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EXHIBIT 10.46
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AND LOAN AGREEMENT (the "Agreement") is entered into
as of this ___ day of January, 1997, by and among ATC HOLDINGS, INC., a
California corporation ("Purchaser"), or its assigns, FIDELITY NATIONAL
FINANCIAL, INC., a Delaware corporation ("Parent"), and AMERICAN TITLE COMPANY,
a California underwritten title company ("Subsidiary").
RECITALS:
Parent desires to sell to Purchaser and Purchaser desires to purchase
from Parent shares of the Common Stock of Subsidiary, in the amount and for the
purchase price set forth herein (the "Stock Acquisition").
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS AND COVENANTS
CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:
1. Purchase and Sale of Securities.
1.1 Securities. Subject to the terms and conditions of this
Agreement, Parent hereby agrees to sell to Purchaser, and Purchaser hereby
agrees to purchase from Parent, one thousand eight hundred (1,800) shares of the
Common Stock of Subsidiary (the "Shares"), which Shares shall constitute sixty
percent (60%) of the issued and outstanding Common Stock of Subsidiary, on a
fully diluted basis, immediately after the Closing.
1.2 Consideration. The consideration for the sale and issuance of
the Shares to Purchaser shall consist of Six Million Dollars ($6,000,000) (the
"Consideration").
1.3 Option to Purchase. Parent grants Purchaser an option to
purchase the remaining forty percent (40%) of the Common Stock of Subsidiary
(the "Ownership Interest") under the following terms and conditions: (a) in the
event that there is a change of control (a controlling interest of Parent is
sold to an independent third party unaffiliated with Parent or its subsidiaries)
or there is a merger between Parent and an independent third party unaffiliated
with Parent or its subsidiaries, Purchaser shall have the right to purchase the
Ownership Interest at 125% of the then net book value of the Ownership Interest,
(b) in the event
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that Parent contemplates the sale of its Ownership Interest during the term of
the Underwriting Agreements or any renewals thereof (see Section 5.1(m)), then
Purchaser shall have the right to purchase the Ownership Interest for 125% of
the net book value of the Ownership Interest, or (c) in the event that after the
expiration of the Underwriting Agreements, should Parent determine to sell the
Ownership Interest, Parent must first offer such Ownership Interest to Purchaser
at a price selected by Parent (the "Sale Price"). Purchaser will have the right,
for 30 days commencing on the date of its receipt of Parent's offer to sell to
Purchaser said Ownership Interest, at the Sale Price. If Purchaser fails to
complete such purchase within the 30 day period, Parent may sell its Ownership
Interest to a third party at or above the Sale Price for 180 days commencing on
the date Purchaser's 30-day option period expires.
2. Closing; Termination.
2.1 Closing. The purchase and sale of the Shares shall take place
on or before the tenth business day after all of the conditions provided for in
Section 5 below have been satisfied, at the offices of Fidelity National
Financial, Inc., 00000 Xxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx, or at such
other time and place as the Purchaser and Parent mutually agree (which time and
place are designated as the "Closing"). At the Closing, Parent shall deliver to
Purchaser (i) a stock certificate evidencing the Shares, against delivery to the
Parent by Purchaser of the amount equal to the purchase price for the Shares,
and (ii) such other documents and instruments as are provided for in this
Agreement or are reasonably requested by Purchaser.
2.2 Business Consulting Agreement. The parties agree to continue
to be bound by the terms of the Business Consulting Agreement attached hereto as
EXHIBIT "A" until the Closing.
2.3 Termination. If the Closing has not occurred by June 30,
1997, either party may terminate this Agreement upon written notice to the other
party, provided that such terminating party is not then in breach of any of its
covenants, representations or warranties contained in this Agreement.
Notwithstanding the foregoing, Purchaser may, at its sole election, extend such
date for up to three additional 30-day increments by giving Parent and
Subsidiary notice of any such extension on or before this Agreement is otherwise
terminated. Any such termination shall not relieve any party of any liability
for any breach which occurred prior to such termination. With respect to any
party not then in breach of this Agreement at the time of such termination, such
party shall have no further obligations or liabilities under this Agreement.
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3. Representations and Warranties of Parent and Subsidiary. Parent and
Subsidiary, jointly and severally, make the following representations and
warranties to Purchaser as of the date hereof and as of the date of Closing
which are true and correct except as otherwise set forth in the attached
disclosure schedules:
3.1 Organization and Standing; Articles and Bylaws. Parent is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, and has full power and authority to own and
operate its properties and assets and to carry on its business as presently
conducted. Subsidiary is a corporation duly organized, validly existing, and in
good standing under the laws of the State of California, and has full power and
authority to own and operate its properties and assets and to carry on its
business as presently conducted. Subsidiary 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) makes such qualification necessary, except where the failure
to so qualify would not have a material adverse effect upon its business and
operations. Each of Parent and Subsidiary has furnished Purchaser or its counsel
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 date of the Closing.
3.2 Capitalization. The authorized capital stock of Subsidiary
consists solely of three thousand (3,000) shares of common stock, with no par
value which shares are 100% owned by Parent. All issued and outstanding shares
of the capital stock of each have been duly authorized and validly issued, and
are fully paid and nonassessable. There are no outstanding rights of first
refusal, preemptive rights or other rights, options, warrants, conversion
rights, or other agreements either directly or indirectly for the purchase or
acquisition of any shares of the capital stock of either. All of the outstanding
shares of the Subsidiary have been duly and validly issued in compliance with
all applicable federal and state securities laws.
3.3 Subsidiaries. Subsidiary does not presently own or control,
directly or indirectly, any equity interest in any corporation, association or
business entity. Subsidiary is not, directly or indirectly, a participant in any
joint venture or partnership.
3.4 Authorization. All corporate action on the part of Parent and
Subsidiary, their officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the documents
contemplated hereby and the performance of all of their obligations hereunder
and thereunder and for the authorization, issuance, sale and delivery of the
Shares
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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 Parent and Subsidiary 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.
3.5 Validity of Shares. The sale of each of the Shares will not
be, subject to any preemptive rights or rights of first refusal and, when
issued, sold and delivered in compliance with the provisions of this Agreement
and the Shares will be validly issued, fully paid and nonassessable, and will be
free of any liens or encumbrances; provided, however, that the Shares may be
subject to restrictions on transfer under state and/or federal securities laws
as set forth herein or as otherwise required by such laws at the time a transfer
is proposed.
3.6 Financial Statements. To the best of Parent's knowledge and
belief, the balance sheet and statement of stockholder's equity of Subsidiary as
of December 31, 1996 (collectively, the "Financial Statements") are complete and
correct, and present fairly, in all material respects, the financial condition
as of the date referred to and have been prepared in accordance with generally
accepted accounting principles.
3.7 Contracts and Agreements. To the best of Parent's knowledge,
based on the representation of management of Subsidiary at December 31, 1996,
all contracts, agreements, and instruments to which Subsidiary is a party are
valid and binding and in full force and effect in all material respects, and to
the best of knowledge of Parent and Subsidiary, no other party thereto is in
material breach thereof.
3.8 Title to Properties and Assets; Liens, etc. To the best of
Parent's knowledge, based on the representation of management of Subsidiary at
December 31, 1996, Subsidiary has good and marketable title to its properties
and assets, and good title to all its leasehold estates, subject to no mortgage,
pledge, lien, lease, encumbrance, or charge, other than (a) liens resulting from
taxes which have not yet become delinquent, or (b) minor liens, encumbrances, or
defects of title which do not, individually or in the aggregate, materially
detract from the value of the property subject thereto or materially impair
their operations. With respect to property leases, Subsidiary is in compliance
with all such leases.
3.9 Compliance with Other Instruments. To the best of Parent's
knowledge, based on the representation of management of Subsidiary at December
31, 1996, Subsidiary is not in violation of any term of its articles of
incorporation or bylaws, any mortgage, indenture, contract, agreement,
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instrument, judgment, decree, order or any statute, rule or regulation
applicable to it. The execution, delivery, and performance of and compliance
with this Agreement, and the issuance and sale of the Shares, will not result in
any violation of any term of the articles of incorporation or bylaws or any
mortgage, indenture, contract, agreement, instrument, judgment, decree or order,
or be in conflict with or constitute a default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance, or charge upon any of
the properties or assets; and there is no term of the articles of incorporation
or bylaws of either Parent or Subsidiary or any mortgage, indenture, contract,
agreement, instrument, judgment, decree or order which materially adversely
affects, or, so far as may now reasonably be foreseen, in the future may
materially adversely affect, Subsidiary's business, prospects, conditions,
affairs, operations or any of its properties or assets.
3.10 Litigation, etc. To the best of Parent's knowledge, there is
no action, suit, proceeding, or investigation currently pending against
Subsidiary.
3.11 Taxes. To the best of Parent's knowledge, Subsidiary has
paid, or has provided adequate reserves (in the good faith judgment of the
management) for the payment of all federal and state income taxes applicable to
the year ended December 31, 1996, its first year of operations, and for the
current fiscal year to the date hereof.
3.12 Insurance. Subsidiary has adequate insurance, with
financially sound and reputable insurers, with respect to its properties that
are of a character customarily insured by entities engaged in the same or a
similar business similarly situated, against loss or damage of the kinds
customarily insured against by such entities, which insurance is of such types
(including public liability insurance) as are customarily carried under similar
circumstances by such other entities.
3.13 Operating Rights. Subsidiary 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 and as proposed to be 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
threatened that could result in the revocation or limitation of any of such
Licenses. Subsidiary has conducted its business so as to comply in all material
respects with all such Licenses.
3.14 Full Disclosure. Neither this Agreement, the representations
and warranties by each contained herein, the exhibits hereto, nor any other
written statement or certificate delivered or to be furnished to Purchaser in
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connection herewith, when read together, contains 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. There is no fact known
which has not been disclosed to Purchaser that would materially adversely affect
its business or financial condition or its ability to perform its obligations
under this Agreement.
3.15 Officers and Directors. Set forth in the disclosure schedule
is a list of all officers and directors of Parent and Subsidiary, which list is
full, complete and correct.
3.16 Voting Agreements. There exists no voting agreements or
voting trusts involving shares of stock of each or any shareholder of
Subsidiary.
3.17 Books and Records. The minute book of the Subsidiary
contains accurate records of all meetings of and corporate actions or written
consents by the shareholders and boards of directors of the Subsidiary.
Subsidiary does not have any of its respective records, systems, controls, data
or information recorded, stored, maintained, operated or otherwise wholly or
partly dependent upon or held by any means (including any electronic, mechanical
or photographic process, whether computerized or not) which (including all means
of access thereto and therefrom) are not under the exclusive ownership and
direct control of the Subsidiary.
3.18 Bank Accounts. Schedule 3.19 hereto sets forth a complete
list of each bank and its address in which the Subsidiary has accounts (giving
the account numbers) or safe deposit boxes or lock boxes, the names of the
persons currently authorized to draw thereon or to have access thereto, and the
current balances in such accounts.
3.19 Powers of Attorney; Guarantees. There are no outstanding
powers of attorney executed on behalf of the Subsidiary. The Subsidiary is not a
guarantor or otherwise liable for any material indebtedness of any other person
or entity.
4. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants as follows:
4.1 Organization and Standing; Articles and Bylaws. Purchaser is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of California, and has full power and authority to own and
operate its properties and assets and to carry on its business as presently
conducted. Purchaser is duly qualified and authorized to do business, and is in
good standing
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as a foreign corporation, in each jurisdiction where the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect upon its business and operations. Purchaser has provided
Parent or its counsel 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 date of the Closing.
4.2 Legal Power. Purchaser has the requisite legal power to enter
into this Agreement, to purchase the Shares and to carry out and perform its
obligations under the terms of this Agreement.
4.3 Authorization. All corporate action on the part of Purchaser
necessary for the authorization, execution and delivery of this Agreement and
the documents contemplated hereby and the performance of all of their
obligations hereunder and thereunder 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
Purchaser enforceable in accordance with its 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.
4.4 Compliance with Other Instruments. Purchaser is not in
violation of any term of its articles of incorporation or bylaws, any mortgage,
indenture, contract, agreement, instrument, judgment, decree, order or any
statute, rule or regulation applicable to it. The execution, delivery, and
performance of and compliance with this Agreement, and the purchase of the
Shares, will not result in any violation of any term of the articles of
incorporation or bylaws or any mortgage, indenture, contract, agreement,
instrument, judgment, decree or order, or be in conflict with or constitute a
default under any such term, or result in the creation of any mortgage, pledge,
lien, encumbrance, or charge upon any of the properties or assets.
4.5 Litigation, etc. There is no action, suit, proceeding, or
investigation currently pending against Purchaser which would prevent the
transactions from closing.
4.6 Full Disclosure. Neither this Agreement, the representations
and warranties by each contained herein, the exhibits hereto, nor any other
written statement or certificate delivered or to be furnished in connection
herewith, when read together, contains 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. There is no fact known which has not
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been disclosed to Parent that would materially adversely affect its business or
financial condition or its ability to perform its obligations under this
Agreement.
4.7 Investment Representations.
(a) Purchaser is acquiring the Shares for its own account,
not as nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the 1933 Act.
(b) Purchaser understands that (i) the Shares have not
been registered under the 1933 Act by reason of a specific exemption therefrom,
that they must be held by it indefinitely, and that it must, therefore, bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the 1933 Act or is exempt from such registration;
and (ii) each certificate representing the Shares will be endorsed with legends
to such effect.
(c) Purchaser acknowledges that it is able to fend for
itself, can bear the economic risk of its investment and has such knowledge and
experience in financial or business matters and that it is capable of evaluating
the merits and risks of the investment in the Shares.
(d) Purchaser understands that the Shares it is purchasing
are characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from Parent in a transaction not involving a
public offering and that under such laws and applicable regulations such
securities may be resold without registration under the 1933 Act, only in
certain limited circumstances, and it represents that it is familiar with SEC
Rule 144 and Rule 144A, as presently in effect, and understands the resale
limitations imposed thereby and by the 1933 Act.
(e) Purchaser was not formed for the specific purpose of
acquiring the Shares offered hereunder.
(f) Purchaser's principal business address is as set forth
on the signature page hereto.
5. Conditions to Closing.
5.1 Conditions to Obligations of the Purchaser. The Closing, the
Purchaser's obligation to purchase the Shares from Parent and Parent's
obligation to sell such Shares as provided in this Agreement are conditioned on
and subject
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to satisfaction of each of the following conditions (which conditions are for
the benefit of and may be unilaterally waived by the Buyer):
(a) No Misrepresentation or Breach of Covenants and
Representations and Warranties. There shall have been no breach by Parent or the
Subsidiary in the performance of any of their respective covenants,
representations and warranties, and agreements contained or referred to in this
Agreement, and each of the Parent and the Subsidiary shall have performed all
obligations required to be performed by them under this Agreement prior to or at
the Closing; each of the representations and warranties of each of the Parent
and the Subsidiary contained or referred to in this Agreement shall be true and
correct in all respects at the Closing as though made at the Closing, except for
changes therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by the Buyer or any transaction
contemplated by this Agreement; and there shall have been delivered to the
Purchaser a certificate or certificates to such effect, dated the date of the
Closing, signed by the Parent and the Subsidiary.
(b) Authorizations and Approvals. All authorizations,
approvals, or permits of any governmental authority or regulatory body of the
United States or of any state specifically including, but not limited to, the
California Department of Insurance, that are required in connection with the
transactions contemplated by this Agreement shall have been duly obtained and
shall be effective on and as of the Closing. No stop order or other order
enjoining the sale of the Shares shall have been issued and no proceedings for
such purpose shall be pending or threatened by the California Commissioner of
Insurance, the Securities and Exchange Commission, the California Commissioner
of Corporations, or any similar officer of any other Federal or state agency
having jurisdiction over this transaction.
(c) No Restraint or Litigation. No order, decree or ruling
of any court shall have been entered, and no action, suit or proceeding before
any court or governmental or regulatory authority or body shall have been
instituted (or threatened if the Purchaser reasonably believes that such threat
will result in institution of an action, suit or proceeding) by any person or by
any governmental or regulatory authority or agency, to restrain, prohibit,
challenge or invalidate any of the transactions contemplated by this Agreement
or which might adversely affect the right of the Purchaser to own the Shares, or
which might adversely affect the right of the Subsidiary to carry out its
respective businesses after the date of the Closing.
(d) Necessary Consents. The parties shall have received
consents, in form and substance satisfactory to counsel for the Purchaser, to
the
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transactions contemplated hereby by all appropriate third parties to all
contracts, leases, agreements and permits material to the operations of the
Subsidiary and the Assets to which the Subsidiary is a party or by which it is
affected and which requires such consent prior to the Closing.
(e) Transfer of 100% of the Outstanding Stock of Nations
Title of Arizona, Inc. to Subsidiary. Parent shall have caused the transfer of
all of the outstanding stock of Nations Title of Arizona to Subsidiary prior to
Closing.
(f) Transfer of 100% of the Outstanding Common Stock of
Fidelity Asset Recovery Services, Inc. Parent shall have caused the transfer of
all of the outstanding Common Stock of Fidelity Asset Recovery Services, Inc. to
subsidiary prior to Closing.
(g) Liens. The Purchaser shall have received reports,
satisfactory to the Purchaser, from the Secretary of State of California
indicating that there are no liens of record as of a date not more than two days
before the Closing with respect to the Assets.
(h) Execution of Documents. Purchaser shall have executed
all documents required by this Agreement to be executed by it.
(i) Use of Title Plant. Subsidiary shall have negotiated
for access to the title plants necessary to its business, the terms of which are
acceptable to all parties.
(j) Closing Deliveries. In addition to the other
deliveries referenced in this Article 5, on the date of the Closing, Parent and
Subsidiary shall deliver to the Purchaser:
(i) Stock Certificates. Stock certificates
representing in the aggregate sixty percent (60%) of the outstanding shares of
the Subsidiary, together with duly executed and witnessed stock powers (in
blank) attached thereto.
(ii) Books. The books, records, customer lists,
files, reports, surveys, studies, projections, budgets and strategic plans in
connection with the ownership, operation, development, maintenance and
management of the Assets and the businesses of the Subsidiary.
(iii) Certificate. A certificate from and executed
by the Parent dated the date of the Closing certifying that the conditions
specified in Sections 5.1(b), 5.1(e), and 5.1(f), hereof have been fulfilled.
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(iv) Secretary's Certificate. A certificate dated
the date of the Closing and signed by the secretary of the Subsidiary setting
forth a copy of the resolutions adopted by the board of directors of the
Subsidiary authorizing the transactions contemplated in this Agreement.
(v) Additional Documents. Such other instruments
and documents which the Purchaser shall reasonably request in furtherance of the
purposes of this Agreement and executed by the Parent and/or the Subsidiary.
(k) Financing. Purchaser shall be able to obtain in its
sole discretion acceptable financing for the completion of this acquisition of
the Shares. In the event Purchaser does not obtain acceptable financing,
Purchaser shall be under no obligation to close.
(l) Performance by Parent and Subsidiary. Parent and
Subsidiary shall have performed, satisfied and complied with all covenants,
agreements and conditions required by this Agreement to be performed and
complied with by them or any of them, on or before the Closing.
(m) Underwriting Agreement. Parent shall cause Subsidiary
to enter into underwriting agreements with Fidelity National Title Insurance
Company and Fidelity National Title Insurance Company of California or their
successors in interest including but not limited to Fidelity National Title
Insurance Company of New York for initial five (5) year terms with an option to
renew on the 5th anniversary of the effective date of the agreements, as
attached hereto as EXHIBIT "C".
All of the foregoing instruments shall be in form and substance
reasonably satisfactory to the Purchaser and its counsel.
5.2 Conditions to Obligations of Parent at the Closing. Parent's
obligations hereunder are subject to the fulfillment, at or prior to the
Closing, of all of the following conditions:
(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by Purchaser in Section 4
hereof shall be true and correct at the date of the Closing, with the same force
and effect as if they had been made on and as of said date; and Purchaser shall
have performed all obligations herein required to be performed by it at or prior
to the Closing.
(b) Authorizations and Approvals. All authorizations,
approvals, or permits of any governmental authority or regulatory body of the
United States or of any state specifically including, but not limited to, the
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California Department of Insurance, that are required in connection with the
transactions contemplated by this Agreement shall have been duly obtained and
shall be effective on and as of the Closing. No stop order or other order
enjoining the sale of the Shares shall have been issued and no proceedings for
such purpose shall be pending or threatened by the California Commissioner of
Insurance, the Securities and Exchange Commission, the California Commissioner
of Corporations, or any similar officer of any other Federal or state agency
having jurisdiction over this transaction.
(c) Necessary Consents. The parties shall have received
consents, in form and substance satisfactory to counsel for the Parent, to the
transactions contemplated hereby by all appropriate third parties to all
contracts, leases, agreements and permits material to the operations of the
Subsidiary and the Assets to which the Subsidiary is a party or by which it is
affected and which requires such consent prior to the Closing.
(d) Execution of Documents. Purchaser shall have executed
all documents required by this Agreement to be executed by it.
(c) Certificate. The President and CEO of Subsidiary shall
have delivered to Purchaser a certificate in which they represent that all the
representations and warranties stated in Sections 3.7, 3.8, 3.9, 3.10, 3.11 and
3.15 are true and correct.
6. Indemnification.
6.1 Parent's and Subsidiary's Indemnity. Parent will make no
claim on Subsidiary for liquidated damages for Fidelity National Title Insurance
Company claims arising from policies written prior to January 1, 1997.
Subsidiary will not be responsible for any escrow or policy files associated
with American Title Insurance Company.
6.2 Purchaser's Indemnity. Purchaser and Subsidiary (as
constituted after the Closing) shall indemnify, defend and hold Parent and
Subsidiary (as constituted prior to the Closing) harmless from and against any
and all liabilities, losses, damages, claims, causes of action, costs and
expenses (including, without limitation, reasonable attorneys' fees), arising
out of or relating to any breach of any representation, warranty or any other
material covenant, term or condition and for any actions brought against Parent
or Subsidiary after Closing which are due to the actions of Purchaser.
6.3 Procedures. In the event any third party asserts any claim
with respect to any matter as to which the indemnities in this Agreement relate,
the
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party against whom the claim is asserted (the "Indemnified Party") shall give
prompt notice to the other party (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
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
and expenses 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 Section 6, the indemnification of the Indemnified Party
shall also include the indemnification of the Indemnified Party's employees,
agents, affiliates, and third parties performing services for the Indemnified
Party, and the reference to this Agreement includes any certificate, schedule,
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.
7. Covenants.
7.1 Covenants of Parent and Subsidiary. Parent and Subsidiary
covenant as more specifically set forth below to the following actions from the
date of execution of this Agreement until the Closing:
7.1.1 Corporate Existence and Foreign Qualification.
Parent and Subsidiary will do and cause to be done all things necessary to (i)
preserve Subsidiary's corporate existence and for Subsidiary to remain in good
standing in the state of its incorporation, (ii) for Subsidiary to become or
remain qualified to do business and to remain in good standing in each
jurisdiction where the nature of its business makes such qualification
necessary.
7.1.2 Dividends. Parent will not cause and Subsidiary
shall not (i) declare, pay or make any dividends or other distribution, whether
in cash or in property, with respect to any class of its common stock or right
to acquire its common stock now or hereafter outstanding, (ii) issue any
warrants, options or other right to acquire any share of Subsidiary's common
stock now or hereafter authorized, (iii) purchase, acquire, redeem, retire, or
cancel any of Subsidiary's common stock now or hereafter outstanding, or set
aside any property or assets for such purpose.
7.1.3 Merger. Parent will not cause and Subsidiary shall
not merge or consolidate with or agree to merge or consolidate with, nor
purchase or
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agree to purchase all or substantially all of the assets of, nor otherwise
acquire any corporation, partnership or other business organization or any
portion thereof.
7.1.4 Additional Stock. Parent will not cause and
Subsidiary shall not authorize for issuance, issue, sell or deliver any
additional shares of its capital stock of any class or issue or grant any
option, warrant or other right to purchase any shares of its capital stock of
any class.
7.1.5 Recapitalization. Parent will not cause and
Subsidiary shall not split, combine or reclassify any shares of its capital
stock of any class or redeem or otherwise acquire, directly or indirectly any
shares of its capital stock of any class.
7.1.6 Additional Debt. Parent will not cause and
Subsidiary shall not incur or become subject to, nor agree to incur or become
subject to, any debt, obligation or liability, contingent or otherwise, except
current liabilities and contractual obligations incurred in or arising in the
usual and ordinary course of business. In addition, Parent will not cause and
Subsidiary shall not guaranty or otherwise become liable with respect to the
obligations of any other person (other than endorsements in the ordinary course
of business of negotiable instruments for deposit or collection).
7.1.7 Payment of Taxes and Other Charges. Parent shall pay
or cause to be paid or discharged, all before the same become delinquent and
prior to December 31, 1996, (i) all taxes, assessments and governmental charges
levied or assessed against Subsidiary on its gross receipts, income, profits,
assets and properties and (ii) all lawful claims against Subsidiary for labor,
materials, supplies, goods and services; provided, however, that Purchaser shall
be required to pay, perform or discharge any sales tax directly related to the
transfer of the Shares to Purchaser as contemplated herein which does not
result, directly or indirectly, from the breach of any representation, warranty
or covenant of Parent or Subsidiary set forth herein.
7.1.8 Financial Statements Records. Parent will not cause
and Subsidiary will not make any material change in the methods of accounting or
accounting practices applied in connection with the Financial Statements or any
of the accounting records of Subsidiary.
8. Miscellaneous.
8.1 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
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among California residents, made and to be performed entirely within the State
of California.
8.2 Survival. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any party and the
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of Parent and Subsidiary pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by them hereunder as of the date of such certificate or instrument.
8.3 Home Office Rights. Parent agrees to grant home office rights
to subsidiary in connection with customer multiple state transactions. Parent
will insure that an underwriter of parent will underwrite such transaction on a
case by case basis with prior approval of underwriting counsel at Parent's
corporate offices. Subsidiary will prepare all documentation on said home office
transactions and Subsidiary will receive the fees generated by the transaction.
8.4 Starter Exchange Program. Parent agrees to cause its
underwriting subsidiaries to provide starters to Subsidiary upon request for $5
per starter requested.
8.5 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.
8.6 Entire Agreement. This Agreement, the Exhibits hereto, and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the subjects 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. Purchaser did a thorough investigation and was familiar
with the company and obtained all information considered necessary to close,
including but not limited to a complete financial review of the Company. 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.
8.7 Severability. In case 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
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intent of the parties, and the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
8.8 Amendment and Waiver. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived only with
the written consent of the parties hereto.
8.9 Notices, etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or on the third day following mailing by registered or
certified mail, return receipt requested, postage prepaid, addressed: (a) if to
Purchaser, at its address as set forth under such Purchaser's signature at the
end of this Agreement, or at such other address as such Purchaser shall have
furnished to the Subsidiary in writing or (b) if to Parent and Subsidiary, at
their addresses as set forth at the end of this Agreement, or at such other
addresses as they shall have furnished to Purchaser in writing.
8.10 Finders' Fees. Each party hereto represents and warrants
that it has retained no finder or broker in connection with the transactions
contemplated by this Agreement and hereby agrees to indemnify and to hold
harmless the other party from any liability for any commission or compensation
in the nature of a finder's fee to any broker or other person or firm (and the
costs and expenses, including reasonable attorneys' fees, of defending against
such liability or asserted liability) for which such other party or any of its
employees or representatives is responsible.
8.11 Fees and Expenses. Each party shall be responsible for such
party's outside legal and accounting fees and other expenses incurred by such
party in connection with this transaction.
8.12 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.
8.13 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.
8.14 Assignment. No party to this Agreement may assign all or any
part of its interest in this Agreement except Purchaser may assign its rights
under this Agreement to a commonly held entity for tax purposes, in which event
this Agreement shall still be binding on all parties and any successors or
assigns.
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8.16 Attorney's Fee Clause. If either party to this Agreement
shall bring any action, suit, counterclaim, appeal, arbitration, or mediation
for any relief against the other, declaratory or otherwise, to enforce the terms
hereof or to declare rights hereunder (collectively, an "Action"), the losing
party shall pay to the prevailing party a reasonable sum for attorneys' fees and
costs (at the prevailing party's attorneys' then-prevailing rates as increased
from time to time by the giving of advance written notice by such counsel to
such party) incurred in bringing and prosecuting such Action and/or enforcing
any judgment, order, ruling, or award (collectively, a "Decision") granted
therein, all of which shall be deemed to have accrued on the commencement of
such Action and shall be paid whether or not such Action is prosecuted to a
Decision. Any Decision entered in such Action shall contain a specific provision
providing for the recovery of attorneys' fees and costs incurred in enforcing
such Decision. The court or arbitrator may fix the amount of reasonable
attorneys' fees and costs on the request of either party. For the purposes of
this paragraph, attorneys' fees shall include, without limitation, fees incurred
in the following: (1) postjudgment motions and collection actions; (2) contempt
proceedings; (3) garnishment, levy, and debtor and third party examination; (4)
discovery; and (5) bankruptcy litigation. "Prevailing party" within the meaning
of this paragraph includes, without limitation, a party who agrees to dismiss an
Action on the other party's payment of the sums allegedly due or performance of
the covenants allegedly breached, or who obtains substantially the relief sought
by it.
8.17 Construction. The parties 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. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. The word "including" shall
mean including without limitation.
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IN WITNESS WHEREOF, the foregoing Agreement is hereby executed as
of the date first above written.
Address: ATC HOLDINGS, INC.,
a California Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Its:
Address: FIDELITY NATIONAL FINANCIAL, INC.,
a Delaware Corporation
00000 Xxx Xxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
Xxxxxx, XX 00000 --------------------------------
Its:
Address: AMERICAN TITLE COMPANY,
a California Corporation
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxx Xxxx
--------------------------------
Its:
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