EXECUTION COPY
CENDANT CORPORATION
(a Delaware Corporation)
15,000,000 Upper DECS(SM)
UNDERWRITING AGREEMENT
Dated: July 20, 2001
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(SM) Service ▇▇▇▇ of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
CENDANT CORPORATION
(a Delaware corporation)
15,000,000 Upper DECS(SM)
UNDERWRITING AGREEMENT
July 20, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Ladies and Gentlemen:
Cendant Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to you (the "Underwriter"), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
("▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇") is acting as representative (in such capacity, the
"Representative")15,000,000 of its Upper DECS on the terms and conditions stated
herein and in Schedule II hereto. The UPPER DECS will initially consist of
15,000,000 units with a stated amount, per Upper DECS, of $50 (the "Stated
Amount"). Each Upper DECS will initially consist of (a) a stock purchase
contract (a "Purchase Contract") under which (i) the holder will agree to
purchase from the Company on August 17, 2004 (the "Purchase Contract Settlement
Date"), for an amount of cash equal to the Stated Amount, shares of common
stock, $.01 par value ("Common Stock"), of the Company equal to the Settlement
Rate (as defined in the Purchase Contract Agreement referred to below) and (ii)
the Company will agree to pay to the holder contract adjustment payments and (b)
$50 principal amount of the Company's senior notes due 2006 (the "Notes") issued
pursuant to the Indenture (as defined below).
The Company also proposes to grant to the Underwriter an option to
purchase up to an additional 2,250,000 of its Upper DECS to cover
over-allotments (the "Option Securities"; the Option Securities, together with
the Initial Securities, being hereinafter called the "Securities"). The Notes
that will initially constitute a component of the Upper DECS are hereinafter
sometimes referred to as the "Underlying Notes". In accordance with the terms of
the Purchase Contract Agreement, to be dated as of July 27, 2001 (the "Purchase
Contract Agreement"), between the Company and Bank One Trust Company, National
Association,as purchase contract agent (the "Purchase Contract Agent"), the
Underlying Notes will be pledged by the Purchase Contract Agent, on behalf of
the holders of the Upper DECS, to The Chase Manhattan Bank, as collateral agent
(the "Collateral Agent"), pursuant to the Pledge Agreement, to be dated as of
July 27, 2001 (the "Pledge Agreement"), among the Company, the Purchase
Contract Agent and the Collateral Agent, to secure the holders' obligations to
purchase Common Stock under the Purchase Contracts. The shares of Common Stock
issuable pursuant to the Purchase Contracts are hereinafter called the "Shares".
The Notes are to be issued pursuant to an indenture dated as of
February 24, 1998 (the "Base Indenture"), between the Company and The Bank of
Nova Scotia Trust Company of New York, as trustee (the "Trustee"), as amended
and supplemented by a supplemental indenture to be dated July 27, 2001 (the
"Supplemental Indenture") between the Company and the Trustee (the Base
Indenture, as supplemented and amended by the Supplemental Indenture, being
referred to as the "Indenture"). The Securities and the Indenture are more fully
described in the Prospectus referred to below.
Pursuant to a Remarketing Agreement (the "Remarketing Agreement") to be
dated as of July 27, 2001, between the Company, the Purchase Contract Agent and
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., the Notes may be remarketed, subject to certain terms
and conditions.
As used in this Agreement, the term "Operative Documents" means this
Agreement, the Purchase Contract Agreement (including the Purchase Contracts),
the Pledge Agreement, the Remarketing Agreement, the Notes, the Indenture and
the Upper DECS.
The Company filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-49405) for the
registration of certain securities, including the Securities, the Underlying
Notes and the Shares, under the Securities Act of 1933, as amended (the "1933
Act"), including the related preliminary prospectus or prospectuses, and the
offering thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations").
Such registration statement has been declared effective by the Commission and
the Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). Such registration statement, in the form in which it
became effective, including the exhibits and schedules thereto is referred to
herein as the "Registration Statement"; and the final prospectus and the final
prospectus supplement relating to the offering of the Securities, in the form
first furnished to the Underwriter by the Company for use in connection with the
offering of the Securities, are collectively referred to herein as the "Final
Prospectus", provided, however, that all references to the "Registration
Statement" and the "Final Prospectus" shall also be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), prior to the execution and delivery of
this Agreement; and provided, further, that all references to "Registration
Statement" shall also include the registration statement filed by the Company
with the Commission pursuant to Section 462(b) of the 1933 Act Regulations (the
"Rule 462(b) Registration Statement"), on July 19, 2001. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
Registration Statement became effective and any prospectus that omitted
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness but prior to the execution and delivery of this
Agreement.
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
Registration Statement, any
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preliminary prospectus or the Final Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information that is incorporated by reference in the
Registration Statement, any preliminary prospectus or the Final Prospectus, as
the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, any preliminary prospectus or the
Final Prospectus shall be deemed to mean and include the filing of any document
under the 1934 Act that is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Final Prospectus, as the case may
be.
It is understood that you propose to offer the Securities for sale to
the public as set forth in the Final Prospectus.
The Company has entered into a merger agreement, dated as of June 18,
2001 (the "Merger Agreement") to purchase Galileo International Inc. (the
"Acquisition").
SECTION 1. Representations and Warranties. (a) The Company represents
and warrants to and agrees with each Underwriter as of the date hereof and as of
the Closing Time (as defined in Section 2(b) hereof) that:
(i) The Company meets the requirements for use of Form S-3 under the
1933 Act. The Registration Statement has become effective under the 1933
Act; no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Company, threatened by the
Commission.
(ii) On the original effective date of the Registration Statement, on
the effective date of the most recent post-effective amendment thereto, if
any, and on the date of the filing by the Company of any annual report on
Form 10-K after the original filing of the Registration Statement, the
Registration Statement complied in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations, the 1939 Act and
the rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations") and did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; on the
date hereof and at the Closing Time, (A) the Registration Statement, and
any amendments and supplements thereto, comply and will comply in all
material respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the 1939 Act and the 1939 Act Regulations, (B) neither the
Registration Statement nor any amendment or supplement thereto includes or
will include an untrue statement of a material fact or omits or will omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (C) neither the Final
Prospectus nor any amendment or supplement thereto includes or will include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding
the foregoing, the representations and warranties in this subsection shall
not apply to statements or omissions from the Registration Statement or
Final Prospectus made in reliance upon and in conformity with information
furnished to
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the Company in writing by any Underwriter through the Representatives
expressly for use in the Registration Statement or Final Prospectus.
Each preliminary prospectus and Final Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied as so
filed in all material respects with the 1933 Act and the 1933 Act
Regulations and, if applicable, each preliminary prospectus and the Final
Prospectus delivered to the Underwriter for use in connection with the
offering of the Securities will, at the time of such delivery, be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement or the Final Prospectus (other than
the Company's Current Reports on Form 8-K dated January 27, 1998; February
6, 1998 and February 16, 1998), at the time they were or hereafter are
filed or last amended, as the case may be, with the Commission, complied
and will comply in all material respects with the requirements of the 1934
Act, and the rules and regulations of Commission thereunder (the "1934 Act
Regulations"), and at the time of filing or as of the time of any
subsequent amendment, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were or are made, not misleading; and any additional
documents deemed to be incorporated by reference in the Registration
Statement or the Final Prospectus will, if and when such documents are
filed with the Commission, or when amended, as appropriate, comply in all
material respects to the requirements of the 1934 Act and the 1934 Act
Regulations and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however that the
representations and warranties in this subsection shall not apply to
statements or omissions from the Registration Statement or Final Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Representatives expressly
for use in the Registration Statement or Final Prospectus.
(iv) The accountants (individually an "Accountant" and together the
"Accountants") who have reported upon the audited financial statements and
schedules included or incorporated by reference in the Registration
Statement are each independent public accountants as required by the 1933
Act and the 1933 Act Regulations with respect to (i) the Company and (ii)
each corporation whose financial statements have been included in the
Registration Statement for each of the years reported on by such
Accountants.
(v) The consolidated financial statements of the Company, Avis Group
Holdings, Inc. and Galileo International, Inc. included or incorporated by
reference in the Registration Statement and the Final Prospectus, together
with the related schedules and notes, present fairly the financial position
of the Company, Avis Group Holdings, Inc. and to the knowledge of the
Company, Galileo International, Inc., as the case may be, and their
consolidated subsidiaries as at the dates indicated and the results of
their operations
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for the periods specified. Except as otherwise stated therein, such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, included
or incorporated by reference in the Registration Statement and the Final
Prospectus present fairly in accordance with GAAP the information required
to be stated therein. The consolidated ratio of earnings to fixed charges
included in the Final Prospectus has been calculated in compliance with
Item 503(d) of Regulation S-K of the Commission. Any selected financial
information and summary financial data included in the Final Prospectus
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Registration Statement and the Final Prospectus. Any pro forma
financial statements and the related notes thereto included in the
Registration Statement and the Final Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein. The Company has made all adjustments
to its financial statements that have been required by the Commission
through the date hereof in connection with the accounting irregularities
described in the Prospectus Supplement.
(vi) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no
development with respect to either the Company or to the knowledge of the
Company, Galileo International Inc. ("Galileo") that would result in a
Material Adverse Effect (defined below) (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those
arising in the ordinary course of business, that are material with respect
to the Company and its subsidiaries, considered as one enterprise, nor any
transactions entered into by Galileo, other than those in the ordinary
course of business, which are material with respect to the Company, its
subsidiaries and, to the knowledge of the Company, Galileo considered as
one enterprise, and (C) except for regular dividends on the common stock in
amounts per share that are consistent with past practice or the applicable
charter document or supplement thereto, respectively, there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock, or to the knowledge of the Company, by
Galileo on any class of their stock. For purposes of this Agreement,
"Material Adverse Effect" with respect to (1) any matter relating to the
Company or any of its subsidiaries, means a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its consolidated subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business and (2) any matter relating to Galileo, means a material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, its
subsidiaries and Galileo considered as one enterprise, whether or not
arising in the ordinary course of business.
(vii) The Company is duly organized and is validly existing in good
standing as a corporation under the laws of the State of Delaware, with
corporate power and
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corporate authority to own, lease and operate its properties and to conduct
its business as presently conducted and as described in the Final
Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Agreement. The Company is qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
Material Adverse Effect.
(viii) Each significant subsidiary (as such term is defined in clauses
(1) and (2) of Rule 1-02(w) of Regulation S-X promulgated under the 1933
Act), if any, of the Company (each, a "Significant Subsidiary") is set
forth on Schedule III hereto. Each Significant Subsidiary is duly organized
and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation with corporate power and corporate
authority under such laws to own, lease and operate its properties and
conduct its business. Each Significant Subsidiary is duly qualified to
transact business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a Material Adverse Effect. Except as otherwise stated in the
Registration Statement and the Final Prospectus, all of the outstanding
shares of capital stock of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable and are
owned by the Company, directly or through one or more Significant
Subsidiaries, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind (each, a "Lien"), except
for such Liens as are not, individually or in the aggregate, material to
the Company and its Significant Subsidiaries, considered as one enterprise.
(ix) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Final Prospectus; since the date indicated
in the Final Prospectus there has been no change in the consolidated
capitalization of the Company and its subsidiaries (other than changes in
outstanding common stock resulting from employee benefit plan or dividend
reinvestment and stock purchase plan transactions); all of the issued and
outstanding capital stock of the Company has been authorized and validly
issued, is fully paid and non-assessable and conforms to the descriptions
thereof contained in the Final Prospectus; and no holder thereof is or will
be subject to personal liability by reason of being such a holder.
(x) This Agreement has been duly authorized, executed and delivered by
the Company.
(xi) The Remarketing Agreement has been duly authorized by the Company
and when executed and delivered by the Company will constitute the valid
and binding obligation of the Company enforceable in accordance with its
terms, except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity)
and except as
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rights to indemnification, contribution or exculpation thereunder may not
be enforceable, and will conform in all material respects to the
description thereof in the Final Prospectus.
(xii) Each of the Purchase Contract Agreement, the Pledge Agreement,
the Notes and the Indenture has been duly authorized and when executed and
delivered by the Company (in the case of the Notes, in accordance with the
Indenture) will constitute the valid and binding obligation of the Company
enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity), and will conform in all
material respects to the description thereof in the Final Prospectus. The
Notes will be entitled to the benefits of the Indenture.
(xiii) The Merger Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally or by general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
the representations and warranties of the Company set forth in the Merger
Agreement are true and correct in all material respects on the date hereof,
except to the extent any such representation or warranty was expressly made
as of another date, in which case such representation and warranty was true
and correct at such date. The Merger Agreement is in full force, and the
Company has performed all of its obligations thereunder required to be
performed on or prior to the date hereof.
(xiv) To the knowledge of the Company, the representations and
warranties of Galileo set for in the Merger Agreement are true and correct
in all material respects on the date hereof, except to the extent any such
representation or warranty was expressly made as of another date, in which
case such representation and warranty was true and correct at such date.
The Merger Agreement is in full force, and Galileo has performed all of its
obligations thereunder required to be performed on or prior to the date
hereof; to the knowledge of the Company, there is no event or condition
which would reasonably be expected to materially and adversely affect the
ability of Galileo to consummate the Acquisition.
(xv) The Upper DECS have been duly authorized and when executed and
delivered by the Company will constitute the valid and binding obligations
of the Company enforceable in accordance with their terms, except to the
extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), and will
conform in all material respects to the description thereof in the Final
Prospectus. The
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Upper DECS and the Shares have been duly registered under the 1934 Act; and
the issuance of the Upper DECS is not subject to preemptive or other
similar rights.
(xvi) The Shares issuable pursuant to the Purchase Contract Agreement
have been duly authorized and reserved for issuance by the Company and,
when issued and delivered in accordance with the provisions of the Purchase
Contract Agreement, will be validly issued and fully paid and
non-assessable; and the issuance of such Shares is not and will not be
subject to preemptive or other similar rights.
(xvii) The Securities and the Indenture conform in all material
respects to the respective statements relating thereto contained in the
Final Prospectus and are in substantially the respective forms filed or
incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xviii) Neither the Company nor any of its Significant Subsidiaries is
in violation of its charter or by-laws. None of the Company or any of its
Significant Subsidiaries is in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, note, lease, loan or credit agreement or any other
agreement or instrument (the "Agreements and Instruments") to which the
Company or any of its Significant Subsidiaries is a party or by which any
of them may be bound, or to which any of the property or assets of the
Company or any Significant Subsidiary is subject, or in violation of any
applicable law, rule or regulation or any judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its Significant Subsidiaries
or any of their respective properties or assets, which violation or default
would, singly or in the aggregate, have a Material Adverse Effect.
(xix) The execution, delivery and performance of this Agreement, the
Indenture, the other Operative Documents and the Securities and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities
and the sale of the Shares pursuant to the Purchase Contracts and the use
of proceeds from the sale of the Securities as described in the Final
Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder and thereunder have been authorized
by all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of any of the terms or provisions of, or constitute a
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its Significant Subsidiaries
or any of their assets, properties or operations (except for such
violations that would not result in a Material Adverse Effect). As used
herein, a "Repayment Event" means any event or condition that gives the
holder of any note, debenture or other evidence of indebtedness of the
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Company or any Significant Subsidiary (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
Significant Subsidiary.
(xx) Except as otherwise described in the Registration Statement and
the Final Prospectus, there is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or to the knowledge of the Company,
threatened against or affecting the Company or any of its Significant
Subsidiaries that is required to be disclosed in the Registration Statement
and the Final Prospectus, or that might reasonably be expected to result in
a Material Adverse Effect, or that might be reasonably expected to
materially and adversely affect the consummation of this Agreement, the
Indenture or the transactions contemplated herein or therein. The aggregate
of all pending legal or governmental proceedings to which the Company or
any Significant Subsidiary is a party or of which any of their respective
properties or operations is the subject that are not described in the
Registration Statement and the Final Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xxi) Subject to each of the franchise and license agreements entered
into by the Company or any of its Significant Subsidiaries, the Company and
each of the Significant Subsidiaries own or have the unrestricted right to
use such patents, patent licenses, trademarks, trademark licenses, service
marks, service ▇▇▇▇ licenses and trade names and registrations thereof
(collectively, "Intellectual Property") as are necessary to carry on their
respective businesses as presently conducted, except where the failure to
own or possess any of the Marks (as defined below) or Ramada Marks (as
defined below) would not have a Material Adverse Effect. In addition to,
and not in limitation of, anything else contained in this paragraph
(xviii), the Company or a Significant Subsidiary (y) is the exclusive owner
of all rights, title and interest (subject to all existing franchise and
license agreements referred to above) in and to the Marks within the United
States and outside the United States is the owner of the registrations and
applications as are necessary to carry on its business as described in the
Final Prospectus and as currently conducted, except where the failure to be
such owner would not have a Material Adverse Effect and (z) is the
exclusive licensee in the United States of the Ramada Marks. The
Intellectual Property with respect to the Company's Century 21, Coldwell
Banker, ERA, Days Inns of America, Inc., Super 8 Motels, Inc., Villager
Franchise Systems, Inc., Knights Franchise Systems, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Travelodge Hotels, Inc., Avis Rent A Car, Inc. and Resort Condominiums
International, LLC businesses (each as described in the Final Prospectus
and as currently conducted) is referred to herein as the "Marks" and the
Intellectual Property with respect to the Company's Ramada business (as
described in the Final Prospectus and as currently conducted) is referred
to herein as the "Ramada Marks."
(xxii) To the best knowledge of the Company without having made any
inquiry or independent investigation, no labor problem exists with the
employees of any party that licenses a franchise, directly or indirectly,
from a Significant Subsidiary (a "Franchisee") or is imminent that could
reasonably be expected to have a Material Adverse Effect.
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(xxiii) To the best knowledge of the Company, no dispute exists or is
imminent with any Franchisee that could reasonably be expected to have a
Material Adverse Effect.
(xxiv) Each Franchisee is such by virtue of being a party to a
franchise contract with either the Company or a Significant Subsidiary and
assuming each such contract has been duly authorized, executed and
delivered by the parties thereto, other than the Company or a Significant
Subsidiary, each such contract constitutes a valid, legal and binding
obligation of each party thereto, enforceable against the Company or a
Significant Subsidiary in accordance with its terms, except (A) for any one
or more of such franchise contracts as would not have a Material Adverse
Effect, and (B) to the extent that enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xxv) The Company and each Significant Subsidiary have complied and are
currently complying in all material respects with the rules and regulations
of the United States Federal Trade Commission and the comparable laws,
rules and regulations of each state or state agency applicable to the
franchising business of the Company and such Significant Subsidiary in each
state in which the Company or such Significant Subsidiary is doing
business. The Company and each Significant Subsidiary have complied and are
currently complying in all material respects with the Federal Real Estate
Settlement Procedures Act and the real estate brokerage laws, rules and
regulations of each state or state agency applicable to the real estate
franchising business of the Company and such Significant Subsidiary in each
state in which the Company or such Significant Subsidiary is doing
business.
(xxvi) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency is
required for the performance by the Company of its obligations hereunder,
in connection with the offering, issuance or sale of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement or in the other Operative Documents or for the due execution,
delivery or performance of the Indenture by the Company, except such as
have been obtained and made under the federal securities laws and such as
may be required under state or foreign securities or Blue Sky laws.
(xxvii) The Company is not, nor upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Final Prospectus will be, an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxviii) None of the Company or its Significant Subsidiaries has taken
any action resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result in, or that has constituted or that reasonably
might be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the
10
sale or resale of the Securities or its common stock, in each case in
violation of applicable law.
(xxix) No "forward looking statement" (as defined in Rule 175 under the
▇▇▇▇ ▇▇▇) contained in the Registration Statement, any preliminary
prospectus or the Final Prospectus was made or reaffirmed without a
reasonable basis or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company and delivered
to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing. (a) On the basis
of the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to sell to the Underwriter,
and the Underwriter agrees to purchase from the Company, at the purchase price
to the Underwriter set forth in Schedule II, the principal amount of Securities
set forth in Schedule I opposite the name of such Underwriter, plus any
additional number of Securities that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 of this Agreement.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Underwriters to purchase up to an
additional 2,250,000 of its Upper DECS at the price per Security set forth in
Schedule II. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Securities upon notice by the Representative to
the Company setting forth the number of Option Securities as to which the
Underwriter is then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representative, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, the Underwriter
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule I
opposite its name.
(c) Payment of the purchase price for, and delivery of certificates
for, the Securities shall be made at the offices of Shearman & Sterling, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be
agreed upon by the Representatives and the Company, at 10:00 A.M. (New York
time) on the third business day after the date of this Agreement (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called the "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriter, payment of the purchase price for, and delivery of
certificates for,
11
such Option Securities shall be made at the above-mentioned offices, or at such
other place as shall be agreed upon by the Representative and the Company, on
each Date of Delivery as specified in the notice from the Representatives to the
Company.
Payment for the Securities purchased by the Underwriter shall be made
by wire transfer of immediately available funds, payable to the Company, against
delivery to the accounts of the Underwriter of the Securities to be purchased by
it. It is understood that the Underwriter has authorized the Representative, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial Securities and the Option Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, individually, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by an Underwriter
whose funds have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
Certificates for the Securities shall be in such denominations and
registered in such names as the Underwriter may request in writing at least two
full business days before the Closing Time. The certificates for Securities will
be made available in New York City for examination by the Underwriter no later
than 10:00 a.m. (New York time) on the business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company agrees with the
Underwriter as follows:
(a) Immediately following the execution of this Agreement, the Company
will prepare a Prospectus Supplement that complies with the 1933 Act and
the 1933 Act Regulations and that sets forth the principal amount of the
Securities and their terms not otherwise specified in the Indenture, the
name of each Underwriter participating in the offering and the principal
amount of the Securities that each severally has agreed to purchase, the
name of each Underwriter, if any, acting as representative of the
Underwriter in connection with the offering, the price at which the
Securities are to be purchased by the Underwriter from the Company, any
initial public offering price, any selling concession and reallowance, and
such other information as the Underwriter and the Company deem appropriate
in connection with the offering of the Securities. The Company will
promptly transmit copies of the Final Prospectus to the Commission for
filing pursuant to Rule 424 under the 1933 Act and will furnish to the
Underwriter as many copies of any preliminary prospectus and the Final
Prospectus as they shall reasonably request.
(b) During the period when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities, the Company will
notify the Underwriter immediately, and confirm the notice in writing, (i)
of the effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the Final
Prospectus, (ii) the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Final Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop
order
12
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose and (v) of the issuance by
any state securities commission or other regulatory authority of any order
suspending the qualification or the exemption from qualification of the
Securities under state securities or Blue Sky laws or the initiation or
threatening of any proceeding for such purpose. The Company will make all
reasonable efforts to prevent the issuance of any stop order and, if any
stop order is issued, to promptly obtain the lifting thereof.
(c) During the period when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities, the Company will
give the Underwriter notice of its intention to file or prepare any
amendment to the Registration Statement (including any post-effective
amendment and any filing under Rule 462(b) of the 1933 Act Regulations), or
any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the Final
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise;
will furnish the Underwriter with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be;
and will not file any such documents to which the Underwriter or counsel
for the Underwriter shall reasonably object.
(d) The Company will deliver to the Underwriter and counsel for the
Underwriter, without charge, conformed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and conformed copies of
all consents and certificates of experts, and will also deliver to the
Underwriter, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for
each of the Underwriter. If applicable, the copies of the Registration
Statement and each amendment thereto furnished to the Underwriter will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(e) The Company will furnish to each Underwriter, without charge,
during the period when the Final Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the Final
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. If applicable, the Final Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(f) The Company will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations and the 1939 Act
and the 1939 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Registration Statement and the Final Prospectus. If at any time when the
Final Prospectus is required by the 1933 Act or the 1934 Act to be
delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the
opinion of counsel for
13
the Underwriter or for the Company, to amend the Registration Statement in
order that the Registration Statement will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or to
amend or supplement the Final Prospectus in order that the Final Prospectus
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement the Final Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(c) hereof, such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Final Prospectus
comply with such requirements, and the Company will furnish to the
Underwriter, without charge, such number of copies of such amendment or
supplement as the Underwriter may reasonably request.
(g) The Company will use its best efforts, in cooperation with the
Underwriter, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Representatives may designate; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification
in effect for so long as may be required in connection with distribution of
the Securities.
(h) The Company will make generally available to its securityholders as
soon as practicable, but not later than 45 days (or 90 days, in the case of
a period that is also the Company's fiscal year) after the close of the
period covered thereby, an earnings statement of the Company and its
subsidiaries (in form complying with the provisions of Rule 158 of the 1933
Act Regulations) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in said Rule 158) of the Registration Statement.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Final Prospectus under
"Use of Proceeds."
(j) The Company, during the period when the Final Prospectus is
required to be delivered under the 1933 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15
of the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
(k) For a period of 90 days from the date of this Agreement, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any securities, purchase contracts
14
or shares of Common Stock or securities convertible into or exchangeable
for Common Stock or substantially similar securities (other than issuances
of shares of Common Stock as consideration in acquisitions by the Company
of unaffiliated entities and currently contemplated issuances of shares of
Common Stock to Galileo International, Inc.) or any debt securities, or
sell or grant options, rights or warrants with respect to any securities,
purchase contracts or shares of Common Stock or securities convertible into
or exchangeable for Common Stock or substantially similar securities (other
than the Shares, options granted pursuant to employee stock option plans
existing on the date hereof and shares sold or disposed of more than 30
days after the date hereof pursuant to the exercise of currently
outstanding options granted under such plans), or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such
securities, purchase contracts or shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, in each
case without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (other than
transfers of shares of Common Stock to affiliates to the extent that the
recipient agrees in writing to be bound by the restrictions set forth
herein); and to cause each executive officer (as defined for purposes of
Section 16 of the Exchange Act) and director of the Company to furnish to
the Underwriter, prior to the Delivery Date, an executed letter in a form
acceptable to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney relating to such matters;
(l) For a period of two years from the Closing Time, the Company will
furnish to the Representatives copies of all annual reports, quarterly
reports and current reports filed with the Commission on Forms 10-K, 10-Q
and 8-K, or such similar forms (including any amendments or supplements
thereto) as may be designated by the Commission, and such other documents,
reports and information (including any amendments or supplements thereto)
as shall be furnished by the Company to its stockholders or securityholders
generally, provided, however, that the Company shall not be required to
provide the Representatives with any such reports or similar forms that
have been filed with the Commission by electronic transmission pursuant to
▇▇▇▇▇.
(m) Neither the Company nor its Significant Subsidiaries will take,
directly or indirectly, any action resulting in a violation of Regulation M
under the 1934 Act, or designed to cause or result in, or that reasonably
might be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities or its common stock, in each case, in violation of
applicable law.
(n) The Company will reserve and keep available at all times, free of
preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy its obligations to issue Shares upon
settlement of the Purchase Contracts.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including,
without limitation, expenses related to the following, if incurred: (i) the
preparation, delivery, printing and filing of the Registration Statement and
Final Prospectus as originally filed (including financial
15
statements and exhibits) and of each amendment thereto; (ii) the printing and
delivery to the Underwriter of this Agreement, any Agreement among Underwriter
and such other documents as may be required in connection with the offering,
purchase, sale and delivery of the Securities; (iii) the preparation, issuance
and delivery of the certificates for the Securities; (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors or agents
(including the transfer agents and registrars), as well as fees and
disbursements of the Trustee and any Depositary, and their respective counsel;
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(g), including filing fees and the reasonable fees
and disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation of the Blue Sky Survey and any Legal Investment
Survey; (vi) the printing and delivery to the Underwriter of copies of the
Registration Statement as originally filed and of each amendment thereto, of
each preliminary prospectus, and of the Final Prospectus and any amendments or
supplements thereto; (vii) the printing and delivery to the Underwriter of
copies of the Blue Sky Survey and any Legal Investment Survey, if any; (viii)
any fees payable in connection with the rating of the Securities by nationally
recognized statistical rating organizations; (ix) the filing fees incident to,
and the fees and disbursements of counsel to the Underwriter in connection with,
the review, if any, by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Securities; and (x) any fees payable to
the Commission.
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriter for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of Shearman & Sterling, counsel
for the Underwriter.
SECTION 5. Conditions of Underwriter' Obligations. The obligations of
the Underwriter to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Company herein contained at the date of this Agreement and at the Closing
Date or in certificates of any officer of the Company or any subsidiary
delivered pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder, and to the following further conditions:
(a) On the date hereof and at the Closing Date, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of
the Commission for additional information shall have been complied with to
the satisfaction of counsel to the Underwriter.
(b) At the Closing Time the Underwriter shall have received:
(1) The favorable opinion, dated as of the Closing Time, of ▇▇▇▇ ▇.
▇▇▇▇, Senior Vice President-Law and Corporate Secretary of the Company,
in form and substance reasonably satisfactory to counsel for the
Underwriter as set forth on Exhibit A attached hereto.
(2) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the
Company, in form and
16
substance satisfactory to counsel for the Underwriter as set forth on
Exhibit B attached hereto.
(3) The favorable opinion, dated as of the Closing Time, of ▇▇▇▇▇▇
▇▇▇▇▇▇, counsel for Bank One Trust Company, National Association,as
Purchase Contract Agent, in form and substance satisfactory to counsel
for the Underwriter as set forth on Exhibit C attached hereto.
(4) The favorable opinion, dated as of the Closing Time, of
Shearman & Sterling, counsel for the Underwriter, in form and substance
satisfactory to the Underwriter, with respect to the issuance and sale
of the Securities, and other related matters as the Underwriter may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(c) Between the date of this Agreement and the Closing Time, no
material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its Significant Subsidiaries, considered as one enterprise,
whether or not in the ordinary course of business.
(d) At the Closing Time, the Underwriter shall have received a
certificate of the President or a Vice President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company to the
effect that (i) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Significant Subsidiaries considered as one
enterprise, whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and correct as
though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or, to the
knowledge of such officers, threatened by the Commission.
(e) At the time of the execution of this Agreement, the Underwriter
shall have received letters from Deloitte & Touche LLP and KPMG LLP, dated
such date and substantially in the form of Exhibit D, Exhibit E and Exhibit
F attached hereto, respectively.
(f) At the Closing Time, the Underwriter shall have received a letter
or letters from each Accountant that furnished a letter pursuant to
subsection (e) of this Section, dated as of the Closing Time, to the effect
that it reaffirms the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Closing Time.
(g) At the Closing Time counsel for the Underwriter shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them
17
to pass upon the issuance and sale of the Securities as herein contemplated
and related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the Underwriter and counsel for
the Underwriter.
(h) Between the date of this Agreement and the Closing Time, and at the
Closing Time, (i) the Securities shall be rated in one of the four highest
rating categories for debt securities ("Investment Grade") by at least one
nationally recognized statistical rating agency, and the Company shall have
delivered to the Underwriter a letter, dated the Closing Time, from such
nationally recognized statistical rating agency, or other evidence
satisfactory to the Underwriter, confirming that the Securities have
Investment Grade ratings, (ii) there shall not have occurred any decrease
in the rating assigned to the Securities or any securities of the Company
by any "nationally recognized statistical rating organization," as defined
for purposes of Rule 436(g)(2) under the 1933 Act Regulations since the
date of this Agreement, and (iii) no such organization shall have publicly
announced that it has under surveillance or review, without indicating an
improvement, its rating of the Securities or any securities of the Company.
(i) In the event that the Underwriter exercise its option provided in
Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company contained
herein and the statements in any certificate furnished by the Company or
any subsidiary of the Company hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the
Representative shall have received.
(1) A certificate, dated such Date of Delivery, signed by the
President or a Vice President,and the Chief financial
officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(d)hereof
remains true and correct as of such Date of Delivery.
(2) The opinion of ▇▇▇▇ ▇. ▇▇▇▇, Senior Vice President and
Corporate Secretary to the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(b)(1).
(3) The opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel for the Company, in form and substance
satisfactory to counsel for the Underwriter, dated such Date
of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b)(2) hereof.
18
(4) The opinion from counsel for Bank One Trust Company,
National Association,as Purchase Contract Agent, in form and
substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b)(3).
(5) The opinion of Shearman & Sterling, counsel for the
underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by
Section 5(b)(4) hereof.
(6) Letters from Deloitte & Touche LLP and KPMG LLP, in form and
substance satisfactory to the Representative and dated such
Date of delivery, substantially in the same form and
substance as the letter furnished to the Representatives
pursuant to Section 5(e) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date
of Delivery.
If any condition specified in this Section 5 shall not have been fulfilled when
and as required to be fulfilled, this Agreement may be terminated by the
Underwriter by notice to the Company at any time prior to the Closing Time, and
such termination shall be without liability to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Final Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided, that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
19
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Representatives, other
than as provided in Section 6(d) below), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under clause (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the Final
Prospectus (or any amendment or supplement thereto) or (B) made in any
preliminary prospectus and corrected in the Final Prospectus, as supplemented,
where the person asserting any such loss, liability, claim, damage or expense
purchased the Securities that are the subject thereof, and it shall have been
established (i) that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) in any case where such delivery is required by the
1933 Act and (ii) the Company shall have previously furnished copies thereof in
sufficient quantities to such Underwriter. The Company acknowledges that (a) the
statements set forth in last paragraph of the cover page regarding delivery of
the Securities and (b) under the heading "Underwriting" (x) the sentences
related to concessions and reallowances and (y) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in the Final
Prospectus constitute the only information furnished in writing by or on behalf
of the Underwriter for inclusion in the Final Prospectus.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in Section 6(a) above, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), or any preliminary prospectus
or the Final Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the Final
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability that it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by the Representatives, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may
20
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) above effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
above affected without its consent if such indemnifying party (i) reimburses
such indemnified party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand, and the Underwriter, on the other hand, from the offering of the
Securities pursuant to this Agreement 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 the
Underwriter, on the other hand, in connection with the statements or omissions
that resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand, and the
Underwriter, on the other hand, in connection with the offering of the
Securities pursuant to this
21
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of such Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriter, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company, on the one hand, and the
Underwriter, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriter 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 above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriter' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the aggregate principal amount of Securities set forth opposite their
respective names in Schedule I to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company or its
subsidiaries submitted pursuant hereto, shall remain
22
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company, and shall survive delivery of and payment for the Securities to the
Underwriter.
SECTION 9. Termination of Agreement. (a) The Underwriter may terminate
this Agreement, by notice to the Company at any time at or prior to the Closing
Time, if (i) there has been, since the date of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change or any development that could reasonably be expected to
result in a prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Significant Subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) there has occurred
any material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation of hostilities or other calamity or
crisis, or any change or development involving a prospective change in national
or international political, financial or economic conditions the effect of which
is such as to make it, in the judgment of the Representatives impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or limited
by the Commission, NASD or the New York Stock Exchange, or if trading generally
on either the American Stock Exchange, the New York Stock Exchange or in the
over-the-counter market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by either of said exchanges or by such system or by order of
the Commission, NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal, New York State, New Jersey, or
Delaware authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further, that Sections 1, 6, 7 and 8
shall survive such termination and remain in full force and effect.
SECTION 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to the Underwriter c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Managing Director, with a copy to Shearman & Sterling, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇
III, Esq.; notices to the Company shall be directed to it at Cendant
Corporation, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇.
▇▇▇▇, Esq., Senior Vice President - Law.
SECTION 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company and the Underwriter and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriter
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and
23
their respective successors and legal representatives, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS
OTHERWISE INDICATED.
SECTION 13. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
SECTION 14. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, shall become a binding agreement
between the Company and the Underwriter in accordance with its terms.
Very truly yours,
CENDANT CORPORATION
By:
-----------------------
Name:
Title:
25
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:
--------------------------------
Authorized Signatory
26
SCHEDULE I
15,000,000 UPPER DECS
Name of Underwriter Principal Amount
------------------- ----------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.................................... 15,000,000
==========
TOTAL................ .................................. 15,000,000
SCHEDULE II
Dated July 20, 2001
CENDANT CORPORATION
15,000,000 UPPER DECS
1. The offering price per Security, determined as provided in said Section 2,
shall be $50.
2. The purchase price per Security to be paid by the several Underwriter shall
be $48.50, being an amount equal to the offering price set forth above less
$1.50 per Security.
SCHEDULE III
Significant Subsidiaries of the Company
---------------------------------------
Cendant Mortgage Corporation
TM Acquisition Corp.
HFS New York Corp.
Avis Rent-a-Car Systems, Inc.
▇.▇. ▇▇▇▇▇▇▇▇ Trust
Raven Funding LLC
Greyhound Funding LLC
Exhibit A
FORM OF OPINION OF ▇▇▇▇ ▇▇▇▇ SENIOR VICE PRESIDENT - LAW AND
CORPORATE SECRETARY OF THE COMPANY
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth above, I am of the opinion that:
(i) The Company has been incorporated and is validly existing as a
corporation under the laws of the State of Delaware.
(ii) The Company has corporate power and authority (i) to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and (ii) to enter into this Agreement, the Remarketing
Agreement, the Purchase Contract Agreement, the Pledge Agreement, the
Indenture, the Supplemental Indenture and to perform its obligations under,
or as contemplated under, each thereof.
(iii) The Company is qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify or be in
good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus (except for subsequent issuances,
if any, pursuant to incentive compensation plan, employee benefit plan or
dividend reinvestment and stock purchase plan transactions), and the shares
of issued and outstanding capital stock of the Company have been authorized
and validly issued and are fully paid and non-assessable; no holder thereof
is or will be subject to personal liability by reason of being such a
holder.
(v) Each Significant Subsidiary (as such term is defined in clauses (1)
and (2) of Rule 1-02(w) of Regulation S-X promulgated under the ▇▇▇▇ ▇▇▇)
is forth on Schedule III to the Underwriting Agreement. Each Significant
Subsidiary is duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation with corporate
power and corporate authority under such laws to own, lease and operate its
properties and conduct its business. Each Significant Subsidiary is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse Effect.
Except as otherwise stated in the Registration Statement and the
Prospectus, all of the outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable and are owned by the Company, directly or
through one or more Significant Subsidiaries, free and clear of any Lien,
except for such Liens as are not, individually or in the aggregate,
material to the Company and its Significant Subsidiaries, considered as one
enterprise.
(vi) Each of the documents incorporated by reference in the
Registration Statement or the Prospectus at the time they were filed or
last amended (other than the financial statements and the notes thereto,
the financial schedules, and any other financial data included or
incorporated by reference therein, as to which I need express no belief),
complied as to form in all material respects with the requirements of the
1934 Act and the 1934 Act Regulations, as applicable.
(vii) The Securities have been authorized for issuance and sale to the
Underwriter pursuant t this Agreement and, when issued and delivered by the
Company pursuant to this Agreement, will be validly issued and fully paid
and non-assessable.
(viii) The Shares subject to the Purchase Contract Agreement have been
validly authorized and reserved for issuance and, when issued and delivered
by the Company in accordance with the provisions of the Purchase Contract
Agreement, the Purchase Contracts and the Pledge Agreement, will be fully
paid and non-assessable; the issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or otherwise.
(ix) The issuance of the Securities is not subject to preemptive or
other similar rights arising by law or otherwise.
(x) This Agreement and the Remarketing Agreement have been duly
authorized, executed and delivered by the Company.
(xi) The entry by the Company into the Purchase Contracts underlying
the Securities that are Upper DECS, offer of the Securities as contemplated
herein and in the Prospectus, the issue of the Shares and the sale of the
Shares by the Company pursuant to the Purchase Contracts; the execution,
delivery and performance of this Agreement, the Remarketing Agreement, the
Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement,
the Indenture and the Securities, and the consummation of the transactions
contemplated herein, therein and in the Registration Statement (including
the issuance and sale of the Securities and the use of proceeds from the
sale of the Securities as described in the Final Prospectus under the
caption "Use of Proceeds") and compliance by the Company with obligations
hereunder and thereunder, have been authorized by all necessary action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of any of the
terms or provisions of, or constitute a default or Repayment Event under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Significant Subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Significant Subsidiary or any of their assets, properties, or operations
(except for such violations that would not result in a
A-2
Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any Significant
Subsidiary.
(xii) There are no statutes required to be described in or incorporated
by reference in the Registration Statement that are not described or
incorporated by reference; and there are no legal or governmental
proceedings pending or, to my knowledge, threatened that are required to be
disclosed or incorporated by reference in the Registration Statement, other
than those disclosed or incorporated by reference therein.
(xiii) There are no contracts, indentures, mortgages, agreements,
notes, leases or other instruments required to be described or referred to
or incorporated by reference in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to or
incorporated by reference therein or filed as exhibits thereto; and the
descriptions thereof or references thereto are true and correct in all
material respects.
Moreover, nothing has come to my attention that causes me to believe
that the Registration Statement, on the original effective date of the
Registration Statement, on the effective date of the most recent post-effective
amendment thereto, if any, on the date of the filing of any annual report on
Form 10-K after the filing of the Registration Statement, or on the date of the
Underwriting Agreement, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, or any
amendment or supplement thereto, at the time the Prospectus Supplement was
issued at the time any such amended or supplemented Prospectus was issued or at
the date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that I express no opinion or belief with respect to
the financial statements, schedules and other financial data included therein or
excluded therefrom.
A-3
Exhibit B
FORM OF OPINION OF SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth above, we are of the opinion that:
(i) The Company meets the requirements for use of Form S-3 under the
1933 Act. The Registration Statement is effective under the 1933 Act; any
required filing of a preliminary prospectus and of the Final Prospectus
pursuant to Rule 424(b) under the Securities Act has been made in the
manner and within the time period required by such Rule 424(b).
(ii) The Registration Statement as of its effective date and the Final
Prospectus and each amendment or supplement thereto as of its issue date
and as of the date hereof (in each case, other than the financial
statements and the notes thereto, the financial schedules, and any other
financial data included or incorporated by reference therein or the
Statements of Eligibility on Form T-1, as to which we express no belief),
complied as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations; and the Indenture complied as to
form in all respects with the requirements of the 1939 Act and the 1939 Act
Regulations.
(iii) Each of the Purchase Contract Agreement, the Remarketing
Agreement, the Pledge Agreement and the Indenture has been duly authorized,
executed and delivered by the Company, and constitute valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be
limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or equity);
(iv) The Upper DECS have been duly authorized by the Company and, when
duly authenticated in accordance with the terms of the Purchase Contract
Agreement and delivered to and paid for by the Underwriter in accordance
with the terms of this Agreement and assuming the certificates evidencing
the Upper DECS have been duly executed by the Purchase Contract Agent as
attorney-in-fact of the holders thereof, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms and will be entitled to the benefits of the Purchase
Contract Agreement, except to the extent that enforcement thereof may be
limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or equity);
(v) The Notes have been duly authorized by the Company for issuance and
sale to the Underwriter pursuant to this Agreement and, when issued and
authenticated in
accordance with the terms of the Indenture and delivered against payment of
the Upper DECS of which they are a part in accordance with the terms of
this Agreement and the Indenture, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms and will be entitled to the benefits of the Indenture,
except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or equity);
(vi) The Shares initially subject to the Purchase Contract Agreement
have been duly authorized and reserved for issuance by the Company and,
when issued by the Company in accordance with the provisions of the
Purchase Contract Agreement and the Purchase Contracts, will be validly
issued, fully paid and non-assessable;
(vii) The certificates for the Upper DECS are in the respective forms
contemplated by the Purchase Contract Agreement, the certificates for the
Notes are in the forms contemplated by the Indenture and the certificates
for the Shares comply with all applicable requirements of the General
Corporation Law of the State of Delaware;
(viii) The Indenture has been authorized, executed and delivered by the
Company and, assuming authorization, execution, and delivery thereof by the
Trustee, is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); and the Indenture has been
duly qualified under the 1939 Act.
(ix) The statements included in the Final Prospectus under the captions
"Description of the Upper DECS and Stripped DECS", "Description of the
Forward Purchase Contracts", "Certain Provisions of the Purchase Contract
Agreement and the Pledge Agreement", "Description of the Senior Notes",
"Description of the Debt Securities" and "Description of Capital Stock", to
the extent that they purport to summarize provisions of the Purchase
Contract Agreement, the Remarketing Agreement, the Pledge Agreement, the
Indenture, the Notes, the Upper DECS and the Company's charter and by-laws
or legal matters, fairly summarize, in all material respects, such
provisions or matters;
(x) To the extent that the statements in the Final Prospectus under the
caption "Certain Federal Income Tax Consequences" purport to describe
specific provisions of the Internal revenue Code or legal matters, such
statements fairly present, in all material respects, an accurate summary of
such provisions or matters;
B-2
(xi) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency is
required for the execution, delivery and performance by the Company of this
Agreement, the Indenture, the other Operative Documents or the Securities,
except such as have been obtained and made under the federal securities
laws and such as may be required under state and foreign securities or Blue
Sky laws.
(xii) The Company is not required to be registered as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
We have been orally advised by the Commission that the Registration
statement was declared effective under the 1933 Act at [ ] [ ].m., New York City
time, on [ ], 1998 and, we have been advised by the Commission that no stop
order suspending the effectiveness of the Registration Statement under the 1933
Act has been issued and, to the best of our knowledge, no proceedings for that
purpose have been initiated or are pending or threatened by the Commission.
In addition, we have participated in conferences with officers and
representatives of the Company, representatives of the independent accountants
of the Company, and you and your counsel at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and we have made no independent check
or verification thereof, except as set forth in numbered paragraph (ix) above,
on the basis of the foregoing, no facts have come to our attention that have led
us to believe that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of the date of the Prospectus
Supplement or as of the date hereof, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that we express no opinion or
belief with respect to the financial statements, schedules and other financial
data included therein or excluded therefrom, including any Forms T-1.
Very truly yours,
B-3
Exhibit C
FORM OF OPINION OF COUNSEL FOR THE
PURCHASE CONTRACT AGENT
(i) Bank One Trust Company is duly incorporated and is validly existing
as a banking corporation with trust powers under the laws of the United
States with all necessary power and authority to execute, deliver and
perform its obligations under the Purchase Contract Agreement and the
Pledge Agreement.
(ii) The execution, delivery and performance by the Purchase Contract
Agent of the Purchase Contract Agreement and the Pledge Agreement, and the
authentication and delivery of the Securities, have been duly authorized by
all necessary corporate action on the part of the Purchase Contract Agent.
The Purchase Contract Agreement and the Pledge Agreement have been duly
executed and delivered by the Purchase Contract Agent, and constitute the
legal, valid and binding obligations of the Purchase Contract Agent,
enforceable against the Purchase Contract Agent in accordance with its
terms, except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
(iii) the execution, delivery and performance of the Purchase Contract
Agreement and the Pledge Agreement by the Purchase Contract Agent does not
conflict with or constitute a breach of the charter or by-laws of the
Purchase Contract Agent.
(iv) no consent, approval or authorization of, or registration with or
notice to, any New York or federal governmental authority or agency is
required for the execution, delivery or performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge Agreement.
B-4
Exhibit D
LETTER OF DELOITTE & TOUCHE LLP
FOR THE COMPANY
Exhibit E
LETTER OF DELOITE & TOUCHE LLP
FOR AVIS GROUP HOLDINGS, INC
Exhibit F
LETTER OF KPMG PEAT MARWICK LLP
