1
Exhibit 10.84
STOCK PURCHASE AGREEMENT
Between
YOSYSTEMS, INC.
DANIEL J. AND SANDRA WHITE
AND
BANKERS HAZARD DETERMINATION SERVICES, INC.
Dated as of July 31, 1997
2
Page
----
ARTICLE I. PURCHASE AND SALE OF YOSYSTEMS SHARES 1
SECTION 1.01 Purchase 1
SECTION 1.02 Transfer 2
SECTION 1.03 Closing 2
SECTION 1.04 Due Diligence 2
SECTION 1.05 Financing 2
SECTION 1.06 Deposit 2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER 3
SECTION 2.01 Corporate Organization and Power 3
SECTION 2.02 Authorization of Agreement 3
SECTION 2.03 Validity 3
SECTION 2.04 Consents and Approvals 3
SECTION 2.05 Titles to Shares 3
SECTION 2.06 Capitalization of YoSystems 3
SECTION 2.07 Litigation Relating to Transaction 4
SECTION 2.08 Broker's or Finders' Fees 4
SECTION 2.09 Taxes and Liabilities 4
SECTION 2.10 Stock Purchase Agreement with
Strategic Holdings USA, Inc. 5
ARTICLE 111. REPRESENTATIONS AND WARRANTIES OF BUYER 5
SECTION 3.01 Corporate Organization and Power 5
SECTION 3.02 Authorization of Agreement 5
SECTION 3.03 Validity 5
SECTION 3.04 Consents and Approvals 6
SECTION 3.05 Litigation Relating to Transaction 6
SECTION 3.06 Broker's or Finders' Fees 6
SECTION 3.07 Capitalization of Buyer 6
SECTION 3.08 Investment Representation and Warranty 6
ARTICLE IV. CONDITIONS PRECEDENT 6
SECTION 4.01 Conditions Precedent to Obligations
of Buyer 6
SECTION 4.02 Conditions Precedent to Obligations
of Seller 8
3
ARTICLE V. TERMINATION AND ABANDONMENT 9
SECTION 5.01 Termination 9
SECTION 5.02 Procedure and Effect of Termination 9
ARTICLE VI. INDEMNIFICATION; REMEDIES 10
SECTION 6.01 Survival of Representations and Warranties 10
SECTION 6.02 Indemnification by Seller 10
SECTION 6.03 Indemnification by Buyer 10
SECTION 6.04 Third Party Claims 11
SECTION 6.05 Further Limitations 13
ARTICLE VII. MISCELLANEOUS 14
SECTION 7.01 Expenses, Etc. 14
SECTION 7.02 Publicity 14
SECTION 7.03 Execution in Counterparts 14
SECTION 7.04 Notices 14
SECTION 7.05 Amendments, Supplements, Etc. 15
SECTION 7.06 Entire Agreement 16
SECTION 7.07 Applicable Law 16
SECTION 7.08 Attorney's Fees 16
SECTION 7.09 Representation Acknowledged 16
SECTION 7.10 Binding Effect. Benefits 16
SECTION 7.11 Assignability 16
4
INDEX TO SCHEDULES, EXHIBITS AND ANNEXES
Exhibit Description Section Ref.
------- ----------- ------------
A SMS Stock Purchase Agreement Recitals
1.01 Form of Option 1.01
1.05 Huntington Loan Commitment 1.05
2.09 Liabilities 2.09
4.01(f) Opinion of Seller's Counsel 4.01(f)
4.01(h) Shareholders' Agreement 4.01(h)
4.01(i) Employment Agreement 4.01(i)
4.01(l) Cross License Agreement 4.01(l)
4.02(d) Opinion of Buyer's Counsel 4.02(d)
6.01 Liabilities 6.01(d)
5
Stock Purchase Agreement
This is a Stock Purchase Agreement ("Agreement") entered into in
Cleveland, Ohio on the dates indicated below, by and between parties as
follows:
a) YoSystems, Inc., an Ohio corporation located at 3900 Laylin Road,
Norwalk, Ohio 44857 ("YoSystems" or "Seller"); and
b) Daniel J. White ("White"); and
c) White and his wife Sandra ("The Whites"); and
d) Bankers Hazard Determination Services, Inc., a Florida corporation
located at 360 Central Avenue, St. Petersburg, Florida 33701,
("Buyer") or assigns.
WITNESSETH
Whereas, on June 17, 1997 YoSystems entered into a Stock Purchase
Agreement with Strategic Holdings USA, Inc. ("Strategic") to purchase all of
the issued and outstanding shares of capital stock of SMS Geotrac, Inc. ("SMS
Geotrac"), a Delaware corporation, hereinafter referred to as "SMS Stock
Purchase Agreement", a copy of which is attached hereto as Exhibit "A" ; and
Whereas, Buyer desires to acquire forty-nine percent (49%) of the then
issued shares of common stock of YoSystems concurrently with YoSystems
acquisition of all of the issued and outstanding shares of common stock of SMS
Geotrac; and
Whereas, the parties hereto desire to enter into this Agreement in order
to confirm their understanding of the terms and conditions pursuant to which
they will own and operate YoSystems.
Now, Therefore, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:
1. PURCHASE AND SALE OF YOSYSTEMS SHARES
Section 1.01. Purchase. Subject to the terms and conditions hereof,
YoSystems, agrees to amend its Articles of Incorporation (the "Amended
Articles") to increase its authorized common stock to 1,000 shares without
par value and to sell to Buyer and Buyer agrees to purchase 490 shares
("the Shares") representing forty-nine percent (49%) of its authorized and
issued shares for a purchase price of Six Million Seven Hundred Fifty
Thousand Dollars ($6,750,000.00) cash on the Closing Date. It is
understood that the remaining 510 shares will be owned by the Whites. It
is also acknowledged and agreed that on or after the Closing Date the
Whites intend to grant options (the "Option") to
6
purchase shares of their YoSystems common stock to approximately 10
current employees (the "Optionees") of SMS Geotrac. The form of Options is
attached hereto as Exhibit "1.01".
Section 1.02. Transfer. On the Closing Date, YoSystems shall issue and
deliver to Buyer a certificate or certificates representing the Shares,
with all requisite stock transfer taxes paid and stamps affixed, free and
clear of all restrictions, liens, charges, security interests, claims,
pledges encumbrances and rights of others except as set forth in the
Shareholders Agreement (as herein defined).
Section 1.03. Closing. The closing contemplated by this Agreement (the
"Closing") shall take place at the offices of Benesch, Friedlander, Coplan
& Aronoff LLP, 2300 BP America Building, 200 Public Square, Cleveland,
Ohio 44114, at 10 a.m. Eastern Standard time, on July 31, 1997, or at such
other place or at such other date and time as YoSystems and Buyer may
mutually agree (such date and time of closing being herein called the
"Closing Date").
Section 1.04. Due Diligence. All due diligence has been completed.
Section 1.05. Financing.
a) YoSystems has received a loan commitment from The Huntington National
Bank of Cleveland, Ohio, a copy of which is attached as Exhibit
"1.05" (the "Huntington Loan") for debt financing for not less than
Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000.00).
The proceeds of this loan will be used to provide the additional
funds required to complete the acquisition of the common stock of
SMS Geotrac.
b) YoSystems will use the purchase price for the Shares to purchase the
stock of SMS Geotrac ($15 million), and pay for all expected costs
and fees of closing the purchase (estimated to be $1 million).
Section 1.06. Deposit. On July 2, 1997, Buyer deposited with the law firm
of Carlton, Fields, et al., 200 Central Avenue, Suite 2300, St.
Petersburg, Florida 33701, the sum of One Million Dollars ($ 1,000,000.00)
to be applied to the purchase price for the Shares at Closing. The
deposited funds together with any interest earned thereon will be
returned to Buyer if the transactions contemplated by this Agreement do
not close on or before July 31, 1997.
2
7
II. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
Section 2.01. Corporate Organization and Power. YoSystems is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Ohio. Seller has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement.
Section 2.02. Authorization of Agreement. The execution, delivery and
consummation of this Agreement by YoSystems has been duly authorized by the
board of directors and the shareholders of YoSystems in accordance with all
applicable laws and the Articles of Incorporation and Code of Resolutions
of YoSystems, and at the Closing no further corporate action will be
necessary on the part of YoSystems or its shareholders to make this
Agreement valid and binding on YoSystems and enforceable against YoSystems
in accordance with its terms. The execution, delivery and consummation of
this Agreement by YoSystems (i) is not contrary to the Articles of
Incorporation or Code of Regulations of YoSystems, (ii) does not now and
will not, with the passage of time, the giving of notice or otherwise,
result in a violation or breach of, or constitute a default under, any term
or provision of any indenture, mortgage, deed of trust, lease, instrument,
order, judgment, decree, rule, regulation, law, contract, agreement or any
other restriction to which YoSystems is a party or to which YoSystems or
any of its assets is subject or bound, and (iii) will not result in the
creation of any lien or other charge upon the Shares or the assets of
YoSystems.
Section 2.03. Validity. This Agreement has been duly executed and delivered
by YoSystems and constitutes the legal, valid and binding obligation of
YoSystems, enforceable against YoSystems in accordance with its terms.
Section 2.04. Consents and Approvals. No order, authorization, approval
or consent from, or filing with, any person or entity or any federal or
state governmental or public body or other authority having jurisdiction
over YoSystems is required for the execution, delivery and performance of
this Agreement.
Section 2.05. Title to Shares. YoSystems has full right, power and
authority to sell, issue, convey and deliver to Buyer, in accordance with
the terms of this Agreement, good and valid title, beneficially and of
record, to all of the Shares, free and clear of all restrictions, claims,
liens, charges, encumbrances and rights of others.
Section 2.06. Capitalization of Yosystems. Giving effect to the Amended
Articles, the total authorized capitalization of YoSystems is 1,000 shares
of Common Stock, without par value, of which 510 shares have been validly
issued and are presently outstanding. All of the outstanding capital stock
of YoSystems is owned by the Whites. YoSystems
3
8
does not hold any shares of capital stock as treasury shares. There are no
outstanding subscriptions, options, agreements, contracts, calls,
commitments or demands of any character to which YoSystems or the Whites
is a party which restrict the transfer of the Shares or otherwise related
to the Shares other than the Option and a related Agreement among
Shareholders, YoSystems, White and the Optionees to be entered
concurrently with the Closing.
Section 2.07. Litigation Relating to Transaction. There are no actions,
suits, proceedings or claims pending before any court, arbitrator or
government agency against or affecting YoSystems. White has not received
formal service of process relating to any currently pending action, suit
or proceeding against SMS Geotrac, other than such actions, suits or
proceedings referred to on Schedule 2.07 of the SMS Geotrac Agreement.
Section 2.08. Broker's or Finders' Fees. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried out
by Seller directly with Buyer without the intervention of any person on
behalf of Seller (other than NatCity Investments, Inc. of Cleveland, Ohio,
whose fees and expenses shall be paid solely by Seller) in such manner as
to give rise to any claim by any person against Buyer for a finder's fee,
brokerage commission or similar payment.
Section 2.09. Taxes and Liabilities.
a) YoSystems (i) has filed, and will file, on a timely basis (including
all extensions), all federal income tax returns and all combined or
unitary state and local income or franchise tax returns
(collectively, "Tax Returns") required to be filed by YoSystems for
all years or periods ending on or before the Closing Date accurately
reflecting in all respects income or franchise taxes owing to the
United States or any state or local government, and (ii) has paid in
full, or if not paid in full prior to the Closing Date the Whites
will pay in full when due, all taxes (including interest, penalties
and additions to tax) shown to be due on such Tax Returns. All such
Tax Returns are, or will be, true, correct and complete in all
material respects.
b) There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any YoSystems federal
income tax return for any period ending on or before the Closing.
c) YoSystems has made or will make available to Buyer for inspection,
complete and correct copies of all federal income tax returns of
YoSystems.
d) Immediately prior to its acquisition of SMS Geotrac, YoSystems shall
have no liabilities except as set forth in Exhibit "2.09" attached
hereto.
4
9
e) Seller shall cause SMS Geotrac to be liquidated on or before
September 30, 1997.
Section 2.10. Stock Purchase Agreement with Strategic Holdings USA, Inc.
a) All representations of YoSystems or White in the SMS Stock Purchase
Agreement shall be true and correct on the date of Closing.
b) Buyer shall receive notice from Seller and Strategic in the same
manner as the parties to the SMS Stock Purchase Agreement prior to
any changes in that Agreement or any agreements referred to therein.
There will be no changes or modifications to the SMS Stock Purchase
Agreement, and all other agreements referred to therein, without
prior written notice to Bankers and Bankers written consent, such
consent not being unreasonably withheld.
c) Buyer shall have access to the books and records of SMS Geotrac.
White represents and warrants Sections 2.05, 2.06, 2.07, 2.08 and 2.09.
III. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 3.01. Corporate Organization and Power. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Florida. Buyer has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby and thereby.
Section 3.02. Authorization of Agreement. The execution, delivery and
consummation of this Agreement by Buyer has been duly authorized by its
board of directors and shareholders in accordance with all applicable laws
and its Certificate of Incorporation and By-Laws, and at the closing no
further corporate action will be necessary on the part of Buyer or its
shareholders to make this Agreement valid and binding on Buyer and
enforceable against Buyer in accordance with its terms. The execution,
delivery and consummation of this Agreement by Buyer (i) is not contrary
to its Certificate of Incorporation or By-Laws and (ii) does not now and
will not, with the passage of time, the giving of notice or otherwise,
result in a violation or breach of, or constitute a default under, any
term or provision of any indenture, mortgage, deed of trust, lease,
instrument, order, judgment, decree, rule, regulation, law, contract,
agreement or any other restriction to which Buyer is a party or to which
Buyer or any of its assets is subject or bound.
Section 3.03. Validity. This Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms.
5
10
Section 3.04. Consents and Approvals. No order, authorization, approval
or consent from, or filing with, any person, entity or federal or state
governmental or public body or other authority having jurisdiction over
Buyer is required for the execution, delivery and performance by it of
this Agreement.
Section 3.05. Litigation Relating to Transaction. There are no actions,
suits, proceedings or claims pending before any court, arbitrator or
government agency against or affecting Buyer which might enjoin or prevent
the consummation of the transactions contemplated by this Agreement.
Section 3.06. Broker's or Finders' Fees. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried out
by Buyer directly with YoSystems and White, without the intervention of
any person on behalf of Buyer (other than NatCity Investments, Inc. of
Cleveland, Ohio, whose fees and expenses shall be paid solely by Seller)
in such manner as to give rise to any claim by any person against
YoSystems and White for a finder's fee, brokerage commission or similar
payment.
Section 3.07. Capitalization of Buyer. On the Closing Date Buyer shall have
the working capital and financial resources necessary to perform its
obligations under this Agreement.
Section 3.08. Investment Representation and Warranty. The Shares being
acquired by Buyer hereunder are being acquired for investment only for
Buyer' own account and not with a view to, or for sale in connection with,
any distribution thereof.
IV. CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Obligations of Buyer. The
obligation of Buyer to consummate the transactions contemplated by this
Agreement are subject, at the option of Buyer, to the satisfaction at or
prior to the Closing Date of each of the following conditions:
a) Accuracy of Representations and Warranties. The representations and
warranties of Seller and White contained in this Agreement or in any
certificate or document delivered to Buyer pursuant hereto shall be
true and correct in all material respects on and as of the Closing
Date as though made at and as of that date, and Seller shall have
delivered to Buyer a certificate to that effect.
b) Compliance with Covenants. Seller shall have performed and complied
with all terms, agreements, covenants and conditions of this
Agreement to be performed or complied with by them at or prior to the
Closing Date, and Seller shall have delivered to Buyer a certificate
to that effect.
6
11
c) Execution and Delivery of Strategic Agreement, Releases, Stockholder
Guaranty and Indemnification Agreement. Strategic Holding USA, Inc.
shall have duly authorized, executed and delivered to Seller a Release
in the form of Exhibit C hereto, and such Release shall be in full
force and effect at the Closing and fully executed stock certificates
and stock powers representing all 100 issued and authorized shares of
common stock of SMS Geotrac, Inc. Welsh, Carson Anderson & Stowe V,
L.P. shall have duly authorized, executed and delivered to YoSystems
(i) the Stockholder Guaranty in the form of Exhibit B to the SMS Stock
Purchase Agreement and (ii) the Indemnification Agreement in the form
of Exhibit C to the SMS Stock Purchase Agreement, and each of such
Stockholder Guaranty and Indemnification Agreement shall be in full
force and effect at the Closing.
d) All assets, including, but not limited to databases, source codes,
digital flood zone maps, and programs currently on the books of SMS
Geotrac shall continue to be owned by SMS Geotrac immediately
following the Closing except that the cash balance will be not less
than $1,000,000.00.
The parties acknowledge that funds in excess of $1,000,000 will be
utilized to pay fees and expenses incurred in connection with this
Agreement and the SMS Stock Purchase Agreement and the balance, if
any, will be paid out as a distribution to White. Such amounts will
be adjusted if necessary after the Closing. For purposes of this
Agreement, all amounts owing from Buyer to Seller pursuant to the
invoices set forth on Exhibit 4.01(d) shall be deemed paid prior to
the Closing.
e) Legal Actions or Proceedings. No legal action or proceeding shall
have been instituted or threatened seeking to restrain, prohibit,
invalidate or otherwise affect the consummation of the transactions
contemplated hereby.
f) Opinion of Counsel for YoSystems. Buyer shall have received the
opinion of Benesch, Friedlander, Coplan & Aronoff, LLP, counsel for
YoSystems, dated the Closing Date, satisfactory in form and substance
to Buyer and its counsel, to the effect set forth in Exhibit "4.01
(f)" hereto.
g) Material Adverse Change, There shall not have occurred a material
adverse change to the business or assets of SMS Geotrac or YoSystems
since the date of this Agreement.
h) Buyer and Seller shall have entered into a Shareholders' Agreement in
the form of Exhibit "4.01(h)" attached hereto (the "Shareholder's
Agreement").
i) YoSystems and Daniel J. White shall have entered into an Employment
Agreement in the form of Exhibit "4.01(i)" attached hereto.
7
12
j) Buyer shall have received certified copies of certificates of good
standing from the Secretary of State of the states in which SMS
Geotrac and YoSystems are incorporated.
k) Buyer shall have received an executed Resolution of Joint Meeting of
Board of Directors and Shareholders of YoSystems authorizing the
transactions contemplated by this Agreement and Exhibits and
Schedules attached thereto.
l) Buyer and YoSystems shall have entered into a Cross License Agreement
in the form of Exhibit "4.01(1)" attached hereto.
m) The Huntington Loan shall be closed and funded concurrently with the
Closing.
n) This Agreement and the documents described in Section 4.01 (c), (f),
(h), (i), (j), (k), (l) and (m) shall be referred to as "Closing
Documents".
Section 4.02. Conditions Precedent to Obligations of Seller. The
obligations of Seller under this Agreement are subject, at the option of
Seller, to the satisfaction at or prior to the Closing Date of each of the
following conditions:
a) Accuracy of Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement or in any certificate
or document delivered to Seller pursuant hereto shall be true and
correct in all material respects on and as of the Closing Date as
though made at and as of that dates and Buyer shall have delivered to
Seller a certificate to such effect.
b) Execution and Delivery of Strategic Agreement, Releases, Stockholder
Guaranty and Indemnification Agreement. Strategic Holding USA, Inc.
shall have duly authorized, executed and delivered to Seller a Release
in the form of Exhibit A hereto, and such Release shall be in full
force and effect at the Closing and fully executed stock certificates
and stock powers representing common stock of SMS Geotrac, Inc. Welsh,
Carson Anderson & Stowe V, L.P. shall have duly authorized, executed
and delivered to YoSystems, (i) the Stockholder Guaranty in the form
of Exhibit B to the SMS Stock Purchase Agreement and (ii) the
Indemnification Agreement in the form of Exhibit C to the SMS Stock
Purchase Agreement, and each of such Stockholder Guaranty and
Indemnification Agreement shall be in full force and effect at the
Closing.
c) Legal Actions or Proceedings. No legal action or proceeding shall
have been instituted or threatened seeking to restrain, prohibit,
invalidate or otherwise affect the consummation of the transactions
contemplated hereby.
8
13
d) Opinion of Counsel to Seller. Seller shall have received the opinion
of C. Anthony Sexton, counsel for Buyer, dated the Closing Date,
satisfactory in form and substance to Seller and their counsel, to
the effect set forth in Exhibit "4.02(d)" hereto.
e) Additional documents shall be executed and delivered as follows:
1. Transactions under Purchase Contract with Strategic Holding USA,
Inc. have been consummated.
2. Shareholders' Agreement.
3. Cross License Agreement.
4. Employment Agreement.
5. The Huntington Loan (executed and funded).
V. TERMINATION AND ABANDONMENT
Section 5.01. Termination. This Agreement may be terminated at any time
prior to the Closing:
a) by the mutual consent of Buyer and YoSystems; or
b) by either Buyer or YoSystems if the Closing contemplated in Section
1.03 above shall not have occurred on or before July 31, 1997 or such
later date as may be agreed upon by the parties hereto or any of the
Conditions Precedent of that party are not met.
Section 5.02. Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions
contemplated hereby by any or all of the parties pursuant to Section 5.01,
written notice thereof shall forthwith be given to the other party to this
Agreement and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by any of
the parties hereto If this Agreement is terminated as provided herein, no
party shall have any liability or further obligation to any other party to
this Agreement pursuant to this Agreement, except that the parties preserve
and shall retain their rights if another party breaches any representations
or warranties or covenants contained herein.
9
14
VI. INDEMNIFICATION; REMEDIES
Section 6.01. Survival of Representations and Warranties. The
representations and warranties of Seller and White in Article 11 and of
Buyer in Article III shall survive the Closing for two years.
Section 6.02. Indemnification by Seller. Seller shall indemnify Buyer and
the stockholders, directors, employees and agents of Buyer in their
capacity as such (collectively, the "Buyer Indemnified Parties") from and
against and shall hold the Buyer Indemnified Parties harmless from:
a) any proceeding, claim, liability loss, damage or deficiency,
including any and all reasonable costs and expenses (including, but
not limited to, reasonable legal and accounting fees) related to any
of the foregoing (collectively, "Loss"), resulting from or arising
out of any inaccuracy in or breach of any representation or warranty
by Seller contained in Article 11 hereof (and White shall indemnify
Buyer for any Losses resulting from or arising out of any inaccuracy
in or breach of any representation or warranty of White contained in
Article 11 hereof);
b) any Loss resulting from or arising out of a breach or nonperformance
of any covenant or obligation of Seller under this Agreement;
c) any Loss resulting from or arising out of the claims of any broker,
finder or other person acting in a similar capacity on behalf of
Geotrac or Seller in connection with the transactions contemplated
herein;
d) any Loss relating or pertaining to any YoSystems tax or other
liability of any nature whatsoever (including interest, penalties and
additions to tax) payable with respect to any period ending on or
prior to Closing (the Whites shall join YoSystems in regards to this
particular indemnification) except for liabilities disclosed on the
attached Exhibit "6.01(d)";
e) any Loss relating or pertaining to inaccuracy in or breach of any
representation, warranty, covenant or obligation of YoSystems under
the SMS Stock Purchase Agreement and its exhibits and schedules.
Section 6.03. Indemnification by Buyer. Buyer shall indemnify YoSystems
and the stockholder directors, employees and agents of YoSystems in their
capacity as such (collectively, the "YoSystems Indemnified Parties") from
and against, and shall hold the YoSystems Indemnified Parties harmless
from:
a) any Loss resulting from or arising out of any inaccuracy in or breach
of any representation or warranty by Buyer in Article III hereof;
10
15
b) any Loss resulting from or arising out of any breach or
nonperformance of any covenant or obligation of Buyer under this
Agreement; and
c) any Loss resulting from or arising out of the claims or any broker,
finder or other person acting in similar capacity on behalf of Buyer
in connection with the transactions contemplated herein.
Section 6.04. Third Party Claims.
a) Notice of Claim. If any legal proceeding is instituted or any claim
is asserted by any third party in respect of which the YoSystems
Indemnified Parties on the one hand, or Buyer Indemnified Parties on
the other hand may be entitled to indemnity hereunder, the party
asserting such right to indemnity (the "Indemnified Party") shall
give the party from whom indemnity is sought (the "Indemnifying
Party") written notice thereof. A delay in giving notice shall only
relieve the Indemnifying Party of liability to the extent the
Indemnifying Party Suffers actual prejudice because of the delay.
The Indemnifying Party shall have 30 days after receipt of such
notice to decide whether it will agree to be responsible for the
claim and provide indemnity hereunder.
b) Indemnifying Party Accepts Responsibility. If the Indemnifying Party
decides to accept responsibility and liability for such claim and
proceeding and provides written notice (the "Response Notice") to
such effect to the Indemnified Party within-such 30-day period, the
Indemnifying Party shall be fully responsible for undertaking and
conducting, through counsel of its own choosing and its own expense,
the settlement or defense of such claim or proceeding.
Notwithstanding the foregoing, the Indemnifying Party shall have the
right, after the completion or resolution or such claim or
proceeding, to assert a claim back against the Indemnified Party,
alleging that the indemnity it provided was not, in fact, required
hereunder. If a court of competent jurisdiction determines that the
Indemnifying Party was not required to provide indemnity for such
claim, the Indemnified Party shall reimburse the Indemnifying Party
for all of the Losses incurred by it in providing indemnity for the
third-party claim and pursuing its claim against the Indemnified
Party. If a court of competent jurisdiction determines that the
Indemnifying Party was required to provide indemnity for such claim,
the Indemnifying Party shall reimburse the Indemnified Party for all
of the Losses, costs or expenses, incurred by the Indemnified Party
in defense of the Indemnifying Party's claim. If a court of competent
jurisdiction determines that the Indemnifying Party was required to
provide indemnity for part, but not all of such third-party claim,
the Indemnified Party shall reimburse the Indemnifying Party far the
Losses, costs and expenses incident to the defense of the third-party
11
16
claim in proportion to the responsibility allocated by such court,
and each party shall bear its own costs and expenses with respect to
the Indemnifying Party's claim against the Indemnified Party.
The indemnified Party shall have the rights with counsel of its own
choice and at its own expense, to participate in, but not control the
defense and settlement of any claim or proceeding for which the
Indemnifying Party accepts responsibility hereunder. In addition, if,
at any time the Indemnified Party believes that a claim is not, (in
fact) the proper subject for indemnification by the Indemnifying
Party, the Indemnified Party may assume from the Indemnifying Party
responsibility for and control of such claim or proceeding; provided
that the Indemnified Party reimburses the Indemnifying Party for all
of the losses, costs and expenses incurred by it to such date in
defense of such claims. If the Indemnified Party assumes control of a
claim pursuant to this paragraph, it thereby becomes fully
responsible and liable for the defense and settlement thereof, and
waives any right to assert any further indemnification obligation
with respect to such claim against the Indemnifying Party.
Notwithstanding anything to the contrary herein, if, in the
reasonable opinion of the Indemnified Party any Third Party Claim or
the litigation or resolution thereof involves an issue or matter
which could have a material adverse effect on the business operations
assets, properties or prospects of the Indemnified Party (including,
without limitation, the administration of the tax returns and
responsibilities under the tax laws of the Indemnified Party), the
Indemnified Party shall have the right to control the defense
compromise and settlement of such Third Party Claim undertaken by the
Indemnifying Party, and the costs and expenses of the Indemnified
Party in connection therewith shall be included as part of the
indemnification obligations of the Indemnifying Party hereunder. If
the Indemnified Party shall elect to exercise such right, the
Indemnifying Party shall have the right to participate in, but not
control, the defense/compromise and settlement of such Third Party
Claim at its sole cost and expense. Any compromise or settlement of
such Third Party Claim shall be subject to the approval of the
Indemnifying Party, which approval shall not be unreasonably
withheld, conditioned or delayed.
c) Indemnifying Party Declines Responsibility. If the Indemnifying
Party fails to deliver a Response Notice timely, or delivers a
Response Notice and declines responsibility and liability for such
claim or proceeding, the Indemnified Party shall undertake, conduct
and control through counsel of its own choosing and at its expense,
the settlement or defense of such claim. Notwithstanding the
foregoing, the Indemnified Party shall retain the right, after the
completion or resolution of such claim or proceeding, to assert a
claim against the Indemnifying Party alleging that it should have
provided indemnity hereunder. If a court of
12
17
competent jurisdiction determines that the Indemnifying Party was
required to provide indemnity for such claim, the Indemnifying Party
shall reimburse the Indemnified Party for all of the Losses costs and
expenses incurred by the Indemnified Party in defending such claim
and pursuing its claim against the Indemnifying Party. If a court of
competent jurisdiction determines that the Indemnifying Party was not
required to provide indemnity for such claim, the Indemnified Party
shall reimburse the Indemnifying Party for all of the Losses, costs
and expenses incurred by the Indemnifying Party in defense of the
Indemnified Party's claim. If a court of competent jurisdiction
determines that the Indemnifying Party was required to provide
indemnity for part, but not all of such third-party claim the
Indemnifying Party shall reimburse the Indemnified Party for the
Losses, costs and expenses incident to the defense of the third-party
claim in proportion to the responsibility allocated by such court,
and each party shall bear its own costs and expenses with respect to
the Indemnified Party's claim against the Indemnifying Party.
The Indemnifying Party shall have the right with counsel of its own
choice at its own expense, to participate in but not control the
defense and settlement of any claim or proceeding for which it
initially declines responsibility. In addition, if at any time, the
Indemnifying Party believes that the claim is, in fact, the proper
subject for indemnity by it, the Indemnifying Party may, subject to
the last paragraph of Section 6.04(b) hereof, assume from the
Indemnified Party responsibility for and control of such claim or
proceeding; provided that the Indemnifying Party reimburses the
Indemnified Party for all of the Losses, costs and expenses incurred
by it to such date in defense of such claim If the Indemnifying Party
assumes control of a claim pursuant to this paragraph, it thereby
becomes fully responsible and liable for the defense and settlement
thereof, and waives any right to claim back against the Indemnified
Party or otherwise object to its indemnification obligations with
respect thereto.
d) Cooperation. Notwithstanding anything to the contrary herein, the
Indemnifying Party and Indemnified Party Shall at all times cooperate
with each other in the defense of any third-party claim or proceeding
and the party controlling such defense shall, upon request by the
other party provide reasonable updates and summaries of such matter.
Each party agrees that it shall not, without the written consent of
the other, settle or compromise any action or claim in any manner
that would materially and adversely affect the other party, other
than as a result of money damages or money payments.
Section 6.05. Further Limitations.
a) Exclusive Remedy. The indemnification provisions of this Article VI
shall be the exclusive remedy following the Closing Date for any
breaches or alleged breaches
13
18
of any representations, warranties or covenants under this Agreement.
Each of the parties hereto, on behalf of itself and its officers,
directors, employees, security holders, partners, affiliates, agents
or representatives (collectively, such party's "Representatives"),
agrees not to bring any actions or proceedings, at law, equity or
otherwise against any other party or its Representatives, in respect
of any breaches of any representation or warranty of this Agreement,
except pursuant to the express provisions of this Article VI, unless
there has been an instance of fraud. The parties hereby agree that no
party has made any representations or warranties, express or implied,
with respect to this Agreement or the matters contemplated hereby
except as explicitly set forth in this Agreement.
b) No Indemnification For Known Breaches of Representations and
Warranties. Notwithstanding any provision to the contrary contained
herein, in the event that any party to this Agreement had actual
knowledge, on or before the Closing Date, of the specific facts upon
which a claim for indemnification for breach of representations and
warranties by any other party is based, then the harmed party shall
have no liability for any Loss resulting from or arising out of such
claim.
VII. MISCELLANEOUS
Section 7.01. Expenses, Etc. Whether or not the transactions contemplated
by this Agreement are consummated, neither of the parties hereto shall
have any obligation to pay any of the fees and expenses of the other party
incident to the negotiation, preparation and execution of this Agreement,
including the fees and expenses of counsel, accountants, investment Buyer
and other experts.
Section 7.02. Publicity. The parties hereto agree to cooperate in issuing
any press release or other public announcement concerning this Agreement
or the transactions contemplated hereby Nothing contained herein shall
prevent any party from at any time furnishing any information required by
any government authority.
Section 7.03. Execution in Counterparts. For the convenience of the
parties, this Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the Same instrument.
Section 7.04. Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if (i) delivered personally, (ii) mailed by
registered or certified mail, return receipt requested and postage
prepaid, or (iii) sent via a nationally recognized overnight courier
service or (iv) sent via facsimile confirmed in writing to the recipient
in each case as follows:
14
19
If to Seller, YoSystems, White or the Whites:
YoSystems, Inc.
3900 Laylin Road
Norwalk, Ohio 44057
Attention: Daniel J. White
Telephone: (419) 668-8899
Telecopy: (419) 668-9266
with a copy to:
Benesch, Friedlander, Coplan & Aronoff LLP
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Attention: Ira Kaplan, Esq.
Telephone: (216) 363-4567
Telecopy: (216) 363-4588
If to Buyer, to:
Bankers Hazard Determination Services, Inc.
360 Central Avenue
St. Petersburg, Florida 33701
Attention: C. Anthony Sexton, Esq.
Telephone: (813) 823-4000 extension 4894
Telecopy: (813) 823-6518
or such other address or addresses as either party hereto shall have
designated by notice in writing to the other party hereto.
Section 7.05. Amendments, Supplements, Etc. At any time this Agreement may
be amended or supplemented by such additional agreements, articles or
certificates, as may be determined by the parties hereto to be necessary,
desirable or expedient to further the purposes of this Agreement, or to
clarify the intention of the parties hereto, or to add to or modify the
covenants, terms or conditions hereof or to effect or facilitate any
governmental approval or acceptance of this Agreement or to effect or
facilitate the filing or recording of this Agreement or the consummation
of any of the transactions contemplated hereby. Any such agreement,
article or certificate must be in writing and signed by both parties. No
oral or unexecuted agreement, promise or undertaking shall be effective to
modify, amend or alter the terms of this Agreement in any manner
whatsoever.
15
20
Section 7.06. Entire Agreement. This Agreement, its Exhibits, Schedules
and Annexes and the documents executed on the Closing Date in connection
herewith, constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements
and understandings, oral and written, between the parties hereto with
respect to the subject matter hereof. No representation, warranty promise,
inducement or statement of intention has been made by either party which
as not embodied in this Agreement or such other documents; and neither
party shall be bound by, or be liable for, any alleged representation,
warranty, promise, inducement or statement or intention not embodied
herein or therein.
Section 7.07. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without
regard to conflicts of law principles. However, jurisdiction and venue for
any action brought to enforce the terms or conditions of this Agreement or
any of its Exhibits or Schedules shall be the domicile of the defendant or
respondent in any such action.
Section 7.08. Attorney's Fees. If any party to this Agreement should bring
a Court action alleging breach of this Agreement or seeking to enforce,
rescind, renounce, declare void or terminate this Agreement or any
provisions thereof, the prevailing party shall be entitled to recover all
of its legal expenses, including reasonable attorney's fees and costs
(including legal expenses for any appeals taken), and to have the same
awarded as part of the judgment in the proceeding in which such legal
expenses and attorney's fees were incurred.
Section 7.09. Representation Acknowledged. The parties acknowledge that
each party and its counsel have reviewed and revised this Agreement and
that the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments or exhibits hereto.
Section 7.10. Binding Effect. Benefits. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors, heirs and permitted assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the
parties hereto or their respective successors and assigns, any rights,
remedied obligations or liabilities under or by reason of this Agreement.
Section 7.11. Assignability. Except for the anticipated assignment of this
Agreement by Buyer to an affiliated company approved of by Seller, neither
this Agreement nor any of the partied rights hereunder shall be assignable
by either party hereto without the prior written consent of the other
party hereto; provided, however, that the parties may assign a security
interest in their rights to receive indemnification hereunder as part of a
grant of collateral security to secure any indebtedness for money borrowed
by YoSystems from a
16
21
bank or other financial institution. An assignee shall be required to
execute the Shareholders Agreement prior to issuance of Shares.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the day and year
indicated below.
WITNESSES Bankers Hazard Determination Services, Inc.
/s/ C. Anthony Sexton BY: /s/ Edwin C. Hussemann
- --------------------------------- ----------------------------------------
/s/ Erica Rudin AS ITS: Treasurer DATE: 7/29/97
- --------------------------------- -------------------- -----------
WITNESSES YoSystems, Inc.
/s/ Ira Kaplan BY: /s/ Daniel J. White
- --------------------------------- ----------------------------------------
/s/ Illegible AS ITS: President DATE: 7/31/97
- --------------------------------- -------------------- -----------
WITNESSES
/s/ Ira Kaplan /s/ Daniel J. White DATE: 7/31/97
- --------------------------------- --------------------------- -----------
Daniel J. White
/s/ Illegible
- ---------------------------------
WITNESSES
/s/ Ira Kaplan /s/ Sandra White DATE: 7/31/97
- --------------------------------- --------------------------- -----------
Sandra White
/s/ Illegible
- ---------------------------------
17