1
EXHIBIT 10.49
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
FIDELITY NATIONAL FINANCIAL, INC.
BRON ACQUISITION CORPORATION
BRON RESEARCH, INC.,
AND
THE SHAREHOLDERS OF BRON RESEARCH, INC.
DATED AS OF SEPTEMBER 24, 1997
2
TABLE OF CONTENTS PAGE
RECITALS.................................................................................... 1
INDEX OF EXHIBITS........................................................................... iv
INDEX OF SCHEDULES.......................................................................... iv
ARTICLE I
Certain Definitions.................................. 2
ARTICLE 2
Plan of Reorganization................................. 7
2.1 The Merger......................................................................... 7
2.2 Conversion of Securities........................................................... 7
ARTICLE 3
Closing........................................ 9
3.1. Closing............................................................................ 9
3.2 Mutual Deliveries at Closing....................................................... 9
3.3 Shareholders' Deliveries at Closing................................................ 9
3.4 Company's Deliveries at Closing.................................................... 9
3.5 FNFI's Deliveries at Closing....................................................... 10
3.6 Conditions of FNFI................................................................. 11
3.7 Conditions of Company and Shareholders............................................. 12
ARTICLE 4
Representations and Warranties of Company and Shareholders................ 14
4.1 Representations and Warranties of Company.......................................... 14
4.1.1 Organization and Standing; Articles and Bylaws............................ 14
4.1.2 Authorization............................................................. 14
4.1.3 Subsidiaries.............................................................. 14
4.1.4 Capitalization............................................................ 14
4.1.5 Financial Statements...................................................... 15
4.1.6 Material Contracts........................................................ 16
4.1.7 Assets Other Than Real Property........................................... 16
4.1.8 Real Property............................................................. 16
4.1.9 No Conflicts.............................................................. 17
4.1.10 Litigation................................................................ 17
4.1.11 Taxes..................................................................... 17
4.1.12 Employees................................................................. 18
4.1.13 Governmental Consents..................................................... 18
4.1.14 Operating Rights.......................................................... 18
i
3
4.1.15 Compliance with Applicable Laws........................................... 18
4.1.16 Insurance................................................................. 19
4.1.17 Absence of Changes........................................................ 19
4.1.18 Employee Plans............................................................ 20
4.1.19 Intellectual Property Rights.............................................. 20
4.1.20 Environment, Health and Safety............................................ 21
4.1.21 Certain Transactions...................................................... 21
4.1.22 Bank Accounts; Powers of Attorney......................................... 21
4.1.23 Tax-Free Reorganization................................................... 22
4.1.24 Employee Loans............................................................ 22
4.1.25 Pooling................................................................... 22
4.1.26 Brokers' Fees............................................................. 22
4.1.27 Full Disclosure........................................................... 22
4.2 Representations and Warranties of Shareholders..................................... 22
4.2.1 Authority................................................................. 22
4.2.2 Ownership of Shares....................................................... 22
4.2.3 No Conflicts.............................................................. 23
4.2.4 Litigation................................................................ 23
4.2.5 Certain Transactions...................................................... 23
4.2.6 Investment Representations................................................ 23
4.2.7 Absence of Claims Against Company......................................... 24
4.2.8 Tax-Free Reorganization................................................... 24
4.2.9 Continuity of Interest.................................................... 24
4.2.10 Pooling................................................................... 24
4.2.11 Brokers' Fees............................................................. 24
4.2.12 Disclosure................................................................ 24
ARTICLE 5
Representations and Warranties of FNFI and Newco.................... 24
5.1 Organization and Standing; Articles and Bylaws..................................... 25
5.2 Authorization...................................................................... 25
5.3 No Conflicts....................................................................... 25
5.4 Fidelity SEC Documents............................................................. 25
5.5 Fidelity Common Stock.............................................................. 26
5.6 Governmental Consents.............................................................. 26
5.7 Tax-Free Reorganization............................................................ 26
5.8 Brokers' Fees...................................................................... 26
5.9 Full Disclosure.................................................................... 26
ARTICLE 6
Conduct of Business Pending Closing.......................... 27
6.1 Qualification...................................................................... 27
6.2 Ordinary Course.................................................................... 27
6.3 Corporate Changes.................................................................. 27
ii
4
6.4 Indebtedness....................................................................... 27
6.5 Accounting......................................................................... 27
6.6 Compliance with Legal Requirements................................................. 28
6.7 Disposition of Assets.............................................................. 28
6.8 Compensation....................................................................... 28
6.9 Modification or Breach of Agreements; New Agreements............................... 28
6.10 Capital Expenditures............................................................... 28
6.11 Consents........................................................................... 28
6.12 Maintenance of Insurance........................................................... 29
6.13 Discharge.......................................................................... 29
6.14 Claims............................................................................. 29
6.15 Taxes and Tax Assessments.......................................................... 29
ARTICLE 7
Additional Covenants.................................. 29
7.1 Covenants of Company and Shareholders.............................................. 29
7.2 Covenants of FNFI and Newco........................................................ 30
7.3 Tax-Free Reorganization/Tax Advice................................................. 31
7.4 Continuity of Interest............................................................. 31
7.5 Access and Information............................................................. 31
7.6 Expenses........................................................................... 32
7.7 Certain Notifications.............................................................. 32
7.8 Publicity.......................................................................... 32
7.9 Further Assurances................................................................. 32
7.10 Competing Offers................................................................... 33
7.11 Post-Termination Employment........................................................ 33
7.12 NYSE Listing....................................................................... 33
7.13 Employee Benefits.................................................................. 33
7.14 Supplements to Schedules........................................................... 34
7.15 Officer and Director Indemnity..................................................... 34
ARTICLE 8
[Omitted].......................................................................... 34
ARTICLE 9
Termination, Amendment and Waiver........................... 34
9.1 Termination........................................................................ 34
9.2 Effect of Termination.............................................................. 34
9.3 Amendment.......................................................................... 35
9.4 Waiver............................................................................. 35
ARTICLE 10
Indemnification.................................... 35
10.1 Survival of Representations and Warranties......................................... 35
iii
5
10.2 Indemnification by Company and Shareholders........................................ 35
10.3 Indemnification by FNFI............................................................ 36
10.4 Third-Party Claims................................................................. 36
10.5 Additional Indemnification Provisions.............................................. 36
10.6 Indemnification Non-Exclusive...................................................... 37
10.7 Access and Information............................................................. 37
10.8 Mitigation......................................................................... 37
10.9 Right of Set-Off................................................................... 37
ARTICLE 11
General Provisions................................... 38
11.1 Governing Law...................................................................... 38
11.2 Successors and Assigns............................................................. 38
11.3 Entire Agreement................................................................... 38
11.4 Severability....................................................................... 38
11.5 Notice............................................................................. 38
11.6 Pooling............................................................................ 40
11.7 Construction....................................................................... 40
11.8 Headings........................................................................... 40
11.9 Counterparts....................................................................... 40
11.10 Recitals, Schedules, and Exhibits.................................................. 40
INDEX OF EXHIBITS
EXHIBIT A - Articles of Merger
EXHIBIT B - Employment Agreement of Xxxxx X. Xxxxx
EXHIBIT C - Employment Agreement of Xxxxxx X. Xxxxxxx, Xx.
EXHIBIT D - Registration Rights Agreement
EXHIBIT E - Officer's Certificate of the Company
EXHIBIT F - Secretary's Certificate of the Company
EXHIBIT G - Opinion of Counsel to the Company
EXHIBIT H - Officer's Certificate of FNFI
EXHIBIT I - Opinion of Counsel to FNFI
INDEX OF SCHEDULES
Schedule 2.1(c)(1) List of Directors of Surviving Corporation
Schedule 2.1(c)(2) List of Officers of Surviving Corporation
Schedule 2.2(d) Allocation of Fidelity Common Stock
Company Disclosure Schedule
iv
6
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered into as of this 24th day of September, 1997, by and among FIDELITY
NATIONAL FINANCIAL, INC., a Delaware corporation ("FNFI"); BRON RESEARCH, INC.,
a Texas corporation ("Company"); XXXXX X. XXXXX, XXXXXX X. XXXXXXX, XX. and XXXX
X. XXXXXXX (collectively, "Shareholders"); and BRON ACQUISITION CORPORATION, a
Texas corporation that is a newly-formed, wholly-owned subsidiary of FNFI
("Newco"). FNFI, Company, Shareholders, and Newco are sometimes referred to
collectively herein as the "Parties" or singularly as a "Party."
RECITALS
A. Shareholders are the record and beneficial owners of all the issued
and outstanding shares of capital stock of Company (the "Company Shares").
B. The respective Boards of Directors of FNFI, Company and Newco deem it
advisable and in the best interests of their respective shareholders that Newco
merge with and into Company (the "Merger") pursuant to this Agreement, the
Articles of Merger substantially in the form attached hereto as Exhibit "A" (the
"Articles of Merger") and the applicable provisions of the laws of the State of
Texas.
C. The Parties hereto expect that the Merger will further certain of
their business objectives, including, without limitation, increased market
share, reduced administrative costs and volume efficiencies.
D. The Boards of Directors of FNFI, Company and Newco have approved and
adopted this Agreement as a plan of reorganization within the provisions of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
E. The Parties intend that the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1
7
ARTICLE I
CERTAIN DEFINITIONS
Unless the context otherwise requires, the terms defined in this Article
1 shall have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and the plural forms of any of the terms herein
defined. Any capitalized term used in this Agreement and not ascribed a meaning
in this Article 1 shall have the meaning ascribed to such term elsewhere in this
Agreement.
"Affiliate" shall mean, with respect to a Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person.
"Articles of Merger" has the meaning set forth in Recital B, above.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or would reasonably form the basis for
any specified consequence.
"Benefit Arrangement" shall mean any form of current or deferred
compensation, bonus, stock option, stock appreciation right, severance pay,
salary continuation, pension, profit-sharing, retirement or incentive plan,
practice or arrangement, any group or individual disability, medical, dental,
health, hospitalization, life insurance or other insurance plans or related
benefits, or any other welfare or similar plan or arrangement for the benefit of
any director, officer or employee, whether active or retired, or for any class
or classes of such directors, officers or employees.
"Claim" shall mean any actual or threatened claim, action, suit,
arbitration, hearing, inquiry, proceeding (including administrative and informal
proceedings), complaint, charge, investigation or audit by or before any
Governmental Entity or arbitrator and any appeal from any of the foregoing.
"Closing" has the meaning set forth in Section 3.1, below.
"Closing Date" has the meaning set forth in Section 3.1, below.
"Closing Fidelity Price" means the average of the per share closing
sales price of FNFI's Common Stock publicly traded on the New York Stock
Exchange for the ten (10) consecutive trading days ending September 22, 1997.
"Code" has the meaning set forth in Recital D, above.
"Company Shares" has the meaning set forth in Recital A.
2
8
"Company Stock" means shares of Common Stock, no par value, of Company.
"Confidential Information" means any information concerning the
businesses and affairs of any of the Parties that is not already generally
available to the public.
"Effective Time" has the meaning set forth in Section 3.1, below.
"Employee Plan" shall mean any "employee benefit plan," as defined in
Section 3(3) of ERISA, which is subject to any provisions of ERISA and covers
any employee, whether active or retired, of the Company.
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Fidelity Common Stock" means the shares of Common Stock, par value of
$0.0001 per share, of FNFI.
"GAAP" means United States generally accepted accounting principles.
"Governmental Entity" shall mean any court, federal, state, local or
foreign government or any administrative agency or commission or any other
governmental authority or instrumentality whatsoever.
"Hazardous Substances" shall mean any hazardous, toxic or infectious
substance, material, gas or waste which is regulated by any local, state or
federal Governmental Entity.
"Indebtedness" shall mean, when used with reference to any Person,
without duplication, (i) any liability of such Person created or assumed by such
Person, or any Subsidiary thereof, (a) for borrowed money, (b) evidenced by a
bond, note, debenture, or similar instrument (including a purchase money
obligation, deed of trust or mortgage) given in connection with the acquisition
of, or exchange for, any property or assets (other than inventory or similar
property
3
9
acquired and consumed in the Ordinary Course of Business), including
securities and other indebtedness, (c) in respect of letters of credit issued
for such Person's account and "swaps" of interest and currency exchange rates
(and other interest and currency exchange rate hedging agreements) to which such
Person is a party or (d) for the payment of money as lessee under leases that
should be, in accordance with GAAP, recorded as capital leases for financial
reporting purposes; (ii) any Liability of others described in the preceding
clause (i) guaranteed as to payment of principal or interest by such Person or
in effect guaranteed by such Person through an agreement, contingent or
otherwise, to purchase, repurchase, or pay the related Indebtedness or to
acquire the security therefor; (iii) all Liabilities or obligations secured by a
Lien upon property owned by such Person and upon which Liabilities or
obligations such Person customarily pays interest or principal, whether or not
such Person has assumed or become liable for the payment of such liabilities or
obligations; and (iv) any amendment, renewal, extension, revision or refunding
of any such Liability or obligation.
"Intellectual Property" means (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof; (ii) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith; (iii) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith; (iv) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals); (v) all computer software (including data and related
documentation); (vi) all other proprietary rights; and (vii) all copies and
tangible embodiments thereof (in whatever form or medium).
"Knowledge" with respect to Company means that Xxxxx X. Xxxxx or Xxxxxx
X. Xxxxxxx, Xx. is actually aware of the fact or matter in question or
reasonably should be aware of the fact or matter in question after a reasonable
investigation concerning such fact or matter. "Knowledge" with respect to a
Shareholder means that such Shareholder is actually aware of the fact or matter
in question or reasonably should be aware of the fact or matter in question
after a reasonable investigation concerning such fact or matter, but only to the
extent such fact or matter relates to that Shareholder individually.
"Legal Requirement" shall mean any statute, law, ordinance, rule,
regulation, permit, order, writ, judgment, injunction, decree or award issued,
enacted or promulgated by any Governmental Entity or any arbitrator with binding
authority on a Party or Parties, as the case may be.
4
10
"Liability" means any liability (whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for
Taxes.
"Licenses" has the meaning set forth in Section 4.1.4, below.
"Lien" shall mean all liens (including judgment and mechanics' liens,
regardless of whether liquidated), mortgages, assessments, security interests,
easements, claims, pledges, trusts (constructive or otherwise), deeds of trust,
options or other charges, encumbrances or restrictions.
"Losses" shall mean any and all Liabilities, losses, damages, demands,
assessments, adjustments, judgments, settlement payments, deficiencies,
penalties, fines, interest (including interests from the date of such damages),
and costs and expenses (including without limitation reasonable attorneys' fees
and disbursements of every kind, nature and description).
"Material Adverse Effect" means any event, effect, development,
occurrence or circumstance, individually or when taken together with all other
such events, effects, developments, occurrences or circumstances, causing,
resulting in or having a material adverse effect on (i) the business, assets,
results of operations, properties or condition (financial or otherwise) of
Company or FNFI, as applicable; or (ii) the legal right or authorization of
Company or FNFI, as applicable, to continue to operate its business.
"Material Contracts" with respect to Company or Newco means (i) any
union contract or any employment or consulting contract or arrangement providing
for future compensation, written or oral, with any officer, director or employee
which is not terminable on thirty (30) days notice or less without penalty or
obligation to make payments related to such termination; (ii) any plan contract
or arrangement, whether written or oral, providing for bonuses, pensions,
deferred compensation, severance pay or benefits, retirement payments, profit
sharing or the like; (iii) any existing distribution agreement, volume purchase
agreement, or similar agreement (but excluding individual customer purchase
orders) in which the annual amount involved in fiscal 1997 exceeded or is
expected to exceed $25,000 in aggregate amount; (iv) any individual customer
purchase order for the sale of goods or services in excess of $25,000; (v)
except for trade indebtedness incurred in the Ordinary Course of Business, any
Indebtedness incurred in the acquisition of companies or other entities or
Indebtedness for borrowed money by way of direct loan, sale of debt securities,
purchase money obligation, conditional sale, guarantee, leasehold obligations or
otherwise; (vi) any contract containing covenants purporting to limit in any way
the freedom of Newco or Company, as applicable, to compete in any line of
business or in any geographic area; (vii) any agreement of indemnification other
than those entered into in connection with the sale of products or services of
Newco or Company, as applicable, in the Ordinary Course of Business; (viii) any
agreement, contract or commitment relating to capital expenditures and which
involve future payments in excess of $25,000 in the aggregate by Newco or
Company, as applicable; (ix) any agreements, contracts or commitments relating
to the
5
11
disposition of assets, including any intangible assets or intellectual property
rights (other than inventory), which involve payments in excess of $25,000 in
the aggregate by Newco or Company, as applicable; (x) any contracts with a
Governmental Entity subject to price redetermination or renegotiation; or (xi)
any other agreement, contract or commitment which is material to Newco or
Company, as applicable. "Material Contracts" with respect to FNFI means any
agreement, contract or commitment which (i) is material to FNFI or (ii) FNFI
files or is requested to file with its SEC reports.
"Merger" has the meaning set forth in Recital B, above.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency and, where appropriate, in accordance with formula).
"Party" has the meaning set forth in the preamble to this Agreement.
"Permitted Liens" means (i) mechanic's, materialmen's, and similar
liens; (ii) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings; (iii)
purchase money liens and liens securing rental payments under capital lease
arrangements; and (iv) liens arising in the Ordinary Course of Business and not
incurred in connection with the borrowing of money.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof), or any other legal
entity.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge or Lien, other than
Permitted Liens.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Surviving Corporation" has the meaning set forth in Section 2.1(a),
below.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental,
6
12
customs, duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax or contribution of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TBCA" means the Texas Business Corporation Act, as amended.
ARTICLE 2
PLAN OF REORGANIZATION
2.1 The Merger.
(a) The Merger. At the Effective Time (as defined in Section 3.1,
below), Newco shall be merged with and into Company pursuant to this Agreement
and the Articles of Merger, and the separate existence of Newco shall cease, all
in accordance with the TBCA. Company, as it exists from and after the Effective
Time, is sometimes referred to herein as the "Surviving Corporation."
(b) Effect of the Merger. Subject to the terms and conditions of
this Agreement and the Articles of Merger, at the Effective Time (i) the
separate existence of Newco shall cease and Newco shall be merged with and into
Company; and (ii) the Merger shall have all the effects provided by the TBCA,
this Agreement and the Articles of Merger.
(c) Articles of Incorporation; Bylaws; Directors and Officers.
The Articles of Incorporation of Surviving Corporation from and after the
Effective Time shall be the Articles of Incorporation of Company until
thereafter amended in accordance with the provisions therein and as provided by
the TBCA. The Bylaws of Surviving Corporation from and after the Effective Time
shall be the Bylaws of Company as in effect immediately prior to the Effective
Time, continuing until thereafter amended in accordance with their terms and the
Articles of Incorporation of Surviving Corporation and as provided by the TBCA.
The initial directors of Surviving Corporation shall be the individuals set
forth on Schedule 2.1(c)(1) hereto, in each case until their successors are
elected and qualified. The initial officers of Surviving Corporation shall be
those individuals holding such titles set forth on Schedule 2.1(c)(2) hereto, in
each case until their successors are duly elected and qualified.
2.2 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of FNFI, Newco, Company or
Shareholders, the shares of capital stock of Newco and Company shall be
converted as follows:
7
13
(a) Capital Stock of Newco. Each issued and outstanding share of
capital stock of Newco shall continue to be issued and outstanding and shall be
converted into one (1) validly issued, fully paid and non-assessable share of
Company Stock.
(b) Cancellation of Certain Shares of Capital Stock of Company.
All shares of capital stock of Company that are owned directly or indirectly by
Company, including all treasury shares and all capital stock which has been
authorized but not issued, shall be canceled and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Company Shares. The Company Shares shall
automatically be canceled, extinguished and converted, without any action on the
part of the holder thereof, into the right to receive shares of Fidelity Common
Stock, as more fully described in subsection (d), below. All Company Shares,
when so converted, shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and Shareholders shall cease to
have any rights with respect thereto, except the right to receive the shares of
Fidelity Common Stock to be paid or issued in consideration therefor upon the
surrender of the Certificates in accordance with subsection (e), below.
(d) Consideration. In consideration for the cancellation and
exchange by Shareholders of the Company Shares, FNFI shall, as soon as
practicable after the Effective Time, issue and deliver to Shareholders Nine
Million Eight Hundred Fifty Thousand Dollars ($9,850,000) of Fidelity Common
Stock, either held in treasury and transferred to Shareholders or newly issued
by FNFI to Shareholders. The exact number of shares of Fidelity Common Stock to
be issued pursuant to this subsection (d) shall be determined by dividing
$9,850,000 by the Closing Fidelity Price and shall be set forth on a certificate
to be agreed to by the Parties at Closing. The Fidelity Common Stock due
Shareholders under this subsection (d) shall be allocated among the Shareholders
in accordance with Schedule 2.2(d) hereto.
(e) Certificate Delivery Requirement. At the Closing,
Shareholders shall deliver to FNFI, against delivery (and written confirmation
thereof) by FNFI of irrevocable instructions to FNFI's transfer agent to issue
the number of shares of Fidelity Common Stock determined in accordance with
subsection (d), above, in the names of Shareholders in the respective amounts
set forth on Schedule 2.2(d) hereto, the certificates (the "Certificates")
representing the Company Shares, duly endorsed in blank by Shareholders, or
accompanied by blank stock powers, and with all necessary transfer tax and other
revenue stamps affixed and canceled. The Certificates so delivered shall be
promptly canceled. Until delivered as contemplated by this subsection (e), each
Certificate shall be deemed at any time after the Effective Time to represent
the right to receive upon such surrender a pro rata portion of Fidelity Common
Stock set forth in subsection (d), above.
8
14
ARTICLE 3
CLOSING
3.1. Closing. The consummation of the Merger and the other transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of FNFI, located at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxxxx, Xxxxxxxxxx
00000, on such date (the "Closing Date") and at such time as may be mutually
designated by the Parties within five (5) business days following the
satisfaction or waiver of the conditions set forth in Sections 3.6 and 3.7,
below (including, without limitation, the Requisite Regulatory Approvals), or
such other date, time, place and manner as the Parties may mutually agree. On
the Closing Date, the Articles of Merger and any required officers'
certificates, shall be filed with the Secretary of State of the State of Texas
in accordance with the provisions of the TBCA. The Merger shall become effective
upon such filing or such later time on the Closing Date as may be specified in
the filing with the Secretary of State of the State of Texas (the "Effective
Time").
3.2 Mutual Deliveries at Closing. Provided that all of the conditions to
the Closing set forth in Sections 3.6 and 3.7, below, have been satisfied or
waived by the Party benefitting therefrom, the appropriate Parties or Persons
shall execute and deliver or cause to be delivered to the appropriate Parties at
Closing the following:
(a) The Employment Agreements in substantially the form of
Exhibits "B" and "C" hereto; and
(b) The Registration Rights Agreement substantially in the form
of Exhibit "D" hereto.
3.3 Shareholders' Deliveries at Closing. Provided that all of the
conditions to the Closing set forth in Sections 3.6 and 3.7, below, have been
satisfied or waived by the Party benefiting therefrom, Shareholders shall
execute and deliver or cause to be delivered to FNFI at the Closing the
following documents:
(a) The Certificates, in accordance with Section 2.2(e), above;
(b) Such other documents and instruments as may be specified in
this Agreement or otherwise reasonably requested by FNFI in order to consummate
the transactions contemplated hereby.
3.4 Company's Deliveries at Closing. Provided that all of the conditions
to the closing set forth in Sections 3.6 and 3.7, below, have been satisfied or
waived from the Party benefitting therefrom, Company shall execute and deliver
or cause to be delivered to FNFI at the Closing the following:
9
15
(a) An Officer's Certificate of the Company dated the Closing
Date substantially in the form of Exhibit "E" hereto;
(b) A Secretary's Certificate of the Company dated the Closing
Date substantially in the form of Exhibit "F" hereto;
(c) An opinion of counsel to the Company substantially in the
form of Exhibit "G" hereto;
(d) Company's original minute book, such minute book to contain
(i) original Articles of Incorporation and all amendments thereto, or copies
thereof if the originals are unavailable; (ii) Company's Bylaws presently in
effect; (iii) Company's stock transfer records together with all available
canceled stock certificates; and (iv) all minutes of meetings or consents in
lieu of such meetings of Company's Board of Directors and shareholders; and
(e) A good standing certificate of Company, dated within fifteen
(15) business days of the Closing Date, for each jurisdiction in which Company
is required to be qualified and authorized to do business;
(f) Minutes of the Board of Directors and shareholders of Company
authorizing and approving this agreement and the transactions contemplated
herein;
(g) Subject to reappointment as provided in Schedule 2.1(c)(1)
and Schedule 2.2(c)(2) hereto, resignations of all of the officers and directors
of Company effective as of the Closing Date; and
(h) Such other documents and instruments as may be specified in
this Agreement or otherwise reasonably requested in writing by FNFI at least
five (5) days prior to the Closing Date in order to consummate the transactions
contemplated hereby.
3.5 FNFI's Deliveries at Closing. Provided that all of the conditions to
the Closing set forth in Sections 3.6 and 3.7, below, have been satisfied or
waived by the Party benefiting therefrom, FNFI shall execute and deliver or
cause to be delivered to Shareholders as soon as practicable following the
Effective Time the following:
(a) The Fidelity Common Stock in accordance with Section 2.2(d),
above;
(b) An Officer's Certificate of FNFI and Newco dated the Closing
Date substantially in the form of Exhibit "H" hereto;
(c) Minutes of the Board of Directors and shareholders of FNFI
and Newco authorizing and approving this agreement and the transactions
contemplated herein;
10
16
(d) An opinion of counsel to FNFI substantially in the form of
Exhibit "I" hereto; and
(e) Such other documents and instruments as may be specified in
this Agreement or otherwise reasonably requested in writing by Shareholders at
least (5) days prior to the Closing Date in order to consummate the transactions
contemplated hereby.
3.6 Conditions of FNFI. FNFI's obligations hereunder to consummate the
Merger are subject to the satisfaction, at or prior to the Effective Time, of
all of the following conditions:
(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by Company and Shareholders
in this Agreement shall be true, correct and complete in all material respects
on and as of the Closing Date with the same force and effect as if they had been
made on and as of said date; and Company and Shareholders shall have in all
material respects performed all of the obligations and complied with each and
all of the covenants required to be performed or complied with by them on or
prior to the Effective Time.
(b) Material Adverse Effect. No act, event or condition shall
have occurred after the date hereof which FNFI determines in its reasonable
discretion has had or could have a Material Adverse Effect on Company.
(c) Authorizations and Approvals. All authorizations, approvals
or consents from third parties, including from any Governmental Entity, landlord
or other Person, necessary for the consummation of the transactions contemplated
hereby shall have been obtained.
(d) Investigation of Company. FNFI shall have concluded (through
its representatives, accountants, counsel and other experts) a due diligence
investigation of the business, condition (financial, legal and other),
properties, assets, prospects, operations and affairs of Company and shall be
satisfied, in its absolute and sole discretion, with the results thereof.
(e) Deliveries. FNFI shall have received from the appropriate
Party or Person, the delivery obligations set forth in Sections 3.2 through 3.4,
above.
(f) Schedules. FNFI shall be satisfied in its absolute and sole
discretion with any written statement and/or supplement provided by Shareholders
and/or Company pursuant to Section 7.14, below.
(g) No Claims. There shall not be instituted and pending or
threatened any Claims before any Governmental Entity (i) challenging the Merger
or otherwise seeking to restrain or prohibit the consummation of the
transactions contemplated hereby, or (ii) seeking
11
17
to prohibit the direct or indirect ownership or operation by FNFI of all or a
material portion of the business or assets of Company, or to compel FNFI or
Company to dispose of or hold separate all or a material portion of the business
or assets of Company or FNFI.
(h) Corporate Action. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments, releases and documents
referenced herein or incident to the transactions contemplated hereby shall be
in form and substance satisfactory to FNFI and its counsel.
(i) Requisite Regulatory Approvals. All notices or filings
required to be made, all authorizations, permits, certificates, registrations,
consents, approvals or orders required to be obtained, and all waiting periods
required to expire, prior to the consummation of the transactions contemplated
by this Agreement under applicable federal law of the United States or
applicable laws of any state having jurisdiction over the transactions
contemplated by this Agreement or the businesses conducted by the Parties or any
Affiliate or Subsidiary of any Party (collectively, the "Requisite Regulatory
Approvals") shall have been obtained or expired, as the case may be, without the
imposition of any condition which is materially burdensome upon FNFI or any
Party or Person to be affected by such condition.
(j) Pooling. FNFI shall be satisfied, upon advice from its
regular outside accountants, that the business combination to be effected by the
Merger and the other transactions related thereto can be accounted for as a
pooling of interests.
(k) Employment Agreements. Xxxxx X. Xxxxx and Xxxxxx X. Xxxxxxx
shall have entered into the Employment Agreements with Surviving Corporation
substantially in the forms attached hereto as Xxxxxxxx "X" xxx "X" xxxxxx.
(x) Registration Rights Agreement. Shareholders shall have
entered into the Registration Rights Agreement substantially in the form of
Exhibit "D" hereto.
3.7 Conditions of Company and Shareholders. Company's and Shareholders'
obligations hereunder to consummate the Merger are subject to the satisfaction,
at or prior to the Effective Time, of the following conditions:
(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by FNFI and Newco in this
Agreement shall be true, correct and complete in all material respects on and as
of the Closing Date with the same force and effect as if they had been made on
and as of said date; and FNFI and Newco shall have in all material respects
performed all of the obligations and complied with each and all of the covenants
required to be performed or complied with by them on or prior to the Effective
Time.
12
18
(b) Material Adverse Effect. No act, event or condition shall
have occurred after the date hereof which Company determines in its reasonable
discretion has had or could have a Material Adverse Effect on FNFI.
(c) Authorizations and Approvals. All authorizations, approvals
or consents, if any, from third parties, including from any Governmental Entity
or other Person, necessary for the consummation of the transactions contemplated
hereby shall have been obtained.
(d) NYSE Listing. FNFI shall have made such filings as are
necessary with the New York Stock Exchange regarding the transactions
contemplated hereby and the shares of Fidelity Common Stock to be issued under
this Agreement shall have been filed for listing on the NYSE, subject only to
official notice of issuance.
(e) Deliveries. Company or Shareholders, as appropriate, shall
have received from FNFI the delivery obligations set forth in Sections 3.2 and
3.5, above.
(f) Corporate Action. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments, releases and documents
referenced herein or incident to the transactions contemplated hereby shall be
in form and substance satisfactory to Company and its counsel.
(g) No Claims. There shall not be instituted and pending or
threatened any Claims before any Governmental Entity (i) challenging the Merger
or otherwise seeking to restrain or prohibit the consummation of the
transactions contemplated hereby, or (ii) seeking to prohibit the direct or
indirect ownership or operation by FNFI of all or a material portion of the
business or assets of Company, or to compel FNFI or Company to dispose of or
hold separate all or a material portion of the business or assets of Company or
FNFI.
(h) Requisite Regulatory Approvals. The Requisite Regulatory
Approvals shall have been obtained or expired, as the case may be, without the
imposition of any condition which is materially burdensome upon Company or any
Party or Person to be affected by such condition.
(i) Employment Agreements. FNFI shall have afforded Xxxxx X.
Xxxxx and Xxxxxx X. Xxxxxxx, Xx. an opportunity to enter into the Employment
Agreements with Surviving Corporation substantially in the forms attached hereto
as Xxxxxxxx "X" xxx "X" xxxxxx.
(x) Registration Rights Agreement. FNFI shall have afforded
Shareholders an opportunity to enter into the Registration Rights Agreement
substantially in the form of Exhibit "D" hereto.
13
19
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS
4.1 Representations and Warranties of Company. Company represents and
warrants to FNFI, Newco and Surviving Corporation that (except for changes
contemplated by this Agreement and except as set forth in the Disclosure
Schedule attached hereto), each of the following statements is true, correct and
complete in all material respects as of the date of this Agreement and will be
true, correct and complete in all material respects as of the Closing Date (each
such statement to be made again by Company on that date with the Closing Date
being substituted for the date of this Agreement throughout this Article 4.1):
4.1.1 Organization and Standing; Articles and Bylaws. Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Texas, has full power and authority to own its assets and
properties and to carry on its business as presently conducted. Company is duly
qualified and authorized to do business, and is in good standing as a foreign
corporation, in each jurisdiction where the nature of its activities and of its
properties (both owned and leased) make such qualification necessary, except
where the failure to so qualify would not have a Material Adverse Effect.
Company has furnished FNFI with copies of its Articles of Incorporation and
Bylaws, as amended to the date hereof. Said copies are true, correct and
complete and contain all amendments through the Closing Date.
4.1.2 Authorization. All corporate action on the part of Company,
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement and the documents contemplated hereby,
the performance of all of Company's obligations hereunder and thereunder, and
for the exchange and cancellation of the Company Shares have been taken or will
be taken prior to the Closing. This Agreement and the documents contemplated
hereby, when executed and delivered, shall constitute valid and legally binding
obligations of Company enforceable in accordance with their respective terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and subject to the availability of equitable remedies.
4.1.3 Subsidiaries. Company has no Subsidiaries and does not
presently own, of record or beneficially, or control, directly or indirectly,
any capital stock, securities convertible into capital stock or any other equity
interest in any corporation, association or business entity, nor is the Company,
directly or indirectly, a participant in any joint venture, partnership or other
entity.
4.1.4 Capitalization. The authorized capital stock of Company
consists of 10,000 shares of Common Stock, no par value, of which 1,000 shares
are issued and outstanding as of the date of this Agreement. All of the Company
Shares have been duly authorized and validly issued and are fully paid and
non-assessable. All of the Company Shares were offered, issued, sold and
delivered by Company in compliance with all applicable state and federal laws
14
20
concerning the issuance of securities. None of the Company Shares were issued in
violation of any preemptive rights created by statue, or by Company's charter
documents, or by any agreement to which Company may be bound.
Schedule 4.1.4 to the Disclosure Schedule hereto contains a complete
list of, and the number of shares owned of record by, the holders of the issued
and outstanding Company Stock.
There are no outstanding shares of Company Stock, preferred stock or any
other equity securities of Company, and there are no options, warrants, calls,
conversion rights, commitments or agreements of any character to which Company
may be bound that do or may obligate Company to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of Company Stock, preferred
stock or other equity securities or that do or may obligate Company to grant,
extend or enter into any such option, warrant, call, conversion right,
commitment or agreement. There are no outstanding arrangements, agreements,
commitments or understandings of any kind affecting or relating to the voting,
issuance, purchase, redemption, repurchase or transfer of any capital stock of
Company or any other securities of Company. Other than pursuant to the merger
referenced in Section 7.1(f) or as provided in or contemplated by this
Agreement, Company has not, or prior to the Effective Time will have not, become
a party to or subject to any contract or obligation wherein any Person has a
right or option to purchase or acquire any rights in any additional capital
stock or securities of Company. As a result of the Merger, FNFI will be the
record and beneficial owner of all outstanding capital stock of Company and
rights to acquire capital stock of Company.
4.1.5 Financial Statements. Schedule 4.1.5 to the Disclosure
Schedule hereto includes (i) true, complete and correct copies of Company's
unaudited balance sheet as of December 31, 1996 (the end of its most recently
completed fiscal year) and statements of income, cash flows and retained
earnings for the year ended December 31, 1996; and (ii) true, complete and
correct copies of Company's unaudited balance sheet as of August 31, 1997 and
statements of income and cash flows for the period then ended. The above
described financial statements have been prepared in accordance with GAAP
consistently applied and fairly present the financial position of Company as of
the dates thereof and the results of its operations and cash flows for the
periods then ended, subject, in the case of all of such financial statements, to
the omission of complete footnote information. There are no Company Liabilities,
direct or indirect, fixed or contingent, which are not reflected in the balance
sheet as of August 31, 1997, except for Liabilities incurred in the Ordinary
Course of Business subsequent to August 31, 1997, which, either individually or
in the aggregate, would not be material. To the Knowledge of Company, there is
no Basis for any assertion against Company of any liability or obligation of any
nature whatsoever that is not fully reflected in the financial statements
delivered to FNFI which, either individually or in the aggregate, would be
materially adverse. Since the date of the August 31, 1997 financial statements,
there have been no material changes in Company's accounting policies.
15
21
4.1.6 Material Contracts. Schedule 4.1.6 to the Disclosure
Schedule hereto contains a complete and accurate list of all Material Contracts
to which Company is a party or bound. True, correct and complete copies of all
Material Contracts listed on Schedule 4.1.6 to the Disclosure Schedule have been
furnished by Company to FNFI. Each Material Contract so listed is a valid and
binding obligation of Company and is enforceable against Company and, to the
Knowledge of Company, against the other party or parties thereto, in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and subject to the availability of
equitable remedies. Company has performed all material obligations required to
be performed by it to date and is not in default under or in breach of any term
or provision of any Material Contract to which Company is a party, is subject or
is otherwise bound, and to the Knowledge of Company no event has occurred that,
with the giving of notice or the passage of time or both, would constitute such
a default or breach under any Material Contract. To the Knowledge of Company, no
party with whom Company has a Material Contract is in default of its obligations
thereunder. No consent or approval of any party to any of the Material Contracts
is necessary in order to permit Company to consummate the transactions
contemplated hereby.
4.1.7 Assets Other Than Real Property. Company has good and
marketable title to all properties and assets (other than real property which is
subject to Section 4.1.8, below) owned or leased by Company, free and clear of
all Liens except for: (i) Liens for current Taxes not yet due and payable which
have been fully reserved for; and (ii) Liens, if any, that are not substantial
in character, amount or extent and do not detract materially from the value, or
interfere with present use or the sale or other disposition, of the property
subject thereto or affected thereby. The assets and properties of Company
constitute all the assets, properties, rights, privileges and interests
necessary for the operation of Company's business. All of the vehicles, material
machinery and equipment of Company are in good working order and condition,
ordinary wear and tear excepted.
4.1.8 Real Property. Company does not own any real property.
Schedule 4.1.8 to the Disclosure Schedule hereto contains an accurate list and
general description of all real property leases, subleases, licenses or similar
agreements ("Leases") to which Company is a party (copies of which have been
previously furnished to FNFI), in each case setting forth (i) the landlord and
tenant or sublessor and sublessee, as applicable, thereof and the date and term
of each of the Leases; (ii) the legal description or street address of each
property covered thereby; and (iii) a brief description (including size and
function) of the principal improvements and buildings thereon (the "Leased
Premises"). Company has valid leasehold interests in the Leased Premises, free
and clear of all Liens and Security Interests, except for (i) Claims of lessors,
co-lessees or sublessees in such matters as are reflected in the Leases; (ii)
title exceptions affecting the fee estate of the lessor under such Leases; and
(iii) other matters as described in the Disclosure Schedule. Company is not in
default, and no facts or circumstances have occurred which, through the passage
of time or both, or the giving of notice would constitute a default, under any
Lease. The activities of Company, with respect to the Leased Premises, are in
all material respects permitted and authorized by applicable zoning laws,
16
22
ordinances and regulations and all laws and regulations of any Governmental
Entity. To the Knowledge of Company, the portions of the buildings on the Leased
Premises that are used in the business of Company are each in good repair and
condition (including without limitation, the electrical, mechanical, HVAC,
plumbing, elevator, other building systems and structural components serving
such premises, and the roofs are water-tight), and are in the aggregate
sufficient to satisfy Company's current business activities as conducted
thereat.
4.1.9 No Conflicts. Neither the execution and delivery nor the
performance of this Agreement by Company will result in any of the following:
(i) a default or an event that, with notice or lapse of time or both, could be a
default, breach or violation of (A) the Articles of Incorporation or Bylaws of
Company, (B) any Material Contract; (ii) the termination of any Material
Contract or the acceleration of the maturity of any Indebtedness or other
material obligation of Company; (iii) the creation or imposition of any Lien
(except for Permitted Liens) on any of the assets or properties of Company; (iv)
the creation or imposition of any Lien on any shares of the Company Stock; or
(v) a violation or breach of any writ, injunction or decree of any Governmental
Entity or arbitrator to which Company is a party or by which any of its
properties are bound.
4.1.10 Litigation. There are no Claims before any court or
administrative agency pending or currently threatened against or with respect to
Company (or to the Knowledge of Company any Basis therefor), which question the
validity of this Agreement or any action taken or to be taken in connection
herewith, or which, individually or in the aggregate, might result in a Material
Adverse Effect, or in any material impairment of the right or ability to carry
on its business as now conducted or as proposed to be conducted, or in any
material Liability on the part of Company. Company is not a party or subject to,
and none of its assets are bound by, the provisions of any order, writ,
injunction, judgment, or decree of any Governmental Entity or arbitrator.
4.1.11 Taxes. Company has no Liability for any federal, state or
local Taxes, except for Taxes which have accrued and are not yet payable.
Company has filed or caused to be filed all Tax Returns required under
applicable law to be filed on or before the Closing Date, Company has paid or
made provision for all Taxes and other charges which have or may become due for
the periods covered by such Tax Returns, and all such Tax Returns are true,
correct and complete in all respects. None of the Tax Returns of Company are
currently under investigation or audit, nor to the Knowledge of Company is an
investigation or audit pending, and there has not been an investigation or audit
of the Tax Returns of Company in the past seven (7) years. There are no
outstanding agreements or waivers extending the statutory period of limitations
applicable to any Tax Return for any period. The accounting treatment of all
items of income, gain, loss, deduction and credit as reported on all Tax Returns
and estimates filed by or on behalf of Company are true, correct and complete,
and all deferred Taxes and all Taxes due for the period ending on the Closing
Date have been accrued on the Balance Sheet of the August 31, 1997 Financial
Statements. No Claim has ever been made by any Governmental Entity in a
jurisdiction where Company does not file Tax Returns that it is or may
17
23
be subject to taxation by that jurisdiction. All taxes owed by
Company or which Company is obligated to withhold from amounts owed or owing to
any employee, independent contractor, stockholder, creditor or third party have
been paid. There are no unresolved Claims concerning Company's Tax Liability,
and no basis for any such Claims exist.
4.1.12 Employees. Schedule 4.1.12 to the Disclosure Schedule
hereto sets forth a complete list of all current employees of Company, together
with each employee's tenure with Company, title or job classification, and the
current annual rate of compensation payable to each such employee. There are no
unfair labor practice complaints, strikes, slowdowns, stoppages or other
controversies pending or, to the Knowledge of Company, attempts to unionize or
controversies threatened between Company and, or relating to, any of its
employees. Company is not a party to any collective bargaining agreement with
respect to any of its employees or to a written employment contract with any of
its employees, and there are no understandings with respect to the employment of
any officer or employee of Company which are not terminable by Company without
liability on not more than thirty (30) days' notice. No officer, director, or
employee is entitled to receive any payment of any amount under any existing
agreement, severance plan or other benefit plan, or to the accrual or vesting of
any other benefit or payment as a result of the consummation of any transactions
contemplated by this Agreement. Company has complied with all applicable federal
and state statutes and regulations which govern workers' compensation, equal
employment opportunity and equal pay. Company's employment of each of its
employees is in compliance with all immigration and naturalization laws of the
United States.
4.1.13 Governmental Consents. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations
or filings with, any Governmental Entity, required on the part of Company in
connection with the valid execution and delivery of this Agreement and the
exchange and cancellation of the Company Stock, or the consummation of any other
transaction contemplated hereby have been obtained, or will be effective at the
Closing.
4.1.14 Operating Rights. Company has all operating authority,
licenses, franchises, permits, certificates, consents, rights and privileges
(collectively, "Licenses") as are necessary or appropriate to the operation of
its business as now conducted. Such Licenses are in full force and effect, no
violations have been or are expected to have been recorded in respect of any
such Licenses, and no proceeding is pending or, to the Knowledge of Company,
threatened that could result in the revocation or limitation of any such
Licenses. Company has conducted its business so as to comply in all material
respects with all such Licenses.
4.1.15 Compliance with Applicable Laws. The properties, assets,
business and operations of Company have been and are being conducted in
compliance with all laws, ordinances, regulations, rules, orders, judgments or
decrees to which Company is subject. Company holds, and the properties, assets,
operations and businesses of Company have been maintained and conducted in all
material respects in compliance with, all Licenses that are
18
24
necessary for the conduct of its businesses. No investigation or review by any
Governmental Entity with respect to Company is pending or, to the best Knowledge
of Company, threatened, nor has any Governmental Entity indicated to Company an
intention to conduct the same.
4.1.16 Insurance. Schedule 4.1.16 to the Disclosure Schedule
hereto sets forth an accurate list, as of August 31, 1997, of all insurance
policies carried by Company and all insurance loss runs or workmen's
compensation claims received for the past two (2) policy years. Attached to
Schedule 4.1.16 to the Disclosure Schedule are true, complete and correct copies
of the summaries from the insurance company of all current insurance policies,
all of which are in full force and effect. All premiums payable under all such
policies have been paid and Company is otherwise in full compliance with the
terms of such policies (or other policies providing substantially similar
insurance coverage). To the Knowledge of Company, such policies of insurance are
of the type and in amounts carried by Persons conducting businesses similar to
that of Company. To the Knowledge of Company, there is no threatened termination
of or material premium increase with respect to, any of such policies. All
claims previously made under such policies have been timely filed.
4.1.17 Absence of Changes. Since January 1, 1997, there has not
been (i) any change or amendment in the Articles of Incorporation, Bylaws or
other governing instruments of Company; (ii) any sale or issuance of, or grant
of options or rights to acquire, any shares of the Company Stock or other
securities of Company or any declaration, setting aside, or payment of dividends
or redemptions in respect of any shares of capital stock of Company, or any
direct or indirect redemption, purchase, or other acquisition of such stock, or
any agreement, understandings or commitments to do the same; (iii) any transfer
or other disposition or pledge of, or the grant of options or rights to acquire,
any of the outstanding shares of the Company Stock; (iv) any amendment,
termination or revocation, or any threat of any amendment, termination, or
revocation having a Material Adverse Effect, of any Material Contract; (v) any
sale, transfer, mortgage, pledge, or subjection to Lien (other than Permitted
Liens) of, on or affecting any of the assets of Company valued at or above
$25,000 individually or in the aggregate; (vi) any increase in the compensation
paid or payable or in the fringe benefits provided to any employee of Company,
or the adoption of any employee benefit plans not in existence in the fiscal
year ended December 31, 1996; (vii) any damage, destruction or loss, whether or
not covered by insurance, of any of the assets of Company; (viii) any purchase
or lease, or commitment for the purchase or lease, of equipment or other capital
items not disclosed in Company's financial statements which is in excess of the
normal, ordinary and usual requirements of the business of Company; (ix) any
change that by itself or together with other changes, has had a Material Adverse
Effect; (x) any agreement or arrangement made by Company or any Shareholder to
take any action which, if taken prior to the date hereof, would have made any
representation or warranty set forth in this Agreement untrue or incorrect as of
the date when made; or (xi) the commencement or notice or, to the Knowledge of
Company, threat of commencement of any Claim against Company or any of its
affairs.
19
25
4.1.18 Employee Plans. Schedule 4.1.18 to the Disclosure Schedule
hereto sets forth a complete list of all Employee Plans and Benefit Arrangements
maintained, administered or contributed to, or otherwise participated in, by
Company. True and complete copies of each such Employee Plan or Benefit
Arrangement, including amendments thereto, have been provided to FNFI, together
with true and complete copies of (i) annual reports for the most recent three
(3) years (Form 5500 Series including, if applicable, Schedules A and B
thereto); (ii) all plan documents and the most recent summary plan description
of each such Employee Plan, together with any modifications thereto; and (iii)
the most recent favorable determination letter (if applicable) from the Internal
Revenue Service for each such Employee Plan. None of the Employee Plans is a
"multiemployer plan" as defined in Section 3(37) of ERISA or a "multiple
employer plan" as covered in Section 412(c) of the Code, and the Company has not
been obligated to make a contribution to any such multiemployer or multiple
employer plan. All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
such Employee Plan or Benefit Arrangement and all contributions for any period
ending on or before the Closing Date which are not yet due have been paid to
each such Employee Plan or Benefit Arrangement or accrued in accordance with
past custom and practice of Company. Each Employee Plan which is intended to be
qualified under Section 401(a) of the Code is so qualified and each trust
maintained pursuant thereto is exempt from income tax under Section 501(a) of
the Code. Neither Company nor any Employee Plan, nor any trusts created
thereunder, nor any trustee, administrator nor any other fiduciary thereof, has
engaged in a "prohibited transaction," as defined in Section 406 of ERISA and
Section 4975 of the Code, or any breach of fiduciary duty as defined in Part 4
of Subtitle B of Title I of ERISA.
4.1.19 Intellectual Property Rights.
(a) Company owns, or has the right to use, sell or license
all Intellectual Property necessary or required for the conduct of its business
as presently conducted and such rights to use, sell or license are reasonably
sufficient for such conduct of Company's business. Company has taken all
reasonable and practicable action designed to safeguard and maintain the secrecy
and confidentiality of, and its proprietary right in, all of its Intellectual
Property.
(b) Neither the manufacture, marketing, license, sale or
intended use of any Intellectual Property licensed or sold by Company or
currently under development by Company violates any license or agreement between
Company and any third party or infringes any Intellectual Property of any other
party; and there is not pending or, to the Knowledge of Company, threatened any
Claim contesting the validity, ownership or right to use, sell, license or
dispose of any Intellectual Property or that the proposed use, sale, license or
disposition thereof conflicts or will conflict with the rights of any other
party, nor to the Knowledge of Company, is there any Basis for any such
assertion.
20
26
4.1.20 Environment, Health and Safety.
(a) Company has complied with all Environmental, Health
and Safety Laws, except where failure to comply would not have a Material
Adverse Effect, and no Claim or notice has been filed or commenced against it
alleging any failure to so comply. Without limiting the generality of the
preceding sentence, Company has obtained and been in compliance with all of the
terms and conditions of all permits, licenses, and other authorizations which
are required under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables which are contained in, all Environmental, Health, and Safety Laws,
except where failure to comply would not have a Material Adverse Effect.
(b) Company has not handled or disposed of any substance,
arranged for the disposal of any substance, exposed any employee or other
individual to any substance or condition, or owned or operated any property or
facility in any manner that could form a reasonable basis for any present or
future Claim against Company giving rise to any Liability, except where having
done so would not have a Material Adverse Effect. Company has no Liability for
damage to any site, location, or body of water (surface or subsurface), for any
illness of or personal injury to any employee or other individual, or for any
reason under any Environmental, Health, and Safety Law which could have a
Material Adverse Effect.
(c) To the Knowledge of Company (with the understanding
that no investigation was attempted or performed), all properties used in its
business are free of Hazardous Substances, except where the existence thereof
would not have a Material Adverse Effect.
4.1.21 Certain Transactions. There are no existing or pending
transactions, nor are there any agreements or understandings, between Company,
on the one hand, and any Shareholder, officer or director of Company, or any
person or entity affiliated with any of them, on the other hand, including,
without limitation, any transactions, arrangements or understandings relating to
the purchase or sale of goods or services or the sale, lease or use of any of
the assets of or by Company, with or without adequate compensation, or to any
indebtedness owed to or by Company, in any amount whatsoever.
4.1.22 Bank Accounts; Powers of Attorney. The Disclosure Schedule
hereto sets forth an accurate list, as of the date of this Agreement, of the
following: (i) the name of each financial institution in which Company has any
account or safe deposit box; (ii) the names in which the accounts or boxes are
held; (iii) the type of account; and (iv) the name of each person authorized to
draw thereon or have access thereto. The Disclosure Schedule hereto also sets
forth the name of each Person holding a general or special power of attorney
from Company and a description of the terms of such power.
21
27
4.1.23 Tax-Free Reorganization. Company has taken all action
necessary to ensure that, from the Company standpoint, the Merger qualifies, in
all respects, as a tax-free reorganization pursuant to Code Section 368(a).
4.1.24 Employee Loans. There are no outstanding loans and/or
other advances made by Company to any of its officers, directors, employees,
agents or consultants.
4.1.25 Pooling. Company is not actually aware of any event or
condition that would adversely affect the ability of FNFI to account for the
business combination to be effected by the Merger as a pooling of interests, it
being understood, however, that neither Company nor any Shareholder has engaged
an accounting firm with respect to such matters and that neither Company, nor
any of its officers, directors, employees, Shareholders or representatives is
qualified to render advice with respect to pooling-of-interests accounting.
4.1.26 Brokers' Fees. Company has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
4.1.27 Full Disclosure. Neither this Agreement, the
representations and warranties by Company contained herein, the Exhibits or
Schedules hereto, nor any other written statement or certificate delivered or to
be furnished to FNFI in connection herewith, when read together, contain any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading.
4.2 Representations and Warranties of Shareholders. Each Shareholder,
severally and not jointly, represents and warrants to FNFI, Newco and Surviving
Corporation that (except for changes contemplated by this Agreement and except
as set forth in the Disclosure Schedule attached hereto), each of the following
statements is true, correct and complete in all material respects as of the date
of this Agreement and will be true, correct and complete in all material
respects as of the Closing Date (each such statement to be made again by each
Shareholder on that date with the Closing Date being substituted for the date of
this Agreement throughout this Article 4.2):
4.2.1 Authority. Such Shareholder has all the power to execute
and deliver this Agreement and to carry out and perform such Shareholder's
respective obligations under the terms of this Agreement; such Shareholder has
the sole power to dispose of his Company Shares, either as his sole and separate
property or as community property, as may be applicable to each Shareholder; and
this Agreement, when executed and delivered by such Shareholder, will constitute
such Shareholder's valid and binding obligation, enforceable against him in
accordance with the terms of this Agreement.
4.2.2 Ownership of Shares. Such Shareholder owns of record and
beneficially, and has good and marketable title to, that number of Company
Shares set forth in Schedule 4.1.4
22
28
to the Disclosure Schedule hereto, free and clear of all Liens, Indebtedness and
Claims of every kind. There are no options, warrants, calls, conversion rights,
commitments or agreements of any character to which such Shareholder may be
bound that do or may obligate such Shareholder to issue, deliver or sell, or
cause to be issued, delivered or sold, shares of such Shareholder's Company
Stock, preferred stock or other equity securities or that do or may obligate
such Shareholder to grant, extend or enter into any such option, warrant, call,
conversion right, commitment or agreement. Other than as provided in or
contemplated by this Agreement, such Shareholder has not, or prior to the
Effective Time will have not, become a party to or subject to any contract or
obligation wherein any Person has a right or option to purchase or acquire from
such Shareholder any rights in any of such Shareholder's capital stock or
securities of Company.
4.2.3 No Conflicts. Neither the execution and delivery nor the
performance of this Agreement by such Shareholder will result in any of the
following: (i) a default or an event that, with notice or lapse of time or both,
could be a default, breach or violation of any Material Contract to which such
Shareholder is a party or by which such Shareholder is bound; (ii) the
termination of any Material Contract or the acceleration of the maturity of any
Indebtedness or other material obligation of such Shareholder; (iii) the
creation or imposition of any Lien (except for Permitted Liens) on any of the
assets or properties of such Shareholder; (iv) the creation or imposition of any
Lien on any shares of the Company Stock owned by such Shareholder; or (v) a
violation or breach of any writ, injunction or decree of any Governmental Entity
or arbitrator to which such Shareholder is a party or by which any of his
properties are bound.
4.2.4 Litigation. To the Knowledge of such Shareholder, there are
no Claims before any Governmental Entity or arbitrator pending or currently
threatened against or with respect to such Shareholder relating to or affecting
such Shareholder's Company Shares (or any Basis therefor), which question the
validity of this Agreement or any action taken or to be taken in connection
herewith, or which, individually or in the aggregate, might result in a Material
Adverse Effect, or in any material impairment of the right or ability of such
Shareholder to enter into or perform under this Agreement.
4.2.5 Certain Transactions. There are no existing or pending
transactions, nor are there any agreements or understandings, between Company,
on the one hand, and such Shareholder, on the other hand, including, without
limitation, any transactions, arrangements or understandings relating to the
purchase or sale of goods or services or the sale, lease or use of any of the
assets of or by Company, with or without adequate compensation, or to any
Indebtedness owed to or by Company, in any amount whatsoever.
4.2.6 Investment Representations. Such Shareholder is receiving
the Fidelity Common Stock for his own account for investment purposes only, and
not as a nominee or agent for any other Person, and not with a view to or for
resale in connection with any distribution thereof. Such Shareholder
acknowledges that the Fidelity Common Stock to be issued hereunder
23
29
will not be registered under the Securities Act, nor qualified under any state
securities laws on the ground, among others, that no distribution or public
offering is to be effected.
4.2.7 Absence of Claims Against Company. Such Shareholder has no
Claims against the Company.
4.2.8 Tax-Free Reorganization. Such Shareholder has taken all
action necessary to ensure that, from such Shareholder's standpoint, the Merger
qualifies, in all respects, as a tax-free reorganization pursuant to Code
Section 368(a).
4.2.9 Continuity of Interest. Such Shareholder has no present
plan, intention or arrangement to dispose of any of the shares of Fidelity
Common Stock issued to him hereunder in a manner that would cause the Merger to
violate the continuity of shareholder interest requirement set forth in Treasury
Regulation Section 1.368-1.
4.2.10 Pooling. Neither such Shareholder nor any of his
Affiliates is aware of any event or condition that would adversely affect the
ability of FNFI to account for the business combination to be effected by the
Merger as a pooling of interests, it being understood, however, that neither
Company nor any Shareholder has engaged an accounting firm with respect to such
matters and that neither Company, nor any of its officers, directors, employees,
shareholders or representatives is qualified to render advice with respect to
pooling-of-interests accounting.
4.2.11 Brokers' Fees. Such Shareholder has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
4.2.12 Disclosure. Nothing has come to the attention of such
Shareholder that would lead such Shareholder to believe that the representations
and warranties by such Shareholder contained herein, the Exhibits or Schedules
hereto, or any other written statement or certificate delivered or to be
furnished by such Shareholder to FNFI in connection herewith, when read
together, contain any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FNFI AND NEWCO
FNFI and Newco represent and warrant to Company and Shareholders that
(except for changes contemplated by this Agreement) each of the following
statements is true, correct and complete in all material respects as of the date
of this Agreement and will be true, correct and complete in all material
respects as of the Closing Date (each such statement to be made again
24
30
by FNFI and Newco on that date with the Closing Date being substituted for the
date of this Agreement throughout this Article 5):
5.1 Organization and Standing; Articles and Bylaws. FNFI and Newco are
corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware and Texas, respectively, have full power and
authority to own their respective assets and properties and to carry on their
respective businesses as presently conducted. FNFI and Newco are duly qualified
and authorized to do business, and are in good standing as foreign corporations,
in each jurisdiction where the nature of their respective activities and of
their respective properties (both owned and leased) make such qualification
necessary, except where the failure to so qualify would not have a Material
Adverse Effect. FNFI and Newco have furnished Company with copies of their
respective Articles of Incorporation and Bylaws, as amended to the date hereof.
Said copies are true, correct and complete and contain all amendments through
the Closing Date.
5.2 Authorization. All corporate action on the part of FNFI and Newco,
and their respective officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the documents
contemplated hereby, the performance of all of FNFI's and Newco's obligations
hereunder and thereunder, and for the exchange and cancellation of the Company
Shares have been taken or will be taken prior to the Closing. This Agreement and
the documents contemplated hereby, when executed and delivered by FNFI and
Newco, shall constitute valid and legally binding obligations of FNFI and Newco
enforceable in accordance with their respective terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and subject to the availability of equitable remedies.
5.3 No Conflicts. Neither the execution and delivery nor the performance
of this Agreement by FNFI or Newco will result in any of the following: (i) a
default or an event that, with notice or lapse of time or both, could be a
default, breach or violation of (A) the Articles of Incorporation or Bylaws of
FNFI or Newco, (B) any Material Contract of FNFI or Newco; (ii) the termination
of any Material Contract of FNFI or Newco or the acceleration of the maturity of
any Indebtedness or other material obligation of FNFI or Newco; (iii) the
creation or imposition of any Lien (except for Permitted Liens) on any of the
respective assets or properties of FNFI or Newco; (iv) the creation or
imposition of any Lien on any shares of the Fidelity Common Stock; or (v) a
violation or breach of any writ, injunction or decree of any Governmental Entity
to which FNFI or Newco is a party or by which any of their respective properties
are bound.
5.4 Fidelity SEC Documents. FNFI has filed all forms, reports and
documents required to be filed with the SEC (the "Fidelity SEC Documents"), all
of which have been made available to Company. As of their respective dates, the
Fidelity SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations of the SEC thereunder applicable to such Fidelity
25
31
SEC Documents, and none of the Fidelity SEC Documents contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of FNFI included in the Fidelity SEC Documents comply in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except in the case of the unaudited interim financial statements, as permitted
by Form 10-Q promulgated by the SEC) and fairly present (subject, in the case of
the unaudited interim financial statements, to recurring audit adjustments
normal in nature and amount) the consolidated financial position of FNFI as at
the dates thereof and the consolidated results of its operations and cash flows
or changes in financial position for the periods then ended. There has been no
Material Adverse Effect on FNFI since the filing of FNFI's most recent Form 10-Q
and there is no Basis for believing that there will be a Material Adverse Effect
on FNFI's results to be stated in FNFI's Form 10-Q for the third quarter of
1997.
5.5 Fidelity Common Stock. All of the shares of Fidelity Common Stock to
be issued to Shareholders in connection with the Merger will be duly authorized,
validly issued, fully paid and non-assessable. Such shares, when issued in
accordance with the terms hereof, will have been offered, issued, sold and
delivered by FNFI in compliance with all applicable state and federal laws, free
and clear of all Liens and Claims and none of such shares shall be issued in
violation of the preemptive rights, rights of first offer, or other rights of
any shareholder of FNFI.
5.6 Governmental Consents. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations
or filings with, any Governmental Entity, required on the part of FNFI and/or
Newco in connection with the valid execution and delivery of this Agreement and
the issuance of Fidelity Common Stock, or the consummation of any other
transaction contemplated hereby have been obtained, or will be effective at the
Closing.
5.7 Tax-Free Reorganization. FNFI and Newco have taken all action
necessary to ensure that, from FNFI's and Newco's standpoint, the Merger
qualifies, in all respects, as a tax-free reorganization pursuant to Code
Section 368(a).
5.8 Brokers' Fees. Neither FNFI nor Newco is a party to or obligated
under any agreement with any broker, agent, or finder relating to the
transactions contemplated hereby, and neither the execution of this Agreement
nor the consummation of the transactions provided for herein will result in any
liability to any broker, agent, or finder.
5.9 Full Disclosure. Neither this Agreement, the representations and
warranties by FNFI and/or Newco contained herein, the Exhibits or Schedules
hereto, nor any other written statement or certificate delivered or to be
furnished to Company in connection herewith, when
26
32
read together, contain any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein not misleading.
ARTICLE 6
CONDUCT OF BUSINESS PENDING CLOSING
During the period commencing on the date hereof and continuing through
the Closing Date, Company and Shareholders, jointly and severally, covenant and
agree that, except for (i) the necessary, reasonable, ordinary and anticipated
effects of the merger described in Section 7.1(f), below, and (ii) changes
contemplated by this Agreement:
6.1 Qualification. Company shall maintain all qualifications to transact
business and remain in good standing in its jurisdiction of incorporation and in
the foreign jurisdictions in which Company owns or leases any property or
conducts any business.
6.2 Ordinary Course. Company shall conduct its business in, and only in,
the Ordinary Course of Business and, to the extent consistent with such
business, shall not make or institute any unusual or novel methods of
management, accounting, or operation that vary materially from those methods
used by the Company as of July 31, 1997. Company will use commercially
reasonable efforts to preserve its business organization intact, to keep
available to Company its present officers and employees, and to preserve its
present relationships with suppliers, customers, and others having business
relationships with the Company. Company shall maintain its properties and assets
in good condition and repair.
6.3 Corporate Changes. Company shall not (i) amend its Articles of
Incorporation or Bylaws (or equivalent documents); (ii) acquire by merging or
consolidating with, or agreeing to merge or consolidate with, or purchase
substantially all of the stock or assets of, or otherwise acquire, any business
or any corporation, partnership, association or other business organization or
division thereof; (iii) enter into any partnership or joint venture; (iv)
declare, set aside, make or pay any dividend or other distribution in respect of
its capital stock or purchase or redeem, directly or indirectly, any shares of
its capital stock; (v) issue or sell any shares of its capital stock of any
class or any options, warrants, conversion or other rights to purchase any such
shares or any securities convertible into or exchangeable for such shares; or
(vi) liquidate or dissolve or obligate itself to do so.
6.4 Indebtedness. Company shall not incur any Indebtedness, sell any
debt securities or lend money to or guarantee the Indebtedness of any Person.
Company shall not restructure or refinance its existing Indebtedness.
6.5 Accounting. Company shall not make any change in the accounting
principles, methods or practices followed by it or depreciation or amortization
policies or rates heretofore
27
33
adopted by it. Company shall maintain its books, records, and accounts in
accordance with GAAP applied on a basis consistent with that of prior periods.
6.6 Compliance with Legal Requirements. Company shall comply promptly
and in all material respects with all requirements that applicable law may
impose upon it, its operations and with respect to the transactions contemplated
by this Agreement, and shall cooperate promptly with, and furnish information
to, FNFI in connection with any such requirements imposed upon FNFI, or upon any
of its Affiliates, in connection therewith or herewith.
6.7 Disposition of Assets. Except in the Ordinary Course of Business,
Company shall not sell, transfer, license, lease or otherwise dispose of, or
suffer or cause the encumbrance by any Lien other than Permitted Liens upon any
of its properties or assets, tangible or intangible, or upon any interest
therein.
6.8 Compensation. Except in the Ordinary Course of Business, Company
shall not (i) adopt or amend in any material respect any collective bargaining,
bonus, profit-sharing, compensation, stock option, pension, retirement, deferred
compensation, Employee Plan, Benefit Arrangement, or any other agreement, trust,
fund or arrangement for the benefit of employees other than to comply with any
Legal Requirement; or (ii) pay, or make any accrual or arrangement for payment
of, any increase in compensation, bonuses or special compensation of any kind,
or any severance or termination pay to, or enter into any employment or loan or
loan guarantee agreement with, any Shareholder or any current or former officer,
director, employee or consultant of Company.
6.9 Modification or Breach of Agreements; New Agreements. Except in the
Ordinary Course of Business, Company shall not terminate or modify, or commit or
cause or suffer to be committed any act that will result in breach or violation
of any term of or (with or without notice or passage of time, or both)
constitute a default under or otherwise give any Person a basis for
nonperformance under, any Material Contract, written or oral, disclosed in this
Agreement or the Schedules hereto. Company shall refrain from becoming a party
to any contract or commitment other than in the Ordinary Course of Business.
Company shall meet all of its contractual obligations in accordance with their
respective terms.
6.10 Capital Expenditures. Except in the Ordinary Course of Business,
except for capital expenditures or commitments necessary to maintain its
properties and assets in good condition and repair (the amount of which shall
not exceed $15,000 individually or in the aggregate), Company shall not purchase
or enter into any contract to purchase any capital assets.
6.11 Consents. Company shall use commercially reasonable efforts to
obtain any consent, authorization or approval of, or exemption by, any
Governmental Entity or Person required to be obtained or made by any Party
hereto in connection with the transactions contemplated hereby or the taking of
any action in connection with the consummation thereof.
28
34
6.12 Maintenance of Insurance. Company shall maintain its policies of
insurance in full force and effect on substantially the same terms and
conditions as in effect on the date of this Agreement, and shall not do, permit
or willingly allow to be done any act by which any of said policies of insurance
may be suspended, materially impaired or canceled.
6.13 Discharge. Company shall not cancel, compromise, release or
discharge any Claim of Company upon or against any Person or waive any right of
Company of material value, and not discharge any Lien upon any asset of Company
or compromise any debt or other obligation of Company to any Person other than
Liens, debts or obligations with respect to current Liabilities of Company.
6.14 Claims. Company shall not institute, settle or agree to settle any
Claim before any Governmental Entity.
6.15 Taxes and Tax Assessments. Company shall pay, when due, and prior
to the imposition or assessment of any interest, penalties or Liens by reason of
the nonpayment of, all Taxes assessed against Company, its assets, properties or
operations. Company shall furnish promptly to FNFI a copy of all notices of
proposed assessment or similar notices or reports that are received from any
taxing authority and which relate to Company's operations for periods ending on
or prior to the Closing Date.
ARTICLE 7
ADDITIONAL COVENANTS
7.1 Covenants of Company and Shareholders. During the period from the
date hereof through the Closing Date, Company and Shareholders agree to:
(a) Comply promptly with all applicable Legal Requirements
imposed upon them with respect to the transactions contemplated by this
Agreement, and shall cooperate promptly with, and furnish information to, FNFI
in connection with any such requirements imposed upon FNFI or upon any of its
Affiliates in connection therewith or herewith;
(b) Use their reasonable best efforts to obtain (and to cooperate
with FNFI in obtaining) any consent, authorization or approval of, or exemption
by, any Person required to be obtained or made by Company and/or Shareholders in
connection with the transactions contemplated by this Agreement;
(c) Use their reasonable best efforts to bring about the
satisfaction of the conditions precedent to Closing set forth in Section 3.6,
above;
29
35
(d) Promptly advise FNFI orally and, within three (3) business
days thereafter, in writing of any change in Company's business or condition
that has had or would reasonably be expected to have a Material Adverse Effect
on Company;
(e) Deliver to FNFI prior to the Closing a written statement
disclosing any untrue statement in this Agreement or any Exhibit or Schedule
hereto (or supplement thereto) or document furnished pursuant hereto, or any
omission to state any material fact required to make the statements herein or
therein contained complete and not misleading, immediately upon the discovery of
such untrue statement or omission, accompanied by a written supplement to any
Exhibit or Schedule to this Agreement that may be affected thereby; provided,
however, that the disclosure of such untrue statement or omission shall not
prevent FNFI from terminating this Agreement pursuant to Section 9.1(b) hereof
at any time at or prior to the Closing in respect of any original untrue or
misleading statement;
(f) Effect and consummate the merger or other business
combination of Firm Computer Solutions, LTD, a Texas limited partnership
("FCS"), with and into Company in accordance with the TBCA, and upon such terms
and conditions and in accordance with such documentation pre-approved by FNFI in
its absolute and sole discretion. Upon the consummation of the merger or other
business combination, (i) all of the assets and liabilities of FCS existing as
of July 31, 1997 (including or excluding, as the case may be, assets and
liabilities subsequently acquired or disposed of in the Ordinary Course of
Business) shall be merged or otherwise transferred into Company; and (ii) all of
the ownership interests in FCS, including all options, warrants, calls,
conversion rights, commitments or agreements of any character which relate to
such ownership interests, shall be canceled and extinguished.
7.2 Covenants of FNFI and Newco. During the period from the date hereof
to the Closing Date, FNFI and Newco shall:
(a) Comply promptly with all applicable Legal Requirements
imposed upon it with respect to the transactions contemplated by this Agreement,
and shall cooperate promptly with, and furnish information to, Shareholders in
connection with any such requirements imposed upon the Shareholders or Company
or upon any of Company's Affiliates in connection therewith or herewith;
(b) Use its reasonable best efforts to obtain any consent,
authorization or approval of, or exemption by, any Person required to be
obtained or made by FNFI in connection with the transactions contemplated by
this Agreement;
(c) Use its reasonable best efforts to bring about the
satisfaction of the conditions precedent to Closing set forth in Section 3.7 of
this Agreement; and
(d) Cause Surviving Corporation to continue at least one (1)
significant historical business line of Company, or use at least a significant
portion of Company's historical
30
36
business assets in a business, in each case in accordance with Treasury
Regulation Section 1.368-1.
(e) Promptly advise Company orally and, within three (3) business
days thereafter, in writing of any change in FNFI's or Newco's business or
condition that has had or would reasonably be expected to have a Material
Adverse Effect on FNFI or Newco;
7.3 Tax-Free Reorganization/Tax Advice.
(a) Except as a result of breaches by FNFI, Newco and/or
Surviving Corporation of Section 7.3(b) below, each Shareholder shall assume and
be fully responsible for any and all Liability, including without limitation any
and all Tax Liability, incurred by him, which is caused by, arises from, or
relates to the failure of the Merger to qualify, in any respects, as a tax-free
reorganization pursuant to Code Section 368(a). Company and Shareholders
acknowledge that they have received their own independent tax advice with
respect to the Merger, this Agreement and the transactions contemplated thereby,
including without limitation whether the Merger qualifies as a tax-free
reorganization in accordance with Section 368(a) of the Code, and except as
provided in Section 7.3(b) below, are not in any way relying on any statements
or advice of FNFI, Newco or any of their officers, directors, employees, agents
or representatives, other than the representations and warranties of FNFI and
Newco contained herein or in any ancillary agreement hereto.
(b) Neither FNFI, Newco, Surviving Corporation nor any
Shareholder shall take any action which, alone or taken together with other
actions, would result in the Merger not being treated as a tax-free
reorganization, including, but not limited to, the taking of any position that
would jeopardize the characterization of the Merger as a tax-free
reorganization.
7.4 Continuity of Interest. Shareholders shall not dispose of any shares
of Fidelity Common Stock in a manner that would cause the Merger to violate the
continuity of shareholder interest requirement set forth in Treasury Regulation
Section 1.368-1.
7.5 Access and Information.
(a) During the period commencing on the date hereof and
continuing through the Closing Date, Shareholders shall cause Company to afford
to FNFI and to FNFI's accountants, counsel, and other representatives,
reasonable access during regular business hours and without undue interruption
to its business to all of its properties, books, contracts, commitments, records
and personnel and, during such period, to cause Company to furnish promptly to
FNFI all information concerning its business, properties and personnel as FNFI
may reasonably request.
(b) Except to the extent permitted by the provisions of Section
7.8, below, FNFI shall hold in confidence, and shall use reasonable efforts to
ensure that its employees and
31
37
representatives hold in confidence, all such information supplied to it by
Shareholder or Company concerning Company and shall not disclose such
information to any third party except as may be required by any Legal
Requirement and except for information that (i) is or becomes generally
available to the public other than as result of disclosure by FNFI or its
representatives; (ii) becomes available to FNFI or its representatives from a
third party other than Shareholders or Company, and FNFI or its representatives
have no reason to believe that such third party is not entitled to disclose such
information; (iii) is known to FNFI or its representatives on a non-confidential
basis prior to its disclosure by Shareholders or Company; or (iv) is made
available by Shareholders or Company to any other Person on a non-restricted
basis. FNFI's obligations under the foregoing sentence shall expire on the
Closing Date or, if the closing does not occur, one year after the date hereof.
7.6 Expenses. All costs and expenses (including, without limitation, all
legal fees and expenses and costs) incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the Party incurring
the same.
7.7 Certain Notifications. At all times from the date hereof to the
Closing Date, each Party shall promptly notify the others in writing of the
occurrence of any event that will or reasonably would be expected to result in
the failure to satisfy any of the conditions specified in Sections 3.6 and 3.7,
above.
7.8 Publicity. At all times prior to the Closing Date, each Party shall
obtain the consent of all other Parties hereto prior to issuing, or permitting
any of its directors, officers, employees or agents to issue, any press release
or other information to the press, employees of Company or any third party with
respect to this Agreement or the transactions contemplated hereby; provided,
however, that no party shall be prohibited from supplying any information to any
of its representatives, agents, attorneys, advisors, and others to the extent
necessary to complete the transactions contemplated hereby so long as such
representatives, agents, attorneys, advisors, and others are made aware of the
terms of this Section 7.8. Nothing contained in this Agreement shall prevent any
party to this Agreement at any time from furnishing any required information to
any Governmental Entity or authority pursuant to a Legal Requirement or from
complying with its legal or contractual obligations; provided that the Party
furnishing such information shall have used its reasonable best efforts to
comply with this provision first, and in any event does so only with the advice
of counsel.
7.9 Further Assurances.
(a) Subject to the terms and conditions of this Agreement, each
of the Parties hereto agrees to use all reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Legal Requirements, to consummate and make
effective the transactions contemplated by this Agreement.
32
38
(b) If at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, Shareholders
and the proper officers or directors of FNFI and Company, as the case may be,
shall take or cause to be taken all such necessary or convenient action and
execute, and deliver and file, or cause to be executed, delivered and filed, all
necessary or appropriate documentation.
7.10 Competing Offers. Shareholders agree that they will not, and will
cause Company not to, directly or indirectly, through an officer, director,
agent, or otherwise, solicit, initiate or encourage the submissions of bids,
offers or proposals by, any Person with respect to an acquisition of Company or
its assets or capital stock or a merger or similar transaction, and Shareholders
will not, and will not permit Company to, engage any broker, financial adviser
or consultant to initiate or encourage proposals or offers from other Persons.
Furthermore, Shareholders shall not, and shall not permit Company to, directly
or indirectly, through any officer, director, agent or otherwise, engage in
negotiations concerning any such transaction with, or provide information to,
any Person other than FNFI and its representatives with a view to engaging, or
preparing to engage, that Person with respect to any matters in this Section
7.10. Shareholders shall ensure that Company shall not commence any proceeding
to merge, consolidate or liquidate or dissolve or obligate itself to do so.
7.11 Post-Termination Employment. Company and Shareholders acknowledge
and agree that after the Effective Time (i) neither FNFI nor Surviving
Corporation shall be required to employ or retain any employee of Company or any
other Person; and (ii) FNFI, in its sole and absolute discretion, may cause
Surviving Corporation to retain all, some, or none or such employees.
7.12 NYSE Listing. FNFI will make such filings as are necessary with the
New York Stock Exchange regarding the transactions contemplated hereby and will
cause the shares of Fidelity Common Stock to be issued under this Agreement to
be approved for listing on the NYSE, subject only to official notice of
issuance, prior to the Effective Time.
7.13 Employee Benefits. As of the Effective Time, the Company's
Benefit Arrangements and Employee Plans shall either be fully maintained or
Company's employees and their eligible dependents shall be consolidated into
FNFI's Benefit Arrangements and Employee Plans with full takeover provisions
("FNFI Coverage"), such that, among other things, Company employees and their
eligible dependents who receive FNFI Coverage are (i) credited for service with
Company to be applied against all service and waiting periods under FNFI
Coverage, (ii) credited for any deductibles paid for the plan year under the
Company's Benefit Arrangements and Employee Plans to be applied against any
deductibles under FNFI Coverage and (iii) not excluded from FNFI Coverage for
any preexisting condition if such employee or eligible dependent was entitled to
coverage under the Company's Benefit Arrangements and Employee Plans as of the
Closing Date.
33
39
7.14 Supplements to Schedules. Within five (5) days prior to the
Closing, Company will supplement or amend the Schedules which it has delivered
pursuant to this Agreement with respect to any matter hereafter arising which,
if existing or occurring at the date of this Agreement, would have been required
to be set forth or described in any such Schedule or which is necessary to
correct any information in any such Schedule which has been rendered inaccurate
thereby.
7.15 Officer and Director Indemnity. FNFI will not permit Company's
organizational documents to be amended to affect adversely the provisions
concerning indemnification for current indemnitees.
ARTICLE 8
[Omitted]
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time:
(a) By mutual consent of the FNFI and Shareholders;
(b) By Shareholders and Company as a group, on the one hand, or
by FNFI, on the other hand, if there has been a material breach, failure to
fulfill or default (collectively, a "Breach") on the part of the other Party
(the "Breaching Party") of any of the representations and warranties contained
herein or in the due and timely performance and satisfaction of any of the
covenants, agreements or conditions contained herein and such Breach is not
cured by the Breaching Party within ten (10) business days of the receipt of
written notice of such Breach from the other Party; or
(c) By Shareholders and Company as a group, on the one hand, or
by FNFI, on the other hand, if there shall be a final non-appealable order of a
Governmental Entity or arbitrator in effect preventing consummation of the
Merger; or there shall be any action taken, or any statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to
the Merger by any Governmental Entity or arbitrator which would make the
consummation of the Merger illegal.
9.2 Effect of Termination. In the case of any termination of this
Agreement pursuant to Section 9.1, above, this Agreement shall forthwith become
void, and there shall be no Liability or obligation on the part of any Party or
its officers, directors or shareholders. Notwithstanding the foregoing sentence,
(i) the provisions of Section 7.5 and 7.6 shall remain
34
40
in full force and effect and survive any termination of this Agreement; (ii)
each Party shall remain liable for any breach of this Agreement prior to its
termination; and (iii) in the event of termination pursuant to Section 9.1(b),
above, then notwithstanding the provisions of Section 7.6, above, the breaching
Party shall be liable to the non-breaching Party to the extent of the expenses
incurred by such other party in connection with this Agreement and the
transactions contemplated thereby.
9.3 Amendment. This Agreement may be amended at any time by a written
instrument executed by the Parties. Any amendment effected pursuant to this
Section 9.3 shall be binding upon all Parties.
9.4 Waiver. Any term or provision of this Agreement may be waived in
writing at any time by the Party or Parties entitled to the benefits thereof.
Any waiver effected pursuant to this Section 9.4 shall be binding upon all
Parties hereto. No failure to exercise and no delay in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege preclude the exercise of any
other right, power or privilege. No waiver of any breach of any covenant or
agreement hereunder shall be deemed a waiver of a preceding or subsequent breach
of the same or any other covenant or agreement. The rights and remedies of each
Party under this Agreement are in addition to all other rights and remedies,
whether at law, in equity or otherwise, that such Party may have against the
other Parties.
ARTICLE 10
INDEMNIFICATION
10.1 Survival of Representations and Warranties. The representations and
warranties of Company and Shareholders contained in this Agreement or in any
writing delivered pursuant hereto or at the Closing shall survive the Closing
and the consummation of the transactions contemplated hereby until the second
(2nd) anniversary of the Closing Date; provided that the representations and
warranties contained in Sections 4.1.2, 4.1.4, 4.1.11, 4.1.20, 4.2.1 and 4.2.2
shall continue until the expiration of the applicable statutes of limitations.
10.2 Indemnification by Company and Shareholders. Effective as of the
Closing, Shareholders, severally in accordance with their pro rata ownership
interests in Company immediately prior to the Effective Time, in consideration
for the exchange of the Company Shares, covenant and agree with FNFI, Newco and
Surviving Corporation and their respective officers, directors, employees,
shareholders, assigns, successors and affiliates (a "FNFI Indemnified Party") to
indemnify and hold harmless a FNFI Indemnified Party from, against and in
respect of any and all Losses suffered, sustained, incurred or paid by any FNFI
Indemnified Party in connection with resulting from or arising out of, directly
or indirectly:
35
41
(a) any breach of any representation or warranty of any
Shareholder or Company set forth in this Agreement or any certificate, document
or instrument delivered by or on behalf of any Shareholder or Company in
connection herewith; or
(b) any non-fulfillment of any covenant or agreement on the part
of any Shareholder or Company in this Agreement which is required to be
performed after the Closing.
Payment shall not be a condition precedent to recovery under the above
indemnities.
10.3 Indemnification by FNFI. Effective as of the Closing, FNFI
covenants and agrees with Shareholders and their respective heirs, successors
and assigns (a "Shareholder Indemnified Party") to indemnify and hold harmless a
Shareholder Indemnified Party from, against and in respect of any and all Losses
suffered, sustained, incurred or paid by any Shareholder Indemnified Party in
connection with resulting from or arising out of, directly or indirectly:
(a) any breach of any representation or warranty of FNFI or Newco
set forth in this Agreement or any certificate, document or instrument delivered
by or on behalf of FNFI or Newco in connection herewith; or
(b) any non-fulfillment of any covenant or agreement on the part
of FNFI or Newco in this Agreement which is required to be performed after the
Closing.
Payment shall not be a condition precedent to recovery under the above
indemnities.
10.4 Third-Party Claims. In the event any third party asserts any Claim
with respect to any matter as to which the indemnities in this Agreement relate,
the Party or Person against whom the Claim is asserted (the "Indemnified Party")
shall give prompt notice to the other Party or Person (the "Indemnifying
Party"), and the Indemnifying Party shall have the right at its election to take
over the defense or settlement of the third-party Claim at its own expense by
giving prompt notice to the Indemnified Party. If the Indemnifying Party does
not give such notice and does not proceed diligently so to defend the
third-party Claim within thirty (30) days after receipt of the notice of the
third-party Claim, the Indemnifying Party shall be bound by any defense or
settlement that the Indemnified Party may make as to those claims and shall
reimburse the Indemnified Party for its Losses related to the defense or
settlement of the third-party Claim. The Parties shall cooperate in defending
against any asserted third-party Claims. For purposes of this Article 10, the
reference to this Agreement includes any certificate, Schedule, Exhibit, list,
summary or other information provided or delivered to a party by the
Indemnifying Party or its agents and affiliates in connection with this
Agreement.
10.5 Additional Indemnification Provisions. Notwithstanding anything to
the contrary in this Article 10, (i) Shareholders aggregate Liability under
Section 10.2, above, shall not exceed Two Million Dollars ($2,000,000); (ii)
Shareholders shall not incur any Liability under Section 10.2, above, until the
aggregate amount of indemnification obligations exceed Twenty-
36
42
Five Thousand Dollars ($25,000); (iii) subject to clause (ii) above,
Shareholders shall not incur any Liability under Section 10.2, above, for an
indemnifiable Loss that individually does not exceed One Thousand Dollars
($1,000); (iv) Shareholders shall have the right but not the obligation to pay
any indemnification obligations owed FNFI in Fidelity Common Stock valued at the
Closing Fidelity Price; and (v) the Parties will make appropriate adjustments
for any Tax benefits or Tax detriments or insurance proceeds in determining the
amount of any indemnification obligation under this Article 10.
10.6 Indemnification Non-Exclusive. The indemnification provisions of
this Article 10 are in addition to, and not in derogation of, any statutory,
equitable or common-law remedy any Party may have for breach of representation,
warranty, covenant or agreement.
10.7 Access and Information. With respect to any claim for
indemnification hereunder, the Indemnified Party will give to the Indemnifying
Party and its counsel, accountants and other representatives full and free
access during normal business hours and upon the giving of reasonable prior
notice to their books and records relating to such claims, and to their
employees, accountants, counsel and other representatives, all without charge to
the Indemnifying Party, except for reimbursement of reasonable out-of-pocket
expenses. The Indemnified Party agrees to maintain any of its books and records
which may relate to a claim for indemnification hereunder for such period of
time as may be necessary to enable the Indemnifying Party to resolve such claim;
provided that the failure to do so shall not relieve the Indemnifying Party of
any obligation hereunder unless the Indemnifying Party demonstrates that the
failure to do so substantially prejudiced the Indemnifying Party in the defense
of any third-party proceeding, and then only to the extent so prejudiced.
10.8 Mitigation. The Indemnified Parties agree to mitigate their Losses
and use their reasonable efforts to collect any indemnifiable damages from any
available insurer or third-party indemnitors before collecting from the
Indemnifying Party; provided, however, nothing in the foregoing sentence shall
preclude any Indemnified Party from filing a claim against the Indemnifying
Party from the outset. If any amounts are recovered from an insurer or third
party after payment to an Indemnified Party, the recovering party (or parties)
shall promptly pay over to such Indemnifying Party (or Parties) any such
recovered amounts, but only to the extent of any Losses with respect to such
matter.
10.9 Right of Set-Off. Any Party to this Agreement shall be entitled to
set-off against any amounts due to another Party under the terms of this
Agreement or under any additional agreement, any amounts due from such other
Party under the terms of this Agreement.
37
43
ARTICLE 11
GENERAL PROVISIONS
11.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents, made and to be performed entirely within the State of
California.
11.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
Parties hereto.
11.3 Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement among the Parties with regard to the
subject matter hereof and no Party shall be liable or bound to any other Party
in any manner by any representations, warranties, covenants, or agreements
except as specifically set forth herein or therein. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the Parties
hereto and their respective successors and assigns, any rights, remedies,
obligations, or Liabilities under or by reason of this Agreement, except as
expressly provided herein.
11.4 Severability. In the event any provision of this Agreement shall be
invalid, illegal, or unenforceable, it shall, to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the Parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
11.5 Notice. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given (i) if
delivered personally (including by overnight express or messenger), upon
delivery; (ii) if delivered by registered or certified mail, return receipt
requested, upon the earlier of actual delivery or three (3) days after being
mailed; or (iii) if given by facsimile, upon confirmation of transmission by
facsimile, in each case to the Parties at the following addresses:
(a) If to FNFI, Newco or Surviving Corporation, addressed to:
Fidelity National Financial, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
38
44
With a copy to:
C. Xxxxx Xxxxxxx, Esq.
Stradling, Yocca, Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
(b) If to Shareholders (Pre-Closing) and/or Company
(Pre-Closing), addressed to:
BRON Research, Inc.
P. O. Box 162094 (mailing address)
Xxxxxx, Xxxxx 00000-0000
0000 X. Xxxxxxx xx Xxxxx Xxx., Xxxxxxxx X
(physical address)
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxx/Xxxxxx X. Xxxxxxx, Xx.
Facsimile: (000) 000-0000
With a copy to:
J. Xxxxxxx Xxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
(c) If to a Shareholder (Post-Closing), addressed to such
Shareholder at such Shareholder's most recent address as
shown on the records of the Company:
With a copy to:
J. Xxxxxxx Xxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
By its inclusion herein as a recipient of copies of notices, the parties
acknowledge and agree that notwithstanding the fact that Xxxxxxx, Phleger &
Xxxxxxxx LLP represented Company (which effective as of the Closing will be
wholly owned by FNFI) in connection with the
39
45
transactions contemplated by this Agreement, Xxxxxxx, Phleger & Xxxxxxxx LLP
shall be (i) permitted to represent the Shareholders and their respective heirs,
executors, administrators, affiliates, successors and assigns in connection with
any and all matters which may arise out of or in connection with this Agreement,
or any ancillary agreement hereto; and (ii) upon the receipt of appropriate
conflict waiver letters, if any be required, and subject to applicable ethical
obligations of attorneys, entitled to represent any of the other Parties (or
their respective Affiliates) on any other matters which any such Party (or its
Affiliates) may request.
11.6 Pooling. If any provision of this Agreement or any ancillary
agreement hereto or the application of any such provisions to any Person or
circumstance precludes the use of "pooling of interests" accounting treatment in
connection with the Merger, then provided the Parties mutually agree, (i) the
Parties shall negotiate in good faith to agree to such amendments, modifications
or supplements of or to this Agreement or such other appropriate actions in
order, to the maximum extent practicable, for the Merger to be accounted for as
a "pooling of interests," which amendments, modifications or supplements shall
be deemed to take effect as of the date of this Agreement or any ancillary
agreement hereto, as applicable; (ii) upon reading such agreement (if any), such
provision shall be of no force and effect to the extent and solely to the extent
necessary to preserve such accounting treatment for the Merger; and (iii) such
invalidity or unenforceability shall in no way affect any of the other
provisions hereof.
11.7 Construction. Parties to this Agreement have participated jointly
in the negotiation and drafting of this Agreement and have had competent counsel
of their own choosing. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
11.8 Headings. The headings of the paragraphs and subparagraphs of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
11.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
11.10 Recitals, Schedules, and Exhibits. The Recitals, Schedules and
Exhibits to this Agreement are incorporated herein and, by this reference, made
a part hereof as if fully set forth at length herein.
[SIGNATURE PAGES FOLLOW.]
40
46
IN WITNESS WHEREOF, the foregoing Agreement and Plan of Reorganization
is hereby executed as of the date first above written.
FNFI:
FIDELITY NATIONAL FINANCIAL, INC.,
a Delaware Corporation
By: /s/ XXXXXX X. XXXXXX
----------------------------------
Its: Executive Vice President
COMPANY:
BRON RESEARCH, INC., a Texas Corporation
By: /s/ XXXXX X. XXXXX
----------------------------------
Its: CEO
SHAREHOLDERS:
/s/ XXXXX X. XXXXX
----------------------------------------
Xxxxx X. Xxxxx
/s/ XXXXXX X. XXXXXXXX, XX.
----------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
/s/ XXXX X. XXXXXXXX
----------------------------------------
Xxxx X. Xxxxxxx
NEWCO:
BRON ACQUISITION CORPORATION, a Texas
Corporation
By: /s/ XXXXXX X. XXXXXX
----------------------------------------
Its: Executive Vice President
