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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
INSURANCE MANAGEMENT SOLUTIONS GROUP, INC.,
AS SELLER,
BANKERS INSURANCE GROUP, INC.
(SOLELY WITH RESPECT TO SECTION 7.2),
GEOTRAC HOLDINGS, INC.,
AS BUYER,
XXXXXX X. XXXXX,
XXXXXX X. XXXXX TRUST,
XXXXXX X. XXXXX TRUST
AND
GEOTRAC OF AMERICA, INC.
FOR
ALL OF THE ISSUED AND OUTSTANDING
SHARES OF CAPITAL STOCK OF
GEOTRAC OF AMERICA, INC.
DATED SEPTEMBER 20, 2001
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TABLE OF CONTENTS
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1. THE TRANSACTION..........................................................................................1
1.1 Sale and Purchase of Shares.....................................................................1
1.2 Purchase Price..................................................................................1
1.3 Closing.........................................................................................2
1.4 Deliveries by Seller............................................................................2
1.5 Deliveries by Buyer.............................................................................2
1.6 Deliveries by Company...........................................................................3
1.7 Deliveries by the Whites........................................................................3
2. REPRESENTATIONS AND WARRANTIES OF SELLER.................................................................4
2.1 Organization and Good Standing..................................................................4
2.2 Authorization and Enforceability................................................................4
2.3 No Violation of Laws or Agreements..............................................................4
2.4 Capitalization and Ownership....................................................................4
2.5 Financial Statements............................................................................5
2.6 Undisclosed Liabilities.........................................................................5
2.7 Taxes and Tax Returns...........................................................................5
2.8 Litigation or Proceedings.......................................................................7
2.9 Consents........................................................................................7
2.10 Employee Benefits Representations and Warranties................................................7
2.11 Brokerage.......................................................................................8
2.12 Books and Records...............................................................................8
2.13 Contracts.......................................................................................8
2.14 No Other Representations or Warranties..........................................................8
3. REPRESENTATIONS AND WARRANTIES OF BUYER TO SELLER........................................................8
3.1 Organization and Good Standing..................................................................8
3.2 Authorization and Enforceability................................................................8
3.3 No Violation of Laws or Agreements..............................................................9
3.4 Litigation or Proceedings.......................................................................9
3.5 Consents........................................................................................9
3.6 Investment Representations......................................................................9
3.7 Solvency.......................................................................................10
3.8 Brokerage......................................................................................10
3.9 No Other Representations or Warranties.........................................................10
4. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF WHITES TO SELLER....................................10
4.1 Power..........................................................................................10
4.2 Validity.......................................................................................10
4.3 Title..........................................................................................10
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4.4 No Violation of Laws or Agreements.............................................................10
4.5 Litigation or Proceedings......................................................................11
4.6 Consents.......................................................................................11
4.7 No Other Representations or Warranties.........................................................11
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND WHITES.................................................11
5.1 Representations True...........................................................................11
5.2 Shareholder Approval...........................................................................11
5.3 Performance of Obligations.....................................................................12
5.4 Receipt of Documents by Buyer..................................................................12
5.5 No Litigation..................................................................................12
5.6 Delivery of Minute Book........................................................................12
5.7 Absence of Material Claims for Certain Erroneous Flood Zone Determinations.....................12
5.8 Undertakings to Vote Seller Stock..............................................................12
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER...........................................................12
6.1 Representations True...........................................................................12
6.2 Shareholder Approval...........................................................................13
6.3 Receipt of Documents by Seller.................................................................13
6.4 Performance of Obligations.....................................................................13
6.5 No Litigation..................................................................................13
6.6 Undertakings to Vote White Shares..............................................................13
7. COVENANTS...............................................................................................13
7.1 Termination of Related Party Agreements; Final Accounting......................................13
7.2 Covenant Not to Compete........................................................................14
7.3 Acquisition Proposals..........................................................................14
7.4 Shareholder Meeting............................................................................15
7.5 Management Continuity..........................................................................16
7.6 Operations of Business Prior to Closing........................................................16
7.7 Access to Properties and Records...............................................................17
7.8 Employee Benefit Plans.........................................................................18
7.9 Insurance Matters..............................................................................18
7.10 Expenses.......................................................................................18
7.11 Filings; Other Actions; Notification...........................................................18
7.12 Reasonable Efforts of Seller...................................................................19
7.13 Reasonable Efforts of Buyer and the Whites.....................................................19
7.14 Further Assurances; Cooperation................................................................19
7.15 Post-Closing Access; Preservation of Books and Records.........................................19
7.16 Consents, Approvals and Filings................................................................20
7.17 Disclosures and Announcements..................................................................20
8. TAX MATTERS.............................................................................................20
8.1 Termination of Tax Sharing Arrangements........................................................20
8.2 Seller's Tax Returns...........................................................................20
8.3 Buyer's and Company's Tax Returns..............................................................21
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8.4 Reimbursement of Taxes.........................................................................21
8.5 Indemnification................................................................................23
8.6 Notification of Proceedings; Control; Refunds..................................................24
8.7 Section 338(h)(10) Election....................................................................25
8.8 Allocation.....................................................................................25
8.9 Allocation of Tax Attributes...................................................................25
8.10 Cooperation on Tax Matters.....................................................................25
8.11 Tax Effect of Payments.........................................................................25
9. SURVIVAL AND INDEMNIFICATION............................................................................25
9.1 Nature and Survival of Representations; Right to Indemnification Not Affected by Knowledge.....25
9.2 Indemnification by Seller......................................................................26
9.3 Indemnification by Buyer.......................................................................26
9.4 Limitations on Indemnification.................................................................26
9.5 Exclusive Remedy...............................................................................27
9.6 Procedure for Indemnification -- Third Party Claims............................................28
9.7 Procedure for Indemnification -- Other Claims..................................................29
10. TERMINATION OF AGREEMENT................................................................................29
10.1 Termination....................................................................................29
10.2 Effects of Termination.........................................................................30
10.3 Termination Fees and Effects...................................................................31
11. MISCELLANEOUS...........................................................................................32
11.1 Notices........................................................................................32
11.2 Assignability..................................................................................33
11.3 Governing Law and Venue; Waiver of Jury Trial..................................................33
11.4 Headings.......................................................................................33
11.5 Amendment and Waiver...........................................................................34
11.6 Entire Agreement; NO OTHER REPRESENTATIONS.....................................................34
11.7 Counterparts...................................................................................34
11.8 No Third-Party Beneficiary Rights..............................................................34
11.9 Severability...................................................................................34
11.10 Definitions....................................................................................35
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EXHIBITS
Exhibit A Supply Agreement
Exhibit B Indemnification Agreement
Exhibit C Termination and Release Agreement
Exhibit D Undertakings to Vote Seller Common Stock
Exhibit E Undertakings to Vote White Shares
SCHEDULES
SCHEDULE TITLE
Schedules 2.1-2.13 Seller Disclosure Letter
Schedule 3.4 Buyer Litigation or Proceedings
Schedule 4.5 White Litigation or Proceedings
Schedule 7.1 Related Party Agreements
Schedule 7.9 Insurance Policies
Schedule 8.1 Tax Sharing Arrangements
Schedule 11.10(b) Business of Geotrac
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INDEX OF DEFINED TERMS
The following terms used herein are defined in the Sections indicated:
Term Section Defined
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Accredited Investor 3.6(b)
Acquisition Proposal Notice 7.3
Acquisition Proposal 7.3
Affected Party 8.6
Affiliate 11.10(a)
Agreement Recitals
Bankruptcy and Equity Exception 2.2
BIG Recitals
Business Recitals
Buyer Recitals
Buyer Indemnified Parties 9.2(b)
Buyer Material Adverse Effect 11.10(c)
Buyer's Returns 8.3
Claim 9.6(a)
Closing Date 1.3
Closing 1.3
Code 11.10(c)
Company Recitals
Company Material Adverse Effect 11.10(e)
Confidentiality Agreement 11.6
Contract 11.10(f)
Control, Controlling, Controlled 11.10(a)
Controlling Party 8.6(b)
Covenant Not To Compete 7.2
Damages 9.2
Employees 11.10(h)
Encumbrance 11.10(i)
Exchange Act 7.3
Former Employee 11.10(h)
GAAP 11.10(j)
Governmental Body 11.10(k)
Group 7.3
IRS 11.10(l)
Knowledge 11.10(m)
Knowledge of Seller 11.10(m)
Law 11.10(n)
Lien 11.10(o)
NASD 7.17
Nasdaq 7.17
Ordinary Course of Business 11.10(p)
Permitted Action 7.3
Person 11.10(q)
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Pre-Closing Consolidated Returns 8.2
Proceeding 11.10(r)
Proxy Statement 7.4
Purchase Price 1.2
Purchased Shares 1.1
Related Party 11.10(h)
Related Party Agreements 7.1
Remedial Amendment Period 2.10(b)
Representatives 7.7
Savings Plan 2.10(b)
SEC 7.4
Section 338(h)(10) Election 8.7
Securities Act 11.10(t)
Seller Recitals
Seller Accrued Taxes 8.3
Seller Board Fiduciary Duties 8.2
Seller Common Stock 1.2
Seller Disclosure Letter 2
Seller Indemnified Parties 9.3
Seller Material Adverse Effect 11.10(u)
Seller Returns 8.2
Seller's Shareholder Meeting 7.4
Seller Taxes 8.2
Seller's Knowledge 11.10(m)
Services Agreement 1.4(f)
Straddle Return 8.3
Tax Attributes 8.9
Tax Return 2.7(k)
Tax Sharing Arrangements 8.1
Taxes 2.7(k)
Threshold Amount 9.4(a)
White Recitals
White Ancillary Instruments 4.1
White Material Adverse Effect 11.10(v)
White Shares 1.2
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("AGREEMENT"), dated as of September 20, 2001,
by and among INSURANCE MANAGEMENT SOLUTIONS GROUP, INC., a Florida corporation
("SELLER"); BANKERS INSURANCE GROUP, INC., a Florida corporation (but solely
with respect to Section 7.2) ("BIG"); GEOTRAC HOLDINGS, INC., a Delaware
corporation ("BUYER"); XXXXXX X. XXXXX, an individual resident of the State of
Ohio, and XXXXXX X. XXXXX TRUST (under Declaration of Trust dated May 7, 1998)
and XXXXXX X. XXXXX TRUST (under Declaration of Trust dated May 7, 1998) (each a
"White Trust" and, collectively with Xxxxxx X. Xxxxx, the "WHITES"); and GEOTRAC
OF AMERICA, INC., a Florida corporation (the "COMPANY").
BACKGROUND
Seller currently owns all of the outstanding capital stock of the
Company, which is engaged in the business of providing flood zone certifications
and certain related services (as specifically described on SCHEDULE 11.10(B),
the "BUSINESS"). Seller desires to sell and transfer to Buyer, and Buyer desires
to purchase from Seller, all of such outstanding capital stock of the Company,
upon the terms and subject to the conditions set forth in this Agreement. The
Whites desire to be parties to this Agreement as provided herein to induce
Seller to enter into this Agreement.
In consideration of the foregoing and of the respective
representations, warranties, covenants, agreements and conditions contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. THE TRANSACTION
1.1 Sale and Purchase of Shares. Subject to the terms and
conditions of this Agreement, at the Closing (as hereinafter defined), Seller
shall sell and transfer to Buyer, and Buyer shall purchase from Seller, all of
the outstanding shares of capital stock of Company (collectively, the "PURCHASED
SHARES") for the consideration specified in Section 1.2 of this Agreement.
1.2 Purchase Price. The aggregate purchase price payable for the
Purchased Shares (the "PURCHASE PRICE") shall be (i) the sum of Nineteen Million
Dollars (US$19,000,000), plus (ii) 524,198 shares (the "WHITE SHARES") of Common
Stock, $0.01 par value per share ("SELLER COMMON STOCK"), of Seller currently
owned by the White Trusts (collectively, the "PURCHASE PRICE"). At the Closing,
Buyer shall pay the Purchase Price as follows:
(a) Buyer shall deliver to Seller, by wire transfer of
immediately available US funds to an account designated in writing by Seller not
less than 24 hours prior to the time set for Closing, the sum of Nineteen
Million Dollars (US$19,000,000); and
(b) The Whites shall deliver, and Buyer shall cause the
Whites to deliver, to Seller the White Shares as provided in Sections 1.5(b) and
1.7(a) below.
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1.3 Closing. For purposes of this Agreement, the term "CLOSING"
shall mean the consummation of the transactions contemplated by this Agreement.
The Closing shall take place (i) at the offices of Seller, 000 Xxxxxxx Xxxxxx,
Xx. Xxxxxxxxxx, Xxxxxxx 00000, at 10:00 a.m. on the second business day after
the last to be satisfied or waived of the conditions set forth in Articles 5 and
6 hereof shall be satisfied or waived in accordance with this Agreement, or (ii)
at such other place and time and/or on such other date as Buyer and Seller may
agree in writing (the "CLOSING DATE"); provided, however, that the Closing Date
shall occur no later than January 31, 2002. The transactions contemplated by
this Agreement shall be deemed to have been consummated effective at 12:01 a.m.,
Eastern Time, on the Closing Date.
1.4 Deliveries by Seller. At the Closing, Seller will deliver, or
will cause to be delivered, to Buyer:
(a) share certificates representing the Purchased Shares,
duly endorsed for transfer or accompanied by duly executed transfer powers;
(b) written resignations of Xxxxx X. Xxxxxx, Xxxxx X.
Xxxxxx and Xxxxxx X. Xxxxx as the directors of the Company;
(c) a certificate of status from the Department of State
of Florida for each of Seller and Company, dated as of a date not earlier than
ten days prior to the Closing Date;
(d) a certificate from the President, or a Vice
President, of Seller certifying that, as of the Closing Date, Seller has
performed in all material respects all of the covenants and complied in all
material respects with all of the provisions required by this Agreement to be
performed or complied with by it at or before the Closing;
(e) a certificate from the corporate secretary of Seller
certifying, as of the Closing Date, as to the incumbency of the corporate
officers of Seller, and to the resolutions adopted by the Board of Directors of
Seller authorizing the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby;
(f) a Flood Zone Determination Service Agreement, dated
the Closing Date and effective immediately after the Closing, between Insurance
Management Solutions, Inc., a wholly-owned subsidiary of Seller ("IMS"), and the
Company, in the form attached hereto as EXHIBIT A (the "SUPPLY AGREEMENT"), duly
executed by IMS;
(g) an Indemnification Agreement, dated the Closing Date
and effective immediately after the Closing, between Seller and Xxxxxx X. Xxxxx
in the form attached hereto as EXHIBIT B (the "INDEMNIFICATION AGREEMENT"), duly
executed by Seller; and
(h) a Termination and Release Agreement, dated the
Closing Date and effective as of the Closing, by and among Seller, Buyer, the
Company, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx and the White Trusts, in the form
attached hereto as EXHIBIT C (the "TERMINATION AND RELEASE AGREEMENT"), duly
executed by Seller.
1.5 Deliveries by Buyer. At the Closing Buyer will deliver, or
will cause to be delivered, to Seller:
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(a) the cash portion of the Purchase Price as required by
Section 1.2(b) of this Agreement;
(b) share certificates representing the White Shares,
duly endorsed for transfer or accompanied by duly executed transfer powers;
(c) certificates of existence and good standing from the
Secretary of State of Delaware for Buyer, dated as of a date not earlier than
ten days prior to the Closing Date;
(d) a certificate from the President, or a Vice
President, of Buyer certifying that, as of the Closing Date, Buyer has performed
in all material respects all of the covenants and complied in all material
respects with all of the provisions required by this Agreement to be performed
or complied with by it at or before the Closing;
(e) a certificate from the corporate secretary of Buyer
certifying, as of the Closing Date, as to the incumbency of the corporate
officers of Buyer and to the resolutions adopted by the Board of Directors and
shareholders, respectively, of Buyer, authorizing the execution and delivery of
this Agreement and performance of the transactions contemplated hereby;
(f) the written resignation of Xxxxxx X. Xxxxx as a
Director of Seller;
(g) the Indemnification Agreement, duly executed by
Xxxxxx X. Xxxxx; and
(h) the Termination and Release Agreement, duly executed
by Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx and each of the White Trusts.
1.6 Deliveries by Company. At the Closing the Company will deliver
to Seller and/or Xxxxxx X. Xxxxx, as the case may be:
(a) the Supply Agreement, duly executed by the Company;
and
(b) the Termination and Release Agreement, duly executed
by the Company.
1.7 Deliveries by the Whites. At the Closing the Whites will
deliver, or will cause to be delivered, to Seller:
(a) share certificates representing the White Shares,
duly endorsed for transfer or accompanied by duly executed stock powers;
(b) the written resignation of Xxxxxx X. Xxxxx as a
Director of Seller;
(c) the Indemnification Agreement, duly executed by
Xxxxxx X. Xxxxx; and
(d) the Termination and Release Agreement, duly executed
by Xxxxxx X. Xxxxx.
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2. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the disclosure letter delivered to Buyer by
Seller upon entering into this Agreement (the "SELLER DISCLOSURE LETTER"),
Seller hereby represents and warrants to Buyer that:
2.1 Organization and Good Standing. Each of Company and Seller is
a corporation duly organized, validly existing and of active status under the
laws of its jurisdiction of incorporation. Company has the corporate power and
authority to own or lease its properties and assets as now owned or leased and
to carry on its business as and where it is now being conducted. Seller has the
corporate power and authority to execute and deliver this Agreement and the
other agreements, documents and instruments to be executed and delivered by
Seller hereunder (the "SELLER ANCILLARY AGREEMENTS") and to perform its
obligations under this Agreement and under each of the Seller Ancillary
Agreements. Copies of Company's and Seller's articles of incorporation and
bylaws, as amended and/or restated to the date hereof, have been delivered to
Buyer and are correct and complete and in full force and effect on the date
hereof.
2.2 Authorization and Enforceability. The execution, delivery and
performance of this Agreement and each of the Seller Ancillary Agreements by
Seller have been duly authorized by all necessary corporate action on the part
of Seller and its Board of Directors, subject only to approval of this Agreement
and the transactions contemplated hereby by the holders of a majority of the
outstanding shares of Seller Common Stock. This Agreement has been duly executed
and delivered by Seller. Assuming the due authorization, execution and delivery
of this Agreement and the Seller Ancillary Instruments by the other parties
hereto and thereto, this Agreement constitutes, and when executed and delivered
each of the Seller Ancillary Instruments will constitute, a valid and legally
binding obligation of Seller enforceable against Seller in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (the "BANKRUPTCY AND EQUITY
EXCEPTION").
2.3 No Violation of Laws or Agreements. The execution and delivery
of this Agreement by Seller do not, and the consummation by Seller of the
transactions contemplated hereby and the compliance by Seller with the terms,
conditions and provisions of this Agreement will not, (a) conflict with, or
result in a violation of any provision of the respective articles of
incorporation or bylaws, as amended and/or restated, of Seller and Company, or
(b) with or without the giving of notice or the lapse of time, or both,
constitute a breach or violation of, or default under, any terms, conditions or
provisions of any indenture, mortgage, deed of trust, lease, instrument, order,
judgment, decree, Law, contract, agreement or any other restriction to which the
Seller is a party or by which Seller, or any of its assets (other than the
Company or any of its assets) may be bound or affected, except, in the case of
clause (b) above, for any breach, violation or default that, individually or in
the aggregate, would not have a Company Material Adverse Effect.
2.4 Capitalization and Ownership. The authorized capital stock of
Company consists of: 500 shares of Common Stock, $1.00 par value (all of which
shares have been validly issued and are presently outstanding and constitute all
of the Purchased Shares); 1,000,000 shares of
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Class "A" Preferred Stock, $10.00 par value, none of which are currently
outstanding; and 1,000,000 shares of Class "B" Preferred Stock $10.00 par value,
none of which are currently outstanding. Company 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 Company or Seller are a party which restrict the transfer of the
Purchased Shares. All of the Purchased Shares are owned of record and
beneficially by Seller, free and clear of all Encumbrances. To Seller's
Knowledge, Company does not own, directly or indirectly, any capital stock of,
or any other equity interest in, any corporation or other business entity. At
the Closing, Seller will convey to Buyer and Buyer will acquire the Purchased
Shares free and clear of all Liens, other than those arising through Buyer or
White or as a result of federal or state securities laws.
2.5 Financial Statements. Included as SCHEDULE 2.5 hereto are
copies of financial statements of the Company consisting of a balance sheet of
Company as of December 31, 2000, and the related statement of income and cash
flows for the year ended December 31, 2000 (including the notes contained
therein or annexed thereto) (the "FINANCIAL STATEMENTS"), which Financial
Statements have been reported on, and are accompanied by, the signed,
unqualified opinion of Xxxxx Xxxxxxxx, LLP. The Financial Statements (a) fairly
present, in all material respects and in accordance with generally accepted
accounting principles, the financial position of the Company as of December 31,
2000, and for the year then ended, and (b) have been prepared in accordance with
GAAP.
2.6 Undisclosed Liabilities. To Seller's Knowledge, Company does
not have, as of the date hereof, any material liability or obligation of any
nature (whether due or to become due, absolute, contingent or otherwise), except
liabilities or obligations (a) reflected in the balance sheet for the year
ending December 31, 2000, or (b) incurred in the Ordinary Course of Business
since December 31, 2000.
2.7 Taxes and Tax Returns.
(a) Company has filed on a timely basis all income,
sales, franchise and other material Tax Returns required to be filed by it on or
before the Closing Date (including any consolidated, combined or unitary Tax
Return required to be filed by any affiliated person or entity) accurately
reflecting all income, sales, franchise and other material Taxes owing to the
United States or any other government or any government subdivision, state or
local, or any other taxing authority, and has paid in full all Taxes for which
it has or may have liability (whether or not shown on any Tax Return). All such
Tax Returns are accurate and complete in all material respects. To Seller's
Knowledge, there is no unassessed Tax deficiency proposed or threatened against
the Company as a result of the operation of its business and the Company is not
a party to any action or proceeding brought by an governmental authority for the
assessment or collection of Taxes. There are no liens on the assets of Company
as a result of any Tax liabilities except for Taxes not yet due and payable.
(b) Company has complied in all material respects with
all applicable laws, rules and regulations relating to the payment and
withholding of Taxes and has, within the time and the manner prescribed by law,
withheld and paid over to the proper governmental authorities, all amounts
required to be so withheld and paid over under applicable Laws.
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(c) Company has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(d) Neither Company nor any member of a consolidated,
combined or unitary group that includes Company is a party to any action or
proceeding brought by any governmental authority for the assessment or
collection of Taxes, nor, to the Knowledge of Seller, has any such event been
asserted or threatened against any of them. Company has not filed any consent of
the type described under Section 341(f) of the Code, nor is it subject to any
accumulated earnings penalties.
(e) There are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any Tax Return of
Company for any period. No taxing authority has audited any Tax Return filed by
Company for any taxable period beginning after December 31, 1997. All Tax
deficiencies raised as a result of any past audits have been satisfied.
(f) Buyer has been furnished with complete and correct
copies of all consolidated, combined or unitary Tax Returns which include the
Company that have been filed by Seller for all taxable years beginning after
December 31, 1997.
(g) No adjustments have been made by Seller or the
Company under Section 481(a) of the Code, which will affect the Taxes of Buyer
or the Company for any taxable years that end on or after the Closing Date. All
Tax rulings or closing agreements to which the Company is a party are set forth
in SCHEDULE 2.7.
(h) There are no Tax sharing agreements or similar
arrangements in effect that include the Company.
(i) There are no Tax deficiencies of any kind assessed
against, relating to, or with respect to which liability could be imposed upon
the Company, including pursuant to Treasury Regulations Section 1.1502-6 or any
corresponding state, local or foreign provision, as a transferee or successor,
by contract or otherwise.
(j) All income or franchise Taxes owed by any
consolidated, combined or unity group of which the Company is, or was, a member,
with respect to each taxable period during which Company was a member of the
group, have been paid in full (regardless of what is shown on a Tax Return).
(k) For purposes of this Agreement, "TAXES" shall mean
any and all taxes, charges, fees, levies or other assessments, including,
without limitation, income, gross receipts, excise, real or personal property,
sales, withholding, social security, retirement, unemployment, use, net worth,
payroll and franchise, taxes, fees and charges, imposed by the IRS or any taxing
authority (whether domestic or foreign including, without limitation, any state,
county, local or foreign government or any subdivision or taxing agency thereof
(including a United States possession)), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall include
any interest whether paid or received, fines, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes, charges,
fees, levies or other assessments. "TAX RETURN" shall mean any report, return,
document,
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declaration or other information or filing required to be supplied to any taxing
authority or jurisdiction (foreign or domestic) with respect to Taxes,
including, without limitation, information returns, any documents with respect
to or accompanying payments of estimated Taxes, or with respect to or
accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.
Anything herein to the contrary notwithstanding, Seller's
representations and warranties pursuant to this Section 2.7 shall be limited as
follows. First, Seller's representations and warranties shall not apply to any
Tax periods, or portions thereof, which ended on or before July 31, 1998.
Second, Seller's representations and warranties shall not apply to any separate,
as opposed to consolidated, combined or unitary, Tax Returns filed by the
Company following July 31, 1998. Third, Seller's representations and warranties
shall not apply to the extent that they would be based, in whole or in part,
upon any inaccurate or incorrect information provided to the Seller by Xxxxxx X.
Xxxxx or by any other employee of the Company (other than an employee of the
Company who is also an employee of Seller).
2.8 Litigation or Proceedings. There are no actions, suits,
investigations or proceedings pending or, to Seller's Knowledge, threatened, at
law or in equity, by or before any Governmental Body against Seller or any of
its executive officers or directors (excluding Xxxxxx X. Xxxxx) in such
capacity, except for those that would not have a Company Material Adverse
Effect.
2.9 Consents. No consent, approval or authorization of, or
registration or filing with, any Person, including any Governmental Body, is
required to be made or obtained by Seller in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby by Seller, except for those specifically contemplated by the terms of
this Agreement, those that have been made or obtained as of the date hereof, and
those that the failure to make or obtain would not have a Company Material
Adverse Effect or prevent, materially delay or materially impair the ability of
Seller to consummate the transactions contemplated by this Agreement.
2.10 Employee Benefits Representations and Warranties
(a) Except as set forth in subsection (b) below, no
Employee Benefit Plan, as defined in Section 11.10(g), for Former Employees or
present Employees of the Company is maintained by Seller or any other entity
(other than the Company) that is an Affiliate of Seller.
(b) Eligible employees of the Company participate in The
Associates Savings Plan ("SAVINGS PLAN"), which is sponsored by Bankers
Financial Corporation, a corporation that beneficially owns, indirectly through
one or more direct or indirect subsidiaries, a majority of the outstanding
Seller Common Stock. The Savings Plan and its associated trust substantially
comply in operation with the applicable requirements of Code Section 401(a), and
the Savings Plan and its associated trust substantially comply in form with the
requirements of Code Section 401(a) except to the extent that it will be amended
prior to the end of the "REMEDIAL AMENDMENT PERIOD" under Section 401(b) of the
Code to comply as to form with the requirements of Code Section 401(a).
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(c) The Company has no liability, whether actual or
contingent, under Title IV of ERISA with respect to any Employee Benefit Plan
maintained by Seller or any entity (other than Company) that is an Affiliate of
Seller.
2.11 Brokerage. Except for Xxxxxxx Xxxxx & Associates, Inc., which
shall be paid solely by Seller, neither Seller nor any of its officers,
directors (excluding Xxxxxx X. Xxxxx) or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated by this Agreement.
2.12 Books and Records. The minute books and stock record books of
the Company, all of which have been made available to Buyer, are complete and
correct in all material respects.
2.13 Contracts. SCHEDULE 2.13 contains a true and correct list of
each Contract between Company and any Related Party other than Contracts which
have been either entered into in the Ordinary Course of Business of Company or
specifically approved by the Board of Directors of Company.
2.14 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article 2, Seller makes no
other express or implied representation or warranty to Buyer in connection with
the transactions contemplated by this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER TO SELLER
Buyer hereby represents and warrants to Seller that:
3.1 Organization and Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the corporate power and authority to own or lease its
properties and assets as now owned or leased and to carry on its business as and
where now being conducted. Buyer has the corporate power and authority to
execute and deliver this Agreement and each other agreement, document and
instrument contemplated hereunder to which it is a party (the "BUYER ANCILLARY
AGREEMENTS") and to perform its obligations under this Agreement and under each
of the Buyer Ancillary Agreements. Copies of Buyer's certificate of
incorporation and bylaws, as amended to date, have been delivered to Seller and
are correct and complete and in full force and effect on the date hereof.
3.2 Authorization and Enforceability. The execution, delivery and
performance of this Agreement and each of the Buyer Ancillary Agreements by
Buyer have been duly authorized by all necessary corporate action on the part of
Buyer, its Board of Directors and stockholders. This Agreement has been duly
executed and delivered by Buyer and each of the Whites. Assuming the due
authorization, execution and delivery of this Agreement and each of the Buyer
Ancillary Agreements and White Ancillary Agreements (as hereinafter defined) to
which it is a party by Seller, (a) this Agreement constitutes, and when executed
and delivered each of the Buyer Ancillary Agreements will constitute, a valid
and legally binding obligation of Buyer enforceable against Buyer in accordance
with its terms subject to the Bankruptcy and Equity Exception, and (b) this
Agreement constitutes, and when executed and delivered each of the White
Ancillary Agreements will constitute, a valid and legally binding obligation of
the Whites
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enforceable against the Whites in accordance with its terms subject to the
Bankruptcy and Equity Exception.
3.3 No Violation of Laws or Agreements. The execution and delivery
of this Agreement by Buyer and each of the Whites do not, and the consummation
by Buyer and the Whites of the transactions contemplated hereby and the
compliance by Buyer and the Whites with the terms, conditions and provisions of
this Agreement will not (a) conflict with, or result in a violation of any
provision of the certificate of incorporation or bylaws of Buyer, or (b) with or
without the giving of notice or the lapse of time, or both, constitute a breach
or violation of, or default under, any terms, conditions or provisions of any
indenture, mortgage, deed of trust, lease, instrument, order, judgment, decree,
Law, Contract, agreement or any other restriction to which Buyer and/or any of
the Whites is a party or by which Buyer and/or any of the Whites, or any of
their respective assets, may be bound or affected, except, in the case of clause
(b) above, for any breach, violation or default that, individually or in the
aggregate, would not have a Buyer Material Adverse Effect, a White Material
Adverse Effect or prevent, materially delay or materially impair the ability of
Buyer and/or any of the Whites to consummate the transaction contemplated by
this Agreement.
3.4 Litigation or Proceedings. Except as set forth on SCHEDULE 3.4
OR SCHEDULE 4.5, there are no actions, suits, investigations or proceedings
pending or, to Buyer's Knowledge, threatened, at law or in equity, by or before
any Governmental Body, agency or instrumentality, against Buyer, any of its
executive officers or directors in such capacity, or any of the Whites, except
for those that would not have a Buyer Material Adverse Effect or prevent,
materially delay or materially impair the ability of Buyer and/or any of the
Whites to consummate the transactions contemplated by this Agreement.
3.5 Consents. No consent, approval or authorization of, or
registration or filing with any Person, including any Governmental Body, is
required to be made or obtained by Buyer or any of the Whites in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby by Buyer, except for those specifically
contemplated by the terms of this Agreement, those that have been made or
obtained as of the date hereof, and those that the failure to make or obtain
would not have a Buyer Material Adverse Effect or prevent, materially delay or
materially impair the ability of Buyer and/or any of the Whites to consummate
the transactions contemplated by this Agreement.
3.6 Investment Representations.
(a) Buyer will acquire the Purchased Shares hereunder for
its own account for investment only, and not with a view to or for sale in
connection with any public distribution thereof within the meaning of the
Securities Act. Buyer hereby acknowledges that the Purchased Shares to be
acquired by Buyer pursuant to this Agreement have not been, and will not be,
registered under the Securities Act or any state securities laws and cannot be
resold without registration thereunder or exemption therefrom. Buyer agrees not
to transfer all or any portion of the Purchased Shares to be acquired pursuant
to this Agreement unless such transfer has been registered or is exempt from
registration under the Securities Act and any applicable state securities laws.
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(b) Buyer, either alone or with its advisers, has such
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of acquiring the Purchased Shares, and has
the ability to bear the economic risk of acquiring the Purchased Shares. Buyer
is an "ACCREDITED INVESTOR," as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act.
3.7 Solvency. Immediately after the Closing, Buyer shall be able
to pay its debts as they become due, shall own assets having a fair market value
greater than the amounts required to pay its debts (including a reasonable
estimate of the amount of contingent liabilities) and shall not have an
unreasonably small amount of capital to conduct its business.
3.8 Brokerage. Except for NatCity Investments, Inc., which shall
be paid solely by Buyer, neither Buyer nor any of its officers, directors or
employees, including Xxxxxx X. Xxxxx, has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
3.9 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article 3, Buyer makes no other
express or implied representation or warranty to Seller in connection with the
transactions contemplated by this Agreement.
4. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF WHITES TO SELLER
Each of the Whites hereby jointly and severally represents and warrants
to Seller that:
4.1 Power. Each of the Whites has the full legal power, right and
authority to enter into, execute and deliver this Agreement and the other
instruments and documents contemplated hereunder (including, if applicable, the
respective stock powers) to be executed and delivered by any or all of them (the
"WHITE ANCILLARY INSTRUMENTS"), and to carry out their respective obligations
under the transactions contemplated hereby and thereby.
4.2 Validity. This Agreement has been duly and validly executed
and delivered by each of the Whites and is, and when executed and delivered each
White Ancillary Instrument will be, the legal, valid and binding obligation of
such White, enforceable in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
4.3 Title. The Xxxxxx X. Xxxxx Trust (under Declaration of Trust
dated May 7, 1998) is the owner of record and beneficially of 262,099 of the
White Shares and the Xxxxxx X. Xxxxx Trust (under Declaration of Trust dated May
7, 1998) is the owner of record and beneficially of 262,099 of the White Shares,
free and clear of all Liens including, without limitation, voting trusts or
agreements, proxies, or marital or community property interests. At the Closing,
the Whites will convey to Seller and Seller will acquire all of the White Shares
free and clear of all Liens, other than those arising through Seller or as a
result of federal or state securities laws.
4.4 No Violation of Laws or Agreements. The execution and delivery
of this Agreement by each of the Whites does not, and the consummation by each
of the Whites of the transactions contemplated hereby and thereby and the
compliance by each of the Whites with the
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terms, conditions and provisions of this Agreement will not, with or without the
giving of notice or the lapse of time, or both, constitute a breach or violation
of, or default under, any terms, conditions or provisions of any indenture,
mortgage, deed of trust, lease, instrument, order, judgment, decree, Law,
Contract, agreement or any other restriction to which any of the Whites is a
party or by which any of the Whites or any of his or its assets may be bound or
affected, except for any breach, violation or default that, individual or in the
aggregate, would not have a White Material Adverse Effect or prevent, materially
delay or materially impair the ability of any of the Whites to consummate the
transactions contemplated by this Agreement.
4.5 Litigation or Proceedings. Except as set forth on SCHEDULE
4.5, there are no actions, suits, investigations or proceedings pending or, to
White's Knowledge, threatened, at law or in equity, by or before any
Governmental Body, agency or instrumentality, against any of the Whites except
for those that would not have a White Material Adverse Effect or prevent,
materially delay or materially impair the ability of any of the Whites to
consummate the transactions contemplated by this Agreement.
4.6 Consents. No consent, approval or authorization of, or
registration or filing with any Person, including any Governmental Body, is
required to be made or obtained by any of the Whites in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby by the Whites, except for those specifically contemplated by
the terms of this Agreement, those that have been made or obtained as of the
date hereof, and those that the failure to make or obtain would not have a White
Material Adverse Effect or prevent, materially delay or materially impair the
ability of any of the Whites to consummate the transactions contemplated by this
Agreement.
4.7 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article 4, none of the Whites
makes any other express or implied representation or warranty to Seller in
connection with the transactions contemplated by this Agreement.
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND WHITES
The obligation of each of Buyer and the Whites to effect the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver, at or prior to the Closing, of each of the following conditions:
5.1 Representations True. The representations and warranties of
Seller contained in Article 2 of this Agreement shall be true and accurate in
all material respects on and as of the Closing Date to the same extent and with
the same force and effect as if made on such date (other than those
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time, which need be true and
accurate only as of such date or with respect to such period, and except as
affected by the transactions contemplated under this Agreement).
5.2 Shareholder Approval. This Agreement and the transactions
contemplated hereby shall have been duly approved by holders of a majority of
the outstanding shares of Seller
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Common Stock in accordance with applicable law and the articles of incorporation
and bylaws of Seller, each as amended and/or restated to date.
5.3 Performance of Obligations. Seller shall have performed in all
material respects the obligations under this Agreement required to be performed
by it on or before the Closing Date.
5.4 Receipt of Documents by Buyer. Buyer shall have received:
(a) the deliveries required by Section 1.4 hereof to be
made, or caused to be made, by Seller at Closing; and
(b) a certificate executed by the President and Secretary
or Treasurer of Seller certifying, to their Knowledge, as to the fulfillment of
the matters contained in this Article 5.
5.5 No Litigation. No court or Governmental Body of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, Law, ordinance, judgment, decree, injunction or other order that is in
effect and permanently enjoins or otherwise prohibits consummation of the
transactions contemplated by this Agreement.
5.6 Delivery of Minute Book. Seller shall have delivered or made
available to Buyer the minute book of Company.
5.7 Absence of Material Claims for Certain Erroneous Flood Zone
Determinations. Since the date of this Agreement, there shall have been no
material claims against the Company arising out of or relating to either (i) the
operations or activities of the Seller and its subsidiaries (other than the
Company or any entity controlled thereby) or (ii) any erroneous flood zone
determinations issued by Bankers Hazard Determination Services, Inc. prior to
July 31, 1998, except, in each case, for those which are or are reasonably
expected to be covered by insurance maintained by the Company or Seller
(excluding any deductible amounts) and for those which would not have a Company
Material Adverse Effect.
5.8 Undertakings to Vote Seller Stock. Seller shall have delivered
to Buyer, concurrent with the execution and delivery of this Agreement, a
written undertaking (in substantially the form attached hereto as EXHIBIT D) by
each of Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxx X. Xxxxx, Xx., Xxxxxxx X. Xxxxxx,
E. Xxx Xxxxxxx, Xxxxxxxxx X. Xxxxxxx and Xxxx X. XxXxxxxx to vote the respective
shares of Seller Common Stock owned thereby in favor of the transactions
contemplated by this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to effect the transaction contemplated by this
Agreement is subject to the satisfaction or waiver, at or prior to the Closing,
of each of the following conditions:
6.1 Representations True. The representations and warranties of
Buyer and the Whites contained in this Agreement shall be true and accurate in
all material respects on and as
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of the Closing Date to the same extent and with the same force and effect as if
made on such date (other than those representations and warranties that address
matters only as of a particular date or only with respect to a specific period
of time, which need be true and accurate only as of such date or with respect to
such period, and except as affected by the transactions contemplated under this
Agreement).
6.2 Shareholder Approval. This Agreement and the transactions
contemplated hereby shall have been duly approved by holders of a majority of
the outstanding shares of Seller Common Stock in accordance with applicable law
and the articles of incorporation and bylaws of Seller, each as amended and/or
restated to date.
6.3 Receipt of Documents by Seller. Seller shall have received:
(a) the deliveries required by Sections 1.5 and 1.7
hereof to be made, or caused to be made, by Buyer and the Whites at Closing; and
(b) a certificate executed by the President and Secretary
or Treasurer of Buyer certifying, to their Knowledge, as to the fulfillment of
the matters contained in this Article 6.
6.4 Performance of Obligations. Buyer and the Whites shall have
performed in all material respects the obligations under this Agreement required
to be performed by them on or before the Closing Date.
6.5 No Litigation. No court or Governmental Body of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, Law, ordinance, judgment, decree, injunction or other order that is in
effect and permanently enjoins or otherwise prohibits consummation of the
transactions contemplated by this Agreement.
6.6 Undertakings to Vote White Shares. Each of the White Trusts
shall have delivered to Seller, concurrent with the execution and delivery of
this Agreement, a written undertaking (in substantially the form attached hereto
as EXHIBIT E) to vote the White Shares in favor of the transactions contemplated
by this Agreement.
7. COVENANTS
7.1 Termination of Related Party Agreements; Final Accounting.
SCHEDULE 7.1 sets forth all Contracts and arrangements, whether written or oral,
existing as of the date hereof between the Company and/or Xxxxxx X. Xxxxx and
any Related Party ("RELATED PARTY AGREEMENTS"). On or before the Closing Date,
the Seller shall take or cause to be taken (and Xxxxxx X. Xxxxx shall cooperate
in taking) all necessary or appropriate actions so that, as of the Closing, (a)
the Company shall have satisfied and paid in full all accounts payable, debts or
obligations of the Company to Seller and/or any Related Party under the Related
Party Agreements through and including the Closing Date, and (b) Seller and the
Related Parties shall have satisfied and paid in full all accounts payable,
debts or obligations of Seller and/or the Related Parties to the Company under
the Related Party Agreements through and including the Closing Date. At Closing,
if any amounts are owing by the Company to Seller or any Related Party such
amounts will be offset against the amounts owing as of the Closing by Seller or
any
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Related Party to Company, then the Company shall pay the balance owing, if any,
in cash, at the Closing. If after offsetting the amounts owed by Seller or a
Related Party to the Company against the amounts owed by the Company to Seller
or any Related Party, there still remains an amount owing to the Company by
Seller or such Related Party, then Seller shall pay, or cause to be paid, such
additional amount to Company at Closing. Except as expressly provided in
SCHEDULE 7.1, the Related Party Agreements shall be terminated effective as of
the Closing, none of the Company, Xxxxxx X. Xxxxx or any Related Party will have
any further rights or obligations under any Related Party Agreement, and each of
Seller, Company and Xxxxxx X. Xxxxx shall execute and deliver to the others the
Termination and Release Agreement.
7.2 Covenant Not to Compete. For a period of five (5) years
commencing on the Closing Date, each of Seller and BIG agrees that neither it
nor any of its subsidiaries shall, directly or indirectly, without the prior
consent of Buyer, (a) engage in the Business, (b) solicit any individuals
employed by Company as of the date hereof (other than executive officers or
directors of the Company who are also executive officers and/or directors of
Seller and/or BIG as of the date hereof) to become employees of Seller, BIG or
any of their respective subsidiaries, or (c) employ or retain as a consultant
any such individual or any entity owned or controlled by any such individual
(together, the "COVENANT NOT TO COMPETE"); provided, however, that the foregoing
Covenant Not to Compete: (i) shall not prohibit the ownership of securities of
corporations or other business entities which are listed on a national
securities exchange or traded in the national over-the-counter market in an
amount which shall not exceed 5% of the outstanding shares or other securities
of any such corporation or other business entity; (ii) shall not prohibit the
general solicitation of employees or consultants in the ordinary course of
business; and (iii) shall be terminated and of no further force and effect in
the event that Buyer or the Company materially breaches the Supply Agreement.
The parties agree that the geographic scope of this Covenant Not to Compete
shall extend to the entire world. The parties agree that the covenants deemed
included in this Section are, taken as a whole, reasonable in their geographic
and temporal coverage, and no party shall raise any issue of geographic or
temporal reasonableness in any proceeding to enforce such covenant. The parties
intend that the covenant contained in the preceding sentence shall be construed
as a series of separate covenants, one for each jurisdiction located outside the
United States and one for each state, city and county included within the United
States and, except for geographic coverage, each such separate covenant shall be
deemed identical.
7.3 Acquisition Proposals. From the date hereof through the first
to occur of the termination of this Agreement and the Closing Date, Seller shall
not, nor shall Seller authorize or permit any of its officers, directors (other
than Xxxxxx X. Xxxxx), employees, representatives, investment bankers,
attorneys, accountants, subsidiaries (other than Company) or other agents to,
(a) solicit or initiate the submission of any Acquisition Proposal (as defined
below), (b) enter into any agreement with respect to any Acquisition Proposal,
or (c) participate in any material discussions or negotiations with, or furnish
written information or material oral information to, any person in connection
with any Acquisition Proposal. If an Acquisition Proposal is made to or received
by Seller after the date hereof, Seller will, within two (2) business days of
such receipt, notify Buyer of the principal terms thereof (an "ACQUISITION
PROPOSAL NOTICE"), but Seller shall not be required to disclose to Buyer the
identity of the person(s) making such offer. Notwithstanding the foregoing, the
provisions hereof shall not prohibit the board of directors of Seller from
taking, or causing to be taken, any action it reasonably believes, based as to
legal
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matters on the advice of outside counsel, is required for the board of directors
of Seller to comply with its fiduciary duties imposed by law (the "SELLER BOARD
FIDUCIARY DUTIES") to respond to an unsolicited Acquisition Proposal, including
(without limitation) (i) furnishing information to, or entering into discussions
or negotiations with, any person or entity that makes an Acquisition Proposal,
and (ii) complying with applicable law, including the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and the rules and regulations promulgated
thereunder. For purposes of this Agreement, the term "PERMITTED ACTION" shall
mean any action taken, or caused to be taken, by the Board of Directors of
Seller described by the preceding sentence. Before providing any written
information or material oral information about Company as permitted by the
immediately preceding sentence, Seller shall have received a written Acquisition
Proposal and shall have informed Buyer of that proposed action and of the
substance of the information to be provided; provided, however, that Buyer shall
not block or delay the provision of such information, and, at Seller's written
request, Buyer shall return to Seller, or forward to a third party, any such
information in Buyer's possession that Seller or Company shall have generated or
provided to Buyer. For purposes of this Agreement, "ACQUISITION PROPOSAL" shall
mean any proposal relating to a (A) merger, consolidation or similar transaction
to which Company is a party, (B) sale, lease or other disposition by merger,
consolidation, share exchange or otherwise of all or substantially all of the
assets of Company, or (C) issuance, sale or other disposition of (other than
pursuant to the pledge thereof to Seller's lenders, which pledge is in existence
on the date hereof) (including by way of merger, consolidation, share exchange
or any similar transaction) equity securities (or options, rights or warrants to
purchase, or securities convertible into, such equity securities) of Company;
provided, however, that the term Acquisition Proposal shall not include, among
other things, (i) any merger, consolidation, share exchange or similar
transaction involving Seller or (ii) any issuance, sale or other disposition of
(including by way of merger, consolidation, share exchange or any similar
transaction) equity securities (or options, rights or warrants to purchase, or
securities convertible into, such equity securities) of Seller.
7.4 Shareholder Meeting. Commencing not later than October 15,
2001, Seller shall take, consistent with applicable law and its Articles of
Incorporation and Bylaws, as amended and/or restated to date, all action
necessary to convene and hold a meeting of holders of Seller Common Stock as
promptly as practicable after October 15, 2001 for the purpose of considering
and voting upon the approval of this Agreement and the transactions contemplated
herein (the "SELLER'S SHAREHOLDER MEETING").
Without limiting the generality of the foregoing, Seller shall,
promptly following October 15, 2001 (but not later than November 5, 2001),
prepare a proxy statement (whether as part of a registration statement on Form
S-4 or otherwise) (the "PROXY STATEMENT"), file it with the Securities and
Exchange Commission ("SEC") under the Exchange Act, and use all reasonable
efforts to have it cleared or declared effective by the SEC. As promptly as
practicable after the Proxy Statement has been cleared or declared effective by
the SEC, Seller shall mail the Proxy Statement to the shareholders of Seller as
of the record date for the shareholders' meeting referred to above. Seller shall
use its reasonable best efforts to obtain and furnish the information required
to be included by it in the Proxy Statement and, after consultation with Buyer,
respond promptly to any comments of the SEC relating to the preliminary Proxy
Statement pertaining to the transactions contemplated by this Agreement and to
cause the definitive Proxy Statement relating to the transactions contemplated
by this Agreement to be mailed to its shareholders, all at the earliest
practicable time. Whenever an
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event occurs which should be set forth in an amendment or supplement to the
Proxy Statement or any other filing required to be made with the SEC, each party
hereto will promptly inform the others and cooperate in filing with the SEC
and/or mailing to shareholders such amendment or supplement. Other than as
required by Seller Board Fiduciary Duties, the Board of Directors of Seller
shall recommend such approval (referral to which shall be included in the Proxy
Statement) and Seller shall take all lawful action to solicit such approval. At
any such meeting of Seller's shareholders all of the White Shares shall be voted
for the approval of this Agreement and the transactions contemplated hereby.
Buyer and the Whites covenant and agree to cooperate with Seller in connection
with the preparation, filing and mailing of the Proxy Statement and any
amendment or supplement thereto, including (without limitation) providing, as
promptly as practicable and at their sole expense, such information as Seller
shall reasonably request for use in the Proxy Statement. Buyer and the Whites
agree that Seller may rely on any information furnished by Buyer or White in
preparing the Proxy Statement and any amendment or supplement thereto.
Nothing in this Section 7.4 is intended to preclude the Board of
Directors of Seller from taking, or causing to be taken, any action which the
Board of Directors determines, based on the advice of outside counsel as to
legal matters, is required by Seller Board Fiduciary Duties.
7.5 Management Continuity. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing, Seller shall cause the Company to continue to employ Xxxxxx X.
Xxxxx in the same capacities and at the same compensation as of the date hereof;
provided, however, that Xxxxxx X. Xxxxx'x employment with the Company may be
terminated for "CAUSE" as provided in Section 8.1 of the Employment Agreement,
dated July 31, 1998, between the Company and Xxxxxx X. Xxxxx.
7.6 Operations of Business Prior to Closing. During the period
from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing, except as expressly contemplated
by this Agreement or with the prior written consent of both Buyer and Seller,
which consent of Buyer shall not be unreasonably withheld or delayed by either
party:
(a) Conduct of Business / Ordinary Course. Seller and, to
the extent within Xxxxxx X. Xxxxx'x control, Xxxxxx X. Xxxxx shall cause Company
to carry on its business in the usual, regular, and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent with such business, shall use their respective reasonable best
efforts, consistent with past practice and policies, to preserve intact
Company's present business organization and maintain its existing relations and
goodwill with customers, suppliers, distributors, employees, consultants and
others having business dealings with Company. Seller shall promptly notify
Buyer, and Buyer and Xxxxxx X. Xxxxx shall promptly notify Seller, of any event
or occurrence or emergency of which such party becomes aware, which is not in
the ordinary course of business of Company or which is material and adverse to
Company's business.
(b) Dividends, Issuance of or Changes in Securities.
Seller shall not cause or permit the Company to: (i) declare, set aside or pay
any dividend; (ii) issue, sell, pledge or dispose of or commit to the issuance,
sale, pledge or disposition of any capital stock of the
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Company, or any securities convertible into capital stock of the Company, or any
options, warrants, calls, commitments, or rights of any character obligating
Company to issue any such capital stock; (iii) split, combine or reclassify any
of its outstanding capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for outstanding capital
stock of the Company; or (iv) repurchase or otherwise acquire any shares of
capital stock of the Company, or any securities convertible into or exchangeable
or exercisable for any shares of its capital stock.
(c) Governing Documents. Neither Seller nor, to the
extent within Xxxxxx X. Xxxxx'x control, Xxxxxx X. Xxxxx shall cause or permit
the Company to amend the Company's Articles of Incorporation or By-laws, as
amended and/or restated as of the date hereof.
(d) No Acquisitions. Neither Seller nor, to the extent
within Xxxxxx X. Xxxxx'x control, Xxxxxx X. Xxxxx shall cause or permit the
Company to acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof.
(e) No Dispositions. Neither Seller nor, to the extent
within Xxxxxx X. Xxxxx'x control, Xxxxxx X. Xxxxx shall cause or permit the
Company to sell, lease, license, transfer, mortgage, encumber or otherwise
dispose of any of Company's material assets or cancel, release, or assign any
material indebtedness or claim, except in the Ordinary Course of Business.
(f) Indebtedness. Neither Seller nor, to the extent
within Xxxxxx X. Xxxxx'x control, Xxxxxx X. Xxxxx shall cause or permit the
Company to incur any material indebtedness for borrowed money by way of direct
loan, sale of debt securities, purchase money obligation, conditional sale,
guarantee, or otherwise, except in the Ordinary Course of Business.
(g) Claims. Neither Seller nor, to the extent within
Xxxxxx X. Xxxxx'x control, Xxxxxx X. Xxxxx shall cause or permit the Company to
settle any material claim, action or proceeding, except in the Ordinary Course
of Business.
7.7 Access to Properties and Records. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Closing, Seller shall, upon reasonable notice (and except
as may otherwise be required by applicable Law), cause the Company to (i) afford
Buyer and its employees, counsel, accountants and other authorized
representatives ("REPRESENTATIVES") reasonable access, during normal business
hours (but in such a manner as not unduly to disrupt the business of the
Company), to the personnel, premises, properties, contracts, books and records
of the Company; provided, however, that no investigation pursuant to this
Section 7.7 shall affect or be deemed to modify any representation or warranty
made by Seller and, provided further, that the foregoing shall not require
Seller or the Company to permit any inspection, or to disclose any information,
that in the reasonable judgment of Seller would result in the disclosure of any
trade secrets of third parties or violate any of the Company's obligations with
respect to confidentiality if the Seller shall have caused the Company to use
reasonable efforts to obtain the consent of such third party to such inspection
or disclosure. Upon the written request of the President and Chief Executive
Officer of Seller, all requests for access or information made pursuant to this
Section shall be directed to the
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President and Chief Executive Officer of Seller or such other Person as he may
designate. All such information shall be governed by the terms of the
Confidentiality Agreement dated April 14, 2000, among Seller, Company, Buyer and
Xxxxxx X. Xxxxx, which Confidentiality Agreement shall survive the termination
of this Agreement. With Seller's prior written consent, which shall not be
unreasonably withheld, Buyer shall be entitled to make appropriate inquiries of
third parties in the course of its investigation.
7.8 Employee Benefit Plans.
(a) Except as set forth in subsection (b) below, the
Company shall be responsible for and shall discharge any and all liabilities or
obligations arising under any Employee Benefit Plan maintained by the Company
for Former Employees or present Employees of Company in accordance with the
terms of such Employee Benefit Plan.
(b) The Company shall promptly contribute to the Savings
Plan Employee elective deferral contributions and the corresponding matching
contribution with respect to compensation that is attributable to services
rendered through the day immediately prior to the Closing Date. Such
contributions shall be made as soon as practicable following the relevant
payroll date, but in no event later than the fifteenth day of the month
immediately following the month in which occurs the relevant payroll date. To
the extent permitted under applicable law, each Employee of the Company who
participates in the Savings Plan and who continues in employment with the
Company immediately following the Closing Date shall be eligible to receive a
lump sum distribution of his or her account balance, subject to applicable
withholding rules. Employees of the Company will not be eligible to share in the
year-end discretionary contribution, if one is made, except to the extent
required by the terms of the Savings Plan or applicable law.
7.9 Insurance Matters. SCHEDULE 7.9 sets forth a list of insurance
policies currently maintained by Seller and/or BIG, which name the Company as an
additional insured. The parties acknowledge that the Company shall be removed as
an additional insured from such policies effective as of the Closing, and Seller
agrees to take, or cause to be taken, any action necessary to cause such
removal; and, following the Closing, neither the Company nor Buyer shall have
any further liability for premiums payable to the insurance companies under such
insurance policies.
7.10 Expenses. Except as otherwise provided in this Agreement,
whether or not the transactions contemplated by this Agreement are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense.
7.11 Filings; Other Actions; Notification.
(a) Buyer, Xxxxxx X. Xxxxx and Seller shall cooperate
with each other and use their respective best efforts to take or cause to be
taken all actions, and do or cause to be done all things, necessary, proper or
advisable on its or his part under this Agreement and applicable Laws to
consummate the transactions contemplated by this Agreement as soon as
practicable, including preparing and filing as soon as practicable all
documentation to effect all necessary
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notices, reports and other filings and to obtain as soon as practicable all
consents, registrations, approvals, permits and authorizations necessary or
advisable to be obtained from any third party and/or any Governmental Body in
order to consummate the transactions contemplated by this Agreement. Subject to
applicable Laws relating to the exchange of information, Buyer and Seller shall
have the right to review in advance, and to the extent practicable each will
consult the other on, all the information relating to Buyer and Seller, as the
case may be, that appear in any filing made with, or written materials submitted
to, any third party and/or any Governmental Body in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of Buyer and Seller shall act reasonably and as promptly as practicable.
(b) Buyer and Seller each shall, upon request by the
other, furnish the other with all information concerning itself, its directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with any statement, filing, notice or application
made by or on behalf of Buyer or Seller to any third party and/or any
Governmental Body in connection with the transactions contemplated by this
Agreement.
(c) Subject to any confidentiality obligations and the
preservation of any attorney-client privilege, Buyer and/or Xxxxxx X. Xxxxx and
Seller each shall keep the other apprised of the status of matters relating to
the completion of the transactions contemplated hereby, including promptly
furnishing the other with copies of notices or other communications received or
made by Buyer and/or Xxxxxx X. Xxxxx or Seller, as the case may be, in
connection therewith.
7.12 Reasonable Efforts of Seller. Seller shall use its reasonable
best efforts to effectuate the transactions contemplated hereby and to fulfill
and cause to be fulfilled the conditions to Closing under this Agreement and
shall promptly notify Buyer in writing of any event or fact that represents or
is likely to cause a breach of any of Seller's representations, warranties,
covenants or agreements contained in this Agreement.
7.13 Reasonable Efforts of Buyer and the Whites. Buyer and the
Whites shall use their reasonable best efforts to effectuate the transactions
contemplated hereby and to fulfill and cause to be fulfilled the conditions to
Closing under this Agreement and shall promptly notify Seller in writing of any
event or fact that represents or is likely to cause a breach of any of Buyer's
and/or any White's representations, warranties, covenants or agreements
contained in this Agreement.
7.14 Further Assurances; Cooperation. At and after the Closing,
each party hereto will execute and deliver such further instruments and
documents and perform such acts as may be reasonably necessary or appropriate to
cause the satisfactory completion and consummation of the transactions
contemplated by this Agreement.
7.15 Post-Closing Access; Preservation of Books and Records. Buyer
and the Company shall, following the Closing, give to Seller and its authorized
Representatives such reasonable access, during normal business hours and upon
prior notice, to books and records of Company (including without limitation all
such books of account and tax records) as Seller may reasonably request in
connection with (a) the preparation and filing of Returns and (b) the
verification of any claim of Buyer for indemnification under this Agreement, and
shall permit Seller to make extracts and copies of such books and records at the
expense of Seller. Buyer and
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the Company shall preserve all books and records of the Company for a period of
seven years after the Closing; provided, however, that Buyer shall have the
right at any time to return any of such books and records to Seller. Seller
shall afford Buyer similar rights of access to any books and records retained by
it.
7.16 Consents, Approvals and Filings. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
Laws to consummate and make effective the transactions contemplated by this
Agreement, including using all reasonable best efforts to obtain all necessary
waivers, consents and approvals, to effect all necessary registrations and
filings (including, but not limited to, filings with all applicable Governmental
Bodies) and to lift any injunction or other legal bar to the transactions
contemplated by this Agreement.
7.17 Disclosures and Announcements. Announcements concerning the
transactions provided for in this Agreement by any party to this Agreement shall
be subject to the prior review and approval of the other parties in all
essential respects, which approval shall not be unreasonably delayed or denied;
provided, however, that the approval of Buyer, the Whites or the Company shall
not be required as to any statements or other information which Seller is
required to make pursuant to any rule or regulation of the SEC, the Nasdaq Stock
Market, the National Association of Securities Dealers, Inc. ("NASD"), or
otherwise required by Law.
8. TAX MATTERS
8.1 Termination of Tax Sharing Arrangements. SCHEDULE 8.1 sets
forth a list of all Tax sharing agreements and arrangements existing as of the
date of this Agreement between the Company (or any direct or indirect subsidiary
of the Company) (collectively, the "BUYER GROUP") and Seller (or any direct or
indirect subsidiary of Seller (other than Company or any direct or indirect
subsidiary of the Company)) (collectively, the "SELLER GROUP"). The parties
hereto agree that, except as otherwise provided in this Article 8, all rights,
liabilities and obligations of the Buyer Group under any Tax sharing agreements
and arrangements in effect on the Closing Date between the Buyer Group (or any
member thereof) and the Seller Group (or any member thereof) shall terminate
immediately prior to the Closing as of the Closing Date (with the result that
the Buyer Group shall not be bound thereby or have any liability thereunder) and
such termination shall be effective at that time without the need of any further
action by the Buyer Group or the Seller Group.
8.2 Seller's Tax Returns. Company shall continue to be included
for any period ending on or before the Closing Date in the consolidated federal
income Tax Return of which Seller is the common parent and in any required state
or local consolidated, combined or unitary income or franchise Tax Returns of
which Seller or any member of the Seller Group is the common parent that include
Company for any period of Company ending prior to or on the Closing Date (all
such Tax Returns covering taxable periods of Company ending prior to or on the
Closing Date being hereinafter referred to as "PRE-CLOSING CONSOLIDATED
RETURNS"). Seller, in a manner consistent with past practices, shall timely
prepare and file or cause to be prepared and filed all Pre-Closing Consolidated
Returns ("SELLER RETURNS"). Seller shall timely pay or cause to be paid all
Taxes due and payable with respect to Seller Returns ("SELLER TAXES"). The
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Buyer Group shall reimburse the Seller Group for the Buyer Group's allocable
share (as determined pursuant to Section 8.4 hereof) of the Taxes due with
respect to any Seller Returns filed after the Closing Date in the manner and at
the times set forth in Section 8.4.
8.3 Buyer's and Company's Tax Returns. The Company shall timely
prepare and file, or cause to be prepared and filed, all Tax Returns required by
Law of the Buyer Group that are not required to be prepared and filed on a
consolidated, combined or unitary with Seller or any member of the Seller Group
("BUYER RETURNS"). Except as otherwise provided in Section 8.7 hereof, the Buyer
Group shall pay all Taxes ("Buyer Taxes") due and payable with respect to the
Buyer Returns. The Seller Group shall timely reimburse the Buyer Group in cash
for the portion of any Taxes due and payable with respect to any Ohio state or
local Buyer Returns for the 2000 taxable year and subsequent periods ending on,
before or including the Closing Date which are solely attributable to the Seller
Group's failure to treat the costs of the Company's map database additions as
current year expenses in any federal Pre-Closing Consolidated Return (which
reimbursement shall be treated as an adjustment to the purchase price). In the
event of a disagreement regarding the amount of the reimbursement, the
determination of the reimbursement amount shall be made by the Independent
Accounting Firm (as hereinafter defined) appointed in a manner similar to that
set forth in Section 8.4.
8.4 Reimbursement of Taxes. Not less than forty-five (45) days
prior to the date tentatively scheduled for Closing, Seller shall deliver to
Buyer a pro forma Return that reflects the tax items of the Buyer Group through
the most recently completed month for the taxable year of the Buyer Group that
will end on or will include the Closing Date for Buyer's review and comments.
Seller shall be required to make any changes to such pro forma Return reasonably
requested by Buyer (which requested changes shall be delivered to Seller within
fifteen (15) days after Buyer's receipt of such pro forma Return) to the extent
consistent with the past practices of Seller or the Company and any other
changes reasonably requested by Buyer. Thereafter, Seller shall deliver to Buyer
Seller's calculation of the amount of Tax attributable to the Buyer Group
pursuant to this Section 8.4 for the period covered by the pro forma Return (the
"INITIAL ESTIMATED TAX CALCULATION"). The Initial Estimated Tax Calculation
shall be computed on a separate return basis and based upon the separate tax
items of the Buyer Group as set forth on the pro forma Return as revised to
incorporate the changes reasonably requested by Buyer; provided, however, in the
case of Florida Corporate Income/Franchise Taxes, the Initial Estimated Tax
Calculation shall be computed on a separate return basis and based upon the
separate tax items of the Buyer Group, except that the Florida apportionment
factors and fraction of the entire consolidated group (and not the apportionment
factors and fraction of only the Buyer Group) shall be used. If Buyer and Seller
are able to agree in writing upon the Initial Estimated Tax Calculation within
ten (10) days following delivery thereof (the "INITIAL ESTIMATED TAX CALCULATION
PERIOD") by Seller to Buyer, then Seller and White shall cause the Company to
pay to Seller at Closing cash in the amount of the Initial Estimated Tax
Calculation (the "INITIAL ESTIMATED TAX AMOUNT"), less any amounts previously
paid by the Company to the Seller Group with respect to the Initial Tax
Calculation Period. In the event Buyer and Seller cannot agree on the Initial
Estimated Tax Calculation within the Initial Estimated Tax Calculation Period,
then the determination of the Initial Estimated Tax Calculation shall be
determined by an accounting firm of nationally recognized standing (the
"INDEPENDENT ACCOUNTING FIRM") to be mutually selected by Buyer and Seller or,
if no agreement is reached, by the accountants engaged by Seller and Buyer,
respectively. The Independent Accounting Firm shall make a calculation of the
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Initial Estimated Tax Calculation, which shall be final and binding. The
Independent Accounting Firm shall make its calculation of the Initial Estimated
Tax Calculation as promptly as possible, but in no event later than the day
immediately preceding the Closing Date. At the Closing, Seller and White shall
cause the Company to pay to Seller, the Initial Estimated Tax Amount as
determined by the Independent Accounting Firm. The fees and expenses of the
Independent Accounting Firm shall be paid one-half by Buyer and one-half by
Seller.
Within forty-five (45) days following the Closing, Seller shall deliver
to Buyer a pro forma Return that reflects the tax items of the Buyer Group
through the Closing Date. Seller shall be required to make any changes
reasonably requested by Buyer to the extent consistent with the past practices
of Seller or the Company and any other changes reasonably requested by Buyer.
Thereafter, Seller shall deliver to Buyer Seller's calculation of the Tax
payable by Company and Buyer pursuant to this Section 8.4 through and including
the Closing Date (the "REVISED ESTIMATED TAX CALCULATION"). The Revised
Estimated Tax Calculation shall be computed on a separate return basis and based
upon the separate tax items of the Buyer Group, as set forth on the pro forma
Return as revised to incorporate the changes reasonably requested by Buyer;
provided, however, in the case of Florida Corporate Income/Franchise Taxes, the
Revised Estimated Tax Calculation shall be computed on a separate return basis
and based upon the separate tax items of the Buyer Group, except that the
Florida apportionment factors and fraction of the entire consolidated group (and
not the apportionment factors and fraction of only the Buyer Group) shall be
used. If Buyer and Seller are able to agree in writing upon the Revised
Estimated Tax Calculation within fifteen (15) days following the delivery of the
Revised Estimated Tax Calculation to Buyer, then the Company shall pay, and the
Buyer shall cause the Company to pay, promptly to Seller an amount equal to (i)
the amount of the Revised Estimated Tax Calculation (the "REVISED ESTIMATED TAX
AMOUNT"), less (ii) the Initial Estimated Tax Amount. In the event Seller and
Buyer cannot agree on the Revised Estimated Tax Calculation within sixty (60)
days following the Closing, then the determination of the Revised Estimated Tax
Amount shall be determined by the Independent Accounting Firm selected as set
forth above, which shall be instructed to use every reasonable effort to make
such determination within fifteen (15) days of submission thereto and, in any
event, as soon as practicable after such submission. The determination of the
Revised Estimated Tax Amount by the Independent Accounting Firm shall be final
and binding. Promptly following such determination, the Company shall pay to
Seller, and Buyer shall cause the Company to pay to Seller, an amount equal to
the Revised Estimated Tax Amount, less the Initial Estimated Tax Amount. The
fees and expenses for the services of the Independent Accounting Firm shall be
paid one-half by the Seller and one-half by the Company and/or Buyer. If the
Initial Estimated Tax Amount exceeds the Revised Estimated Tax Amount, the
Seller shall promptly pay an amount in cash to Buyer equal to such excess.
At least 30 days prior to the filing of any Pre-Closing Consolidated
Return required to be filed more than 75 days following the Closing Date (or as
soon as practicable in the case of a Pre-Closing Consolidated Return required to
be filed within 75 days of the Closing Date), Seller shall deliver a copy of a
pro forma Return that reflects the separate tax items of the Buyer Group for the
period covered by such Pre-Closing Consolidated Return to Buyer, for Buyer's
review and comment. Seller shall be required to make any changes reasonably
requested by Buyer (which requested changes shall be delivered to Seller within
fifteen (15) days after Buyer's receipt of the pro forma Return) to the extent
consistent with the past practices of Seller or the
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Company and any other changes reasonably requested by Buyer. Within thirty (30)
days after the finalization of the pro forma Return (i.e., after all changes
requested by Buyer have been made as provided in the previous sentence), Buyer
or the Company shall pay to Seller an amount equal to the excess of (i) the Tax
(the "Final Tax Amount"), if any, that the Company would be required to pay for
the period covered by the pro forma Return computed as if the Buyer Group had
filed a separate Return for such period based on the pro forma Return, but
excluding any deferred income triggered into income pursuant to Treasury
Regulations Sections 1.1502-13 or 1.1502-14 (or any comparable state provision)
or any excess loss accounts taken into income under Treasury Regulations Section
1.1502-19 (or any comparable state provision) over (ii) the Revised Estimated
Tax Amount; provided, further, in the case of Florida Corporate Income/Franchise
Taxes, the Final Tax Amount shall be computed on a separate return basis and
based upon the separate tax items of the Buyer Group, except that the Florida
apportionment factors and fraction of the entire consolidated group (and not the
apportionment factors and fraction of only the Buyer Group) shall be used. If
the Final Tax Amount is less that the Revised Estimated Tax Amount, then Seller
shall pay Buyer, in cash, an amount equal to the excess of the Revised Estimated
Tax Amount over the Final Tax Amount within thirty (30) days of the finalization
of the pro forma Return.
Any payments due from the Buyer and Company pursuant to this Section
8.4 may, at Buyer's option, be alternatively paid in a manner which ensures that
the payments will be deposited with the United States Treasury (or State or
Local Revenue Department) as actual or estimated tax payments towards the tax
due on any Pre-Closing Consolidated Return.
For purposes of this Section 8.4, (i) the income of the Buyer Group
will be apportioned to the period up to and including the Closing Date by
closing the books of the Buyer Group as of the end of the Closing Date, (ii) if
the Buyer Group or the Seller Group is permitted under any applicable state or
local income tax law to treat the Closing Date as the last day of a taxable
period, Buyer and Seller shall treat (and cause their respective affiliates to
treat) the Closing Date as the last day of a taxable period, and (iii)
notwithstanding anything else herein, the pro forma Returns that reflect the
separate tax items of the Buyer Group delivered under this Section 8.4 shall be
prepared in a manner which treats the costs of the Company's map database
additions as current year expenses in accordance with the method reflected in
the monthly tax accruals supplied by Seller to the Company prior to August 8,
2001 and used in the Company's interim financial statements prior to August 8,
2001 and such treatment shall be considered consistent with the past practices
of the Seller and the Company.
8.5 Indemnification.
(a) After the Closing Date, the Seller Group shall,
jointly and severally, indemnify and hold harmless Buyer and the Company from
and against, and neither Buyer nor Company shall have any liability with respect
to, any Tax liability with respect to (i) any Seller Taxes, except to the extent
that the Buyer Group has failed to reimburse the Seller Group for its allocable
share (as determined pursuant to Section 8.4 hereof) of the Taxes due with
respect to any Seller Returns filed after the Closing Date, (ii) any Taxes
attributable to an election made pursuant to Section 8.7 of this Agreement,
(iii) any liability of the Company for Taxes of any person or entity other than
the Buyer Group under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign laws); and (iv) any liability of the
Company for
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Taxes to any direct or indirect parent of the Seller under any tax sharing
agreement. Notwithstanding the foregoing, no indemnification is provided by the
Seller Group under this Section 8.5(a) for any Taxes due in respect of the Buyer
Group or its operations or activities for any period, or portion thereof, ending
on or before July 31, 1998.
(b) After the Closing Date, Buyer and the Company shall,
jointly and severally, indemnify and hold harmless the Seller Group from and
against (i) any Buyer's Taxes (other than any Buyer's Taxes attributable to any
election made pursuant to Section 8.7 of this Agreement) and (ii) any Taxes
payable by the Seller Group with respect to the Buyer Group as a result, in
whole or in part, of any inaccurate or incorrect information provided to Seller
by Xxxxxx X. Xxxxx or by any other employee of the Company (other than an
employee of the Company who is also an employee of Seller), but only to the
extent attributable to such inaccurate or incomplete information.
8.6 Notification of Proceedings; Control; Refunds.
(a) If the Buyer or Company receives notice, whether
orally or in writing, of any pending or threatened federal, state, local,
municipal or foreign examinations, claims settlements, proposed adjustments,
assessments or reassessments or related matters with respect to Taxes that could
affect Seller or any Affiliate, or if Seller or any Affiliate receives notice of
such matters that could affect Buyer or Company, the party receiving notice
shall promptly notify in writing the potentially affected party. The failure of
any party to give the notice required by this paragraph shall not impair that
party's rights under this Agreement except to the extent that the other parties
demonstrate that they have been damaged thereby.
(b) Notwithstanding anything to the contrary in Section
9.6 of this Agreement, Seller or Buyer, as applicable (the "CONTROLLING PARTY"),
shall have the right, at its own expense, to control any audit or examination by
any taxing authority and/or contest, resolve and defend against any assessment,
notice of deficiency or other adjustment or proposed adjustment relating to or
with respect to any Taxes for which the Controlling Party is required to
indemnify any other party pursuant to Section 8.5; provided that, in the event
that any such adjustment could have an adverse effect on the Tax liability of
the other party (or affect Buyer by having an effect on the Tax liability of
Company) (the "AFFECTED PARTY"), the Controlling Party shall (i) give the
Affected Party written notice of any such adjustment, (ii) permit the Affected
Party to participate in the proceeding to the extent the adjustment may affect
the Tax liability of the Affected Party and (iii) not settle or otherwise
compromise such proceeding without the prior written consent of the Affected
Party, which consent shall not be unreasonably withheld or delayed. Any Tax
refunds or credits against Tax shall be for the benefit of the group which
directly or indirectly (by reimbursement or otherwise) paid the Tax refunded or
which resulted in the credit realized; provided, however, that any refund or
credit resulting from the deduction or amortization of the costs of map database
additions of the Company for 2000 shall be for the benefit of the Seller Group
and for periods prior to 2000 shall be shared fifty percent (50%) to the Seller
Group and fifty percent (50%) to the Buyer Group. Seller, Buyer and the Company
agree to reasonably cooperate in obtaining any refunds or credits for periods or
portions of periods ending prior to the Closing Date and to pay such refunds or
the Tax benefit of the credit to the party that is entitled to the benefit of
such credit or refund; provided, however, that it shall be wholly within
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the discretion of the Seller Group whether to file any amended returns or claims
for refund for any period.
8.7 Section 338(h)(10) Election. At Buyer's option, Seller will
join with Buyer in making an election under Section 338(h)(10) of the Code and
comparable provisions of the laws of any other state or local jurisdiction with
respect to the purchase and sale of the Purchased Shares hereunder (a "SECTION
338(H)(10) ELECTION")). Seller will pay any Tax attributable to the making of a
Section 338(h)(10) Election or any similar election under state or local law.
8.8 Allocation. For purposes of any allocation required by any
election pursuant to Section 8.7, it is agreed that the assets of Company have
the respective fair market values to be determined in good faith by Buyer for
financial accounting purposes. The parties hereto shall file returns for Taxes
and information reports based on such fair market values.
8.9 Allocation of Tax Attributes. Subsequent to the filing of
Seller's consolidated federal income tax return for the taxable period which
includes the Closing Date, if no Section 338(h)(10) Election is made, Seller
shall determine, under Seller's policy, consistently applied, and pursuant to
Treasury Regulations Section 1.1502-79, the portion of any net operating loss or
business and other credit carryovers ("TAX ATTRIBUTES"), not availed of in
Seller's consolidated federal income tax returns, that are available to the
Company when it ceases to be a member of the affiliated group of which Seller is
the common parent. Seller will not elect to retain any Tax Attributes of the
Company pursuant to Treasury Regulations Section 1.1502-20(g).
8.10 Cooperation on Tax Matters. Buyer, Company and Seller shall,
at their own cost and expense, cooperate fully, as and to the extent reasonably
requested by the other parties, in connection with the filing of Tax Returns
pursuant to this Section and any audit, litigation or other proceeding with
respect to Taxes. Buyer, Company, Seller and their respective Affiliates shall
preserve all information, returns, books, record and documents relating to any
liabilities for Taxes with respect to a taxable period until the later of the
expiration of all applicable statutes of limitation and extensions thereof, or
the conclusion of all litigation with respect to Taxes for such period.
8.11 Tax Effect of Payments. Any indemnification payments made
pursuant to this Article 8 shall be treated for tax purposes as an adjustment to
the Purchase Price unless otherwise required by applicable law.
9. SURVIVAL AND INDEMNIFICATION
9.1 Nature and Survival of Representations; Right to
Indemnification Not Affected by Knowledge. The representations and warranties
set forth in Articles 2, 3 and 4 shall survive the Closing hereunder for a
period of eighteen (18) months from the Closing Date, except that the
representations and warranties of Seller set forth in Section 2.7 shall survive
Closing hereunder for a period equal to the applicable statute of limitations
period during which a Governmental Body or other third party may assert a claim
with respect to the subject matter of such section. Neither Buyer's nor Seller's
right to indemnification hereunder based on breaches of another party's
representations, warranties, covenants, and obligations will be adversely
affected by any investigation conducted or any knowledge acquired (or capable of
being acquired) at any time,
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whether before or after the execution and delivery of this Agreement or the
Closing; provided, however, that to the extent Xxxxxx X. Xxxxx (a) has Knowledge
on or before the date hereof of facts constituting a breach of one or more of
Seller's representations and warranties hereunder, or (b) caused or causes,
directly or indirectly, any breach of any representations, warranties, covenants
or other obligations of Seller hereunder, no Buyer Indemnified Party shall be
entitled to indemnification arising out of the breach by Seller of such
representations, warranties, covenants or other obligations. The waiver of any
condition based on the accuracy of any representation and warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification hereunder based on such representations,
warranties, covenants, and obligations.
9.2 Indemnification by Seller. Subject to the terms and conditions
of this Article 9, Seller shall indemnify, defend and hold harmless Buyer, its
directors, officers, employees and controlled and controlling persons, and,
after the Closing, the Company (collectively, "BUYER INDEMNIFIED PARTIES") from
and against any loss, liability, claim, obligation, fine, penalty, damage,
deficiency, and any actions, judgments, costs and expenses (including reasonable
expenses, including attorneys' fees, incurred in investigating, preparing for or
defending any litigation, settlement or other proceeding) incident to any of the
foregoing (collectively, "DAMAGES") arising out of or resulting from:
(a) the inaccuracy or breach of any representation or
warranty of Seller contained in this Agreement or the nonfulfillment or breach
of any covenant or agreement on the part of Seller contained in this Agreement
or in any certificate furnished pursuant hereto; or
(b) any claim by any Person for brokerage or finder's
fees or commissions or similar payments based upon any agreement or
understanding alleged to have been made by such Person with Seller (or any
Person (other than Company or any officer or director thereof in such capacity)
acting on its behalf) in connection with any of the transactions contemplated
hereby.
9.3 Indemnification by Buyer. Subject to the terms and conditions
of this Article 9, Buyer shall indemnify, defend and hold harmless Seller and
its directors, officers, employees and controlled and controlling persons
(collectively, "SELLER INDEMNIFIED PARTIES") from and against any Damages
arising out of or resulting from:
(a) the inaccuracy or breach of any representation or
warranty of Buyer and/or any of the Whites contained in this Agreement or the
nonfulfillment or breach of any covenant or agreement on the part of Buyer
and/or any of the Whites contained in this Agreement or in any certificate
furnished pursuant hereto; or
(b) any claim by any Person for brokerage or finder's
fees or commissions or similar payments based upon any agreement or
understanding alleged to have been made by such Person with Buyer or any White
(or any Person acting on Buyer's or any White's behalf) in connection with any
of the transactions contemplated hereby.
9.4 Limitations on Indemnification.
(a) Limitations on Buyer's Indemnification Obligations.
The Seller Indemnified Parties shall only be entitled to indemnification from
Buyer with respect to any
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Damages incurred by Seller Indemnified Parties if the aggregate Damages of all
Seller Indemnified Parties (with respect to all claims brought for
indemnification hereunder) exceeds $100,000 (the "THRESHOLD AMOUNT"); thereafter
Buyer shall indemnify Seller Indemnified Parties for all Damages (including
those used in calculating the Threshold Amount) incurred by Seller Indemnified
Parties up to, but not exceeding, the aggregate sum of Two Million Dollars
($2,000,000), plus any amounts payable by Buyer pursuant to Section 8.5(b). If
Buyer receives written notice from a Seller Indemnified Party of a Claim prior
to the expiration of the survival period, Buyer's obligation to indemnify Seller
Indemnified Parties with respect to such claim shall survive such expiration and
be enforceable as otherwise provided in this Article 9. Any such written notice,
to be effective, must specify with reasonable detail the nature and, to the
extent determinable at the time of notice, the amount of the indemnity claim.
(b) Limitations on Seller's Indemnification Obligations.
The Buyer Indemnified Parties shall only be entitled to indemnification from
Seller with respect to any Damages incurred by Buyer Indemnified Parties if the
aggregate Damages of all Buyer Indemnified Parties (with respect to all claims
brought for indemnification hereunder) exceeds the Threshold Amount; thereafter,
Seller shall indemnify Buyer Indemnified Parties for all Damages (including
those used in calculating the Threshold Amount) incurred by Buyer Indemnified
Parties up to, but not exceeding, the aggregate sum of Two Million Dollars
($2,000,000), plus any amounts payable by Seller under Section 8.5(a). If Seller
receives written notice from a Buyer Indemnified Party of a Claim prior to the
expiration of the survival period, Seller's obligation to indemnify Buyer
Indemnified Parties with respect to such claim shall survive such expiration and
be enforceable as otherwise provided in this Article 9. Any such written notice,
to be effective, must specify with reasonable detail the nature and, to the
extent determinable at the time of notice, the amount of the indemnity claim.
9.5 Exclusive Remedy. Following the Closing, the indemnification
provided for in this Article 9 shall be the sole and exclusive remedy of the
parties and their respective officers, directors, employees, controlled and
controlling persons, successors and assigns for any breach of or inaccuracy in
any representation or warranty or any breach, nonfulfillment or default in the
performance of any of the covenants or agreements contained in this Agreement
(but not any such covenants or agreements to the extent they are by their terms
to be performed after the Closing Date). The parties shall not be entitled to a
rescission of this Agreement or to any further indemnification rights or claims
of any nature whatsoever in respect thereof (whether by contract, common law,
statute, law, regulation or otherwise, including, without limitation, under the
Racketeer Influence and Corrupt Organizations Act of 1970, as amended), all of
which the parties hereby waive; PROVIDED, HOWEVER, nothing herein is intended to
waive any claims for fraud. Notwithstanding anything to the contrary contained
herein, none of the Whites shall have any liability to, or obligation to
indemnify, any Seller Indemnified Party under this Agreement other than as
provided in Section 10.3(b); provided, however, nothing herein is intended to
waive any claims against any of the Whites for fraud, pursuant to any other
agreement or for actions taken by Xxxxxx X. Xxxxx in his capacity as an
executive officer or director of the Company.
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9.6 Procedure for Indemnification -- Third Party Claims.
(a) Promptly after receipt by an Indemnified Party under
Section 9.2 or 9.3 of a notice of the commencement of any Proceeding against it,
such Indemnified Party will, if a claim for Damages ("CLAIM") is to be made
against any Indemnifying Party under such section, give notice to the
Indemnifying Party of the commencement of such Proceeding, but the failure to
notify the Indemnifying Party will not relieve the Indemnifying Party of any
liability that it may have to any Indemnified Party, except to the extent that
the Indemnifying Party is prejudiced by the Indemnifying Party's failure to give
such notice.
(b) If any proceeding referred to in Section 9.6(a) is
brought against an Indemnified Party and it gives notice to the Indemnifying
Party of the commencement of such Proceeding, the Indemnifying Party will be
entitled to participate in such Proceeding and, to the extent that it wishes
(unless (i) the Indemnifying Party is also a party to such Proceeding and the
Indemnified Party reasonably determines in good faith that joint representation
would be inappropriate, or (ii) the Indemnifying Party fails to provide
reasonable assurance to the Indemnified Party of its financial capacity to
defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel reasonably
satisfactory to the Indemnified Party and, after notice from the Indemnifying
Party to the Indemnified Party of its election to assume the defense of such
Proceeding, the Indemnifying Party will not, as long as it diligently conducts
such defense, be liable to the Indemnified Party under this Section 9.6 for any
fees of other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the Indemnified Party in
connection with the defense of such Proceeding. If the Indemnifying Party
assumes the defense of a Proceeding: (i) no compromise or settlement of such
Claims shall be effected by the Indemnifying Party without the Indemnified
Party's consent, which consent shall not be unreasonably withheld; and (ii) the
Indemnified Party will have no liability with respect to any compromise or
settlement of such Claims effected without its consent. If notice is given to an
Indemnifying Party of the commencement of any Proceeding and the Indemnifying
Party does not, within fifteen (15) days after the Indemnified Party's notice is
given, give notice to the Indemnified Party of its election to assume the
defense of such Proceeding, the Indemnifying Party will be bound by any
determination made in such Proceeding or any compromise or settlement effected
by the Indemnified Party. So long as the Indemnifying Party is defending any
such Proceeding actively and in good faith, the Indemnified Party shall not
settle or compromise any Claims made therein. The Indemnified Party shall make
available to the Indemnifying Party and its Representatives all records and
other materials required by them and in the possession or under the control of
the Indemnified Party, for the use of the Indemnifying Party and its
Representatives in defending any such Proceeding, and shall in all other
respects give reasonable cooperation in such defense.
(c) Notwithstanding the foregoing, if an Indemnified
Party determines in good faith that there is a reasonable probability that a
Proceeding may materially and adversely affect it other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Party may, by notice to the Indemnifying Party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the Indemnifying Party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
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9.7 Procedure for Indemnification -- Other Claims. A Claim for
indemnification for any matter not involving a third-party Claim may be asserted
by written notice to the party from whom indemnification is sought.
10. TERMINATION OF AGREEMENT
10.1 Termination. This Agreement and the transactions contemplated
hereunder may be terminated and abandoned at any time prior to the Closing
(unless otherwise specified below), whether before or after any required
approval of Seller's shareholders has been obtained:
(a) by mutual consent in writing of Buyer and Seller;
(b) by either Buyer or Seller through the action of its
Board of Directors if any Governmental Body shall have issued an order, decree
or ruling, or taken any other action (which order, decree, ruling or other
action the parties hereto shall use their respective best efforts to lift,
remove, repeal or overturn), in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling or other action shall have become final and
non-appealable;
(c) by either Buyer or Seller through the action of its
Board of Directors if, at a duly held shareholders' meeting of Seller (or any
adjournment thereof) at which the approval of this Agreement and the
transactions contemplated hereby is voted upon, the requisite shareholder
adoption and approval shall not have been obtained;
(d) by Seller through the action of its Board of
Directors:
(i) upon five (5) days' prior notice to Buyer if
Seller's Board of Directors, after consulting with outside
counsel, determines in good faith that a failure to terminate
this Agreement could reasonably be expected to result in a
breach of its fiduciary duties to shareholders imposed by law
by reason of an unsolicited Acquisition Proposal in connection
with which the Seller has complied in all material respects
with the provisions of Section 7.3 of this Agreement; provided
that prior to the expiration of the five-day notice period for
termination, the Seller shall, and shall have caused its
respective financial and legal advisors to, use reasonable
efforts to negotiate with Buyer and White to make such
adjustments to the terms and conditions of this Agreement as
would enable Seller to proceed with the transactions
contemplated herein on such adjusted terms;
(ii) if, prior to the consummation of the
transactions contemplated by this Agreement, Buyer breaches or
fails in any material respect to perform or comply with any of
its material covenants and agreements contained herein, or any
representation or warranty of Buyer set forth in this
Agreement shall not be true and correct in all material
respects; provided, however, that if any such breach or
inaccuracy is cured prior to termination, Seller may not
terminate this Agreement pursuant to this Section 10.1(d)(ii);
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(iii) if, prior to the consummation of the
transactions contemplated by this Agreement, any of the Whites
breaches or fails in any material respect to perform or comply
with any of his or its material covenants and agreements
contained herein, or any representation or warranty of any of
the Whites set forth in this Agreement shall not be true and
correct in all material respects; provided, however, that if
any such breach or inaccuracy is cured prior to termination,
Seller may not terminate this Agreement pursuant to this
Section 10.1(d)(iii); or
(iv) if any of the conditions contained in
Article 6 have not been fulfilled in all respects in each case
at or prior to the Closing Date, provided that neither Seller
nor the Company is then in breach in any material respect of
any of its representations or warranties or material covenants
or agreements under this Agreement.
(e) by Buyer through the action of its Board of
Directors;
(i) if, prior to the consummation of the
transactions contemplated by this Agreement, the Board of
Directors of Seller (A) withdraws or adversely modifies its
adoption of this Agreement or its recommendation that the
shareholders of Seller approve this Agreement, (B) shall have
adopted and approved an agreement relating to an Acquisition
Proposal other than pursuant to this Agreement, or (C) shall
have submitted an Acquisition Proposal other than pursuant to
this Agreement to a vote of the shareholders of Seller and
either recommended that the shareholders of Seller approve
such Acquisition Proposal or taken no position with respect
thereto;
(ii) if, prior to the consummation of the
transactions contemplated by this Agreement, Seller breaches
or fails in any material respect to perform or comply with any
of its material covenants and agreements contained herein, or
any representation or warranty of Seller set forth in this
Agreement shall not be true and correct in any material
respect; provided that Xxxxxx X. Xxxxx did not (a) have
Knowledge on or before the date hereof of facts constituting a
breach of any such representation or warranty or (b) cause,
directly or indirectly, such breach of any representation,
warranty, covenant or agreement of Seller; and provided,
further, that if any such breach or inaccuracy is cured prior
to termination, Buyer may not terminate this Agreement
pursuant to this Section 10.1(e)(ii); or
(iii) if any of the conditions contained in
Article 5 have not been fulfilled in all respects in each case
at or prior to the Closing Date, provided that neither Buyer
nor any of the Whites is then in breach in any material
respect of any of its, his or their representations or
warranties or material covenants or agreements under this
Agreement.
10.2 Effects of Termination. In the event of the termination of
this Agreement as provided in Section 10.1, written notice thereof shall
forthwith be given to the other parties specifying the provision hereof pursuant
to which such termination is made, and this Agreement
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shall forthwith become null and void and of no effect (except as otherwise
expressly provided herein), and there shall be no liability on the part of any
party hereto (or any of their respective directors, officers, employees, agents,
legal and financial advisers or other Representatives) except (a) for fraud, and
(b) as set forth in Section 10.3 hereof.
10.3 Termination Fees and Effects.
(a) If Seller shall terminate this Agreement pursuant to
Section 10.1(d)(i), or if Buyer shall terminate this Agreement pursuant to
Section 10.1(e)(i) hereof, and neither Buyer nor any of the Whites is in breach
in any material respect of its representations, warranties or material covenants
hereunder, then Seller shall pay promptly to Buyer (but in no event later than
three (3) business days after the date of termination of this Agreement) a
termination fee (as liquidated damages) of Five Hundred Thousand Dollars
($500,000) by wire transfer of same day funds to an account previously
designated in writing by Buyer to Seller.
(b) If (i) Seller shall terminate this Agreement pursuant
to Section 10.1(d)(ii), Section 10.1(d)(iii), or Section 10.1(d)(iv) (other than
as a result of a failure to satisfy the condition set forth in Section 6.2 or
Section 6.5 hereof), (ii) Buyer or any White terminates this Agreement other
than pursuant to Sections 10.1(a), 10.1(b), 10.1(c) or 10.1(e) above or
otherwise in violation of this Agreement fails or refuses to close the
transactions contemplated by this Agreement as provided in Section 1.3 hereof,
or (iii) Xxxxxx X. Xxxxx has failed to use his reasonable best efforts to
consummate the transactions contemplated hereby and as a result of such failure
either the transactions contemplated by this Agreement shall not have been
consummated at such time or this Agreement otherwise shall have been terminated,
and in any such case Seller is not in breach in any material respect of its
representations, warranties or material covenants hereunder, then, in addition
to any remedies the Seller may be entitled to at law or in equity against Buyer,
the following shall occur: (A) the Whites, jointly and severally, shall pay
promptly to Seller (but in no event later than three (3) business days after the
date of termination of this Agreement) a termination fee (as liquidated damages)
of Four Hundred Thousand Dollars ($400,000) by wire transfer of same day funds
to an account previously designated in writing by Seller to Xxxxxx X. Xxxxx, and
(B) the Corporate Governance Agreement, dated July 31, 1998, by and among the
Company, Xxxxxx X. Xxxxx and Seller (the "CORPORATE GOVERNANCE AGREEMENT") shall
be automatically terminated and of no further force and effect, and Xxxxxx X.
Xxxxx shall execute and deliver to Seller and Company any releases reasonably
requested by Seller relating thereto.
(c) If (i) either Buyer or Seller terminates this
Agreement pursuant to Section 10.1(c), or (ii) Seller terminates this Agreement
other than pursuant to Sections 10.1(a), 10.1(b) or 10.1(d) above or otherwise
in violation of this Agreement fails or refuses to close the transactions
contemplated by this Agreement as provided in Section 1.3 hereof, or (iii) Buyer
terminates this Agreement pursuant to Section 10.1(e)(ii) or Section
10.1(e)(iii) (other than as a result of the failure to satisfy the condition set
forth in Section 5.5 hereof), and in any such event neither Buyer nor any of the
Whites is in breach in any material respect of its representations, warranties
or material covenants hereunder, then Seller shall pay promptly to Buyer (but in
no event later than three (3) business days after the date of termination of
this Agreement) a termination fee (as liquidated damages) of Four Hundred
Thousand Dollars ($400,000) by wire transfer of same day funds to an account
previously designated in writing by Buyer to Seller.
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(d) The parties acknowledge that the agreements contained
in this Section 10.3 are an integral part of the transactions contemplated in
this Agreement, and that, without these agreements, none of the parties would
enter into this Agreement; accordingly if any party fails to pay promptly any
amount due pursuant to this Section 10.3, or otherwise fails to comply with its
obligations pursuant to this Section 10.3, and, in order to obtain such payment
or compliance, any other party commences a suit which results in a judgment
against such breaching party, the breaching party shall pay to the other party
its costs and expenses (including reasonable attorneys' fees) in connection with
such suit, together with interest on the amount of the applicable fee at the
annual rate of interest equal to 15% per annum.
11. MISCELLANEOUS
11.1 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given (a) via
confirmed facsimile transmission (based upon the confirmation received by the
sending facsimile machine) to the facsimile number of the appropriate party set
forth below (with a copy of such notice forwarded by nationally recognized
overnight courier addressed as set forth below), which notice shall be deemed
effective upon the senders' receipt of such confirmation and such forwarding to
a nationally recognized overnight courier, (b) by forwarding such notice for
delivery by nationally recognized overnight courier addressed in the manner set
forth below, which notice is effective on the business day following such
forwarding, or (c) by actual delivery to the address set forth below), which
notice will be effective upon such delivery. All notices shall be addressed to
the other party at the following address (or at such other address as shall be
given in writing by any party to the other in accordance with these provisions):
(a) If to Buyer or any of the Whites, to:
Geotrac
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Fax No.: (000) 000-0000
With a required copy to:
Xxxxxxx Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP
0000 XX Xxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
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(b) If to Seller, to:
Insurance Management Solutions Group, Inc.
000 Xxxxxxx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, President and CEO
Fax No.: (000) 000-0000
With a required copy to:
Xxxxx & Lardner
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
11.2 Assignability. Neither this Agreement nor any of the rights or
obligations of the parties hereunder may be assigned, by operation of law or
otherwise, without the prior written consent of all of the parties hereto.
Notwithstanding the foregoing sentence, Seller may, without the prior consent of
any other party hereto, assign its rights and obligations hereunder pursuant to
any transaction not constituting an Acquisition Proposal as defined in Section
7.3 of this Agreement; provided, however, that if Seller is the surviving party
in any such transaction, it shall not be discharged from its obligations
hereunder.
11.3 Governing Law and Venue; Waiver of Jury Trial. THIS AGREEMENT
SHALL BE DEEMED TO BE MADE AND IN ALL RESPECTS SHALL BE INTERPRETED, GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD
TO ITS CONFLICTS OF LAWS PROVISIONS. The parties hereby irrevocably submit to
the jurisdiction of the Federal courts of the United States of America located
in the State of Florida or in the State of Ohio or, if unavailable to the
parties, the courts of the State of Florida or of the State of Ohio solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby, and hereby waive, and agree not to assert,
as a defense in any action, suit or Proceeding for the interpretation or
enforcement hereof or of any such documents, that it is not subject thereto or
that such action, suit or Proceeding may not be brought or is not maintainable
in said courts or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such action or
Proceeding shall be heard and determined in such a State of Florida, State of
Ohio or Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or Proceeding in such manner as may be permitted by law shall be
valid and sufficient service thereof.
11.4 Headings. The headings preceding the text of the sections and
subsections hereof are inserted solely for convenience of reference, and shall
not constitute a part of this Agreement,
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nor shall they affect its meaning, construction or effect. All words used in
this Agreement will be construed to be of such gender or number as the context
may require.
11.5 Amendment and Waiver. The parties may by mutual agreement
amend this Agreement in any respect, and any party, as to such party, may (a)
extend the time for the performance of any of the obligations of any other
party, and (b) waive (i) any inaccuracies in representations by any other party,
(ii) compliance by any other party with any of the agreements contained herein
and performance of any obligations by such other party, and (iii) the
fulfillment of any condition that is precedent to the performance by such party
of any of its obligations under this Agreement; provided, however, that after
the approval and adoption of this Agreement by the shareholders of Seller, no
amendment may be made which would (x) change the amount or type of consideration
to be received by Seller pursuant to Section 1.2 or (y) change any other term or
condition of the Agreement if such change would materially and adversely affect
Seller or the holders of shares of Seller Common Stock. To be effective, any
such amendment or waiver must be in writing and be signed by the party against
whom enforcement of the same is sought.
11.6 Entire Agreement; NO OTHER REPRESENTATIONS. This Agreement
(including any exhibits and schedules hereto), the Option, the Seller Disclosure
Letter and the Confidentiality Agreement, dated April 14, 2000, by and among
Seller, Buyer, Xxxxxx X. Xxxxx and the Company (the "CONFIDENTIALITY
AGREEMENT"), constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties both written and
oral, among the parties, with respect to the subject matter hereof. EACH PARTY
HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
THIS AGREEMENT, NONE OF SELLER, COMPANY, BUYER OR THE WHITES MAKES ANY OTHER
REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY HIMSELF, ITSELF OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISERS OR OTHER
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
11.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall, when taken together, constitute one instrument.
11.8 No Third-Party Beneficiary Rights. Except as provided in
Section 8.4, Article 8 or Section 10.3(c) hereof, this Agreement is not intended
to and shall not be construed to give any Person other than the parties
signatory hereto any rights (including, without limitation, any third party
beneficiary rights) or remedies with respect to or in connection with any
agreement or provision contained herein or contemplated hereby.
11.9 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the
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other provisions hereof. If any provision of this Agreement, or the application
thereof to any Person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
11.10 Definitions.
(a) "AFFILIATE" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with the first Person. For the purposes of this definition, "CONTROL,"
when used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities, by
contract or otherwise, and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
(b) "BUSINESS" means the business of the Company as
specifically described on SCHEDULE 11.10(B).
(c) "BUYER MATERIAL ADVERSE EFFECT" means a material
adverse effect on the business, properties, financial condition or results of
operations of Buyer considered as a whole; provided, however, that any such
effect resulting from any change (i) in Law or GAAP, (ii) in economic or
business conditions generally, or (iii) resulting from the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby shall not be considered when determining if a Buyer Material Adverse
Effect has occurred.
(d) "CODE" means the U.S. Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
(e) "COMPANY MATERIAL ADVERSE EFFECT" means a material
adverse effect on the business, properties, financial condition or results of
operations of Company considered as a whole; provided, however, that any such
effect resulting from any change (i) in Law or GAAP (ii) in economic or business
conditions generally, or (iii) resulting from the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby shall not
be considered when determining if a Company Material Adverse Effect has
occurred.
(f) "CONTRACT" means any oral or written lease, pledge,
mortgage, instrument, note, license, commitment, agreement or other undertaking
to which any Person is or by which any of its assets are bound.
(g) "EMPLOYEE BENEFIT PLAN" means any "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), any fringe benefit plan, any equity compensation
plan or arrangement, any plan, policy or arrangement for the provision of
executive compensation, incentive benefits, bonus or severance benefits,
collective bargaining agreements, deferred compensation agreements,
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cafeteria plan or split-dollar insurance arrangement or any other plan, policy
or arrangement for the provision of employee benefits.
(h) "EMPLOYEES" means all individuals engaged in the
conduct of the Business with whom Company maintains, on the Closing Date, a
current active employer-employee relationship, including any such individuals on
layoff, short-term disability or leave of absence, whether paid or unpaid. The
term "FORMER EMPLOYEE" means any individual as to whom an employer-employee
relationship has existed in the past with Company, but does not exist on the
Closing Date, including any such individual who remains entitled to benefits
under any benefit plan of the Company.
(i) "ENCUMBRANCE" means any charge, claim, marital or
community property interest, condition, equitable interest, lien, option,
pledge, security interest, right of first refusal, or restriction of any kind or
nature, including any restriction on use, voting, transfer, receipt of income,
or exercise of any other attribute of ownership.
(j) "GAAP" means U.S. generally accepted accounting
principles, consistently applied.
(k) "GOVERNMENTAL BODY" means any: (i) nation, state,
county, city, town, village, district or other jurisdiction of any nature; (ii)
federal, state, local, municipal, foreign, or other government; (iii)
governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or entity and any court or
other tribunal); (iv) multi-national organization or body; or (v) body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature.
(l) "IRS" means the U.S. Internal Revenue Service.
(m) "KNOWLEDGE" means, with respect to an individual,
that (i) such individual is actually aware of a particular fact or other matter
or (ii) a prudent individual could be expected to discover or otherwise become
aware of such fact or other matter in the course of conducting a reasonably
comprehensive investigation concerning the existence of such fact or other
matter. A Person (other than an individual) will be deemed to have "KNOWLEDGE"
of a particular fact or other matter if any individual who is serving as a
director or executive officer of such Person (or in any similar capacity) has
Knowledge of such fact or other matter. "BUYER'S KNOWLEDGE" or "KNOWLEDGE OF
BUYER" shall include (without limitation) the Knowledge of Xxxxxx X. Xxxxx.
Notwithstanding the foregoing, "SELLER'S KNOWLEDGE" or "KNOWLEDGE OF SELLER"
means the actual awareness of a particular fact or other matter by Xxxxx X.
Xxxxxx, the President and Chief Executive Officer of Seller.
(n) "LAW" means any federal, state, local or foreign law,
statute, ordinance, rule, order or regulation of any Governmental Body.
(o) "LIEN" means, with respect to any property or asset,
any mortgage, lien, pledge, charge, security interest, Encumbrance or other
adverse claim of any kind in respect of such property or asset.
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(p) "ORDINARY COURSE OF BUSINESS" means, with respect to
Company, an action which is: (i) consistent with the past practices of Company
and is taken in the ordinary course of the normal day-to-day operations of
Company; or (ii) similar in nature and magnitude to actions customarily taken in
the ordinary course of the normal day-to-day operations of other Persons that
are in the same or a similar line of business as Company.
(q) "PERSON" means any individual, corporation (including
any non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.
(r) "PROCEEDING" means any action, suit, arbitration,
proceeding, investigation or inquiry, whether civil, criminal or administrative.
(s) "RELATED PARTY" means Seller, or any officer,
director or other Affiliate of Seller, but specifically excluding Company, its
employees, Buyer, Xxxxxx X. Xxxxx and any Affiliates of Buyer or Xxxxxx X.
Xxxxx.
(t) "SECURITIES ACT" means the Securities Act of 1933 or
any successor law, and any regulations and rules issued pursuant to that Act or
any successor law.
(u) "SELLER MATERIAL ADVERSE EFFECT" means a material
adverse effect on the business, properties, financial condition or results of
operations of Seller considered as a whole; provided, however, that any such
effect resulting from any change (i) in Law or GAAP, (ii) in economic or
business conditions generally, or (iii) resulting from the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby shall not be considered when determining if a Seller Material Adverse
Effect has occurred.
(v) "WHITE MATERIAL ADVERSE EFFECT" means a material
adverse effect on the financial condition of the Whites considered as a whole;
provided, however, that any such effect resulting from any change (i) in Law or
GAAP, (ii) in economic or business conditions generally, or (iii) resulting from
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall not be considered when determining if a
White Material Adverse Effect has occurred.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
SELLER:
INSURANCE MANAGEMENT SOLUTIONS GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President/CEO
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BUYER:
GEOTRAC HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title:
-------------------------------------
WHITES:
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Individually
XXXXXX X. XXXXX TRUST
(under Declaration of Trust dated May 7, 1998)
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Sole Trustee
XXXXXX X. XXXXX TRUST
(under Declaration of Trust dated May 7, 1998)
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Sole Trustee
COMPANY:
GEOTRAC OF AMERICA, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title:
-------------------------------------
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Bankers Insurance Group, Inc. hereby executes this Agreement on the day
and year first above written solely with respect to the obligations set forth in
Section 7.2 hereof.
BANKERS INSURANCE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Chairman
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EXHIBIT A
FLOOD ZONE DETERMINATION SERVICE AGREEMENT
THIS AGREEMENT ("Agreement") is entered into effective __________, 200__, by and
between Geotrac of America, Inc. ("Company") and Insurance Management Solutions,
Inc. ("Client").
WHEREAS, Client desires a Federal Emergency Management Agency (FEMA) National
Flood Insurance Program (NFIP) Flood Zone Determination program to determine for
insurance purposes whether properties are or are not in a FEMA defined Special
Flood Hazard Area ("Flood Area"), and collectively, with the purposes set forth
in Section H (the "Authorized Uses"), and other NFIP information, and whereas
Company is in the business of supplying such information.
WHEREAS, Client wishes to retain Company upon the terms and conditions contained
in this Agreement;
NOW THEREFORE, for mutual consideration, the parties do hereby agree as follows:
A. FLOOD ZONE DETERMINATIONS PURCHASE REQUIREMENTS
1. Purchase Requirements. Subject to the Level of Service set forth in
this Agreement, during the term of this Agreement, Client will purchase
from Company, and Company shall sell to Client, Client's requirements
for Flood Zone Determination Information (as defined below), on the
terms and for the prices provided herein and on the attached fee
schedule.
2. Level of Service. During the term of this Agreement, the Company shall
be obligated to provide Client with a level of service equal to that
provided by the Company to Client during the last two years (the
"Required Service Level"). If at any time during the term of this
Agreement Company fails to provide the Required Service Level, Company
shall have thirty (30) days after its receipt of written notice from
Client of such failure to cure such failure. If Company does not cure
such failure within that thirty (30) day period, Client may acquire
Flood Zone Determination Information that the Company cannot provide
from another vendor of its choice. As Client's sole and exclusive
remedy for Company's failure to provide the Required Service Level,
Company shall pay Client the amount by which the "Mitigation Payment
Amount" exceeds the amount that Client would have paid the Company for
service in excess of what the Company has supplied up to the Required
Service Level. For purposes of this Agreement "Mitigation Payment
Amount" shall mean an amount equal to the lesser of (a) the fair market
value of the services obtained by Client from another vendor for
services in excess of what the Company has supplied up to the Required
Service Level, and (b) the amount actually paid by Client to such other
vendor in excess of what the Company has supplied up to the Required
Service Xxxxx.
00
B. SUBMISSION OF VALID STREET ADDRESSES; PROVISION OF SERVICES
Client will submit Valid Street Addresses (as defined below) to Company for the
purpose of making Flood Zone Determinations commencing as of the date hereof.
Company will provide to Client on each Valid Street Address the following
information (such information being referred to herein as "Flood Zone
Determination Information"):
1. Current-In-Force NFIP Community Status Information. Company will supply
Current-In-Force NFIP Community Status Information consisting of NFIP
Community Number, Program or Suspension/Sanction Date, and NFIP Program
Status (Emergency, Regular, Non-Participating, Suspended/Sanctioned).
2. Detailed FEMA Flood Zone Code. Company will supply the FEMA Flood Zone
Code of the property referred to by the Client supplied Valid Street
Address.
3. Current-In-Force NFIP Flood Map Panel. Company will identify the
Current-In-Force NFIP Flood Map Panel consisting of the full eleven
digit FEMA map number and panel date or in those cases where no FEMA
map is published, a Company derived community identifying number.
C. TRANSMISSIONS OF INFORMATION
Client will transmit requests to Company electronically one or more times a day.
It is Client's obligation to supply, at a minimum: application identification
number; property location-State, County, City/Place, full street address, and 5
digit zip code. Client shall also provide a Valid Street Address. A "Valid
Street Address" is defined as a street address found in the quarterly update of
the USPS Zip +4 data base, and does not include P.O. Box or Rural Route and box.
In those instances where Client does not supply a Valid Street Address, Company
will cancel the order, and electronically inform Client's ordering location of
the invalid address. It is Client's obligation to supply a new order to Company,
as soon as possible, with a Valid Street Address.
Company will transmit key data elements back to Client electronically. Each
party agrees to work in good faith to meet the data and turn around needs of the
other.
D. BILLING
Client will fully cooperate with Company's billing practices and Client shall
not act in any manner to circumvent Company's ability to charge for services.
Except as otherwise agreed in writing between parties, Client is solely
responsible for the billing of and collection from all its accounts, customers
or end users, and billing adjustments it grants its customers or end users.
E. TERM
This Agreement shall have an initial term of ten (10) years, commencing on the
date of this Agreement. The term shall be automatically renewed thereafter for
successive one (1) year
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periods, unless either party shall provide to the other no less than thirty (30)
days written notice of the intention to terminate this Agreement as of the end
of the said initial or extended term.
F. TERMINATION
Either party may terminate this Agreement for non-performance or upon voluntary
or involuntary bankruptcy proceedings by the other party. In the event of the
failure of performance by either party hereunder, the non-performing party shall
have a period of thirty (30) days from the date of receiving written notice from
the other party to cure any such breach. If such breach is not cured within
thirty (30) days the other party may terminate this contract with ten (10) days
written notice to the non-performing company. In addition, and notwithstanding
any other provision of this Agreement, in the event of any (A) merger,
consolidation, share exchange or similar transaction to which either Client
and/or its parent, Insurance Management Solutions Group, Inc. ("IMSG"), is a
party, (B) sale, lease or other disposition, by merger, consolidation, share
exchange or otherwise, of all or substantially all of the assets of Client
and/or IMSG or (C) other transaction in which any person (or "group" (as such
term is defined under the Securities Exchange Act of 1934) of persons) shall
acquire beneficial ownership (as such term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of a controlling (i.e., 50% or greater) equity
interest in the Client and/or IMSG, then, for a period of sixty (60) days
following the date of such merger, consolidation, share exchange, sale,
acquisition or other transaction, the Client or the acquiring person, as the
case may be, shall have the right, but not the obligation, to terminate this
Agreement by delivering written notice to the Company and such termination, if
any, shall be effective thirty (30) days following delivery of such notice of
termination to the Company; provided, however, that if such acquiring person is,
at the time such transaction is consummated, a material customer of Company,
then this Agreement shall be automatically terminated as of the thirtieth day
following consummation of such merger, consolidation, share exchange, sale,
acquisition or other similar transaction.
G. CONFIDENTIAL INFORMATION
Company acknowledges that it may gain access to certain information regarding
customers of Client. Company agrees that this information shall not be disclosed
or made available to any third person or entity, except that in the instance of
loan applications where the applicant(s) is also the owner(s) of the real
property that will secure the loan, the Company may disclose to a third party
the name of a mortgage loan applicant(s) for the sole purpose of obtaining
information necessary to determine the location of buildings located upon the
property that will secure the loan without the specific authorization of Client.
Company agrees that when information is disclosed to a third party, Company will
notify Client of this disclosure.
In like manner Client acknowledges that it may gain access to certain
information regarding business practices, technology and pricing of Company.
Client agrees that this information shall not be disclosed or made available to
any third person or entity, except as necessary for
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Client to perform its obligations under this Agreement or for auditing or
regulatory purposes without the specific authorization of Company.
H. USE OF INFORMATION
Information supplied by Company to Client is to be used by Client for the
Authorized Uses within the context of Client's NFIP flood insurance business and
not for lender compliance with NFIP (the "Authorized Purpose") and for no other
purposes.
Company is providing Client with the services and information hereunder for use
in connection with Client's business as presently conducted. Client may not,
without Company's prior written consent, sell or otherwise distribute services
or information provided by Company under this Agreement, except in a manner and
at a price consistent with Client's present distribution of services or
information provided by Company prior to the date of this Agreement. It is
expressly agreed that the Information supplied by Company hereunder may not be
resold to any customer or prospective customer of the Company.
Company's principal obligation under this Agreement is to provide accurate Flood
Zone Determination Information for the Authorized Uses. Except for the remedy
specifically set forth in Section A-2 with respect to any Company failure to
provide the Required Service Level, Company will only be liable under this
Agreement for damages caused by inaccurate Flood Zone Determination Information
provided by Company and used by Client only for the Authorized Uses.
I. SYSTEMS USED IN SERVICES
Client has been advised that the computer software used or employed by Company
in making and/or printing Geotrac NFIP Compliance Packets hereunder, and in
tracking the loan portfolio of Client for the Life of Loan service referred to
above if included within this Agreement (collectively referred to as the
"Systems") are and shall remain at all times the sole property of Company and
constitute material and confidential trade secrets of Company. This includes,
without limitation, its source codes, screens, documentation and any
improvements or modifications of the Systems. Client will strictly maintain, and
will cause its officers, directors, employees, affiliates, agents, and
representatives to, strictly maintain the confidentiality of the Systems.
J. ARBITRATION
Any controversy or claim arising out of or related to this Agreement or the
breach thereof, shall be settled by binding arbitration in accordance with the
Arbitration Rules of the American Arbitration Association then prevailing, and
judgment upon the award rendered by the arbitration arbitrators may be entered
in any court having jurisdiction thereof.
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K. INDEPENDENT CONTRACTOR
Company shall perform services under this Agreement as an independent contractor
and not as the agent of Client. Company shall not be authorized to act on behalf
of Client except as provided herein or as otherwise specifically directed by
Client.
L. ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the parties with
respect to the subject matter of this Agreement. This Agreement may only be
modified by a written document executed by both parties.
M. SEVERABILITY
If any term or provision of this Agreement is held by a court of competent
jurisdiction to be unenforceable or void, such term or provision shall be
severed from the remaining provisions and such remaining provisions shall remain
in full force and effect.
N. NOTICES
Any notice or other communication to be given under the terms of this Agreement,
shall be in writing and shall be delivered in person, or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Company: Geotrac
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
If to Client: Insurance Management Solutions, Inc.
000 Xxxxxxx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
O. WAIVER/AMENDMENTS
Waiver by one party of the performance of any covenant, condition or obligation
of another party shall not invalidate this Agreement, nor shall such waiver be
considered to be a waiver by such party of any other covenant, condition or
obligation contained in this Agreement. This Agreement may not be modified or
amended except by an agreement in writing signed by both Client and Company.
P. ATTORNEY'S FEES
If any party to this Agreement institutes an action or other proceeding to
enforce any rights arising under this Agreement, the party prevailing in any
such action or other proceeding shall
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be paid, to the extent permitted by law, all reasonable costs and attorney's
fees by the other party.
Q. TIME IS OF THE ESSENCE
Time is of the essence in performance under this Agreement.
R. GOVERNING LAW
This Agreement is made pursuant to and shall be construed and governed by the
laws of the State of Ohio.
S. HEADINGS/COUNTERPARTS
The subject headings of this Agreement are included for the purposes of
convenience only and shall not effect the construction or interpretation of any
of the provisions of this Agreement. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original but all of
which together constitutes one and the same instrument.
T. ASSIGNMENT
The Company may not assign any of its rights or obligations under this Agreement
without the prior written consent of Client. Client may assign its rights and
obligations under this Agreement to any acquiring party (other than a material
customer of the Company) in connection with any (A) merger, consolidation, share
exchange or similar transaction to which either Client and/or IMSG is a party,
(B) sale, lease or other disposition, by merger, consolidation, share exchange
or otherwise, of all or substantially all of the assets of Client and/or IMSG or
(C) other transaction in which any person (or group (as such term is defined
under the Securities Exchange Act of 1934 of persons) shall acquire beneficial
ownership (as such term is defined in Rule 13d-3 under the Securities Exchange
Acts of 1934) of a controlling (i.e., 50% or greater) equity interest in Client
and/or IMSG. Notwithstanding anything to the contrary contained herein, any
assignment of this Agreement shall not, without the Company's prior written
consent, materially increase the Company's obligations to provide Flood Zone
Determination Information above the level that it would have been required to
provide to Client and/or IMSG hereunder but for such assignment. The Company
understands and acknowledges, however, that any such assignment may result in
the Company providing a materially lesser number of flood zone determinations
than are being provided to Client prior to any such assignment. This Agreement
is binding on and will inure to the benefit of the parties and their respective
successors and permitted assigns. Any assignment of this Agreement shall not
release the assignor of its obligations hereunder, except that Client shall be
discharged from its obligations hereunder if it is not the surviving party in
any merger, consolidation or similar transaction.
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U. PRICING
AUTOMATED FLOOD ZONE DETERMINATIONS (THOSE DETERMINATIONS COMPLETED WITHOUT
MANUAL INTERVENTION FROM GEOTRAC'S AUTOMATED FLOOD ZONE DETERMINATION DATABASE)
$______ EACH
MANUAL FLOOD ZONE DETERMINATIONS (THOSE DETERMINATIONS THAT ARE NOT COMPLETED
THROUGH GEOTRAC'S AUTOMATED FLOOD
ZONE DETERMINATION DATABASE)
$______ EACH
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
COMPANY: GEOTRAC OF AMERICA, INC.
By
------------------------------------------------
Title
---------------------------------------------
Date
----------------------------------------------
CLIENT: INSURANCE MANAGEMENT SOLUTIONS, INC.
By
------------------------------------------------
Title
---------------------------------------------
Date
----------------------------------------------
Account Number(s):
---------------
Rep Code:
------------------------
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EXHIBIT B
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is executed as of
__________, 200__, by and between Insurance Management Solutions Group, Inc., a
Florida corporation ("IMSG"), and Xxxxxx X. Xxxxx ("White").
WHEREAS, White served as a director of IMSG from July 31, 1998 until
the date hereof;
WHEREAS, IMSG, Bankers Insurance Group, Inc., Geotrac Holdings, Inc.
("GHI"), White, Xxxxxx X. Xxxxx Trust (under Declaration of Trust dated May 7,
1998), Xxxxxx X. Xxxxx Trust (under Declaration of Trust dated May 7, 1998) and
Geotrac of America, Inc. have entered into that certain Stock Purchase
Agreement, dated as of September 20, 2001 (the "Purchase Agreement"), pursuant
to which GHI is acquiring all of the outstanding capital stock of Geotrac of
America, Inc. a Delaware corporation and wholly-owned subsidiary of IMSG; and
WHEREAS, the conditions to the closing of the Purchase Agreement
include that (i) White resign as a member of the Board of Directors of IMSG and
(ii) IMSG and White enter into this Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, the
parties hereto agree as follows:
1. Indemnification.
(a) Following the Closing (as defined in the Purchase
Agreement), IMSG shall, to the fullest extent permitted under
applicable law, indemnify and hold harmless White from and against all
damages, costs, losses, liabilities and expenses (including, without
limitation, reasonable attorneys' fees), judgments, fines, and amounts
paid in settlement, incurred by White in connection with any claim,
action, suit or proceeding arising out of or pertaining to matters
existing or occurring prior to the Closing by reason of the fact that
White served as a director of IMSG, including, but not limited to, any
obligations arising out of or from that certain litigation captioned
"In Re Insurance Management Solutions Group, Inc., Securities
Litigation," Case No. 8:00-CV-2013-T-26F filed in the United States
District Court, Middle District of Florida, Tampa Division by Xxxxxx
Xxxxxxx and Xxxxxx Xxxxxxx.
(b) Following the Closing, to the fullest extent
permitted under applicable law, IMSG shall advance all expenses,
including, without limitation, reasonable attorneys' fees, incurred by
White with respect to which White is entitled to indemnification as set
forth in Section 1(a) hereof. Advances for such expenses shall be made
as they are incurred by White upon written notice thereof from White to
IMSG and upon receipt by IMSG of the appropriate undertakings from
White.
55
(c) Promptly after obtaining knowledge thereof, White
will notify IMSG of the existence of any claim, demand, loss,
liability, cause of action or other matter involving liability or
potential liability to which IMSG's indemnification obligations would
or might apply. Such notice must specify in reasonable detail the
representation, warranty, covenant, commitment or obligation with
respect to which the claim is made, the facts giving rise to the claim
and the alleged basis therefor, and the amount (to the extent then
determinable) of liability for which indemnity is asserted. The failure
of White to provide such notice shall not relieve IMSG of its
obligations under this Agreement, unless IMSG is adversely affected or
prejudiced by such failure. In the event of any claim, action, suit or
proceeding by a third party (each a "Third-Party Claim") with respect
to which White wishes to claim indemnification under this Section 1,
White will give IMSG twenty (20) business days (or such shorter period
as required by the exigencies of such Third-Party Claim, but in no
event less than ten (10) business days) in which to assume the defense
thereof at its own expense, and upon the assumption of such defense
within such period, IMSG shall not be liable to White for any costs or
expenses of other counsel incurred by White in connection with such
Third-Party Claim. If IMSG, within such period, fails to elect to
assume such defense, or if IMSG fails to commence or continue such
defense, White will have the right, but not the obligation, to retain
counsel satisfactory to him to assume such defense. White will not
compromise or settle a Third-Party Claim without the written consent of
IMSG, which consent may not be unreasonably withheld. If a Third-Party
Claim is one that cannot by its nature be defended solely by IMSG,
White will make available all information and assistance that IMSG may
reasonably request, provided that any reasonable expenses incurred by
White in providing such information and assistance shall be reimbursed
by IMSG.
(d) If the indemnification provided for in this Section 1
is unavailable to White hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to subsections (a) or (b)
above, then IMSG, in lieu of indemnifying White, and White will
contribute to the amount paid or payable by White as a result of such
losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of IMSG and White in
connection with the actions which resulted in such losses, claims,
damages, liabilities or expense, as well as any other relevant
equitable considerations. The relative fault of IMSG and White will be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a
material fact, has been made by, or relates to information supplied by,
IMSG or White, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above are deemed to
include any reasonable legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this subparagraph (d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
in this paragraph. Notwithstanding the foregoing, no person
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guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act of 1933, as amended) shall be entitled to
any contribution hereunder.
2. Liability Insurance. IMSG shall maintain its existing
directors' and officers' liability insurance ("D&O Insurance"), or coverage on
materially similar terms thereof, for a period of six (6) years following the
Closing (as defined in the Purchase Agreement) so long as the annual premium
therefor is not in excess of 250% of the last annual premium paid prior to the
date hereof (the "Current Premium"); provided, however, that if such D&O
Insurance is terminated or cancelled during such six-year period: (i) in the
event such D&O Insurance is terminated or cancelled (A) by the insurer other
than due to IMSG's failure to pay timely any required premium or (B) by IMSG
because the annual premium is in excess of 250% of the Current Premium, IMSG
shall use reasonable efforts to obtain as much D&O Insurance (but not in excess
of the current amounts of D&O Insurance coverage) as can be obtained for the
remainder of such period for a premium not in excess (on an annualized basis) of
250% of the Current Premium; and (ii) in the event such D&O Insurance is
terminated or cancelled by either IMSG or the Insurer for any reason other than
as set forth in clause (i) above, and such D&O Insurance is not replaced prior
to any lapse in coverage, IMSG shall obtain as much D&O Insurance (but not in
excess of the current amounts of D&O Insurance coverage) as can be obtained for
the remainder of such period for a premium not in excess (on an annualized
basis) of 250% of the Current Premium.
3. Miscellaneous.
(a) This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Florida
without regard to its conflicts of laws provisions.
(b) This Agreement may not be assigned by White without
the prior written consent of IMSG. If IMSG or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation
or entity and shall not be the continuing or surviving entity of such
consolidation or merger or (ii) shall transfer all or substantially all
of its properties and assets to any individual, corporation or other
entity, then, and in each such case, proper provisions shall be made so
that the successors and assigns of IMSG shall assume all of the
obligations of IMSG set forth in this Agreement.
(c) This Agreement supersedes any prior agreement or
understanding, whether written or oral, between the parties with
respect to the subject matter of this Agreement. This Agreement shall
be binding upon and shall inure to the benefit of the parties and their
respective heirs, executors, legal representatives, and permitted
successors and assigns. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by
the parties or, in the case of a waiver, by the party waiving
compliance.
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(d) This Agreement may be executed simultaneously in
separate counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same agreement.
(e) Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is finally
determined by a court of competent jurisdiction to be unenforceable or
invalid under applicable law, such provision will be effective only to
the extent of its enforceability or validity, without affecting the
enforceability or validity of the remainder of this Agreement, and the
parties agree that such court shall have jurisdiction to reform this
Agreement to the maximum extent permitted by law, and the parties agree
to abide by the court"s determination. In the event that any such
provision of this Agreement cannot be reformed, such provision will be
deemed severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the day and year first written above.
INSURANCE MANAGEMENT
SOLUTIONS GROUP, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
--------------------------------------------
Xxxxxx X. Xxxxx
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EXHIBIT C
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT (this "Agreement") is executed
as of __________, 200_, by and among Insurance Management Solutions Group, Inc.,
a Florida corporation ("IMSG"); Geotrac Holdings, Inc., a Delaware corporation
("GHI"); Geotrac of America, Inc., a Florida corporation ("Geotrac"); and Xxxxxx
X. Xxxxx, an individual resident of the State of Ohio, Xxxxxx X. Xxxxx, an
individual resident of the State of Ohio, Xxxxxx X. Xxxxx Trust (under
Declaration of Trust dated May 7, 1998) and Xxxxxx X. Xxxxx Trust (under
Declaration of Trust dated May 7, 1998) (each a "White" and collectively the
"Whites").
WHEREAS, IMSG, Bankers Insurance Group, Inc., GHI, White, Xxxxxx X.
Xxxxx Trust, Xxxxxx X. Xxxxx Trust and Geotrac have entered into that certain
Stock Purchase Agreement, dated as of September 20, 2001 (the "Purchase
Agreement"), pursuant to which GHI is acquiring all of the outstanding capital
stock of Geotrac;
WHEREAS, the conditions to the closing of the Purchase Agreement
include IMSG, GHI, Geotrac and the Whites executing and delivering this
Termination and Release Agreement; and
WHEREAS, each party hereto desires to enter into this Agreement in
order to induce the other parties hereto to enter into the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, the
parties hereto agree as follows:
1. Termination of Corporate Governance Agreement. Effective as of
the date hereof, that certain Corporate Governance Agreement, dated July 31,
1998, by and among the Geotrac, Xxxxxx X. Xxxxx and IMSG (the "Corporate
Governance Agreement"), is hereby terminated and of no further force and effect,
and Xxxxxx X. Xxxxx hereby irrevocably releases and forever discharges IMSG,
Geotrac and their respective officers, directors, employees, subsidiaries,
affiliates, shareholders, controlling persons, successors and assigns from any
and all claims, demands, proceedings, causes of action, suits, judicial or
administrative orders, obligations, contracts, agreements, debts and
liabilities, whatsoever, whether known or unknown, suspected or unsuspected,
both at law and in equity (collectively, "Claims"), which Xxxxxx X. Xxxxx now
has, has ever had or may hereafter have arising out of or related to the
Corporate Governance Agreement.
2. Mutual Release.
(a) Effective immediately following the Closing (as
defined in the Purchase Agreement), IMSG hereby completely and
irrevocably releases and forever discharges Geotrac and its officers,
directors, employees, subsidiaries, affiliates, sole shareholder,
controlling persons, successors and assigns (individually a "Geotrac
Releasee" and collectively the "Geotrac Releasees") from any and all
Claims which IMSG now has,
59
has ever had or may hereafter have against any Geotrac Releasee arising
contemporaneously with or prior to the Closing and whether or not
relating to Claims pending on, or asserted after, the Closing;
provided, however, that nothing contained herein shall operate to
release: (i) any Claims against a Geotrac Releasee under the Purchase
Agreement or any documents entered into or delivered pursuant to the
Purchase Agreement; (ii) any Claims against Xxxxxx X. Xxxxx arising out
of or relating to the service of Xxxxxx X. Xxxxx as a director of IMSG
and/or a director, officer or employee of any subsidiary or affiliate
of IMSG and for which Xxxxxx X. Xxxxx is not entitled to
indemnification from IMSG under (A) the Indemnification Agreement of
even date herewith between IMSG and Xxxxxx X. Xxxxx, (B) IMSG's
articles of incorporation and bylaws, as amended and/or restated, or
(C) applicable Florida law; or (iii) any Claims against any officer,
director or employee (other than Xxxxxx X. Xxxxx) of Geotrac or any
subsidiary thereof arising out of or relating to a breach of his or her
fiduciary duties to IMSG as the sole shareholder of Geotrac.
(b) Effective immediately following the Closing, Geotrac
hereby completely and irrevocably releases and forever discharges IMSG
and its officers, directors, employees, subsidiaries, affiliates,
shareholders, controlling persons, successors and assigns (individually
an "IMSG Releasee" and collectively the "IMSG Releasees") from any and
all Claims which Geotrac now has, has ever had or may hereafter have
against any IMSG Releasee arising contemporaneously with or prior to
the Closing and whether or not relating to Claims pending on, or
asserted after, the Closing; provided, however, that nothing contained
herein shall operate to release any Claims against an IMSG Releasee
under the Purchase Agreement or any documents entered into or delivered
pursuant to the Purchase Agreement.
(c) Effective immediately following the Closing, each of
the Whites hereby completely and irrevocably releases and forever
discharges each of the IMSG Releasees from any and all Claims which
such White now has, has ever had or may hereafter have against any IMSG
Releasee arising contemporaneously with or prior to the Closing and
whether or not relating to Claims pending on, or asserted after, the
Closing; provided, however, that nothing contained herein shall operate
(i) to release any Claims against an IMSG Releasee under the Purchase
Agreement or any documents entered into or delivered pursuant to the
Purchase Agreement, or (ii) to preclude Xxxxxx X. Xxxxx from asserting
available cross-claims or counterclaims in any action brought by or on
behalf of IMSG against Xxxxxx X. Xxxxx that would be released pursuant
to this Agreement but for clause (ii) of the exception to the release
granted by IMSG in Section 2(a) above.
(d) Effective immediately following the Closing, GHI
hereby completely and irrevocably releases and forever discharges each
of the IMSG Releasees from any and all Claims which GHI now has, has
ever had or may hereafter have against any IMSG Releasee arising
contemporaneously with or prior to the Closing and whether or not
relating to Claims pending on, or asserted after, the Closing;
provided, however, that nothing contained herein shall operate to
release any Claims against an IMSG Releasee
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60
under the Purchase Agreement or any documents entered into or delivered
pursuant to the Purchase Agreement.
(e) Notwithstanding the foregoing, the provisions of this
Section 2 shall not relieve any Geotrac Releasee or IMSG Releasee from
any Claims resulting from intentional or deliberate acts of bad faith,
fraud or self-dealing.
3. Review and Advice of Counsel. IMSG, Geotrac, GHI and the
Whites acknowledge that they have each read this Agreement and know its
contents; that their respective attorneys have explained the nature and effect
of this Agreement; and that they have each signed this Agreement voluntarily,
with a full understanding of its significance, and intending to be bound by its
terms.
4. No Institution of Litigation. IMSG, Geotrac, GHI and the
Whites hereby irrevocably covenant to refrain from, directly or indirectly,
asserting against any party purported to be released hereby, or commencing,
instituting or causing to be commenced, any proceeding of any kind against any
party purported to be released hereby, any Claim purported to be released
pursuant to this Agreement.
5. Indemnification.
(a) Without in any way limiting any of the rights and
remedies otherwise available to a Geotrac Releasee, IMSG shall defend,
indemnify and hold harmless each Geotrac Releasee from and against all
Claims or expenses (including reasonable costs of investigation and
attorneys' fees) arising directly or indirectly from or in connection
with the assertion by or on behalf of IMSG of any Claim purported to be
released pursuant to this Agreement.
(b) Without in any way limiting any of the rights and
remedies otherwise available to an IMSG Releasee, Geotrac shall defend,
indemnify and hold harmless each IMSG Releasee from and against all
Claims or expenses (including reasonable costs of investigation and
attorneys' fees) arising directly or indirectly from or in connection
with the assertion by or on behalf of Geotrac of any Claim purported to
be released pursuant to this Agreement.
(c) Without in any way limiting any of the rights and
remedies otherwise available to an IMSG Releasee, the Whites, jointly
and severally, shall defend, indemnify and hold harmless each IMSG
Releasee from and against all Claims or expenses (including reasonable
costs of investigation and attorneys' fees) arising directly or
indirectly from or in connection with the assertion by or on behalf of
the Whites, or any of them, of any Claims purported to be released
pursuant to this Agreement.
(d) Without in any way limiting any of the rights and
remedies otherwise available to an IMSG Releasee, GHI shall defend,
indemnify and hold harmless each IMSG Releasee from and against all
Claims or expenses (including reasonable costs of
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61
investigation and attorneys' fees) arising directly or indirectly from
or in connection with the assertion by or on behalf of GHI of any
Claims purported to be released pursuant to this Agreement.
6. Miscellaneous.
(a) This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Florida
without regard to its conflicts of laws provisions.
(b) This Agreement may not be assigned by any party
hereto without the consent of the other parties hereto. Notwithstanding
the foregoing, in the event that IMSG or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation
or entity and shall not be the continuing or surviving entity of such
consolidation or merger, or (ii) shall transfer all or substantially
all of its properties and assets to any individual, corporation or
other entity, then, and in each such case, the successor or assign of
IMSG shall be entitled to all the rights, and shall assume all of the
obligations, of IMSG set forth in this Agreement.
(c) This Agreement supersedes any prior agreement or
understanding, whether written or oral, among the parties with respect
to the subject matter of this Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their
respective heirs, executors, legal representatives, successors and
permitted assigns. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions hereof may
be waived, only by a written instrument signed by the parties or, in
the case of a waiver, by the party waiving compliance.
(d) This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same agreement.
(e) Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is finally
determined by a court of competent jurisdiction to be unenforceable or
invalid under applicable law, such provision will be effective only to
the extent of its enforceability or validity, without affecting the
enforceability or validity of the remainder of this Agreement, and the
parties agree that such court shall have jurisdiction to reform this
Agreement to the maximum extent permitted by law, and the parties agree
to abide by the court"s determination. In the event that any such
provision of this Agreement cannot be reformed, such provision will be
deemed severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
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62
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first written above.
INSURANCE MANAGEMENT
SOLUTIONS GROUP, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
GEOTRAC HOLDINGS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
GEOTRAC OF AMERICA, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
--------------------------------------------
Xxxxxx X. Xxxxx, individually
--------------------------------------------
Xxxxxx X. Xxxxx, individually
XXXXXX X. XXXXX TRUST
By:
-----------------------------------------
Xxxxxx X. Xxxxx, Sole Trustee
XXXXXX X. XXXXX TRUST
By:
-----------------------------------------
Xxxxxx X. Xxxxx, Sole Trustee
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EXHIBIT D
AGREEMENT TO VOTE SHARES
THIS AGREEMENT TO VOTE SHARES ("Agreement") is executed as of September
___, 2001, by and among Insurance Management Solutions Group, Inc., a Florida
corporation ("IMSG"), Geotrac Holdings, Inc., a Delaware corporation ("GHI"),
and ______________, an individual resident of the State of Florida
("Shareholder").
[NOTE: SEPARATE AGREEMENT TO BE EXECUTED BY EACH OF XXXXX X. XXXXXX,
XXXXX X. XXXXXX, XXXX X. XXXXX, XX., XXXXXXX X. XXXXXX, E. XXX XXXXXXX,
XXXXXXXXX X. XXXXXXX AND XXXX X. XXXXXXXX.]
WHEREAS, IMSG, Bankers Insurance Group, Inc., GHI, Xxxxxx X. Xxxxx,
Xxxxxx X. Xxxxx Trust (under Declaration of Trust dated May 7, 1998), Xxxxxx X.
Xxxxx Trust (under Declaration of Trust dated May 7, 1998) and Geotrac of
America, Inc. have entered into that certain Stock Purchase Agreement, dated as
of September 20, 2001 (the "Purchase Agreement"), pursuant to which GHI will
acquire all of the outstanding capital stock of Geotrac of America, Inc., a
Delaware corporation and wholly-owned subsidiary of IMSG;
WHEREAS, the conditions to the closing of the Purchase Agreement
include that Shareholder deliver a written undertaking to vote the ______ shares
of Common Stock, par value $.01 per share, of IMSG owned of record and
beneficially thereby (the "Shareholder's Shares") in favor of the transactions
contemplated by the Purchase Agreement; and
WHEREAS, the Shareholder desires to enter into this Agreement in order
to induce GHI to enter into the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, the
parties hereto agree as follows:
1. Agreement To Vote Shares. Shareholder is the owner of record
and beneficially of the Shareholder's Shares. Shareholder agrees to vote, or
cause to be voted, all of said Shareholder's Shares, at any meeting of the
shareholders of IMSG and in any action by written consent of the shareholders of
IMSG, as follows: (a) in favor of the transactions contemplated by the Purchase
Agreement and (b) against any action or agreement (other than any merger,
consolidation, share exchange or similar transaction involving IMSG) that would
impede, interfere with or attempt to discourage any of the transactions
contemplated by the Purchase Agreement.
2. Review and Advice of Counsel. Shareholder acknowledges that he
has read this Agreement and knows its contents; that his attorney has explained
the nature and effect of this Agreement; and that he has signed this Agreement
voluntarily, with a full understanding of its significance, and intending to be
bound by its terms.
64
3. Miscellaneous.
(a) This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Florida
without regard to its conflicts of laws provisions.
(b) This Agreement may not be assigned by any party
hereto without the prior written consent of the other parties hereto.
(c) This Agreement supersedes any prior agreement or
understanding, whether written or oral, between the parties with
respect to the subject matter of this Agreement. This Agreement shall
be binding upon and shall inure to the benefit of the parties and their
respective heirs, executors, legal representatives, successors and
permitted assigns. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions hereof may
be waived, only by a written instrument signed by the parties or, in
the case of a waiver, by the party waiving compliance.
(d) This Agreement may be executed in separate
counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall
constitute one and the same agreement.
(e) Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is finally
determined by a court of competent jurisdiction to be unenforceable or
invalid under applicable law, such provision will be effective only to
the extent of its enforceability or validity, without affecting the
enforceability or validity of the remainder of this Agreement, and the
parties agree that such court shall have jurisdiction to reform this
Agreement to the maximum extent permitted by law, and the parties agree
to abide by the court"s determination. In the event that any such
provision of this Agreement cannot be reformed, such provision will be
deemed severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
(f) This Agreement shall terminate upon the earlier of
(1) the termination of the Purchase Agreement and (2) the Closing (as
defined in the Purchase Agreement) of the transactions contemplated by
the Purchase Agreement.
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65
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
INSURANCE MANAGEMENT
SOLUTIONS GROUP, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
GEOTRAC HOLDINGS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
SHAREHOLDER:
--------------------------------------------
, Individually
------------------
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EXHIBIT E
AGREEMENT TO VOTE SHARES
THIS AGREEMENT TO VOTE SHARES ("Agreement") is executed as of September
_____, 2001, by and among Insurance Management Solutions Group, Inc., a Florida
corporation ("IMSG"), Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx Trust (under
Declaration of Trust dated May 7, 1998) (together with Xxxxxx X. Xxxxx, the
"Whites").
[NOTE: SEPARATE AGREEMENT TO BE EXECUTED BY XXXXXX X. XXXXX AND THE
XXXXXX X. XXXXX TRUST.]
WHEREAS, IMSG, Bankers Insurance Group, Inc. ("BIG"), Geotrac Holdings,
Inc. ("GHI"), the Whites, Xxxxxx X. Xxxxx Trust (under Declaration of Trust
dated May 7, 1998) and Geotrac of America, Inc. have entered into that certain
Stock Purchase Agreement, dated as of September 20, 2001 (the "Purchase
Agreement"), pursuant to which GHI will acquire all of the outstanding capital
stock of Geotrac of America, Inc., a Delaware corporation and wholly-owned
subsidiary of IMSG;
WHEREAS, the conditions to the closing of the Purchase Agreement
include that the Whites deliver a written undertaking to vote the 262,099 White
Shares (as defined in the Purchase Agreement) owned of record and beneficially
thereby in favor of the transactions contemplated by the Purchase Agreement; and
WHEREAS, the Whites desire to enter into this Agreement in order to
induce IMSG to enter into the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, the
parties hereto agree as follows:
1. Agreement To Vote Shares. The Whites are the owners of record
and beneficially of 262,099 White Shares. The Whites, jointly and severally,
agree to vote, or cause to be voted, all of said 262,099 White Shares, at any
meeting of the shareholders of IMSG and in any action by written consent of the
shareholders of IMSG, as follows: (a) in favor of the transactions contemplated
by the Purchase Agreement; and (b) against any action or agreement (other than
any merger, consolidation, share exchange or similar transaction involving IMSG)
that would impede, interfere with or attempt to discourage any of the
transactions contemplated by the Purchase Agreement.
2. Review and Advice of Counsel. The Whites acknowledge that they
have read this Agreement and know its contents; that their attorneys have
explained the nature and effect of this Agreement; and that they have signed
this Agreement voluntarily, with a full understanding of its significance, and
intending to be bound by its terms.
67
3. Miscellaneous.
(a) This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Florida
without regard to its conflicts of laws provisions.
(b) This Agreement may not be assigned by any party
hereto without the prior written consent of the other parties hereto.
(c) This Agreement supersedes any prior agreement or
understanding, whether written or oral, between the parties with
respect to the subject matter of this Agreement. This Agreement shall
be binding upon and shall inure to the benefit of the parties and their
respective heirs, executors, legal representatives, successors and
permitted assigns. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions hereof may
be waived, only by a written instrument signed by the parties or, in
the case of a waiver, by the party waiving compliance.
(d) This Agreement may be executed in separate
counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall
constitute one and the same agreement.
(e) Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is finally
determined by a court of competent jurisdiction to be unenforceable or
invalid under applicable law, such provision will be effective only to
the extent of its enforceability or validity, without affecting the
enforceability or validity of the remainder of this Agreement, and the
parties agree that such court shall have jurisdiction to reform this
Agreement to the maximum extent permitted by law, and the parties agree
to abide by the court"s determination. In the event that any such
provision of this Agreement cannot be reformed, such provision will be
deemed severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
(f) This Agreement shall terminate upon the earlier of
(1) the termination of the Purchase Agreement and (2) the Closing (as
defined in the Purchase Agreement) of the transactions contemplated by
the Purchase Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
INSURANCE MANAGEMENT
SOLUTIONS GROUP, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
XXXXXX X. XXXXX TRUST
(under Declaration of Trust dated May 7, 1998)
By:
-----------------------------------------
Xxxxxx X. Xxxxx, Sole Trustee
--------------------------------------------
Xxxxxx X. Xxxxx, Individually
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