwriter or controlling person and shall
survive the transfer of such securities by such holder.
(b) INDEMNIFICATION BY THE SELLERS. The Company may require,
as a condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2.3, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such Registrable
Securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 2.6) the Company, each
director of the Company, each officer of the Company, each other person, if any,
who controls the Company within the meaning of the Securities Act, each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such holder or any such
underwriter within the meaning of the Securities 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
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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 such seller specifically stating that it is for use
in the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Any 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 seller.
Notwithstanding the foregoing, the indemnity obligation of each seller of
Registrable Securities pursuant to this Section 2.6(b) shall be limited to an
amount equal to the total proceeds (before deducting underwriting discounts and
commissions and expenses) received by such seller from the underwriters for the
sale of shares by such seller in a registration hereunder.
(c) 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 2.6,
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 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 2.6, 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 may exist in respect of such claim, 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 the indemnifying party 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 other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action 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, or a covenant not to xxx, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
(d) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding subdivisions of this Section 2.6 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities 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 Securities Act.
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(e) INDEMNIFICATION PAYMENTS. The indemnification required
by this Section 2.6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
(f) CONTRIBUTION. If the indemnification provided for in the
preceding subdivisions of this Section 2.6 is unavailable to an indemnified
party in respect of any expense, loss, claim, damage or liability referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such expense, loss, claim, damage or liability (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the holder or underwriter, as the case may be, on
the other from the distribution of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the holder or underwriter, as the case may be, on the other
in connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the holder or underwriter, as the case may be, on the other in connection
with the distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company bear to the gain, if
any, realized by the selling holder or the underwriting discounts and
commissions received by the underwriter, as the case may be. The relative fault
of the Company on the one hand and of the holder or underwriter, as the case may
be, on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission to
state a material fact relates to information supplied by the Company, by the
holder or by the underwriter and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission,
PROVIDED that the foregoing contribution agreement shall not inure to the
benefit of any indemnified party if indemnification would be unavailable to such
indemnified party by reason of the provisions contained in the first sentence of
subdivision (a) of this Section 2.6, and in no event shall the obligation of any
indemnifying party to contribute under this subdivision (f) exceed the amount
that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under subdivisions (a) or
(b) of this Section 2.6 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subdivision (f)
were determined by PRO RATA allocation (even if the holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the
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immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in the preceding sentence and subdivision (c) of this
Section 2.6, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subdivision (f), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. 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.
3. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
COMMISSION: The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
COMMON STOCK: As defined in Section 1.
COMPANY: As defined in the introductory paragraph of this Agree
ment.
EXCHANGE ACT: The Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the
Commission there under, all as the same shall be in effect at
the time. Reference to a particular Section of the Securities
Exchange Act of 1934 shall include a reference to the comparable
Section, if any, of any such similar Federal statute.
INITIATING HOLDERS: Any holder or holders of Registrable
Securities holding at least $10 million in value of Registrable
Securities (based on the Market Price of such Registrable
Securities), and initiating a request pursuant to Section 2.1
for the registration of all or part of such holder's or holders'
Registrable Securities.
MARKET PRICE: The market price per share of Common Stock on any
date shall be deemed to be the average of the daily closing
prices for
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the 20 consecutive trading days on the New York Stock Exchange
ending on the day prior to such date. The closing price for each
day shall be the last sale price regular way, or, in case no
such sale takes place on such day, the average of the closing
bid and asked prices regular way, in either case on the New York
Stock Exchange, or, if the Common Stock is not listed or
admitted to trading on such exchange, on the principal national
securities exchange on which the Common Stock is listed or
admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, the
average of the highest reported bid and lowest reported asked
prices as furnished by the National Association of Securities
Dealers ("NASD") or similar organization if the NASD is no
longer reporting such information.
PERSON: A corporation, an association, a partnership, an
organization, business, an individual, a governmental or
political subdivision thereof or a governmental agency.
REGISTRABLE SECURITIES: any shares of Common Stock issued to the
Investor pursuant to the Subscription Agreement or issued upon
conversion of any common stock purchase warrants issued to the
Investor and any securities issued or issuable with respect to
any Common Stock referred to above by way of stock dividend or
stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization
or otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities
when (a) a registration statement with respect to the sale of
such securities shall have become effective under the Securities
Act and such securities shall have been disposed of in
accordance with such registration statement, (b) they shall have
been distributed to the public pursuant to Rule 144 (or any
successor provision) under the Securities Act, (c) they shall
have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been
delivered by the Company and subse quent disposition of them
shall not require registration or qualification of them under
the Securities Act or any similar state law then in force, or
(d) they shall have ceased to be outstanding.
REGISTRATION EXPENSES: All expenses incident to the Company's
performance of or compliance with Section 2, including, without
limitation, all registration, filing and NASD fees, all stock
exchange listing fees, all fees and expenses of complying with
securities or blue
15
sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and
disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits
or "cold comfort" letters required by or incident to such
performance and compliance, the reasonable fees and
disbursements of counsel retained by the holder or holders of
Registrable Securities being registered (up to a maximum of
$25,000 and any fees and disbursements of underwriters custom
arily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if
any.
SECURITIES ACT: The Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the Commission
thereunder, all as of the same shall be in effect at the time.
References to a particular Section of the Securities Act of 1933
shall include a reference to the comparable Section, if any, of
any such similar federal statute.
4. AMENDMENTS AND WAIVERS. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of a majority of the Registrable Securities. Each holder of any
Registrable Securities at the time or thereafter outstanding shall be bound by
any consent authorized by this Section 4, whether or not such Registrable
Securities shall have been marked to indicate such consent.
5. NOTICES. Except as otherwise provided in this Agreement, all
notices, requests and other communications to any Person provided for hereunder
shall be in writing and shall be given to such Person (a) in the case of a party
hereto other than the Company, addressed to such party in the manner set forth
in the applicable Subscription Agreement or at such other address as such party
shall have furnished to the Company in writing, (b) in the case of any other
holder of Registrable Securities, at the address that such holder shall have
furnished to the Company in writing, or, until any such other holder so
furnishes to the Company an address, then to and at the address of the last
holder of such Registrable Securities who has furnished an address to the
Company, or (c) in the case of the Company, at 0 Xxxx 00xx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, to the attention of its President, or at such other
address, or to the attention of such other officer, as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding. Each
such notice, request or other communication shall be effective (i) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (ii) if given by any other
means (including, without limitation, by air courier), when delivered at the
address
16
specified above, PROVIDED that any such notice, request or communication
to any holder of Registrable Securities shall not be effective until received.
6. ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto other than the Company shall also be for the benefit of
and enforceable by any subsequent holder of any Registrable Securities, subject
to the provisions respecting the minimum numbers or percentages of shares of
Registrable Securities required in order to be entitled to certain rights, or
take certain actions, contained herein.
7. DESCRIPTIVE HEADINGS. The descriptive headings of the several
Sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CON STRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PAR TIES SHALL BE GOVERNED BY, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS
OF LAWS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
9. COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the Company and each other party hereto relating to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
11. SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS FROM ANY THEREOF. EACH
PARTY HERETO HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF TO SUCH PARTY BY REGISTERED OR CERTIFIED MAIL, POSTAGE
17
PREPAID, RETURN RECEIPT REQUESTED, TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN
SECTION 5. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND EACH
OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
12. SEVERABILITY. If any provision of this Agreement, or the
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers hereunto duly authorized as
of the date first above written.
CENDANT CORPORATION
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: SVP
CHATHAM STREET HOLDINGS, LLC
By: /s/ Xxxxxxx X. Weinir
------------------------------------
Name: Xxxxxxx X. Weinir
Title: Vice President
