STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("THE AGREEMENT") is entered into by
and between Pacific Coast Title of Santa Xxxxxxx County, a California
corporation ("Seller"), and American Title Company, a California corporation
("Purchaser"), as of this 9th day of August, 1997.
RECITALS
1. Seller owns one hundred percent (100%) of the issued and
outstanding shares of the common stock (the "Stock") of Santa Xxxxxxx Title
Company, a California corporation (the "Company"), and there are no other
outstanding classes or series of stock or options, warrants or rights to
acquire any shares of stock of the Company.
2. Purchaser desires to acquire one hundred percent (100%) of
the Stock.
3. Seller and Purchaser desire to set forth their mutual
understanding regarding the terms and conditions upon which the purchase of
the Stock will be consummated.
NOW, THEREFORE, for and in consideration of the above premises and
for other good and valuable consideration, the receipt and sufficiency of
which is hereby expressly acknowledged, the parties hereto do hereby agree as
follows:
I. SALE AND PURCHASE. Subject to the terms and conditions contained herein,
at a closing (as defined in Section 2 hereof), Seller shall transfer the
Stock to Purchaser. Such transfer shall be evidenced by the delivery to
Purchaser of one or more certificates representing the Stock accompanied by
duly executed stock powers.
1. CLOSING. Subject to satisfaction of each of the conditions
precedent contained in Section 8 hereof, the purchase of the Stock shall be
consummated at a closing (the "Closing") to take place at the offices of the
Company at 00000 Xxx Xxxxxx Xxx., Xxxxx 000, Xxxxxx, XX 00000 upon receipt of
the approval of the Department of Insurance of the State of California to
this transaction.
2. PURCHASE PRICE. The consideration (the "Purchase Price") to be paid
by Purchaser for the purchase of the Stock shall be One Hundred Sixty Thousand
Dollars ($160,000.00), which shall be paid at the Closing in the following
manner:
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a. Subject to the terms set forth in Section 3(c) below, One
Hundred Fifty Thousand Dollars ($150,000.00) shall be delivered to Seller at the
Closing either by cashier's check or wire transfer to an account designated by
Seller; and
b. Ten Thousand Dollars ($10,000) shall be placed in an escrow
account with an escrow agent acceptable to both parties for a period as
further described in (c) below.
c. Seller and Purchaser agree to the placement of $10,000.00
in an escrow account which amount would have otherwise been payable to Seller
as part of the Purchase Price for the Stock in accordance with Section 2
above, to cover all outstanding payables, or other unasserted obligations. If
after a period of 30 days from the date of Closing there are remaining funds
held in the escrow Seller shall be entitled to receive such funds in full
settlement of all amounts otherwise due to Seller under Section 2 above.
d. At Closing all of the outstanding trustee work under the
name of Pacific Coast Title will transfer to Santa Xxxxxxx Title Company.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Purchaser as follows:
a. ORGANIZATION AND AUTHORITY. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the
state of California. Seller has all requisite power, authority and legal
right to enter into this Agreement and, upon receipt of all required
regulatory approvals, if any, and the expiration of all required waiting
periods, to consummate the transactions contemplated herein.
b. ENFORCEABILITY: NO VIOLATION. This Agreement constitutes a
valid and binding obligation of Seller enforceable against Seller in
accordance with its terms, subject to general principles of equity. Neither
the execution and delivery of this Agreement nor the effectuation by Seller
of the transactions contemplated hereby (i) will violate any statute or law,
or any rule, regulation, order, writ, injunction or decree of any court or
governmental authority, or (ii) will violate or conflict with or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default), under, or will result in the termination of, or
accelerate the performance required by, any term or provision of (A) the
charter or bylaws of Seller, or (B) any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which
Seller is a party or by which Seller or any of its assets or properties may
be bound or affected. Except for filings, consents, approvals or
authorizations which will have been made or obtained or actions which will
have been taken at or prior to the Closing, no filing with, or consent,
approval, authorization or action by, any governmental authority is required
in connection with the execution and delivery by Seller of this Agreement or
the effectuation by it of the transactions contemplated herein.
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c. CAPITAL STRUCTURE. The authorized capital stock of the
Company consists solely of 10,000 shares of common stock, $1.00 par value, of
which 10,000 shares are issued and outstanding.
d. TITLE TO STOCK. Seller has good, valid and defensible title
to the Stock, free and clear of any lien, mortgage, pledge, voting trust,
restriction on sale, proxy or encumbrance and upon consummation of the
purchase and sale of the Stock, Seller will deliver such Stock, free and
clear of any lien, mortgage, pledge, voting trust, restriction on sale, proxy
or encumbrance (other than those imposed by applicable securities laws or
created by Purchaser).
e. BROKERS OR FINDERS. There is no agent's, broker's or
finder's fee or commission payable in connection with the transactions
contemplated by this Agreement by virtue of or resulting from any action or
agreement by Seller, or any of its representatives, affiliates or associates.
f. TAX RETURNS. To the best of Seller's knowledge, all
federal, state and local taxes owed by the Company for prior years have been
paid and any current federal, state and local taxes will be paid at or prior
to the Closing. There are no pending matters or obligations of the Seller or
Company related to taxes owed for periods prior to the Closing which have not
been disclosed to Purchaser.
g. FINANCIAL STATEMENTS. Attached as Schedule A are true,
correct and complete copies of (i) the audited financial statements of the
Company, including the balance sheets of the Company as at July 31, 1997 (the
"Company Balance Sheets"), and the Statements of Operations, Stockholder's
Equity and Cash Flows for the three fiscal years then ended, together with
the reports thereon of independent certified public accountants (such audited
financial statement, including the notes and schedules thereto, if any, are
hereinafter referred to as the "Company Financial Statements"); and
h. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected on the Company Balance Sheet as of July 31, 1997 or on Schedule B
attached hereto, the Company does not have any indebtedness, liability or
obligation of any nature, whether absolute, accrued, contingent or otherwise,
related to or arising from the operation of the business or the ownership,
possession or use of any assets, other than those which have arisen since
July 31, 1997 in the ordinary course of business on terms and conditions and
in amounts consistent with past practices and on terms not more onerous than
available to other corporations. Company represents that it will leave all
payable current as of the Closing.
i. ACTIONS, SUITS, ETC. Schedule C sets forth as of the date
of this Agreement all actions, suits, claims, complaints, charges, hearings,
investigations, arbitrations (or other dispute resolution proceedings) or
other proceedings pending or threatened in writing (or to its knowledge
otherwise) against, by or affecting the Company in any court or panel or
before any arbitrator or governmental agency, domestic or foreign, other than
(1) actions related to garnishments
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of employee wages, (2) routine matters covered by insurance, (3) policy
claims, and (4) matters in which the Company is the plaintiff or claimant and
no counterclaim has been asserted. The Company has not been charged with, and
to the best of its knowledge is not under investigation with respect to, any
charge concerning any violation of any provision of any federal, state or
other applicable law or administrative regulation in respect to its business,
except as set forth in Schedule D. Except as set forth in Schedule D, there
are no judgments unsatisfied against the Company and no consent decrees to
which the Company is subject. The Company is not involved in or threatened
with any labor dispute which could have a material adverse effect on the
business and operations of the Company.
j. MATERIAL CONTRACTS. Schedule E sets forth an accurate, correct
and complete list of all instruments, commitments, agreements, arrangements and
understandings related to the business to which the Company is a party or bound,
or pursuant to which the Company is a beneficiary, meeting any of the
descriptions set forth below (the "Material Contracts"):
(1) Real Estate Leases, Personal Property Leases,
insurance policies, licenses of Intellectual Property, Technical Information
or Software, Agency Agreements, Employment Contracts and Benefit Plans;
(2) Any contract for capital expenditures or for the
purchase of goods or services in excess of $20,000, except those incurred in
the ordinary course of business and to be performed in six months or less;
(3) Any instrument evidencing indebtedness (other than
routine purchase orders), any liability for borrowed money, any obligation
for the deferred payment of the purchase price for property in excess of
$25,000 (excluding normal trade payables), or any instrument guaranteeing any
indebtedness, obligation or liability.
(4) Any advertising contract not terminable without
payment or penalty on sixty (60) days (or less) notice;
(5) Any deed, lease, easement, agreement or other
instrument affecting any right, title or interest in or to real property;
(6) Any contract with any government or any agency or
instrumentality thereof;
(7) Any license or royalty agreement;
(8) Any power of attorney, proxy or similar instrument;
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(9) Any contract for the purchase or sale of any assets
in excess of $50,000 other than in the ordinary course of business or
granting an option or preferential rights to purchase or sell any assets in
excess of $50,000;
(10) Any contract containing covenants not to compete in
any line of business or with any person in any geographical area;
(11) Any contract relating to the acquisition of a
business or the equity of any other person;
(12) Any other contract, commitment, agreement,
arrangement or understanding related to the business (other than those
excluded by an express exception from the descriptions set forth in
subsections;
(13) Above which provides for payment or performance by
either party thereto having an aggregate value of $50,000 or more, and is not
terminable without payment or penalty on sixty (60) days (or less) notice.
Accurate, correct and complete copies of each Material Contract have
been made available to Purchaser. Each Material Contract is in full force and
effect and is valid, binding and enforceable as to the Company in accordance
with its terms. To Seller's knowledge, each other party has complied in all
material respects with all material commitments and obligations on its part
to be performed or observed under each Material Contract. No event has
occurred which is or, after the giving of notice or passage of time, or both,
would constitute a material default under or a material breach of any
Material Contract by the Company or, to the knowledge of Seller, by any other
party. The Company has not received written notice or to its knowledge been
given other notice of an intention to cancel or terminate a Material Contract
or to exercise or not exercise options or rights under a Material Contract.
The Company has not received any written or, to its knowledge, other notice
of a default, offset or counterclaim under any Material Contract, or any
other written or, to its knowledge, other communication calling upon the
Company to comply with any provision of any Material Contract or asserting
noncompliance by the Company. Except as disclosed in this Agreement, the
consummation of the transactions contemplated hereby without notice to or
consent or approval of any party, will not constitute a default under or a
breach of any provision of a Material Contract, and the Company will have and
may enjoy and enforce all rights and benefits under each Material Contract
after Closing. There is no security interest, lien, encumbrance or claim of
any kind on the Company under any Material Contract.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller as follows:
a. ORGANIZATION AND AUTHORITY. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of California. Purchaser has all requisite power, authority and legal
right to enter into this Agreement and, upon
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receipt of all required regulatory approvals, if any, and the expiration of
all required waiting periods, to consummate the transactions contemplated
herein.
b. ENFORCEABILITY; NO VIOLATION. This Agreement constitutes a
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms, subject to general principles of equity. Neither
the execution and delivery of this Agreement nor the effectuation by
Purchaser of the transactions contemplated hereby (i) will violate any
statute or law, or any rule, regulation, order, writ, injunction or decree of
any court or governmental authority, or (ii) will violate or conflict with or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default), under, or will result in the termination
of, or accelerate the performance required by, any term or provision of (A)
the charter or bylaws of Purchaser, or (B) any contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character
to which Purchaser is a party or by which Purchaser or any of its assets or
properties may be bound or affected. Except for filings, consents, approvals
or authorizations which will have been made or obtained or actions which will
have been taken at or prior to the Closing, no filing with, or consent,
approval, authorization or action by, any governmental authority is required
in connection with the execution and delivery by Purchaser of this Agreement
or the effectuation by it of the transactions contemplated herein.
c. INVESTIGATION AND REVIEW. Purchaser, with the assistance
and advice of its accountants and other advisors whom it has deemed
appropriate, will have a full opportunity to complete a review of all
information pertaining to the business and financial operations of the
Company which will be provided directly to Purchaser or to which Purchaser
will be given access either by the Seller or the Seller's representatives.
Purchaser will, in addition, be given the opportunity to request additional
information concerning the Company's assets, liabilities, books, records and
financial status, and will receive full and adequate responses to any such
requests. Purchaser shall complete its investigation and review on or before
August , 1997.
d. BROKERS OR FINDERS . There are no agent's, broker's or
finder's fees or commission payable in connection with the purchase of the
Stock by virtue of or resulting from any action or agreement of Purchaser or
Purchaser's representatives, affiliates or associates.
5. PRE-CLOSING COVENANT OF SELLER. Prior to the Closing, Seller
shall not make any cash payments or expenditures out of the Company except
for payment of administrative, operational, and maintenance expenses incurred
in the normal course of business.
6. CONDITIONS PRECEDENT FOR PURCHASER. The obligations of Purchaser
to consummate the purchase of the Stock pursuant to the terms of this
Agreement are subject to the satisfaction, prior to or at the Closing, of
each of the following conditions, provided, however, that any or all such
conditions may be waived in whole or in part by Purchaser:
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a. SELLER'S COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties made by Seller in this
Agreement shall have been true and correct when made and shall be true and
correct in all respects at the date of the Closing with the same force and
effect as if such representations and warranties were made at and as of the
Closing date, and Seller shall have performed or complied with all
agreements, covenants and conditions required by this Agreement to be
performed or complied with by Seller prior to or at the Closing.
b. NO LEGAL PROCEEDINGS. At the Closing, no suit, action or
other legal or administrative proceeding before any court or other
governmental agency shall be pending or threatened by third parties not
affiliated with Purchaser or Seller in connection with this Agreement or the
consummation of the transactions contemplated herein.
c. CERTIFICATE. The Purchaser shall have been furnished at
Closing with a certificate of Seller, certifying the matters specified in
Section 8(a) above.
7. REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided herein, all representations and warranties contained in this
Agreement and in any certificate or other document delivered pursuant to this
Agreement shall survive Closing only for the period ending eighteen (18)
months after the Closing.
8. BINDING EFFECT ON THIS AGREEMENT. This Agreement, together with
the certificates, affidavits, confidentiality agreements, releases and other
instruments delivered by or on behalf of the parties pursuant to this
Agreement, constitute the entire contract between the parties, and no party
shall be liable for or bound to any warranties, representations or agreements
except as specifically set forth herein, therein or in such certificates,
affidavits, confidentiality agreements, releases or other instruments. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successors and
assigns of the parties hereto. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto
and their respective heirs, legal representatives and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided herein.
9. ASSIGNMENT. Seller may not assign its rights or obligations
hereunder without the prior written consent of the Purchaser. Purchaser has
the right to assign all of its rights and obligations hereunder to any of its
underwriting subsidiaries.
10. APPLICABLE LAW. This Agreement is made pursuant to, will be
construed under, and will be conclusively deemed for all purposes to have
been executed and delivered under, the laws of the State of California. The
appropriate state or federal courts located in Orange County, California
shall have jurisdiction over all matters arising under the Agreement
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or any certificates or instruments delivered in connection herewith and will
be the proper form in which to adjudicate such matters.
11. NOTICES. All notices, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage pre-paid by certified mail, return
receipt requested:
If to Seller: PACIFIC COAST TITLE COMPANY OF SANTA XXXXXXX COUNTY
0000 X. Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
MCL [Initialed]
JJB [Initialed]
If to Purchaser: American Title Company
00000 Xxx Xxxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Such addresses may be changed from time to time by written notice to the
other party.
12. SECTION AND OTHER HEADINGS. The headings contained in this
Agreement and in any certificates or instruments delivered in connection
herewith are for reference purposes only and will not effect in any way the
meaning or interpretation of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all of which together
will constitute one instrument.
14. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, the legality, validity, and enforceability of the remaining
provisions of this Agreement shall not be effected thereby. In lieu of such
illegal, invalid, or unenforceable provision, there shall be added automatically
as a part of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be legal, valid, and enforceable.
15. FORBEARANCE; WAIVER. Forbearance or failure to pursue any legal
or equitable remedy or right available to a party upon default or breach under
this Agreement shall not constitute waiver of such right, nor shall any such
forbearance, failure or actual waiver imply or constitute waiver of subsequent
default or breach.
16. EXPENSES. Each party hereto shall pay all expenses and fees
incurred by such party incident to this Agreement, and in connection with the
consummation of the
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purchase of the Stock. The prevailing party in a legal proceeding based upon
this Agreement shall be entitled to reasonable attorney's fees and court
costs in addition to any other recoveries allowed by law.
IN WITNESS WHEREOF, the undersigned parties hereto have executed
this Agreement effective on the date first stated above.
MCL [Initialed]
JJB [Initialed]
SELLERS: ---------------------------------------------
PACIFIC COAST TITLE COMPANY OF SANTA XXXXXXX COUNTY
/s/ [Illegible]
----------------------------
BY:
Its: President
PURCHASER: ---------------------------------------------
AMERICAN TITLE COMPANY
/s/ Xxxxxxx X. Xxxxxxx
----------------------------
BY: Xxxxxxx X. Xxxxxxx
Its: CEO
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