UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
Homestore, Inc.
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(Name of Issuer)
Common Stock, Par Value $0.001 Per Share
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(Title of Class of Securities)
437852106
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(CUSIP Number)
Eric J. Bock, Esq.
Executive Vice President - Law and Corporate Secretary
Cendant Corporation
9 West 57th Street
New York, New York 10019
Telephone: (212) 431-1836
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 17, 2003
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
CUSIP No. 437852106 Page 2 of 6 Pages
13D
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
CENDANT CORPORATION (I.R.S. IDENTIFICATION NO. 06-0918165)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS |_|
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
NUMBER OF
SHARES 13,731,503(1)
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING - 0 -
PERSON ------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
13,731,503(1)
------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,731,503(1)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.4%(1)
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14 TYPE OF REPORTING PERSON
CO
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The shares of Homestore, Inc. common stock beneficially owned by Cendant
Corporation are held of record by Cendant Membership Services Holdings,
Inc., a wholly-owned subsidiary of Cendant Corporation.
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1 Reflects Cendant Corporation's contract to sell 3,400,000 shares of
Homestore, Inc. common stock as described in this Amendment No. 3.
This Amendment No. 3 amends and supplements the Statement on Schedule 13D/A
filed with the Securities and Exchange Commission on October 2, 2003 (the
"Statement"). Capitalized terms used and not defined herein shall have the
meanings assigned to such terms in the Statement. Except as disclosed herein
there has been no change in the information previously reported on Schedule
13D.
Item 5. Interest in Securities of the Issuer.
Item 5 of this Schedule 13D is amended as follows:
(a) Cendant beneficially owns 13,731,503(1) shares of Homestore
Common Stock through its wholly owned subsidiary Cendant Membership Services
Holdings, Inc. ("CMS"). Based on the 120,283,050 shares of Homestore Common
Stock that were issued and outstanding as of October 31, 2003 (as reported by
Homestore, Inc. in its Form 10-Q filed with the Securities and Exchange
Commission for the quarterly period ended September 30, 2003), the
13,731,503(1) shares of Homestore Common Stock beneficially owned by Cendant
represented 11.4%(1) of the issued and outstanding shares of Homestore Common
Stock on such date.
(b) Cendant has the sole power to vote or direct the voting of the
shares of Homestore Common Stock and the sole power to dispose of, or to
direct the disposition of, the shares of Homestore Common Stock.
(c) (i) On December 17, 2003, Cendant sold 1,000,000 shares of
Homestore Common Stock at a price of $3.70 per share.
(ii) On December 17, 2003, Cendant entered into a contract with
Citibank, N.A. ("Citibank") pursuant to which Cendant will sell 3,400,000
shares of Homestore Common Stock to Citibank at $3.33 per share plus a capped
share appreciation rights option (the "SAR") from Citibank with respect to the
same number of shares of Homestore Common Stock. The SAR and sale of Homestore
Common Stock will be settled in ten installments based on a ten-trading-day
period beginning January 20, 2004 and ending February 2, 2004 (each such
trading day, a "Settlement Date"). On each Settlement Date, the settlement
price of the portion of the SAR settled on that date will be equal to the
excess, if any, of the closing price of Homestore Common Stock on that
Settlement Date over $3.33 (any such excess, a "Realization") multiplied by
the number of shares of Homestore Common Stock underlying the portion of the
SAR settled on such Settlement Date, provided that in no case shall any
Realization be more than $0.555 per share. Cendant's obligations under the
contract are secured by a pledge of 3,400,000 shares of Homestore Common
Stock. Prior to an event of default with respect to the pledge, Cendant has
sole voting power with respect to the shares of Homestore Common Stock subject
to the pledge.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Item 6 of this Schedule 13D is hereby amended as follows:
Range Forward Transaction
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On December 17, 2003, Cendant entered into a contract with
Citibank pursuant to which Cendant will sell 3,400,000 shares of
Homestore Common Stock to Citibank at $3.33 per share plus the SAR
from Citibank with respect to the same number of shares of Homestore
Common Stock. The SAR and sale of Homestore Common Stock will be
settled in ten installments based on a ten-trading-day period beginning
January 20, 2004 and ending February 2, 2004. On each Settlement
Date, the settlement price of the portion of the SAR settled on that
date will be equal to the excess, if any, of the closing price of
Homestore Common Stock on that Settlement Date over $3.33 multiplied
by the number of shares of Homestore Common Stock underlying the
portion of the SAR settled on such Settlement Date, provided that in
no case shall any Realization be more than $0.555 per share.
Cendant's obligations under the contract are secured by a pledge of
3,400,000 shares of Homestore Common Stock. Prior to an event of
default with respect to the pledge, Cendant has sole voting power
with respect to the shares of Homestore Common Stock subject to the
pledge.
In addition, under the contract, during the period from
December 17, 2003 until the final Settlement Date, Cendant has agreed
that neither Cendant nor any of its subsidiaries will (i) offer,
sell, transfer, agree to sell or transfer, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, assign, pledge, hypothecate
or otherwise transfer or dispose of, directly or indirectly, any
shares of Homestore Common Stock or any securities convertible into
or exercisable or exchangeable therefor, or any interest therein or
(ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
owning any of such shares.
References to, and descriptions of, the contract as set forth above
in this Item 6 are qualified in their entirety by reference to the copy of the
Master Terms and Conditions for Range Forward Transactions attached as Exhibit
1 to this Amendment No. 3 to Schedule 13D, and are incorporated in this Item 6
in their entirety where such references and descriptions appear.
Item 7. Material to be Filed as Exhibits.
Exhibit Description
1. Master Terms and Conditions for Range Forward Transactions,
dated as of December 17, 2003, between Citibank, N.A. and
Cendant Corporation.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: December 23, 2003
CENDANT CORPORATION
By: /s/ Eric J. Bock
----------------------------------
Name: Eric J. Bock, Esq.
Title: Executive Vice President - Law
and Corporate Secretary
EXHIBIT 1
MASTER TERMS AND CONDITIONS FOR RANGE FORWARD TRANSACTIONS
BETWEEN CITIBANK, N.A. AND CENDANT CORPORATION
The purpose of this Master Terms and Conditions for Range Forward
Transactions (the "Master Confirmation"), dated as of December 17, 2003, is to
set forth certain terms and conditions for range forward transactions that
Cendant Corporation ("Counterparty") will enter into with Citibank, N.A.
("Citibank"). Each such transaction (a "Transaction") entered into between
Citibank and Counterparty that is to be subject to this Master Confirmation
shall be evidenced by a written confirmation substantially in the form of
Exhibit A hereto, with such modifications thereto as to which Counterparty and
Citibank mutually agree (a "Confirmation"). This Master Confirmation and each
Confirmation together constitute a "Confirmation" as referred to in the
Agreement specified below.
This Master Confirmation and a Confirmation evidence a complete
binding agreement between you and us as to the terms of the Transaction to
which this Master Confirmation and such Confirmation relates. In addition, you
and we agree to use our best efforts promptly to negotiate, execute and
deliver an ISDA Master Agreement (Multicurrency-Cross Border) (the "ISDA
Agreement") in the form published by the International Swaps and Derivatives
Association, Inc. ("ISDA"), with such modifications as you and we shall in
good faith agree (as modified, the "Agreement"). Upon the execution by you and
us of the Agreement, this Master Confirmation and each Confirmation will
supplement, form a part of, and be subject to the Agreement. A copy of the
ISDA Agreement has been, or promptly after the date hereof will be, delivered
to you. Prior to execution of the Agreement, this Master Confirmation and each
Confirmation hereunder, together with all other documents referring to the
ISDA Agreement (each a "Confirmation") confirming transactions (each a
"Transaction") entered into between you and us (notwithstanding anything to
the contrary in a Confirmation), shall supplement, form a part of, and be
subject to an agreement in the form of the ISDA Agreement as if we had
executed an agreement in such form on the Trade Date of the first such
Transaction between you and us.
The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "Definitions") as published by ISDA are
incorporated into this Master Confirmation.
THIS MASTER CONFIRMATION WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CHOICE
OF LAW DOCTRINE. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS
RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY
CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.
1. In the event of any inconsistency between this Master
Confirmation, on the one hand, and the Definitions, the ISDA Agreement or,
when executed, the Agreement, on the other hand, this Master Confirmation will
control for the purpose of the Transaction to which a Confirmation relates. In
the event of any inconsistency between the Definitions, the ISDA Agreement,
the Agreement (when executed) and this Master Confirmation, on the one hand,
and a Confirmation, on the other hand, the Confirmation will govern. With
respect to a Transaction, capitalized terms used herein that are not otherwise
defined shall have the meaning assigned to them in the Confirmation relating
to such Transaction.
2. Each party will make each payment specified in this Master
Confirmation or a Confirmation as being payable by such party, not later than
the due date for value on that date in the place of the account specified
below or otherwise specified in writing, in freely transferable funds and in a
manner customary for payments in the required currency.
3. Confirmations:
This Master Confirmation and the Agreement, together with the
Confirmation relating to a Transaction, shall constitute the written agreement
between Counterparty and Citibank with respect to such Transaction.
Each Transaction to which a Confirmation relates is a range forward
transaction, which consists of a share forward transaction for the sale of the
Number of Shares from Share Seller to Share Buyer at the Forward Price on the
Settlement Date (each, a "Forward") and a capped share appreciation rights
option (each, an "Option"), the terms of which include:
General Terms:
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Trade Date: As provided in the relevant
Confirmation.
Issuer: HomeStore, Inc.
Shares: The common stock of the Issuer
(Symbol: "HOMS").
Number of Shares: As provided in the relevant
Confirmation
Forward:
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Share Seller: Counterparty
Share Buyer: Citibank
Forward Price: As provided in the relevant
Confirmation
Settlement Date: The Settlement Date for the
Forward shall be the Settlement Date
that would be determined for the
Option set forth below as set forth in
Section 6.2 of the Definitions as if
such Option were a physically settled
option. On the Settlement Date
Counterparty shall deliver the Number
of Shares to Citibank or its designee
and Citibank shall pay the Forward
Price to the Counterparty.
Option
------
Option Style: European
Option Type: Call
Seller: Citibank
Buyer: Counterparty
Number of Options: As provided in the relevant Confirmation.
Option Entitlement: One Share per Option
Premium: Unless otherwise provided in the relevant
Confirmation, none (determined on a net
basis for Forward and the Option).
Strike Price I: Equal to the Forward Price.
Strike Price II: As provided in the relevant Confirmation
Exchange: NASDAQ
Related Exchanges: American Stock Exchange, Pacific Stock
Exchange, Philadelphia Stock Exchange,
Chicago Board Options Exchange and any
other relevant futures or options
exchange with respect to the Shares.
Automatic Exercise: Applies
Strike Price Differential: The greater of (i) the relevant Settlement
Price over Strike Price I, but not greater than
the Maximum Differential, and (ii) zero.
Maximum Differential: The difference between Strike Price II and
Strike Price I.
Procedure for Exercise:
----------------------
Expiration Time: The Valuation Time
Expiration Date: As provided in the relevant Confirmation (or if
such date is not an Exchange Business Day, the
next following Exchange Business Day). If there
is a Market Disruption Event on the Expiration
Date, the Expiration Date will be adjusted in
accordance with the terms hereof (as if such date
were a Valuation Date).
Automatic Exercise: Applicable; provided, however, that Buyer may
not prevent the exercise of any Option.
Settlement Price: The closing price of a Share, as reported by
the Exchange (by reference to Bloomberg HOMS
UQ [Equity] HP), at the Expiration Time on the
Expiration Date.
Valuation:
---------
Valuation Time: At the close of trading in respect of regular
trading hours on the Exchange, without regard
to extended trading hours on the Exchange, if
any.
Valuation Date: The Exercise Date; provided that if a Market
Disruption Event occurs on that date, the
Valuation Date for the relevant Transaction
shall be the first succeeding Exchange
Business Day on which there is no Market
Disruption Event and which is not or is not
deemed to be a Valuation Date in respect of
any other Transaction under this Master
Confirmation; provided, further, that if the
Valuation Date has not occurred pursuant to
the preceding proviso as of the Final
Disruption Date for such Transaction, that
Final Disruption Date shall be the Valuation
Date (irrespective of whether such day is a
Valuation Date in respect of any other
Transaction under this Master Confirmation)
and the Settlement Price shall be the price
determined by the Calculation Agent in its
discretion.
Final Disruption Date: As provided in the relevant Confirmation.Market
Disruption Event: Means, notwithstanding the
provisions in the Definitions, the occurrence
or existence at any time on a Valuation Date
of any suspension of or limitation in trading
in the Shares or in listed options or futures
on the Shares (by reason of movements in
price exceeding limits permitted by the
relevant exchange or otherwise), if, in the
determination of the Calculation Agent, such
suspension or limitation is material.
The Calculation Agent shall as soon as
reasonably practicable under the
circumstances notify the other party of the
occurrence or existence of a Market
Disruption Event on any day that but for the
occurrence or existence of a Market
Disruption Event would have been a Valuation
Date.
Settlement Terms:
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Settlement: Settlement of a Transaction shall be by Physical
Settlement for the Forward Transaction and
by Cash Settlement for the Option.
Failure to Deliver: Inapplicable
Conditions to
Physical Settlement: The Shares delivered to Citibank shall be eligible
for resale pursuant to Rule 144. At or prior
to delivery of any Shares, Citibank shall
have received customary Rule 144 selling
documentation and if and only if, under the
applicable rules of the Clearance System, the
Shares to be delivered cannot be deposited
into the Clearance System on or before the
Settlement Date because of their restricted
status under the Securities Act of 1933, as
amended (the "Securities Act"), then the
following provisions shall apply in lieu of
the last sentence of Section 6.1 of the
Definitions and the provisions relating to
Settlement Disruption Events:
(a) Counterparty shall deliver or cause the
delivery to or at the direction of Citibank
of one or more stock certificates
representing the Number of Shares registered
in the name of Citibank or its nominee, with
all necessary stock issuance and transfer tax
stamps affixed thereto, without any legends
or endorsements thereon other than a legend
to the effect that the Shares have not been
registered under the Securities Act, and,
therefore, cannot be resold unless they are
registered under the Securities Act or resold
in a transaction exempt from or not subject
to the registration requirements of the
Securities Act. Counterparty shall cause the
transfer of such Shares to be registered on
the books of the Issuer and/or any applicable
transfer agent.
(b) The sum of (i) the Forward Price times
the Number of Shares and (ii) the Cash
Settlement Amount for the Option (the
"Settlement Amount") shall be paid by wire
transfer of immediately available funds to
the account of Counterparty designated in
writing to Citibank prior to the Settlement
Date; provided that Citibank shall be
entitled to delay payment of the Settlement
Amount until such time as Citibank receives
the unlegended shares, representing all the
Number of Shares. Citibank agrees to use
reasonable efforts to sell the Shares
delivered by Counterparty as soon as
reasonably practicable after receipt and to
provide the Issuer customary Rule 144 selling
documentation in connection with such sales.
Adjustments:
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Potential Adjustment Event: Sections 9.1(e)(iv) and (v) of the Definitions
are hereby deleted. Section 9.1(e)(vi) of the
Definitions is hereby restated as follows:
"(vi) any event that may have a
material effect on the theoretical
value of the Shares or a Transaction."
Method of Adjustment: In the event of the occurrence of a Potential
Adjustment Event, the Calculation Agent will
determine whether such Potential Adjustment
Event has a material effect on the
theoretical value of the Shares or a
Transaction and, if so, will (i) make the
corresponding adjustment(s), if any, to the
Number of Options, the Option Entitlement,
the Number of Shares, the Strike Prices and,
in any case, any other variable relevant to
the exercise, valuation, settlement or
payment terms of a Transaction as the
Calculation Agent determines appropriate to
account for that material effect and (ii)
determine the effective date(s) of the
adjustment(s).
The Calculation Agent shall provide prompt
notice of any adjustment(s), including a
schedule or other reasonably detailed
explanation of the basis for and
determination of each adjustment. If as a
result of such adjustments the Calculation
Agent determines that an amount is owed to
Citibank by Counterparty, the Calculation
Agent shall notify Counterparty of such
amount, which Counterparty shall pay to
Citibank within three (3) Currency Business
Days following the receipt of such notice.
Dividend Adjustment: Counterparty agrees to notify Citibank promptly
of the first to occur of the announcement of
an ex-dividend date of any cash dividend by
or receipt of any cash dividend payment from
the Issuer. If the dividend so announced or
received is in excess of the Regular Dividend
(and so long as such dividend is not an
"extraordinary dividend", as that term is
used in the Definitions), then upon such
notification, the Calculation Agent will, at
its election, either (i) make such
adjustments to the Strike Prices of each
Transaction or (ii) determine that an amount
is owed to Citibank by Counterparty, in each
case as it deems appropriate to preserve for
the parties the intended economic benefits of
such Transaction.
The Calculation Agent shall provide prompt
notice of any such adjustments, including a
schedule or other reasonably detailed
explanation of the basis for and
determination of each adjustment. If the
Calculation Agent determines that an amount
is owed to Citibank by Counterparty, the
Calculation Agent shall notify Counterparty
of such amount, which Counterparty shall pay
to Citibank within three (3) Currency
Business Days following the receipt of such
notice.
"Regular Dividend" means $0.00 per share per
quarter. For the avoidance of doubt, if as a
result of any Merger Event or Potential
Adjustment Event (or any combination thereof)
the Shares are adjusted to include the Shares
of an issuer other than the initial Issuer or
of more than one issuer (whether or not
including the initial Issuer), then such
adjustment shall apply with respect to any
cash dividends to which the successor or
additional Shares of the applicable issuer(s)
are entitled and the Calculation Agent shall
adjust the amount of the Regular Dividend
after the Merger Event or Potential
Adjustment Event.
Extraordinary Events:
- --------------------
Merger Event: Means, in respect of any relevant Shares, any (i)
reclassification or change of such Shares
that results in a transfer of or an
irrevocable commitment to transfer
outstanding Shares, (ii) consolidation,
amalgamation or merger of the Issuer with or
into another entity (whether or not the
Issuer is the continuing entity), (iii)
tender or exchange offer for such Shares that
results in a transfer of or an irrevocable
commitment to transfer outstanding Shares,
(iv) sale, transfer, lease or conveyance of a
material portion of the Issuer's assets to
another entity or entities in a single
transaction or series of related
transactions, (v) purchase or other
acquisition of an entity, division, business
or any material portion thereof in a single
transaction or series of related transactions
that results in a material increase or change
in the Issuer's assets, and (vi) any other
corporate event or action affecting the
Issuer that may have a material effect on the
theoretical value of the Shares or a
Transaction, in each case if the Merger Date
occurs on or before the Expiration Date or
Valuation Date, as applicable.
Consequences of Merger Events:
(a) Share-for-Share: Cancellation and Payment.(b) Share-for-Other:
Cancellation and Payment. (c) Share-for-Combined
and any other Merger Event: Cancellation and
Payment.
Notwithstanding Section 9.2(b) of the
Definitions, "Merger Date" means, in respect
of a Merger Event, the date of the first
public announcement of a firm intention to
enter into the Merger Event, as determined by
the Calculation Agent.
Cancellation and Payment. Notwithstanding
anything in the Definitions to the contrary,
if Cancellation and Payment is applicable,
then the Transactions subject to this Master
Confirmation will be cancelled and one party
will pay to the other party an amount
determined as provided below, such payment to
be made not later than three Currency
Business Days following the determination by
the Calculation Agent of such amount
(denominated in the currency for settlement
of the relevant Transaction as determined by
the Calculation Agent). The amount to be paid
by one party will pay to the other party will
be the amount determined by the Calculation
Agent based on an amount representing the
Calculation Agent's determination of the fair
value to Citibank of a comparable security
with terms (including but not limited to
imbedded options) that would preserve for
Citibank the economic equivalent of any
payment or delivery (assuming satisfaction of
each applicable condition precedent) by the
parties in respect of the relevant
Transaction that would have been required
after that date but for the occurrence of the
Merger Event, Nationalization, Insolvency or
De-Listing Event, as the case may be. The
Calculation Agent shall provide Counterparty
with a schedule or other reasonably detailed
explanation of the basis for and
determination of such amount.
Nationalization, Insolvency or
De-Listing: Cancellation and Payment as described
above shall apply, at the election of
Citibank at any time after the
relevant Announcement Date.
"Insolvency" means that "Bankruptcy" as
defined in Section 5(a)(vii) of the ISDA
Master Agreement has occurred with respect to
the Issuer (without regard to any grace
periods included therein).
"De-Listing Event" means that the
Shares cease to be listed on or quoted
by any of the New York Stock Exchange,
the American Stock Exchange or the
NASDAQ National Market (or their
respective successors) for any reason
other than a Merger Event. For
purposes of a De-Listing Event, the
Announcement Date shall be deemed to
be the date that the De-Listing Event
first occurs (as determined by the
Calculation Agent).
4. Calculation Agent:
Citibank is the Calculation Agent and shall make all calculations,
adjustments and determinations required pursuant to a Transaction, and such
calculations, adjustments and determinations shall be binding absent manifest
error.
5. Collateral:
(a) On or prior to the Trade Date for a Transaction, Counterparty
shall deliver a number of Shares equal to the Number of Underlying Shares for
such Transaction (the "Collateral Shares") (if such Shares are in certificated
form, together with proper instruments of assignment duly executed in favor of
Citibank or its designee or in blank) to Citibank or its designee, in each
case in a manner acceptable to Citibank. Counterparty hereby grants Citibank a
continuing first priority, perfected security interest in and right of setoff
against the Collateral Shares, all distributions thereon and rights relating
thereto, and any other collateral acceptable to Citibank in its sole
discretion that may be delivered by or on behalf of Counterparty in connection
with such Transaction, and all proceeds of any of the foregoing (collectively,
"Collateral"), as security for the prompt and complete payment and performance
when due (whether on an Early Termination Date or otherwise) of all of
Counterparty's payment and performance obligations under the Transactions
hereunder and the ISDA Master Agreement (the "Secured Obligations"). Citibank
may reregister the Collateral Shares and any other Collateral in its name or
the name of its nominee at any time and, if such Shares or such other
Collateral are in certificated form, Counterparty agrees to use reasonable
best efforts (including, without limitation, providing at Counterparty's
expense any opinion of counsel required by the Issuer) to cause the Issuer to
effect such reregistration.
(b) Counterparty represents, on each date on which Counterparty
delivers or Citibank otherwise receives Collateral, that (i) Counterparty is
the owner of all Collateral free of any lien, security interest, charge,
adverse claim, restriction on transfer or other encumbrance, other than the
Permitted Securities Law Restriction, (ii) Counterparty has the power and
authority and has obtained all of the necessary consents and approvals to
grant a first priority security interest to Citibank in the Collateral, (iii)
upon the delivery of the Collateral Shares as described above and any other
Collateral in a manner acceptable to Citibank, Citibank will have a valid and
perfected first priority security interest in the Collateral Shares and the
other Collateral, (iv) none of Counterparty's entry into this Master
Confirmation or Citibank's exercise of any of its rights and remedies
hereunder will violate or conflict with the terms of any agreement made by or
applicable to Counterparty or will violate or conflict with any law, rule,
policy or order applicable to Counterparty or the Collateral, and (v)
Counterparty has furnished Citibank with copies of all agreements, contracts
or instruments that relate to the Collateral Shares.
(c) In addition to the rights granted to a secured party under the
Uniform Commercial Code (whether or not in effect in the jurisdiction where
such rights are exercised), Citibank shall be entitled to hold the Collateral
as collateral to the extent set forth below until the date all of
Counterparty's obligations in connection with each Transaction hereunder,
whether absolute or contingent, have been fully performed (the "Termination
Date"). If Counterparty defaults on any obligation to Citibank under this
Master Confirmation or otherwise, Citibank may exercise all rights with
respect to the Collateral, sell or liquidate the Collateral to satisfy any of
Counterparty's obligations to Citibank and set off any amounts payable by
Counterparty with respect to any Secured Obligations against any Collateral
held by Citibank or the cash equivalent of any Collateral (or any obligation
of Citibank to deliver any Collateral to Counterparty). Counterparty
acknowledges and agrees that the Collateral may decline speedily in value and
is of a type customarily sold on a recognized market and, therefore, that
Citibank is not required to send any notice of its intention to sell or
otherwise dispose of the Collateral hereunder, except any notice that is
required under applicable law and cannot be waived (in which case Counterparty
agrees that ten days' prior written notice shall be commercially reasonable).
Following a default, Citibank may, in its sole and absolute discretion, sell
Collateral in a private sale in such manner and under such circumstances as
Citibank may deem necessary or advisable (with Citibank or its affiliate
having the right to purchase any or all of the Collateral Shares to be sold)
and notwithstanding that a registration statement for all or any of such
Collateral has been or could be filed or is not required under the Securities
Act. Counterparty acknowledges that such sale shall be deemed to have been
made in a commercially reasonable manner, notwithstanding that any such sale
may be for a price less than that which might have been obtained had such
Collateral been so registered or otherwise publicly sold. Without limiting the
foregoing, upon request of Citibank following such default, Counterparty shall
use reasonable best efforts to procure the registration by the Issuer of the
Collateral Shares. Citibank shall apply the Collateral or the net proceeds of
any such collection, exercise or sale to the payment in whole or in part of
the Secured Obligations in such order as Citibank shall determine in the
exercise of its sole discretion. Counterparty shall remain fully liable to
Citibank for any amounts that remain outstanding after Citibank has liquidated
and/or sold the Collateral and deducted its reasonable attorney fees and other
costs and expenses incurred in connection therewith, plus interest thereon at
the Default Rate from the date incurred to the date paid (which shall be
Secured Obligations).
(d) Unless a Potential Event of Default, an Event of Default or a
Termination Event has occurred and is continuing with respect to Counterparty
or an Early Termination Date has occurred or been designated as a result of an
Event of Default or Termination Event with respect to Counterparty,
Counterparty shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of this Master Confirmation; provided,
however, that Counterparty shall not exercise or refrain from exercising such
right if, in the judgment of Citibank, such action would have a material
adverse effect on the value of the Collateral.
(e) Unless a Potential Event of Default, an Event of Default or a
Termination Event has occurred and is continuing with respect to Counterparty
or an Early Termination Date has occurred or been designated as a result of an
Event of Default or Termination Event with respect to Counterparty, Citibank
shall pay over, or cause to be paid over, to Counterparty any cash dividends
or similar cash distributions made in respect of the Collateral actually
received by or on behalf of Citibank (other than any Excluded Distribution).
Any cash Excluded Distribution which results in a payment obligation by
Counterparty to Citibank under "Method of Adjustment" or "Dividend Adjustment"
above shall be retained by Citibank in satisfaction of Counterparty's payment
obligation under the relevant provision, and any other Excluded Distribution
shall be retained by Citibank as Collateral. Any Excluded Distribution, if
received by Counterparty, shall promptly be paid or delivered to Citibank in
the manner directed by Citibank to be held as Collateral hereunder or to be
applied to cover Counterparty's payment obligation under "Method of
Adjustment" or "Dividend Adjustment" above, as the case may be, and shall be
deemed held in trust for Citibank until so paid or delivered. For purposes of
this provision, "Excluded Distribution" shall mean any dividend or other
distribution in respect of the Collateral whose receipt constitutes a
Potential Adjustment Event, that is in excess of the Regular Dividend or that
is made in connection with a Merger Event.
(f) Unless Counterparty satisfies Counterparty's obligations under a
Transaction through delivery of other Shares, Counterparty hereby authorizes
Citibank on the applicable Settlement Date to apply Collateral in the form of
Shares to satisfy Counterparty's delivery obligations, if any, under such
Transaction; provided that in no event shall (i) Citibank be required to make
such application and (ii) this provision be construed as altering in any way
Counterparty's obligations to satisfy all conditions to physical settlement
under this Confirmation (see "Conditions to Physical Settlement" above). If so
requested by a party, the other party agrees to cooperate in good faith
(subject, in the case of Citibank, to such terms and conditions as it deems
appropriate) in efforts to have the Collateral Shares deposited into the
Clearance System.
(g) Counterparty will faithfully preserve and protect Citibank's
security interest in the Collateral, will defend Citibank's right, title, lien
and security interest in and to the Collateral against the claims and demands
of all persons whomsoever, and will do all such acts and things and deliver
all such documents and instruments, including without limitation further
pledges, assignments, account control agreements, financing statements and
continuation statements, as Citibank in its sole discretion may deem necessary
or advisable from time to time in order to preserve, protect and perfect such
security interest or to enable Citibank to exercise or enforce its rights with
respect to any Collateral. Counterparty hereby irrevocably appoints Citibank
as Counterparty's attorney-in-fact for the purpose of taking any action and
executing any instrument which Citibank may deem necessary or advisable to
accomplish the purposes of the pledge contemplated by this Master
Confirmation. Citibank shall exercise reasonable care of the Collateral to the
extent required by applicable law and in any event shall be deemed to have
exercised reasonable care if it exercises at least the same degree of care as
it would exercise with respect to its own property. Except as specified in the
preceding sentence, Citibank shall have no duty with respect to the
Collateral, including, without limitation, any duty to collect any
distributions thereon or enforce or preserve any rights in the Collateral
pertaining thereto.
(h) Counterparty will not permit any lien, security interest, charge,
adverse claim, restriction on transfer or other encumbrance, other than the
lien and security interest Counterparty created hereby in favor of Citibank
and the Permitted Securities Law Restriction, to exist upon any of the
Collateral. Counterparty will not take any action that could in any way limit
or adversely affect the ability of Citibank to realize upon its rights in the
Collateral. Counterparty will promptly pay when due all taxes, assessments or
charges of any nature that are imposed with respect to the Collateral, or
income or distributions in respect of the Collateral, upon becoming aware of
the same. Notwithstanding anything to the contrary elsewhere in the Agreement
or any Confirmation, all payments and all deliveries of Collateral, or income
or distributions in respect of Collateral, pursuant to the Agreement shall be
made and the value of any Collateral, or income or distributions in respect of
Collateral, shall be calculated net of any and all present or future taxes,
levies, imposts, duties, charges, assessments or fees of any nature (including
interest, penalties and additions thereto) that are imposed by any government
or other taxing authority in respect thereof.
(i) When no amounts are or thereafter may become payable or Shares
deliverable by Counterparty with respect to any Secured Obligations (except
for any potential liability under Section 2(d) of the ISDA Master Agreement),
Citibank will return to Counterparty all Collateral, if any. When (x) no
amounts are or thereafter may become payable or Shares deliverable by
Counterparty with respect to any Secured Obligations relating to a particular
Transaction (except for any potential liability under Section 2(d) of the ISDA
Master Agreement), (y) no Potential Event of Default, Event of Default or
Termination Event has occurred and is continuing with respect to Counterparty
and (z) no Early Termination Date has occurred or been designated as the
result of an Event of Default or Termination Event with respect to
Counterparty, Citibank will return to Counterparty all Collateral relating to
such Transaction, if any, as determined by Citibank.
(j) The provisions of this Section 5 constitute a Credit Support
Document with respect to Counterparty. The Transactions hereunder shall be
disregarded for purposes of determining Exposure under any Credit Support
Annex between the parties and any Collateral delivered to or received by
Citibank under this Master Confirmation shall constitute neither Posted
Collateral nor an Independent Amount under any such Credit Support Annex.
6. Securities Law Representations and Agreements:
Counterparty hereby represents, warrants and agrees in favor of
Citibank on the Trade Date and, if different, on each date Collateral Shares
(as defined in Section 4 above) are delivered to Citibank:
(a) Prior to the entering into a Transaction, the Collateral Shares
were "restricted securities" within the meaning of Rule 144 (the "Permitted
Securities Law Restriction").
(b) Counterparty is an Insider. "Insider" means a person who is an
officer, director or beneficial owner of more than 10% of any class of equity
securities of the Issuer required to file reports pursuant to Section 16(a) of
the Securities Exchange Act of 1934, as amended, or otherwise an affiliate of
the Issuer within the meaning of the Securities Act.
(c) Counterparty's "holding period" for the Collateral Shares,
determined in accordance with Rule 144, commenced February 16, 2001. The
pledge of the Shares constitutes a bona fide pledge with full recourse to
Counterparty.
(d) Neither Counterparty, nor any other "person" associated with
Counterparty within the meaning of paragraph (a)(2) of Rule 144 (each such
other person, an "Associated Person"), has any reason to believe that the
Issuer has not complied with the reporting requirements as outlined in Rule
144(c).
(e) Other than pursuant to the Transactions, neither Counterparty nor
any Associated Person have, within the three-month period immediately
preceding the Trade Date of a Transaction, (i) sold, pledged or otherwise
disposed of any shares issued by the Issuer that are of the same class as the
Shares or any securities issued by the Issuer that are convertible into shares
of such class or any interest in such shares or securities or (ii) acted in
concert with any person in connection with the sale, pledge or other
disposition of any such shares or securities or any interest therein, in each
case to the extent such sale, pledge or other disposition may be aggregated
pursuant to Rule 144 with any disposition of the Collateral Shares by
Citibank.
(f) Until the Termination Date, Counterparty will not, nor will
Counterparty permit any Associated Person to, without Citibank's prior written
consent (i) during the period from the Trade Date until the final Expiration
Date, neither Counterparty nor any of its subsidiaries will (i) offer, sell,
transfer, agree to sell or transfer, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, assign, pledge, hypothecate or otherwise transfer or dispose of,
directly or indirectly, any Shares or any securities convertible into or
exercisable or exchangeable therefor, or any interest therein or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of owning the Shares, whether any such
transaction described in clause (i) or (ii) of this sentence is to be settled
by delivery of such shares, in cash or otherwise or (iii) act in concert with
any person in connection with any transaction described in clause (i) or (ii)
above.
(g) Counterparty will not offer or sell, directly or indirectly, any
Shares pursuant to a registration statement under Section 5 of the Securities
Act during the period from and including the fifth Exchange Business Day prior
to and ending on the Valuation Date or any other date of termination or unwind
of a Transaction in whole or in part.
(h) Counterparty understands and will comply with Counterparty's
responsibilities under applicable securities laws in connection with the
Transactions including, but not limited to, the provisions of Rule 144 and the
filing requirements (to the extent applicable) of Sections 13 and 16 of the
Securities Exchange Act of 1934.
7. Additional Representations and Agreements:
(a) In connection with this Master Confirmation, each Confirmation,
each Transaction to which a Confirmation relates and any other documentation
relating to the Agreement, each party represents and acknowledges to the other
party on the Trade Date of each Transaction that:
(i) such party is acting as principal for such party's own
account and not as agent when entering into such Transaction;
(ii) such party has sufficient knowledge and expertise to
enter into such Transaction and such party is entering into such
Transaction in reliance upon such tax, accounting, regulatory, legal,
and financial advice as such party deems necessary and not upon any
view expressed by the other. Such party has made such party's own
independent decision to enter into such Transaction, is acting at
arm's length and is not relying on any communication (written or
oral) of the other party as a recommendation or investment advice
regarding such Transaction. Such party has the capability to evaluate
and understand (on such party's own behalf or through independent
professional advice), and does understand, the terms, conditions and
risks of such Transaction and is willing to accept those terms and
conditions and to assume (financially and otherwise) those risks.
Such party acknowledges and agrees that the other party is not acting
as a fiduciary or advisor to such party in connection with such
Transaction. Such party is entering into such Transaction for the
purposes of hedging such party's underlying assets or liabilities or
in connection with a line of business, and not for purposes of
speculation; and
(iii) such party is an "accredited investor" as defined in
Section 2(a)(15)(ii) of the Securities Act and an "eligible contract
participant" as such term is defined in the Commodity Exchange Act,
as amended.
(b) In connection with this Master Confirmation, each
Confirmation, each Transaction to which a Confirmation relates and any other
documentation relating to the Agreement, Counterparty represents and
acknowledges to Citibank on the Trade Date of each Transaction that:
(i) Counterparty understands no obligations of Citibank to
Counterparty hereunder will be entitled to the benefit of deposit
insurance and that such obligations will not be guaranteed by any
affiliate of Citibank or any governmental agency;
(ii) Counterparty's financial condition is such that
Counterparty has no need for liquidity with respect to Counterparty's
investment in such Transaction and no need to dispose of any portion
thereof to satisfy any existing or contemplated undertaking or
indebtedness. Counterparty's investments in and liabilities in
respect of such Transaction, which Counterparty understands are not
readily marketable, is not disproportionate to Counterparty's net
worth, and Counterparty is able to bear any loss in connection with
such Transaction, including the loss of Counterparty's entire
investment in such Transaction;
(iii) COUNTERPARTY UNDERSTANDS THAT SUCH TRANSACTION IS
SUBJECT TO COMPLEX RISKS WHICH MAY ARISE WITHOUT WARNING AND MAY AT
TIMES BE VOLATILE AND THAT LOSSES MAY OCCUR QUICKLY AND IN
UNANTICIPATED MAGNITUDE AND IS WILLING TO ACCEPT SUCH TERMS AND
CONDITIONS AND ASSUME (FINANCIALLY AND OTHERWISE) SUCH RISKS;
(iv) Neither Counterparty nor any of Counterparty's
affiliates is in possession of any material non-public information
concerning the Issuer. "Material" information for these purposes is
any information to which an investor would reasonably attach
importance in reaching a decision to buy, sell or hold securities of
the Issuer;
(v) Counterparty is entering into such Transaction for
Counterparty's own account and not with a view to transfer, resale or
distribution and understands that such Transaction may involve the
purchase or sale of a security as defined in the Securities Act and
the securities laws of certain states, that any such security has not
been registered under the Securities Act or the securities laws of
any state and, therefore, may not be sold, pledged, hypothecated,
transferred or otherwise disposed of unless such security is
registered under the Securities Act and any applicable state
securities law, or an exemption from registration is available;
(vi) Counterparty is aware and acknowledges that Citibank,
its affiliates or any entity with which Citibank hedges such
Transaction may from time to time take positions in instruments that
are identical or economically related to such Transaction or the
Shares or have an investment banking or other commercial relationship
with the Issuer. In addition, Counterparty acknowledges that the
proprietary trading and other activities and transactions of
Citibank, its affiliates or any entity with which Citibank hedges
such Transaction, including purchases and sales of the Shares in
connection with, or in anticipation of, such Transaction, may affect
the trading price of the Shares;
(vii) Counterparty will immediately inform Citibank of any
changes in the information set forth herein occurring prior to the
Termination Date;
(viii) Counterparty will immediately notify Citibank of the
occurrence of an Event of Default under the ISDA Master Agreement
where Counterparty is the Defaulting Party, or the occurrence of any
event that with the giving of notice, the lapse of time or both would
be such an Event of Default; and
(ix) Counterparty was not or will not be insolvent at the
time any Transaction hereunder was consummated, and was not or will
not be rendered insolvent or will not be insolvent as a result
thereof. At the time of any transfer to or for the benefit of
Citibank, Counterparty did not intend or will not intend to incur,
and did not incur or will not incur, debts that were beyond the
ability of Counterparty to pay as they mature.
8. Acknowledgments:
The parties hereto intend for:
(a) Each Transaction hereunder to be a "securities contract" and a
"swap agreement" as defined in the Bankruptcy Code (Title 11 of the United
States Code) (the "Bankruptcy Code"), and the parties hereto are entitled to
the protections afforded by, among other Sections, Sections 362(b)(6), 555 and
560 of the Bankruptcy Code.
(b) A party's right to liquidate a Transaction and to exercise any
other remedies upon the occurrence of any Event of Default under the ISDA
Master Agreement with respect to the other party to constitute a "contractual
right" as described in the Bankruptcy Code.
(c) Any cash, securities or other property provided as performance
assurance, credit support or collateral with respect to a Transaction to
constitute "margin payments" and "transfers" under a "swap agreement" as
defined in the Bankruptcy Code.
(d) All payments for, under or in connection with a Transaction, all
payments for the Shares and the transfer of such Shares to constitute
"settlement payments" and "transfers" under a "swap agreement" as defined in
the Bankruptcy Code.
9. Indemnification:
Counterparty agrees to indemnify and hold harmless Citibank, its
Affiliates and its assignees and their respective directors, officers,
employees, agents and controlling persons (Citibank and each such person being
an "Indemnified Party") from and against any and all losses, claims, damages
and liabilities, joint or several, to which such Indemnified Party may become
subject, and relating to or arising out of any of the Transactions
contemplated by this Master Confirmation, including but not limited to any
sale of the Collateral Shares, and will reimburse any Indemnified Party for
all expenses (including reasonable counsel fees and expenses) as they are
incurred in connection with the investigation of, preparation for or defense
or settlement of any pending or threatened claim or any action, suit or
proceeding arising therefrom, whether or not such Indemnified Party is a party
thereto and whether or not such claim, action, suit or proceeding is initiated
or brought by or on behalf of Counterparty. Counterparty will not be liable
under the foregoing indemnification provision to the extent that any loss,
claim, damage, liability or expense is found in a nonappealable judgment by a
court of competent jurisdiction to have resulted from Citibank's breach of a
material term of this Master Confirmation, willful misconduct or gross
negligence. If for any reason the foregoing indemnification is unavailable to
any Indemnified Party or insufficient to hold harmless any Indemnified Party,
then Counterparty shall contribute, to the maximum extent permitted by law
(but only to the extent that such harm was not caused by Citibank's breach of
a material term of this Master Confirmation, willful misconduct or gross
negligence), to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage or liability. Counterparty also agrees that
no Indemnified Party shall have any liability to Counterparty or any person
asserting claims on behalf of or in right of Counterparty in connection with
or as a result of any matter referred to in this Master Confirmation or the
ISDA Master Agreement except to the extent that any losses, claims, damages,
liabilities or expenses incurred by Counterparty result from the breach of a
material term of this Master Confirmation, or the Indemnified Party's gross
negligence or willful misconduct. The provisions of this Section 8 shall
survive completion of the Transactions contemplated by this Master
Confirmation and any assignment and delegation pursuant to Section 9(b) of
this Master Confirmation and shall inure to the benefit of any permitted
assignee of Citibank.
10. Other Provisions:
(a) Early Termination. The parties agree that for purposes of Section
6(e) of the ISDA Master Agreement, Second Method and Loss will apply to each
Transaction under this Master Confirmation.
(b) Transfer. Notwithstanding any provision of the Agreement to the
contrary, Citibank shall be entitled to assign its rights and obligations
hereunder to make or receive cash payments and transfer of Shares and other
related rights to one or more entities that are wholly-owned, directly or
indirectly, by Citigroup Inc., or any successor thereto (each, a "Citibank
Affiliate"); provided that Counterparty shall have recourse to Citibank in the
event of the failure by a Citibank Affiliate to perform any of such
obligations hereunder. Notwithstanding the foregoing, recourse to Citibank
shall be limited to recoupment of Counterparty's monetary damages and
Counterparty hereby waives any right to seek specific performance by Citibank
of its obligations hereunder. Such failure after any applicable grace period
shall be an Additional Termination Event with the Transaction to which the
failure relates as the sole Affected Transaction and Citibank as the sole
Affected Party.
(c) Consent to Recording. Each party (i) consents to the recording of
the telephone conversations of trading and marketing personnel of the parties
and their affiliates in connection with this Master Confirmation and (ii)
agrees to obtain any necessary consent of, and give notice of such recording
to, such personnel of such party and such party's affiliates.
(d) Severability; Illegality. If compliance by either party with any
provision of a Transaction would be unenforceable or illegal, (i) the parties
shall negotiate in good faith to resolve such unenforceability or illegality
in a manner that preserves the economic benefits of the transactions
contemplated hereby and (ii) the other provisions of such Transaction shall
not be invalidated, but shall remain in full force and effect.
(e) Waiver of Trial by Jury. EACH OF COUNTERPARTY AND CITIBANK HEREBY
IRREVOCABLY WAIVES (ON SUCH PARTY'S OWN BEHALF AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ON BEHALF OF SUCH PARTY'S STOCKHOLDERS) ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS MASTER CONFIRMATION OR
THE ACTIONS OF CITIBANK OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR
ENFORCEMENT HEREOF.
(f) Confidentiality. Citibank and Counterparty agree that (i)
Counterparty is not obligated to Citibank to keep confidential from any and
all persons or otherwise limit the use of any element of Citibank's
descriptions relating to tax aspects of the Transactions hereunder and any
part of the structure necessary to understand those tax aspects, and (ii)
Citibank does not assert any claim of proprietary ownership in respect of such
descriptions contained herein of the use of any entities, plans or
arrangements to give rise to significant U.S. federal income tax benefits for
Counterparty.
11. Borrow Events:
Borrow Cost Increase. If at any time following 30 days after the
Trade Date for a Transaction, Citibank does not, after using commercially
reasonable efforts, successfully borrow Shares (up to a number equal to the
Number of Underlying Shares) on terms that require Citibank to pay or bear
costs in connection with such borrow in an amount less than or equal to the
Fixed Borrow Cost, then the Calculation Agent will (a) make the corresponding
adjustment(s), if any, to the Number of Options, the Option Entitlement, the
Number of Shares, the Strike Prices, the Forward Price and, in any case, any
other variable relevant to the exercise, valuation, settlement or payment
terms of a Transaction as the Calculation Agent determines appropriate to
account for any excess borrowing costs and (b) determine the effective date(s)
of the adjustment(s).
WHERE:
"Fixed Borrow Cost" means 25 basis points per annum based on the
closing price of a Share on the Exchange Business Day immediately preceding
the relevant day.
12. Accounts for Payment:
To Citibank: Citibank, N.A.
ABA# 021000089
For credit to Equity Derivatives
DDA# 00167679
To Counterparty: Please provide.
Yours sincerely,
CITIBANK, N.A.
By: /s/ William Ortner
-------------------------
Name: William Ortner
Title: Vice President
Confirmed as of the date first above written:
CENDANT CORPORATION
By: /s/ David Wyshner
---------------------
Name: David Wyshner
Title: Executive Vice President, Finance, Planning & Development
EXHIBIT A
FORM OF RANGE FORWARD
CONFIRMATION
CONFIRMATION
Date: _________________
To: Cendant Corporation ("Counterparty")
Telefax No.: _________________
Attention: _________________
From: Citibank, N.A. ("Citibank")
Telefax No.: 212-615-8985
The purpose of this communication is to set forth the terms and
conditions of the referenced Transactions entered into on the Trade Dates
specified below (each a "Transaction") between you and us. This communication,
together with the Master Confirmation (as defined below), constitutes a
"Confirmation" as referred to in the Master Confirmation.
1. The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "Definitions") as published by the International
Swaps and Derivatives Association, Inc. and in the Master Confirmation are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.
2. This Confirmation supplements, forms a part of, and is subject to
the Master Terms and Conditions for Range Forward Transactions dated as of
December 17, 2003 (the "Master Confirmation") between you and us. All
provisions contained in the Agreement (as modified and as defined in the
Master Confirmation) shall govern this Confirmation except as expressly
modified below.
3. The particular Transactions to which this Confirmation relates are
range forward transactions, the terms of which are as follows:
- ------------------------------------------------------------------------------------------------
Forward
Transaction Number of Price/Strike Strike Price Expiration
Reference No. Trade Date Shares/Options Price I II Date
- ------------------------------------------------------------------------------------------------
E03-02000, 12/17/03 340,000 $3.33 $3.885 01/20/04
E03-02001
- ------------------------------------------------------------------------------------------------
E03-02002, 12/17/03 340,000 $3.33 $3.885 01/21/04
E03-02003
- ------------------------------------------------------------------------------------------------
E03-02004, 12/17/03 340,000 $3.33 $3.885 01/22/04
E03-02005
- ------------------------------------------------------------------------------------------------
E03-02006, 12/17/03 340,000 $3.33 $3.885 01/23/04
E03-02007
- ------------------------------------------------------------------------------------------------
E03-02008, 12/17/03 340,000 $3.33 $3.885 01/26/04
E03-02009
- ------------------------------------------------------------------------------------------------
E03-02010, 12/17/03 340,000 $3.33 $3.885 01/27/04
E03-02011
- ------------------------------------------------------------------------------------------------
E03-02012, 12/17/03 340,000 $3.33 $3.885 01/28/04
E03-02013
- ------------------------------------------------------------------------------------------------
E03-02014, 12/17/03 340,000 $3.33 $3.885 01/29/04
E03-02015
- ------------------------------------------------------------------------------------------------
E03-02016, 12/17/03 340,000 $3.33 $3.885 01/30/04
E03-02017
- ------------------------------------------------------------------------------------------------
E03-02018, 12/17/03 340,000 $3.33 $3.885 02/02/04
E03-02019
- ------------------------------------------------------------------------------------------------
Final Disruption Date: The fifth Exchange Business Day following
the final Expiration Date set forth in
the chart above.
Counterparty hereby agrees (a) to check this Confirmation carefully
and immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing correctly sets
forth the terms of the agreement between us with respect to each particular
Transaction to which this Confirmation relates by manually signing this
Confirmation and providing any other information requested herein or in the
Master Confirmation and immediately sending a facsimile transmission of an
executed copy to Confirmation Unit 212-615-8985, with an executed copy sent to
Citibank, N.A., 333 West 34th Street, 2nd Floor, New York, New York 10001,
Attention: Confirmation Unit.
Yours sincerely,
CITIBANK, N.A.
By:_____________________
Authorized Representative
Confirmed as of the date first above written:
CENDANT CORPORATION
By: ________________________
Name:
Title:
