EXHIBIT 10.1
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of November 16, 2000 (this
"Agreement"), by and among Cendant Corporation, a Delaware corporation
("Cendant"), Cendant Stock Corporation, a Delaware corporation and a wholly
owned subsidiary of Cendant ("Seller") and Liberty CNDT, Inc., a Delaware
corporation ("Liberty CNDT").
WHEREAS, Liberty CNDT desires to purchase from Seller, and
Seller desires to sell to Liberty CNDT, 2,346,515 shares (the "Shares") of
the common stock, par value $.01 per share, of Cendant designated CD common
stock (the "Common Stock"), in exchange for the surrender of a Warrant,
issued by Cendant to Liberty CNDT on February 7, 2000 and providing for the
purchase of 28,956,000 shares of Common Stock at an exercise price of
$23.00 per share (the "Warrant"); and
WHEREAS, Cendant has agreed, in consideration of the purchase
of the Shares by Liberty CNDT from Seller, which is a wholly owned
subsidiary of Cendant, to prepare and file with the Securities and Exchange
Commission (the "Commission"), and cause to become effective, a
Registration Statement on Form S-3 that permits the resale of the Shares by
Liberty CNDT or its transferee in the public market.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties hereby agree as follows:
ARTICLE I
THE PURCHASE
Section 1.1 Purchase and Sale. Upon the terms and subject to
the conditions of this Agreement, on the date hereof Seller is selling and
delivering to Liberty CNDT, and Liberty CNDT is purchasing from Seller, the
Shares, in consideration for which Liberty CNDT is delivering the Warrant
to Seller.
Section 1.2 Deliveries by the Parties. Subject to the terms and
conditions hereof, Seller is delivering to Liberty CNDT a certificate, duly
registered on the stock books of Cendant, in the name of "Liberty CNDT,
Inc.," representing the Shares, against receipt from Liberty CNDT of the
Warrant.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND CENDANT
Seller and Cendant represent and warrant to Liberty CNDT as follows:
Section 2.1 Organization. Each of Seller and Cendant 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.
Section 2.2 Authority. Each of Seller and Cendant has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by
the Board of Directors of each of Seller and Cendant and by all other
requisite corporate action on the part of each of Seller and Cendant. This
Agreement has been validly executed and delivered by each of Seller and
Cendant and (assuming this Agreement has been duly authorized, executed and
delivered by Liberty CNDT) constitutes a valid and binding agreement of
each of Seller and Cendant, enforceable against Seller and Cendant in
accordance with its terms, except that (a) such enforcement may be subject
to any bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other laws, now or hereafter in effect, relating to or limiting
creditors' rights generally and (b) enforcement of this Agreement,
including, among other things, the remedy of specific performance and
injunctive and other forms of equitable relief, may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
Section 2.3 The Shares. The Shares have been duly and validly
authorized and issued to Seller and, upon delivery to Liberty CNDT (or its
permitted assignee) against the delivery and surrender of the Warrant, in
accordance with the terms of this Agreement, the Shares shall be duly and
validly issued, fully paid and non-assessable. Delivery of the
certificate(s) for the Shares will pass valid title to the Shares, free and
clear of any claim, lien, charge, security interest, encumbrance,
restriction on transfer or voting or other defect in title whatsoever
("Liens"), other than Liens resulting from any action(s) relating to
Liberty CNDT.
Section 2.4 Capitalization. The authorized capital of Cendant
consists of 2,500,000,000 shares of Common Stock comprised of 2,000,000,000
shares designated as CD stock, 500,000,000 shares designated as Xxxx.xxx
stock and 10,000,000 shares of preferred stock, par value $.01 per share
(the "Preferred Stock"). As of October 31, 2000, there were 782,958,489
shares of Common Stock issued and outstanding, 3,742,286 shares of Xxxx.xxx
stock issued and outstanding (excluding Cendant's 22,500,000 notional
interest) and no shares of Preferred Stock issued and outstanding.
Section 2.5 Consents and Approvals; No Violations. Neither the
execution and delivery of this Agreement by Seller or Cendant, nor the
consummation by Seller or Cendant of the transactions contemplated hereby
or thereby will (a) conflict with or result in any breach of any provision
of the certificate of incorporation or by-laws, as amended, of Seller or
Cendant, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or require any
consent under, any indenture, license, contract, agreement or other
instrument or obligation to which Seller or Cendant is a party, (c) violate
any order, writ, injunction, decree or award rendered by any Governmental
Entity (as hereinafter defined) or any statute, rule or regulation
(collectively, "Laws" and, individually, a "Law") applicable to Seller or
Cendant, or (d) require any filing with, or the obtaining of any permit,
authorization, consent or approval of, any governmental or regulatory
authority or court, domestic or foreign (a "Governmental Entity").
Section 2.6 SEC Reports. Since January 1, 2000, Cendant has
filed all required reports, schedules, forms, statements and other
documents, including exhibits and all other information incorporated
therein (the "SEC Documents"), with the Commission. As of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), or the Securities Exchange Act of 1934, as amended, as the case may
be, and the rules and regulations of the Commission promulgated thereunder
applicable to such SEC Documents, and none of the SEC Documents when filed
(as amended and restated and as supplemented by subsequently filed SEC
Documents) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading. At the time the Cendant Registration
Statement (as defined in Annex A) is declared effective under the
Securities Act, the prospectus included as part thereof will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that no representation or warranty is made
herein with respect to any information included in or omitted from the
Cendant Registration Statement or the related prospectus in reliance upon
or in conformity with written information furnished to Cendant by Liberty
CNDT or any other Holder (as defined in Annex A) for use in the preparation
of the Cendant Registration Statement.
Section 2.7 Shareholder Vote. The delivery and sale of the
Shares will not require any vote of Cendant's shareholders pursuant to the
terms of the certificate of incorporation, as amended, of Cendant or the
rules of the New York Stock Exchange (the "NYSE").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LIBERTY CNDT
Liberty CNDT represents and warrants to Seller and Cendant as
follows:
Section 3.1 Organization. Liberty CNDT 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. Liberty
CNDT is a wholly owned subsidiary of Liberty Media Corporation, a Delaware
corporation ("Liberty").
Section 3.2 Authority Relative to this Agreement. Liberty CNDT
has the corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all requisite
corporate action on the part of Liberty CNDT. This Agreement has been duly
and validly executed and delivered by Liberty CNDT and (assuming this
Agreement has been duly authorized, executed and delivered by Seller and
Cendant) constitutes a valid and binding agreement of Liberty CNDT,
enforceable against Liberty CNDT in accordance with its terms, except that
(a) such enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws, now or
hereafter in effect, relating to or limiting creditors' rights generally
and (b) enforcement of this Agreement, including, among other things, the
remedy of specific performance and injunctive and other forms of equitable
relief, may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
Section 3.3 Consents and Approvals; No Violations. Neither the
execution and delivery of this Agreement by Liberty CNDT, nor the
consummation by Liberty CNDT of the transactions contemplated hereby will
(a) conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws (or similar organizational
documents) of Liberty CNDT, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration)
under, or require any consent under, any indenture, license, contract,
agreement or other instrument or obligation to which the Liberty CNDT is a
party, (c) violate any order, writ, injunction, decree or award rendered by
any Governmental Entity or Law applicable to Liberty CNDT, or (d) require
any filing with, or the obtaining of any permit, authorization, consent or
approval of, any Governmental Entity.
Section 3.4 Liberty CNDT Acknowledgment. Liberty CNDT has
conducted its own independent investigation, review and analysis of
Cendant. In entering into this Agreement, Liberty CNDT acknowledges that it
has relied solely upon the aforementioned investigation, review and
analysis, and, other than with respect to the representations and
warranties made in Article II of this Agreement, Liberty CNDT acknowledges
that none of Cendant, or any of its directors, officers, employees,
affiliates, controlling persons, agents, advisors or representatives makes
or has made any representation or warranty, either express or implied.
ARTICLE IV
COVENANTS
Section 4.1 Preparation and Filing of Registration Statement.
Subject to the terms and conditions of Annex A hereto, Cendant shall, as
promptly as practicable after the date hereof, prepare and file the Cendant
Registration Statement with the Commission and use its commercially
reasonable securities efforts to cause the Cendant Registration Statement
to become and remain effective under the Securities Act. The rights and
obligations of the parties with respect to the registration and resale of
the Shares are as set forth in Annex A hereto, which is hereby incorporated
into this Agreement by reference thereto.
Section 4.2 Public Announcements. Cendant and Liberty CNDT will
consult with each other with respect to the issuance of a joint report,
statement or press release with respect to this Agreement and the
transactions contemplated hereby.
Section 4.3 Retention of Warrant. Seller shall retain sole
possession of the Warrant during the period commencing with its receipt
thereof pursuant to the Agreement and ending with the Expiration Date (as
such term is defined in the Warrant), and during such period Seller shall
not cancel or otherwise terminate the Warrant (other than in connection
with the exercise thereof by Seller).
ARTICLE V
MISCELLANEOUS
Section 5.1 Entire Agreement. This Agreement (including Annex A
hereto, which is incorporated by reference herein) constitutes the entire
agreement of the parties relating to the subject matter hereof and
supersedes other prior agreements and understandings among the parties both
oral and written regarding such subject matter.
Section 5.2 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.
Section 5.3 Notices. Any notice required or permitted by this
Agreement must be in writing and must be sent by facsimile, by nationally
recognized commercial overnight courier, or mailed by United States
registered or certified mail, addressed to the other party at the address
below or to such other address for notice (or facsimile number, in the case
of a notice by facsimile) as a party gives the other party written notice
of in accordance with this Section 8.3. Any such notice will be effective
as of the date of receipt:
(a) if to Seller or Cendant, to it at
Cendant Corporation
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000/23
Attention: General Counsel
(b) if to Liberty CNDT (or its transferee), to it at
c/o Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx
Fax: (000) 000-0000
Attention: General Counsel
Section 5.4 Governing Law; Jurisdiction. 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 or conflict of
law provision or rule thereof. Each of the parties hereto hereby
irrevocably and unconditionally consents to 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 this Agreement and the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts) and further agrees that service of
any process, summons, notice or document by U.S. registered mail to its
respective address set forth in Section 7.3 (or to such other address for
notice that such party has given the other party written notice of in
accordance with Section 7.3) shall be effective service of process for any
litigation brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying
of venue of any litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or
of the United States of America in each case located in the County of New
York and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such litigation brought in
any such court has been brought in an inconvenient forum.
Section 5.5 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.
Section 5.6 Counterparts. This Agreement may be signed in
counter-parts 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.
Section 5.7 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Liberty CNDT may transfer
the Shares (or any portion thereof) to another direct or indirect wholly
owned subsidiary of Liberty. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly signed as of the date first above written.
CENDANT STOCK CORPORATION
By: ___________________________________
Name:
Title:
CENDANT CORPORATION
By: ___________________________________
Name:
Title:
LIBERTY CNDT, INC.
By: __________________________________
Name:
Title:
ANNEX A
REGISTRATION PROCEDURES FOR
SHARES OF CENDANT CORPORATION
This Annex A forms part of the Purchase Agreement, dated as of
November 16, 2000 (the "Purchase Agreement"), among Cendant Corporation
("Cendant"), a Delaware corporation, Cendant Stock Corporation, a Delaware
corporation and a wholly owned subsidiary of Cendant, and Liberty CNDT,
Inc., a Delaware corporation ("Liberty CNDT"). The rights and obligations
of Liberty CNDT, any assignee of Liberty CNDT pursuant to Section 7.7 of
the Purchase Agreement and Cendant with respect to the registration, offer
and resale of the Shares (as defined in the Purchase Agreement) are as set
forth on this Annex A.
Section 1. DEFINITIONS; INTERPRETATION.
1.1 Definitions. As used in this Annex A, the following terms
have the following meanings:
"Action" has the meaning set forth in Section 3.3.
"Cendant Indemnified Parties" has the meaning set forth in Section
3.2.
"Cendant Registration Statement" means a registration statement on
Form S-3 to be filed by Cendant with the Commission pursuant to Rule 415
under the Securities Act, so as to permit the offer and subsequent resale
of the Shares from time to time following the effective date of such
registration statement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" has the meaning set forth in Section 2.1.
"NYSE" means the New York Stock Exchange.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization or government or political department or agency
thereof or other entity.
"Registered Shares" means (i) the Shares and (ii) any shares of
capital stock issued with respect to or in exchange for the shares referred
to in the preceding clause (i) by way of a stock dividend or stock split or
in connection with a recapitalization or a merger, consolidation or other
reorganization. As to any particular Registered Shares, such shares shall
cease to be Registered Shares when (i) the Cendant Registration Statement
shall have become effective under the Securities Act and such Registered
Shares shall have been disposed of in accordance with the Cendant
Registration Statement, (ii) such shares shall have been distributed
pursuant to Rule 144 (or any successor provision then in force) under the
Securities Act, (iii) such shares shall have been otherwise transferred,
new certificates or other evidences of ownership for them not bearing a
legend restricting further transfer and not subject to any stop transfer
order or other restrictions on transfer shall have been delivered by
Cendant or the transfer agent for such shares and subsequent disposition of
such shares shall not require registration or qualification under the
Securities Act or any state securities laws then in force, (iii) such
shares shall be eligible for sale pursuant to Rule 144(k) (or any successor
provision then in force) or (iv) such shares shall cease to be outstanding.
"Registration Expenses" means the following expenses incident to
Cendant's performance of its obligations hereunder: (i) registration and
filing fees with the Commission; (ii) fees and expenses of compliance with
state securities or "blue sky" laws (including reasonable fees and
disbursements of "blue sky" counsel); (iii) printing expenses, messenger
and delivery expenses; (iv) fees and expenses incurred in connection with
the listing of the Registered Shares on the NYSE or on such securities
exchange or other national market system on which shares of the same class
or series as the Registered Shares may then be principally traded; and (v)
fees and expenses of counsel for Cendant and of its independent certified
public accountants, including the expenses of any special audits or "cold
comfort" letters. The term "Registration Expenses" does not include, and
Cendant shall not be responsible for: (a) brokerage commissions,
underwriting discounts and commissions and transfer taxes attributable to
the sale of any of the Registered Shares; (b) fees and disbursements of
underwriters and underwriters counsel (other than fees and expenses of such
counsel incurred in connection the "blue sky" qualification of the
Registered Shares); (c) fees and disbursements of counsel or of any experts
retained by Liberty CNDT in connection with the registration of the
Registered Shares or the disposition of such securities; or (d) any other
out-of-pocket expenses of Liberty CNDT.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Indemnified Parties" has the meaning set forth in Section
3.1.
All other capitalized terms used herein and not otherwise defined
have the meanings ascribed thereto in the Agreement.
1.2 Interpretation. When a reference is made in this Annex A to
a Section, such reference shall be to a Section of this Annex A, unless
otherwise clearly indicated. The headings contained in this Annex A are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Schedule or the Agreement. Whenever the word
"including" is used in this Annex A, it shall be deemed to be followed by
the words "without limitation." The use of any gender herein shall be
deemed to be or include the other genders and the use of the singular
herein shall be deemed to be or include the plural (and vice versa),
wherever appropriate.
Section 2. REGISTRATION.
2.1 Registration Procedures.
Following the execution by the parties of the Purchase
Agreement, Cendant shall (i) prepare and, as soon as practicable
thereafter, cause to be filed with the Commission the Cendant Registration
Statement, and (ii) use its commercially reasonable efforts to cause the
Cendant Registration Statement to be declared effective at the earliest
practicable date and, subject to the terms of this Annex A, to remain
effective for so long as any Registered Shares remain outstanding. In
connection with such registration of the Registered Shares, Cendant shall:
(i) prepare and file with the Commission such amendments and
supplements to the Cendant 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 Registered
Shares covered by such registration statement until such time as all
of such Registered Shares have been disposed of in accordance with
the intended methods of disposition thereof as set forth in such
registration statement or no Registered Shares shall remain
outstanding.
(ii) furnish to each holder of Registered Shares (a "Holder")
and any managing underwriter such number of conformed copies of such
registration statement and of each amendment and supplement thereto
(in each case including all exhibits), such number of copies of the
prospectus included in such registration statement, and such other
documents as a Holder or such managing underwriter may reasonably
request to facilitate the disposition of the Registered Shares in
accordance with the intended methods of disposition thereof as set
forth in such registration statement;
(iii) use its commercially reasonable efforts to register or
qualify all the Registered Shares under such securities or "blue sky"
laws of such jurisdictions as the Holders shall reasonably request
(given the intended methods of distribution), and do any and all
other acts and things which may be reasonably necessary or advisable
to enable each Holder to consummate the disposition in such
jurisdictions of his Registered Shares covered by such registration
statement; provided, however, that in connection therewith Cendant
shall not be required to register or qualify any Registered Shares
under the securities or "blue sky" laws of any jurisdiction where
Cendant would be required (x) to qualify to do business as a foreign
corporation or as a dealer in such jurisdiction, (y) to conform its
capitalization or the composition of its assets at the time to the
securities or "blue sky" laws of such jurisdiction or (z) to take any
action that would subject it to service of process in suits other
than those arising out of the offer and sale of the Registered Shares
covered by such registration statement or subject itself to taxation
in such jurisdiction;
(iv) immediately notify each Holder, at any time when the
prospectus included in such registration statement is required to be
delivered pursuant to the Securities Act in connection with a sale of
Registered Securities, of the happening of any event which comes to
the attention of Cendant and as a result of which such prospectus, as
then in effect, would 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, in the light of the
circumstances under which they were made, not misleading, and,
subject to Section 2.4(d), Cendant will promptly prepare and furnish
to each Holder a supplement to or an amendment of such prospectus so
that, as thereafter delivered to the purchasers of such Registered
Shares, such prospectus will not contain an untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(v) immediately notify each Holder of the issuance or, to the
knowledge of Cendant, threatened issuance of any stop order by the
Commission suspending the effectiveness of the registration statement
or of the receipt by Cendant of any notification with respect to the
suspension or threatened suspension of the qualification of any
Registered Shares for sale under the securities or blue sky laws of
any jurisdiction, and Cendant shall take all commercially practicable
action necessary (i) to prevent the entry of any threatened stop
order or any threatened suspension or (ii) to remove any stop order
or lift any suspension once entered;
(vi) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission,
and make available to its securities holders as promptly as
practicable an earnings statement covering a period of twelve months
beginning 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 promulgated thereunder;
(vii) enter into customary agreements (including an
underwriting agreement containing customary terms and conditions) and
take such other actions as are reasonably required to facilitate the
disposition of such Registered Shares; and
(viii) use its commercially reasonable efforts to cause the
Registered Shares to be listed on the NYSE or on such other
securities exchange or national market system on which securities of
Cendant of the same class or series as the Registered Shares are then
principally traded.
2.2 Registration Expenses. Cendant will pay all Registration
Expenses in connection with the registration of Registered Shares pursuant
to Section 2.1. Liberty CNDT will pay, and hold Cendant harmless from, all
other costs and expenses incurred by or on behalf of Liberty CNDT or any
Holder in connection with an offer and sale or other disposition of
Registered Shares pursuant to this Annex A.
2.3 Preparation; Reasonable Investigation. In connection with
the preparation and filing of the Cendant Registration Statement, Cendant
shall provide the Holders and their respective attorneys and accountants
the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission
(other than any documents incorporated by reference in any prospectus), and
each amendment thereof or supplement thereto, and shall make available and
give each of them such access to its books and records, pertinent corporate
documents and such opportunities to discuss the business of Cendant with
its employees as shall be necessary for the Holders to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act.
Cendant shall not file any registration statement, any prospectus included
therein or any amendment thereof or supplement thereto with the Commission
over the reasonable objections of any counsel for the Holders.
2.4 Certain Covenants. Each Holder shall furnish to Cendant
such information regarding such Holder, its intended method of distribution
of Registered Shares and such other information as Cendant may from time to
time reasonably request for purposes of preparation of the Cendant
Registration Statement and to maintain the effectiveness of such
registration statement.
(a) At least two business day prior to any disposition of
Registered Shares by each Holder, such Holder will orally advise Cendant of
the dates on which such disposition is expected to commence and terminate,
the number of Registered Shares expected to be sold, the method of
disposition and such other information as Cendant may reasonably request in
order to supplement the prospectus contained in the registration statement
in accordance with the rules and regulations of the Commission. Promptly
after receiving such advice, Cendant will, if necessary, (i) prepare a
supplement to the prospectus based upon such advice and file the same with
the Commission pursuant to Rule 424(b) under the Securities Act and (ii),
if necessary, qualify the Registered Shares to be sold under the securities
or blue sky laws of such jurisdictions in the United States as such Holder
shall reasonably request (subject to the proviso of Section 2.1(iii)).
(b) Cendant may postpone the filing or the effectiveness of the
Cendant Registration Statement or suspend the use of the Cendant
Registration Statement for a period of time, not to exceed 120 days in any
12-month period, if Cendant determines that the filing or continued use of
the Cendant Registration Statement would require Cendant to disclose a
material financing, acquisition or other corporate development of Cendant
or any of its affiliates and Cendant shall have determined that such
disclosure is not in the best interest of Cendant (any such determination
to be made by resolution of the Board of Directors of Cendant). Cendant
shall promptly notify each Holder at such time assuch financing,
acquisition or other corporate development has been otherwise publicly
disclosed or terminated or counsel to Cendant has determined that such
disclosure is not required due to subsequent events.
(c) Each Holder agrees that, upon receipt of any notice from
Cendant of the happening of any event of the kind described in Section
2.1(iv), such Holder will forthwith discontinue disposition of the
Registered Shares pursuant to such registration statement until receipt of
copies of the supplemented or amended prospectus contemplated by Section
2.1(iv), and, if so directed by Cendant, will deliver to Cendant all copies
of the prospectus covering the Registered Shares in its possession at the
time of receipt of such notice.
(d) Each Holder shall, at any time it is engaged in a
distribution of Registered Shares, comply with all applicable laws,
including Regulation M promulgated under the Exchange Act and (i) will not
engage in any stabilization activity in connection with the securities of
Cendant in contravention of such rules, (ii) will distribute the Registered
Shares solely in the manner described in the Cendant Registration Statement
and (iii) will not bid for or purchase any securities of Cendant or attempt
to induce any person to purchase any securities of Cendant other than as
permitted under the Exchange Act.
(e) Each Holder shall provide such information and materials,
execute all such documents and take all such other actions as Cendant shall
reasonably request in order to permit Cendant to comply with all applicable
requirements of law and to effect the registration of the Registered
Shares.
Section 3. INDEMNIFICATION.
3.1 Indemnification by Cendant. Cendant will indemnify and hold
harmless each Holder, such holders's directors, officers and partners and
each other Person, if any, who controls such Holder within the meaning of
the Securities Act or the Exchange Act ("Seller Indemnified Parties"),
against any and all losses, claims, damages or liabilities, joint or
several, and expenses to which the Seller Indemnified Parties, or any of
them, may become subject, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) or expenses
arise out of or are based upon (x) any untrue statement or alleged untrue
statement of any material fact contained in the Cendant Registration
Statement, any preliminary, final or summary prospectus included therein,
or any amendment or supplement thereto, or (y) 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 Cendant will
reimburse such Seller Indemnified Parties for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending such loss, claim, liability, action or proceeding; provided, that
Cendant shall not be liable to any Holder, such holder's directors,
officers or partners or any Person, if any, who controls such Holder within
the meaning of the Securities Act or the Exchange Act 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 (i) any actual or
alleged untrue statement in or any actual or alleged omission from, the
Cendant Registration Statement or amendment or supplement thereto or any
preliminary, final or summary prospectus, in reliance upon and in
conformity with written information furnished by or on behalf of such
Holder to Cendant specifically for use in the preparation thereof, (ii) any
actual or alleged untrue statement of a material fact or any actual or
alleged omission of a material fact required to be stated in any
preliminary prospectus if such Holder sells Registered Shares to a Person
to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent, if
Cendant had previously furnished copies thereof to such Holder or its
representatives and such final prospectus, as then amended or supplemented,
corrected any such misstatement or omission or (iii) the use of any
preliminary, final or summary prospectus by or on behalf of such Holder
after Cendant has notified such holder, in accordance with Section 2.1(iv),
that such prospectus contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein, in the light
of the circumstances under which they were made, not misleading.
3.2 Indemnification by Holders. Each Holder will indemnify and
hold harmless Cendant, each of its directors and officers, and each Person,
if any, who controls Cendant within the meaning of the Securities Act or
the Exchange Act (the "Cendant Indemnified Parties"), against any and all
losses, claims, damages or liabilities and expenses to which the Cendant
Indemnified Parties may become subject, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) or
expenses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Cendant Registration
Statement, any preliminary, final or summary prospectus included therein,
or amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, if the statement or omission
was made in reliance upon and in conformity with written information
furnished to Cendant by or on behalf of such Holders specifically for use
in the preparation thereof or (ii) the use of any prospectus by or on
behalf of such Holders after Cendant has notified such Holders that such
prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding
the foregoing, no Holder shall be liable under this Section 3.2 for any
amounts exceeding the gross proceeds received by such Holder in connection
with the sale of such Holder's Registered Shares.
3.3 Indemnification Procedures. Any Person that proposes to
assert the right to be indemnified under this Section 3 shall, promptly
after receipt of notice of any claim, action, suit, proceeding or other
litigation (collectively, an "Action") against such Person in respect of
which a claim is to be made against an indemnifying party under this
Section 3, notify such indemnifying party of the commencement of such
Action, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party of any such Action shall not relieve it from
any liability that it may have to any indemnified party otherwise than
under this Section 3, except to the extent that such indemnifying party is
prejudiced by such failure to give notice. In case any such Action shall be
brought and notice given to the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and to
assume the defense thereof, with counsel satisfactory to the 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 further legal
or other expenses incurred by such indemnified party, except as provided
below and except for the reasonable costs of investigation subsequently
incurred by such indemnified party in connection with the defense thereof.
The indemnified party shall have the right to employ separate counsel and
to participate in (but not control) any such Action, but the fees and
expenses of such counsel shall be the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized by the indemnifying party, (ii) the indemnified party shall have
been advised by its counsel in writing that there are legal defenses
available to it that are different from or in addition to those available
to the indemnifying parties, (iii) the indemnified party shall have been
advised by its counsel in writing that there is a conflict of interest
between the indemnifying party and the indemnified party in the conduct of
the defense of such Action (in which case the indemnifying party shall not
have the right to direct the defense of such Action on behalf of the
indemnified party) or (iv) the indemnifying party shall not in fact have
employed counsel to assume the defense of such Action, in each of which
cases the fees and expenses of such counsel shall be at the expense of the
indemnifying party. An indemnifying party shall not be liable for any
settlement of an Action effected without its written consent (which consent
shall not be unreasonably withheld). No indemnifying party will 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
Action. An indemnifying party who is not entitled to, or elects not to,
assume the defense of an Action will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such Action.
3.4 Contribution. If recovery is not available under the
foregoing indemnification provisions, for any reason other than as
specified therein, the parties entitled to indemnification by the terms
thereof shall be entitled to contribution for any and all losses, claims,
damages or liabilities, joint or several, and expenses to which they may
become subject, in such proportion as is appropriate to reflect the
relative fault of the parties entitled to indemnification, on the one hand,
and the indemnifying parties, on the other, in connection with the matter
out of which such losses, claims, damages, liabilities or expenses arise or
result from. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the parties'
relative knowledge and access to information concerning the matter with
respect to which the Action was asserted, the opportunity to correct and
prevent any statement or omission, and any other equitable considerations
appropriate under the circumstances. Cendant and each Holder agrees that it
would not be equitable if the amount of such contribution were determined
by pro rata or per capita allocation.
Section 4. RULE 144.
4.1 Subject to Section 2.4, Cendant hereby covenants to use its
commercially reasonable efforts to file in a timely manner all reports
required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Commission thereunder (or, if
at any time Cendant is not required to file such reports, it will, upon the
request of Holder, make publicly available other information so long as
necessary to permit sales under Rule 144 under the Securities Act), and it
will take such further action as any Holder may reasonably request, all to
the extent required from time to time to enable Cendant to meet the
requirements for issuers entitled to register securities on Form S-3 or any
successor form.
