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Exhibit 10.59
STOCK PURCHASE AGREEMENT
BY AND AMONG
GRANITE FINANCIAL, INC,
FIDELITY NATIONAL FINANCIAL, INC.,
LEXINGTON CAPITAL CORPORATION,
AND
THE SHAREHOLDERS OF LEXINGTON CAPITAL CORPORATION
DATED AS OF AUGUST 31, 1998
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TABLE OF CONTENTS PAGE
RECITALS........................................................................ 1
INDEX OF EXHIBITS................................................................iv
INDEX OF SCHEDULES...............................................................iv
ARTICLE I
Certain Definitions............................... 1
ARTICLE 2
Stock Purchase................................. 6
2.1 Sale and Transfer of Stock............................................. 6
2.2 Consideration.......................................................... 6
ARTICLE 3
Closing..................................... 7
3.1. Closing................................................................. 7
3.2 Mutual Deliveries at Closing............................................ 7
3.3 Shareholders' Deliveries at Closing..................................... 7
3.4 Company's Deliveries at Closing......................................... 7
3.5 GFI's and FNFI's Deliveries at Closing...................................8
3.6 Conditions of GFI and FNFI.............................................. 9
3.7 Conditions of Company and Shareholders................................. 10
ARTICLE 4
Representations and Warranties of Company and Shareholders.. 11
4.1 Organization and Standing; Articles and Bylaws......................... 12
4.2 Authorization.......................................................... 12
4.3 Subsidiaries........................................................... 12
4.4 Capitalization......................................................... 12
4.5 Financial Statements................................................... 13
4.6 Material Contracts..................................................... 13
4.7 Assets Other Than Real Property........................................ 14
4.8 Real Property.......................................................... 14
4.9 No Conflicts........................................................... 14
4.10 Litigation............................................................. 15
4.11 Taxes.................................................................. 15
4.12 Employees.............................................................. 15
4.13 Consents............................................................... 16
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4.14 Operating Rights....................................................... 16
4.15 Compliance with Applicable Laws........................................ 16
4.16 Insurance.............................................................. 16
4.17 Absence of Changes..................................................... 17
4.18 Employee Plans......................................................... 17
4.19 Intellectual Property Rights........................................... 18
4.20 Environment, Health and Safety......................................... 18
4.21 Certain Transactions................................................... 19
4.22 Bank Accounts; Powers of Attorney.......................................19
4.23 Investment Representation...............................................19
4.24 Absence of Claims Against Company.......................................20
4.25 Employee Loans......................................................... 20
4.26 Brokers' Fees.......................................................... 20
4.27 Full Disclosure........................................................ 20
ARTICLE 5
Representations and Warranties of GFI and FNFI.............. 20
5.1 Organization and Standing; Articles and Bylaws......................... 20
5.2 Authorization.......................................................... 20
5.3 No Conflicts........................................................... 21
5.4 Fidelity SEC Documents................................................. 21
5.5 Fidelity Common Stock.................................................. 21
5.6 Consents............................................................... 22
5.7 Brokers' Fees.......................................................... 22
5.8 Full Disclosure........................................................ 22
ARTICLE 6
Conduct of Business Pending Closing................... 22
6.1 Qualification.......................................................... 22
6.2 Ordinary Course........................................................ 22
6.3 Corporate Changes...................................................... 23
6.4 Indebtedness........................................................... 23
6.5 Accounting..............................................................23
6.6 Compliance with Legal Requirements..................................... 23
6.7 Disposition of Assets.................................................. 23
6.8 Compensation........................................................... 23
6.9 Modification or Breach of Agreements; New Agreements................... 24
6.10 Capital Expenditures................................................... 24
6.11 Consents............................................................... 24
6.12 Maintenance of Insurance............................................... 24
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6.13 Discharge.............................................................. 24
6.14 Claims................................................................. 24
6.15 Taxes and Tax Assessments.............................................. 24
ARTICLE 7
Additional Covenants............................ 24
7.1 Covenants of Company and Shareholders.................................. 25
7.2 Covenants of GFI and FNFI.............................................. 25
7.3 Tax Advice..............................................................26
7.4 Access and Information................................................. 26
7.5 Expenses............................................................... 27
7.6 Certain Notifications.................................................. 27
7.7 Publicity.............................................................. 27
7.8 Further Assurances..................................................... 27
7.9 Competing Offers....................................................... 27
7.10 NYSE Listing........................................................... 28
7.11 Distribution of Retained Earnings.......................................28
7.12 Board of Directors......................................................28
ARTICLE 8
Termination, Amendment and Waiver..................... 28
8.1 Termination............................................................ 28
8.2 Effect of Termination.................................................. 29
8.3 Amendment.............................................................. 29
8.4 Waiver................................................................. 29
ARTICLE 9
Indemnification............................... 29
9.1 Survival of Representations and Warranties............................. 29
9.2 Indemnification by Company and Shareholders............................ 30
9.3 Indemnification by FNFI................................................ 30
9.4 Third-Party Claims..................................................... 30
9.5 Access and Information................................................. 31
9.6 Mitigation............................................................. 31
9.7 Right of Set-Off....................................................... 31
9.8 Limitations............................................................ 31
9.8 Indemnification Exclusive.............................................. 31
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ARTICLE 10
General Provisions.............................. 32
10.1 Governing Law.......................................................... 32
10.2 Successors and Assigns................................................. 32
10.3 Entire Agreement....................................................... 32
10.4 Severability........................................................... 32
10.5 Notice................................................................. 33
10.6 Construction........................................................... 33
10.7 Headings............................................................... 34
10.8 Counterparts........................................................... 34
10.9 Recitals, Schedules, and Exhibits...................................... 34
INDEX OF EXHIBITS
EXHIBIT A - Employment Agreements for Shareholders
EXHIBIT B - Registration Rights Agreement
EXHIBIT C - Officer's Certificate of the Company
EXHIBIT D - Secretary's Certificate of the Company
EXHIBIT E - Opinion of Counsel to the Company
EXHIBIT F - Officer's Certificate of GFI and FNFI
EXHIBIT G - Secretary's Certificate of GFI and FNFI
EXHIBIT H - Opinion of Counsel to GFI and FNFI
INDEX OF SCHEDULES
Company Disclosure Schedule
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of this 31st day of August, 1998, by and among GRANITE FINANCIAL, INC., a
Delaware corporation ("GFI"), FIDELITY NATIONAL FINANCIAL, INC., a Delaware
corporation ("FNFI"), LEXINGTON CAPITAL CORPORATION, an Illinois corporation
("Company"), ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (collectively, the
"Shareholders). GFI, FNFI, Company, and Shareholders are sometimes referred to
collectively herein as the "Parties" or singularly as a "Party."
RECITALS
A. Shareholders are the record and beneficial owners of all the issued
and outstanding shares of capital stock of Company (the "Company Shares").
B. GFI is a wholly owned subsidiary of FNFI.
B. The respective Boards of Directors of GFI, FNFI, and Company deem it
advisable and in the best interests of their respective shareholders that GFI
purchase all of the Company Shares pursuant to this Agreement.
C. The Shareholders desire to sell all of the Company Shares to GFI
pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
Unless the context otherwise requires, the terms defined in this Article
1 shall have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and the plural forms of such terms. Any
capitalized term used in this Agreement and not ascribed a meaning in this
Article 1 shall have the meaning ascribed to such term elsewhere in this
Agreement.
"Affiliate" means, with respect to a Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person.
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"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or would reasonably form the basis for
any specified consequence.
"Benefit Arrangement" means any form of current or deferred
compensation, bonus, stock option, stock appreciation right, severance pay,
salary continuation, pension, profit-sharing, retirement or incentive plan,
practice or arrangement, any group or individual disability, medical, dental,
health, hospitalization, life insurance or other insurance plans or related
benefits, or any other welfare or similar plan or arrangement for the benefit of
any director, officer or employee of Company, whether active or retired, or for
any class or classes of such directors, officers or employees.
"Claim" means any actual or threatened claim, action, suit, arbitration,
hearing, inquiry, proceeding (including administrative and informal
proceedings), complaint, charge, investigation or audit by or before any
Governmental Entity or arbitrator and any appeal from any of the foregoing.
"Closing" has the meaning set forth in Section 3.1, below.
"Closing Date" has the meaning set forth in Section 3.1, below.
"Closing Fidelity Price" means the average of the per share closing
sales price of FNFI's Common Stock publicly traded on the New York Stock
Exchange for the ten (10) consecutive trading days ending two (2) business days
prior to the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Shares" has the meaning set forth in Recital A.
"Company Stock" means shares of Common Stock, $1.00 par value, of
Company.
"Confidential Information" means any information concerning the
businesses and affairs of any of the Parties that is not already generally
available to the public.
"Disclosure Schedule" means the Schedules to this Agreement required to
be prepared by Company and Shareholders and delivered to GFI.
"Employee Plan" means any "employee benefit plan," as defined in Section
3(3) of ERISA, which is subject to any provisions of ERISA and covers any
employee, whether active or retired, of the Company.
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"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all Legal Requirements concerning
pollution or protection of the environment, public health and safety, or
employee health and safety, including Legal Requirements relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, toxic materials
or other Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Fidelity Common Stock" means the shares of restricted Common Stock, par
value of $0.0001 per share, of FNFI.
"GAAP" means United States generally accepted accounting principles, as
amended from time to time.
"Governmental Entity" means any court, federal, state, local or foreign
government or any administrative agency or commission or any other governmental
authority or instrumentality whatsoever.
"Hazardous Substances" means any hazardous, toxic or infectious
substance, material, gas or waste which is regulated by any Governmental Entity.
"Indebtedness" means, when used with reference to any Person, without
duplication, (i) any Liability of such Person created or assumed by such Person,
or any Subsidiary thereof, (A) for borrowed money, (B) evidenced by a bond,
note, debenture, or similar instrument (including a purchase money obligation,
deed of trust or mortgage) given in connection with the acquisition of, or
exchange for, any property or assets (other than inventory or similar property
acquired and consumed in the Ordinary Course of Business), including securities
and other indebtedness, (C) in respect of letters of credit issued for such
Person's account and "swaps" of interest and currency exchange rates (and other
interest and currency exchange rate hedging agreements) to which such Person is
a party or (D) for the payment of money as lessee under leases that should be,
in accordance with GAAP, recorded as capital leases for financial reporting
purposes; (ii) any Liability of others described in the preceding clause (i)
guaranteed as to payment of principal or interest by such Person or in effect
guaranteed by such Person through an agreement, contingent or otherwise, to
purchase, repurchase, or pay the related Indebtedness or to acquire the security
therefor; (iii) all Liabilities or obligations secured by a Lien upon property
owned by such Person and upon which Liabilities or obligations such Person
customarily pays interest or principal, whether or not such Person has assumed
or become liable for the payment of such liabilities or
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obligations; and (iv) any amendment, renewal, extension, revision or refunding
of any such Liability or obligation.
"Intellectual Property" means (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof; (ii) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith; (iii) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith; (iv) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals); (v) all computer software (including data and related
documentation); (vi) all other proprietary rights; and (vii) all copies and
tangible embodiments thereof (in whatever form or medium).
"Knowledge" or "Known" means that Company and the Shareholders are
actually aware of the fact or matter in question or reasonably should be aware
of the fact or matter in question after a reasonable investigation in the
Ordinary Course of Business concerning such fact or matter.
"Legal Requirement" means any statute, law, ordinance, rule, regulation,
permit, order, writ, judgment, injunction, decree or award issued, enacted or
promulgated by any Governmental Entity or any arbitrator with binding authority
on a Party or Parties, as the case may be.
"Liability" means any liability (whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including, but not limited to,
any liability for Taxes.
"Licenses" has the meaning set forth in Section 4.14, below.
"Lien" means all liens (including judgment and mechanics' liens,
regardless of whether liquidated), mortgages, assessments, security interests,
easements, pledges, trusts (constructive or otherwise), deeds of trust, options
or other charges, encumbrances or restrictions.
"Losses" means any and all losses, damages, demands, assessments,
adjustments, judgments, settlement payments, deficiencies, penalties, fines,
interest (including interests from the date of such damages), and costs and
expenses (including without limitation reasonable attorneys' fees and
disbursements of every kind, nature and description), less any recoveries
thereon.
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"Material Adverse Effect" means any event, effect, development,
occurrence or circumstance, individually or when taken together with all other
such events, effects, developments, occurrences or circumstances, causing,
resulting in or having a material adverse effect on (i) the business, assets,
results of operations, properties or condition (financial or otherwise) of
Company, GFI or FNFI, as applicable; or (ii) the legal right or authorization of
Company, GFI or FNFI, as applicable, to continue to operate its business as a
going concern.
"Material Contracts" means with respect to Company (i) any union
contract or any employment or consulting contract or arrangement providing for
future compensation, written or oral, with any officer, director or employee
which is not terminable on thirty (30) days notice or less without penalty or
obligation to make payments related to such termination; (ii) any plan contract
or arrangement, whether written or oral, providing for bonuses, pensions,
deferred compensation, severance pay or benefits, retirement payments, profit
sharing or the like; (iii) any existing broker agreement, lease sale or purchase
agreement, distribution agreement, volume purchase agreement, or similar
agreement in which the annual amount involved in fiscal 1997 and fiscal year
1998 exceeded or is expected to exceed $10,000 in aggregate amount; (iv) except
for trade indebtedness incurred in the Ordinary Course of Business, any
Indebtedness incurred in the acquisition of companies or other entities or
Indebtedness for borrowed money by way of direct loan, sale of debt securities,
recourse obligations on lease sales, purchase money obligation, conditional
sale, guarantee, leasehold obligations or otherwise; (v) any contract containing
covenants purporting to limit in any way the freedom of Company to compete in
any line of business or in any geographic area; (vi) any agreement of
indemnification; (vii) any agreement, contract or commitment relating to capital
expenditures and which involve future payments in excess of $25,000 in the
aggregate by Company; (viii) any agreements, contracts or commitments relating
to the disposition of assets, including any intangible assets or intellectual
property rights (other than inventory), which involve payments in excess of
$25,000 in the aggregate by Company; (ix) any contracts with a Governmental
Entity subject to price redetermination or renegotiation; or (x) all insurance
policies of Company; (xi) all equipment leases of Company in which the Company
is lessee and which involve payments in excess of $20,000 in the aggregate; or
(xii) any other agreement, contract or commitment which is material to Company.
"Material Contracts" with respect to GFI or FNFI means any agreement, contract
or commitment which FNFI files or is requested to file with its SEC reports.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency and, where appropriate, in accordance with formula).
"Party" has the meaning set forth in the preamble to this Agreement.
"Permitted Liens" means (i) liens for Taxes not yet due and payable or
for Taxes that the taxpayer is contesting in good faith through appropriate
proceedings; (ii) purchase money liens and liens securing rental payments under
capital lease arrangements and (iii) liens, if any, that are not substantial in
character, amount or extent and do not detract materially from the value, or
interfere
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with present use or the sale or other disposition, of the property subject
thereto or affected thereby.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof), or any other legal
entity.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs, duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax or contribution of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
ARTICLE 2
STOCK PURCHASE
2.1 Sale and Transfer of Stock. On the basis of the representations,
warranties, covenants and agreements and subject to the satisfaction (or waiver
by the Party whose obligations hereunder are subject to such satisfaction) of
the conditions set forth in this Agreement, on the Closing Date, Shareholders
shall sell, convey, assign, transfer and deliver to GFI, and GFI shall purchase
and acquire from Shareholders, all of the Company Shares owned by Shareholders,
which constitutes 100% of the issued and outstanding capital stock of the
Company. Shareholders shall transfer to GFI good and marketable title to such
Company Shares, free and clear of all Liens.
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2.2 Consideration. In consideration for the sale of all of the Company
Shares to GFI, GFI and FNFI shall provide Shareholders with the following
consideration at the Closing:
(a) Cash in the amount of $3,000,000; and
(b) A number of shares of Fidelity Common Stock equal to
$500,000 divided by the Closing Fidelity Price.
The cash and Fidelity Common Stock due the Shareholders under this Section 2.2
shall be allocated among the Shareholders in proportion to the number of Company
Shares owned by each Shareholder.
ARTICLE 3
CLOSING
3.1. Closing. The consummation of the purchase of the Company Shares by
GFI and the other transactions contemplated by this Agreement (the "Closing")
shall occur at such place and on such date (the "Closing Date") and at such time
as may be mutually designated by the Parties within five (5) business days
following the satisfaction or waiver of the conditions set forth in Sections 3.6
and 3.7, below, or such other date, time, place and manner as the Parties may
mutually agree.
3.2 Mutual Deliveries at Closing. Provided that all of the conditions to
the Closing set forth in Sections 3.6 and 3.7, below, have been satisfied or
waived by the Party benefitting therefrom, the appropriate Parties or Persons
shall execute and deliver or cause to be delivered to the appropriate Parties at
Closing the following:
(a) The Employment Agreements between Company and each of the
Shareholders in substantially the form of Exhibit "A" hereto; and
(b) The Registration Rights Agreement substantially in the form
of Exhibit "B" hereto.
3.3 Shareholders' Deliveries at Closing. Provided that all of the
conditions to the Closing set forth in Sections 3.6 and 3.7, below, have been
satisfied or waived by the Party benefiting therefrom, Shareholders shall
execute and deliver or cause to be delivered to GFI at the Closing the following
documents:
(a) The original stock certificates for all of the Company
Shares along with duly executed stock powers in favor of GFI for each
certificate;
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(b) Such other documents and instruments as may be specified in
this Agreement or otherwise reasonably requested by GFI in order to consummate
the transactions contemplated hereby.
3.4 Company's Deliveries at Closing. Provided that all of the conditions
to the closing set forth in Sections 3.6 and 3.7, below, have been satisfied or
waived from the Party benefitting therefrom, Company shall execute and deliver
or cause to be delivered to GFI at the Closing the following:
(a) An Officer's Certificate of the Company dated the Closing
Date substantially in the form of Exhibit "C" hereto;
(b) A Secretary's Certificate of the Company dated the Closing
Date substantially in the form of Exhibit "D" hereto;
(c) An opinion of counsel to the Company substantially in the
form of Exhibit "E" hereto;
(d) Company's original minute book, such minute book to contain
(i) original Articles of Incorporation and all amendments thereto, or copies
thereof if the originals are unavailable; (ii) Company's Bylaws presently in
effect; (iii) Company's stock transfer records together with all available
canceled stock certificates; and (iv) all minutes of meetings or consents in
lieu of such meetings of Company's Board of Directors and shareholders;
(e) A good standing certificate of Company, dated within thirty
(30) business days of the Closing Date, for each jurisdiction in which Company
is required to be qualified and authorized to do business;
(f) Minutes of the Board of Directors and shareholders of
Company authorizing and approving this Agreement and the transactions
contemplated herein;
(g) The resignations of all of the officers and directors of
Company effective as of the Closing Date; and
(h) Such other documents and instruments as may be specified in
this Agreement or otherwise reasonably requested in writing by GFI at least five
(5) days prior to the Closing Date in order to consummate the transactions
contemplated hereby.
3.5 GFI and FNFI's Deliveries at Closing. Provided that all of the
conditions to the Closing set forth in Sections 3.6 and 3.7, below, have been
satisfied or waived by the Party benefiting therefrom, GFI or FNFI shall execute
and deliver or cause to be delivered to Shareholders at the Closing (or such
later time as may be indicated below) the following:
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(a) An Officer's Certificate of each of GFI and FNFI dated the
Closing Date substantially in the form of Exhibit "F" hereto (provided, however,
that such Officer's certificate may be delivered within 30 days following the
Closing);
(b) A Secretary's Certificate of each of GFI and FNFI dated the
Closing Date substantially in the form of Exhibit "G" hereto (provided, however,
that such Secretary's certificate may be delivered within 30 days following the
Closing);
(c) An opinion of counsel to GFI and FNFI substantially in the
form of Exhibit "H" hereto;
(d) The cash and Fidelity Common Stock in accordance with
Section 2.2, above;
(e) Such other documents and instruments as may be specified in
this Agreement or otherwise reasonably requested in writing by Shareholders at
least (5) days prior to the Closing Date in order to consummate the transactions
contemplated hereby.
3.6 Conditions of GFI and FNFI. GFI's and FNFI's obligations hereunder
to consummate the transactions hereunder are subject to the satisfaction, 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 Company and Shareholders
in this Agreement shall be true, correct and complete in all material respects
on and as of the Closing Date with the same force and effect as if they had been
made on and as of said date; and Company and Shareholders shall have in all
material respects performed all of the obligations and complied with each and
all of the covenants required to be performed or complied with by them on or
prior to the Closing Date.
(b) Material Adverse Effect. No act, event or condition shall
have occurred after the date hereof which has had or could have a Material
Adverse Effect on Company.
(c) Authorizations and Approvals. All authorizations, approvals
or consents from third parties, including from any Governmental Entity,
shareholders, landlord or other Person, necessary for the consummation of the
transactions contemplated hereby shall have been obtained.
(d) Deliveries. GFI and FNFI shall have received from the
appropriate Party or Person, the delivery obligations set forth in Sections 3.2
through 3.4, above.
(e) No Claims. There shall not be instituted and pending or
threatened any Claims before any Governmental Entity (i) challenging or
otherwise seeking to restrain or prohibit the consummation of the transactions
contemplated hereby, or (ii) seeking to prohibit the direct
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or indirect ownership or operation by GFI or FNFI of all or a material portion
of the business or assets of Company, or to compel GFI, FNFI or Company to
dispose of or hold separate all or a material portion of the business or assets
of Company, GFI or FNFI.
(f) Corporate Action. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments, releases and documents
referenced herein or incident to the transactions contemplated hereby shall be
in form and substance satisfactory to GFI, FNFI and their counsel.
(g) Requisite Regulatory Approvals. All notices or filings
required to be made, all authorizations, permits, certificates, registrations,
consents, approvals or orders required to be obtained, and all waiting periods
required to expire, prior to the consummation of the transactions contemplated
by this Agreement under applicable federal law of the United States or
applicable laws of any state having jurisdiction over the transactions
contemplated by this Agreement or the businesses conducted by the Parties or any
Affiliate or Subsidiary of any Party (collectively, the "Requisite Regulatory
Approvals") shall have been obtained or expired, as the case may be, without the
imposition of any condition which is materially burdensome upon GFI, FNFI or any
Party or Person to be affected by such condition.
(h) Employment Agreements. Each Shareholder shall have entered
into the Employment Agreement with the Company substantially in the form
attached hereto as Exhibit "A."
(i) Registration Rights Agreement. Shareholders shall have
entered into the Registration Rights Agreement substantially in the form of
Exhibit "B" hereto.
(j) Residual Interests in Leases and Equipment. Prior to the
Closing, the Shareholders shall fully assign and transfer to the Company all
right, title and interest of the Shareholders in and to any "Residuals," as
hereafter defined, on equipment lease transactions originated by the Company at
any time prior to Closing. Residuals mean all rights of the Shareholders or the
Company to the lease agreement and equipment subject to the lease agreement
after the lessee has performed all obligations during the scheduled lease term,
including any release, sale or other re-marketing of the equipment, payments
made by lessee during any renewal or extension of the lease term or holding over
past the expiration of the lease agreement. Such Residuals shall be recorded as
an asset on the balance sheet of the Company.
(l) Shareholder Indebtedness. Prior to the Closing, Shareholders
shall fully repay all loans, indebtedness and other advances made by the Company
to Shareholders.
3.7 Conditions of Company and Shareholders. Company's and Shareholders'
obligations hereunder to consummate the transactions hereunder are subject to
the satisfaction, at or prior to the Closing, of the following conditions:
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(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by GFI and FNFI in this
Agreement shall be true, correct and complete in all material respects on and as
of the Closing Date with the same force and effect as if they had been made on
and as of said date; and GFI and FNFI shall have in all material respects
performed all of the obligations and complied with each and all of the covenants
required to be performed or complied with by them on or prior to the Closing.
(b) Material Adverse Effect. No act, event or condition shall
have occurred after the date hereof has had or could have a Material Adverse
Effect on GFI or FNFI.
(c) Authorizations and Approvals. All authorizations, approvals
or consents from third parties, including from any Governmental Entity,
shareholders, landlord or other Person, necessary for the consummation of the
transactions contemplated hereby shall have been obtained.
(d) NYSE Listing. FNFI shall have made such filings as are
necessary with the New York Stock Exchange regarding the transactions
contemplated hereby and the shares of Fidelity Common Stock to be issued under
this Agreement shall have been filed for listing on the NYSE, subject only to
official notice of issuance.
(e) Deliveries. Company or Shareholders, as appropriate, shall
have received from GFI or FNFI the delivery obligations set forth in Sections
3.2 and 3.5, above.
(f) Corporate Action. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments, releases and documents
referenced herein or incident to the transactions contemplated hereby shall be
in form and substance satisfactory to Company, Shareholders and their counsel.
(g) No Claims. There shall not be instituted and pending or
threatened any Claims before any Governmental Entity (i) challenging or
otherwise seeking to restrain or prohibit the consummation of the transactions
contemplated hereby, or (ii) seeking to prohibit the direct or indirect
ownership or operation by GFI or FNFI of all or a material portion of the
business or assets of Company, or to compel GFI or FNFI or Company to dispose of
or hold separate all or a material portion of the business or assets of Company,
GFI or FNFI.
(h) Requisite Regulatory Approvals. The Requisite Regulatory
Approvals shall have been obtained or expired, as the case may be, without the
imposition of any condition which is materially burdensome upon Company or any
Party or Person to be affected by such condition.
(i) Employment Agreements. The Company shall have entered into
the Employment Agreements with each of the Shareholders substantially in the
forms attached hereto as Exhibit "A" hereto.
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(j) Registration Rights Agreement. FNFI shall have afforded
Shareholders an opportunity to enter into the Registration Rights Agreement
substantially in the form of Exhibit "B" hereto.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS
The Company and Shareholders each represents and warrants to GFI and
FNFI that (except for changes contemplated by this Agreement and except as set
forth in the Disclosure Schedule attached hereto), each of the following
statements is true, correct and complete in all material respects as of the date
of this Agreement and will be true, correct and complete in all material
respects as of the Closing Date (each such statement to be made again by Company
and Shareholders on that date with the Closing Date being substituted for the
date of this Agreement throughout this Article 4):
4.1 Organization and Standing; Articles and Bylaws. Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Illinois, has full power and authority to own its assets and
properties and to carry on its business as presently conducted. Company is duly
qualified and authorized to do business, and is in good standing as a foreign
corporation, in each jurisdiction where the nature of its activities and of its
properties (both owned and leased) make such qualification necessary, except
where the failure to so qualify would not have a Material Adverse Effect.
Company has furnished GFI with copies of its Articles of Incorporation and
Bylaws, as amended to the date hereof. Said copies are true, correct and
complete and contain all amendments through the Closing Date.
4.2 Authorization. All actions on the part of the Shareholders and all
corporate action on the part of Company, its officers, directors and
shareholders necessary for the authorization, execution and delivery of this
Agreement and the documents contemplated hereby, the performance of all of
Company's and Shareholders 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 Company and Shareholders enforceable in
accordance with their respective terms, except as the enforceability thereof may
be affected by the laws of bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally or any equitable remedy
a court may impose.
4.3 Subsidiaries. Except as disclosed in Schedule 4.3, the Company has
no Subsidiaries and does not presently own, of record or beneficially, or
control, directly or indirectly, any capital stock, securities convertible into
capital stock or any other equity interest in any corporation, association or
business entity, nor is the Company, directly or indirectly, a participant in
any joint venture, partnership or other entity.
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4.4 Capitalization. The authorized capital stock of Company consists of
100,000 shares of Common Stock, $1.00 par value, of which 6,000 shares are
issued and outstanding as of the date of this Agreement. All of the Company
Shares have been duly authorized and validly issued and are fully paid and
non-assessable. All of the Company Shares were offered, issued, sold and
delivered by Company in compliance with all applicable state and federal laws
concerning the issuance of securities. None of the Company Shares were issued in
violation of any preemptive rights created by statue, or by Company's charter
documents, or by any agreement to which Company may be bound.
Schedule 4.4 to the Disclosure Schedule hereto contains a complete list
of, and the number of shares owned of record by, the holders of the issued and
outstanding Company Stock.
There are no outstanding shares of Company Stock, preferred stock or any
other equity securities of Company, and there are no options, warrants, calls,
conversion rights, commitments or agreements of any character to which Company
or Shareholders may be bound that do or may obligate Company or Shareholders to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of Company Stock, preferred stock or other equity securities or that do
or may obligate Company or Shareholders to grant, extend or enter into any such
option, warrant, call, conversion right, commitment or agreement. There are no
outstanding arrangements, agreements, commitments or understandings of any kind
affecting or relating to the voting, issuance, purchase, redemption, repurchase
or transfer of any capital stock of Company or any other securities of Company.
Company and Shareholders have not, or prior to the Closing will have not, become
a party to or subject to any contract or obligation wherein any Person has a
right or option to purchase or acquire any rights in any additional capital
stock or securities of Company. Shareholders own of record and beneficially, and
have good and marketable title to all of the Company Shares, free and clear of
all Claims and Liens. As a result of the completion of the transactions set
forth herein, GFI will be the record and beneficial owner of all outstanding
capital stock of Company and rights to acquire capital stock of Company.
4.5 Financial Statements. Schedule 4.5 to the Disclosure Schedule hereto
includes (i) true, complete and correct copies of Company's balance sheet as of
December 31, 1997 (the end of its most recently completed fiscal year) and
statements of income and retained earnings for the year ended December 31, 1997;
and (ii) true, complete and correct copies of Company's balance sheet as of July
3,1998 and statement of income for the period then ended (collectively, the
"Financial Statements"). The Financial Statements have been prepared as a
compilation and fairly present the financial position of Company as of the dates
thereof and the results of its operations for the periods then ended, subject,
in the case of the June 30, 1998 Financial Statements, to the omission of
complete footnote information and normal year-end adjustments. There are no
material Company Liabilities, direct or indirect, fixed or contingent, which are
not reflected in the balance sheet as of July 3, 1998, except for Liabilities
incurred in the Ordinary Course of Business subsequent to July 3, 1998, which,
either individually or in the aggregate, would not be material. To the Company
and Shareholders' Knowledge, there is no Basis for any assertion against Company
of any Liability or obligation of any nature whatsoever that is not fully
reflected in the
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Financial Statements which, either individually or in the aggregate, would be
material. Since the date of the December 31, 1997 Financial Statements, there
have been no material changes in Company's accounting policies.
4.6 Material Contracts. Schedule 4.6 to the Disclosure Schedule hereto
contains a complete and accurate list of all Material Contracts to which Company
is a party or bound. True, correct and complete copies of all Material Contracts
listed on Schedule 4.6 to the Disclosure Schedule have been furnished or made
available by Company to GFI. Each Material Contract so listed is a valid and
binding obligation of Company and is enforceable against Company and the other
Person or Persons thereto, in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and subject to the availability of equitable remedies. Company has performed all
obligations required to be performed by it to date and is not in default under
or in breach of any term or provision of any Material Contract to which Company
is a party, is subject or is otherwise bound, and, to the Knowledge of Company
and the Shareholders, no event has occurred that, with the giving of notice or
the passage of time or both, would constitute such a default or breach under any
Material Contract. To the Knowledge of Company and the Shareholders, no party
with whom Company has a Material Contract is in default of its obligations
thereunder, except as disclosed on Schedule 4.6. No consent or approval of any
party to any of the Material Contracts is necessary in order to permit Company
to consummate the transactions contemplated hereby.
4.7 Assets Other Than Real Property. Company has good and marketable
title to all properties and assets (other than real property which is subject to
Section 4.8, below) owned or leased by Company, free and clear of all Liens
except for Permitted Liens and those Liens set forth on Schedule 4.7. The assets
and properties of Company constitute all the assets, properties, rights,
privileges and interests necessary for the operation of Company's business. All
of the vehicles, machinery and equipment of Company are in good working order
and condition, ordinary wear and tear excepted.
4.8 Real Property. Company does not own any real property. Schedule 4.8
to the Disclosure Schedule hereto contains an accurate list and general
description of all real property leases, subleases, licenses or similar
agreements ("Leases") to which Company is a party (copies of which have been
previously furnished to GFI), in each case setting forth (i) the landlord and
tenant or sublessor and sublessee, as applicable, thereof and the date and term
of each of the Leases; (ii) the legal description or street address of each
property covered thereby; and (iii) a brief description (including size and
function) of the principal improvements and buildings thereon (the "Leased
Premises"). Company has valid leasehold interests in the Leased Premises, free
and clear of all Liens and Claims, except for (i) Claims of lessors, co-lessees
or sublessees in such matters as are reflected in the Leases; (ii) title
exceptions affecting the fee estate of the lessor under such Leases; and (iii)
other matters as described in the Disclosure Schedule. Company is not in
default, and no facts or circumstances have occurred which, through the passage
of time or both, or the giving of notice would constitute a default, under any
Lease. To the Company's and Shareholders' Knowledge, the activities of Company,
with respect to the Leased Premises, are in
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all material respects permitted and authorized by applicable zoning laws,
ordinances and regulations and all laws and regulations of any Governmental
Entity. To the Knowledge of Company and Shareholders, the portions of the
buildings on the Leased Premises that are used in the business of Company are
each in good repair and condition (including without limitation, the electrical,
mechanical, HVAC, plumbing, elevator, other building systems and structural
components serving such premises, and the roofs are water-tight), and are in the
aggregate sufficient to satisfy Company's current business activities as
conducted thereat.
4.9 No Conflicts. The execution and delivery nor the performance of this
Agreement by Company will result in any of the following: (i) a default or an
event that, with notice or lapse of time or both, could be a default, breach or
violation of (A) the Articles of Incorporation or Bylaws of Company, (B) any
Material Contract; (ii) the termination of any Material Contract or the
acceleration of the maturity of any Indebtedness or other material obligation of
Company; (iii) to the Knowledge of Company and the Shareholders, the creation or
imposition of any Lien (except for Permitted Liens) on any of the assets or
properties of Company; (iv) to the Knowledge of Company and the Shareholders,
the creation or imposition of any Lien on any shares of the Company Stock; or
(v) to the Knowledge of Company and the Shareholders, a violation or breach of
any writ, injunction or decree of any Governmental Entity or arbitrator to which
Company is a party or by which any of its properties are bound.
4.10 Litigation. There are no Claims before any court or administrative
agency pending or, to the Company's and Shareholders' Knowledge, currently
threatened against or with respect to Company (or to the Knowledge of Company or
Shareholders any Basis therefor), which question the validity of this Agreement
or any action taken or to be taken in connection herewith, or which,
individually or in the aggregate, might result in a Material Adverse Effect, or
in any material impairment of the right or ability to carry on its business as
now conducted or as proposed to be conducted, or in any material Liability or
Loss on the part of Company. Except as provided in Schedule 4.10 to the
Disclosure Schedule, Company and Shareholders are not a party or subject to, and
none of their assets are bound by, the provisions of any order, writ,
injunction, judgment, or decree of any Governmental Entity or arbitrator.
4.11 Taxes. Company has no Liability for any federal, state or local
Taxes, except for Taxes which have accrued and are not yet payable. Company has
filed or caused to be filed all Tax Returns required under applicable law to be
filed on or before the Closing Date, Company has paid or made provision for all
Taxes and other charges which have or may become due for the periods covered by
such Tax Returns, and all such Tax Returns are true, correct and complete in all
respects. None of the Tax Returns of Company are currently under investigation
or audit, nor is an investigation or audit pending, and there has not been an
investigation or audit of the Tax Returns of Company in the past seven (7)
years. There are no outstanding agreements or waivers extending the statutory
period of limitations applicable to any Tax Return for any period. The
accounting treatment of all items of income, gain, loss, deduction and credit as
reported on all Tax Returns and estimates filed by or on behalf of Company are
true, correct and complete, and all deferred Taxes and all Taxes due for the
period ending on the Closing Date have been accrued on
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the Balance Sheet of the June 30, 1998 Financial Statements. No Claim has ever
been made by any Governmental Entity in a jurisdiction where Company does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
All Taxes owed by Company or which Company is obligated to withhold from amounts
owed or owing to any employee, independent contractor, stockholder, creditor or
third party have been paid. There are no unresolved Claims concerning Company's
Tax Liability, and to the Knowledge of Company and Shareholders no Basis for any
such Claims exist.
4.12 Employees. Schedule 4.12(a) to the Disclosure Schedule hereto sets
forth a complete list of all current employees of Company, together with each
employee's tenure with Company, title or job classification, and the current
annual rate of compensation payable to each such employee. There are no unfair
labor practice complaints, strikes, slowdowns, stoppages or other controversies
pending or, to the Company's and Shareholders' Knowledge, threatened, attempts
to unionize or controversies threatened between Company and, or relating to, any
of its employees, nor to the Knowledge of Company or Shareholders any Basis
therefore. Company is not a party to any collective bargaining agreement with
respect to any of its employees or, except as set forth on Schedule 4.12(b) of
the Disclosure Schedule, to a written employment contract with any of its
employees, and there are no understandings with respect to the employment of any
officer or employee of Company which are not terminable by Company without
Liability on not more than thirty (30) days' notice. Except as set forth in the
Company's profit sharing plan and retirement plan attached hereto as Schedule
4.18, no officer, director, or employee is entitled to receive any payment of
any amount under any existing agreement, Benefit Arrangement, Employment Plan or
other benefit, or to the accrual or vesting of any other benefit or payment as a
result of the consummation of any transactions contemplated by this Agreement.
Company has complied with all applicable Legal Requirements which govern
workers' compensation, equal employment opportunity and equal pay. Company's
employment of each of its employees is in compliance with all immigration and
naturalization laws of the United States.
4.13 Consents. All consents, approvals, orders, or authorizations of, or
registrations, qualifications, designations, declarations or filings with, any
Governmental Entity or under any Material Contract, required on the part of
Company in connection with the valid execution and delivery of this Agreement
and the sale of the Company Shares, or the consummation of any other transaction
contemplated hereby have been obtained, or will be effective at the Closing,
except for those consents where the failure to obtain such consents does not
result in a Material Adverse Effect on the Company, GFI, FNFI or the Company
Shares.
4.14 Operating Rights. To the Company's and Shareholders' Knowledge,
Company has all operating authority, licenses, franchises, permits,
certificates, consents, rights and privileges (collectively, "Licenses") as are
necessary or appropriate to the operation of its business as now conducted,
except for those Licenses where the failure to hold such Licenses would not
result in a Material Adverse Effect on the Company, GFI, FNFI or the Company
Shares. Such Licenses are in full force and effect, no violations have been or
are expected to have been recorded in respect of any such Licenses, and no
proceeding is pending or, to the Company's and
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Shareholders' Knowledge, threatened or any Basis therefore, that could result in
the revocation or limitation of any such Licenses. Company has conducted its
business so as to comply in all material respects with all such Licenses.
4.15 Compliance with Applicable Laws. To the Company's and Shareholders'
Knowledge, the properties, assets, business and operations of Company have been
and are being maintained and conducted in compliance with all Legal Requirements
to which Company is subject. No investigation or review by any Governmental
Entity with respect to Company is pending or, to the Company's and Shareholders'
Knowledge, threatened, or to the Knowledge of Company or Shareholders is there
any Basis therefore, nor has any Governmental Entity indicated to Company an
intention to conduct the same.
4.16 Insurance. Schedule 4.16 to the Disclosure Schedule hereto sets
forth an accurate list, as of the date of this Agreement first set forth above,
of all insurance policies carried by Company and all insurance loss runs or
workmen's compensation claims received for the past two (2) policy years.
Attached to Schedule 4.16 to the Disclosure Schedule are true, complete and
correct copies of the policies from the insurance company of all current
insurance policies, all of which are in full force and effect. All premiums
payable under all such policies have been paid and Company is otherwise in full
compliance with the terms of such policies (or other policies providing
substantially similar insurance coverage). To the Knowledge of Company or
Shareholders, such policies of insurance are of the type and in amounts carried
by Persons conducting businesses similar to that of Company. To the Company's
and Shareholders' Knowledge, there is no pending termination of or material
premium increase with respect to, any of such policies. All claims previously
made under such policies have been timely filed.
4.17 Absence of Changes. Except as set forth on Schedule 4.17 to the
Disclosure Schedule, since January 1, 1998, there has not been (i) any change or
amendment in the Articles of Incorporation, Bylaws or other governing
instruments of Company; (ii) any sale or issuance of, or grant of options or
rights to acquire, any shares of the Company Stock or other securities of
Company or any declaration, setting aside, or payment of dividends or
redemptions in respect of any shares of capital stock of Company, or any direct
or indirect redemption, purchase, or other acquisition of such stock, or any
agreement, understandings or commitments to do the same; (iii) any transfer or
other disposition or pledge of, or the grant of options or rights to acquire,
any of the outstanding shares of the Company Stock; (iv) any amendment,
termination or revocation, or any threat of any amendment, termination, or
revocation of any Material Contract; (v) any sale, transfer, mortgage, pledge,
or subjection to Lien (other than Permitted Liens) of, on or affecting any of
the assets of Company valued at or above $10,000 individually or in the
aggregate; (vi) any increase in the compensation paid or payable or in the
fringe benefits provided to any employee of Company, or the adoption of any
Benefit Arrangements or Employee Plans not in existence in the fiscal year ended
December 31, 1997; (vii) any damage, destruction or loss, whether or not covered
by insurance, of any of the assets of Company; (viii) any purchase or lease, or
commitment for the purchase or lease, of equipment or other capital items not
disclosed in Company's Financial Statements which is in excess of the normal,
ordinary and usual requirements
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of the business of Company; (ix) any change that by itself or together with
other changes, has had a Material Adverse Effect; (x) any agreement or
arrangement made by Company or any Shareholder to take any action which, if
taken prior to the date hereof, would have made any representation or warranty
set forth in this Agreement untrue or incorrect as of the date when made; or
(xi) the commencement or notice or threat of commencement of any Claim against
Company or any of its affairs.
4.18 Employee Plans. Schedule 4.18 to the Disclosure Schedule hereto
sets forth a complete list of all Employee Plans and Benefit Arrangements
maintained, administered or contributed to, or otherwise participated in, by
Company. True and complete copies of each such Employee Plan or Benefit
Arrangement, including amendments thereto, have been provided to GFI, together
with true and complete copies of (i) annual reports for the most recent three
(3) years (Form 5500 Series including, if applicable, Schedules A and B
thereto); (ii) all plan documents and the most recent summary plan description
of each such Employee Plan, together with any modifications thereto; and (iii)
the most recent favorable determination letter (if applicable) from the Internal
Revenue Service for each such Employee Plan. None of the Employee Plans is a
"multiemployer plan" as defined in Section 3(37) of ERISA or a "multiple
employer plan" as covered in Section 412(c) of the Code, and the Company has not
been obligated to make a contribution to any such multiemployer or multiple
employer plan. All contributions under the terms of the Plan or Arrangement or
applicable law (including all employer contributions and employee salary
reduction contributions) which are due have been paid to each such Employee Plan
or Benefit Arrangement and all contributions for any period ending on or before
the Closing Date which are not yet due have been paid to each such Employee Plan
or Benefit Arrangement or accrued in accordance with past custom and practice of
Company. Each Employee Plan which is intended to be qualified under Section
401(a) of the Code is, to the Company's and Shareholders' Knowledge, so
qualified and each trust maintained pursuant thereto is exempt from income tax
under Section 501(a) of the Code. Neither Company nor any Employee Plan, nor any
trusts created thereunder, has engaged in a non-exempted "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the Code,
or any breach of fiduciary duty as defined in Part 4 of Subtitle B of Title I of
ERISA in connection with any Employee Plan.
4.19 Intellectual Property Rights.
(a) To the Company's and Shareholders' Knowledge, Company owns,
or has the right to use, sell or license all Intellectual Property necessary or
required for the conduct of its business as presently conducted and such rights
to use, sell or license are reasonably sufficient for such conduct of Company's
business. Company has taken all reasonable and practicable action designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
right in, all of its Intellectual Property.
(b) Neither the manufacture, marketing, license, sale or
intended use of any Intellectual Property licensed or sold by Company or
currently under development by Company violates any license or agreement between
Company and any third party or, to the Company's and
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Shareholders' Knowledge infringes any Intellectual Property of any other party;
and there is not pending or threatened, nor to the Knowledge of Company or
Shareholders any Basis therefor, any Claim contesting the validity, ownership or
right to use, sell, license or dispose of any Intellectual Property or that the
proposed use, sale, license or disposition thereof conflicts or will conflict
with the rights of any other party, nor to the Knowledge of Company or
Shareholders, is there any Basis for any such assertion.
4.20 Environment, Health and Safety.
(a) Company has complied with all Environmental, Health and
Safety Laws, except where failure to comply would not have a Material Adverse
Effect, and Company has received no written notice that a Claim or notice has
been filed or commenced against it alleging any failure to so comply. Without
limiting the generality of the preceding sentence, Company has, to the Company's
and Shareholders' Knowledge, obtained and been in compliance with all of the
terms and conditions of all Licenses and other authorizations which are required
under, and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
which are contained in, all Environmental, Health, and Safety Laws, except where
failure to comply would not have a Material Adverse Effect.
(b) Company has not, in violation of any Environmental, Health
and Safety Laws, handled or disposed of any substance, arranged for the disposal
of any substance, exposed any employee or other individual to any substance or
condition, or owned or operated any property or facility in any manner that
could form a Basis for any present or future Claim against Company giving rise
to any Liability, except where having done so would not have a Material Adverse
Effect. To the Company's and Shareholders' Knowledge, Company has no Liability
for damage to any site, location, or body of water (surface or subsurface), for
any illness of or personal injury to any employee or other individual, or for
any reason under any Environmental, Health, and Safety Law which could have a
Material Adverse Effect.
(c) All properties used in the Company's business are, to the
Company's and Shareholders' Knowledge, free of Hazardous Substances, except
where the existence thereof would not have a Material Adverse Effect.
4.21 Certain Transactions. There are no existing or pending
transactions, nor are there any agreements or understandings, between Company,
on the one hand, and any Shareholder, officer or director of Company, or any
person or entity affiliated with any of them, on the other hand, including,
without limitation, any transactions, arrangements or understandings relating to
the purchase or sale of goods or services or the sale, lease or use of any of
the assets of or by Company, with or without adequate compensation, or to any
indebtedness owed to or by Company, in any amount whatsoever.
4.22 Bank Accounts; Powers of Attorney. Schedule 4.22 of the Disclosure
Schedule sets forth an accurate list, as of the date of this Agreement, of the
following: (i) the name of each
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financial institution in which Company has any account or safe deposit box; (ii)
the names in which the accounts or boxes are held; (iii) the type of account;
and (iv) the name of each person authorized to draw thereon or have access
thereto. The Disclosure Schedule hereto also sets forth the name of each Person
holding a general or special power of attorney from Company and a description of
the terms of such power.
4.23 Investment Representations. Each Shareholder is an "accredited
investor," as such term is defined under the Securities Act. Each Shareholder is
receiving the Fidelity Common Stock for his own account for investment purposes
only, and not as a nominee or agent for any other Person, and not with a view to
or for resale in connection with any distribution thereof. Each Shareholder
acknowledges that the Fidelity Common Stock to be issued hereunder will not be
registered under the Securities Act, nor qualified under any state securities
laws on the ground, among others, that no distribution or public offering is to
be effected.
4.24 Absence of Claims Against Company. No Shareholder has any Claims
against the Company.
4.25 Employee Loans. Except as set forth on the Schedule 4.25, there are
no outstanding loans and/or other advances made by Company to any of its
officers, directors, shareholders, employees, agents or consultants.
4.26 Brokers' Fees. Company and Shareholders have no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
4.27 Full Disclosure. Neither this Agreement, the representations and
warranties by Company and Shareholders contained herein, the Exhibits or
Schedules hereto, nor any other written statement or certificate delivered or to
be furnished to GFI or FNFI in connection herewith, when read together, contain
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. To the Knowledge of Company and Shareholders, there is no fact which
has not been disclosed to GFI and FNFI that would have a Material Adverse Effect
or would affect the ability of Company and Shareholders to perform their
obligations under this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GFI AND FNFI
GFI and FNFI represent and warrant to Company and Shareholders that
(except for changes contemplated by this Agreement) each of the following
statements is true, correct and complete in all material respects as of the date
of this Agreement and will be true, correct and complete in all material
respects as of the Closing Date (each such statement to be made again by
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GFI and FNFI on that date with the Closing Date being substituted for the date
of this Agreement throughout this Article 5):
5.1 Organization and Standing; Articles and Bylaws. GFI and FNFI are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware, have full power and authority to own their
respective assets and properties and to carry on their respective businesses as
presently conducted. GFI and FNFI are duly qualified and authorized to do
business, and are in good standing as foreign corporations, in each jurisdiction
where the nature of their respective activities and of their respective
properties (both owned and leased) make such qualification necessary, except
where the failure to so qualify would not have a Material Adverse Effect.
5.2 Authorization. All corporate action on the part of GFI and FNFI, and
their respective officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the documents
contemplated hereby, the performance of all of GFI's and FNFI's obligations
hereunder and thereunder, and for the purchase of the Company Shares and the
issuance of the Fidelity Stock have been taken or will be taken prior to the
Closing. This Agreement and the documents contemplated hereby, when executed and
delivered by GFI and FNFI, shall constitute valid and legally binding
obligations of GFI and FNFI enforceable in accordance with their respective
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and subject to the availability of equitable remedies.
5.3 No Conflicts. Neither the execution and delivery nor the performance
of this Agreement by GFI and FNFI will result in any of the following: (i) a
default or an event that, with notice or lapse of time or both, could be a
default, breach or violation of (A) the Articles of Incorporation or Bylaws of
GFI or FNFI, (B) any Material Contract of GFI or FNFI; (ii) the termination of
any Material Contract of GFI or FNFI or the acceleration of the maturity of any
Indebtedness or other material obligation of GFI or FNFI; (iii) the creation or
imposition of any Lien (except for Permitted Liens) on any of the respective
assets or properties of GFI or FNFI; (iv) the creation or imposition of any Lien
on any shares of the Fidelity Common Stock; or (v) a violation or breach of any
writ, injunction or decree of any Governmental Entity to which GFI or FNFI is a
party or by which any of their respective properties are bound.
5.4 Fidelity SEC Documents. FNFI has filed all forms, reports and
documents required to be filed with the SEC (the "Fidelity SEC Documents"), all
of which have been made available to Company. As of their respective dates, the
Fidelity SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations of the SEC thereunder applicable to such Fidelity SEC Documents,
and none of the Fidelity SEC Documents contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of FNFI included
in the Fidelity SEC Documents comply in all material
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respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except in the case of the unaudited interim financial statements, as permitted
by Form 10-Q promulgated by the SEC) and fairly present (subject, in the case of
the unaudited interim financial statements, to recurring audit adjustments
normal in nature and amount) the consolidated financial position of FNFI as at
the dates thereof and the consolidated results of its operations and cash flows
or changes in financial position for the periods then ended. There has been no
Material Adverse Effect on FNFI since the filing of FNFI's most recent Form
10-Q.
5.5 Fidelity Common Stock. All of the shares of Fidelity Common Stock to
be issued to Shareholders pursuant to Section 2.2 above, will be duly
authorized, validly issued, fully paid and non-assessable. Such shares, when
issued in accordance with the terms hereof, will have been offered, issued, sold
and delivered by FNFI in compliance with all applicable state and federal laws,
free and clear of all Liens and Claims and none of such shares shall be issued
in violation of the preemptive rights, rights of first offer, or other rights of
any shareholder of FNFI.
5.6 Consents. All consents, approvals, orders, or authorizations of, or
registrations, qualifications, designations, declarations or filings with, any
Governmental Entity, required on the part of GFI and/or FNFI in connection with
the valid execution and delivery of this Agreement and the issuance of Fidelity
Common Stock, or the consummation of any other transaction contemplated hereby
have been obtained, or will be effective at the Closing.
5.7 Brokers' Fees. Neither GFI nor FNFI is a party to or obligated under
any agreement with any broker, agent, or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement nor the
consummation of the transactions provided for herein will result in any
liability to any broker, agent, or finder.
5.8 Full Disclosure. Neither this Agreement, the representations and
warranties by GFI and/or FNFI contained herein, the Exhibits or Schedules
hereto, nor any other written statement or certificate delivered or to be
furnished to Company in connection herewith, when read together, contain any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading. To
the Knowledge of GFI and FNFI, there is no fact which has not been disclosed to
Company and Shareholders that would have a Material Adverse Effect or would
affect the ability of GFI and FNFI to perform their obligations under this
Agreement.
ARTICLE 6
CONDUCT OF BUSINESS PENDING CLOSING
During the period commencing on the date hereof and continuing through
the Closing Date, Company and Shareholders, jointly and severally, covenant and
agree that:
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6.1 Qualification. Company shall maintain all qualifications to transact
business and remain in good standing in its jurisdiction of incorporation and in
the foreign jurisdictions in which Company owns or leases any property or
conducts any business.
6.2 Ordinary Course. Company shall conduct its business in, and only in,
the Ordinary Course of Business and, to the extent consistent with such
business, shall not make or institute any unusual or novel methods of
management, accounting, or operation that vary materially from those methods
used by the Company as of December 31, 1997. Company will use commercially
reasonable efforts to preserve its business organization intact, to keep
available to Company its present officers and employees, and to preserve its
present relationships with suppliers, customers, and others having business
relationships with the Company. Company shall maintain its properties and assets
in good condition and repair.
6.3 Corporate Changes. Company shall not (i) amend its Articles of
Incorporation or Bylaws (or equivalent documents); (ii) acquire by merging or
consolidating with, or agreeing to merge or consolidate with, or purchase
substantially all of the stock or assets of, or otherwise acquire, any business
or any corporation, partnership, association or other business organization or
division thereof; (iii) enter into any partnership or joint venture; (iv) except
as provided in Section 7.11, declare, set aside, make or pay any dividend or
other distribution in respect of its capital stock or purchase or redeem,
directly or indirectly, any shares of its capital stock; (v) issue or sell any
shares of its capital stock of any class or any options, warrants, conversion or
other rights to purchase any such shares or any securities convertible into or
exchangeable for such shares; or (vi) liquidate or dissolve or obligate itself
to do so.
6.4 Indebtedness. Except in the Ordinary Course of Business and as
disclosed on Schedule 6.4, Company shall not incur any Indebtedness, sell any
debt securities or lend money to or guarantee the Indebtedness of any Person.
Company shall not restructure or refinance its existing Indebtedness.
6.5 Accounting. Company shall not make any change in the accounting
principles, methods or practices followed by it or depreciation or amortization
policies or rates heretofore adopted by it. Company shall maintain its books,
records, and accounts in accordance with GAAP applied on a basis consistent with
that of prior periods.
6.6 Compliance with Legal Requirements. Company shall comply promptly
and in all material respects with all Legal Requirements imposed upon it, its
operations and with respect to the transactions contemplated by this Agreement,
and shall cooperate promptly with, and furnish information to, GFI and FNFI in
connection with any such requirements imposed upon GFI or FNFI, or upon any of
its Affiliates, in connection therewith or herewith.
6.7 Disposition of Assets. Except in the Ordinary Course of Business,
Company shall not sell, transfer, license, lease or otherwise dispose of, or
suffer or cause the encumbrance by any
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Lien other than Permitted Liens upon any of its properties or assets, tangible
or intangible, or upon any interest therein.
6.8 Compensation. Except in the Ordinary Course of Business, Company
shall not (i) adopt or amend in any material respect any collective bargaining,
bonus, profit-sharing, compensation, stock option, pension, retirement, deferred
compensation, Employee Plan, Benefit Arrangement, or any other agreement, trust,
fund or arrangement for the benefit of employees other than to comply with any
Legal Requirement; or (ii) pay, or make any accrual or arrangement for payment
of, any increase in compensation, bonuses or special compensation of any kind,
or any severance or termination pay to, or enter into any employment or loan or
loan guarantee agreement with, any Shareholder or any current or former officer,
director, employee or consultant of Company.
6.9 Modification or Breach of Agreements; New Agreements. Except in the
Ordinary Course of Business, Company shall not terminate or modify, or commit or
cause or suffer to be committed any act that will result in breach or violation
of any term of or (with or without notice or passage of time, or both)
constitute a default under or otherwise give any Person a basis for
nonperformance under, any Material Contract, written or oral. Company shall
refrain from becoming a party to any contract or commitment other than in the
Ordinary Course of Business. Company shall meet all of its contractual
obligations in accordance with their respective terms.
6.10 Capital Expenditures. Except in the Ordinary Course of Business,
except for capital expenditures or commitments necessary to maintain its
properties and assets in good condition and repair (the amount of which shall
not exceed $15,000 individually or in the aggregate), Company shall not purchase
or enter into any contract to purchase any capital assets.
6.11 Consents. Company shall use commercially reasonable efforts to
obtain any consent, authorization or approval of, or exemption by, any
Governmental Entity or Person required to be obtained or made by any Party
hereto in connection with the transactions contemplated hereby or the taking of
any action in connection with the consummation thereof.
6.12 Maintenance of Insurance. Company shall maintain its policies of
insurance in full force and effect on substantially the same terms and
conditions as in effect on the date of this Agreement first set forth above, and
shall not do, permit or willingly allow to be done any act by which any of said
policies of insurance may be suspended, materially impaired or canceled.
6.13 Discharge. Company shall not cancel, compromise, release or
discharge any Claim of Company upon or against any Person or waive any right of
Company of material value, and not discharge any Lien upon any asset of Company
or compromise any debt or other obligation of Company to any Person other than
Liens, debts or obligations with respect to current Liabilities of Company.
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6.14 Claims. Company shall not institute, settle or agree to settle any
Claim before any Governmental Entity.
6.15 Taxes and Tax Assessments. Company shall pay, when due, and prior
to the imposition or assessment of any interest, penalties or Liens by reason of
the nonpayment of, all Taxes assessed against Company, its assets, properties or
operations. Company shall furnish promptly to GFI a copy of all notices of
proposed assessment or similar notices or reports that are received from any
taxing authority and which relate to Company's operations for periods ending on
or prior to the Closing Date.
ARTICLE 7
ADDITIONAL COVENANTS
7.1 Covenants of Company and Shareholders. During the period from the
date hereof through the Closing Date, Company and Shareholders agree to:
(a) Comply promptly with all applicable Legal Requirements
imposed upon them with respect to the transactions contemplated by this
Agreement, and shall cooperate promptly with, and furnish information to, GFI or
FNFI in connection with any such requirements imposed upon GFI or FNFI or upon
any of its Affiliates in connection therewith or herewith;
(b) Use their reasonable best efforts to obtain (and to
cooperate with GFI and FNFI in obtaining) any consent, authorization or approval
of, or exemption by, any Person required to be obtained or made by Company
and/or Shareholders in connection with the transactions contemplated by this
Agreement;
(c) Use their reasonable best efforts to bring about the
satisfaction of the conditions precedent to Closing set forth in Section 3.6,
above;
(d) Promptly advise GFI and FNFI orally and, within three (3)
business days thereafter, in writing of any change in Company's business or
condition that has had or would reasonably be expected to have a Material
Adverse Effect on Company;
(e) Deliver to GFI and FNFI prior to the Closing a written
statement disclosing any untrue statement in this Agreement or any Exhibit or
Schedule hereto (or supplement thereto) or document furnished pursuant hereto,
or any omission to state any material fact required to make the statements
herein or therein contained complete and not misleading, immediately upon the
discovery of such untrue statement or omission, accompanied by a written
supplement to any Exhibit or Schedule to this Agreement that may be affected
thereby; provided, however, that the disclosure of such untrue statement or
omission shall not prevent GFI or FNFI from terminating this Agreement pursuant
to Section 8.1(b), below, at any time at or prior to the Closing in respect of
any original untrue or misleading statement; and
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(f) Within five business (5) days prior to the Closing, deliver
to GFI and FNFI the Disclosure Schedule.
7.2 Covenants of GFI and FNFI. During the period from the date hereof to
the Closing Date, GFI and FNFI shall:
(a) Comply promptly with all applicable Legal Requirements
imposed upon it with respect to the transactions contemplated by this Agreement,
and shall cooperate promptly with, and furnish information to, Shareholders in
connection with any such requirements imposed upon the Shareholders or Company
or upon any of Company's Affiliates in connection therewith or herewith;
(b) Use its reasonable best efforts to obtain any consent,
authorization or approval of, or exemption by, any Person required to be
obtained or made by GFI and FNFI in connection with the transactions
contemplated by this Agreement;
(c) Use its reasonable best efforts to bring about the
satisfaction of the conditions precedent to Closing set forth in Section 3.7 of
this Agreement; and
(d) Promptly advise Company orally and, within three (3)
business days thereafter, in writing of any change in GFI's or FNFI's business
or condition that has had or would reasonably be expected to have a Material
Adverse Effect on GFI or FNFI;
7.3 Tax Advice. Each Shareholder shall assume and be fully responsible
for any and all Liability, including without limitation any and all Tax
Liability, incurred by such Shareholder, which is caused by, arises from, or
relates to the sale of the Company Shares to GFI and the other transactions set
forth herein. Company and Shareholders acknowledge that they have received their
own independent tax advice with respect to this Agreement and the transactions
contemplated thereby, and are not in any way relying on any statements or advice
of GFI, FNFI or any of their officers, directors, employees, agents or
representatives with respect to such matters.
7.4 Access and Information.
(a) During the period commencing on the date hereof and
continuing through the Closing Date, Shareholders shall cause Company to afford
to GFI and FNFI and to their accountants, counsel, and other representatives,
reasonable access during regular business hours and without undue interruption
to its business to all of its properties, books, contracts, commitments, records
and personnel and, during such period, to cause Company to furnish promptly to
GFI and FNFI all information concerning its business, properties and personnel
as GFI or FNFI may reasonably request.
(b) Except to the extent permitted by the provisions of Section
7.7, below, GFI and FNFI shall hold in confidence, and shall use reasonable
efforts to ensure that their respective
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employees and representatives hold in confidence, all such information supplied
to it by Shareholder or Company concerning Company and shall not disclose such
information to any third party except as may be required by any Legal
Requirement and except for information that (i) is or becomes generally
available to the public other than as result of disclosure by GFI or FNFI or its
representatives; (ii) becomes available to GFI or FNFI or their representatives
from a third party other than Shareholders or Company, and GFI or FNFI or their
representatives have no reason to believe that such third party is not entitled
to disclose such information; (iii) is known to GFI or FNFI or their
representatives on a non-confidential basis prior to its disclosure by
Shareholders or Company; or (iv) is made available by Shareholders or Company to
any other Person on a non-restricted basis. GFI and FNFI's obligations under the
foregoing sentence shall expire on the Closing Date or, if the closing does not
occur, one (1) year after the date hereof.
7.5 Expenses. All costs and expenses (including, without limitation, all
legal fees and expenses and costs) incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the Party incurring
the same. The legal expenses of the Company shall either (i) be paid by the
Shareholders or (ii) be paid by the by the Company and deducted from the amount
of retained earnings to be distributed to the Shareholders under Section 7.11.
7.6 Certain Notifications. At all times from the date hereof to the
Closing Date, each Party shall promptly notify the others in writing of the
occurrence of any event that will or reasonably would be expected to result in
the failure to satisfy any of the conditions specified in Sections 3.6 and 3.7,
above.
7.7 Publicity. At all times prior to the Closing Date, each Party shall
obtain the consent of all other Parties hereto prior to issuing, or permitting
any of its directors, officers, employees or agents to issue, any press release
or other information to the press, employees of Company or any third party with
respect to this Agreement or the transactions contemplated hereby; provided,
however, that no party shall be prohibited from supplying any information to any
of its representatives, agents, attorneys, advisors, and others to the extent
necessary to complete the transactions contemplated hereby so long as such
representatives, agents, attorneys, advisors, and others are made aware of the
terms of this Section 7.7. Nothing contained in this Agreement shall prevent any
party to this Agreement at any time from furnishing any required information to
any Governmental Entity or authority pursuant to a Legal Requirement or from
complying with its legal or contractual obligations; provided that the Party
furnishing such information shall have used its reasonable best efforts to
comply with this provision first, and in any event does so only with the advice
of counsel.
7.8 Further Assurances.
(a) Subject to the terms and conditions of this Agreement, each
of the Parties hereto agrees to use all reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Legal Requirements, to consummate and make
effective the transactions contemplated by this Agreement.
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(b) If at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, Shareholders
and the proper officers or directors of GFI, FNFI and Company, as the case may
be, shall take or cause to be taken all such necessary or convenient action and
execute, and deliver and file, or cause to be executed, delivered and filed, all
necessary or appropriate documentation.
7.9 Competing Offers. Shareholders agree that they will not, and will
cause Company not to, directly or indirectly, through an officer, director,
agent, or otherwise, solicit, initiate or encourage the submissions of bids,
offers or proposals by, any Person with respect to an acquisition of Company or
its assets or capital stock or a merger or similar transaction, and Shareholders
will not, and will not permit Company to, engage any broker, financial adviser
or consultant to initiate or encourage proposals or offers from other Persons.
Furthermore, Shareholders shall not, and shall not permit Company to, directly
or indirectly, through any officer, director, agent or otherwise, engage in
negotiations concerning any such transaction with, or provide information to,
any Person other than GFI and FNFI and their representatives with a view to
engaging, or preparing to engage, that Person with respect to any matters in
this Section 7.9. Shareholders shall ensure that Company shall not commence any
proceeding to merge, consolidate or liquidate or dissolve or obligate itself to
do so.
7.10 NYSE Listing. FNFI will make such filings as are necessary with the
New York Stock Exchange regarding the transactions contemplated hereby and will
cause the shares of Fidelity Common Stock to be issued under this Agreement to
be approved for listing on the NYSE, subject only to official notice of
issuance, prior to the Closing.
7.11 Distribution of Retained Earnings. Notwithstanding anything to the
contrary contained herein, Shareholders may, immediately prior to the Closing,
take a distribution from the Company equal to the retained earnings of the
Company as of Closing (but excluding from such retained earnings the Residuals
assigned to the Company under Section 3.6(l)), computed in accordance with the
Code and regulations issued thereunder. The purpose of such distribution is to
allow Shareholders to receive the net profits of the Company earned through the
Closing which have not previously been distributed to the Shareholders.
7.12 Board of Directors. Following the Closing, the Shareholders shall
be appointed to and shall serve on the Board of Directors of the Company along
with such other persons as designated from time to time by GFI. Shareholders
acknowledge that GFI will appoint at least 3 other persons to the Board and that
GFI shall at all times have control over the Board of Directors.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing:
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(a) By written consent of GFI, FNFI, Company and Shareholders;
(b) By Shareholders and Company as a group, on the one hand, or
by GFI and FNFI as a group, on the other hand, if there has been a breach,
failure to fulfill or default (collectively, a "Breach") on the part of the
other Party (the "Breaching Party") of any of the representations and warranties
contained herein or in the due and timely performance and satisfaction of any of
the covenants, agreements or conditions contained herein; or
(c) By Shareholders and Company as a group, on the one hand, or
by GFI and FNFI as a group, on the other hand, if there shall be a final
non-appealable order of a Governmental Entity or arbitrator in effect preventing
consummation of the transactions hereunder; or there shall be any action taken,
or any statute, rule, regulation or order enacted, promulgated or issued or
deemed applicable to the transactions hereunder by any Governmental Entity or
arbitrator which would make the consummation of the transactions illegal.
(d) By Shareholders and Company as a group, on the one hand, or
by GFI and FNFI as a group, on the other hand, if the Closing has not occurred
on or prior to August 14, 1998.
8.2 Effect of Termination. In the case of any termination of this
Agreement pursuant to Section 8.1, above, this Agreement shall forthwith become
void, and there shall be no Liability or obligation on the part of any Party or
its officers, directors or shareholders. Notwithstanding the foregoing sentence,
(i) the provisions of Section 7.4(b) and 7.5 shall remain in full force and
effect and survive any termination of this Agreement; (ii) each Party shall
remain liable for any breach of this Agreement prior to its termination; and
(iii) in the event of termination pursuant to Section 8.1(b), above, then
notwithstanding the provisions of Section 7.5, above, the Breaching Party shall
be liable to the non-breaching Party to the extent of the expenses incurred by
such other party in connection with this Agreement and the transactions
contemplated thereby.
8.3 Amendment. This Agreement may be amended at any time by a written
instrument executed by the Parties. Any amendment effected pursuant to this
Section 8.3 shall be binding upon all Parties.
8.4 Waiver. Any term or provision of this Agreement may be waived in
writing at any time by the Party or Parties entitled to the benefits thereof.
Any waiver effected pursuant to this Section 8.4 shall be binding upon all
Parties hereto. No failure to exercise and no delay in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege preclude the exercise of any
other right, power or privilege. No waiver of any breach of any covenant or
agreement hereunder shall be deemed a waiver of a preceding or subsequent breach
of the same or any other covenant or agreement. The rights and remedies of each
Party under this Agreement are in addition to all other rights and remedies,
whether at law, in equity or otherwise, that such Party may have against the
other Parties.
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ARTICLE 9
INDEMNIFICATION
9.1 Survival of Representations and Warranties. The representations and
warranties of Company, Shareholders, GFI and FNFI contained in this Agreement or
in any writing delivered pursuant hereto or at the Closing shall survive the
Closing and the consummation of the transactions contemplated hereby until 18
months after the Closing Date; provided that the representations and warranties
contained in Sections 4.2, 4.4, 4.11, and 4.20 shall continue until the
expiration of the applicable statutes of limitations.
9.2 Indemnification by Company and Shareholders. Effective as of the
Closing and subject to the limitations set forth in Section 9.9, Shareholders,
in consideration for the purchase of the Company Shares by GFI, covenant and
agree with GFI, FNFI and their respective officers, directors, employees,
shareholders, assigns, successors and Affiliates (a "FNFI Indemnified Party") to
indemnify and hold harmless a FNFI Indemnified Party from, against and in
respect of any and all Losses suffered, sustained, incurred or paid by any FNFI
Indemnified Party in connection with resulting from or arising out of, directly
or indirectly:
(a) any breach of any representation or warranty of any
Shareholder or Company set forth in this Agreement or any certificate, document
or instrument delivered by or on behalf of any Shareholder or Company in
connection herewith;
(b) any non-fulfillment of any covenant or agreement on the part
of any Shareholder or Company in this Agreement; or
(c) the business, operations or assets of Company prior to the
Effective Time, except to the extent disclosed in the Financial Statements or
the Disclosure Schedule.
Payment shall not be a condition precedent to recovery under the above
indemnities.
9.3 Indemnification by GFI and FNFI. Effective as of the Closing and
subject to the limitations set forth in Section 9.9, GFI and FNFI covenant and
agree with Shareholders and their respective heirs, successors and assigns (a
"Shareholder Indemnified Party") to indemnify and hold harmless a Shareholder
Indemnified Party from, against and in respect of any and all Losses suffered,
sustained, incurred or paid by any Shareholder Indemnified Party in connection
with resulting from or arising out of, directly or indirectly:
(a) any breach of any representation or warranty of GFI or FNFI
set forth in this Agreement or any certificate, document or instrument delivered
by or on behalf of GFI or FNFI in connection herewith; or
(b) any non-fulfillment of any covenant or agreement on the part
of GFI or FNFI in this Agreement which is required to be performed after the
Closing.
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Payment shall not be a condition precedent to recovery under the above
indemnities.
9.4 Third-Party Claims. In the event any third party asserts any Claim
with respect to any matter as to which the indemnities in this Agreement relate,
the Party or Person against whom the Claim is asserted (the "Indemnified Party")
shall give prompt notice to the other Party or Person (the "Indemnifying
Party"), and the Indemnifying Party shall have the right at its election to take
over the defense or settlement of the third-party Claim at its own expense by
giving prompt notice to the Indemnified Party. If the Indemnifying Party does
not give such notice and does not proceed diligently so to defend the
third-party Claim within thirty (30) days after receipt of the notice of the
third-party Claim, the Indemnifying Party shall be bound by any defense or
settlement that the Indemnified Party may make as to those claims and shall
reimburse the Indemnified Party for its Losses related to the defense or
settlement of the third-party Claim. The Parties shall cooperate in defending
against any asserted third-party Claims. For purposes of this Article 9, the
reference to this Agreement includes any certificate, Disclosure Schedule,
Exhibit, list, summary or other information provided or delivered to a party by
the Indemnifying Party or its agents and affiliates in connection with this
Agreement.
9.5 Access and Information. With respect to any Claim for
indemnification hereunder, the Indemnified Party will give to the Indemnifying
Party and its counsel, accountants and other representatives full and free
access during normal business hours and upon the giving of reasonable prior
notice to their books and records relating to such Claims, and to their
employees, accountants, counsel and other representatives, all without charge to
the Indemnifying Party, except for reimbursement of reasonable out-of-pocket
expenses. The Indemnified Party agrees to maintain any of its books and records
which may relate to a Claim for indemnification hereunder for such period of
time as may be necessary to enable the Indemnifying Party to resolve such Claim;
provided that the failure to do so shall not relieve the Indemnifying Party of
any obligation hereunder unless the Indemnifying Party demonstrates that the
failure to do so substantially prejudiced the Indemnifying Party in the defense
of any third-party proceeding, and then only to the extent so prejudiced.
9.6 Mitigation. The Indemnified Parties agree to mitigate their Losses
and use their reasonable efforts to collect any indemnifiable damages from any
available insurer or third-party indemnitors before collecting from the
Indemnifying Party; provided, however, nothing in the foregoing sentence shall
preclude any Indemnified Party from filing a Claim against the Indemnifying
Party from the outset. If any amounts are recovered from an insurer or third
party after payment to an Indemnified Party, the recovering party (or parties)
shall promptly pay over to such Indemnifying Party (or Parties) any such
recovered amounts, but only to the extent of any Losses with respect to such
matter.
9.7 Right of Set-Off. Any Party to this Agreement shall be entitled to
set-off against any amounts due to another Party under the terms of this
Agreement or under any additional agreement (except for the Employment
Agreements) executed in connection herewith, any amounts due from such other
Party under the terms of this Agreement.
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9.8 Limitations. The obligations of the parties to indemnify the other
parties under this Article 9 are subject to the following limitations:
(a) Each of the Shareholder's obligations shall be limited to an
aggregate amount equal to the total consideration received by such Shareholder
under Section 2.2.
(b) Any indemnification claim under this Article 9 asserted by
GFI or FNFI against the Company or the Shareholders shall be asserted on a 50/50
basis against each of the Shareholders (i.e., each Shareholder shall not be
liable for more than 50% of any such claim).
(c) GFI or FNFI shall not assert a claim for indemnification
until the total of all claims exceed an aggregate amount of $20,000 (the
"Threshold Amount"). Once the claims exceed the Threshold Amount, GFI and FNFI
can assert and recover all amounts owed hereunder, including the initial $20,000
representing the Threshold Amount.
(d) FNFI's obligations to indemnify the Shareholders under this
Article 9 shall only apply to those breaches by FNFI of its representations,
warranties, covenants and obligations under this Agreement and not the
representations, warranties, covenants and obligations of GFI.
9.9 Indemnification Exclusive. The indemnification provisions of this
Article 9 are the sole and exclusive remedy any Party has against another Party
for any breach of representation, warranty, covenant or agreement.
ARTICLE 10
GENERAL PROVISIONS
10.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Illinois as applied to agreements among Illinois
residents, made and to be performed entirely within the State of Illinois.
10.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
Parties hereto.
10.3 Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement among the Parties with regard to the
subject matter hereof and no Party shall be liable or bound to any other Party
in any manner by any representations, warranties, covenants, or agreements
except as specifically set forth herein or therein. Nothing in this Agreement,
express or implied, is intended to confer upon any Person, 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.
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10.4 Severability. In the event any provision of this Agreement shall be
invalid, illegal, or unenforceable, it shall, to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the Parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
10.5 Notice. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given (i) if
delivered personally (including by overnight express or messenger), upon
delivery; (ii) if delivered by registered or certified mail, return receipt
requested, upon the earlier of actual delivery or three (3) days after being
mailed; or (iii) if given by facsimile, upon confirmation of transmission by
facsimile, in each case to the Parties at the following addresses:
(a) If to GFI or FNFI, addressed to:
Fidelity National Financial, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇, Esq.
Fidelity National Financial, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to Shareholders or Company, addressed to:
Lexington Capital Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇ ▇▇▇▇▇, Esq.
▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
10.6 Construction. Parties to this Agreement have participated jointly
in the negotiation and drafting of this Agreement and have had competent counsel
of their own choosing. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
10.7 Headings. The headings of the Articles and Sections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
10.8 Counterparts. This Agreement may be executed by facsimile and in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one instrument.
10.9 Recitals, Schedules, and Exhibits. The Recitals, Schedules and
Exhibits to this Agreement are incorporated herein and, by this reference, made
a part hereof as if fully set forth at length herein.
[SIGNATURE PAGES FOLLOW.]
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IN WITNESS WHEREOF, the foregoing Stock Purchase Agreement is hereby
executed as of the date first above written.
FNFI:
FIDELITY NATIONAL FINANCIAL, INC.,
a Delaware Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Its: Executive Vice President
---------------------------------
GFI:
GRANITE FINANCIAL, INC.,
a Delaware Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Its: Chief Executive Officer
---------------------------------
COMPANY:
LEXINGTON CAPITAL CORPORATION, an
Illinois Corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Its: President
---------------------------------
SHAREHOLDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, shareholder
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, shareholder
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