XXXXXXX 0X
XXXXXXXX AGREEMENT
PURCHASE AGREEMENT, dated as of December 15, 1999 (this "Agreement"),
by and between Cendant Corporation, a Delaware corporation ("Cendant"), and
Liberty Media Corporation, a Delaware corporation ("Liberty").
WHEREAS, Liberty desires to purchase from Cendant, and Cendant desires
to sell to Liberty, 18,000,000 shares (the "Shares") of the common stock, par
value $.01 per share, of Cendant ( the "Common Stock"), as well as non-
transferable warrants (in substantially the form of Exhibit A hereto) to
purchase up to 28,956,000 shares of Common Stock for an exercise price of $23.00
per share (subject to the anti-dilution adjustments set forth in the Warrants
(as hereinafter defined)) at any time during the period beginning on the Closing
Date and ending on the second anniversary thereof (the "Warrants").
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:
ARTICLE 1
THE PURCHASE
Section 1.1 Purchase and Sale. Upon the terms and subject to the
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conditions of this Agreement, at the Closing (as hereinafter defined), Cendant
will issue to Liberty, and Liberty will purchase from Cendant (x) the Shares, in
consideration for which, at the Closing, Liberty will pay to Cendant an amount
equal to three hundred million dollars ($300,000,000) in cash (the "Shares
Purchase Price"), and (y) the Warrant, in consideration for which, at the
Closing, Liberty will pay to Cendant an amount equal to one hundred million
dollars ($100,000,000) in cash (the "Warrant Purchase Price" and, together with
the Shares Purchase Price, the "Purchase Price"). Upon the Closing, Liberty
shall pay the Purchase Price to Cendant by wire transfer of immediately
available funds to an account or accounts designated by Cendant in writing for
such purpose prior to the Closing.
Section 1.2 Time and Place of Closing. Upon the terms and subject to
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the conditions of this Agreement, the closing of the transactions contemplated
by
this Agreement (the "Closing") will take place at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
a.m. (New York City time) on the third business day following the satisfaction
or waiver of the conditions set forth in Article V, unless another time or date
is agreed to by the parties hereto (the "Closing Date").
Section 1.3 Deliveries by Cendant. Subject to the terms and conditions
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hereof, at the Closing, Cendant will deliver the following to Liberty:
(a) A certificate or certificates, duly registered on the stock
books of Cendant in the name of Liberty, representing the Shares;
(b) The Warrants; and
(c) The officer's certificate provided for in Section 5.3(c).
Section 1.4 Deliveries by Liberty. Subject to the terms and conditions
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hereof, at the Closing, Liberty will deliver the following to Cendant:
(a) The Purchase Price, in immediately available funds, in the
manner set forth in Section 1.1 hereof; and
(b) The officer's certificate provided for in Section 5.2(c).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF CENDANT
Section 2.1 Organization. Cendant is a corporation duly incorporated,
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validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its business
substantially as it is now being conducted.
Section 2.2 Authority. Cendant has the corporate power and authority to
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execute and deliver this Agreement and the Warrants and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Warrants and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all requisite
corporate action on the part of Cendant. Each of this Agreement has been (and
upon the Closing the Warrants will be) validly executed and delivered by
Cendant and (assuming this Agreement has been duly authorized, executed and
delivered by Liberty) constitutes (or in the case of the Warrants, will
constitute) a valid and binding agreement of Cendant, enforceable against
Cendant in accordance with its terms, except that (a) such enforcement may be
subject to any bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other laws, now or hereafter in effect, relating to or limiting
creditors' rights generally and (b) enforcement of this Agreement and the
Warrants, including, among other things, the remedy of specific performance and
injunctive and other forms of equitable relief, may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
Section 2.3 The Shares. The Shares have been duly and validly
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authorized and, when a certificate evidencing the Shares is issued and delivered
against payment of the Shares Purchase Price in accordance with the terms of
this Agreement, the Shares shall be duly and validly issued, fully paid and non-
assessable. Delivery of the certificate(s) for the Shares will pass valid title
to the Shares, free and clear of any claim, lien, charge, security interest,
encumbrance, restriction on transfer or voting or other defect in title
whatsoever ("Liens"), other than Liens resulting from any action(s) relating to
Liberty. As of the Closing, the sale of the Shares to Liberty will be registered
under an effective shelf registration statement filed by Cendant with the
Securities and Exchange Commission (the "SEC").
Section 2.4 The Warrant Shares. The shares of Common Stock issuable
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upon exercise of the Warrants (the "Warrant Shares") (a) are duly and validly
authorized, (b) at the Closing Date, will be reserved for issuance upon exercise
of the Warrants in accordance with their terms, including by reason of the anti-
dilution provisions thereof, (c) assuming issuance in accordance with the terms
of the Warrants, will at the time of exercise of the Warrants be duly and
validly issued, fully paid and nonassessable, and (d) at the time of exercise of
the Warrants, will be registered under an effective registration statement filed
by Cendant with the SEC. Delivery of the certificate(s) for the Warrant Shares
upon exercise of the Warrants will pass valid title to the Warrant Shares, free
and clear of all Liens whatsoever, other than Liens resulting from any action(s)
relating to Liberty. At the time of the Closing, the Warrant Shares will be
registered under an effective shelf registration statement filed by Cendant with
the SEC.
Section 2.5 Capitalization. The authorized capital of Cendant consists
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of 2,000,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). As of October 26,
1999, there were 711,025,187 shares of Common Stock issued and outstanding and
no shares of Preferred Stock issued and outstanding.
Section 2.6 Consents and Approvals; No Violations. Neither the
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execution and delivery of this Agreement or the Warrants by Cendant, nor the
consummation by Cendant of the transactions contemplated hereby or thereby will
(a) conflict with or result in any breach of any provision of the amended and
restated certificate of incorporation (the "Cendant Charter") or amended and
restated by-laws of Cendant, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
require any consent under, any indenture, license, contract, agreement or other
instrument or obligation to which the Cendant is a party, (c) violate any order,
writ, injunction, decree or award rendered by any Governmental Entity (as
hereinafter defined) or any statute, rule or regulation (collectively, "Laws"
and, individually, a "Law") applicable to Cendant, or (d) require any filing
with, or the obtaining of any permit, authorization, consent or approval of, any
governmental or regulatory authority or court, domestic or foreign (a
"Governmental Entity"), except in the case of clauses (c) and (d) of this
Section 2.6, for the applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act").
Section 2.7 SEC Reports. Since January 1, 1999, Cendant has filed all
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required reports, schedules, forms, statements and other documents, including
exhibits and all other information incorporated therein (the "SEC Documents"),
with the SEC. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
such SEC Documents, and none of the SEC Documents when filed (as amended and
restated and as supplemented by subsequently filed SEC Documents) contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Section 2.8 Shareholder Vote. The delivery and sale of the Shares and
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the Warrants, and the exercise of the Warrants and the delivery of the Warrant
Shares in accordance with the terms thereof, will not require any vote of
Cendant's shareholders pursuant to the terms of the Cendant Charter or the rules
of the New York Stock Exchange (the "NYSE").
Section 2.9 Approval of Disinterested Directors. Notwithstanding the
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foregoing representations, on the date hereof Cendant has not obtained the
approval of a majority of its disinterested directors for the issuance of the
Warrant Shares pursuant to the Warrants, which approval shall be obtained prior
to the Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LIBERTY
Section 3.1 Organization. Liberty is a corporation duly incorporated,
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validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its business
substantially as it is now being conducted.
Section 3.2 Authority Relative to this Agreement. Liberty has the
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corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all requisite corporate action on the part
of Liberty. This Agreement has been duly and validly executed and delivered by
Liberty and (assuming this Agreement has been duly authorized, executed and
delivered by Cendant) constitutes a valid and binding agreement of Liberty,
enforceable against Liberty in accordance with its terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws, now or hereafter in effect,
relating to or limiting creditors' rights generally and (b) enforcement of this
Agreement, including, among other things, the remedy of specific performance and
injunctive and other forms of equitable relief, may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
Section 3.3 Consents and Approvals; No Violations. Neither the
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execution and delivery of this Agreement by Liberty, nor the consummation by
Liberty of the transactions contemplated hereby will (a) conflict with or result
in any breach of any provision of the certificate of incorporation or by-laws
(or similar organizational documents) of Liberty, (b) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, or require any consent under, any indenture, license, contract, agreement
or other instrument or obligation to which the Liberty is a party, (c) violate
any order, writ, injunction,
decree or award rendered by any Governmental Entity or Law applicable to
Liberty, or (d) require any filing with, or the obtaining of any permit,
authorization, consent or approval of, any Governmental Entity, except in the
case of clauses (c) and (d) of this Section 3.3, for the applicable requirements
of the HSR Act.
Section 3.4 Liberty Acknowledgment. Liberty has conducted its own
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independent investigation, review and analysis of Cendant. In entering into this
Agreement, Liberty acknowledges that it has relied solely upon the
aforementioned investigation, review and analysis, and, other than with respect
to the representations and warranties made in Article II of this Agreement,
Liberty acknowledges that none of Cendant, or any of its directors, officers,
employees, affiliates, controlling persons, agents, advisors or representatives
makes or has made any representation or warranty, either express or implied.
ARTICLE 4
COVENANTS
Section 4.1 Consents; Cooperation. Each of Cendant and Liberty shall
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cooperate, and use its best efforts, to prepare and file all necessary materials
with the appropriate Governmental Entities pursuant to the HSR Act within five
business days of the date of this Agreement. Each party covenants to (x) furnish
the other party with such necessary or appropriate information and reasonable
assistance as such other party may reasonably request in connection with its
preparation of necessary filings and submission pursuant to the HSR Act and (y)
use its commercially reasonable efforts to comply as promptly as possible with
requests for additional information issued by applicable Governmental Entities
pursuant to the HSR Act.
Section 4.2 Future Development Efforts. (a) From and after the
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Closing, each of Cendant and Liberty agree to work together to develop Internet
and related opportunities associated with Cendant's travel, mortgage, real
estate and membership businesses. These efforts may include the creation of
joint ventures among Liberty, Cendant and others, as well as equity investments
by either Liberty and Cendant in businesses owned by the other, subject, in all
cases, to the negotiation of mutually agreeable terms between the parties.
(b) In addition, Cendant agrees to assist Liberty in creating a
new venture that will seek to provide broadband video, voice and data services
and content to hotels and their guests on a worldwide basis, in consideration
for which
Cendant will receive an equity participation interest in such venture, subject
to the negotiation of mutually agreeable terms between the parties.
(c) Cendant and Liberty covenant to pursue opportunities within
the cable industry to leverage Cendant's direct marketing resources and
capabilities, subject to the negotiation of mutually agreeable terms between the
parties with respect to any specific transaction.
(d) The provisions of this Section 4.2 shall not prohibit nor in
any way interfere with the right of Liberty or Cendant, or any of their
respective affiliates, to engage in any business or pursue any business
opportunity (including entering into any agreement in connection therewith),
anywhere in the world, including those that may be in competition with, or
complimentary to, any business engaged in by the other or any of its affiliates.
Section 4.3 Public Announcements. Prior to the Closing, except as
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otherwise agreed to by the parties, the parties shall not issue any report,
statement or press release or otherwise make any public statements with respect
to this Agreement and the transactions contemplated hereby, except as in the
reasonable judgment of a party (or, in the case of Liberty, AT&T Corporation)
may be required by law or in connection with its obligations as a publicly-held,
exchange-listed company, in which case the parties will use their reasonable
best efforts to reach mutual agreement as to the language of any such report,
statement or press release. Upon execution hereof and upon the Closing, Cendant
and Liberty will consult with each other with respect to the issuance of a joint
report, statement or press release with respect to this Agreement and the
transactions contemplated hereby.
ARTICLE 5
CONDITIONS AND TERMINATION
Section 5.1 Conditions to Each Party's Obligations to Consummate the
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Transactions Under this Agreement. The respective obligations of each party to
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consummate the transactions contemplated hereby is subject to the satisfaction
at or prior to the Closing of the following conditions:
(a) Any waiting periods applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
terminated; and
(b) Neither Cendant nor Liberty shall be subject to any order,
decree or injunction of a court of competent jurisdiction, and no statute, rule
or regulation shall have been enacted, promulgated or issued, which enjoins or
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Warrants.
Section 5.2 Conditions to Cendant's Obligations to Consummate the
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Transactions Under this Agreement. The obligation of Cendant to consummate
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the transactions contemplated hereby are further subject to the satisfaction or
waiver of the following conditions:
(a) The representations and warranties of Liberty contained in
this Agreement shall be true and correct at and as of the Closing Date in all
material respects as though such representations and warranties were made at and
as of such date (except to the extent expressly made as of an earlier date, in
which case, as of such date);
(b) Liberty shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement to be
performed or complied with by it on or prior to the Closing; and
(c) Liberty shall have delivered to Cendant an officer's
certificate to the effect that each of the conditions specified above in
Sections 5.2(a) and (b) is satisfied.
Section 5.3 Conditions to Liberty's Obligations to Consummate the
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Transactions Under this Agreement. The obligation of Liberty to consummate the
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transactions contemplated hereby are further subject to satisfaction or waiver
of the following conditions:
(a) The representations and warranties of Cendant contained in
this Agreement shall be true and correct at and as of the Closing Date in all
material respects as though such representations and warranties were made at and
as of such date (except to the extent expressly made as of an earlier date, in
which case, as of such date);
(b) Cendant shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement to be
performed or complied with by it on or prior to the Closing;
(c) Cendant shall have delivered to Liberty an officer's
certificate to the effect that each of the conditions specified above in
Sections 5.3(a) and (b) is satisfied;
(d) The Shares and the Warrant Shares shall have been approved
for listing on the NYSE, subject only to official notice of issuance;
(e) The sale of the Shares to Liberty shall have been registered
under an effective shelf registration statement filed by Cendant with the SEC;
and
(f) Cendant shall have obtained the approval of a majority of
its disinterested directors for the issuance of the Warrant Shares pursuant to
the Warrant.
ARTICLE 6
TERMINATION
Section 6.1 Termination. This Agreement may be terminated and the
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transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:
(a) by mutual agreement of the parties; or
(b) by Cendant or Liberty at any time after 60 days from the
date of this Agreement if the Closing shall not have occurred by such date;
provided, however, that the right to terminate this Agreement under this Section
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6.1(b) shall not be available to a party, if it has breached any of its
representations, warranties or covenants hereunder in any material respect and
such breach has been the cause of or resulted in the failure of the Closing to
occur on or before such date.
Section 6.2 Procedure for and Effect of Termination. In the event of
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termination of this Agreement and the abandonment of the transactions
contemplated hereby by the parties pursuant to Section 6.1 hereof, written
notice thereof shall be given by a party so terminating to the other party and
this Agreement shall forthwith terminate and shall become null and void and of
no further effect, and the transactions contemplated hereby shall be abandoned
without further action by Cendant or Liberty. If this Agreement is terminated
pursuant to Section 6.1 hereof:
(a) all filings, applications and other submissions made
pursuant hereto shall, to the extent practicable, be withdrawn from the
Governmental Entity to which made; and
(b) there shall be no liability or obligation hereunder on the
part of Cendant or Liberty or any of their respective directors, officers,
employees, affiliates, controlling persons, agents or representatives, except
that Cendant or Liberty, as the case may be, may have liability to the other
party if the basis of termination is a breach by Cendant or Liberty, as the case
may be, of one or more of the provisions of this Agreement, and except that the
obligations provided for in this Section 6.2 shall survive any such termination.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Entire Agreement. This Agreement constitutes the entire
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agreement of the parties relating to the subject matter hereof and supersedes
other prior agreements and understandings between the parties both oral and
written regarding such subject matter.
Section 7.2 Severability. Any provision of this Agreement that is held
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by a court of competent jurisdiction to violate applicable law shall be limited
or nullified only to the extent necessary to bring the Agreement within the
requirements of such law.
Section 7.3 Notices. Any notice required or permitted by this Agreement
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must be in writing and must be sent by facsimile, by nationally recognized
commercial overnight courier, or mailed by United States registered or certified
mail, addressed to the other party at the address below or to such other address
for notice (or facsimile number, in the case of a notice by facsimile) as a
party gives the other party written notice of in accordance with this Section
8.3. Any such notice will be effective as of the date of receipt:
(a) if to Cendant, to
Cendant Corporation
9 West 00/xx/ Xxxxxx
00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000/23
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxx, Esq.
(b) if to Liberty, to
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx
Fax: (000) 000-0000
Attention: General Counsel
Section 7.4 Governing Law; Jurisdiction. This Agreement shall be
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governed by, enforced under and construed in accordance with the laws of the
State of New York, without giving effect to any choice or conflict of law
provision or rule thereof. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America in each case
located in the County of New York for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts) and further
agrees that service of any process, summons, notice or document by U.S.
registered mail to its respective address set forth in Section 7.3 (or to such
other address for notice that such party has given the other party written
notice of in accordance with Section 7.3) shall be effective service of process
for any litigation brought against it in any such court. Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to the laying
of venue of any litigation arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or of the United
States of America in each case located in the County of New York and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such litigation brought in any such court has been
brought in an inconvenient forum.
Section 7.5 Descriptive Headings. The descriptive headings herein are
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inserted for convenience of reference only and shall in no way be construed to
define, limit, describe, explain, modify, amplify, or add to the interpretation,
construction or meaning of any provision of, or scope or intent of, this
Agreement nor in any way affect this Agreement.
Section 7.6 Counterparts. This Agreement may be signed in counterparts
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and all signed copies of this Agreement will together constitute one original of
this Agreement. This Agreement shall become effective when each party hereto
shall have received counterparts thereof signed by all the other parties hereto.
Section 7.7 Assignment. Neither this Agreement nor any of the rights,
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interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party, except that Liberty may cause the Shares and/or the
Warrants and Warrant Shares to be sold to, and registered in the name of, a
wholly owned direct or indirect subsidiary of Liberty. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
Section 7.8 Definition of "Shares." As used in this Agreement, the term
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"Shares" includes (a) all dividends (other than ordinary cash dividends with a
record date prior to the Closing) and distributions declared by Cendant on the
Shares subsequent to the date hereof and prior to the Closing and (b) shall be
appropriately adjusted to give effect to any subdivision, combination or
reclassification of the Shares effected prior to the Closing.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly signed as of the date first above written.
CENDANT CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Senior Executive Vice President
and Chief Financial Officer
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President
