Exhibit 10.29
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
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In the Matter of )
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LAWYERS TITLE ) File No. 971-0115
CORPORATION, )
)
a corporation. )
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AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of the acquisition by Lawyers Title Corporation ("LTC") of certain
assets of Reliance Group Holdings, Inc. ("Reliance"), and it now appearing that
LTC, hereinafter sometimes referred to as "proposed respondent," is willing to
enter into an agreement containing an order to divest certain assets, and to
cease and desist from making certain acquisitions, and providing for other
relief:
IT IS HEREBY AGREED by and between proposed respondent, by its duly
authorized officers and attorney, and counsel for the Commission that:
1. Proposed respondent LTC is a corporation organized, existing and doing
business under and by virtue of the laws of the Commonwealth of
Virginia with its office and principal place of business located at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
2. Proposed respondent admits all the jurisdictional facts set forth in
the draft of complaint here attached.
3. Proposed respondent waives:
a. any further procedural steps;
b. the requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge
or contest the validity of the order entered pursuant to this
agreement; and
d. any claim under the Equal Access to Justice Act.
4. Proposed respondent shall submit, within thirty (30) days of the date
this agreement is signed by proposed respondent and every thirty (30)
days thereafter until this order becomes final, a report pursuant to
Section 2.33 of the Commission; Rules, signed by the proposed
respondent, setting forth in detail the manner in which the proposed
respondent will comply with Paragraphs II. through IV. of the order
when and if entered. Such report will not become part of the public
record unless and until the accompanying agreement and order are
accepted by the Commission for public comment.
5. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information in respect thereto publicly
released. The Commission thereafter may either withdraw its acceptance
of this agreement and so notify the proposed respondent, in which event
it will take such action as it may consider appropriate, or issue and
serve its complaint (in such form as the circumstances may require) and
decision, in disposition of the proceeding.
6. This agreement is for settlement purposes only and does not constitute
an admission by proposed respondent that the law has been violated as
alleged in the draft of complaint here attached, or that the facts as
alleged in the draft complaint, other than jurisdictional facts, are
true.
7. This agreement contemplates that, if it is accepted by the Commission,
and if such acceptance is not subsequently withdrawn by the Commission
pursuant to the provisions of Section 2.34 of the Commission's Rules,
the Commission may, without further notice to the proposed respondent,
(1) issue its complaint corresponding in form and substance with the
draft of complaint here attached and its decision containing the
following order to divest and to cease and desist in disposition of the
proceeding and (2) make information public with respect thereto. When
so entered, the order to cease and desist shall have the same force and
effect and may be altered, modified or set aside in the same manner and
within the same time provided by statute for other orders. The order
shall become final upon service. Delivery by the U.S. Postal Service of
the complaint and decision containing the agreed-to order to proposed
respondent's address as stated in this agreement shall constitute
service. Proposed respondent waives any right it may have to any other
manner of service. The complaint may be used in construing the terms of
the order, and no agreement, understanding, representation, or
interpretation not contained in the order or the agreement may be used
to vary or contradict the terms of the order.
8. By signing this agreement containing consent order, proposed respondent
represents that it can accomplish the full relief contemplated by this
agreement.
9. Proposed respondent has read the proposed complaint and order
contemplated hereby. Proposed respondent understands that once the
order has been issued, it will be required
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to file one or more compliance reports showing that it has fully
complied with the order. Proposed respondent agrees to comply with
Paragraphs II. C. and IV. of the proposed order from the date it signs
this agreement. Proposed respondent further understands that it may be
liable for civil penalties in the amount provided by law for each
violation of the order after it becomes final.
ORDER
I.
IT IS ORDERED that, as used in this order, the following definitions
shall apply:
A. "Respondent" or "LTC" means Lawyers Title Corporation, its
directors, officers, employees, agents, representatives,
predecessors, successors, and assigns; its subsidiaries,
divisions, groups and affiliates controlled by Lawyers
TitleCorporation, and the respective directors, officers,
employees, agents, representatives, successors, and assigns of
each.
B. The term "Reliance Group" means Reliance Group Holdings, Inc.,
its directors, officers, employees, agents, representatives,
predecessors, successors, and assigns; its subsidiaries,
divisions, groups and affiliates controlled by Reliance
GroupHoldings, Inc., and the respective directors, officers,
employees, agents,representatives, successors, and assigns of
each.
C. "Commission" means the Federal Trade Commission.
D. The term "title plant" means a privately owned collection of
records and/or indices regarding the ownership of and
interests in real property. The term includes such collections
that are regularly maintained and updated by obtaining
information or documents from the public records, as well as
such collections ofinformation that are not regularly updated.
E. The "Acquisition" means the acquisition of the title insurance
operations of Reliance Group by LTC, in exchange for the
acquisition by Reliance Group of a minority voting interest in
LTC and other consideration, as described in the Amended and
Restated Stock Purchase Agreement dated as of December 11,
1997.
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II.
IT IS FURTHER ORDERED that:
A. Respondent shall divest, absolutely and in good faith, within
six months from thedate the agreement containing consent order
is signed by respondent, all of its rights, title and interest
in the properties described below:
1 For each of the following counties or other local
jurisdictions, either the rights, title and interest
prior to the Acquisition of LTC or the rights, title
and interest prior to the Acquisition of Reliance
Group in all title plants serving such county or
local jurisdiction:
Washington, District of Columbia
Brevard County, Florida
Broward County, Florida
Clay County, Florida
Indian River County, Florida
Pasco County, Florida
St. ▇▇▇▇▇ County, Florida
St. Lucie County, Florida
▇▇▇▇▇▇ County, Michigan
Oakland County, MichiganWayne County, Michigan
St. Louis City & County, Missouri
2. Respondent shall also divest all user or access
agreements pertaining to each divested title plant.
At the acquirer's option at the time of purchase, and
at a commercially reasonable price, LTC shall
continue to provide computer and other services
previously provided for each divested title plant by
LTC or Reliance Group, for a period up to three years
from the date such title plant is divested, and shall
assist the buyer in transferring the computer and
other services to any other provider of such
services.
B. Respondent shall divest the properties specified in Paragraph
II. A. only to anacquirer or acquirers that receive the prior
approval of the Commission and only in a manner that receives
the prior approval of the Commission. The purpose of the
divestiture is to ensure the continued use of the divested
title plants as ongoing, viable title plants used in the
production and/or sale of title information, and to remedy the
lessening of competition resulting from the Acquisition as
alleged in the Commission's complaint.
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C. Pending divestiture of the properties as specified in
Paragraph II. A., respondent shall take such actions as are
necessary to maintain the viability and marketability of such
properties and to prevent the destruction, removal, wasting,
deterioration, or impairment of any of the properties. LTC
shall comply with the following requirements with respect to
all title plants serving the counties or other local
jurisdictions listed in Paragraph II. A. in which either LTC
or Reliance Group has any rights, title or interest, during
the period prior to the completion of the required divestiture
for each such county or other local jurisdiction:
1. LTC shall cause the title plants to be maintained,
including but not limited to updating the records
and/or indices contained in the title plants, to the
extent and in the manner maintained prior to the
Acquisition.
2. LTC shall cause to be maintained in good faith all
contracts or agreements for access to the title
plants subject to the terms, conditions and
stipulations of those contracts, and will refrain
from taking any action toward terminating those
contracts other than that which would be commercially
reasonable under the terms of such contracts or
agreements.
3. LTC shall cause access to the title plants to
continue to be provided to accessors whose contracts
or agreements for access to the title plants expire
by their terms prior to the completion of the
required divestiture, in good faith on terms,
conditions and stipulations identical to those set
forth in such contracts or agreements.
III.
IT IS FURTHER ORDERED that:
A. If LTC has not divested, absolutely and in good faith and with
the Commission'sprior approval, all of the properties
specified in Paragraph II. A. within six months from the date
the agreement containing consent order is signed by
respondent, the Commission may appoint a trustee to accomplish
the required divestitures. In the event that the Commission or
the Attorney General brings an action pursuant to ss. 5(l) of
the Federal Trade Commission Act, 15 U.S.C.ss.45(l), or any
other statute enforced by the Commission, LTC shall consent to
the appointment of a trustee in such action. Neither the
appointment of a trustee nor a decision not to appoint a
trustee under this Paragraph shall preclude the Commission or
the Attorney General from seeking civil penalties or any other
relief available to it, including a court-appointed trustee,
pursuant toss.5(l) of the Federal Trade Commission Act, or any
other statute enforced by the Commission, for any failure by
the respondent to comply with this order.
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B. If a trustee is appointed by the Commission or a court
pursuant to Paragraph III. A. of this order, respondent shall
consent to the following terms and conditions regarding the
trustee's powers, duties, authority, and responsibilities:
l. The Commission shall select the trustee, subject to
the consent of respondent, which consent shall not be
unreasonably withheld. The trustee shall be a person
with experience and expertise in acquisitions and
divestitures. If respondent has not opposed, in
writing, including the reasons for opposing, the
selection of any proposed trustee within ten (10)days
after notice by the staff of the Commission to
respondent of the identity of any proposed trustee,
respondent shall be deemed to have consented to the
selection of the proposed trustee.
2. Subject to the prior approval of the Commission, the
trustee shall have the exclusive power and authority
to accomplish the divestiture of the properties
specified in Paragraph II. A. that have not been
divested by LTC, including the authority, subject to
the approval of the Commission, with respect to any
of the listed counties or local jurisdictions as to
which divestiture has not been completed by LTC, to
determine whether to divest the rights, title and
interest prior to the Acquisition of LTC or the
rights, title and interest prior to the Acquisition
of Reliance Group in title plants serving such county
or local jurisdiction.
3. Within ten (10) days after appointment of the
trustee, respondent shall execute a trust agreement
that, subject to the prior approval of the Commission
and, in the case of a court-appointed trustee, of the
court, transfers to the trustee all rights and powers
necessary to permit the trustee to accomplish the
divestitures required by this order.
4. The trustee shall have twelve (12) months from the
date the Commission approves the trust agreement
described in Paragraph III. B. 3. to accomplish the
divestitures, which shall be subject to the prior
approval of the Commission. If, however, at the end
of the twelve-month period, the trustee has submitted
a plan of divestiture or believes that divestiture
can be accomplished within a reasonable time, the
divestiture period may beextended by the Commission,
or, in the case of a court-appointed trustee, by the
court; provided, however, the Commission may extend
this period only two (2) times.
5. The trustee shall have full and complete access to
the personnel, books, records and facilities related
to the properties specified in Paragraph II. A. that
have not been divested by LTC, and to any other
relevant information as the trustee may request.
Respondent shall develop such financial or
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other information as such trustee may request and
shall cooperate with the trustee. Respondent shall
take no action to interfere with or impede the
trustee's accomplishment of the divestiture. Any
delays in divestiture caused by respondent shall
extend the trustee's period for divestiture under
this Paragraph in an amount equal to the delay, as
determined by the Commission or, for a
court-appointed trustee, by the court.
6. The trustee shall use his or her best efforts to
negotiate expeditiously the most favorable price and
terms available in each contract that is submitted to
the Commission, subject to respondent's absolute and
unconditional obligation to divest at no minimum
price. The divestiture shall be made in the manner
and to the acquirer or acquirers as set out in
Paragraph II. of this order; provided, however, if
the trustee receives bona fide offers from more than
one acquiring entity, and if the Commission
determines to approve more than one such acquiring
entity, the trustee shall divest to the acquiring
entity or entities selected by respondent from among
those approved by the Commission.
7. The trustee shall serve, without bond or other
security, at the cost and expense of respondent, on
such reasonable and customary terms and conditions as
the Commission or a court may set. The trustee shall
have the authority to employ, at the cost and expense
of respondent, such consultants, accountants,
attorneys, investment bankers, business brokers,
appraisers, and other representatives and assistants
as are necessary to carry out the trustee's duties
and responsibilities. The trustee shall account for
all monies derived from the divestiture and all
expenses incurred. After approval by the Commission
and, in the case of a court-appointed trustee, by the
court, of the account of the trustee, including fees
for his or her services, all remaining monies shall
be paid at the direction of the respondent, and the
trustee's power shall be terminated. The
trustee'scompensation shall be based at least in
significant part on a commission arrangement
contingent on the trustee's completing divestiture of
the properties specified in Paragraph II. A. that
have not been divested by LTC.
8. Respondent shall indemnify the trustee and hold the
trustee harmless against any losses, claims, damages,
liabilities, or expenses arising out of, or in
connection with, the performance of the trustee's
duties, including all reasonable fees of counsel and
other expenses incurred in connection with the
preparation for, or defense of any claim, whether or
not resulting in any liability, except to the extent
that such liabilities, losses, damages, claims, or
expenses result from misfeasance, gross negligence,
willful or wanton acts, or bad faith by the trustee.
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9. If the trustee ceases to act or fails to act
diligently, a substitute trustee shall be appointed
in the same manner as provided in Paragraph III. A.
of this order.
10. The Commission or, in the case of a court-appointed
trustee, the court, may on its own initiative or at
the request of the trustee issue such additional
orders or directions as may be necessary or
appropriate to accomplish the divestiture required by
this order.
11. The trustee shall have no obligation or authority to
operate or maintain the properties specified in
Paragraph II. A. that have not been divested by LTC.
12. The trustee shall report in writing to respondent and
the Commission every sixty (60) days concerning the
trustee's efforts to accomplish divestiture.
IV.
IT IS FURTHER ORDERED that:
A. For a period of ten (10) years from the date this order
becomes final, respondent shall not, without providing advance
written notification to the Commission, directly or
indirectly, through subsidiaries, partnerships, or otherwise:
1. Acquire any stock, share capital, equity or other
interest in any concern, corporate or non-corporate,
that has any direct or indirect ownership interest in
a title plant serving any county or other local
jurisdiction specified in Paragraph II. A., where at
the time of the acquisition the respondent has a
direct or indirect ownership interest in any title
plant serving the same county or local jurisdiction;
or
2. Acquire any assets (other than in the ordinary course
of business) or ownership interest in a title plant
serving any county or other local jurisdiction
specified in Paragraph II. A., where at the time of
the acquisition the respondent has a direct or
indirect ownership interest in any title plant
serving the same county or local jurisdiction.
Notification is not required to be made pursuant to this
Paragraph IV. with respect to any acquisition by respondent of
a copy of title records or other information from a person or
entity which thereafter retains the original information in
its ownership and control, and where competition in the
ordinary course between the parties is not otherwise
restrained.
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B. Notification pursuant to this Paragraph shall be given on the
Notification andReport Form set forth in the Appendix to Part
803 of Title 16 of the Code of Federal Regulations as amended
(hereinafter referred to as "the Notification"), andshall be
prepared and transmitted in accordance with the requirements
of that part, except that no filing fee will be required for
any such notification, notification shall be filed with the
Secretary of the Commission, notification need not be made to
the United States Department of Justice, and notification is
required only of respondent and not of any other party to the
transaction. In addition to the information required to be
supplied on such Notification and Report Form pursuant to the
above-referenced regulation, the respondent shall submit the
following supplemental information in respondent's possession
or reasonably available to respondent:
1. The name of each county or local jurisdiction to
which the terms of Paragraph IV. A. 1. or 2. are
applicable;
2. A description of the title plant assets or interests
that are being acquired; and
3. With respect to each title plant serving each county
or local jurisdiction to which the terms of Paragraph
IV. A. 1. or 2. are applicable (including title
plants in which the respondent has a direct or
indirect ownership interest as well as other title
plants known to the respondent) the names of all
persons or entities who hold any direct or indirect
ownership interest in the title plant and the
percentage interest held by each; the time period
covered by each category of title records contained
in the title plant; whether therespective categories
of title records are regularly being updated; the
indexing system or systems used with respect to each
category of title records; and the names of all
persons, including but not limited to title insurers
or agents, who have access to the title plant.
C. Respondent shall provide the Notification to the Commission at
least thirty daysprior to consummating the transaction
(hereinafter referred to as the "first waitingperiod"). If,
within the first waiting period, representatives of the
Commission make a written request for additional information
or documentary material (within the meaning of 16
C.F.R.ss.803.20), respondent shall not consummate the
transaction until twenty days after submitting such additional
information or documentary material. Early termination of the
waiting periods in this paragraph may be requested and, where
appropriate, granted by letter from the Bureau of Competition.
Provided, however, that prior notification shall not be
required by this paragraph for a transaction for which
notification is required to be made, and has been made,
pursuant to Section 7A of the ▇▇▇▇▇▇▇ Act, 15 U.S.C.ss.18a.
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V.
IT IS FURTHER ORDERED that:
A. Within thirty (30) days after the date this order becomes
final and every thirty (30) days thereafter until respondent
has fully complied with the provisions of Paragraphs II. and
III. of this order, respondent shall submit to the Commission
a verified written report setting forth in detail the manner
and form in which it intends to comply, is complying, and has
complied with Paragraphs II. and III. of this order.
Respondent shall include in its compliance reports, among
other things that are required from time to time, a full
description of the efforts being made to comply with
Paragraphs II. and III. of the order, including a description
of all substantive contacts or negotiations for the
divestiture and the identity of all parties contacted.
Respondent shall include in its compliance reports copies of
all written communications to and from such parties, all
internal memoranda, and all reports and recommendations
concerning divestiture.
B. One year (1) from the date this order becomes final, annually
for the next nine (9)years on the anniversary of the date this
order becomes final, and at other times as the Commission may
require, respondent shall file a verified written report with
the Commission setting forth in detail the manner and form in
which it has complied and is complying with Paragraph IV. of
this order.
VI.
IT IS FURTHER ORDERED that respondent shall notify the Commission at
leastthirty (30) days prior to any proposed change in the corporate respondent
such as dissolution, assignment, sale resulting in the emergence of a successor
corporation, or the creation or dissolution of subsidiaries or any other change
in the corporation that may affect compliance obligations arising out of the
order.
VII.
IT IS FURTHER ORDERED that, for the purpose of determining or
securingcompliance with this order, upon written request, respondent shall
permit any duly authorized representative of the Commission:
A. Access, during office hours and in the presence of counsel, to
inspect and copy allbooks, ledgers, accounts, correspondence,
memoranda and other records and documents in the possession or
under the control of respondent relating to any matters
contained in this order; and
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B. Upon five days' notice to respondent and without restraint or
interference from it,to interview officers, directors, or
employees of respondent.
Signed this 6th day of February , 1998.
LAWYERS TITLE CORPORATION, A CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Counsel for Lawyers Title Corporation
FEDERAL TRADE COMMISSION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Attorney
Bureau of Competition
Approved:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Assistant Director
Bureau of Competition
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
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Acting Deputy Director
Bureau of Competition
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
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for Director
Bureau of Competition
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