PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of December 15, 1999 (this "Agreement"),
by and between Cendant Corporation, a Delaware corporation ("Cendant"), and
Liberty Media Corporation, a Delaware corporation ("Liberty").
WHEREAS, Liberty desires to purchase from Cendant, and Cendant desires
to sell to Liberty, 18,000,000 shares (the "Shares") of the common stock, par
value $.01 per share, of Cendant ( the "Common Stock"), as well as
non-transferable warrants (in substantially the form of Exhibit A hereto) to
purchase up to 28,956,000 shares of Common Stock for an exercise price of $23.00
per share (subject to the anti-dilution adjustments set forth in the Warrants
(as hereinafter defined)) at any time during the period beginning on the Closing
Date and ending on the second anniversary thereof (the "Warrants").
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, at the Closing (as hereinafter defined), Cendant
will issue to Liberty, and Liberty will purchase from Cendant (x) the Shares, in
consideration for which, at the Closing, Liberty will pay to Cendant an amount
equal to three hundred million dollars ($300,000,000) in cash (the "Shares
Purchase Price"), and (y) the Warrant, in consideration for which, at the
Closing, Liberty will pay to Cendant an amount equal to one hundred million
dollars ($100,000,000) in cash (the "Warrant Purchase Price" and, together with
the Shares Purchase Price, the "Purchase Price"). Upon the Closing, Liberty
shall pay the Purchase Price to Cendant by wire transfer of immediately
available funds to an account or accounts designated by Cendant in writing for
such purpose prior to the Closing.
Section 1.2 Time and Place of Closing. Upon the terms and subject to
the conditions of this Agreement, the closing of the transactions contemplated
by
this Agreement (the "Closing") will take place at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
a.m. (New York City time) on the third business day following the satisfaction
or waiver of the conditions set forth in Article V, unless another time or date
is agreed to by the parties hereto (the "Closing Date").
Section 1.3 Deliveries by Cendant. Subject to the terms and conditions
hereof, at the Closing, Cendant will deliver the following to Liberty:
(a) A certificate or certificates, duly registered on the
stock books of Cendant in the name of Liberty, representing the Shares;
(b) The Warrants; and
(c) The officer's certificate provided for in Section 5.3(c).
Section 1.4 Deliveries by Liberty. Subject to the terms and conditions
hereof, at the Closing, Liberty will deliver the following to Cendant:
(a) The Purchase Price, in immediately available funds, in the
manner set forth in Section 1.1 hereof; and
(b) The officer's certificate provided for in Section 5.2(c).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CENDANT
Section 2.1 Organization. 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. Cendant has the corporate power and authority to
execute and deliver this Agreement and the Warrants and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Warrants and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all requisite
corporate
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action on the part of Cendant. Each of this Agreement has been (and upon the
Closing the Warrants will be) validly executed and delivered by Cendant and
(assuming this Agreement has been duly authorized, executed and delivered by
Liberty) constitutes (or in the case of the Warrants, will constitute) a valid
and binding agreement of Cendant, enforceable against 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 and the Warrants, 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, when a certificate evidencing the Shares is issued and delivered
against payment of the Shares Purchase Price 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. As of the Closing, the sale of the Shares to Liberty will
be registered under an effective shelf registration statement filed by Cendant
with the Securities and Exchange Commission (the "SEC").
Section 2.4 The Warrant Shares. The shares of Common Stock issuable
upon exercise of the Warrants (the "Warrant Shares") (a) are duly and validly
authorized, (b) at the Closing Date, will be reserved for issuance upon exercise
of the Warrants in accordance with their terms, including by reason of the
anti-dilution provisions thereof, (c) assuming issuance in accordance with the
terms of the Warrants, will at the time of exercise of the Warrants be duly and
validly issued, fully paid and nonassessable, and (d) at the time of exercise of
the Warrants, will be registered under an effective registration statement filed
by Cendant with the SEC. Delivery of the certificate(s) for the Warrant Shares
upon exercise of the Warrants will pass valid title to the Warrant Shares, free
and clear of all Liens whatsoever, other than Liens resulting from any action(s)
relating to Liberty. At the time of the Closing, the Warrant Shares will be
registered under an effective shelf registration statement filed by Cendant with
the SEC.
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Section 2.5 Capitalization. The authorized capital of Cendant consists
of 2,000,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). As of October 26, 1999,
there were 711,025,187 shares of Common Stock issued and outstanding and no
shares of Preferred Stock issued and outstanding.
Section 2.6 Consents and Approvals; No Violations. Neither the
execution and delivery of this Agreement or the Warrants by Cendant, nor the
consummation by Cendant of the transactions contemplated hereby or thereby will
(a) conflict with or result in any breach of any provision of the amended and
restated certificate of incorporation (the "Cendant Charter") or amended and
restated by-laws of 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 the 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 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"), except in the case of clauses (c) and (d) of this
Section 2.6, for the applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act").
Section 2.7 SEC Reports. Since January 1, 1999, 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 SEC. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, as the case may be,
and the rules and regulations of the SEC 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.
Section 2.8 Shareholder Vote. The delivery and sale of the Shares and
the Warrants, and the exercise of the Warrants and the delivery of the Warrant
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Shares in accordance with the terms thereof, will not require any vote of
Cendant's shareholders pursuant to the terms of the Cendant Charter or the rules
of the New York Stock Exchange (the "NYSE").
Section 2.9 Approval of Disinterested Directors. Notwithstanding the
foregoing representations, on the date hereof Cendant has not obtained the
approval of a majority of its disinterested directors for the issuance of the
Warrant Shares pursuant to the Warrants, which approval shall be obtained prior
to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LIBERTY
Section 3.1 Organization. Liberty 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 3.2 Authority Relative to this Agreement. Liberty 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. This Agreement has been duly and validly executed and delivered by
Liberty and (assuming this Agreement has been duly authorized, executed and
delivered by Cendant) constitutes a valid and binding agreement of Liberty,
enforceable against Liberty 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, nor the consummation by
Liberty 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
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organizational documents) of Liberty, (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 is a party, (c) violate any order,
writ, injunction, decree or award rendered by any Governmental Entity or Law
applicable to Liberty, or (d) require any filing with, or the obtaining of any
permit, authorization, consent or approval of, any Governmental Entity, except
in the case of clauses (c) and (d) of this Section 3.3, for the applicable
requirements of the HSR Act.
Section 3.4 Liberty Acknowledgment. Liberty has conducted its own
independent investigation, review and analysis of Cendant. In entering into this
Agreement, Liberty 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 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 Consents; Cooperation. Each of Cendant and Liberty shall
cooperate, and use its best efforts, to prepare and file all necessary materials
with the appropriate Governmental Entities pursuant to the HSR Act within five
business days of the date of this Agreement. Each party covenants to (x) furnish
the other party with such necessary or appropriate information and reasonable
assistance as such other party may reasonably request in connection with its
preparation of necessary filings and submission pursuant to the HSR Act and (y)
use its commercially reasonable efforts to comply as promptly as possible with
requests for additional information issued by applicable Governmental Entities
pursuant to the HSR Act.
Section 4.2 Future Development Efforts. (a) From and after the Closing,
each of Cendant and Liberty agree to work together to develop Internet and
related opportunities associated with Cendant's travel, mortgage, real estate
and membership businesses. These efforts may include the creation of joint
ventures among Liberty, Cendant and others, as well as equity investments by
either Liberty
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and Cendant in businesses owned by the other, subject, in all cases, to the
negotiation of mutually agreeable terms between the parties.
(b) In addition, Cendant agrees to assist Liberty in creating
a new venture that will seek to provide broadband video, voice and data services
and content to hotels and their guests on a worldwide basis, in consideration
for which Cendant will receive an equity participation interest in such venture,
subject to the negotiation of mutually agreeable terms between the parties.
(c) Cendant and Liberty covenant to pursue opportunities
within the cable industry to leverage Cendant's direct marketing resources and
capabilities, subject to the negotiation of mutually agreeable terms between the
parties with respect to any specific transaction.
(d) The provisions of this Section 4.2 shall not prohibit nor
in any way interfere with the right of Liberty or Cendant, or any of their
respective affiliates, to engage in any business or pursue any business
opportunity (including entering into any agreement in connection therewith),
anywhere in the world, including those that may be in competition with, or
complimentary to, any business engaged in by the other or any of its affiliates.
Section 4.3 Public Announcements. Prior to the Closing, except as
otherwise agreed to by the parties, the parties shall not issue any report,
statement or press release or otherwise make any public statements with respect
to this Agreement and the transactions contemplated hereby, except as in the
reasonable judgment of a party (or, in the case of Liberty, AT&T Corporation)
may be required by law or in connection with its obligations as a publicly-held,
exchange-listed company, in which case the parties will use their reasonable
best efforts to reach mutual agreement as to the language of any such report,
statement or press release. Upon execution hereof and upon the Closing, Cendant
and Liberty 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.
ARTICLE V
CONDITIONS AND TERMINATION
Section 5.1 Conditions to Each Party's Obligations to Consummate the
Transactions Under this Agreement. The respective obligations of each party to
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consummate the transactions contemplated hereby is subject to the satisfaction
at or prior to the Closing of the following conditions:
(a) Any waiting periods applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
terminated; and
(b) Neither Cendant nor Liberty shall be subject to any order,
decree or injunction of a court of competent jurisdiction, and no statute, rule
or regulation shall have been enacted, promulgated or issued, which enjoins or
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Warrants.
Section 5.2 Conditions to Cendant's Obligations to Consummate the
Transactions Under this Agreement. The obligation of Cendant to consummate the
transactions contemplated hereby are further subject to the satisfaction or
waiver of the following conditions:
(a) The representations and warranties of Liberty contained in
this Agreement shall be true and correct at and as of the Closing Date in all
material respects as though such representations and warranties were made at and
as of such date (except to the extent expressly made as of an earlier date, in
which case, as of such date);
(b) Liberty shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement to be
performed or complied with by it on or prior to the Closing; and
(c) Liberty shall have delivered to Cendant an officer's
certificate to the effect that each of the conditions specified above in
Sections 5.2(a) and (b) is satisfied.
Section 5.3 Conditions to Liberty's Obligations to Consummate the
Transactions Under this Agreement. The obligation of Liberty to consummate the
transactions contemplated hereby are further subject to satisfaction or waiver
of the following conditions:
(a) The representations and warranties of Cendant contained in
this Agreement shall be true and correct at and as of the Closing Date in all
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material respects as though such representations and warranties were made at and
as of such date (except to the extent expressly made as of an earlier date, in
which case, as of such date);
(b) Cendant shall have performed and complied in all
material respects with all agreements and obligations required by this Agreement
to be performed or complied with by it on or prior to the Closing;
(c) Cendant shall have delivered to Liberty an officer's
certificate to the effect that each of the conditions specified above in
Sections 5.3(a) and (b) is satisfied;
(d) The Shares and the Warrant Shares shall have been approved
for listing on the NYSE, subject only to official notice of issuance;
(e) The sale of the Shares to Liberty shall have been
registered under an effective shelf registration statement filed by Cendant with
the SEC; and
(f) Cendant shall have obtained the approval of a majority of
its disinterested directors for the issuance of the Warrant Shares pursuant to
the Warrant.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:
(a) by mutual agreement of the parties; or
(b) by Cendant or Liberty at any time after 60 days from the
date of this Agreement if the Closing shall not have occurred by such date;
provided, however, that the right to terminate this Agreement under this Section
6.1(b) shall not be available to a party, if it has breached any of its
representations, warranties or covenants hereunder in any material respect and
such breach has been the cause of or resulted in the failure of the Closing to
occur on or before such date.
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Section 6.2 Procedure for and Effect of Termination. In the event of
termination of this Agreement and the abandonment of the transactions
contemplated hereby by the parties pursuant to Section 6.1 hereof, written
notice thereof shall be given by a party so terminating to the other party and
this Agreement shall forthwith terminate and shall become null and void and of
no further effect, and the transactions contemplated hereby shall be abandoned
without further action by Cendant or Liberty. If this Agreement is terminated
pursuant to Section 6.1 hereof:
(a) all filings, applications and other submissions made
pursuant hereto shall, to the extent practicable, be withdrawn from the
Governmental Entity to which made; and
(b) there shall be no liability or obligation hereunder on the
part of Cendant or Liberty or any of their respective directors, officers,
employees, affiliates, controlling persons, agents or representatives, except
that Cendant or Liberty, as the case may be, may have liability to the other
party if the basis of termination is a breach by Cendant or Liberty, as the case
may be, of one or more of the provisions of this Agreement, and except that the
obligations provided for in this Section 6.2 shall survive any such termination.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Entire Agreement. This Agreement constitutes the entire
agreement of the parties relating to the subject matter hereof and supersedes
other prior agreements and understandings between the parties both oral and
written regarding such subject matter.
Section 7.2 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 7.3 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
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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 Cendant, to
Cendant Corporation
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000/23
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxx, Esq.
(b) if to Liberty, to
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx
Fax: (000) 000-0000
Attention: General Counsel
Section 7.4 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
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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 7.5 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 7.6 Counterparts. This Agreement may be signed in counterparts
and all signed copies of this Agreement will together constitute one original of
this Agreement. This Agreement shall become effective when each party hereto
shall have received counterparts thereof signed by all the other parties hereto.
Section 7.7 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 may cause the Shares and/or the
Warrants and Warrant Shares to be sold to, and registered in the name of, a
wholly owned direct or indirect 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.
Section 7.8 Definition of "Shares." As used in this Agreement, the term
"Shares" includes (a) all dividends (other than ordinary cash dividends with a
record date prior to the Closing) and distributions declared by Cendant on the
Shares subsequent to the date hereof and prior to the Closing and (b) shall be
appropriately adjusted to give effect to any subdivision, combination or
reclassification of the Shares effected prior to the Closing.
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly signed as of the date first above written.
CENDANT CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Executive Vice President
and Chief Financial Officer
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
EXHIBIT A
CENDANT CORPORATION
(Incorporated under the laws of the State of Delaware)
VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON ________ __, 2002 (1)
Warrant to Purchase 28,956,000
Shares of Common Stock
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
FOR VALUE RECEIVED, CENDANT CORPORATION (the "Company"), a Delaware
corporation, hereby certifies that Liberty Media Corporation ("Liberty") or its
permitted transferees (the "Holder") is entitled, subject to the provisions of
this warrant (the "Warrant"), to purchase from the Company, at any time, or from
time to time during the period commencing at 9:00 a.m. New York City local time,
on _______ __, 2000 (the "Closing Date") (2), and expiring, unless earlier
terminated as hereinafter provided, at 5:00 p.m. New York City local time on
_______ __, 2002 (the "Expiration Date"), up to 28,956,000 fully paid and
nonassessable shares of Common Stock (as hereinafter defined) at a price of
$23.00 per share (such exercise price per share, as adjusted proportionately in
the case of an adjustment described in Section 7 hereto, being hereinafter
referred to as the "Exercise Price").
The term "Common Stock" means the shares of Common Stock, $.01 par
value, of the Company as constituted on December 15, 1999 (the "Base Date"),
together with any other equity securities that may be issued by the Company in
addition thereto or in substitution therefor. The aggregate number of shares of
Common Stock issuable upon the exercise of this Warrant shall be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Stock".
-------------
1 Date will be the second anniversary of the Closing Date.
2 This will be the Closing Date.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant is lost, stolen, destroyed
or mutilated, which shall be at any time enforceable by anyone.
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held, subject to all of the conditions,
limitations and provisions set forth herein.
1. Exercise of Warrant. This Warrant may be exercised in whole or in
part at any time, or from time to time, during the period commencing at 9:00
a.m., New York City local time, on the Closing Date, and expiring at 5:00 p.m.,
New York City local time, on _______ __, 2002 (subject to Section 7.2 hereof)
or, if such day is a day on which banking institutions in the City of New York
are authorized by law to close, then on the next succeeding day that shall not
be such a day. This Warrant may be exercised by presentation and surrender
hereof to the Company at its principal office, with the Warrant Exercise Form
attached hereto duly executed and accompanied by payment (either in cash or by
certified or official bank check, payable to the order of the Company) of the
Exercise Price for the number of shares specified in such Form and instruments
of transfer, if appropriate, duly executed by the Holder or his or her duly
authorized attorney. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the shares purchasable hereunder. Upon receipt by the Company of
this Warrant, together with the Exercise Price, at its office, or by the stock
transfer agent of the Company at its office, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such shares
of Common Stock shall not then be actually delivered to the Holder. The Company
shall pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.
2. Reservation of Shares. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common Stock
or other shares of capital stock of the Company (and other securities and
property) from time to time receivable upon exercise of this Warrant. All such
shares (and other
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securities and property) shall be duly authorized and, when issued upon such
exercise shall be validly issued, fully paid and nonassessable and free of all
preemptive rights.
3. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. In lieu of
fractional shares, there shall be paid to the Holder of this Warrant at the
time the Warrant is surrendered pursuant to Section 1 an amount in cash equal to
the same fraction of the Current Market Price of a share of Common Stock on the
trading day immediately prior to the date of such exercise. "Current Market
Price" means the closing sale price of the Common Stock (regular way) on the New
York Stock Exchange.
4. Non-Transferability of Warrant. This Warrant cannot be sold,
transferred or assigned, except to a direct or indirect wholly-owned subsidiary
of Liberty; provided, however, that the Holder must at all times be either
Liberty or a direct or indirect wholly-owned subsidiary of Liberty.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder of the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
6. Redemption. This Warrant is not redeemable by the Company.
7. Anti-Dilution Provisions.
7.1 Adjustment for Dividends in Other Securities, Property,
Etc.; Reclassification, Etc. (a) In case at any time or from time to time after
the Base Date the holders of Common Stock (or any other securities at the time
receivable upon the exercise of this Warrant) shall have received, or on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive without payment therefor: (i) other or
additional securities or property (other than cash) by way of dividend or
distribution (other than distributions referred to in Section 7.1(b) below),
(ii) any cash paid or payable except cash paid out of earned surplus of the
Company at the Base Date as increased (decreased) by subsequent credits
(charges) thereto (other than credits as a result of a revaluation of property)
and that does not constitute an Extraordinary Cash Dividend (as defined below),
or (iii) other or additional (or less) securities or property (including cash)
by way of stock-split, spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement, then, and in each such case, the
Holder of this Warrant, upon the exercise thereof as provided in Section 1,
shall be entitled to receive the amount of securities and property (including
cash in the cases referred to in clauses (ii) and (iii) above) which such Holder
would hold on the date of such exercise or then be entitled to receive if on the
Base Date it had been the holder of record of the number of shares of Common
Stock (as constituted on the Base Date) subscribed for
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upon such exercise as provided in Section 1 and had thereafter, during the
period from the Base Date to and including the date of such exercise, retained
such shares and/or all other additional (or less) securities and property
(including cash in the cases referred to in clauses (b) and (c) above)
receivable by it as aforesaid during such period, giving effect to all
adjustments called for during such period by Section 7.2.
(b) If the Company shall distribute to all holders of Common
Stock subscription rights or warrants that (i) expire prior to the Expiration
Date (and in the case of subscription rights or warrants for Common Stock, the
exercise price thereof is less than the Current Market Price on the
Determination Date) and (ii) are generally not taxable to the recipients, then
the Exercise Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date for the determination of stockholders
entitled to receive such distribution by a fraction, of which the numerator
shall be the Current Market Price on the Determination Date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company) of such subscription rights or warrants distributed per share of Common
Stock to the holders of Common Stock, and of which the denominator shall be such
Current Market Price. The "Determination Date" means the earlier of (A) the
record date for the determination of stockholders entitled to receive the
subscription rights or warrants to which this paragraph (b) applies and (B) the
"ex-dividend" date for the issuance of such subscription rights or warrants. The
adjustment pursuant to the foregoing provisions of this paragraph (b) shall be
made successively whenever any distribution to which this paragraph (b) applies,
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution. Upon each
adjustment to the Exercise Price as a result of this paragraph (b), this Warrant
shall thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of shares of Common Stock (calculated to the nearest hundredth)
obtained by (x) multiplying the number of shares of Common Stock purchasable
upon exercise of this Warrant prior to such adjustment by the Exercise Price in
effect immediately prior to the adjustment of the Exercise Price and (y)
dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.
(c) The term "Extraordinary Cash Dividend" means any cash
dividend with respect to the Common Stock the amount of which, together with the
aggregate amount of cash dividends on the Common Stock to be aggregated with
such cash dividend in accordance with the following provisions of this
paragraph, equals or exceeds the threshold percentage set forth in the following
sentence. If, upon the date prior to the "ex-dividend" date with respect to a
cash dividend on the Common Stock, the aggregate of the amount of such cash
dividend together with the amount of all cash dividends on the Common Stock with
"ex-dividend" dates occurring in the 365 consecutive day period ending on the
date prior to the "ex-
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dividend" date with respect to the cash dividend to which this provision is
being applied (other than any such other cash dividends with "ex dividend" dates
occurring in such period for which a prior adjustment under this Section 7.1 was
made) equals or exceeds on a per share basis 15% of the average of the Current
Market Prices during the period beginning on the date after the first such
"ex-dividend" date in such period and ending on the date prior to the
"ex-dividend" date with respect to a cash dividend to which this provision is
being applied (except that if no other cash dividend has had an "ex-dividend"
date occurring in such period, the period for calculating the average of such
closing sale prices shall be the period commencing 365 days prior to the date
immediately prior to the "ex-dividend" date with respect to the cash dividend to
which this provision is being applied), such cash dividend together with each
other cash dividend with an "ex-dividend" date occurring in such 365-day period
that is aggregated with such cash dividend in accordance with this paragraph
shall be deemed be deemed to be an Extraordinary Cash Dividend.
7.2 Adjustment for Reorganization, Consolidation, Merger, Etc.
In case of (i) any reorganization of the Company (or any other corporation or
entity, the securities of which are at the time receivable on the exercise of
this Warrant) after the Base Date or (ii) the Company (or any such other
corporation or entity) shall consolidate with or merge into another corporation
or entity or convey all or substantially all of its assets to another
corporation or other entity or (iii) the Company is a party to a merger or
binding share exchange which reclassifies or changes all of its outstanding
Common Stock, then, and in each such case, the Holder of this Warrant upon the
exercise thereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation, merger, conveyance or binding share
exchange, shall be entitled to receive, in lieu of the securities and property
receivable upon the exercise of this Warrant prior to such consummation, the
securities or property to which such Holder would have been entitled upon
consummation if said Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in Section 7.1; in each
such case, the terms of this Warrant shall be applicable to the securities or
property receivable upon the exercise of this Warrant after such consummation.
In case the Company (or any other corporation or other entity, the securities of
which are at the time receivable on exercise of this Warrant) shall consolidate
with or merge into another corporation or convey all or substantially all of its
assets to another corporation, then, if and only if the consideration per share
of Common Stock received in such transaction is comprised solely of cash ("Cash
Consideration") and such Cash Consideration is equal to or less than the
Exercise Price then the Warrants shall automatically expire upon consummation of
such transaction provided that, in each case, the Warrants shall survive
consummation of such transaction and the terms of this Section 7.2 shall apply.
The Company shall not effect any such consolidation, merger, transfer or binding
share exchange of all of its shares of Common Stock unless prior to or
simultaneously with the consummation thereof the successor (if other than the
Company) resulting from such
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consolidation or merger or the entity purchasing such assets or other
appropriate entity shall assume, by written agreement, the obligation to deliver
to the Holder of this Warrant such securities, cash or other property as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase and the other obligations under this Warrant.
7.3 Certificate as to Adjustments. In each case of an
adjustment in the number of shares of Common Stock (or other securities or
property) receivable on the exercise of the Warrant, the Company at its expense
will promptly compute such adjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based, including a statement of
the pro forma adjusted Exercise Price. The Company will forthwith mail a copy of
each such certificate to the Holder of this Warrant.
7.4 Notices of Record Date, Etc.
In case:
(a) the Company shall take a record of the holders of its
Common Stock (or other securities at the time receivable upon the exercise of
the Warrant) for the purpose of entitling them to receive any dividend (other
than a cash dividend that is not an Extraordinary Cash Dividend) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities, or to receive any other
right;
(b) of any capital reorganization of the Company (other than a
stock split or reverse stock split), any reclassification of the capital stock
of the Company, any consolidation or merger of the Company with or into another
corporation or entity (other than a merger for purposes of change of domicile)
or any conveyance of all or substantially all of the assets of the Company to
another corporation or entity;
(c) of any voluntary of involuntary dissolution, liquidation
or winding-up of the Company; or
(d) the Company proposes to take any other action that would
require adjustment to the Exercise Price or the number of shares of Common Stock
issuable upon exercise of this Warrant pursuant to this Section 7,
then, and in such case, the Company shall mail or cause to be
mailed to the Holder of the Warrant at the time outstanding a notice specifying,
as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend,
6
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, binding share exchange, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any,
is to be fixed, as to which the holders of record of Common Stock (or such other
securities at the time receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or such other securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up. Such notice shall be mailed at least twenty (20) days prior to the
date therein specified.
7.5 De Minimus Adjustments. No adjustment to the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this Section 7.5 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 7 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
8. Applicable Law. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Delaware.
9. Notice. Notices and other communications to be given to the Holder
of the Warrant evidenced by this certificate shall be deemed to have been
sufficiently given, if delivered or mailed, addressed in the name and at the
address of such owner appearing on the records of the Company, and if mailed,
sent registered or certified mail, postage prepaid. Notices or other
communications to the Company shall be deemed to have been sufficiently given if
delivered by hand or mailed, by registered or certified mail, postage prepaid,
to the Company at 0 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx 00000, Attn: General
Counsel, or at such other address as the Company shall have designated by
written notice to such registered owner as herein provided, Notice by mail shall
be deemed given when deposited in the United States mail as herein provided.
10. Registration. At the time of the exercise of this Warrant, the
shares of Common Stock issuable pursuant thereto shall be registered under an
effective registration statement filed by Cendant with the Securities and
Exchange Commission.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
CENDANT CORPORATION
By:
--------------------------------
Name:
Title:
8
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing __________________________ shares of Common Stock of
Cendant Corporation and hereby makes payment at the rate of $____ per share, or
an aggregate if $______, in payment therefor.
----------------------------
Name of Registered Holder
----------------------------
Signature
---------------------------
Signature, if held jointly
Date
----------------------------
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