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Exhibit 99.2
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT, dated as of October 13, 1998 (the "Agreement"), by and
among American Bankers Insurance Group, Inc., a Florida corporation ("ABIG"),
Cendant Corporation, a Delaware corporation ("Cendant"), and Season Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Cendant
("Season").
WHEREAS, ABIG, Cendant and Season have entered into the Agreement and Plan of
Merger, dated as of March 23, 1998 (the "Merger Agreement"), pursuant to which,
among other things, Season has offered to purchase (the "Tender Offer")
23,501,260 shares of Common Stock, par value $1.00 per share, of ABIG ("ABIG
Common Share") at a price of $67.00 per ABIG Common Share, and following
consummation of the Tender Offer, ABIG will be merged (the "Merger") into Season
and each ABIG Common Share issued and outstanding immediately prior to the
effective time of the Merger (other than ABIG Common Shares held by Cendant or
Season) will be converted into, and become exchangeable for, that number of
shares of Common Stock, par value $.01 per share, of Cendant with a value of
$67.00;
WHEREAS, requests have been made by certain regulators whose approval is
required prior to consummation of the Tender Offer and the Merger for
commitments from Cendant regarding ABIG that exceed statutory requirements and
any commitment made by Cendant in the Merger Agreement, which requests have
created uncertainty with respect to Cendant's possible acquisition of ABIG; and
WHEREAS, ABIG and Cendant believe it is in their respective best interests, and
in the best interests of their respective stockholders, that the uncertainty
with respect to Cendant's possible acquisition of ABIG be resolved as promptly
as possible.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
1. Each of the parties hereto expressly agrees that (i) the Merger
Agreement shall be terminated pursuant to Section 8.1 thereof immediately upon
the execution and delivery of this Agreement and the receipt by ABIG of the
Termination Fee (as hereinafter defined) and (ii) as a result of such
termination, the Merger Agreement shall be null and void and of no further
effect, and no obligations or provisions thereunder shall survive such
termination. In addition, each of the parties hereto agrees that,
notwithstanding Section 8.5(a) of the Merger Agreement, none of the parties
thereto shall have any liabilities or damages to the other parties thereto for
any breach or alleged breach of the Merger Agreement, including any willful
breach. As promptly as practicable after the execution hereof, as a result of
the termination of the Merger Agreement Cendant and Season agree to either
terminate the Tender Offer or permit the Tender Offer to expire by its terms
without any ABIG Common Shares being purchased pursuant thereto.
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2. Simultaneously with the execution of this Agreement, Cendant shall
pay to ABIG $400 million (the "Termination Fee") by wire transfer of same day
funds to an account designated by ABIG.
3. Cendant agrees that upon execution of this Agreement, it will take
all necessary steps to withdraw any Form A applications that it has pending with
insurance regulatory authorities in order to obtain approval to acquire control
of ABIG and to withdraw from any proceedings or hearings in connection
therewith. Cendant further agrees that neither it nor any of its officers,
directors, employees, affiliates, agents or other representatives or advisors,
including, without limitation, legal, investment banking and accounting advisors
(all such persons, collectively, "Representatives") shall take, directly or
indirectly, any actions or make any statements intended to frustrate or delay
any merger or other business combination between ABIG and any other party or to
object to the acceptability of any other party as a controlling person of ABIG.
4. Each of the parties hereto absolutely, fully and forever releases
the other parties and their respective affiliates, their respective
Representatives and stockholders, and their respective successors and assigns
(the "Released Parties") from any and all claims relating to the proposed
acquisition of ABIG by Cendant that any party hereto ever had, now has or
hereafter can, shall or may have against the Released Parties, from the
beginning of the world to the day of the date of this release, including,
without limitation, any claims asserted or that could have been asserted in
connection with the Merger Agreement, any Company Report or Parent Report (as
such terms are defined in the Merger Agreement) or any accounting issues at
former CUC International Inc. businesses; provided, however, that this Section 4
shall not include a release or discharge from any claim to enforce the
provisions of this Agreement.
5. Cendant hereby agrees to continue to be bound by the confidentiality
undertakings and agreements of the Confidentiality Agreement (as such term is
defined in the Merger Agreement) in accordance with the terms thereof. ABIG
hereby agrees to be bound by the confidentiality undertakings and agreements of
the Confidentiality Agreement with respect to information furnished to ABIG by
Cendant and, for this purpose, references in the Confidentiality Agreement to
the "Company" shall also be deemed to be references to Cendant and references in
the Confidentiality Agreement to "Evaluation Material" shall also be deemed to
be references to any information concerning Cendant (whether prepared by
Cendant, its advisors or otherwise) which has been furnished to ABIG by or on
behalf of Cendant in connection with the Merger.
6. Each of the parties hereto agrees that it shall not (i) make or
publish any statement which is, or may reasonably be considered to be,
disparaging of the other parties or their respective subsidiaries, affiliates,
directors, employees, products or services or (ii) take any action or encourage
the taking of any action by others which is, or may reasonably be considered to
be, adverse to the interests of the other parties in respect of the subject
matter of this Agreement.
7. Each of the parties hereby represents and warrants to the others
that (i) it is a corporation duly organized, validly existing and in good
standing under the laws of its state of organization and has the requisite
corporate power and authority to enter into and perform this Agreement; (ii) the
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execution and delivery of this Agreement by it and the consummation by it of the
transactions contemplated hereby have been duly executed and delivered by its
duly authorized officer and constitutes a valid and binding obligation of it;
and (iii) the execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby do not require the
consent, waiver, approval or authorization of or any filing with any
governmental or regulatory authority, agency, commission, body, court or other
governmental entity or any other person and will not violate, result in a breach
of or the acceleration of any obligation under, or constitute a default under,
any provision of such party's charter or by-laws, or any material indenture,
mortgage, lien, lease, agreement, contract, instrument, order, law, rule,
regulation, ordinance, judgment, decree or restriction by which it or any of its
subsidiaries or any of their respective properties or assets is bound.
8. This Agreement, together with the Merger Agreement and the other
documents referred to therein, contains the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, oral or written, with respect to
such transactions. This Agreement may not be changed, amended or modified
orally, but may be changed only by an agreement in writing signed by each of the
parties hereto. This Agreement, and all of the parties' respective rights and
obligations hereunder, shall survive indefinitely and shall not be affected,
altered, abridged or terminated by virtue of the termination of the Merger
Agreement.
9. This Agreement may be executed in any number of counterparts, each
of which, when executed, shall be deemed to be an original and all of which
together shall constitute one and the same document, provided that this
Agreement shall not become effective until executed by all of the parties
hereto.
10. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware (regardless of the laws that might
otherwise govern under applicable Delaware principles of conflicts of law).
EACH PARTY HERETO AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR
PROCEEDING ARISING WITH RESPECT TO THIS AGREEMENT, IT SHALL SUBMIT TO THE
JURISDICTION OF THE CHANCERY COURT OF DELAWARE AND AGREES TO VENUE IN SUCH
COURT. EACH PARTY HEREBY APPOINTS THE SECRETARY OF SUCH PARTY AS ITS AGENT FOR
SERVICE OF PROCESS FOR PURPOSES OF THE FOREGOING SENTENCE ONLY.
11. Each party hereto will consult with the other parties hereto before
issuing any press release with respect to the transactions contemplated by this
Agreement; and no party shall issue any such press release prior to such
consultation except as may be required by law or the applicable rules and
regulations of the New York Stock Exchange.
12. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
13. The parties hereto agree that any breach of the provisions of this
Agreement would irreparably injure the other parties hereto and that money
damages would be an inadequate remedy therefor. Accordingly, each party hereto
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shall be entitled to one or more injunctions enjoining any such breach and
requiring specific performance of this Agreement and consent to the entry
thereof, in addition to any other remedy to which that party is entitled at law
or in equity.
14. This Agreement is for settlement purposes only and will not be used
by the parties hereto in any litigation as an admission of any liability or
wrongdoing on the part of any party hereto or its Representatives, other than
litigation arising out of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
AMERICAN BANKERS INSURANCE GROUP, INC.
By:
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Name:
Title:
CENDANT CORPORATION
By:
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Name:
Title:
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
SEASON ACQUISITION CORP.
By:
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Name:
Title:
