EXHIBIT 1.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), is entered into as of this
2nd day of June, 1999, by and between RealAmerica Co. ("RealAmerica"), a
Delaware corporation, as SELLER and those individuals listed on Exhibit "A"
attached hereto and made a part hereof, (collectively referred herein as the
"The Merrion Shareholders"), as BUYER.
W I T N E S S E T H:
WHEREAS, RealAmerica is the owner of 100% of the capital stock of Merrion
Reinsurance Company Ltd. ("Merrion"), a corporation domiciled in Ireland; and
WHEREAS, in connection with its acquisition of Trucat Holding Company,
Inc., a Delaware corporation (hereinafter "Trucat") RealAmerica is obligated
prior to the closing with Trucat to dispose of its business interests and
subsidiaries with the result that RealAmerica shall have no interest in
Merrion at the time of the acquisition of Trucat; and
WHEREAS, RealAmerica desires to sell, transfer and assign to The Merrion
Shareholders all of its right, title and interest in and to 100% of the
capital stock of Merrion in exchange for the shares held by The Merrion
Shareholders in RealAmerica as set out on Exhibit "A" attached hereto and made
a part hereof; and
WHEREAS, it is the intent of both RealAmerica and The Merrion Shareholders
that The Merrion Shareholders acquire all of the assets and liabilities of
Merrion at the time of closing and that The Merrion Shareholders retain no
interest in or to any class of stock of RealAmerica; and
WHEREAS, the Board of Directors of RealAmerica and The Merrion
Shareholders deem it in the best interests of each to complete the transaction
herein contemplated;
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements, provisions, covenants, representations and warranties herein
contained, the parties hereto hereby agree as follows:
1. Purchase and Sale of Assets.
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1.01 PURCHASE AND SALE. On and subject to the terms and conditions of
this Agreement, The Merrion Shareholders agrees to purchase from RealAmerica
and RealAmerica agrees to sell, transfer, convey and deliver to The Merrion
Shareholders all of RealAmerica's right, title and interest in and to the
Acquired Assets.
1.02 PURCHASE PRICE. The Merrion Shareholders agree to purchase the
Acquired Assets from RealAmerica at Closing for the following consideration:
(a) The Merrion Shareholders will endorse stock certificates to
RealAmerica representing 5,273,000 shares of fully paid, non-assessable
restricted Class B common stock of RealAmerica.
(b) The Merrion Shareholders will endorse stock certificates to
RealAmerica representing 91,000 shares of the fully paid, non-assessable
restricted Series A preferred stock of RealAmerica.
1.03 CLOSING. Subject to the terms and provisions of this Agreement,
the closing of the transactions contemplated by this Agreement will be at
10:00 a.m. at the offices of RealAmerica located at 000 XX Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, XX 00000, on or before, June 30, 1999, or at such
earlier or later date or such other place as shall be mutually agreed upon by
The Merrion Shareholders and RealAmerica, such date and time sometimes being
referred to herein as the "Closing" or "Closing Date."
2. Representations and Warranties of The Merrion Shareholders.
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The Merrion Shareholders represent and warrant both jointly and
severally, to RealAmerica that, to the best of its knowledge, the statements
contained in this Section 2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 2.
2.01 AUTHORITY. The Merrion Shareholders have all requisite power and
authority to execute and deliver this Agreement and all agreements,
instruments and documents to be executed and delivered by The Merrion
Shareholders.
2.02 DISCLOSURE. The representations and warranties contained in this
Section 2 do not contain any untrue statement of a fact or omit to state any
fact necessary in order to make the statements and information contained in
this Section 2 not misleading.
2.03 REPRESENTATION. The Merrion Shareholders represent and warrant
that in making the decision to sell the Acquired Assets, they have relied upon
their own independent investigations and the independent investigations by
their representatives, including their own professional legal, tax, and
business advisors, and that The Merrion Shareholders and their
representatives have been given the opportunity to examine all relevant
documents and to ask questions of and to receive answers from RealAmerica.
3. Representations and Warranties Concerning RealAmerica.
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RealAmerica, represents and warrants to The Merrion Shareholders that, to
the best of their knowledge, the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date as though the Closing Date were substituted
for the date of this Agreement throughout this Section 3.
3.01 AUTHORITY. RealAmerica has all requisite power and authority to
execute and deliver this Agreement and all agreements, instruments and
documents to be executed and delivered by RealAmerica hereunder, to consummate
the transactions contemplated hereby and to perform all terms and conditions
hereof to be performed by it. This Agreement constitutes, and each other
agreement and instrument to be executed by RealAmerica hereunder, when
executed and delivered by RealAmerica, will constitute, the valid and binding
obligation of RealAmerica enforceable against it in accordance with its terms.
3.02 NON-CONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, judgment, order, decree,
stipulation, injunction, charge or other restriction of any government,
governmental agency or court to which RealAmerica is subject or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel or require any notice under any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, security interest or
other arrangement to which RealAmerica is a party or by which it is bound or
to which any of its assets is subject or result in the imposition of any
security interest upon any of its assets. RealAmerica is not required to give
any notice to, make any filing with, or obtain any authorization, consent or
approval of any federal, state or local government, governmental agency, bank,
financial institution or other party in order for RealAmerica and The Merrion
Shareholders to consummate the transactions contemplated by this Agreement.
3.03 TITLE. RealAmerica has, and upon the Closing Date will have, valid
and binding contractual rights to acquire the Acquired Assets, free and clear
of all liens, claims, mortgages, security interests, pledges, encumbrances or
restrictions on transfer of any kind or nature.
3.04 GOVERNMENTAL APPROVALS. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any federal,
state or local governmental authority (including, without limitation, any
department, bureau or agency), is required to be obtained or made in
connection with the execution and delivery of this Agreement by RealAmerica or
the consummation by RealAmerica of the transactions contemplated hereby the
failure of which to obtain would have a material adverse affect on the
Acquired Assets, The Merrion Shareholders or The Merrion Shareholders's
ability to own, operate or exploit the Acquired Assets.
3.05 DISCLOSURE. The representations and warranties contained in this
Section 3 do not contain any untrue statement of a fact or omit to state any
fact necessary in order to make the statements and information contained in
this Section 3 not misleading.
4. Survival and Indemnity.
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4.01 SURVIVAL. All of the representations and warranties of RealAmerica
contained in this Agreement and the representations of The Merrion
Shareholders contained in this Agreement shall survive the Closing Date, even
if the damaged party knew or had reason to know of any misrepresentation or
breach of warranty at the time of the Closing Date, and shall continue in full
force and effect for a period of six months thereafter.
4.02 INDEMNIFICATION FOR BENEFIT OF THE THE MERRION SHAREHOLDERS . In
the event RealAmerica breaches any of their joint and several representations,
warranties or covenants contained herein, and provided that The Merrion
Shareholders makes a written claim for indemnification against RealAmerica
pursuant to Section 4.04, then RealAmerica agrees to indemnify and hold
armless The Merrion Shareholders from and against the entirety of any Adverse
Consequences The Merrion Shareholders may suffer through and after the date of
the claim for indemnification (including any Adverse Consequences The Merrion
Shareholders may suffer after the end of the applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by
the breach.
4.03 INDEMNIFICATION FOR BENEFIT OF REALAMERICA. In the event The
Merrion Shareholders breaches any of its representations, warranties and
covenants contained herein, and provided that RealAmerica makes a written
claim for indemnification against The Merrion Shareholders pursuant to Section
4.04, then The Merrion Shareholders agree to indemnify and hold harmless
RealAmerica from and against the entirety of any Adverse Consequences
RealAmerica may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in the nature of
or caused by the breach.
4.04 INDEMNIFICATION PROCEDURE. If any third party shall notify any
party to this Agreement (the "Indemnified Party") with respect to any matter
which may give rise to a claim for indemnification against any other party
(the "Indemnifying Party") under this Section 4, then the Indemnified Party
shall notify each Indemnifying Party thereof promptly; provided however, that
no delay on the part of the Indemnified Party in notifying any Indemnifying
Party shall relieve the Indemnifying Party from any liability or obligation
hereunder unless (and then solely to the extent) the Indemnifying Party
thereby is damaged. In the event any Indemnifying Party notifies the
Indemnified Party within 10 days after the Indemnified Party has given notice
of the matter that the Indemnifying Party is assuming the defense thereof, (i)
the Indemnifying Party will defend the Indemnified Party against the matter
with counsel of the Indemnified Party's choice reasonably satisfactory to the
Indemnifying Party, (ii) the Indemnified Party may retain separate co-counsel
at its sole cost and expense, (iii) the Indemnified Party will not consent to
the entry of any judgment or enter into any settlement with respect to the
matter without the written consent of the Indemnifying Party not to be
withheld unreasonably, and (iv) the Indemnifying Party will not consent to the
entry of any judgment with respect to the matter, or enter into any settlement
which does not include a provision whereby the plaintiff or claimant in the
matter releases the Indemnified Party for all liability with respect thereto,
without the written consent of the Indemnified Party not to be withheld
unreasonably. In the event no Indemnifying Party notifies the Indemnified
Party with 10 days after the Indemnified Party has given notice of the matter
that the Indemnifying Party is assuming the defense thereof, however, the
Indemnified Party may defend against, or enter into any settlement with
respect to, the matter in any manner it reasonably may deem appropriate.
4.05 DETERMINATION OF LOSS. The parties shall make appropriate
adjustment for tax benefits and insurance proceeds and for the time cost of
money in determining the amount of loss for purposes of this Section 4.
4.06 OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory or
common law remedy any party may have for breach of representation, warranty or
covenant.
4.07 DEFINITION OF ADVERSE CONSEQUENCES. As used in this Section 4,
"Adverse Consequences" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demand, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, taxes, liens, losses
(including any losses resulting from the loss or invalidity of the leases
comprising the Acquired Assets), expenses and fees, including all attorneys'
fees and court costs.
5. Conduct and Transactions prior to Closing.
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5.01 COVENANTS OF REALAMERICA. Between the date of this Agreement and
the Closing Date or, if earlier termination of this Agreement:
(a) RealAmerica agrees to give The Merrion Shareholders its agents
and representatives, full access to the Acquired Assets and all of
RealAmerica's premises and books and records relating to the Acquired
Assets and its operation, and to furnish The Merrion Shareholders with such
financial and operating data and other information with respect to the
Acquired Assets and its ownership and operation as The Merrion Shareholders
shall from time to time request; provided, however, that any such
investigation shall not affect any of the representations and warranties of
RealAmerica hereunder; and provided further, that any such investigation
shall be conducted in such manner as not to interfere unreasonably with the
operation of the business of RealAmerica.
(b)RealAmerica will conduct its business relating to the Acquired
Assets only in the ordinary course and will not engage in any practice,
take any action or enter into any transaction relating to the Acquired
Assets outside the ordinary course of business.
6. Conditions to Closing.
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6.01 CONDITIONS TO OBLIGATIONS OF THE MERRION SHAREHOLDERS. The
obligation of The Merrion Shareholders to effect the Closing of the
transactions
contemplated by this Agreement shall be subject to the following conditions:
(a) RealAmerica shall have furnished The Merrion Shareholders with
certified copies of resolutions duly adopted by its Board of Directors
authorizing all necessary and proper corporate action approving the
execution, delivery and performance of this Agreement.
(b) Except to the extent waived hereunder, (i) the representations
and warranties of RealAmerica contained herein shall be true and correct in
all material respects at the Closing Date with the same effect as though
made at such time; and (ii) RealAmerica shall have performed all
obligations and complied with all covenants required by this Agreement to
be performed or complied by them prior to the Closing Date.
(c) RealAmerica shall have obtained and delivered to The Merrion
Shareholders all consents required to consummate the transactions
contemplated by this Agreement.
(d) There shall not have occurred (i) any material adverse change
in the Acquired Assets or the business, properties, results of operations
or financial condition of RealAmerica, (ii) any loss of or damage to any of
the Acquired Assets (whether or not covered by insurance) of RealAmerica
which will materially affect or impair the ability of The Merrion
Shareholders to own or operate the Acquired Assets.
(e) All statutory requirements for the valid consummation by
RealAmerica of the transactions contemplated by this Agreement shall have
been fulfilled and all authorizations, consents and approvals of all
federal, state or local governmental agencies and authorities required to
be obtained in order to permit consummation by RealAmerica of the
transactions contemplated by this Agreement and to permit the business now
or previously carried on by RealAmerica at the Acquired Assets to continue
unimpaired to any material degree immediately following the Closing Date
shall have been obtained. Between the date of this Agreement and the
Closing Date, no governmental agency, whether federal, state or local,
shall have instituted (or threatened to institute) an investigation or
other proceeding which is pending at the Closing Date relating to the
transactions contemplated by this Agreement and between the date of this
Agreement and the Closing Date no action or proceeding shall have been
instituted or, to the knowledge of RealAmerica, shall have been threatened
by any party (public or private) before a court or other governmental body
to restrain or prohibit the transactions contemplated by this Agreement or
to obtain damages in respect thereof.
(f) RealAmerica shall have complied with the delivery requirements
set forth in Section 7.03 of this Agreement.
6.02 CONDITIONS TO OBLIGATIONS OF REALAMERICA. The obligation of
RealAmerica to effect the Closing of the transactions contemplated by this
Agreement shall be subject to the following conditions:
(a) Except to the extent waived hereunder, (i) the representations
and warranties of The Merrion Shareholders contained herein shall be true
in all material respects at the Closing Date with the same effect as though
made at such time; and (ii) The Merrion Shareholders shall have performed
all material obligations and complied with all material covenants required
by this Agreement to be performed or complied with by it prior to the
Closing Date.
(b) All statutory requirements for the valid consummation by The
Merrion Shareholders of the transactions contemplated by this Agreement
shall have been fulfilled.
(c) To the extent necessary to complete the transactions
contemplated hereby, the Merrion Shareholders shall cooperate with the
management of RealAmerica to resign offices or directorships as the case
may be and to take other action necessary and requisite in the discretion
of management of RealAmerica to effect the Trucat acquisition.
7. Actions at Closing.
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7.01 TRANSACTIONS AT THE CLOSING. At the Closing the following events
shall occur, each event under the control of one party hereto being a condition
precedent to the events under the control of the other party, and each event
being deemed to have occurred simultaneously with the other events.
7.02 DELIVERIES BY THE MERRION SHAREHOLDERS. At Closing, The Merrion
Shareholders will deliver to RealAmerica:
(a) a certificate(s) for the RealAmerica Shares, properly
endorsed;
7.03 DELIVERIES BY REALAMERICA. At Closing, RealAmerica shall deliver to
The Merrion Shareholders:
(a) The stock certificates and other instruments of transfer,
assignment and conveyance as The Merrion Shareholders shall reasonably
request to vest in The Merrion Shareholders good and marketable title to
the Acquired Assets; and
(b) certified copies of corporate resolutions and other corporate
proceedings taken by RealAmerica to authorize the execution, delivery and
performance of this Agreement; and
8. Termination.
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8.01 TERMINATION OF THE AGREEMENT. The parties may terminate this
Agreement as provided below:
(a) The Merrion Shareholders and RealAmerica may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(b) The Merrion Shareholders may terminate this Agreement by
giving written notice to RealAmerica on or before the Closing Date if The
Merrion Shareholders are not satisfied with the results of their continuing
business, legal and accounting due diligence regarding RealAmerica;
(c) The Merrion Shareholders may terminate this Agreement by
giving written notice to RealAmerica at any time prior to the Closing (i)
in the event RealAmerica has breached any material representation,
warranty or covenant contained in this Agreement in any material respect,
The Merrion Shareholders have notified RealAmerica of the breach and the
breach has continued without cure for a period of 10 days after the notice
of breach or (ii) if the Closing shall not have occurred on or before June
30, 1999, or such later date as may be agreed to by The Merrion
Shareholders and RealAmerica in writing, by reason of the failure of any
condition precedent under Section 6.01 hereof (unless the failure results
primarily from The Merrion Shareholders itself breaching any
representation, warranty or covenant contained in this Agreement); and
(d) RealAmerica may terminate this Agreement by giving written
notice to The Merrion Shareholders at any time prior to the Closing (i) in
the event The Merrion Shareholders have breached any material
representation, warranty or covenant contained in this Agreement in any
material respect, RealAmerica has notified The Merrion Shareholders of the
breach and the breach has continued without cure for a period of 10 days
after the notice of breach or (ii) if the Closing shall not have occurred
on or before June 30, 1999, or such later date as may be agreed to by The
Merrion Shareholders and RealAmerica in writing, by reason of the failure
of any condition precedent under Section 6.02 hereof (unless the failure
results primarily from RealAmerica itself breaching any representation,
warranty or covenant contained in this Agreement).
8.02 EFFECT OF TERMINATION. If either The Merrion Shareholders or
RealAmerica terminates this Agreement pursuant to Section 8.01 above, all rights
and obligations of the parties hereunder shall terminate without any liability
of any party to any other party.
9. Miscellaneous.
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9.01 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. Except as
otherwise specifically provided, the covenants, representations and warranties
contained herein shall expire and be terminated and extinguished at the Closing
Date.
9.02 GOVERNING LAW. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of Delaware.
9.03 NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if sent by registered mail or certified
mail, postage prepaid if addressed as follows:
To: The Merrion Shareholders
The Merrion Shareholders
C/o Merrion Reinsurance Company Ltd.
0 Xxxxxxxxxxx Xxxxxxx,
Xxxxx Xxxxx Xxxx
Xxxxxx 0, Xxxxxxx
Attention: Mr. Xxxxxx Xxxxxx,
Managing Director
To: RealAmerica
RealAmerica Co.
000 XX Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Director
9.04 NO ASSIGNMENT. This Agreement may not be assigned by either party or
by operation of law or otherwise unless expressly agreed to in advance and in
writing by both parties hereto and, in the event of an attempted assignment,
this Agreement shall terminate.
9.05 ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the parties and supersedes any
prior understandings, agreements or representations by or among the parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
9.06 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
9.07 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.08 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by The
Merrion Shareholders and RealAmerica. No waiver by an party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence.
9.09 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.10 EXPENSES. Except as otherwise expressly provided herein, each of the
parties will bear his or its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
9.11 CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. 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 requires otherwise. The
word "including" shall mean including without limitation. The parties intend
that each representation, warranty and covenant contained herein shall have
independent significance. If any party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
The Merrion Shareholders
By: /s/ Officer of the Cuff Foundation
_________________________________________
By: /s/ Officer of the Speed 3105 Foundation
_________________________________________
By: /s/ Officer of the Total Foundation
_________________________________________
By: /s/ Xxxxxx Xxxxxx
_________________________________________
RealAmerica Co.
By: /s/ Xxxxxxx X. Xxxxxx
_________________________________________
Xxxxxxx X. Xxxxxx
Director
