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EXHIBIT 10.53
EXECUTION COPY
STOCK AND ASSET PURCHASE AGREEMENT
THIS STOCK AND ASSET PURCHASE AGREEMENT (the "Agreement") is dated as of
May 22, 1997, by and between XXXXXXX X. XXXXXXX and XXXX X. XXXXXX, XX., on
behalf of a new entity formed by them for the purpose of this Agreement
(collectively, the "Purchaser"), and FIDELITY NATIONAL FINANCIAL, INC. (the
"Seller") with respect to the stock of FNF Ventures, Inc., a California
corporation (the "Company"), and certain related assets.
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
Sale of Stock and Related Assets
1.1 Sale of Stock and Other Assets. Subject to the terms and conditions
stated below, Seller agrees to sell and deliver to Purchaser and its successors
and assigns forever (a) all 250 shares of Company's common stock (the "Stock")
and (b) all the right, title and interest of Seller and its affiliates
(including without limitation Cal-West Services, Inc.), established by a
participation agreement dated January 19, 1996 granting a 25% interest in a
promissory note in the original principal amount of $1,000,000, and in a right
to acquire 37.5% of the shares of Falzetti Umbrella, Inc. (such interest being
called the "Other Assets" for purposes of this Agreement) and the Purchaser
agrees to purchase from the Seller all 250 shares of Stock, and the "Other
Assets," for the purchase price hereinafter set forth, on the Closing Date.
1.2 Purchase Price. In full consideration for the purchase of the Stock
and the Other Assets, the Purchaser shall
(a) pay to the Seller, on the Closing Date, an aggregate amount
of $2,600,000 for the Stock payable to the bank account designated by Seller in
immediately available funds;
(b) pay to Seller's designated affiliate the sum of $240,776 in
immediately available funds as consideration for the Other Assets;
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(c) grant to Seller or Seller's designee, as additional
consideration for sale of the Stock, a participation interest representing only
the right to receive 20% of any value received by Company from its existing
warrants in the following companies:
AMI Telecommunications, Inc.
Bluebird Systems, Inc.
NetPro Computing, Inc.
distributable at the earlier of (x) the date such warrants or shares obtained by
exercise thereof are sold for cash or for securities of another entity or (y)
the date any dividends are paid or securities obtained upon exercise of the
warrants are distributed to other holders or (z) after restrictions on transfer
imposed in the applicable Restricted Stock Agreement lapse; and
(d) pay, or cause Company to pay, the "Inter-Company Balance"
described below in Section 4.2(c) on the Closing Date.
1.3 Allocation of Price. Seller and Purchaser agree that the $2,600,000
payment and the grant of a participation interest as contemplated by Section
1.2(c) represent consideration for the Stock and the sum of $240,776 represents
consideration for the Other Assets.
1.4 Closing. The sale referred to in Section 1.1 shall take place at
10:00 a.m. at the offices of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxx
Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000 on or before the
thirtieth business day after receipt of the approval from the United States
Small Business Administration ("SBA") for the change of control of Company, or
at such other time and date as the parties hereto shall by written instrument
designate. Such time and date are herein referred to as the "Closing Date."
At the Closing:
(a) Seller shall tender or instruct the escrow holder to tender
the certificates for the Stock, together with appropriate transfer documents for
the Other Assets, duly endorsed in a manner reasonably satisfactory to
Purchaser, and accompanied by any necessary consents of third parties to the
transfer of the Other Assets;
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(b) Seller shall deliver written resignations of Xxxxxxx X.
Xxxxx, XX, M'Liss Xxxxx Xxxx, Xxxx X. Xxxxxx and Xxxxx X. Xxxxxx.
(c) Seller shall deliver a certificate executed by Seller, dated
as of the Closing Date, that all warranties and representations given by Seller
in this Agreement are true and correct as of such date;
(d) Seller shall deliver a certified copy of the resolutions of
the Board of Directors of Seller authorizing the execution, delivery and
consummation of this Agreement and all agreements and documents executed in
connection herewith by it, sufficient in form and content to meet the
requirements of the law of the state of Seller's incorporation relevant to such
transactions and certified by officers of Seller to be validly adopted and in
full force and effect and unamended as of the Closing;
(e) Purchaser shall pay the amounts described in Sections 1.2(a)
and 1.2(b), less the deposit contemplated by Section 1.5, shall cause the escrow
holder to deliver the deposit, and shall provide evidence satisfactory to Seller
of the participation described in Section 1.2(c); and
(f) Purchaser and Seller shall agree upon the Inter-Company
Balance and Purchaser shall pay such amount, if any, as is due Seller.
1.5 Deposit. Upon execution of this Agreement, Purchaser has deposited
with American Title Company the sum of $100,000 and shall deposit a further
$200,000 upon filing the application for change of control described in Section
4.3, which amounts shall represent a deposit against the purchase price. Such
amounts shall be released from escrow to Seller not more than five (5) days
after the SBA confirms receipt of the change of control application or, in any
event, no later than on June 27, 1997. Such amount shall be returned to
Purchaser within five days if the Closing does not occur because approval of the
SBA for the transfer of control of the Company to Purchaser is not obtained,
provided Purchaser has complied with its obligations under Section 4.3 to apply
for and diligently prosecute the process of obtaining such approval. The deposit
shall also be returned to Purchaser if Seller is unable, or fails, to make the
deliveries required by Section 1.4(a) or Section 1.4(b), or if the Closing does
not occur because of a material misrepresentation by Seller. If the transactions
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contemplated by this Agreement fail to close for any other reason, such deposit
shall be retained by Seller.
ARTICLE II
Representations of the Seller
The Seller hereby represents and warrants to Purchaser as follows:
2.1 Ownership of the Stock; Right to Sell. The Seller is the lawful
owner of 250 validly issued shares of Company's common stock, constituting all
outstanding shares of the Company, free and clear of all liens, encumbrances,
restrictions and claims of every kind. Seller has full legal right, power and
authority to enter into this Agreement and to sell, assign, transfer and convey
the shares of Stock and to sell, or cause an affiliate to sell, the Other
Assets, and has validly executed and delivered this Agreement, which is Seller's
legal, valid and binding obligation, except as enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or other similar laws,
now or hereafter in effect, relating to or limiting creditors' rights generally,
and (b) general principles of equity (whether considered in an action in equity
or at law). The delivery to Purchaser of the Stock pursuant to the provisions of
this Agreement will transfer to Purchaser valid title thereto, free and clear of
all liens, encumbrances, restrictions and claims of every kind. Delivery of an
assignment of the participation interest described in Section 1.1 will transfer
to Purchaser valid title to the Other Assets.
2.2 Capitalization. There are no outstanding options, warrants, rights,
calls, commitments, conversion rights, rights of exchange, plans or other
agreements of any character providing for the purchase, issuance or sale of any
shares of the Stock of the Company other than as contemplated by this Agreement.
2.3 Consents Required by Seller. Except for the approval of the United
States Small Business Administration, no approval, authorization, consent, order
or other action of, or filing with, any third party, including without
limitation, any public, governmental, administrative or regulatory authority or
agency, is required in connection with the execution, delivery or performance of
this Agree-
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ment by Seller or the consummation of the transactions it contemplates by
Seller.
2.4 No Violations; No Consents Required by the Company. To Seller's
actual knowledge, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) violate any
provision of law applicable to the Company, the Articles of Incorporation or
bylaws of the Company, or any order, judgment or decree of any court or other
agency of government binding on the Company, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any contractual obligation of the Company material to the condition
(financial or otherwise) of the Company's business, or (iii) result in or
require the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the assets of the Company.
2.5 Litigation. To Seller's actual knowledge, there are no actions,
suits, proceedings, orders or investigations pending or threatened against the
Company at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, and there is no basis known to Seller for
any of the foregoing.
2.6 Compliance with the Law and Other Instruments. To Seller's actual
knowledge, the business and operation of the Company have been and are being
conducted in accordance and in full compliance with all applicable laws,
ordinances, rules and regulations of all authorities, the violation of which,
individually or in the aggregate, would materially and adversely affect the
business of the Company. To Seller's actual knowledge, the Company has all
current licenses and permits required for the conduct of its business and is in
compliance with the terms of such licenses and permits and the regulations and
requirements of licensing and permit authorities.
2.7 Absence of Undisclosed Liabilities. To Seller's actual knowledge,
the Company has no liabilities or obligations of any nature or of any amount,
whether accrued, absolute, liquidated or unliquidated, contingent or otherwise,
except:
(a) to the extent reflected in the Company's audited financial
statements for the year ended December 31, 1996 ("Financials Date"); and
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(b) those that have been or will be incurred in or as a result of
the ordinary course of business of the Company since the Financials Date, or
those that are not material.
2.8 Brokers and Finders. Seller has not incurred any liability for any
brokerage fees, commissions, finders' fees or similar fees or expenses for which
Purchaser or the Company may be liable.
ARTICLE III
Representations of the Purchaser
The Purchaser hereby represents and warrants to Seller as follows:
3.1 Organization. The entity being formed as the Purchaser will at the
Closing be a limited partnership duly organized, existing, and in good standing
under the laws of the State of California, with the power and authority to
perform this Agreement and in good standing in California to the extent
necessary to perform its obligations under this Agreement.
3.2 Authorization. The execution and delivery of this Agreement by
Purchaser and the performance of its obligations hereunder have been duly
authorized by the general partner of Purchaser and no other corporate action or
approval by Purchaser or its partners is necessary for the execution, delivery
or performance of this Agreement by Purchaser. This Agreement has been duly
executed and delivered by Purchaser, and is a valid and binding obligation of
Purchaser, enforceable against it in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, relating to or
limiting creditors' rights generally, and (b) general principles of equity
(whether considered in an action in equity or at law).
3.3 Investment Intent. Purchaser is acquiring the Stock for purposes
of investment and not with a view to resale or any distribution thereof as such
term is used in federal and California securities laws.
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ARTICLE IV
Covenants
4.1 Exclusive Dealings. During the period from the date of this
Agreement to the Closing Date or the date of termination of this Agreement, the
Seller shall not directly or indirectly, encourage, initiate or engage in
discussions or negotiations with, or provide any information to, any person or
entity, other than the Purchaser, concerning any purchase of the Stock or any
merger, sale of substantial assets or similar transaction involving the Company.
4.2 Operating the Business Pending the Closing. From the date of
execution of this Agreement, until the Closing, the business of the Company
shall be operated in the ordinary course of business and Seller and Purchaser
agree that the Company shall not (i) pay any dividends or redeem any shares or
(ii) make any additional loans or commitments to loan funds unless either funds
are available from SBA "leverage" provisions or such funds are provided by
Purchaser in a form acceptable to Seller.
(a) If any event such as a merger, sale of assets, initial public
offering or other event which causes the prepayment of any of the Company's
outstanding loans occurs, the funds derived from such prepayment shall be
retained by the Company in an interest-bearing account and not distributed
unless there is a corresponding dollar-for-dollar reduction in the purchase
price.
(b) In the event the Company receives any proceeds from any of
the warrants referred to in section 1.2(c) above prior to the Closing, 20% of
such amount shall be distributed to Seller immediately, and the balance shall be
retained by the Company for the benefit of Purchaser.
(c) Any funds needed to pay Company's normal operating costs
shall continue to be advanced by Seller and its affiliates as has been the case
in the past. All amounts so advanced, and any repayments, shall be recorded on
the books of Company and Seller in accordance with past practice and the
resulting amount (the "Inter-Company Balance") shall be due and payable from
Purchaser or Company to Seller at the Closing. Seller agrees to furnish Company
its computation of the Inter-Company Balance at least 24 hours prior to the
Closing.
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(d) Without Purchaser's consent, Company will not change its
manner of doing business, or, except for cause, its management from the date of
this Agreement until the date of the Closing.
(e) During the period from the date of this Agreement to the
Closing Date, the Company shall not issue any capital stock or securities
convertible into capital stock.
(f) During the period from the date of this Agreement to the
Closing Date, the Company shall not permit any increase in the salaries or other
compensation payable to officers, directors or employees of the Company.
4.3 Application for Governmental Consent. Immediately upon the
execution and delivery of this Agreement, Purchaser agrees to commence the
preparation of the appropriate request to the United States Small Business
Administration for a change in control of the Company, to complete and file such
application with all reasonable promptness and not later than June 27, 1997, and
to diligently pursue such approval. Seller agrees that Company may cooperate in
this effort and agrees to direct Company to cooperate to the extent needed.
4.4 Confidentiality. In connection with Seller's ownership of the
Stock, Company has disclosed to Seller financial and other information
concerning the Company and its business, customers, vendors and future plans.
All of such information shall be deemed to be Confidential Information. The
parties agree that the Confidential Information was divulged in confidence, and
that the Confidential Information constitutes a trade secret and proprietary
information of the Company. Seller agrees:
(a) Not to directly or indirectly disclose the Confidential
Information, or any part thereof, to any third party, without the prior written
consent of the Purchaser except for: (i) disclosure to parties assisting the
Purchaser or its affiliates to prepare for the Closing; (ii) disclosure in the
course of preparation or review of Seller's financial statements and tax returns
or reports, (iii) any disclosure reasonably related to regulations or litigation
affecting the business of Seller or its affiliates, and (iv) any disclosure
related to pending or potential transactions involving Seller or its affiliates
which do not violate this Agreement and in which Seller has, by
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agreement or otherwise, a reasonable expectation the Confidential information
will remain non-public and confidential.
(b) Not to use the Confidential Information, or any part thereof,
for the benefit of the Seller or any third party except in connection with this
Agreement, including after the Closing except for: (i) disclosure or use in the
course of preparation or review of Seller's financial statements and tax returns
or reports, (ii) any disclosure or use reasonably related to regulations or
litigation affecting the business of Seller or its affiliates, and (iii) any
disclosure related to pending or potential transactions involving Seller or its
affiliates which do not violate this Agreement and in which Seller has, by
agreement or otherwise, a reasonable expectation the Confidential information
will remain non-public and confidential.
(c) To the extent the Confidential Information is contained in a
writing, to return all Confidential Information and copies thereof to the
Company immediately upon demand made after the Closing, except for copies needed
to support Seller's financial and tax reporting, or its compliance with other
agreements.
The parties agree that the term Confidential Information shall not include
information which has become publicly known and made generally available through
no wrongful act of the Seller. Each party agrees that if the Seller breaches the
provisions of this Section 4.4, that it will be difficult if not impossible to
determine the damages to be suffered by the Company. Accordingly, the Seller
agrees that in the event of such breach, the Company shall be entitled to
equitable and injunctive relief, without having to post a bond, in addition to
any other relief to which it may be entitled.
4.5 Best Efforts. Purchaser and Seller agree to use best efforts to
cause the satisfaction of all conditions to the Closing, including without
limitation, on Seller's part, causing its subsidiaries to take any actions
required to carry out the transactions contemplated by this Agreement.
ARTICLE V
Conditions to Purchaser's Obligations
The obligation of Purchaser to consummate the purchase of the Stock
pursuant to this Agreement is subject to
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the satisfaction of the following conditions, any of which may be waived in
writing by Purchaser.
5.1 Truth of Representations and Warranties. The representations and
warranties of the Seller contained in Article II of this Agreement shall be true
and correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date.
5.2 No Litigation Threatened. No action or proceedings shall have been
instituted or, to the best knowledge, information and belief of the Purchasers,
threatened before a court or other government body or by any public authority to
restrain or prohibit any of the transactions contemplated hereby.
5.3 Governmental Approvals. The approval of the United States Small
Business Association for the change of control of Company from Seller to
Purchaser, and all consents and appraisals necessary to permit the consummation
of the transactions contemplated by this Agreement shall have been obtained and
shall be in full force and effect.
5.4 Tender of Documents. Seller shall have delivered, or shall have
directed the escrow holder to deliver, certificates evidencing the shares of
Stock and the documents comprising the Other Assets duly endorsed and otherwise
in proper form for transfer, to Purchaser's and its counsel's reasonable
satisfaction.
ARTICLE VI
Conditions to the Seller's Obligations
The obligation of Seller to consummate the sale of the Stock pursuant to
this Agreement is subject to the satisfaction of the conditions set forth below.
Seller may waive any condition in writing.
6.1 Truth of Representations and Warranties. The representations and
warranties of the Purchaser contained in Article III of this Agreement shall be
true and correct on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date.
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6.2 No Litigation Threatened. No action or proceedings shall have been
instituted or, to the best knowledge, information and belief of Seller,
threatened before a court or other government body or by any public authority to
restrain or prohibit any of the transactions contemplated hereby.
6.3 Governmental Approvals. All governmental consents and approvals, if
any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
6.4 Payment. Purchaser shall at the closing on the Closing Date deliver,
and direct the escrow holder to deliver, the Purchase Price for the shares of
Stock owned by the Seller, and for the Other Assets in immediately available
funds and shall have delivered evidence reasonably satisfactory to Purchaser
that the participation interest described in Section 1.2(b) has been granted.
ARTICLE VII
Indemnity
7.1 Indemnification by Seller. Seller shall indemnify and hold harmless
the Company and Purchaser from and against and shall reimburse the Company and
Purchaser against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, remedies and penalties, including
interest, penalties and reasonable attorneys' fees and expenses (collectively,
"Losses") that Purchaser or the Company shall incur or suffer and which arise
from or are attributable to, by reason of, or in connection with any breach or
inaccuracy of or any failure to perform or comply with any of Seller's
representations, warranties, agreements or covenants contained in this Agreement
(including any exhibit, letter, schedule or certificate referred to herein).
7.2 Indemnification by Purchaser. Purchaser shall indemnify and hold
harmless Seller from and against and shall reimburse Seller against and in
respect of any and all Losses that Seller shall incur or suffer and which arise
from or are attributable to, by reason of, or in connection with any breach or
inaccuracy of or any failure to perform or comply with any of Purchaser's
representations, warranties, agreements or covenants contained in this Agreement
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(including any exhibit, letter, schedule or certificate referred to herein).
7.3 Notification and Participation. Each party agrees to notify the
others of any liabilities, claims, litigation or proceeding that reasonably
appear to involve matters covered by the indemnities set forth in Sections 7.2
and 7.3 promptly upon its discovery or notification thereof, whether before or
after the Closing Date.
ARTICLE VIII
Termination
8.1 Termination.
Seller or Purchaser may terminate this Agreement, without
liability to any party, by mutual agreement upon two (2) days' written notice or
upon receipt of a formal denial from the SBA of the application to transfer
control of Company.
ARTICLE IX
Miscellaneous
9.1 Expenses. The parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers. None of such expenses shall be charged to or paid by Company prior to
Closing.
9.2 Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of California applicable to agreements executed and to be performed solely
within such State.
9.3 Jurisdiction; Attorneys' Fees. Any judicial proceeding brought
against any of the parties to this Agreement on any dispute arising out of this
Agreement or any matter related hereto shall be brought in the courts of the
State of California, County of Orange, or in the United States District Court
for the Central District of California, and, by execution and delivery of this
Agreement, each of the parties to this Agreement accepts the exclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any
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final judgment rendered thereby in connection with this Agreement. The
prevailing party or parties in any such litigation shall be entitled to receive
from the losing party or parties all costs and expenses, including reasonable
counsel fees, incurred by the prevailing party or parties.
9.4 Captions. The article and section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
9.5 Notices. Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered in person or sent by telex,
telecopy or by registered or certified mail, postage prepaid, addressed as
follows:
If to the Purchaser: Xxxxxxx X. Xxxxxxx
c/o Pinecreek Investment Company
0000 Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
Attention: Xxxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
If to the Seller: Fidelity National Financial, Inc.
Attention: M'Liss Xxxxx Xxxx, Esq.
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
or such other address or number as shall be furnished in writing by any such
party, and such notice or communication shall be deemed to have been given as of
the date so delivered, sent by telecopier, telex or mailed.
9.6 Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
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9.7 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
9.8 Entire Agreement. This Agreement, including the other documents
referred to herein which form a part hereof, contains the entire understanding
of the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
9.9 Access. Purchaser acknowledges that Messrs. Zurbach and Xxxxxx
manage the business of Company and have full access to the records of Company
and thus are able to make informed decisions about Company's business and the
desirability of purchasing it.
9.10 Amendments. This Agreement may not be changed orally, but only by
an agreement in writing signed by Purchaser and the Seller.
9.11 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
9.12 Third Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person or entity other than the parties hereto.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names
to be hereunto subscribed all as of the day and year first above written.
"Purchaser"
/s/ XXXXXXX X. XXXXXXX
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/s/ XXXX X. XXXXXX, XX.
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"Seller"
FIDELITY NATIONAL FINANCIAL, INC.
By: /s/ XXXXXX X. XXXXXX
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Name:
---------------------------------
Title:
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