Document:

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                      RESALE REGISTRATION RIGHTS AGREEMENT

                                     between

                               CENDANT CORPORATION

                                       and

                              LEHMAN BROTHERS INC.

                          DATED AS OF FEBRUARY 13, 2001

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            RESALE REGISTRATION RIGHTS AGREEMENT, dated as of February 13, 2001,
between Cendant Corporation, a Delaware corporation (together with any successor
entity, herein referred to as the "Issuer"), and Lehman Brothers Inc. (the
"Initial Purchaser").

            Pursuant to the Purchase Agreement, dated February 7, 2001, between
the Issuer and the Initial Purchaser (the "Purchase Agreement"), the Initial
Purchaser has agreed to purchase from the Issuer $1,232,715,000 ($1,479,358,000
if the Initial Purchaser exercises the over-allotment option in full) in
aggregate principal amount at maturity of Zero Coupon Senior Convertible
Contingent Debt Securities (CODES SM) Notes due 2021 (the "Debentures"). The
Debentures will be convertible into fully paid, nonassessable CD common stock,
par value $.01 per share, of the Issuer (the "Common Stock") on the terms, and
subject to the conditions, set forth in the Indenture (as defined herein). To
induce the Initial Purchaser to purchase the Debentures, the Issuer has agreed
to provide the registration rights set forth in this Agreement pursuant to
Section 3(m) of the Purchase Agreement.

            The parties hereby agree as follows:

            1.    DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:

            AGREEMENT:  This Resale Registration Rights Agreement.

            APPLICABLE AMOUNT: With respect to each $1,000 principal amount at
      maturity of the Debentures, the sum of the initial issue price of such
      Debentures ($608.41) plus accrued original issue discount with respect to
      such Debentures through the date of determination.

            BLUE SKY APPLICATION:  As defined in Section 6(a) hereof.

            BROKER-DEALER: Any broker or dealer registered under the Exchange
      Act.

            BUSINESS DAY: A day other than a Saturday or Sunday or any day on
      which banking institutions in the city of New York are authorized or
      obligated by law or executive order to close.

            CLOSING DATE: The date of this Agreement.

            COMMISSION: Securities and Exchange Commission.

            COMMON STOCK: As defined in the preamble hereto.

            DAMAGES PAYMENT DATE: Each February 13 and August 13.

            DEBENTURES: As defined in the preamble hereto.

            EFFECTIVENESS PERIOD: As defined in Section 2(a)(iii) hereof.

            EFFECTIVENESS TARGET DATE: As defined in Section 2(a)(ii) hereof.

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            EXCHANGE ACT: Securities Exchange Act of 1934, as amended.

            HOLDER: A Person who owns, beneficially or otherwise, Transfer
      Restricted Securities.

            HOLDER QUESTIONNAIRE: As defined in Section 2(b) hereof.

            INDEMNIFIED HOLDER: As defined in Section 6(a) hereof.

            INDENTURE: The Indenture, dated as of February 13, 2001, between the
      Issuer and The Bank of New York, as trustee (the "Trustee"), pursuant to
      which the Debentures are to be issued, as such Indenture is amended,
      modified or supplemented from time to time in accordance with the terms
      thereof.

            INITIAL PURCHASER: As defined in the preamble hereto.

            ISSUER: As defined in the preamble hereto.

            LIQUIDATED DAMAGES: As defined in Section 3(a) hereof.

            MAJORITY OF HOLDERS: Holders holding over 50% of the aggregate
      principal amount at maturity of Debentures outstanding; PROVIDED that, for
      purpose of this definition, a holder of shares of Common Stock which
      constitute Transfer Restricted Securities and issued upon conversion of
      the Debentures shall be deemed to hold an aggregate principal amount at
      maturity of Debentures (in addition to the principal amount at maturity of
      Debentures held by such holder) equal to the quotient of (x) the number of
      such shares of Common Stock held by such holder and (y) the conversion
      rate then in effect as determined in accordance with the Indenture.

            NASD: National Association of Securities Dealers, Inc.

            PERSON: An individual, partnership, corporation, unincorporated
      organization, trust, joint venture or a government or agency or political
      subdivision thereof.

            PURCHASE AGREEMENT: As defined in the preamble hereto.

            PROSPECTUS: The prospectus included in a Shelf Registration
      Statement, as amended or supplemented by any prospectus supplement and by
      all other amendments thereto, including post-effective amendments, and all
      material incorporated by reference into such Prospectus.

            QUESTIONNAIRE DEADLINE: As defined in Section 2(b) hereof.

            RECORD HOLDER: With respect to any Damages Payment Date, each Person
      who is a Holder on the 15th day preceding the relevant Damages Payment
      Date.

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            REGISTRATION DEFAULT: As defined in Section 3(a) hereof.

            SALE NOTICE: As defined in Section 4(d) hereof.

            SECURITIES ACT: Securities Act of 1933, as amended.

            SHELF FILING DEADLINE: As defined in Section 2(a)(i) hereof.

            SHELF REGISTRATION STATEMENT: As defined in Section 2(a)(i) hereof.

            SUSPENSION NOTICE. As defined in Section 4(c) hereof.

            SUSPENSION PERIOD. As defined in Section 4(b)(i) hereof.

            TIA: Trust Indenture Act of 1939, as in effect on the date the
      Indenture is qualified under the TIA.

            TRANSFER RESTRICTED SECURITIES: Each Debenture and each share of
      Common Stock issued upon conversion of Debentures until the earlier of:

                  (i) the date on which such Debenture or such share of Common
            Stock issued upon conversion has been effectively registered under
            the Securities Act and disposed of in accordance with the Shelf
            Registration Statement;

                  (ii) the date on which such Debenture or such share of Common
            Stock issued upon conversion is transferred in compliance with Rule
            144 under the Securities Act or may be sold or transferred by a
            person who is not an affiliate of the Issuer pursuant to Rule 144
            under the Securities Act (or any other similar provision then in
            force) without any volume or manner of sale restrictions thereunder;
            or

                  (iii) the date on which such Debenture or such share of Common
            Stock issued upon conversion ceases to be outstanding (whether as a
            result of redemption, repurchase and cancellation, conversion or
            otherwise).

            UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration
      in which securities of the Issuer are sold to an underwriter for
      reoffering to the public.

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            2.    SHELF REGISTRATION.

            (a)   The Issuer shall:

                  (i) not later than 90 days after the date hereof (the "Shelf
            Filing Deadline"), cause to be filed a registration statement
            pursuant to Rule 415 under the Securities Act (the "Shelf
            Registration Statement"), which Shelf Registration Statement shall
            provide for resales of all Transfer Restricted Securities held by
            Holders that have provided the information required pursuant to the
            terms of Section 2(b) hereof;

                  (ii) use its reasonable best efforts to cause the Shelf
            Registration Statement to be declared effective by the Commission
            not later than 180 days after the date hereof (the "Effectiveness
            Target Date"); and

                  (iii) use its reasonable best efforts to keep the Shelf
            Registration Statement continuously effective, supplemented and
            amended as required by the provisions of Section 4(b) hereof to the
            extent necessary to ensure that (A) it is available for resales by
            the Holders of Transfer Restricted Securities entitled to the
            benefit of this Agreement and (B) conforms with the requirements of
            this Agreement and the Securities Act and the rules and regulations
            of the Commission promulgated thereunder as announced from time to
            time for a period (the "Effectiveness Period") of:

                        (1)   two years following the last date of original
                  issuance of Debentures; or

                        (2) such shorter period that will terminate when (x) all
                  of the Holders of Transfer Restricted Securities are able to
                  sell all Transfer Restricted Securities immediately without
                  restriction pursuant to Rule 144(k) under the Securities Act
                  or any successor rule thereto, (y) when all Transfer
                  Restricted Securities have ceased to be outstanding (whether
                  as a result of redemption, repurchase and cancellation,
                  conversion or otherwise) or (z) all Transfer Restricted
                  Securities of Holders that complete and deliver in a timely
                  manner the Holder Questionnaire are registered under the Shelf
                  Registration Statement and have been disposed of in accordance
                  with the Shelf Registration Statement.

            (b) No Holder of Transfer Restricted Securities may include any of
its Transfer Restricted Securities in the Shelf Registration Statement pursuant
to this Agreement unless such Holder furnishes to the Issuer in writing, prior
to or on the 20th Business Day after receipt of a request therefor (the
"Questionnaire Deadline"), such information as the Issuer may reasonably request
for use in connection with the Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein and in any application to be filed with
or under state securities laws (the form of which request is attached hereto as
Exhibit A and is referred to herein as the "Holder Questionnaire"). In
connection with all such requests for information from

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Holders of Transfer Restricted Securities, the Issuer shall notify such Holders
of the requirements set forth in the preceding sentence. Holders that do not
complete the questionnaire and deliver it to the Issuer shall not be named as
selling securityholders in the Prospectus or preliminary Prospectus included in
the Shelf Registration Statement and therefore shall not be permitted to sell
any Transfer Restricted Securities pursuant to the Shelf Registration Statement.
No Holder of Transfer Restricted Securities shall be entitled to Liquidated
Damages pursuant to Section 3 hereof unless such Holder shall have provided all
such reasonably requested information prior to or on the Questionnaire Deadline.
Each Holder as to which the Shelf Registration Statement is being effected
agrees to furnish promptly to the Issuer all information required to be
disclosed in order to make information previously furnished to the Issuer by
such Holder not materially misleading. Each Holder who intends to be named as a
selling Holder in the Shelf Registration Statement shall promptly furnish to the
Issuer in writing such other information as the Issuer may from time to time
reasonably request in writing.

            3.    LIQUIDATED DAMAGES.

            (a)   If:

                  (i)   the Shelf Registration Statement is not filed with
            the Commission prior to or on the Shelf Filing Deadline;

                  (ii)  the Shelf Registration Statement has not been
            declared effective by the Commission prior to or on the
            Effectiveness Target Date;

                  (iii) except as provided in Section 4(b)(i) hereof, the Shelf
            Registration Statement is filed and declared effective but, during
            the Effectiveness Period, shall thereafter cease to be effective or
            fail to be usable for its intended purpose without being succeeded
            within five Business Days by a post-effective amendment to the Shelf
            Registration Statement or a report filed with the Commission
            pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
            that cures such failure and, in the case of a post-effective
            amendment, is itself immediately declared effective; or

                  (iv) (A) prior to or on the 45th or 75th day, as the case may
            be, of any Suspension Period, such suspension has not been
            terminated or (B) Suspension Periods exceed an aggregate of 90 days
            in any 360 day period,

(each such event referred to in foregoing clauses (i) through (iv), a
"Registration Default"), the Issuer hereby agrees to pay liquidated damages
("Liquidated Damages") with respect to the Transfer Restricted Securities from
and including the day following the Registration Default to but excluding the
day on which the Registration Default has been cured, accruing at a rate:

                  (A) in respect of the Debentures, to each holder of
            Debentures, (x) with respect to the first 90-day period during which
            a Registration Default shall have occurred and be continuing, equal
            to 0.25% per annum of the Applicable Amount of the Debentures, and
            (y) with respect to the period commencing on the 91st day following
            the day the Registration Default shall have occurred and be
            continuing,

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            equal to 0.50% per annum of the Applicable Amount of the Debentures;
            PROVIDED that in no event shall Liquidated Damages accrue at a rate
            per year exceeding 0.50% of the Applicable Amount of the Debentures;
            and

                  (B) in respect of any shares of Common Stock, to each holder
            of shares of Common Stock issued upon conversion of Debentures, (x)
            with respect to the first 90-day period in which a Registration
            Default shall have occurred and be continuing, equal to 0.25% per
            annum of the Applicable Amount of the converted Debentures, and (y)
            with respect to the period commencing the 91st day following the day
            the Registration Default shall have occurred and be continuing,
            equal to 0.50% per annum of the Applicable Amount of the converted
            Debentures; PROVIDED that in no event shall Liquidated Damages
            accrue at a rate per year exceeding 0.50% of the Applicable Amount
            of the converted Debentures.

            (b) All accrued Liquidated Damages shall be paid in arrears to
Record Holders by the Issuer on each Damages Payment Date by wire transfer of
immediately available funds or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Debenture or share of Common
Stock, the accrual of Liquidated Damages with respect to such Debenture or share
of Common Stock will cease.

            All obligations of the Issuer set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.

            The Liquidated Damages set forth above shall be the exclusive
monetary remedy available to the Holders of Transfer Restricted Securities for
such Registration Default.

            4.    REGISTRATION PROCEDURES.

            (a)   In connection with the Shelf Registration Statement, the
Issuer shall comply with all the provisions of Section 4(b) hereof and shall use
its best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto, shall as expeditiously as
possible prepare and file with the Commission a Shelf Registration Statement
relating to the registration on any appropriate form under the Securities Act.

            (b)   In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the Issuer shall:

                  (i) Subject to any notice by the Issuer in accordance with
            this Section 4(b) of the existence of any fact or event of the kind
            described in Section 4(b)(iii)(D), use its reasonable best efforts
            to keep the Shelf Registration Statement continuously effective
            during the Effectiveness Period; upon the occurrence of any event
            that would cause the Shelf Registration Statement or the Prospectus
            contained therein (A) to contain a material misstatement or omission
            or (B) not be

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            effective and usable for resale of Transfer Restricted Securities
            during the Effectiveness Period, the Issuer shall file promptly an
            appropriate amendment to the Shelf Registration Statement or a
            report filed with the Commission pursuant to Section 13(a), 13(c),
            14 or 15(d) of the Exchange Act, in the case of clause (A),
            correcting any such misstatement or omission, and, in the case of
            either clause (A) or (B), use its best efforts to cause such
            amendment to be declared effective and the Shelf Registration
            Statement and the related Prospectus to become usable for their
            intended purposes as soon as practicable thereafter. Notwithstanding
            the foregoing, the Issuer may suspend the effectiveness of the Shelf
            Registration Statement by written notice to the Holders for a period
            not to exceed an aggregate of 45 days in any 90-day period (each
            such period, a "Suspension Period") if:

                        (x) an event occurs and is continuing as a result of
                  which the Shelf Registration Statement would, in the Issuer's
                  reasonable judgment, 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; and

                        (y) the Issuer reasonably determines that the disclosure
                  of such event at such time would have a material adverse
                  effect on the business of the Issuer (and its subsidiaries, if
                  any, taken as a whole);

            PROVIDED that in the event the disclosure relates to a previously
            undisclosed proposed or pending material business transaction, the
            disclosure of which would impede the Issuer's ability to consummate
            such transaction, the Issuer may extend a Suspension Period from 45
            days to 75 days; PROVIDED, HOWEVER, that Suspension Periods shall
            not exceed an aggregate of 90 days in any 360-day period.

                  (ii) Prepare and file with the Commission such amendments and
            post-effective amendments to the Shelf Registration Statement as may
            be necessary to keep the Shelf Registration Statement effective
            during the Effectiveness Period; cause the Prospectus to be
            supplemented by any required Prospectus supplement, and as so
            supplemented to be filed pursuant to Rule 424 under the Securities
            Act, and to comply fully with the applicable provisions of Rules 424
            and 430A under the Securities Act in a timely manner; and comply
            with the provisions of the Securities Act with respect to the
            disposition of all securities covered by the Shelf Registration
            Statement during the applicable period in accordance with the
            intended method or methods of distribution by the sellers thereof
            set forth in the Shelf Registration Statement or supplement to the
            Prospectus; provided that in no event will such method(s) of
            distribution take the form of an Underwritten Offering without the
            prior agreement of the Issuer, which agreement will not be
            unreasonably withheld.

                  (iii) Advise the underwriter(s), if any, and selling Holders
            promptly (but in any event within five Business Days) and, if
            requested by such Persons, to confirm such advice in writing:

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                        (A) when the Prospectus or any Prospectus supplement or
                  post-effective amendment has been filed, and, with respect to
                  the Shelf Registration Statement or any post-effective
                  amendment thereto, when the same has become effective,

                        (B) of any request by the Commission for amendments to
                  the Shelf Registration Statement or amendments or supplements
                  to the Prospectus or for additional information relating
                  thereto,

                        (C) of the issuance by the Commission of any stop order
                  suspending the effectiveness of the Shelf Registration
                  Statement under the Securities Act or of the suspension by any
                  state securities commission of the qualification of the
                  Transfer Restricted Securities for offering or sale in any
                  jurisdiction, or the initiation of any proceeding for any of
                  the preceding purposes, or

                        (D) of the existence of any fact or the happening of any
                  event, during the Effectiveness Period, that makes any
                  statement of a material fact made in the Shelf Registration
                  Statement, the Prospectus, any amendment or supplement
                  thereto, or any document incorporated by reference therein
                  untrue, or that requires the making of any additions to or
                  changes in the Shelf Registration Statement or the Prospectus
                  in order to make the statements therein not misleading.

            If at any time the Commission shall issue any stop order suspending
            the effectiveness of the Shelf Registration Statement, or any state
            securities commission or other regulatory authority shall issue an
            order suspending the qualification or exemption from qualification
            of the Transfer Restricted Securities under state securities or Blue
            Sky laws, the Issuer shall use its reasonable best efforts to obtain
            the withdrawal or lifting of such order at the earliest possible
            time and will provide to the Initial Purchaser and each Holder who
            is named in the Shelf Registration Statement prompt notice of the
            withdrawal of any such order.

                  (iv) Furnish to one counsel for the selling Holders and each
            of the underwriter(s), if any, before filing with the Commission, a
            copy of the Shelf Registration Statement and copies of any
            Prospectus included therein or any amendments or supplements to the
            Shelf Registration Statement or Prospectus (other than documents
            incorporated by reference after the initial filing of the Shelf
            Registration Statement), which documents will be subject to the
            review of such holders and underwriter(s), if any, for a period of
            at least five Business Days (in the case of the Shelf Registration
            Statement) and two Business Days (in the case of any amendment or
            supplement thereto), and the Issuer will not file the Shelf
            Registration Statement or Prospectus or any amendment or supplement
            to the Shelf Registration Statement or Prospectus (other than
            documents incorporated by reference) to which a selling Holder of
            Transfer Restricted Securities covered by the Shelf Registration
            Statement or the underwriter(s), if any, shall reasonably object
            prior to the filing thereof. A selling Holder or underwriter, if
            any, shall be

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            deemed to have reasonably objected to such filing if the Shelf
            Registration Statement, amendment, Prospectus or supplement, as
            applicable, as proposed to be filed, contains a material
            misstatement or omission.

                  (v) Make available at reasonable times for inspection by one
            or more representatives of the selling Holders, designated in
            writing by a Majority of Holders whose Transfer Restricted
            Securities are included in the Shelf Registration Statement, any
            underwriter participating in any distribution pursuant to the Shelf
            Registration Statement, and any attorney or accountant retained by
            such selling Holders or any of the underwriter(s), all financial and
            other records, pertinent corporate documents and properties of the
            Issuer as shall be reasonably necessary to enable them to exercise
            any applicable due diligence responsibilities, and cause the
            Issuer's officers, directors, managers and employees to supply all
            information reasonably requested by any such representative or
            representatives of the selling Holders, underwriter, attorney or
            accountant in connection with the Shelf Registration Statement after
            the filing thereof and before its effectiveness, subject, upon the
            request of the Issuer, to the execution of a confidentiality
            agreement which is reasonable in the context of a registered public
            offering.

                  (vi) If requested by any selling Holders or the
            underwriter(s), if any, promptly incorporate in the Shelf
            Registration Statement or Prospectus, pursuant to a supplement or
            post-effective amendment if necessary, such information as such
            selling Holders and underwriter(s), if any, may reasonably request
            to have included therein, including, without limitation: (1)
            information relating to the "Plan of Distribution" of the Transfer
            Restricted Securities, (2) information with respect to the principal
            amount of Debentures or number of shares of Common Stock being sold
            to such underwriter(s), (3) the purchase price being paid therefor
            and (4) any other terms of the offering of the Transfer Restricted
            Securities to be sold in such offering; and make all required
            filings of such Prospectus supplement or post-effective amendment as
            soon as reasonably practicable after the Issuer is notified of the
            matters to be incorporated in such Prospectus supplement or
            post-effective amendment.

                  (vii) Furnish to each selling Holder and each of the
            underwriter(s), if any, upon their request, without charge, at least
            one copy of the Shelf Registration Statement, as first filed with
            the Commission, and of each amendment thereto (and any documents
            incorporated by reference therein or exhibits thereto (or exhibits
            incorporated in such exhibits by reference) as such Person may
            request).

                  (viii) Deliver to each selling Holder and each of the
            underwriter(s), if any, without charge, as many copies of the
            Prospectus (including each preliminary prospectus) and any amendment
            or supplement thereto as such Persons reasonably may request;
            subject to any notice by the Issuer in accordance with this Section
            4(b) of the existence of any fact or event of the kind described in
            Section 4(b)(iii) (D), the Issuer hereby consents to the use of the
            Prospectus and any amendment or supplement thereto by each of the
            selling Holders and each of the underwriter(s), if

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            any, in connection with the offering and the sale of the Transfer
            Restricted Securities covered by the Prospectus or any amendment or
            supplement thereto.

                  (ix)  The Issuer shall:

                        (A) upon request, furnish to each selling Holder and
                  each underwriter, if any, in such substance and scope as they
                  may reasonably request and as are customarily made by issuers
                  to underwriters in primary underwritten offerings for selling
                  security holders, upon the date of closing of any sale of
                  Transfer Restricted Securities in an Underwritten
                  Registration:

                             (1) a certificate, dated the date of such closing,
                        signed by the Chief Financial Officer of the Issuer
                        confirming, as of the date thereof, the matters set
                        forth in Section 5(g) of the Purchase Agreement and such
                        other matters as such parties may reasonably request;

                             (2) opinions, each dated the date of such closing,
                        of counsel to the Issuer covering such of the matters as
                        are customarily covered in legal opinions to
                        underwriters in connection with underwritten offerings
                        of securities; and

                             (3) customary comfort letters, dated the date of
                        such closing, from the Issuer's independent accountants
                        (and from any other accountants whose report is
                        contained or incorporated by reference in the Shelf
                        Registration Statement) to the extent deliverable in
                        accordance with their professional standards, in the
                        customary form and covering matters of the type
                        customarily covered in comfort letters to underwriters
                        in connection with underwritten offerings of securities;

                        (B) set forth in full in the underwriting agreement, if
                  any, indemnification provisions and procedures which provide
                  rights no less protective than those set forth in Section 6
                  hereof with respect to all parties to be indemnified; and

                        (C) deliver such other documents and certificates as may
                  be reasonably requested by such parties to evidence compliance
                  with clause (A) above and with any customary conditions
                  contained in the underwriting agreement or other agreement
                  entered into by the selling Holders pursuant to this clause
                  (ix).

                  (x) Before any public offering of Transfer Restricted
            Securities, cooperate with the selling Holders, the underwriter(s),
            if any, and their respective counsel in connection with the
            registration and qualification of the Transfer Restricted Securities
            under the securities or Blue Sky laws of such jurisdictions in

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            the United States as the selling Holders or underwriter(s), if any,
            may reasonably request and do any and all other acts or things
            necessary or advisable to enable the disposition in such
            jurisdictions of the Transfer Restricted Securities covered by the
            Shelf Registration Statement; PROVIDED, HOWEVER, that the Issuer
            shall not be required (A) to register or qualify as a foreign
            corporation or a dealer of securities where it is not now so
            qualified or to take any action that would subject it to the service
            of process in any jurisdiction where it is not now so subject or (B)
            to subject themselves to taxation in any such jurisdiction if they
            are not now so subject.

                  (xi) Cooperate with the selling Holders and the
            underwriter(s), if any, to facilitate the timely preparation and
            delivery of certificates representing Transfer Restricted Securities
            to be sold and not bearing any restrictive legends (unless required
            by applicable securities laws); and enable such Transfer Restricted
            Securities to be in such denominations and registered in such names
            as the Holders or the underwriter(s), if any, may request at least
            two Business Days before any sale of Transfer Restricted Securities
            made by such underwriter(s).

                  (xii) Use its reasonable best efforts to cause the Transfer
            Restricted Securities covered by the Shelf Registration Statement to
            be registered with or approved by such other U.S. governmental
            agencies or authorities as may be necessary to enable the seller or
            sellers thereof or the underwriter(s), if any, to consummate the
            disposition of such Transfer Restricted Securities.

                  (xiii) Subject to Section 4(b)(i) hereof, if any fact or event
            contemplated by Section 4(b)(iii)(D) hereof shall exist or have
            occurred, use its reasonable best efforts to prepare a supplement or
            post-effective amendment to the Shelf Registration Statement or
            related Prospectus or any document incorporated therein by reference
            or file any other required document so that, as thereafter delivered
            to the purchasers of Transfer Restricted Securities, the Prospectus
            will not contain an untrue statement of a material fact or omit to
            state any material fact required to be stated therein or necessary
            to make the statements therein not misleading.

                  (xiv) Provide CUSIP numbers for all Transfer Restricted
            Securities not later than the effective date of the Shelf
            Registration Statement and provide the Trustee under the Indenture
            with certificates for the Debentures that are in a form eligible for
            deposit with The Depository Trust Company.

                  (xv) Cooperate and assist in any filings required to be made
            with the NASD and in the performance of any due diligence
            investigation by any underwriter that is required to be retained in
            accordance with the rules and regulations of the NASD.

                  (xvi) Otherwise use its best efforts to comply with all
            applicable rules and regulations of the Commission and all reporting
            requirements under the rules and regulations of the Exchange Act.

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                  (xvii) Cause the Indenture to be qualified under the TIA not
            later than the effective date of the Shelf Registration Statement
            required by this Agreement, and, in connection therewith, cooperate
            with the Trustee and the holders of Debentures to effect such
            changes to the Indenture as may be required for such Indenture to be
            so qualified in accordance with the terms of the TIA; and execute
            and use its best efforts to cause the Trustee thereunder to execute
            all documents that may be required to effect such changes and all
            other forms and documents required to be filed with the Commission
            to enable such Indenture to be so qualified in a timely manner.

                  (xviii) Cause all Transfer Restricted Securities covered by
            the Shelf Registration Statement to be listed or quoted, as the case
            may be, on each securities exchange or automated quotation system on
            which similar securities issued by the Issuer are then listed or
            quoted.

                  (xix) Provide to each Holder upon written request each
            document filed with the Commission pursuant to the requirements of
            Section 13 and Section 15 of the Exchange Act after the effective
            date of the Shelf Registration Statement.

            (c)   Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice (a "Suspension Notice") from the
Issuer of the existence of any fact of the kind described in Section
4(b)(iii)(D) hereof, such Holder will, and will use its reasonable best efforts
to cause any underwriter(s) in an Underwritten Offering to, forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the Shelf
Registration Statement until:

                  (i)   such Holder has received copies of the supplemented
            or amended Prospectus contemplated by Section 4(b)(xiii) hereof;
            or

                  (ii) such Holder is advised in writing by the Issuer that the
            use of the Prospectus may be resumed, and has received copies of any
            additional or supplemental filings that are incorporated by
            reference in the Prospectus.

If so directed by the Issuer, each Holder will deliver to the Issuer (at the
Issuer's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of suspension.

            (d)   Upon the effectiveness of the Shelf Registration Statement,
each Holder shall notify the Issuer at least three Business Days prior to any
intended distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "Sale Notice"), which notice shall be effective for
five Business Days. Each Holder of Transfer Restricted Securities, by accepting
the same, agrees to hold any communication by the Company in response to a Sale
Notice in confidence.

<PAGE>

                                                                              13

            5.    REGISTRATION EXPENSES.

            (a)   All expenses incident to the Issuer's performance of or
compliance with this Agreement shall be borne by the Issuer regardless of
whether a Shelf Registration Statement becomes effective, including, without
limitation:

                  (i)   all registration and filing fees and expenses
            (including filings made by any Initial Purchaser or Holders with
            the NASD);

                  (ii)  all fees and expenses of compliance with federal
            securities and state Blue Sky or securities laws;

                  (iii) all expenses of printing (including printing of
            Prospectuses and certificates for the Common Stock to be issued upon
            conversion of the Debentures) and the Issuer's expenses for
            messenger and delivery services and telephone;

                  (iv)  all fees and disbursements of counsel to the Issuer and,
            subject to Section 5(b) below, the Holders of Transfer Restricted
            Securities;

                  (v)   all application and filing fees in connection with
            listing (or authorizing for quotation) the Common Stock on a
            national securities exchange or automated quotation system pursuant
            to the requirements hereof; and

                  (vi)  all fees and disbursements of independent certified
            public accountants of the Issuer (including the expenses of any
            special audit and comfort letters required by or incident to such
            performance).

            The Issuer shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.

            (b)   In connection with the Shelf Registration Statement required
by this Agreement, including any amendment or supplement thereto, and any other
documents delivered to any Holders, the Issuer shall reimburse the Initial
Purchaser and the Holders of Transfer Restricted Securities being registered
pursuant to the Shelf Registration Statement, as applicable, for the reasonable
fees and disbursements of not more than one counsel, which shall be Simpson
Thacher & Bartlett, or such other counsel as may be chosen by a Majority of
Holders for whose benefit the Shelf Registration Statement is being prepared.

            6.    INDEMNIFICATION AND CONTRIBUTION.

            (a)   The Issuer shall indemnify and hold harmless each Holder, such
Holder's officers and employees and each person, if any, who controls such
Holder within the meaning of the Securities Act (each, an "Indemnified Holder"),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to resales of the Transfer Restricted
Securities), to

<PAGE>

                                                                              14

which such Indemnified Holder may become subject, insofar as any such loss,
claim, damage, liability or action arises out of, or is based upon:

            (i) any untrue statement or alleged untrue statement of a material
      fact contained in (A) the Shelf Registration Statement or Prospectus or
      any amendment or supplement thereto or (B) any blue sky application or
      other document or any amendment or supplement thereto prepared or executed
      by the Issuer (or based upon written information furnished by or on behalf
      of the Issuer expressly for use in such blue sky application or other
      document or amendment on supplement) filed in any jurisdiction
      specifically for the purpose of qualifying any or all of the Transfer
      Restricted Securities under the securities law of any state or other
      jurisdiction (such application or document being hereinafter called a
      "Blue Sky Application"); or

            (ii) the omission or alleged omission to state therein any material
      fact required to be stated therein or necessary to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading,

and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; PROVIDED,
HOWEVER, that the Issuer shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in the Shelf Registration Statement or Prospectus or amendment or
supplement thereto or Blue Sky Application in reliance upon and in conformity
with written information furnished to the Issuer by or on behalf of any Holder
(or its related Indemnified Holder) specifically for use therein, provided,
further, that the Issuer shall not be liable for any loss, liability, claim,
damage or expense (1) arising from an offer or sale of Transfer Restricted
Securities occurring during a Suspension Period, provided the Holder has
received a Suspension Notice with respect to such Suspension Period, or (2) if
the Holder fails to deliver at or prior to the written confirmation of sale, a
Prospectus that is amended or supplemented, and such Prospectus, as amended or
supplemented, would have corrected the untrue statement or omission or alleged
untrue statement or omission of a material fact contained in the Prospectus
delivered by the Holder, so long as the Prospectus, as amended or supplemented,
has been delivered to such Holder prior to such time. The foregoing indemnity
agreement is in addition to any liability which the Issuer may otherwise have to
any Indemnified Holder.

            (b)   Each Holder, severally and not jointly, shall indemnify and
hold harmless the Issuer, its officers and employees and each person, if any,
who controls the Issuer within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Issuer or any such officer, employee or
controlling person may become subject, insofar as any such loss, claim, damage
or liability or action arises out of, or is based upon:

            (i)   any untrue statement or alleged untrue statement of any
      material fact contained in the Shelf Registration Statement or Prospectus
      or any amendment or supplement thereto or any Blue Sky Application; or

<PAGE>

                                                                              15

            (ii)  the omission or the alleged omission to state therein any
      material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were
      made, not misleading,

but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall reimburse the Issuer and any such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Issuer or any such officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Holder may
otherwise have to the Issuer and any such officer, employee or controlling
person.

            (c)   Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent it has
been materially prejudiced by such failure and, PROVIDED, FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 6.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the Holders shall have the right to employ one separate firm to represent
jointly the Holders and their officers, employees and controlling persons who
may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Holders against the Issuer under this Section 6
if, in the reasonable judgment of the Holders seeking indemnification, it is
advisable for the Holders and such officers, employees and controlling persons
to be jointly represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the Issuer. No indemnifying
party shall:

            (i) without the prior written consent of the indemnified parties
      (which consent shall not be unreasonably withheld) settle or compromise or
      consent to the entry of any judgment with respect to any pending or
      threatened claim, action, suit or proceeding in respect of which
      indemnification or contribution may be sought hereunder (whether or not
      the indemnified parties are actual or potential parties to such claim or
      action) unless such settlement, compromise or consent includes an
      unconditional release of each indemnified party from all liability arising
      out of such claim, action, suit or proceeding, or

<PAGE>

                                                                              16

            (ii) be liable for any settlement of any such action effected
      without its written consent (which consent shall not be unreasonably
      withheld), but if settled with its written consent or if there be a final
      judgment for the plaintiff in any such action, the indemnifying party
      agrees to indemnify and hold harmless any indemnified party from and
      against any loss of liability by reason of such settlement or judgment.

            (d)   If the indemnification provided for in this Section 6 shall
for any reason be unavailable or insufficient to hold harmless an indemnified
party under Section 6(a) or 6(b) in respect of any loss, claim, damage or
liability (or action in respect thereof) referred to therein, each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability (or action in respect thereof):

             (i) in such proportion as is appropriate to reflect the relative
      benefits received by the Issuer from the offering and sale of the Transfer
      Restricted Securities on the one hand and a Holder with respect to the
      sale by such Holder of the Transfer Restricted Securities on the other, or

            (ii) if the allocation provided by clause (6)(d)(i) is not permitted
      by applicable law, in such proportion as is appropriate to reflect not
      only the relative benefits referred to in clause 6(d)(i) but also the
      relative fault of the Issuer on the one hand and the Holders on the other
      in connection with the statements or omissions or alleged statements or
      alleged omissions that resulted in such loss, claim, damage or liability
      (or action in respect thereof), as well as any other relevant equitable
      considerations.

The relative benefits received by the Issuer on the one hand and a Holder on the
other with respect to such offering and such sale shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Debentures
purchased under the Purchase Agreement (before deducting expenses) received by
the Issuer, on the one hand, bear to the total net gain received by such Holder
with respect to its sale of Transfer Restricted Securities on the other. The
relative fault of the parties shall be determined by reference to 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 Issuer
on the one hand or the Holders on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Issuer and each Holder agree that it would not
be just and equitable if the amount of contribution pursuant to this Section
6(d) were determined by PRO RATA allocation or by any other method of allocation
that does not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or action
in respect thereof, referred to above in this Section 6 shall be deemed to
include, for purposes of this Section 6, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
or preparing to defend any such action or claim. Notwithstanding the provisions
of this Section 6, no Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Transfer Restricted
Securities purchased by it were resold exceeds the amount of any damages which
such Holder has otherwise been required to pay by reason of any untrue or
alleged untrue statement or

<PAGE>

                                                                              17

omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute as provided in this
Section 6(d) are several and not joint.

            7.    RULE 144A. In the event the Issuer is not subject to Section
13 or 15(d) of the Exchange Act, the Issuer hereby agrees with each Holder, for
so long as any Transfer Restricted Securities remain outstanding, to make
available to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.

            8.    PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.  No Holder may
participate in any Underwritten Registration hereunder unless such Holder:

            (i)   agrees to sell such Holder's Transfer Restricted Securities on
      the basis provided in any underwriting arrangements approved by the
      Persons entitled hereunder to approve such arrangements; and

            (ii)  completes and executes all reasonable questionnaires, powers
      of attorney, indemnities, underwriting agreements, lock-up letters and
      other documents required under the terms of such underwriting
      arrangements.

            9.    SELECTION OF UNDERWRITERS. The Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering if approved
by the Issuer as provided in Section 4(b)(ii). In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by a Majority of Holders
whose Transfer Restricted Securities are included in such offering; PROVIDED,
that such investment bankers and managers must be reasonably satisfactory to the
Issuer.

            10.   MISCELLANEOUS.

            (a)   REMEDIES. The Issuer acknowledges and agrees that any failure
by the Issuer to comply with its obligations under Section 2 hereof may result
in material irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Issuer's obligations under Section 2 hereof. The Issuer
further agrees to waive the defense in any action for specific performance that
a remedy at law would be adequate.

            (b)   INTENTIONALLY OMITTED.

            (c)   NO INCONSISTENT AGREEMENTS. The Issuer will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with

<PAGE>

                                                                              18

the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. In addition, the Issuer shall not grant to any of its
security holders (other than the Holders of Transfer Restricted Securities in
such capacity) the right to include any of its securities in the Shelf
Registration Statement provided for in this Agreement other than the Transfer
Restricted Securities. The Issuer has not previously entered into any agreement
(which has not expired or been terminated) granting any registration rights with
respect to its securities to any Person which rights conflict with the
provisions hereof.

            (d)   AMENDMENTS AND WAIVERS. This Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given, unless the Issuer has obtained the written
consent of a Majority of Holders.

            (e)   NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, facsimile
transmission, or air courier guaranteeing overnight delivery:

                  (i)   if to a Holder, at the address set forth on the
            records of the registrar under the Indenture or the transfer
            agent of the Common Stock, as the case may be; and

                  (ii)  if to the Issuer:

                        Cendant Corporation
                        9 West 57th Street
                        New York, New York 10019
                        Attention:  Eric J. Bock, Esq.
                        Fax (212) 413-1923

                        With a copy to:

                        Skadden, Arps, Slate, Meagher & Flom LLP
                        4 Times Square
                        New York, New York 10036
                        Attention:  Vincent J. Pisano, Esq.
                        Fax (917)-777-2718

            All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if transmitted by
facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.

            (f)   SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED,
HOWEVER, that (i) this Agreement shall not inure to the benefit of or be

<PAGE>

                                                                              19

binding upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities from such Holder and
(ii) nothing contained herein shall be deemed to permit any assignment, transfer
or other disposition of Transfer Restricted Securities in violation of the terms
of the Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement.

            (g)   COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

            (h)   SECURITIES HELD BY THE ISSUER OR THEIR AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Transfer
Restricted Securities is required hereunder, Transfer Restricted Securities held
by the Issuer or its "affiliates" (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

            (i)   HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

            (j)   GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

            (k)   SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.

            (l)   ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Issuer with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.

<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                    CENDANT CORPORATION

                                    By______________________________
                                      NAME:
                                      TITLE:

                                    LEHMAN BROTHERS INC.

                                    By_____________________________
                                        AUTHORIZED REPRESENTATIVE

<PAGE>

                                                                       EXHIBIT A

                               CENDANT CORPORATION

             FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

      The undersigned beneficial holder of Zero Coupon Senior Convertible Debt
Securities (CODESSM) due 2021 (the "Debentures") of Cendant Corporation (the
"Issuer"), or CD common stock, par value $.01 per share (the "Shares" and
together with the Debentures, the "Transfer Restricted Securities") of the
Issuer understands that the Issuer has filed, or intends to file, with the
Securities and Exchange Commission (the "Commission") a registration statement
(the "Shelf Registration Statement"), for the registration and resale under Rule
415 of the Securities Act of 1933, as amended (the "Securities Act"), of the
Transfer Restricted Securities in accordance with the terms of the Registration
Rights Agreement, dated as of February 13, 2001 (the "Registration Rights
Agreement") between the Issuer and Lehman Brothers Inc. A copy of the
Registration Rights Agreement is available from the Issuer upon request at the
address set forth below. All capitalized terms not otherwise defined herein have
the meaning ascribed thereto in the Registration Rights Agreement.

      Each beneficial owner of Transfer Restricted Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Transfer Restricted Securities pursuant to the Shelf Registration
Statement, a beneficial owner of Transfer Restricted Securities generally will
be required to be named as a selling securityholder in the related Prospectus,
deliver a Prospectus to purchasers of Transfer Restricted Securities and be
bound by those provisions of the Registration Rights Agreement applicable to
such beneficial owner (including certain indemnification provisions, as
described below). BENEFICIAL OWNERS THAT DO NOT COMPLETE THIS NOTICE AND
QUESTIONNAIRE WITHIN 20 BUSINESS DAYS OF RECEIPT HEREOF AND DELIVER IT TO THE
ISSUER AS PROVIDED BELOW WILL NOT BE NAMED AS SELLING SECURITYHOLDERS IN THE
PROSPECTUS AND THEREFORE WILL NOT BE PERMITTED TO SELL ANY TRANSFER RESTRICTED
SECURITIES PURSUANT TO THE SHELF REGISTRATION STATEMENT.

      Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus.

                                      A-1
<PAGE>

                                     NOTICE

      The undersigned beneficial owner (the "Selling Securityholder") of
Transfer Restricted Securities hereby gives notice to the Issuer of its
intention to sell or otherwise dispose of Transfer Restricted Securities
beneficially owned by it and listed below in Item 3 (unless otherwise specified
under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by
signing and returning this Notice and Questionnaire, understands that it will be
bound by the terms and conditions of this Notice and Questionnaire and the
Registration Rights Agreement.

      Pursuant to the Registration Rights Agreement, the undersigned has agreed
to indemnify and hold harmless the Issuer, the Issuer's directors, the Issuer's
officers who sign the Shelf Registration Statement and each person, if any, who
controls the Issuer within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against certain losses arising
in connection with statements concerning the undersigned made in the Shelf
Registration Statement or the related Prospectus in reliance upon the
information provided in this Notice and Questionnaire.

      The undersigned hereby provides the following information to the Issuer
and represents and warrants that such information is accurate and complete:

                                  QUESTIONNAIRE

1.    (a)   Full legal name of Selling Securityholder:

      (b)   Full legal name of registered holder (if not the same as (a) above)
            through which Transfer Restricted Securities listed in Item (3)
            below are held:

      (c)   Full legal name of DTC participant (if applicable and if not the
            same as (b) above) through which Transfer Restricted Securities
            listed in Item (3) are held:

2.    Address for notices to Selling Securityholders:

      Telephone:

      Fax:

      Contact Person:

3.    Beneficial ownership of Transfer Restricted Securities:

                                      A-2
<PAGE>

      (a)   Type of Transfer Restricted Securities beneficially owned, and
            principal amount of Debentures or number of shares of Common Stock,
            as the case may be, beneficially owned:

      (b)   CUSIP No(s). of such Transfer Restricted Securities beneficially
owned:

4.    Beneficial ownership of the Issuer's securities owned by the Selling
      Securityholder:

      Except as set forth below in this Item (4), the undersigned is not the
      beneficial or registered owner of any securities of the Issuer other than
      the Transfer Restricted Securities listed above in Item (3) ("Other
      Securities").

      (a)   Type and amount of Other Securities beneficially owned by the
            Selling Securityholder:

      (b)   CUSIP No(s). of such Other Securities beneficially owned:

4.    Relationship with the Issuer

      Except as set forth below, neither the undersigned nor any of its
      affiliates, officers, directors or principal equity holders (5% or more)
      has held any position or office or has had any other material relationship
      with the Issuer (or their predecessors or affiliates) during the past
      three years.

      State any exceptions here:

6.    Plan of Distribution

      Except as set forth below, the undersigned (including its donees or
      pledgees) intends to distribute the Transfer Restricted Securities listed
      above in Item (3) pursuant to the Shelf Registration Statement only as
      follows (if at all). Such Transfer Restricted Securities may be sold from
      time to time directly by the undersigned or, alternatively, through
      underwriters, broker-dealers or agents. If the Transfer Restricted
      Securities are sold through underwriters or broker-dealers, the Selling
      Securityholder will be responsible for underwriting discounts or
      commissions or agent's commissions. Such Transfer Restricted Securities
      may be sold in one or more transactions at fixed prices, at prevailing
      market prices at the time of sale, at varying prices determined at the
      time of sale, or at

                                      A-3
<PAGE>

      negotiated prices. Such sales may be effected in transactions (which may
      involve crosses or block transactions):

                 (i)    on any national securities exchange or quotation service
            on which the Transfer Restricted Securities may be listed or
            quoted at the time of sale;

                 (ii)   in the over-the-counter market;

                 (iii)  in transactions otherwise than on such exchanges or
            services or in the over-the-counter market; or

                 (iv)   through the writing of options.

      In connection with sales of the Transfer Restricted Securities or
      otherwise, the undersigned may enter into hedging transactions with
      broker-dealers, which may in turn engage in short sales of the Transfer
      Restricted Securities and deliver Transfer Restricted Securities to close
      out such short positions, or loan or pledge Transfer Restricted Securities
      to broker-dealers that in turn may sell such securities.

      State any exceptions here:

      Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
agreement of the Issuer.

      The undersigned acknowledges that it understands its obligation to comply
with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder relating to stock manipulation, particularly Regulation M
thereunder (or any successor rules or regulations), in connection with any
offering of Transfer Restricted Securities pursuant to the Shelf Registration
Statement. The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.

      The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.

      Pursuant to the Registration Rights Agreement, the Issuer has agreed under
certain circumstances to indemnify the Selling Securityholders against certain
liabilities.

      In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Issuer of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while

                                      A-4
<PAGE>

the Shelf Registration Statement remains effective. All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing at the
address set forth below.

      By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related Prospectus. The undersigned understands that such information will be
relied upon by the Issuer in connection with the preparation or amendment of the
Shelf Registration Statement and the related Prospectus.

      IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.

Dated:

Beneficial Owner

By: ________________________________
    Name:
    Title:

Please return the completed and executed Notice and Questionnaire to Cendant
Corporation at:

            Cendant Corporation
            9 West 57th Street
            New York, New York 10019
            Attention:  James E. Buckman, Esq.

                                       A-5<PAGE>

                                                                   Exhibit 10.4

                              EMPLOYMENT AGREEMENT

            This Employment Agreement dated as of September 3, 1998 by and
between Cendant Corporation, a Delaware corporation ("Cendant") and Richard A.
Smith (the "Executive").

            WHEREAS, Cendant desires to employ the Executive as Chairman and
Chief Executive Officer, Cendant Real Estate Division, and the Executive desires
to serve Cendant in such capacity.

            NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

                                    SECTION I
                                   EMPLOYMENT

      Cendant agrees to employ the Executive and the Executive agrees to be
employed by Cendant for the Period of Employment as provided in Section III
below and upon the terms and conditions provided in this Agreement.

                                   SECTION II
                          POSITION AND RESPONSIBILITIES

            During the Period of Employment, the Executive will serve as
Chairman and Chief Executive Officer, Cendant Real Estate Division, and subject
to the direction of the Chief Executive Officer of Cendant (the "CEO"), will
perform such duties and exercise such supervision with regard to the business of
Cendant as are associated with such position, as well as such additional duties
as may be prescribed from time to time by the Board of Directors of Cendant (the
"Board") and/or the CEO. Cendant acknowledges that such position is equivalent
to the position of Vice Chairman of Cendant Corporation for purposes of
compensation, employee benefits, officer perquisites and officer
indemnification. The Executive will, during the Period of Employment, devote
substantially all of his time and attention during normal business hours to the
performance of services for Cendant. The Executive will maintain a primary
office and conduct his business in Parsippany, New Jersey (the "Business
Office"), except for normal and reasonable business travel in connection with
his duties hereunder.

<PAGE>

                                   SECTION III
                              PERIOD OF EMPLOYMENT

            The period of the Executive's employment under this Agreement (the
"Period of Employment") will begin on the date hereof and end on June 30, 2001,
subject to extension or termination as provided in this Agreement.

                                   SECTION IV
                            COMPENSATION AND BENEFITS

A.    COMPENSATION.

      For all services rendered by the Executive pursuant to this Agreement
during the Period of Employment, including services as an executive, officer,
director or committee member of Cendant or any subsidiary or affiliate of
Cendant, the Executive will be compensated as follows:

      i.    BASE SALARY.

            Cendant will pay the Executive a fixed base salary ("Base Salary")
of not less than $650,000, per annum, and thereafter will be eligible to receive
annual increases as the Board deems appropriate, in accordance with Cendant's
customary procedures regarding the salaries of senior officers, but with due
consideration given to the published Consumer Price Index applicable to the New
York/New Jersey greater metropolitan area. Base Salary will be payable according
to the customary payroll practices of Cendant, but in no event less frequently
than once each month.

      ii.   ANNUAL INCENTIVE AWARDS

            The Executive will be eligible for discretionary annual incentive
compensation awards; PROVIDED, that the Executive will be eligible to receive an
annual bonus for each fiscal year of Cendant during the Period of Employment
based upon a target bonus equal to 100% of Base Salary, subject to Cendant's
attainment of applicable performance targets established and certified by the
Compensation Committee of the Board (the "Committee"). The parties acknowledge
that it is currently contemplated that such performance targets will be stated
in terms of "earnings before interest and taxes" of Cendant, however such
targets may relate to such other financial and business criteria of Cendant or
any of its subsidiaries or business units as determined by the Committee in its
sole discretion (each such annual bonus, an "Incentive Compensation Award").
<PAGE>

      iii.  LONG-TERM INCENTIVE AWARDS

            The Executive will be eligible for annual stock option awards,
subject to the sole discretion of the Committee.

      iv.   ADDITIONAL BENEFITS

            The Executive will be entitled to participate in all other
compensation and employee benefit plans or programs and receive all benefits and
perquisites for which salaried employees of Cendant generally are eligible under
any plan or program now in effect, or later established by Cendant, on the same
basis as similarly situated senior executives of Cendant with comparable duties
and responsibilities. The Executive will participate to the extent permissible
under the terms and provisions of such plans or programs, and in accordance with
the terms of such plans and program.

                                    SECTION V
                                BUSINESS EXPENSES

            Cendant will reimburse the Executive for all reasonable travel and
other expenses incurred by the Executive in connection with the performance of
his duties and obligations under this Agreement. The Executive will comply with
such limitations and reporting requirements with respect to expenses as may be
established by Cendant from time to time and will promptly provide all
appropriate and requested documentation in connection with such expenses.

                                   SECTION VI
                                   DISABILITY

      A. If the Executive becomes Disabled, as defined below, during the Period
of Employment, the Period of Employment may be terminated at the option of the
Executive upon notice of resignation to Cendant, or at the option of Cendant
upon notice of termination to the Executive. Cendant's obligation to make
payments to the Executive under this Agreement will cease as of such date of
termination, except for Base Salary and any Incentive Compensation Awards earned
but unpaid as of the date of such termination. In such event (i) each of the
Executive's then outstanding options to purchase shares of Cendant common stock
which was granted on or after the date hereof will become immediately and fully
vested and exercisable and, notwithstanding any term or provision relating to
such option to the contrary, shall remain exercisable until the first to occur
of the fifth (5th) anniversary of the Executive's termination of employment by
reason of his becoming Disabled, and the original expiration date of such option
and (ii) the Executive and each of his depend-

<PAGE>

ents then covered under applicable health, medical, life and disability
insurance benefit plans of Cendant at the time of the Executive's termination of
employment shall remain eligible to continue to participate in such plans
(subject to the Executive or such dependents continuing to pay the applicable
employee portion of any premiums, co-payments, deductibles and similar costs)
until the end of the plan year in which the Executive reaches, or would have
reached, age sixty-two (62), or until such dependents would otherwise have
become ineligible for such benefits under the terms of such plans, whichever is
earlier. For purposes of this Agreement, "Disabled" means the Executive's
inability to perform his duties hereunder as a result of serious physical or
mental illness or injury for a period of no less than 180 days, together with a
determination by an independent medical authority that (i) the Executive is
currently unable to perform such duties and (ii) in all reasonable likelihood
such disability will continue for a period in excess of an additional 90 days.
Such medical authority shall be mutually and reasonably agreed upon by Cendant
and the Executive and such opinion shall be binding on Cendant and the
Executive.

                                   SECTION VII
                                      DEATH

            In the event of the death of the Executive during the Period of
Employment, the Period of Employment will end and Cendant's obligation to make
payments under this Agreement will cease as of the date of death, except for
Base Salary and any Incentive Compensation Awards earned but unpaid as of the
date of death, which will be paid to the Executive's surviving spouse, estate or
personal representative, as applicable. In addition, in such event (i) each of
the Executive's then outstanding options to purchase shares of Cendant common
stock which was granted on or after the date hereof will become immediately and
fully vested and exercisable and, notwithstanding any term or provision relating
to such options to the contrary, shall remain exercisable (by the Executive's
beneficiary or estate, as provided in any applicable option plan or agreement)
until the first to occur of the fifth (5th) anniversary of the Executive's
death, and the original expiration date of such option and (ii) each of the
Executive's dependents then covered under applicable health, medical, life and
disability insurance benefit plans of Cendant at the time of the Executive's
death shall remain eligible to continue to participate in such plans (subject to
such dependents continuing to pay the applicable employee portion of any
premiums, co-payments, deductibles and similar costs) until the end of the plan
year in which the Executive would have reached age sixty-two (62), or until such
dependents would otherwise have become ineligible for such benefits under the
terms of such plans, whichever is earlier.
<PAGE>

                                  SECTION VIII
                       EFFECT OF TERMINATION OF EMPLOYMENT

            A. WITHOUT CAUSE TERMINATION; CONSTRUCTIVE DISCHARGE NOT IN
CONNECTION WITH A CHANGE OF CONTROL TRANSACTION; AND RESIGNATION AFTER
EXPIRATION OF PERIOD OF EMPLOYMENT. If the Executive's employment terminates due
to either (i) a Without Cause Termination, (ii) a Constructive Discharge or
(iii) a Resignation at any time following the expiration of the Period of
Employment, as extended from time to time (each such term as defined below), and
a Change of Control Transaction (as defined below) has not occurred within the
past twenty-four (24) months, (A) Cendant will pay the Executive (or his
surviving spouse, estate or personal representative, as applicable) a lump sum
amount equal to the Executive's then current Base Salary for the remainder of
the Period of Employment (or, if greater, a period of one year) plus any and all
Base Salary and Incentive Compensation Awards earned but unpaid through the date
of such termination, (B) each of the Executive's then outstanding options to
purchase shares of Cendant common stock which were granted on or after the date
hereof will become immediately and fully vested and exercisable and,
notwithstanding any term or provision relating to such options to the contrary,
shall remain exercisable until the first to occur of the fifth (5th) anniversary
of the Executive's termination of employment and the original expiration date of
such option and (C) the Executive and each of his dependents then covered under
applicable health, medical, life and disability insurance benefit plans of
Cendant at the time of the Executive's termination of employment shall remain
eligible to continue to participate in such plans (subject to the Executive or
such dependents continuing to pay the applicable employee portion of any
premiums, co-payments, deductibles and similar costs) until the end of the plan
year in which the Executive reaches, or would have reached, age sixty-two (62),
or until such dependents would otherwise have become ineligible for such
benefits under the terms of such plans, whichever is earlier.

            B. WITHOUT CAUSE TERMINATION AND CONSTRUCTIVE DISCHARGE IN
CONNECTION WITH A CHANGE OF CONTROL TRANSACTION. If a Change in Control
Transaction occurs and the Executive's employment terminates due to either a
Without Cause Termination or a Constructive Discharge within twenty-four (24)
months after such Change in Control Transaction (i) Cendant will pay the
Executive upon such termination a lump sum amount equal to the product of (A)
the sum of the Executive's then current Base Salary and the Executive's target
Incentive Compensation Award for the year in which such termination occurs,
multiplied by (B) 300%, (ii) each of the Executive's then outstanding options to
purchase shares of Cendant common stock which was granted on or after the date
hereof will become immediately and fully vested and exercisable and,
notwithstanding any term or provision relating to such options to the contrary,
shall remain exercisable until the first to oc-
<PAGE>

cur of the fifth (5th) anniversary of the Executive's termination of employment,
and the original expiration date of such option and (iii) the Executive and each
of his dependents then covered under applicable health, medical, life and
disability insurance benefit plans of Cendant at the time of the Executive's
termination of employment shall remain eligible to continue to participate in
such plans (subject to the Executive or such dependents continuing to pay the
applicable employee portion of any premiums, co-payments, deductibles and
similar costs) until the end of the plan year in which the Executive reaches, or
would have reached, age sixty-two (62), or until such dependents would otherwise
have become ineligible for such benefits under the terms of such plans,
whichever is earlier.

            C. TERMINATION FOR CAUSE; RESIGNATION. If the Executive's employment
terminates due to a Termination for Cause or a Resignation, Base Salary and any
Incentive Compensation Awards earned but unpaid as of the date of such
termination will be paid to the Executive in a lump sum. Each outstanding stock
options held by the Executive as of the date of termination will be treated in
accordance with its terms. Except as provided in this paragraph, Cendant will
have no further obligations to the Executive hereunder.

            D.    For purposes of this Agreement, the following terms have
the following meanings:

      i. "Termination for Cause" means (i) the Executive's willful failure to
substantially perform his duties as an employee of Cendant or any subsidiary
(other than any such failure resulting from incapacity due to physical or mental
illness), (ii) any act of fraud, misappropriation, dishonesty, embezzlement or
similar conduct against Cendant or any subsidiary, (iii) the Executive's
conviction of a felony or any crime involving moral turpitude (which conviction,
due to the passage of time or otherwise, is not subject to further appeal) or
(iv) the Executive's gross negligence in the performance of his duties.

      ii. "Constructive Discharge" means (i) any material failure of Cendant to
fulfill its obligations under this Agreement (including without limitation any
reduction of the Base Salary, as the same may be increased during the Period of
Employment, or other element of compensation), (ii) the Business Office is
relocated to any location which is more than 30 miles from the city limits of
Parsippany, New Jersey or (iii) either (A) the Executive no longer reports
directly to the CEO or (B) Henry R. Silverman is no longer the CEO; PROVIDED,
HOWEVER, that any Constructive Discharge under clause (iii) shall not be deemed
to occur until the date which is six (6) months following the attainment of such
clause (iii). The Executive will provide Cendant a written notice which
describes the circumstances being relied on for the termination with respect to
this Agreement within thirty (30) days after the event giving rise to
<PAGE>

the notice. Cendant will have thirty (30) days after receipt of such notice to
remedy the situation prior to the termination for Constructive Discharge.

      iii.  "Without Cause Termination" or "Terminated Without Cause" means
termination of the Executive's employment by Cendant other than due to death,
disability, or Termination for Cause.

      iv.   "Resignation" means a termination of the Executive's employment
by the Executive, other than in connection with a Constructive Discharge.

       v.   "Change of Control Transaction" means any transaction or series of

transactions pursuant to or as a result of which (i) during any period of not
more than 24 months, individuals who at the beginning of such period constitute
the Board, and any new director (other than a director designated by a third
party who has entered into an agreement to effect a transaction described in
clause (ii), (iii) or (iv) of this paragraph (v)) whose election by the Board or
nomination for election by Cendant's stockholders was approved by a vote of at
least a majority of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved (other than approval given in connection with an actual
or threatened proxy or election contest), cease for any reason to constitute at
least a majority of the members of the Board, (ii) beneficial ownership of 50%
or more of the shares of Cendant common stock (or other securities having
generally the right to vote for election of the Board) ("Shares") shall be sold,
assigned or otherwise transferred, directly or indirectly, other than pursuant
to a public offering, to a third party, whether by sale or issuance of Shares or
other securities or otherwise, (iii) Cendant or any subsidiary thereof shall
sell, assign or otherwise transfer, directly or indirectly, assets (including
stock or other securities of subsidiaries) having a fair market or book value or
earning power of 50% or more of the assets or earning power of Cendant and its
subsidiaries (taken as a whole) to any third party, other than Cendant or a
wholly-owned subsidiary thereof, (iv) control of 50% or more of the business of
Cendant shall be sold, assigned or otherwise transferred directly or indirectly
to any third party or (v) during any period of time during which the Executive
is employed primarily by the Cendant Real Estate Division (such division,
collectively with each other business unit or division for which the Executive
has direct reporting responsibility to the CEO, the "Division") there is
consummated a transaction (or a series of transactions over a period of no more
than one year) involving the divestiture by Cendant of all or a portion of the
Division and, as a direct result of such transaction, the aggregate revenues for
the Division are decreased by 50% (which decrease shall be measured by comparing
the net revenues for the Division over the four fiscal calendar quarters of
Cendant ending immediately prior to such transaction, against the aggregate
revenues for the Division over the same period after excluding any portion of
such revenues attributable to the portions of the Divi-
<PAGE>

sion which are no longer owned by Cendant) and such decrease is solely and
directly attributable to such transaction(s).

            E. CONDITIONS TO PAYMENT AND ACCELERATION. All payments due to the
Executive under this Section VIII shall be made as soon as practicable;
PROVIDED, HOWEVER, that such payments, as well as the modification of the terms
of any Cendant options provided under this Section VIII, shall be subject to,
and contingent upon, the execution by the Executive (or his beneficiary or
estate) of a release of claims against Cendant and its affiliates in such form
determined by Cendant in its sole discretion. The payments due to the Executive
under this Section VIII shall be in lieu of any other severance benefits
otherwise payable to the Executive under any severance plan of Cendant or its
affiliates. To the extent any term or condition of any option to purchase
Cendant common stock conflicts with any term or condition of this Agreement
applicable to such option, the term or condition set forth in this Agreement
shall govern.

                                   SECTION IX
                          OTHER DUTIES OF THE EXECUTIVE
                  DURING AND AFTER THE PERIOD OF EMPLOYMENT

            A. The Executive will, with reasonable notice during or after the
Period of Employment, furnish information as may be in his possession and fully
cooperate with Cendant and its affiliates as may be requested in connection with
any claims or legal action in which Cendant or any of its affiliates is or may
become a party. After the Period of Employment, the Executive will cooperate as
reasonably requested with Cendant and its affiliates in connection with any
claims or legal actions in which Cendant or any of its affiliates is or may
become a party. Cendant agrees to reimburse the Executive for any reasonable
out-of-pocket expenses incurred by Executive by reason of such cooperation,
including any loss of salary, and Cendant will make reasonable efforts to
minimize interruption of the Executive's life in connection with his cooperation
in such matters as provided for in this paragraph.

            B. The Executive recognizes and acknowledges that all information
pertaining to this Agreement or to the affairs; business; results of operations;
accounting methods, practices and procedures; members; acquisition candidates;
financial condition; clients; customers or other relationships of Cendant or any
of its affiliates ("Information") is confidential and is a unique and valuable
asset of Cendant or any of its affiliates. Access to and knowledge of certain of
the Information is essential to the performance of the Executive's duties under
this Agreement. The Executive will not during the Period of Employment or
thereafter, except to the extent reasonably necessary in performance of his
duties under this Agreement, give to any person, firm, association, corporation,
or governmental agency any Information,
<PAGE>

except as may be required by law. The Executive will not make use of the
Information for his own purposes or for the benefit of any person or
organization other than Cendant or any of its affiliates. The Executive will
also use his best efforts to prevent the disclosure of this Information by
others. All records, memoranda, etc. relating to the business of Cendant or its
affiliates, whether made by the Executive or otherwise coming into his
possession, are confidential and will remain the property of Cendant or its
affiliates.

            C. i. During the Period of Employment and for a two (2) year period
thereafter (the "Restricted Period"), irrespective of the cause, manner or time
of any termination, the Executive will not use his status with Cendant or any of
its affiliates to obtain loans, goods or services from another organization on
terms that would not be available to him in the absence of his relationship to
Cendant or any of its affiliates.

      ii. During the Restricted Period, the Executive will not make any
statements or perform any acts intended to or which may have the effect of
advancing the interest of any existing or prospective competitors of Cendant or
any of its affiliates or in any way injuring the interests of Cendant or any of
its affiliates. During the Restricted Period, the Executive, without prior
express written approval by the Board, will not engage in, or directly or
indirectly (whether for compensation or otherwise) own or hold proprietary
interest in, manage, operate, or control, or join or participate in the
ownership, management, operation or control of, or furnish any capital to or be
connected in any manner with, any party which competes in any way or manner with
the business of Cendant or any of its affiliates, as such business or businesses
may be conducted from time to time, either as a general or limited partner,
proprietor, common or preferred shareholder, officer, director, agent, employee,
consultant, trustee, affiliate, or otherwise. The Executive acknowledges that
Cendant's and its affiliates' businesses are conducted nationally and
internationally and agrees that the provisions in the foregoing sentence will
operate throughout the United States and the world.

      iii. During the Restricted Period, the Executive, without express prior
written approval from the Board, will not solicit any members or the
then-current clients of Cendant or any of its affiliates for any existing
business of Cendant or any of its affiliates or discuss with any employee of
Cendant or any of its affiliates information or operation of any business
intended to compete with Cendant or any of its affiliates.

      iv. During the Restricted Period, the Executive will not interfere with
the employees or affairs of Cendant or any of its affiliates or solicit or
induce any person who is an employee of Cendant or any of its affiliates to
terminate any relationship
<PAGE>

such person may have with Cendant or any of its affiliates, nor will the
Executive during such period directly or indirectly engage, employ or
compensate, or cause or permit any person with which the Executive may be
affiliated, to engage, employ or compensate, any employee of Cendant or any of
its affiliates. The Executive hereby represents and warrants that the Executive
has not entered into any agreement, understanding or arrangement with any
employee of Cendant or any of its affiliates pertaining to any business in which
the Executive has participated or plans to participate, or to the employment,
engagement or compensation of any such employee.

      v. For the purposes of this Agreement, proprietary interest means legal or
equitable ownership, whether through stock holding or otherwise, of an equity
interest in a business, firm or entity or ownership of more than 5% of any class
of equity interest in a publicly-held company and the term "affiliate" will
include without limitation all subsidiaries and licensees of Cendant.

            D. The Executive hereby acknowledges that damages at law may be an
insufficient remedy to Cendant if the Executive violates the terms of this
Agreement and that Cendant will be entitled, upon making the requisite showing,
to preliminary and/or permanent injunctive relief in any court of competent
jurisdiction to restrain the breach of or otherwise to specifically enforce any
of the covenants contained in this Section IX without the necessity of showing
any actual damage or that monetary damages would not provide an adequate remedy.
Such right to an injunction will be in addition to, and not in limitation of,
any other rights or remedies Cendant may have. Without limiting the generality
of the foregoing, neither party will oppose any motion the other party may make
for any expedited discovery or hearing in connection with any alleged breach of
this Section IX.

            E. The period of time during which the provisions of this Section IX
will be in effect will be extended by the length of time during which the
Executive is in breach of the terms hereof as determined by any court of
competent jurisdiction on Cendant's application for injunctive relief.

            F. The Executive agrees that the restrictions contained in this
Section IX are an essential element of the compensation the Executive is granted
hereunder and but for the Executive's agreement to comply with such
restrictions, Cendant would not have entered into this Agreement.

                                    SECTION X
                                 INDEMNIFICATION

            Cendant will indemnify the Executive to the fullest extent permitted
by the laws of the state of Cendant's incorporation in effect at that time, or
the cer-
<PAGE>

tificate of incorporation and by-laws of Cendant, whichever affords the greater
protection to the Executive.

                                   SECTION XI
                                  CERTAIN TAXES

            Anything in this Agreement or in any other plan, program or
agreement to the contrary notwithstanding and except as set forth below, in the
event that (i) the Executive becomes entitled to any benefits or payments under
Paragraph A of Section VIII hereof and (ii) it shall be determined that any
payment or distribution by Cendant to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section XI) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section XI, if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount (the "Reduced Amount") that could be paid to the Executive such that the
receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate, shall
be reduced to the Reduced Amount. All determinations required to be made under
this Section XI, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Deloitte & Touche LLP or such
other certified public accounting firm as may be designated by Cendant.

                                   SECTION XII
                                   MITIGATION

            The Executive will not be required to mitigate the amount of any
payment provided for hereunder by seeking other employment or otherwise, nor
will the amount of any such payment be reduced by any compensation earned by the
Ex-
<PAGE>

ecutive as the result of employment by another employer after the date the
Executive's employment hereunder terminates.

                                  SECTION XIII
                                WITHHOLDING TAXES

            The Executive acknowledges and agrees that Cendant may directly or
indirectly withhold from any payments under this Agreement all federal, state,
city or other taxes that will be required pursuant to any law or governmental
regulation.

                                   SECTION XIV
                           EFFECT OF PRIOR AGREEMENTS

            This Agreement will supersede any prior employment agreement between
Cendant and the Executive hereof (including, without limitation, that certain
letter agreement between Cendant and the Executive dated as of the date hereof),
and any such prior employment agreement will be deemed terminated without any
remaining obligations of either party thereunder.

                                   SECTION XV
                   CONSOLIDATION, MERGER OR SALE OF ASSETS

            Nothing in this Agreement will preclude Cendant from consolidating
or merging into or with, or transferring all or substantially all of its assets
to, another corporation which assumes this Agreement and all obligations and
undertakings of Cendant hereunder. Upon such a consolidation, merger or sale of
assets the term "Cendant" will mean the other corporation and this Agreement
will continue in full force and effect.

                                   SECTION XVI
                                  MODIFICATION

            This Agreement may not be modified or amended except in writing
signed by the parties. No term or condition of this Agreement will be deemed to
have been waived except in writing by the party charged with waiver. A waiver
will operate only as to the specific term or condition waived and will not
constitute a waiver for the future or act on anything other than that which is
specifically waived.
<PAGE>

                                  SECTION XVII
                                  GOVERNING LAW

            This Agreement has been executed and delivered in the State of New
Jersey and its validity, interpretation, performance and enforcement will be
governed by the internal laws of that state.

                                  SECTION XVIII
                                   ARBITRATION

            A. Any controversy, dispute or claim arising out of or relating to
this Agreement or the breach hereof which cannot be settled by mutual agreement
(other than with respect to the matters covered by Section IX for which Cendant
may, but will not be required to, seek injunctive relief) will be finally
settled by binding arbitration in accordance with the Federal Arbitration Act
(or if not applicable, the applicable state arbitration law) as follows: Any
party who is aggrieved will deliver a notice to the other party setting forth
the specific points in dispute. Any points remaining in dispute twenty (20) days
after the giving of such notice may be submitted to arbitration in New York, New
York, to the American Arbitration Association, before a single arbitrator
appointed in accordance with the arbitration rules of the American Arbitration
Association, modified only as herein expressly provided. After the aforesaid
twenty (20) days, either party, upon ten (10) days notice to the other, may so
submit the points in dispute to arbitration. The arbitrator may enter a default
decision against any party who fails to participate in the arbitration
proceedings.

            B. The decision of the arbitrator on the points in dispute will be
final, unappealable and binding, and judgment on the award may be entered in any
court having jurisdiction thereof.

            C. Except as otherwise provided in this Agreement, the arbitrator
will be authorized to apportion its fees and expenses and the reasonable
attorneys' fees and expenses of any such party as the arbitrator deems
appropriate. In the absence of any such apportionment, the fees and expenses of
the arbitrator will be borne equally by each party, and each party will bear the
fees and expenses of its own attorney.

            D. The parties agree that this Section XVIII has been included to
rapidly and inexpensively resolve any disputes between them with respect to this
Agreement, and that this Section XVIII will be grounds for dismissal of any
court action commenced by either party with respect to this Agreement, other
than post-
<PAGE>

arbitration actions seeking to enforce an arbitration award. In the event that
any court determines that this arbitration procedure is not binding, or
otherwise allows any litigation regarding a dispute, claim, or controversy
covered by this Agreement to proceed, the parties hereto hereby waive any and
all right to a trial by jury in or with respect to such litigation.

            E. The parties will keep confidential, and will not disclose to any
person, except as may be required by law, the existence of any controversy
hereunder, the referral of any such controversy to arbitration or the status or
resolution thereof.

                                   SECTION XIX
                                    SURVIVAL

            Sections IX, X, XI, XII, XIII and XVIII will continue in full force
in accordance with their respective terms notwithstanding any termination of the
Period of Employment.

                                   SECTION XX
                                  SEPARABILITY

            All provisions of this Agreement are intended to be severable. In
the event any provision or restriction contained herein is held to be invalid or
unenforceable in any respect, in whole or in part, such finding will in no way
affect the validity or enforceability of any other provision of this Agreement.
The parties hereto further agree that any such invalid or unenforceable
provision will be deemed modified so that it will be enforced to the greatest
extent permissible under law, and to the extent that any court of competent
jurisdiction determines any restriction herein to be unreasonable in any
respect, such court may limit this Agreement to render it reasonable in the
light of the circumstances in which it was entered into and specifically enforce
this Agreement as limited.
<PAGE>

            IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.

                                          CENDANT CORPORATION

                                          -------------------------------------
                                          By:    Thomas D. Christopoul
                                          Title: Executive Vice President
                                                 Human Resources

                                          RICHARD A. SMITH

                                          --------------------------

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