<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 13, 1996
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INFORMATION MANAGEMENT RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 7371 59-2911475
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
--------------
SUITE 500
26750 U.S. HIGHWAY 19 NORTH
CLEARWATER, FLORIDA 34621
(813) 797-7080
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
SATISH K. SANAN
CHIEF EXECUTIVE OFFICER
INFORMATION MANAGEMENT RESOURCES, INC.
SUITE 500
26750 U.S. HIGHWAY 19 NORTH
CLEARWATER, FLORIDA 34621
(813) 797-7080
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------
COPIES TO:
OBY T. BREWER III, ESQ. MARY ELLEN KANOFF, ESQ.
JOHN C. YATES, ESQ. LATHAM & WATKINS
LAUREN Z. BURNHAM, ESQ. 633 WEST 5TH STREET
MORRIS, MANNING & MARTIN, L.L.P. SUITE 4000
1600 ATLANTA FINANCIAL CENTER LOS ANGELES, CALIFORNIA 90071
3343 PEACHTREE ROAD, N.E. (213) 485-1234
ATLANTA, GEORGIA 30326
(404) 233-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES REGISTERED REGISTERED (1) SHARE (2) PRICE (2) FEE
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<S> <C> <C> <C> <C>
Common Stock, $.10 par
value................. 4,025,000 Shares $13.00 $52,325,000 $18,043.10
</TABLE>
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(1) Includes 525,000 shares subject to the underwriters' over-allotment
option.
(2) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 13, 1996
3,500,000 SHARES
[LOGO]
INFORMATION MANAGEMENT RESOURCES, INC.
COMMON STOCK
Of the 3,500,000 shares of Common Stock offered hereby, 2,950,000 shares are
being sold by Information Management Resources, Inc. ("IMR" or the "Company")
and 550,000 shares are being sold by the Selling Shareholders. The Company will
not receive any of the proceeds from the sale of shares by the Selling
Shareholders. See "Principal and Selling Shareholders."
Prior to this offering (the "Offering"), there has been no public market for
the Common Stock of the Company. It is currently estimated that the initial
public offering price of the Common Stock will be between $11.00 and $13.00 per
share. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. Application has been made for
quotation of the Common Stock on the Nasdaq National Market under the symbol
"IMRI."
SEE "RISK FACTORS" COMMENCING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
Proceeds to
Price to Underwriting Proceeds to Selling
Public Discount (1) Company (2) Shareholders
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<S> <C> <C> <C> <C>
Per Share...................... $ $ $ $
Total (3)...................... $ $ $ $
</TABLE>
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(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting expenses payable by the Company, estimated at $1,000,000.
(3) The Company and a Selling Shareholder have granted to the Underwriters a
30-day option to purchase up to 525,000 additional shares of Common Stock
solely to cover over-allotments, if any. If the Underwriters exercise this
option in full, the Price to Public will total $ , the Underwriting
Discount will total $ , the Proceeds to Company will total $ and the
Proceeds to Selling Shareholders will total $ . See "Underwriting."
The shares of Common Stock are offered by the several Underwriters named
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that delivery of the
certificates representing such shares will be made against payment therefor at
the office of Montgomery Securities on or about , 1996.
-----------
Montgomery Securities Alex. Brown & Sons
Incorporated
, 1996
<PAGE>
[DIAGRAM]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
CC-PAC (R), Solution 2000 (R) and Transform2000(R) are registered service
marks of the Company. TransformIMS SM, TransformVSAM SM and TransformDB2 SM
are service marks of the Company.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained in this Prospectus, including "Risk Factors" and the
Consolidated Financial Statements and Notes thereto. Except as otherwise noted,
all information in this Prospectus: (i) assumes an initial public offering
price of $12.00 per share and no exercise of the Underwriters' over-allotment
option; and (ii) gives effect to the reclassification of the Company's Common
Stock in September 1996 whereby each share of the Company's outstanding voting
common stock and non-voting common stock (each having a par value of $.10 per
share) was converted into 10.0 shares of voting Common Stock, par value $.10
per share ("Common Stock"). See "Underwriting" and "Description of Capital
Stock."
THE COMPANY
Information Management Resources, Inc. ("IMR" or the "Company") provides
applications software outsourcing solutions for the information technology
("IT") departments of large businesses with intensive information processing
needs. The Company's services, which generally are offered on a fixed-price,
fixed-time frame basis, include software development, application maintenance,
Year 2000 conversion and migration and re-engineering services. In addition,
the Company offers programming and consulting services on a time-and-materials
basis in order to optimize employee utilization and provide a potential source
of future outsourcing contracts. The Company's services, which it terms
"transitional outsourcing," assist clients in the maintenance of mainframe-
based legacy applications and in the transition from legacy systems to open
architecture, client/server and other emerging technologies. IMR delivers many
of its transitional outsourcing services using its proprietary Total Software
Quality Management ("TSQM") software engineering process and its dedicated
offshore software development facility in Bangalore, India. This facility is
linked by satellite communications to both the Company's offices and the
offices of many of its clients. This allows IMR to offer its services on a 24-
hour basis through an on-site, off-site and offshore project team working
multiple shifts made possible by the time difference between North America and
India. The Company believes that its proprietary TSQM process, software
engineering methodologies and toolsets, and its offshore software development
center enable it to provide high quality, cost-effective IT solutions through
the utilization of global resources.
Faced with intense competition, deregulation, innovation and rapid
technological advancements, companies worldwide are seeking to enhance or
completely replace their IT systems in order to achieve greater productivity
and manage their operations more efficiently. Although client/server and other
emerging technologies offer the promise of faster, more functional and more
flexible software applications, the implementation of business solutions
encompassing these new technologies presents major challenges for companies
that lack highly skilled technical personnel and project management skills. As
a result, many large companies are pursuing ways to outsource their IT
projects, particularly on a fixed-price, fixed-time frame basis in order to
minimize the risks associated with such large scale technology projects.
Dataquest, a recognized market research firm, estimated that the market for
systems integration, consulting, applications development and outsourcing
services was approximately $91.0 billion worldwide in 1994 and estimated this
market to be growing by approximately 16.5% annually through 1999. In
particular, outsourcing represents a particularly cost-effective solution for
IT projects such as the fast approaching Year 2000 problem. Resolving a Year
2000 problem, which occurs because many existing computer systems run software
programs permitting only two-digit entries for years (e.g., 1996 is read as
"96") and therefore cannot properly process dates in the next century, is a
highly time- and labor-intensive project often requiring software development
professionals to analyze millions of lines of code. As a result, the Company
believes that most large Year 2000 conversion projects will be outsourced.
Although the size of the Year 2000 problem is difficult to estimate, the
Gartner Group, a recognized industry source, has estimated that the worldwide
costs (including in-house costs) to resolve the Year 2000 problem could range
from $300 billion to $600 billion.
3
<PAGE>
The IMR solution is a systematic and disciplined approach that the Company
employs in every outsourcing engagement. There are three critical components of
the IMR solution, which management believes differentiate the Company from
other IT providers. First, the Company has a two-phased TSQM software
engineering process that encompasses an extensive front-end project assessment
and a fixed-price, fixed-time frame implementation stage. Through the rigorous
adherence to its TSQM software engineering process, the Company is able to
identify, monitor and manage the risks associated with the cost, schedule,
performance, support and delivery of projects on a fixed-price, fixed-time
frame basis. Second, the Company's offshore software development facility
provides IMR with a significant cost advantage as well as the ability to create
a virtual "second shift" for its North American clients. Third, IMR's
proprietary toolsets are used to facilitate and streamline a Year 2000
conversion project as well as the migration from mainframe computing
environments to flexible open systems and relational database management
systems computing environments. Together, these elements of the Company's
service delivery model help to optimize cost savings, accelerate project
delivery and mitigate risk to both IMR and its clients.
The Company's clients are primarily Fortune 200 or comparably sized companies
with significant IT budgets and recurring needs for software development,
application maintenance, Year 2000 conversion services and IT staffing. IMR
serves clients in a variety of industries including financial services,
insurance, manufacturing, retail and utilities. In 1995 and the first six
months of 1996, the Company provided transitional outsourcing services to such
companies as Commercial Union Insurance Companies, Dayton Hudson Corporation,
John Hancock Financial Services, Michelin Tire Corporation, NOVUS Services,
Inc. (formerly known as Discover Card Services, Inc.) SPS Payment Systems and
Southern California Edison. Through a staff of more than 500 software
development professionals, the Company serves its clients from its headquarters
in Clearwater, Florida, its offshore software development center in Bangalore,
India, its branch offices located in Boston, Chicago, Dallas and Rochester and
its affiliate office in London, England.
The Company's objective is to be a leading provider of comprehensive
transitional IT outsourcing services and solutions. In order to achieve this
objective, the Company focuses on the following key business strategies: (i)
develop long-term strategic partner relationships with clients; (ii) develop
and enhance processes, methodologies and productivity-enhancing software tools;
(iii) focus on fixed-price, fixed-time frame projects; (iv) continue to expand
its offshore software development resources; (v) concentrate on key
technologies; and (vi) attract, train and retain highly skilled employees. The
Company plans to remain focused on these core business principles while
employing a rapid growth strategy. As a result of its expertise in the Year
2000 services market, the Company recently has obtained a significant number of
new contracts for Year 2000 projects and expects to derive a significantly
higher percentage of its total revenues from Year 2000 conversion services for
the next three years. As of the date of this Prospectus, the Company is engaged
to perform Year 2000 services for more than 20 clients, substantially all of
which represent new customers for the Company. A core element of the Company's
long-term growth strategy is to use the client relationships and the knowledge
of its clients' computer systems obtained in providing Year 2000 services to
generate additional IT projects from these clients.
THE OFFERING
<TABLE>
<C> <S>
Common Stock offered by the Company................ 2,950,000 shares
Common Stock offered by the Selling Shareholders... 550,000 shares
Common Stock to be outstanding after the Offering.. 13,887,090 shares (1)
Use of proceeds.................................... For: (i) purchase of
minority interest in IMR-
India (as defined herein);
(ii) repayment of debt;
(iii) payment of
undistributed S
corporation earnings; and
(iv) general corporate
purposes and working
capital, which may include
future acquisitions.
Proposed Nasdaq National Market symbol............. IMRI
</TABLE>
- --------
(1) Includes options for the purchase of 4,500,500 shares of Common Stock which
are exercisable as of, or within 60 days of, November 1, 1996 at a weighted
average exercise price of $0.34 per share (of which options for the
purchase of 4,064,550 shares of Common Stock are held by Satish K. Sanan,
the Company's President, Chief Executive Officer and majority shareholder).
See "Certain Transactions--Options Issued to Mr. Sanan." Excludes: (i)
options for the purchase of 526,050 shares of Common Stock at a weighted
average exercise price of $2.88 per share which are outstanding as of the
date of this Prospectus but which will generally be exercisable over the
next five years; (ii) 386,860 shares of Common Stock reserved for issuance
under the Stock Option Plan (as defined herein) for which no options have
yet been granted; (iii) 150,000 shares reserved for issuance under the
Directors Stock Option Plan (as defined herein), of which options to
purchase 30,000 shares will be granted upon consummation of this Offering.
Also excludes 200,000 shares reserved for issuance under the Stock Purchase
Plan (as defined herein), which shares will be issued from time to time
after consummation of this Offering. See "Capitalization," "Management--
Director Compensation," "--Employee Benefit Plans," "Principal and Selling
Shareholders," and Note 15 to Notes to Consolidated Financial Statements.
4
<PAGE>
AFFILIATE RELATIONSHIPS
As of June 30, 1996, the Company owned approximately 34.2% of the outstanding
equity of Information Management Resources (India) Limited ("IMR-India"), India
Magnum Fund N.V. ("India Magnum"), a private investment fund, owned 35.1%,
Second India Investment Fund, B.V. ("Second India"), a private investment fund,
owned 10.5%, Satish K. Sanan, the Company's President, Chief Executive Officer
and majority shareholder, owned 18.4% and the balance was owned by several
individual shareholders. In August 1996, the Company completed the acquisition
of Second India's entire 10.5% equity interest in IMR-India in exchange for
approximately $1.8 million in cash and in connection therewith, approximately
$527,000 of indebtedness owed by IMR-India to Second India was cancelled. In
July and September 1996, the Company entered into agreements pursuant to which
the Company will acquire: (i) Mr. Sanan's entire equity interest in IMR-India
for an aggregate price of approximately $3.1 million in cash; and (ii) India
Magnum's entire equity interest in IMR-India for an aggregate price of
approximately $5.1 million in cash. These transactions will be closed upon
consummation of this Offering. Upon the closing of these transactions, the
Company will own approximately 98.2% of IMR-India's outstanding equity. The
balance of approximately 1.8% will continue to be held by individual
shareholders. The acquistions of the equity interests of IMR-India from Second
India, Mr. Sanan and India Magnum are collectively referred to herein as the
"IMR-India Acquisitions." Additionally, IMR-India has granted to certain of its
employees options to acquire additional shares which, if fully vested, would
upon exercise represent 3.5% of IMR-India's equity and would result in a
corresponding decrease in the Company's equity interest. The Company's
financial statements have been consolidated with the financial statements of
IMR-India for all periods since September 1993, the date the Company first
acquired an equity interest in IMR-India. See "Certain Transactions--IMR-India
Transactions" and Note 2 to Notes to Consolidated Financial Statements.
In 1993, the Company formed Information Management Resources (U.K.) Limited
("IMR-U.K.") for the purpose of providing IT services in the U.K. and certain
countries in western Europe. As of the date of this Prospectus, the Company
owns 39.5% of the outstanding equity of IMR-U.K., and Mr. Sanan and his spouse
together own 10.5% of such outstanding equity. The balance of IMR-U.K.'s
outstanding equity is owned by The Link Group of Companies Limited (the "Link
Group"), a U.K.-based computer services firm. Link Group is owned by Philip and
Sheila Shipperlee. Mr. Shipperlee is a director of the Company. The Company's
investment in IMR-U.K. is accounted for under the equity method. See "Certain
Transactions--IMR-U.K. Transactions."
IMR is a Florida corporation organized in 1988. Unless the context otherwise
requires, references in this Prospectus to "IMR" or the "Company" refer to
Information Management Resources, Inc. and its consolidated subsidiary, IMR-
India. The Company's principal executive offices are located at 26750 U.S.
Highway 19 North, Suite 500, Clearwater, Florida 34621, and its telephone
number is (813) 797-7080.
FORWARD-LOOKING STATEMENTS
Information contained in this Prospectus includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), that are based largely on the Company's current
expectations and are subject to a number of risks and uncertainties. Forward-
looking statements can be identified by the use of forward-looking terminology
such as "may," "will," "should," "expect," "anticipate," "estimate,"
"continue," "plans," "intends" or other similar terminology. The Company faces
many risks and uncertainties, including those described in this Prospectus
under the caption "Risk Factors." Because of these many risks and
uncertainties, the Company's actual results may differ materially from any
results presented in or implied by the forward-looking statements included in
this Prospectus.
5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------------------- -----------------
1991 1992 1993 1994 1995 1995 1996
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS
DATA:
Revenues................ $5,630 $10,132 $12,429 $14,101 $22,700 $ 10,575 $ 12,397
Gross profit............ 1,968 3,724 2,298 5,439 8,991 3,821 5,175
Income (loss) from oper-
ations................. 469 701 (3,246) 829 3,508 1,353 2,082
Net income (loss)....... 463 656 (3,673) 814 2,517 981 1,509
Pro forma net income
(1)(2)................. 1,612 944
======= ========
Pro forma net income per
share (1)(2)(3)........ $ 0.12 $ 0.08
======= ========
Pro forma weighted
average number of
common and common stock
equivalent shares
outstanding (4)........ 13,669 11,274
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996
------------------
AS
ACTUAL ADJUSTED(5)
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<S> <C> <C>
BALANCE SHEET DATA:
Working capital.............................................. $1,685 $22,170
Total assets................................................. 9,840 34,374
Long-term debt, net of current portion....................... 969 0
Shareholders' equity......................................... 2,864 30,410
</TABLE>
- --------
(1) Pro forma net income and net income per share give effect to the Company's
conversion from an S corporation to a C corporation for U.S. federal and
state income tax purposes. As an S corporation, the Company was not subject
to income taxes but instead passed its tax attributes through to its
shareholders. As a C corporation, the Company will be subject to income
taxes at corporate income tax rates. The pro forma statements of operations
data above present net income and net income per share as if the Company
had been subject to corporate income taxes for the year ended December 31,
1995 and the six months ended June 30, 1996 . See "Prior S Corporation
Status and Distributions," "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Net Charge Resulting from S
Corporation Termination" and Notes 13 and 20 to Notes to Consolidated
Financial Statements.
(2) Pro forma net income and net income per share do not give effect to the
IMR-India Acquisitions. Pro forma net income for the year ended December
31, 1995 and the six months ended June 30, 1996 would have been $1,770,000
and $997,000, respectively, if the IMR-India Acqusitions had occurred as of
the beginning of each period presented. Acquisitions from Second India and
India Magnum will be accounted for as purchase transactions, and resulting
goodwill will be amortized using the straight-line method over ten years.
The acqusition from Satish K. Sanan will be accounted for as a reduction of
equity.
(3) Supplemental pro forma net income per share would have been $0.09 and $0.13
for the six months ended June 30, 1996 and the year ended December 31,
1995, respectively, giving effect to the use of a portion of the net
proceeds of this Offering to repay the Company's bank borrowings
outstanding at the beginning of periods presented and a corresponding
increase in the weighted average number of shares outstanding to 11,496,165
and 13,816,782 at June 30, 1996 and December 31, 1995, respectively.
(4) Weighted average number of shares outstanding for the six months ended June
30, 1996 reflects the repurchase by the Company of approximately 2,676,940
shares in January 1996 from certain shareholders which were held in
treasury and the subsequent issuance in February 1996 of options to acquire
approximately 2,643,340 shares granted to Mr. Sanan which shares are
retroactively treated as outstanding for such periods. See "Certain
Transactions--Options Issued to Mr. Sanan."
(5) Adjusted to give effect to: (i) the sale by the Company of 2,950,000 shares
of Common Stock offered hereby at an assumed initial public offering price
of $12.00 per share and the application of the estimated net proceeds
therefrom; (ii) the inclusion of a current deferred income tax liability of
$258,000 and noncurrent deferred income tax liabilities of $772,000 to
reflect temporary differences between the bases of assets and liabilities
for financial statement purposes and income tax purposes upon the
conversion from S corporation to C corporation income tax status; and (iii)
a distribution to the Company's shareholders of $220,000 which represents
undistributed taxable income through June 30, 1996 (the amount of such
distribution is estimated to be approximately $1.4 million at the time of
consummation of this Offering). See "Prior S Corporation Status and
Distributions," "Use of Proceeds," "Capitalization" and Notes 13 and 20 to
Notes to Consolidated Financial Statements.
6
<PAGE>
RISK FACTORS
Prospective investors should consider carefully the following factors, in
addition to the other information contained in this Prospectus, in evaluating
the Company and its business before purchasing shares of Common Stock offered
hereby.
MANAGEMENT OF GROWTH. An important element of the Company's strategy is to
pursue continued rapid growth of its business. The Company's revenues
increased approximately 61.0% in 1995, from $14.1 million in 1994 to $22.7
million in 1995. Revenues for the first six months of 1995 and 1996 were $10.8
million and $12.3 million, respectively. Since January 1, 1995, the Company's
staff has increased from approximately 340 to approximately 500 software
development professionals as of September 1, 1996, and significant increases
are expected to continue during the remainder of 1996 and 1997. The Company's
growth will continue to place significant demands on its management and other
resources. In particular, the Company will have to continue to increase the
number of its personnel, particularly skilled technical, marketing and
management personnel, and continue to develop and improve its operational,
financial, communications and other internal systems, both in the U.S. and
offshore. The Company's inability to manage its growth effectively could have
a material adverse effect on the quality of the Company's services and
projects, its ability to attract and retain key personnel, its business
prospects and its results of operations and financial condition. In 1993, the
Company experienced a loss partly related to increased infrastructure expenses
incurred to support anticipated growth. Any future unexpected shortfall in
revenues without a corresponding and timely reduction in staffing and other
expenses, or a staffing increase that is unaccompanied by a corresponding
increase in revenues, could also have a material adverse effect on the
Company's results of operations and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Results of Operations."
DEPENDENCE ON KEY EXECUTIVE. The Company's success will depend in large part
upon the continued availability of the services of Satish K. Sanan, the
Company's President, Chief Executive Officer and majority shareholder. The
loss of the services of Mr. Sanan would have a material adverse effect on the
Company. See "Management--Executive Compensation."
VARIABILITY OF QUARTERLY OPERATIONS AND FINANCIAL RESULTS. The Company's
operations and related revenues and operating results historically have varied
substantially from quarter to quarter, and the Company expects these
variations to continue. Among the factors causing these variations have been
the number, timing and scope of IT projects in which the Company is engaged,
the contractual terms of such projects, delays incurred in the performance of
such projects, the accuracy of estimates of resources and time frames required
to complete ongoing projects, and general economic conditions. A high
percentage of the Company's operating expenses, particularly personnel and
rent, are relatively fixed in advance of any particular quarter. As a result,
unanticipated variations in the number and timing of the Company's projects or
in employee utilization rates may cause significant variations in operating
results in any particular quarter. An unanticipated termination of a major
project, a client's decision not to pursue a new project or proceed to
succeeding stages of a current project, or the completion during a quarter of
several major client projects could require the Company to continue to pay
underutilized employees and therefore have a material adverse effect on the
Company's results of operations and financial condition. As a result of the
foregoing factors, the Company's operating results for a future quarter may be
below the expectations of public market analysts and investors. In such event,
the price of the Company's Common Stock likely will be adversely affected. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview."
HISTORICAL RELIANCE ON SIGNIFICANT CLIENTS. The Company has derived and
believes that it will continue to derive a significant portion of its revenues
from a limited number of large corporate clients. During the first six months
of 1996, the Company's five largest clients accounted for approximately 65.3%
of revenues. During the first six months in 1996, NOVUS Services, Inc.
("NOVUS") and SPS Payments Systems, Inc. ("SPS"), which are affiliated
companies, together accounted for approximately 35.5% of revenues and units of
Dayton Hudson Corporation accounted for approximately 8.8% of revenues. In
1995, the Company's five largest clients accounted for approximately 65.6% of
its revenues. NOVUS and SPS together accounted for 35.1% of 1995
7
<PAGE>
revenues, while Dayton Hudson Corporation accounted for 12.0% of 1995
revenues. The volume of work performed for specific clients is likely to vary
from year to year, and a major client in one year may not provide the same
level of revenues in any subsequent year. The loss of any large client could
have a material adverse effect on the Company's results of operations and
financial condition. Because many of its contracted engagements involve
projects that are critical to the operations of its clients' businesses, IMR's
failure to meet a client's expectations could result in a cancellation or
nonrenewal of the contract and could damage the Company's reputation and
adversely affect its ability to attract new business. Furthermore, under
substantially all of its contracts, the Company is not the exclusive outside
source for IT services to the client. Accordingly, a client's dissatisfaction
with IMR's performance could lead the client to purchase these services from
another competitor. See "Business--Clients and Representative Projects."
COMPETITIVE MARKET FOR TECHNICAL PERSONNEL. The future success of the
Company's growth strategy will depend to a significant extent on its ability
to attract, train, motivate and retain highly skilled software development
professionals, particularly project managers, software engineers and other
senior technical personnel. The Company believes that in both the U.S. and
India there is a shortage of, and significant competition for, software
development professionals with the advanced technological skills necessary to
perform the services offered by the Company. The Company's ability to maintain
and renew existing engagements and obtain new business depends, in large part,
on its ability to hire and retain technical personnel with the IT skills that
keep pace with continuing changes in information processing technology,
evolving industry standards and changing client preferences. An inability to
hire such additional qualified personnel could impair the Company's ability to
manage and complete its existing projects and to bid for or obtain new
projects. Further, the Company must train and manage its growing employee
base, requiring an increase in the level of responsibility for both existing
and new management personnel. There can be no assurance that the management
skills and systems currently in place will be adequate or that the Company
will be able to assimilate new employees successfully. Accordingly, there can
be no assurance that the Company will be successful in retaining current or
future employees. In addition, a significant number of the Company's employees
reside in India. Historically, the Company's wage costs in India have been
significantly lower than its wage costs in the U.S. for comparably-skilled
employees, although wage costs in India are presently increasing at a faster
rate than in the U.S. See "Management's Discussion and Analysis of Financial
Condition and Results of Operation--Effects of Inflation" and "Business--Human
Resources."
DEPENDENCE ON INDIA OFFSHORE SOFTWARE DEVELOPMENT CENTER. A significant
element of the Company's business strategy is to continue to leverage its
offshore software development center in Bangalore, India which provides IMR
with a cost advantage as well as the ability to provide 24-hour service to its
clients. In order to provide its service delivery model, the Company must
maintain active satellite communications between its offices, the offices of
its clients in the U.S. and the Bangalore offshore software development
facility. Any loss of the Company's ability to transmit voice and data through
satellite communications to India could have a material adverse effect on the
Company's results of operation and financial condition. In the past, India has
experienced significant inflation, low growth in gross domestic product and
shortages of foreign exchange. India also has experienced civil unrest and
terrorism and, in the past, has been involved in conflict with neighboring
countries. No assurance can be given that the Company will not be adversely
affected by changes in inflation, interest rates, taxation, social stability
or other political, economic or diplomatic developments in or affecting India
in the future. In addition, the Indian government has exercised and continues
to exercise significant influence over many aspects of the Indian economy, and
Indian government actions concerning the economy could have material adverse
effect on private sector entities, including the Company. During the past five
years, India's government has provided significant tax incentives and relaxed
certain regulatory restrictions in order to encourage foreign investment in
specified sectors of the economy, including the software development industry.
Certain of those benefits which directly affected the Company include, among
others, tax holidays, liberalized import and export duties and preferential
rules on foreign investment and repatriation. Notwithstanding these benefits,
however, India's central and state governments remain significantly involved
in the Indian economy as regulators. The elimination of any of the benefits
realized by the Company from its Indian operations could have a material
adverse effect on the Company's results of operations and financial condition.
8
<PAGE>
FIXED-PRICE, FIXED-TIME FRAME CONTRACTS. As a core element of its business
philosophy, the Company's strategy is to offer many of its IT services on
fixed-price, fixed-time frame contracts, rather than contracts in which
payment to the Company is determined solely on a time-and-materials basis.
Although the Company uses its TSQM software engineering process and its past
project experience to reduce the risks associated with estimating, planning
and performing the fixed-price projects, the Company bears the risk of cost
over-runs and inflation in connection with these projects. The Company's
failure to estimate accurately the resources and time required for a project
or its failure to complete its contractual obligations within the time frame
committed could have a material adverse effect on the Company's results of
operations and financial condition.
POTENTIAL DECREASE IN SERVICES AFTER ADDRESSING THE YEAR 2000 PROBLEM. The
Company expects to derive a significantly higher percentage of its total
revenues from Year 2000 conversion services for at least the next three years.
Although the Company realized only 2.5% and 12.2% of total revenues from Year
2000 conversion services in 1995 and the first six months of 1996,
respectively, a majority of the Company's current project bookings are for
Year 2000 conversion projects. Further, the Company believes that demand for
Year 2000 conversion services will continue after the turn of the century;
however, this demand is expected to begin to diminish after the Year 2000 as
many Year 2000 compliance solutions are implemented and tested. A core element
of the Company's growth strategy is to use the business relationships and the
knowledge of its clients' computer systems obtained in providing its Year 2000
services to generate additional IT projects for these clients. There can be no
assurance, however, that the Company will be successful in generating
additional business from its Year 2000 clients for other services. In
addition, by utilizing significant resources during the next several years to
solve its clients' Year 2000 problems, the Company's ability to continue to
deliver other IT services could be adversely affected. See "Business--
Services--Year 2000 Services."
COMPETITION. The IT services market is highly competitive and served by
numerous national, regional and local firms, all of which are either an
existing or potential competitor of the Company. Many of these competitors
have significantly greater financial, technical and marketing resources and
generate greater revenue than the Company, and there can be no assurance that
the Company will not lose existing clients to such competitors. The Company
believes that its ability to compete also depends in part on a number of
factors outside its control, including the ability of its competitors to hire
and retain professional and technical employees, the price at which others
offer comparable services and the extent of its competitors' responsiveness to
client needs. See "Business--Competition."
POTENTIAL LIABILITY TO CLIENTS. Many of the Company's engagements involve
projects that are critical to the operations of its clients' businesses and
provide benefits that may be difficult to quantify. Any failure in a client's
system could result in a claim for substantial damages against the Company,
regardless of the Company's responsibility for such failure. Although the
Company attempts to limit contractually its liability for damages arising from
negligent acts, errors, mistakes or omissions in rendering its IT services,
there can be no assurance the limitations of liability set forth in its
service contracts will be enforceable in all instances or would otherwise
protect the Company from liability for damages. Although the Company maintains
general liability insurance coverage, including coverage for errors or
omissions, there can be no assurance that such coverage will continue to be
available on reasonable terms or will be available in sufficient amounts to
cover one or more large claims, or that the insurer will not disclaim coverage
as to any future claim. The successful assertion of one or more large claims
against the Company that exceed available insurance coverage or changes in the
Company's insurance policies, including premium increases or the imposition of
large deductible or co-insurance requirements, could adversely affect the
Company's results of operations and financial condition.
IMMIGRATION ISSUES. The Company believes that its success in part has
resulted from its ability to attract and retain persons with technical and
project management skills from other countries, especially India. As of
September 1, 1996, approximately 150 of the Company's 245 U.S. employees were
working for the Company in the H-1B, non-immigrant work permitted visa
classification. There is a limit on the number of new H-1B petitions that the
INS may approve in any government fiscal year, and in years in which this
limit is reached, the Company may be unable to obtain H-1B visa's necessary to
bring critical foreign employees to the U.S. Compliance with existing U.S.
immigration laws, or changes in such laws making it more difficult to hire
foreign
9
<PAGE>
nationals or limiting the ability of the Company to retain H-1B employees in
the U.S., could require the Company to incur additional unexpected labor costs
and expenses. Any such restrictions or limitations on the Company's hiring
practices could have a material adverse effect on the Company's results of
operations and financial condition. See "Business--Human Resources."
POSSIBLE ACQUISITIONS. Given the highly fragmented nature of the IT services
market, together with significant barriers to entry in major accounts, the
Company believes that opportunities exist to expand through the selective
acquisition of smaller regional IT services firms with established customers.
As of the date of this Prospectus, the Company has no existing agreements or
commitments to effect any acquisition. Accordingly, there can be no assurance
that the Company will be able to identify suitable acquisition candidates
available for sale at reasonable prices, consummate any acquisition or
successfully integrate any acquired business into the Company's operations.
Further, acquisitions may involve a number of special risks, including
diversion of management's attention, failure to retain key acquired personnel,
unanticipated events or circumstances, legal liabilities and amortization of
acquired intangible assets, some or all of which could have a material adverse
effect on the Company's results of operations and financial condition. Client
satisfaction or performance problems at a single acquired firm could have a
material adverse impact on the reputation of the Company as a whole. The
Company expects to finance any future acquisitions with the proceeds of this
Offering as well as with possible debt financing, the issuance of equity
securities (common or preferred stock) or a combination of the foregoing.
There can be no assurance that the Company will be able to arrange adequate
financing on acceptable terms. See "Business--Strategies--Growth Strategies."
BENEFITS TO PRINCIPAL SELLING SHAREHOLDER. A substantial portion of the net
proceeds from this Offering will benefit Satish K. Sanan, the Company's
President, Chief Executive Officer and majority shareholder. Of the net
proceeds to the Company from this Offering, approximately $3.1 million will be
paid to Mr. Sanan for the acquisition by the Company of Mr. Sanan's 18.4%
equity interest in IMR-India, an estimated $1.2 million will be used to pay a
dividend to Mr. Sanan in connection with the Company's termination of its S
corporation election, which amount represents undistributed S corporation
earnings, and approximately $2.6 million will be used to repay indebtedness of
the Company that is personally guaranteed by Mr. Sanan. Also, Mr. Sanan will
receive net proceeds from this Offering, after deduction of underwriting
discounts, aggregating approximately $4.5 million in connection with the sale
by Mr. Sanan of 403,360 shares of the Company's Common Stock in this Offering
($7.4 million if the Underwriters' over-allotment option is exercised in
full). The expenses of the Offering associated with the Common Stock offered
by the Selling Shareholders, other than underwriting discounts, will be paid
by the Company. See "Prior S Corporation Status and Distributions," "Use of
Proceeds," "Principal and Selling Shareholders" and "Certain Transactions."
BROAD MANAGEMENT DISCRETION AS TO USE OF PROCEEDS. A substantial portion of
the net proceeds to be received by the Company in connection with this
Offering is allocated to working capital and general corporate purposes.
Accordingly, management will have broad discretion with respect to the
expenditure of such proceeds. Purchasers of shares of Common Stock offered
hereby will be entrusting their funds to the Company's management, upon whose
judgment they must depend, with limited information concerning the specific
working capital requirements and general corporate purposes to which the funds
will ultimately be applied. See "Use of Proceeds."
CONTROL BY PRINCIPAL SHAREHOLDER. Upon completion of the Offering, Mr. Sanan
will beneficially own approximately 67.4% of the outstanding shares of Common
Stock (approximately 64.2% if the Underwriters' over-allotment option is
exercised in full). Accordingly, Mr. Sanan will be in a position to control
the Company through his ability to control any election of members of the
Board of Directors as well as any decision whether to merge or sell the assets
of the Company, adopt, amend or repeal the Company's Amended and Restated
Articles of Incorporation and Restated Bylaws, or take other actions requiring
the vote or consent of the Company's shareholders. Such provisions could also
discourage bids for the shares of Common Stock at a premium as well as create
a depressive effect on the market price of the shares of Common Stock. See
"Principal and Selling Shareholders" and "Description of Capital Stock."
10
<PAGE>
INTELLECTUAL PROPERTY RIGHTS. In order to protect its proprietary rights in
these various intellectual properties, the Company relies upon a combination
of copyright and trade secret laws, nondisclosure and other contractual
arrangements, and technical measures. India is a member of the Berne
Convention, an international treaty. As a member of the Berne Convention, the
government of India has agreed to recognize protections on intellectual
property conferred under the laws of foreign countries, including the laws of
the U.S. The Company believes that laws, rules, regulations and treaties in
effect in the U.S. and India are adequate to protect it from misappropriation
or unauthorized use of its intellectual property. However, there can be no
assurance that such laws will not change and, in particular, that the laws of
India will not change in ways that may prevent or restrict the transfer of
software components, libraries and toolsets from India to the U.S. There can
be no assurance that the steps taken by the Company will be adequate to deter
misappropriation of its intellectual property, or that the Company will be
able to detect unauthorized use and take appropriate steps to enforce its
rights. Although the Company believes that its intellectual property rights do
not infringe on the intellectual property rights of others, there can be no
assurance that such a claim will not be asserted against the Company in the
future, that assertion of such claims will not result in litigation or that
the Company would prevail in such litigation or be able to obtain a license
for the use of any infringed intellectual property from a third party on
commercially reasonable terms. Furthermore, litigation, regardless of its
outcome, could result in substantial cost to the Company and divert
management's attention from the Company's operations. Any infringement claim
or litigation against the Company could, therefore, have a material adverse
effect on the Company's results of operations and financial condition. See
"Business--Intellectual Property."
CERTAIN ANTI-TAKEOVER PROVISIONS. The Amended and Restated Articles of
Incorporation and Restated Bylaws provide for a classified Board of Directors,
and members of the Board of Directors may be removed only for cause upon the
affirmative vote of holders of at least two-thirds of the shares of capital
stock of the Company entitled to vote. In addition, the Board of Directors
will have the authority, without further action by the shareholders, to fix
the rights and preferences and issue shares of, Preferred Stock. These
provisions, and other provisions of the Amended and Restated Articles of
Incorporation and Restated Bylaws, may have the effect of deterring hostile
takeovers or delaying or preventing changes in control or management of the
Company, including transactions in which shareholders might otherwise receive
a premium for their shares over then current market prices. In addition, these
provisions may limit the ability of shareholders to approve transactions that
they may deem to be in their best interests. See "Description of Capital
Stock--Preferred Stock" and "--Certain Articles of Incorporation and Bylaw
Provisions." Florida law also contains provisions that may have the effect of
delaying, deferring or preventing a non-negotiated merger or other business
combination involving the Company. These provisions are intended to encourage
any person interested in acquiring the Company to negotiate with and obtain
the approval of its Board of Directors in connection with the transaction.
Certain of these provisions may, however, discourage a future acquisition of
the Company not approved by the Board of Directors in which shareholders might
receive an attractive value for their shares or that a substantial number or
even a majority of the Company's shareholders might believe to be in their
best interest. As a result, shareholders who desire to participate in such a
transaction may not have the opportunity to do so. Such provisions could also
discourage bids for the shares of Common Stock at a premium as well as create
a depressive effect on the market price of the shares of Common Stock. See
"Description of Capital Stock--Certain Articles of Incorporation and Bylaw
Provisions" and "--Certain Provisions of Florida Law."
SHARES ELIGIBLE FOR FUTURE SALE. Upon consummation of the Offering, the
Company will have outstanding 9,386,590 shares of Common Stock and will have
granted options for the purchase of 5,059,120 shares of Common Stock pursuant
to the Stock Option Plan at a weighted average exercise price of $0.60 per
share. Of such options granted pursuant to the Stock Option Plan: (i) options
for the purchase of 4,064,550 shares of Common Stock (at a weighted average
exercise price of $0.36 per share) are held by Mr. Sanan, the Company's
President, Chief Executive Officer and majority shareholder, and are currently
exercisable; and (ii) options for the purchase of 435,950 shares of Common
Stock (at a weighted average exercise price of $0.12 per share) are held by
other officers and employees of the Company and are exercisable as of, or
within 60 days of, November 1, 1996. Of the 9,386,590 shares outstanding, the
3,500,000 shares sold in this Offering will be freely tradable without
restriction or further registration under the Securities Act, unless they are
purchased by
11
<PAGE>
"affiliates" of the Company as that term is defined in Rule 144 under the
Securities Act. The remaining 5,886,590 outstanding shares of Common Stock may
be sold in the public market only if registered or pursuant to an exemption
from registration such as Rule 144 or 144(k) promulgated under the Securities
Act. The holders of all remaining 5,886,590 shares (and holders of options for
the purchase of 4,451,020 shares of Common Stock which are exercisable as of,
or within 60 days of, November 1, 1996) have agreed not to offer, sell,
contract to sell, grant any option to purchase or otherwise dispose of, or
agree to dispose of, any shares of Common Stock (other than gifts) until 180
days after the date of this Prospectus without prior written consent of
Montgomery Securities. See "Underwriting." Promptly following the consummation
of this Offering, the Company intends to file a Registration Statement on Form
S-8 under the Securities Act to register: (i) 5,413,410 shares of Common Stock
reserved for issuance under the Stock Option Plan; (ii) the 150,000 shares
reserved under the Directors Stock Option Plan, of which options for the
purchase of 30,000 shares will be granted upon consummation of the Offering;
and (iii) the 200,000 shares reserved under the Stock Purchase Plan. After the
date of such filing, except for shares held by "affiliates" of the Company as
defined in Rule 144 under the Securities Act, shares purchased pursuant to the
Stock Option Plan (if not otherwise subject to a lock-up agreement) generally
would be available for resale in the public market. See "Shares Eligible for
Future Sale."
NO PRIOR PUBLIC MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK
PRICE. Prior to the Offering, there has been no public market for the Common
Stock. Although the Company has made application for the quotation of the
Common Stock on the Nasdaq National Market, there can be no assurance that an
active trading market will develop or be sustained after the Offering. The
initial public offering price of the Common Stock offered hereby will be
determined through negotiations among the Company, the Selling Shareholders
and the Representatives of the Underwriters and may bear no relationship to
the market price of the Common Stock after the Offering. The market price of
the Common Stock could be subject to significant fluctuations in response to
variations in quarterly operating results and other factors. In addition, the
securities markets have experienced significant price and volume fluctuations
from time to time that have often been unrelated or disproportionate to the
operating performance of particular companies. These broad fluctuations may
adversely affect the market price of the Common Stock. See "Underwriting."
DILUTION. The purchasers of the Common Stock offered hereby will experience
immediate and significant dilution. See "Dilution."
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. This Prospectus contains
certain forward-looking statements, including, among others: (i) the potential
extent of the Year 2000 problem and the anticipated growth in the Year 2000
services market; (ii) presently anticipated trends in the Company's results of
operations and financial condition; (iii) the ability of the Company to rely
on cash generated from operations and the proceeds of this Offering to finance
its working capital requirements; (iv) the Company's business strategy for
expanding its services; and (v) the Company's ability to distinguish itself
from its current and future competitors. These forward-looking statements are
based largely on the Company's current expectations and are subject to a
number of risks and uncertainties. Actual results could differ materially from
these forward-looking statements. In addition to the other risks described
elsewhere in this "Risk Factors" discussion, important factors to consider in
evaluating such forward-looking statements include: (i) the shortage of
reliable market data regarding the Year 2000 conversion services market; (ii)
changes in external competitive market factors or in the Company's internal
budgeting process which might impact trends in the Company's results of
operations; (iii) unanticipated working capital or other cash requirements;
(iv) changes in the Company's business strategy or an inability to execute its
strategy due to unanticipated changes in the Year 2000 conversion services
market; (v) the Company's failure to perform Year 2000 conversion projects to
a client's satisfaction; and (vi) various competitive factors that may prevent
the Company from competing successfully in the marketplace. In light of these
risks and uncertainties, many of which are described in greater detail
elsewhere in this "Risk Factors" discussion, there can be no assurance that
the forward-looking statements contained in this Prospectus will in fact
transpire.
12
<PAGE>
PRIOR S CORPORATION STATUS AND DISTRIBUTIONS
Since its inception, the Company has elected to operate under Subchapter S
of the Internal Revenue Code of 1986, as amended (the "Code"), and comparable
provisions of certain state income tax laws. An S corporation generally is not
subject to income tax at the corporate level (with certain exceptions under
state income tax laws). Instead, the S corporation's income generally passes
through to the shareholders and is taxed on their personal income tax returns.
Upon completion of the Offering, the Company will elect to terminate its S
corporation status. As a result, the Company's earnings through the date of
termination of the Company's S corporation status will be taxed for federal
and state income tax purposes, with certain exceptions, directly to
shareholders of the Company prior to the closing of this Offering (the "Pre-
Offering Shareholders"). Subsequent to the termination of its S corporation
status the Company will be subject to federal and state income taxes on its
earnings.
Prior to the Offering, the Company declared a distribution to the Pre-
Offering Shareholders in an amount equal to the Company's undistributed S
corporation earnings from October 27, 1988 through the date immediately
preceding the date of termination of the Company's S corporation status which
will occur one day prior to the consummation of the Offering. If the Company's
S corporation status had terminated as of June 30, 1996, the amount of the
additional distribution would have been approximately $220,000. The actual
amount of this distribution is estimated to be approximately $1.4 million,
reflecting undistributed earnings through the anticipated closing of the
Offering. This distribution will be made from the proceeds of this Offering.
See "Risk Factors--Benefits to Principal Selling Shareholder," "Use of
Proceeds" and "Certain Transactions--Other Transactions."
Prior to the consummation of this Offering, it is currently anticipated that
the Company will enter into an S corporation termination, tax allocation and
indemnification agreement with the Pre-Offering Shareholders relating to the
distribution of undistributed S corporation earnings to such shareholders and
to the indemnification arrangements among such shareholders and the Company
for certain tax liabilities.
In connection with the termination of its S corporation status, the Company
is required by the Code to change its method of accounting for tax reporting
purposes from the cash method to the accrual method, resulting in a
significant net charge to earnings which will be recognized in the quarter
ending December 31, 1996. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Net Charge Resulting from S
Corporation Termination."
13
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,950,000 shares of
Common Stock offered by the Company hereby are estimated to be approximately
$31.9 million ($34.9 million if the Underwriters' over-allotment option is
exercised in full), assuming an initial public offering price of $12.00 per
share and after deducting estimated underwriting discounts and estimated
expenses payable by the Company in connection with the Offering. The Company
will not receive any of the net proceeds from the sale of shares of Common
Stock by the Selling Shareholders in the Offering. See "Principal and Selling
Shareholders."
From the net proceeds of the Offering, the Company intends to: (i) pay
approximately $3.1 million to Satish K. Sanan, the Company's President, Chief
Executive Officer and majority shareholder and approximately $5.1 million to
India Magnum for the Company's acquisition the outstanding equity interests in
IMR-India presently owned by each of them; (ii) repay outstanding borrowings
under the Company's revolving line of credit with Barnett Bank of Pinellas
County ("Barnett Bank"), which at September 1, 1996, were approximately $1.8
million; (iii) distribute to the Pre-Offering Shareholders an amount equal to
the Company's undistributed S corporation earnings from October 27, 1988
through the date of termination of the Company's S corporation status which
the Company estimates will be approximately $1.4 million; and (iv) repay
outstanding borrowings under the Company's term loan with Barnett Bank, which
at September 1, 1996, were approximately $870,000. See "Prior S Corporation
Status and Distributions" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Net Charge Resulting from S
Corporation Termination."
The borrowings under the Company's revolving line of credit to be repaid
with a portion of the proceeds of this Offering bear interest at 30-day LIBOR
plus 1.8% (7.2% as of June 30, 1996), are due on demand and are secured by the
personal guarantee of Mr. Sanan. A portion of the outstanding balance of this
debt was incurred to finance the Company's acquisition of Second India's 10.5%
equity interest in IMR-India. The borrowings under the Company's term loan to
be repaid with a portion of the proceeds of this Offering bear interest at 30-
day LIBOR plus 2.0% (7.4% as of June 30, 1996) and are repayable monthly.
The remaining net proceeds of approximately $19.7 million (approximately
$22.7 million if the Underwriters' over-allotment option is exercised in full)
will be used for working capital and other general corporate purposes which
may include future acquisitions.
The Company may also use a portion of the net proceeds to fund possible
acquisitions of, or investments in, businesses and technologies that are
complementary to those of the Company. The Company has no specific agreements,
commitments or understandings with respect to any such acquisitions or
investments. The amounts actually expended for each purpose may vary
significantly and are subject to change at the Company's discretion depending
upon certain factors, including economic or industry conditions, changes in
the competitive environment and strategic opportunities that may arise. See
"Risk Factors--Broad Management Discretion as to Use of Proceeds" and
"Business--Strategies--Growth Strategies." Pending application of the net
proceeds as described above, the Company intends to invest the net proceeds of
the Offering in interest-bearing securities.
DIVIDEND POLICY
Other than the distribution to be made to the Company's Pre-Offering
Shareholders described under "Prior S Corporation Status and Distributions,"
the Company does not intend to declare or pay cash dividends in the
foreseeable future. Management anticipates that all earnings and other cash
resources of the Company, if any, will be retained by the Company for
investment in its business. The payment of dividends is subject to the
discretion of the Board of Directors of the Company and will depend on the
Company's results of operations, financial position and capital requirements,
general business conditions, restrictions imposed by financing arrangements,
if any, legal and regulatory restrictions on the payment of dividends, and
other factors the Company's Board of Directors deems relevant.
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<PAGE>
CAPITALIZATION
The following table sets forth at June 30, 1996 the actual short-term
obligations and capitalization of the Company and such amounts as adjusted to
reflect: (i) the issuance and sale by the Company of the 2,950,000 shares of
Common Stock offered hereby at an assumed offering price of $12.00 per share,
after deducting the estimated underwriting discounts and commissions and
offering expenses; and (ii) the application of the estimated net proceeds to
the Company of the Offering. See "Use of Proceeds." This table should be read
in conjunction with the Company's Consolidated Financial Statements and Notes
thereto.
<TABLE>
<CAPTION>
JUNE 30, 1996
-----------------
AS
ACTUAL ADJUSTED
------- --------
(IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt and note payable sharehold-
er.......................................................... $ 1,512 $ 0
======= =======
Long-term debt, net of current portion....................... $ 969 $ 0
Minority interest (1)........................................ 1607 45
Shareholders' equity:
Preferred stock, $.10 par value; no shares authorized or
outstanding (actual); 10,000,000 shares authorized, no
shares issued (as adjusted) (3)........................... -- --
Common stock, $.10 par value; 10,000,000 shares authorized,
9,085,960 shares issued (actual); 40,000,000 shares
authorized, 9,386,590 shares issued
(as adjusted) (2)(3)(4)................................... 909 939
Additional paid-in capital (5)............................. 1,167 29,517
Retained earnings (5)...................................... 2,193 0
Cumulative foreign currency translation adjustments........ (46) (46)
Treasury stock at cost; 2,681,940 shares (actual) (2)...... (1,359) 0
------- -------
Total shareholders' equity............................... 2,864 30,410
------- -------
Total capitalization................................... $ 5,440 $30,455
======= =======
</TABLE>
- --------
(1) Reflects the IMR-India Acquisitions. See "Use of Proceeds" and "Certain
Transactions."
(2) Includes 2,681,940 shares held in treasury which will be retired upon the
consummation of the Offering.
(3) In September 1996, the Company adopted its Amended and Restated Articles
of Incorporation which, among other things: (i) increased the number of
authorized shares of Common Stock to 40,000,000; (ii) reclassified each
existing share of voting common stock and non-voting common stock into ten
shares of Common Stock; and (iii) created a class of preferred stock and
authorized 10,000,000 shares of such class. See "Description of Capital
Stock" and Note 20 to Notes to Consolidated Financial Statements.
(4) Excludes: (i) 5,445,980 million shares of Common Stock presently reserved
for issuance upon exercise of options granted under the Stock Option Plan,
of which options to purchase 5,059,120 shares were outstanding as of the
date of this Prospectus at a weighted average exercise price of $0.60 per
share (32,750 shares of which will be acquired by certain of the Selling
Shareholders, at a weighted average exercise price of $0.10 per share, and
will be sold in this Offering); (ii) 150,000 shares reserved for issuance
upon exercise of options granted under the Directors Stock Option Plan, of
which options to purchase 30,000 shares will be granted upon consummation
of this Offering; and (iii) 200,000 shares reserved for issuance under the
Stock Purchase Plan which shares will be issued from time to time after
consummation of this Offering. See "Management--Employee Benefit Plans"
and "--Director Compensation."
(5) Reflects: (i) deferred income taxes of $1.0 million recorded as a result
of the termination of the S corporation election; (ii) a distribution to
the Company's shareholders in the amount of previously taxable income,
which was $220,000 as of June 30, 1996 (the Company estimates that this
distribution will actually be approximately $1.4 million at the time of
the Offering); (iii) payment of approximately $3.1 million to Satish K.
Sanan in connection with the IMR-India Acquisitions resulting in a
corresponding reduction in equity; and (iv) reclassification of
accumulated earnings and profits of $776,000 to additional paid-in
capital. See "Use of Proceeds" and "Certain Transactions."
15
<PAGE>
DILUTION
As of June 30, 1996, the net tangible book value of the Company was
approximately $1.8 million or $0.28 per share of Common Stock. Net tangible
book value per share represents the amount of the Company's total tangible
assets less total liabilities, divided by the number of shares of Common Stock
outstanding. After giving effect to the sale by the Company of the 2,950,000
shares of Common Stock offered hereby at an assumed initial public offering
price of $12.00 per share, the application of the estimated net proceeds
therefrom after deducting the underwriting discount and estimated offering
expenses and the exercise by certain Selling Shareholders of stock options
covering an aggregate of 32,570 shares which were sold in the Offering, the
pro forma net tangible book value of the Company at June 30, 1996 would have
been approximately $29.4 million, or $3.13 per share of Common Stock. This
represents an immediate increase in such net tangible book value of $2.85
existing shareholders and an immediate decrease in net tangible book value of
$8.87 per share to new investors. The following table illustrates this
unaudited per share dilution to new investors:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............... $12.00
Net tangible book value per share as of June 30, 1996....... $0.28
Increase in net tangible book value per share attributable
to new investors........................................... 2.85
-----
Adjusted net tangible book value per share after the Offer-
ing.......................................................... 3.13
------
Dilution per share to new investors........................... $ 8.87
======
</TABLE>
The following table sets forth, on an unaudited basis as of June 30, 1996,
the number of shares of Common Stock previously issued by the Company, the
total consideration reflected in the accounts of the Company and the average
price per share to the existing shareholders and new investors, assuming the
sale by the Company of 2,950,000 shares of Common Stock at an assumed initial
public offering price of $12.00 per share, and before deducting the estimated
underwriting discounts and commissions and estimated offering expenses:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing shareholders
(1)(2)................... 6,404,020 68.5% $ 1,062,000 2.9% $ 0.17
New investors............. 2,950,000 31.5 35,400,000 97.1 $12.00
--------- ----- ----------- -----
Total (1)(2)............ 9,354,020 100.0% $36,462,000 100.0%
========= ===== =========== =====
</TABLE>
- --------
(1) Excludes 32,570 shares to be issued upon the exercise of options by
certain of the Selling Shareholders in this Offering, at a weighted
average exercise price of $0.10 per share.
(2) The foregoing computation excludes: (i) shares of Common Stock issuable
upon exercise of outstanding stock options, 4,500,500 of which are
exercisable as of, or within 60 days of, November 1, 1996 at a weighted
average exercise price of $0.34 per share; (ii) 150,000 shares reserved
for issuance under the Directors Stock Option Plan; and (iii) 200,000
shares reserved for issuance under the Stock Purchase Plan. Upon the
exercise of such options, there will be further dilution to new investors.
See "Certain Transactions," "Management--Employee Benefit Plans," "--
Director Compensation" and Note 15 to Notes to Consolidated Financial
Statements.
Sales by the Selling Shareholders in the Offering will cause the percentage
of shares held by the existing shareholders to be approximately 62.7% of the
shares of Common Stock to be outstanding after this Offering, and will
increase the number of shares to be purchased by new shareholders to 37.3% of
the total number of shares of Common Stock to be outstanding after the
Offering. Assuming full exercise of the Underwriters' over-allotment option,
the percentage of shares held by existing shareholders would be 58.3% of the
total number of shares of Common Stock to be outstanding after the Offering,
and the number of shares held by new shareholders would be increased to
4,025,000 shares, or 41.7% of the total number of shares of Common Stock to be
outstanding after the Offering. See "Risk Factors--Dilution," "Management" and
"Principal and Selling Shareholders."
The exercise of a material number of these options will have the effect of
increasing the net tangible book value dilution of new investors in this
Offering.
16
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following selected consolidated financial data of the Company set forth
below should be read in conjunction with the Consolidated Financial Statements
of the Company, including the Notes thereto, and Management's Discussion and
Analysis of Financial Condition and Results of Operations included elsewhere
herein. The consolidated statements of operations data for the years ended
December 31, 1993, 1994 and 1995, and the consolidated balance sheet data as
of December 31, 1994 and 1995 are derived from, and are qualified by reference
to, the audited consolidated financial statements included elsewhere in this
Prospectus. The statements of operations data for the years ended December 31,
1991 and 1992 and the balance sheet data as of December 31, 1991, 1992 and
1993 are derived from audited financial statements not included herein. The
consolidated statements of operations data for the six months ended June 30,
1995 and 1996 and the consolidated balance sheet data at June 30, 1996 are
derived from unaudited consolidated financial statements included elsewhere in
this Prospectus. The unaudited consolidated financial statements have been
prepared by the Company on a basis consistent with the Company's audited
consolidated financial statements and, in the opinion of Management, include
all adjustments, consisting only of normal recurring adjustments necessary for
a fair presentation of the information. Historical results are not necessarily
indicative of results to be expected in the future.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------ ------------------
1991 1992 1993 1994 1995 1995 1996
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS
DATA:
Revenues................ $5,630 $10,132 $12,429 $14,101 $22,700 $ 10,575 $ 12,397
Cost of revenues........ 3,662 6,408 10,131 8,662 13,709 6,754 7,222
------ ------- ------- ------- ------- -------- --------
Gross profit............ 1,968 3,724 2,298 5,439 8,991 3,821 5,175
Selling, general and
administrative
expenses............... 1,499 3,023 5,544 4,610 5,483 2,468 3,093
------ ------- ------- ------- ------- -------- --------
Income (loss) from
operations............ 469 701 (3,246) 829 3,508 1,353 2,082
------ ------- ------- ------- ------- -------- --------
Other (expense) income:
Loss in equity
investment............ 0 0 (159) (126) (110) (58) (1)
Interest expense....... (17) (61) (275) (473) (349) (197) (160)
Other income........... 11 16 0 1,097 473 436 32
------ ------- ------- ------- ------- -------- --------
Total other (expense)
income................ (6) (45) (434) 498 14 181 (129)
------ ------- ------- ------- ------- -------- --------
Income (loss) before
provision (benefit) for
income taxes and
minority interest...... 463 656 (3,680) 1,327 3,522 1,534 1,953
Provision (benefit) for
income taxes........... 0 0 (2) 450 293 198 114
------ ------- ------- ------- ------- -------- --------
Income (loss) before
minority interest...... 463 656 (3,678) 877 3,229 1,336 1,839
Minority interest in net
(income) loss.......... -- -- 5 (63) (712) (355) (330)
------ ------- ------- ------- ------- -------- --------
Net income (loss)....... $ 463 $ 656 $(3,673) $ 814 $ 2,517 $ 981 $ 1,509
====== ======= ======= ======= ======= ======== ========
Pro forma net
income (1)(2).......... $ 1,612 $ 944
======= ========
Pro forma net income per
share (1)(2)(3)........ $ .12 $ .08
======= ========
Pro forma weighted
average number of
common and common
stock equivalent shares
outstanding (4)........ 13,669 11,274
</TABLE>
<TABLE>
<CAPTION>
AS
DECEMBER 31, ADJUSTED
------------------------------------- JUNE 30, JUNE 30,
1991 1992 1993 1994 1995 1996 1996(5)
------ ------ ------- ------ ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......... $ 565 $1,065 $(2,535) $ (340) $2,346 $1,685 $22,170
Total assets............ 1,323 2,927 4,396 7,099 8,658 9,840 34,374
Long-term debt, net of
current portion........ 0 240 172 2,153 1,184 969 0
Total shareholders'
equity................. 816 1,321 (503) 264 2,708 2,864 30,410
</TABLE>
Footnotes to table appear on following page.
17
<PAGE>
Footnotes to table from previous page.
- --------
(1) Pro forma net income and net income per share give effect to the Company's
conversion from an S corporation to a C corporation for U.S. federal and
state income tax purposes. As an S corporation, the Company was not
subject to income taxes but instead passed its tax attributes through to
its shareholders. As a C corporation, the Company will be subject to
income taxes at corporate income tax rates. The pro forma statements of
operations data above present net income and net income per share as if
the Company had been subject to corporate income taxes for the year ended
December 31, 1995 and the six months ended June 30, 1996 . See "Prior S
Corporation Status and Distributions," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Net Charge
Resulting from S Corporation Termination" and Notes 13 and 20 to Notes to
Consolidated Financial Statements.
(2) Pro forma net income and net income per share do not give effect to the
IMR-India Acquisitions. Pro forma net income for the year ended December
31, 1995 and the six months ended June 30, 1996 would have been $1,770,000
and $997,000, respectively, if the IMR-India Acqusitions had occurred as
of the beginning of each period presented. Acquisitions from Second India
and India Magnum will be accounted for as purchase transactions, and
resulting goodwill will be amortized using the straight-line method over
ten years. The acqusition from Satish K. Sanan will be accounted for as a
reduction of equity.
(3) Supplemental pro forma net income per share would have been $0.09 and
$0.13 for the six months ended June 30, 1996 and the year ended December
31, 1995, respectively, giving effect to the use of a portion of the net
proceeds of this Offering to repay the Company's bank borrowings
outstanding at the beginning of periods presented and a corresponding
increase in the weighted average number of shares outstanding to
11,496,165 and 13,816,782 at June 30, 1996 and December 31, 1995,
respectively.
(4) Weighted average number of shares outstanding for the six months ended
June 30, 1996 reflects the repurchase by the Company of approximately
2,676,940 shares in January 1996 from certain shareholders which were held
in treasury and the subsequent issuance in February 1996 of options to
acquire approximately 2,643,340 shares granted to Mr. Sanan which shares
are retroactively treated as outstanding for such periods. See "Certain
Transactions--Options Issued to Mr. Sanan."
(5) Adjusted to give effect to: (i) the sale by the Company of 2,950,000
shares of Common Stock offered hereby at an assumed initial public
offering price of $12.00 per share and the application of the estimated
net proceeds therefrom; (ii) the inclusion of a current deferred income
tax liability of $258,000 and noncurrent deferred income tax liabilities
of $772,000 to reflect temporary differences between the bases of assets
and liabilities for financial statement purposes and income tax purposes
upon the conversion from S corporation to C corporation income tax status;
and (iii) a distribution to the Company's shareholders of $220,000 which
represents undistributed taxable income through June 30, 1996 (the amount
of such distribution is estimated to be approximately $1.4 million at the
time of consummation of this Offering). See "Prior S Corporation Status
and Distributions," "Use of Proceeds," "Capitalization" and Notes 13 and
20 to Notes to Consolidated Financial Statements.
18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
IMR provides application software outsourcing solutions for the IT
departments of large businesses with intensive information processing needs.
The Company's services, which generally are offered on a fixed-price, fixed-
time frame basis, include software development, application maintenance, Year
2000 conversion and migration and re-engineering services. In addition, the
Company offers programming and consulting services on a time-and-materials
basis. The Company has derived the majority of its revenues to date from the
Company's software development, application maintenance and programming and
consulting services. Recently, a substantial majority of the Company's new
business contracts have been for Year 2000 conversion services.
Revenues from services provided on a fixed-price basis are recognized using
the percentage of completion method. Revenues from services provided on a
time-and-materials basis are recognized in the period that services are
provided. The Company bears the risk of cost over-runs and inflation with
respect to its fixed-price projects. In order to mitigate these risks, the
Company subdivides its projects into smaller phases, and the Company and its
clients agree on a fixed-price and fixed-time frame prior to commencement of
each phase. These agreements may be revised, pending approval by the Company
and its clients, when a significant change in the scope or cost of a phase
arises that neither the Company nor the client had anticipated. Under the
percentage of completion method, the Company must estimate the percentage of
completion of each project at the end of each financial reporting period.
Estimates are subject to adjustment as a project progresses to reflect changes
in projected completion costs or dates. The cumulative impact of any revision
in estimates of the percentage of work completed is reflected in the financial
reporting period in which the change in the estimate becomes known. Since the
Company bears the risk of cost over-runs and inflation associated with fixed-
price, fixed-time frame projects, the Company's operating results may be
adversely affected by inaccurate estimates of contract completion costs and
dates. Although from time to time the Company has been required to make
revisions to its work completion estimate, to date none of such revisions has
had a material adverse effect on the Company's operating results or financial
condition. See "Risk Factors--Variability of Quarterly Operations and
Financial Results."
In early 1996, several conferences and market pronouncements increased
worldwide awareness of the impending problems associated with the inability of
software applications to effectively process programs that use the two-digit
data field format to represent a year. The Company has generated new contracts
for a significant number of Year 2000 conversion projects as a result of the
Company's Transform2000 toolset, TSQM methodology and successful completion of
Year 2000 projects. Accordingly, the Company anticipates that revenues from
Year 2000 services will continue to increase significantly as a percentage of
the Company's total revenues over the next three years. The Company recently
increased its staff of software development professionals from approximately
375 as of January 1, 1996 to approximately 500 as of September 1, 1996
principally to perform the significant additional services required by its new
Year 2000 contracts. The Company believes that demand for Year 2000 conversion
services will continue after the turn of the century, although this demand is
expected to diminish after the year 2000 as many Year 2000 compliance
solutions are implemented and tested. See "Risk Factors--Potential Decrease in
Services after Addressing the Year 2000 Problem" and "--Fixed-Price, Fixed-
Time Frame Contracts."
AFFILIATE RELATIONSHIPS
At June 30, 1996, the Company owned approximately 34.2% of the outstanding
equity of IMR-India. In August 1996, the Company completed the acquisition of
Second India's entire 10.5% equity interest in IMR-India in exchange for
approximately $1.8 million in cash and in connection therewith, approximately
$527,000 of indebtedness owed by IMR-India to Second India was cancelled. In
July and September 1996, the Company entered into agreements pursuant to which
the Company will acquire: (i) Mr. Sanan's entire 18.4% interest in IMR-India
for approximately $3.1 million in cash; and (ii) India Magnum's entire 35.1%
interest in IMR-India for approximately $5.1 million in cash. These
transactions will be closed upon consummation of this Offering.
19
<PAGE>
Upon closing of these transactions, the Company will own approximately 98.2%
of IMR-India's outstanding equity capital and the balance will be held by
individual shareholders. Additionally, IMR-India has granted to certain of its
employees options to acquire additional shares which, if fully vested, would
upon exercise represent 3.5% of IMR-India's equity, and would cause the
Company's equity interest to decrease accordingly. The Company's financial
statements have been consolidated with the financial statements of IMR-India
for all periods since September 1993, the date the Company first acquired an
equity interest in IMR-India. As of the date of this Prospectus, the Company
owns a 39.5% equity interest in IMR-U.K. See "Certain Transactions--IMR India
Transactions" and "--IMR U.K. Transactions."
INCOME TAX MATTERS
Since its inception, the Company has elected to operate as an S corporation
under the Code. An S corporation generally is not subject to income tax at the
corporate level (with certain exceptions under state income tax laws). Upon
completion of this Offering, the Company will elect to terminate its S
corporation status and, thereafter, will be subject to federal and state
income taxes on its earnings. See "Prior S Corporation Status and
Distributions."
IMR-India is eligible for certain favorable tax provisions provided under
India law including: (i) an exemption from payment of corporate income taxes
for a period of five consecutive years in the first eight years of operation
(the "Tax Holiday"); or (ii) an exemption from income taxes on the profits
derived from exporting computer software or transmitting software from India
(the "Export Exemption"). The Export Exemption remains available after
expiration of the Tax Holiday. As a result of the availability of these
exemptions, the Company has not recorded deferred income taxes applicable to
the undistributed earnings of IMR-India, which aggregated approximately
$525,000 at June 30, 1996. The Company considers these earnings to be
permanently invested in India and does not anticipate repatriating any of
these earnings to the U.S. If the Company determines to repatriate any
earnings of IMR-India, it will be required to record a provision for income
taxes on such amounts and, upon repartriation of the funds, pay U.S. taxes
thereon. See Note 13 to Notes to Consolidated Financial Statements.
NET CHARGE RESULTING FROM S CORPORATION TERMINATION
In connection with the termination of its S corporation status, the Company
is required by the Code to change its method of accounting for tax reporting
purposes from the cash method to the accrual method. This change will result
in a net charge to earnings in the quarter in which this Offering closes
resulting from differences in the tax treatment of certain of the Company's
assets and liabilities under the cash and accrual methods of accounting and
will be reflected through an increase in current and deferred income tax
liabilities. The actual current and deferred income tax liabilities and the
offsetting related income tax provision will be recorded in the Company's
Consolidated Financial Statements as of the date of termination of the
Company's S corporation status. Based upon the Company's unaudited results of
operations and financial information as of and for the six months ended June
30, 1996 and assuming the Company ceased to operate as an S corporation as of
such date, the net charge to earnings as a provision for current and deferred
income taxes would have been approximately $1.0 million. This net charge is
based upon adjusting a taxable temporary difference of approximately $2.7
million (the tax effect of which is approximately $1.0 million), which would
be included in taxable income in four equal amounts for tax years beginning
with 1996. The actual net charge to earnings could be greater, depending upon
the Company's results of operations and financial condition as of the date of
termination of the Company's S corporation status. See "Prior S Corporation
Status and Distributions," "Use of Proceeds" and Notes to Consolidated
Financial Statements.
20
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth certain operating data as a percentage of
gross revenues for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------- --------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Revenues..................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues............. 81.5 61.4 60.4 63.9 58.3
------- ------- ------- ------ ------
Gross profit................. 18.5 38.6 39.6 36.1 41.7
Selling, general and adminis-
trative expenses............ 44.6 32.7 24.2 23.3 24.9
------- ------- ------- ------ ------
Income (loss) from opera-
tions..................... (26.1) 5.9 15.4 12.8 16.8
Other (expense) income:
Loss in equity investment.. (1.3) (0.9) (0.5) (0.6) (0.0)
Interest expense........... (2.2) (3.4) (1.5) (2.0) (1.3)
Other income............... 0.0 7.8 2.1 4.1 0.3
------- ------- ------- ------ ------
Total other (expense) in-
come.................... (3.5) 3.5 0.1 1.7 (1.0)
------- ------- ------- ------ ------
Income (loss) before
provision (benefit) for
income taxes and minority
interest.................... (29.6) 9.4 15.5 14.5 15.8
Provision (benefit) for in-
come taxes.................. 0.0 3.2 1.3 1.9 0.9
------- ------- ------- ------ ------
Income (loss) before minor-
ity interest.............. (29.6) 6.2 14.2 12.6 14.9
Minority interest in net (in-
come) loss.................. 0.0 (0.4) (3.1) (3.3) (2.7)
------- ------- ------- ------ ------
Net income (loss).......... (29.6)% 5.8% 11.1% 9.3% 12.2%
======= ======= ======= ====== ======
Pro forma net income......... 7.1% 7.6%
======= ======
</TABLE>
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Revenues. Revenues were $12.4 million during the first six months of 1996,
representing a 17.2% increase over revenues of $10.6 million in the first six
months of 1995. This increase principally reflected generally more favorable
project pricing in 1996 and significant increases in revenues from Year 2000,
application maintenance and software development projects, partially offset by
a reduction in revenues from programming and consulting projects. During the
first six months of 1996, the Company realized a 440.1%, 115.0% and 29.2%
increase in revenues from Year 2000, application maintenance and software
development projects, respectively. Revenues from Year 2000 conversion
projects represented 12.1% and 2.6% of total revenues during the first six
months of 1996 and 1995, respectively. Revenues from the Company's five
largest clients represented 65.3% of revenues in the first six months of 1996,
while revenues from the Company's five largest clients represented 64.8% of
revenues in the first six months in 1995.
Cost of Revenues. Cost of revenues were $7.2 million in the first six months
of 1996, representing an 6.9% increase over cost of revenues of $6.8 million
for the first six months of 1995. Cost of revenues consist primarily of
salaries and employee benefits for personnel dedicated to client projects as
well as amortization of capitalized software cost. Cost of revenues
represented 58.3% and 63.9% of revenues in the first six months of 1996 and
1995, respectively. This decrease in the percentage of revenues reflects: (i)
the Company's implementation of better controls over project pricing and
margins; (ii) generally more favorable pricing beginning in the second half of
1995; and (iii) improved utilization of technical personnel in India in the
first six months of 1996. This improved utilization reflected the benefits
associated with the completion of the Company's consolidation of its India
offshore development center from locations in Bombay and Trivandrum to a
single location in Bangalore. The decrease was partially offset by a high
margin software development contract that commenced in the second quarter of
1995 as well as an increase in higher margin fixed-price Year 2000 and
software development projects.
21
<PAGE>
Gross Profit. Gross profit was $5.2 million during the first six months of
1996, representing a 35.4% increase over gross profit of $3.8 million during
the first six months of 1995. As a percentage of revenues, gross profit
increased from 36.1% in the first six months of 1995 to 41.7% in the same
period for 1996 for the reasons stated above.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses in the first six months of 1996 were $3.1 million
representing a 25.3% increase over selling, general and administrative
expenses of $2.5 million in the first six months of 1995. Selling, general and
administrative expenses consist primarily of salaries, employee benefits,
travel, promotion, telecommunications, management, finance, administrative and
occupancy costs. Selling, general and administrative costs were 24.9% of
revenues in the first six months of 1996 as compared to 23.3% of revenues in
the first six months of 1995. This increase reflected the establishment of a
new incentive program for project personnel which commenced in the second half
of 1995. In addition, in the quarter ended June 1995, the Company experienced
lower selling, general and administrative expenses due to the temporary
reduction in administrative personnel costs and other expenses during the
consolidation of the Company's India offshore software development center from
locations in Bombay and Trivandrum to the present location in Bangalore.
Income (Loss) from Operations. Income from operations was $2.1 million
during the first six months of 1996, representing a 53.8% increase over income
from operations of $1.4 million during the first six months of 1995. As a
percentage of revenues, operating income increased from 12.8% in the first six
months of 1995 to 16.8% in the same period for 1996 for the reasons stated
above.
Other (Expense) Income. The Company incurred other expense of $129,000 in
the first six months of 1996 as compared to other income of $181,000 in the
first six months of 1995. Other income in 1995 included a non-recurring
$428,000 net gain realized from the sale by IMR-India of certain of its assets
and real property in Bombay and Trivandrum. The loss in equity investment
represents losses associated with the Company's 39.5% interest in IMR-U.K.
Results for IMR-U.K. improved from a loss in the first six months of 1995 to
approximately break-even in the same period in 1996.
Minority Interest in Net (Income) Loss. The minority interest in income
decreased from $355,000 in the first six months of 1995, to $330,000 in the
first six months of 1996. This represents the equity interest in IMR-India's
net income held by those stockholders of IMR-India other than the Company. The
reduction in the minority interest in net income from the first six months of
1995 to the first six months in 1996 reflects a slightly higher profit
realized by IMR-India in 1995 resulting from the $428,000 net gain referenced
above.
Provision for Income Taxes. The provision for income taxes reflects taxable
income derived by IMR-India related to sales of software products in India and
the gain realized from its asset sale. The favorable tax rates in India
reflect benefits in the Indian income and export taxation laws for companies
primarily engaged in exporting computer software and software-related
services. The tax provision for IMR-India's domestic operations was $114,000
in the first six months of 1996 as compared to $198,000 in the first six
months in 1995, which principally reflects the additional tax expense incurred
on the sale of certain assets and real property.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
Revenues. Revenues were $22.7 million in 1995, representing a 61.0% increase
from revenues of $14.1 million in 1994. This increase reflected increases in
both the size and the number of client projects. In 1995, the Company realized
a significant increase in revenues from software development, application
maintenance and migration and re-engineering projects. Revenues from the
Company's five largest clients in 1995 represented 65.6% of 1995 revenues,
while revenues from the Company's five largest clients in 1994 represented
49.0% of 1994 revenues. In particular, the Company benefited from a large
migration contract that commenced in late 1994 and continued throughout 1995
as well as a large software development project that started in mid-1995.
Cost of Revenues. Cost of revenues were $13.7 million in 1995, representing
a 58.3% increase over cost of revenues of $8.7 million in 1994. Cost of
revenues represented 60.4% and 61.4% of revenues in 1995 and
22
<PAGE>
1994, respectively. This decrease as a percentage of revenues reflects the
Company's implementation of tighter controls over project pricing and margins
as well as an increase in higher margin Year 2000 projects. This decrease
would have been larger except for the benefits of a number of higher margin
contracts completed in the first quarter of 1994. In addition, in 1995 the
Company incurred lower expenses due to the temporary reduction in personnel
costs and other expenses during the consolidation of the Company's India
offshore software development center from locations in Bombay and Trivandrum
to the present location in Bangalore.
Gross Profit. Gross profit was $9.0 million in 1995, representing a 65.3%
increase over gross profit of $5.4 million in 1994. As a percentage of
revenues, gross profit increased from 38.6% in 1994 to 39.6% in the same
period for 1995 for the reasons stated above.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $5.4 million in 1995 representing an 18.9%
increase over selling, general and administrative expenses of $4.6 million in
1994. Selling, general and administrative expenses were 24.2% and 32.7% of
revenues in 1995 and 1994, respectively. The decrease as a percentage of
revenues was a result of the Company's ability to achieve significantly higher
revenues in 1995 without a corresponding increase in management, finance,
administrative and occupancy costs, a large portion of which are fixed in
nature.
Income (Loss) from Operations. Income from operations was $3.5 million in
1995, representing a 323.2% increase over income from operations of $829,000
in 1994. As a percentage of revenues, income from operations increased from
5.9% in 1994 to 15.4% in the same period for 1995 for the reasons stated
above.
Other (Expense) Income. The Company realized other income of $14,000 in 1995
as compared to $498,000 in 1994. Other income in 1995 included a non-recurring
$428,000 net gain realized upon the sale of real estate and assets by IMR-
India, offset by interest expense of $349,000 and the Company's share of
losses in IMR-U.K. of $110,000. Other income in 1994 reflected non-recurring
income of $1.0 million derived from the Company's sale of a portion of its
equity interest in IMR-India to India Magnum plus $71,000 realized upon the
sale by IMR-India of certain assets and real property, partially offset by
interest expense of $473,000 and the Company's share of a loss in IMR-U.K. of
$126,000. At the beginning of 1994, the Company's interest in IMR-U.K. was
50.0%. The Company phased down the operations in IMR-U.K. in early 1994 and
recommenced operations after receiving a 50.0% investment by The Link Group of
Companies Limited in late 1994. The Company's interest in IMR-U.K.'s loss
decreased from $126,000 in 1994 to $110,000 in 1995, reflecting the decrease
in the Company's interest from 50.0% in 1994 to 39.5% in 1995.
Minority Interest in Net (Income) Loss. In 1995, the minority interest in
net income was $712,000 as compared to $63,000 in 1994. This substantial
increase reflects significantly increased profits realized by IMR-India in
1995, as well as the decrease in the Company's equity interest. In 1995, the
Company held a 34.2% equity interest in IMR-India, while the Company held a
69.3% equity interest in 1994.
Provision (Benefit) for Income Taxes. The tax provision was $293,000 in 1995
as compared to $451,000 in 1994. During 1994, the Company paid $365,000 of
India withholding taxes incurred in connection with the Company's sale of a
portion of its equity interest in IMR-India to India Magnum. The 1995 tax
provision includes taxes payable on the gain realized from the 1995 sale by
IMR-India of certain assets and real property as well as an increase in
taxable income for domestic operations of IMR-India in 1995.
23
<PAGE>
YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993
Revenues. Revenues were $14.1 million in 1994, representing a 13.5% increase
from revenues of $12.4 million in 1993. This increase primarily reflected an
increase in the average size of projects provided for the Company's principal
clients. Revenues from the Company's five largest clients in 1994 represented
49.0% of 1994 revenues, while revenues from the Company's five largest clients
in 1993 represented 42.0% of 1993 revenues.
Cost of Revenues. Cost of revenues were $8.7 million in 1995, representing a
14.5% decrease from cost of revenues of $10.1 million in 1993. Cost of
revenues represented 61.4% and 81.5% of revenues in 1994 and 1993,
respectively. This decrease as a percentage of revenues reflects the
acquisition in September 1993 of the Company's 69.3% interest in IMR-India
(resulting in lower development costs to the Company), as well as the effect
in 1993 of lower margin projects taken on to validate the Company's software
development concept and to secure client relationships. In addition, the
Company incurred a significant non-reimbursed expense of approximately
$900,000 in 1993 to develop the software toolsets for client/server migration
and Year 2000 conversion services.
Gross Profit. Gross profit was $5.4 million in 1994, representing a 136.7%
increase over gross profit of $2.3 million in 1993. As a percentage of
revenues, gross profit increased from 18.5% in 1993 to 38.6% in the same
period for 1994 for the reasons stated above.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $4.6 million in 1994, representing a 16.8%
decrease from selling, general and administrative expenses of $5.5 million in
1993. Selling, general and administrative expenses represented 32.7% and 44.6%
of revenues in 1994 and 1993, respectively. During 1993, the Company increased
its selling, general and administrative expenses significantly in anticipation
of increased revenues. In 1994, the Company acted to significantly reduce
selling, general and administrative expenses principally through significant
decreases in the costs for personnel and overhead. Selling, general and
administrative expenses as a percentage of revenues were also positively
affected by the September 1993 acquisition of the Company's 69.3% interest in
IMR-India. See "Risk Factors-- Management of Growth."
Income (Loss) from Operations. Income from operations was $829,000 in 1994,
as compared to a loss from operations of $3.2 million in 1993.
Other (Expense) Income. The Company realized other income of $498,000 in
1994 as compared to other expenses of $434,000 in 1993. This difference
principally reflected income of $1.0 million derived from the Company's 1994
sale to India Magnum of a portion of the Company's equity in IMR-India, plus
$71,000 realized upon the sale by IMR-India of certain assets and real
property. The Company had no corresponding other income for 1993. Interest
expense increased from $275,000 in 1993 to $473,000 in 1994 as a result of
substantially increased borrowings under the Company's lines of credit.
Minority Interest in Net (Income) Loss. In 1994, the minority interest in
net income was $63,000 compared to a $5,000 minority interest in net loss in
1993. This change reflects the profit realized by IMR-India during 1994 and a
slight loss realized by IMR-India during 1993.
Provision (Benefit) for Income Taxes. The Company recorded a provision for
income taxes of $451,000 in 1994, reflecting the Company's net income, as
compared to a benefit of $2,000 in 1993. The 1994 provision principally
reflects the $365,000 withholding taxes to be paid in connection with the
Company's sale of a portion of its equity interest in IMR-India.
24
<PAGE>
QUARTERLY RESULTS OF OPERATIONS
The following table presents certain unaudited quarterly statements of
operations data for each of the 10 quarters beginning January 1, 1994 and
ending June 30, 1996. The information relating to the quarters beginning
January 1, 1994 and ending on December 31, 1995 is derived from and is
qualified by reference to the audited Consolidated Financial Statements
appearing elsewhere in this Prospectus and, in the opinion of management,
includes all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of that information. The results of
operations for any quarter are not necessarily indicative of the results to be
expected for any future period.
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------------------------
1994 1995 1996
---------------------------------- ---------------------------------- ----------------
MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 JUNE 30
------- ------- -------- ------- ------- ------- -------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $3,602 $3,608 $3,501 $3,390 $5,203 $5,372 $5,853 $6,272 $6,090 $6,307
Gross profit............ 1,795 1,256 1,040 1,349 2,144 1,678 2,247 2,923 2,556 2,619
Income from operations.. 512 29 (75) 364 806 547 790 1,365 1,010 1,073
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------------------------
1994 1995 1996
---------------------------------- ---------------------------------- ----------------
MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 JUNE 30
------- ------- -------- ------- ------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Gross profit............ 49.8 34.8 29.7 39.8 41.2 31.2 38.4 46.6 42.0 41.5
Income from operations.. 14.2 0.8 (2.1) 10.7 15.5 10.2 13.5 21.7 16.6 17.0
</TABLE>
The Company's operations and related revenues and operating results
historically have varied substantially from quarter to quarter, and the
Company expects these variations to continue. Among the factors causing these
variations have been the number, timing and scope of IT projects in which the
Company is engaged, the contractual terms of such projects, delays incurred in
the performance of such projects, the accuracy of estimates of resources and
time frames required to complete ongoing projects, and general economic
conditions. A high percentage of the Company's operating expenses,
particularly personnel and rent, are relatively fixed in advance of any
particular quarter. As a result, unanticipated variations in the number and
timing of the Company's projects or in employee utilization rates may cause
significant variations in operating results in any particular quarter. An
unanticipated termination of a major project, a client's decision not to
pursue a new project or proceed to succeeding stages of a current project, or
the completion during a quarter of several major client projects could require
the Company to pay underutilized employees and therefore have a material
adverse effect on the Company's results of operations and financial condition.
See "Risk Factors--Variability of Quarterly Operations and Financial Results."
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities used cash of $1.6 million in 1993 and
$747,000 in 1994 and generated cash of $1.0 million in 1995 and $908,000 for
the six months ended June 30, 1996. The Company's use of cash in 1993 was due
primarily to the net loss generated in that period. The Company's use of cash
in 1994 was due primarily to an increase in accounts receivable and other
current assets as well as the Company's recognition of a $1.0 million gain on
the sale of a portion of its investment in IMR-India. The Company generated
cash in 1995 and in the first six months of 1996 due to a higher level of net
income in both periods which was partially offset in both periods by increases
in accounts receivable.
The Company's investing activities used cash of $418,000 in 1993, generated
cash of $1.3 million in 1994 and $503,000 in 1995, and used cash of $982,000
for the six months ended June 30, 1996. The Company's use of cash in 1993 was
due in large part to capital expenditures and investments in IMR-U.K. The
Company generated cash in 1994 and 1995 as a result of the sale of a portion
of its investment in IMR-India as well as IMR-India's sale of real property
and other assets in India. The cash generated in both of those period was
offset by capital expenditures. The Company's use of cash in the first six
months of 1996 was due in large part to capital expenditures and an additional
investment in IMR-U.K.
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<PAGE>
The Company's financing activities provided cash of $2.5 million in 1993,
and used cash of $149,000 in 1994, $804,000 in 1995 and $621,000 for the six
months ended June 30, 1996. The Company generated cash in 1993 as a result of
borrowings under the Company's bank credit facilities as well as increasing
the amount payable to IMR-India prior to its acquisition by IMR-U.S in
September 1993. The Company's use of cash in 1994, 1995 and the six months
ended June 30, 1996 was due primarily to the repayment of bank borrowings and
payments made under capital lease obligations, which were partially offset by
additional borrowings under the Company's bank credit facilities.
As of June 30, 1996, the Company had working capital of $1.7 million. Cash
and cash equivalents were $939,000. Available bank lines of credit totaled
$2.5 million at June 30, 1996 ($3.25 million less $775,000 outstanding). As of
September 9, 1996, the outstanding borrowings under these facilities were $1.9
million. Borrowings in 1996 have been used primarily to finance the Company's
$1.8 million acquisition of Second India's equity interest in IMR-India. See
"Certain Transactions--IMR India Transactions."
The Company maintains a term note payable to Barnett Bank, which is
repayable monthly, together with interest thereon at 30-day LIBOR plus 2.0%
(7.4% as of June 30, 1996) in installments of $16,250 commencing August 1996
through July 2001. This term loan is collateralized by the Company's accounts
receivable and equipment, and is guaranteed by Mr. Sanan. The Company
maintains a line of credit with Barnett Bank which allows the Company to
borrow up to 80% of the book value of the Company's accounts receivable with
interest at 30-day LIBOR plus 1.8% (7.2% as of June 30, 1996). At June 30,
1996, there was no amount outstanding and payable under this line of credit
and $2.4 million was available for borrowing. Subsequent to June 30, 1996, the
Company borrowed $1.8 million from this line of credit in order to fund a
payment to Second India to purchase its equity interest in IMR-India. See
"Certain Transactions--IMR India Transactions." At September 1, 1996, the
outstanding balance under this line of credit was $1.8 million. The Company
plans to repay the outstanding balance from this line of credit from the
proceeds of the Offering. See "Use of Proceeds." Provisions of this line of
credit and certain notes payable contain financial covenants, including
covenants which require the Company to maintain certain financial ratios. At
June 30, 1996, the Company was in compliance with these covenants.
The Company maintains an export sales accounts receivable discounting
facility with Canara Bank, an Indian government owned bank. Principal payments
on amounts borrowed are due within 90 days of their respective borrowings.
Interest is currently payable at 13.0%. At June 30, 1996, December 31, 1995
and December 31, 1994, approximately $775,000, $655,000 and $425,000,
respectively, were due under this facility. The maximum amount available under
this facility at June 30, 1996 was approximately $585,000; however, the bank
has permitted a temporary increase in the amount available under this
facility. During May 1996, IMR-India applied to the bank to increase the
credit facility to approximately $877,000. Pending action on the application,
the bank has temporarily allowed IMR-India to utilize the additional amount of
the facility. The facility is collateralized by IMR-India's export accounts
receivable, property and equipment, and is guaranteed by Satish K. Sanan, the
Company's President, Chief Executive Officer and majority shareholder.
In connection with the Company's purchase in August 1996 of Second India's
entire interest in IMR-India, pursuant to the terms of agreements between the
Company and Second India, IMR-India's obligation to repay a loan from Second
India in the amount of $527,000 was cancelled. See "Certain Transactions--IMR-
India Transactions."
The Company estimates that it will incur capital expenditures in 1996 of
approximately $400,000 to complete improvements for additional space in the
IMR-India's office facilities in Bangalore, India. In August 1996, IMR-India
obtained a letter commitment for a total loan of $1.3 million from the Export-
Import Bank of India to finance the purchase of plant and equipment for
expansion of its facility at Bangalore. The completion of this loan will be
conditioned upon the negotiation and execution of final legal documents. The
loan is repayable in eight equal bi-annual installments of $162,500,
commencing September 1997. Interest on the loan will be payable at LIBOR plus
3.0% per annum, will be secured by a first lien on all of IMR-India's property
and equipment and will be guaranteed by Mr. Sanan.
26
<PAGE>
The Company believes that the net proceeds of this Offering, together with
its lines of credit and internally generated funds, will permit it to repay
all outstanding short-term debt, meet its working capital obligations and fund
the development of its business for the next 12 months.
EFFECTS OF INFLATION
The Company's most significant costs are the salaries and related benefits
for its consultants and other professionals. Competition in India and the U.S.
for IT professionals with the advanced technological skills necessary to
perform the services offered by the Company have caused wages to increase at a
rate greater than the general rate of inflation. As with other IT service
providers, the Company must adequately anticipate wage increases, particularly
on its fixed-price contracts. Further, India has in the past experienced
significant inflation. Historically, the Company's wage costs in India have
been significantly lower than its wage costs in the U.S. for comparably-
skilled employees, although wage costs in India are presently increasing at a
faster rate than in the U.S. There can be no assurance that the Company will
be able to recover cost increases through increases in the prices that it
charges for its services in the U.S. See "Risk Factors--Competitive Market for
Technical Personnel" and "--Fixed-Price, Fixed-Time Frame Contracts."
NEW ACCOUNTING PRONOUNCEMENTS
In October 1995, the Financial Accounting Standards Board issued Statement
No. 123 ("SFAS 123") which establishes a fair value based method for
accounting for stock-based compensation plans. With respect to stock options
granted to employees, SFAS 123 permits companies to continue using the
accounting method promulgated by the Accounting Principals Board Opinion No.
25 (APB 25), "Accounting for Stock Issued to Employees," to measure
compensation or, alternatively, to adopt the fair value based method
prescribed by SFAS 123. If the APB 25 method is continued, pro forma footnote
disclosures are required as if SFAS 123 accounting provisions were followed.
Management has determined not to adopt the SFAS 123 accounting recognition
provisions. Accordingly, SFAS 123 will not have any impact on the Company's
financial statements, except for the addition of the required footnote
disclosures.
SFAS No. 121, "Accounting for the Impairment of Long-lived Assets for Long-
lived Assets to be Disposed Of" is effective for years beginning after
December 15, 1995. This statement requires that long-lived assets and certain
intangibles to be held and used by the Company be reviewed for impairment.
This pronouncement is not expected to have a material impact on the financial
statements of the Company.
27
<PAGE>
BUSINESS
OVERVIEW
The Company provides applications software outsourcing solutions for the IT
departments of large businesses with intensive information processing needs.
The Company's services, which generally are offered on a fixed-price, fixed-
time frame basis, include software development, application maintenance, Year
2000 conversion, and migration and re-engineering services. In addition, the
Company offers programming and consulting services on a time-and-materials
basis in order to optimize employee utilization and provide a potential source
of future outsourcing contracts. The Company's services, which it terms
"transitional outsourcing," assist clients in the maintenance of mainframe-
based legacy applications and in the transition from legacy systems to open
architecture, client/server and other emerging technologies. IMR delivers many
of its transitional outsourcing services using its proprietary TSQM software
engineering process and its offshore software development facility in
Bangalore, India. This facility is linked by satellite communications to both
the Company's offices and the offices of many of its clients. This allows IMR
to offer its services on a 24-hour basis through an on-site, off-site and
offshore project team working multiple shifts made possible by the time
difference between North America and India. The Company believes that its
proprietary TSQM process, software engineering methodologies and toolsets, and
its offshore software development center enable it to provide high quality,
cost-effective IT solutions through the utilization of global resources.
The Company's clients are primarily Fortune 200 or comparably sized
companies with significant IT budgets and recurring needs for software
development, application maintenance, Year 2000 conversion and IT staffing
services. IMR serves clients in a variety of industries including financial
services, insurance, manufacturing, retail and utilities. In 1995 and the
first six months of 1996, the Company provided transitional outsourcing
services for such companies as Commercial Union Insurance Companies, Dayton
Hudson Corporation, John Hancock Financial Services, Michelin Tire
Corporation, SPS Payment Systems and Southern California Edison. Through a
staff of more than 500 software development professionals, the Company serves
its clients from its headquarters in Clearwater, Florida, its offshore
software development center in Bangalore, India, its branch offices located in
Boston, Chicago, Dallas and Rochester, and its affiliate office in London,
England.
INDUSTRY OVERVIEW
Intense competition, deregulation, innovation and rapid technological
advancements are forcing companies to make fundamental changes in their
business processes. These changes have compelled many businesses to downsize
staffs and reduce costs in order to achieve greater returns on investment.
While confronting these internal challenges, companies also face customer
demands to improve service levels, lower costs, reduce delivery times and
increase value. In this competitive environment, improving IT systems is one
critical way for businesses to achieve greater productivity and manage their
operations more efficiently. As a result, the ability of an organization to
integrate and deploy improved information technologies in a cost-effective
manner has become critical to its success.
Although client/server and other emerging technologies offer the promise of
faster, more functional and more flexible software applications, the
implementation of business solutions encompassing these new technologies
presents companies with major challenges. Designing, developing and employing
these solutions requires highly skilled individuals trained in many diverse
technologies and architectures. However, there is a shortage of these
individuals, and many large companies are reluctant to expand their IT
departments through additional staffing, particularly at a time when they are
attempting to minimize their fixed costs and reduce workforces. Moreover,
redeploying and retraining in-house resources to develop and implement new
technologies typically is impractical because the in-house IT staff must
continue to support existing legacy systems and dated technology. In addition,
implementing new systems also requires highly developed project management
skills so that projects are completed within budget and on time.
28
<PAGE>
As a result of the challenges presented by the technological transition to
client/server systems and the ongoing need to maintain legacy systems, many
large companies are seeking ways to outsource their IT projects, particularly
on a fixed-price, fixed-time frame basis in order to minimize the risks
associated with such large scale technology projects. Dataquest, a recognized
market research firm, estimated that the market for systems integration,
consulting, applications development and outsourcing services was
approximately $91.0 billion worldwide in 1994 and estimated this market to be
growing by approximately 16.5% annually through 1999. Outsourcing enables
organizations to focus on core-competencies, to reduce costs by converting in-
house fixed IT costs to variable costs and to reduce the time-to-completion of
significant IT projects.
Outsourcing represents a particularly cost-effective solution for labor-
intensive IT projects such as the fast approaching Year 2000 problem. Many
existing computer systems run software programs permitting only two- digit
entries for years (e.g., 1996 is read as "96") and therefore cannot properly
process dates in the next century. For decades, computer programmers have
encoded mainframe software applications using this two-digit format to
represent a year (e.g., "95" for "1995" in the "yymmdd" format). Programmers
engaged in this "short-cut" to free up valuable computer memory and disk
storage space during a time when availability of these resources was a
critical programming consideration. Many software programs that use the two-
digit year date field to perform computations or decision-making functions
will fail due to an inability to correctly interpret dates in the 21st
century. For example, many software systems will misinterpret "00" to mean the
year 1900 rather than 2000. Resolving a Year 2000 problem is a highly time-
and labor-intensive project often requiring software engineers to analyze
millions of lines of software code and millions of items of data. As a result,
the Company believes that most large Year 2000 conversion projects will be
outsourced. Although the size of the Year 2000 problem is difficult to
estimate, the Gartner Group, a recognized industry source, has estimated that
the worldwide costs (including in-house costs) to resolve the Year 2000
problem could range from $300 billion to $600 billion.
THE IMR SOLUTION
The Company employs a systematic and disciplined approach to every
outsourcing engagement. The three critical components of the IMR solution,
which management believes differentiate the Company from other IT service
providers, are: (i) its TSQM software engineering process; (ii) its offshore
software development capability; and (iii) its proprietary toolsets. Together,
these three key elements of the Company's service delivery model help ensure
that clients receive high quality, cost-effective solutions on time and within
budget.
The TSQM Software Engineering Process. TSQM is a set of defined software
development processes, techniques and tools that are implemented to maximize
quality in the Company's processes, deliverables and services, and to minimize
project risks. Continuously refined since the Company's inception, TSQM
represents the software engineering process through which the Company defines
and performs projects. For every project, the Company implements its two-
phased TSQM process that encompasses: (i) an extensive front-end assessment
that defines the scope and risks of the project; and (ii) a fixed-price
implementation stage that is further subdivided into smaller phases with
frequent deliverables and feedback from its clients. Through the rigorous
adherence to its TSQM process, the Company identifies, monitors and manages
the risks associated with the cost, schedule, performance, support and
delivery of projects on a fixed-price, fixed-time frame basis. This process
also allows the Company to detect, correct and mitigate quality defects and to
establish appropriate contingencies for each project.
Offshore Software Development. The Company's offshore software development
center in India provides IMR with a significant cost advantage as well as the
ability to provide 24-hour service to its clients. The Company's costs in
India have historically been significantly lower than costs incurred for
comparable resources in the U.S. Through satellite communications, many of the
Company's clients are linked to IMR's India facility where, on average,
approximately 70% of a project's work is performed. Due to the time difference
between India and the U.S., the Company can create a virtual "second shift"
for its North American clients allowing for more rapid completion of projects
and off-peak utilization of clients' technology resources. In addition, for
larger projects with critically short time frames, the offshore facility
allows the Company to parallel process many of its development phases to
accelerate delivery time.
29
<PAGE>
Proprietary Toolsets. The Company has made a significant investment to
design and develop a set of proprietary software tools which are used to
facilitate and streamline a Year 2000 conversion project as well as the
migration from mainframe computing environments to flexible open systems and
relational database management systems ("RDBMS") computing environments. These
tools, which are developed utilizing object-oriented technologies, allow the
Company to reduce both the cost and time required to successfully complete
large scale migration projects. The Company's TransformIMS, TransformVSAM and
TransformDB2 toolsets support the migration of mainframe-based legacy systems
(e.g., IMS and DB2) and their related applications to RDBMS environments
(e.g., Oracle, Sybase and Informix). Transform2000 supports full life cycle
conversion for Year 2000 projects. IMR uses Transform2000 to download
application source code and data to work-stations and to analyze this
information to identify two-digit year field codes. Transform2000
automatically transforms and converts much of this data to make it Year 2000
compliant.
STRATEGIES
The Company's objective is to be a leading provider of comprehensive
transitional IT outsourcing services and solutions to large businesses with
intensive information processing needs. The Company plans to pursue the
following strategies to achieve this objective:
BUSINESS STRATEGIES
Develop Long-Term Strategic Partner Relationships with Clients. The Company
strives to develop "strategic partner" relationships with its clients whereby
the Company shares both the risks and rewards associated with outsourcing
engagements. To establish these relationships with clients, the Company
endeavors to integrate its on-site personnel into the operations and employee
culture of its clients' IT departments and regularly makes significant
investments in technology to support the strategic technical direction of its
clients. For example, the Company recently acquired certain integrated
advanced client/server and computer assisted software engineering technologies
to support several large client projects. These investments helped the Company
secure the loyalty and trust of clients and provided it with the tools and
knowledge to perform similar projects for other clients. To ensure constant
communication, the Company uses several methods to obtain continuous client
feed-back, including client satisfaction surveys, consultant performance
surveys and regularly scheduled meetings with a client's senior management. A
substantial portion of the performance incentive for the senior executives,
sales executives and senior project managers of the Company is directly linked
to client satisfaction and on-time within budget delivery of quality IT
services.
Develop and Enhance Processes, Methodologies and Productivity-Enhancing
Software Tools. The Company is committed to improving and enhancing its TSQM
process as well as its proprietary software engineering methodologies and
toolsets. With the rapid evolution of technology, the Company believes it is
imperative to invest in research and development. The Company currently is
designing and developing new productivity software tools to automate testing
processes and improve project estimating and risk assessment techniques.
Moreover, the Company plans to add additional modules to its current software
tools which will allow the re-design, migration and conversion of additional
types of databases and programming languages. The Company believes that this
strategy is critical in differentiating the Company from its competitors.
Focus on Fixed-Price, Fixed-Time Frame Projects. As a core element of its
business philosophy, the Company offers many of its IT services on a fixed-
price, fixed-time frame basis. Management believes that effectively structured
fixed-price, fixed-time frame projects provide clients with significantly
reduced risks while offering the Company the potential benefit of enhanced
margins. In order to reduce the risks to the Company, the fixed-time frame
component of a project is divided into several phases with frequent
deliverables. The Company believes that discreet project phases make it easier
for the Company to commit to a fixed price for a project, meet client
expectations, maintain high quality and control costs. The Company strives to
reduce risks and achieve greater potential profits through shorter development
cycles, the implementation of a rigorous change-order management process and
the use of global resources. Furthermore, in order to monitor its financial
performance, IMR constantly reviews project data and adheres to strict
financial management practices.
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Continue to Expand Offshore Software Development Resources. The Company
believes that the availability of high quality technical resources at its
offshore development facility in Bangalore, India is one of its most
significant competitive advantages due to the lower cost structure and ability
to provide multiple work shifts. The Company's success will depend to a
significant extent on its ability to attract, train, motivate and retain
highly skilled employees in India, particularly project managers, software
engineers and other senior technical personnel. The Company intends to further
develop these resources by focusing on recruiting skilled technical personnel
in India and expanding its physical facilities. The Company is in the initial
stages of the design and development of new software development facilities in
Bangalore that would combine state-of-the-art computing and communications
facilities with quality living arrangements and amenities for the Company's
employees. These actions are designed to position the Company to attract and
retain the best technical personnel available in India to support its business
activities in the U.S. and elsewhere. From time to time, the Company
investigates the expansion of its offshore capabilities to other foreign
locations to match its present and projected business requirements with the
availability of qualified technical personnel.
Concentrate on Key Technologies. Through its transitional outsourcing
service delivery model, the Company maintains a high level of knowledge of
advanced technical areas such as IBM mainframe systems, advanced case tools,
client/server technologies, object-oriented technologies and rapid application
development. The Company conducts consistent personnel training to expand the
knowledge base of its employees in these key technological areas.
Attract, Train and Retain Highly Skilled Employees. The future success of
the Company's growth strategy will depend to a significant extent on its
ability to attract, train, motivate and retain highly skilled IT
professionals, particularly project managers, software engineers and other
senior technical personnel. To achieve this objective, the Company maintains
programs and personnel to seek and hire the best available IT professionals
and to train these professionals in both legacy systems and emerging
technologies. The Company believes, however, that in both the U.S. and India
there is a shortage of, and significant competition for, IT professionals with
the advanced technological skills necessary to perform the services offered by
the Company. In order to attract, motivate and retain its employees in the
face of these shortages, the Company focuses on its corporate culture,
incentive programs, compensation and benefits, and provides a career and
education management program to create an individualized structured career
growth plan for its employees.
GROWTH STRATEGIES
Convert Year 2000 Projects into Long-Term Application Maintenance
Outsourcing Business. As a result of its comprehensive Year 2000 services, the
Company has obtained a significant number of contracts to perform Year 2000
conversion projects. The demand for the Company's services in this area
provides the opportunity to select those accounts with the greatest long-term
potential to convert its Year 2000 business into long-term application
maintenance outsourcing engagements. A core element of the Company's growth
strategy is to use the client relationships and the knowledge of client
computer systems obtained in providing Year 2000 services to obtain additional
IT projects for these clients. In particular, the Company believes that the
detailed knowledge of its clients' systems gained during performance of its
Year 2000 services will serve as a competitive advantage in securing
application maintenance projects from these clients. Clients that choose to
outsource applications maintenance services can focus their internal resources
on new strategic application development. The Company believes maintenance
outsourcing engagements converted from Year 2000 projects can be a source of
low risk, long-term revenues. See "--Clients and Representative Projects."
Develop Expertise in Key Vertical Markets. Although the Company has a
diverse client base, the Company recently has completed projects for companies
in key vertical markets, including insurance, financial services,
manufacturing, retail and utilities. These industries generally are dominated
by large companies with intensive IT needs. As its business increases in these
targeted vertical markets, the Company believes it will gain a broader
knowledge and expertise of these industries. The Company seeks to leverage
this developing expertise and its existing accounts into a larger
concentration of clients in these targeted markets. Also, the Company plans to
design and develop re-usable object class software code libraries which have
specific application to clients in these targeted vertical markets.
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Expand Geographic Presence. IMR's business model integrates on-site, off-
site and offshore resources to enable the on-time delivery of high quality
cost-effective IT solutions. As the Company expands its customer base, it
intends to open additional small regional offices to enable the Company to
sell and support existing and new clients in these geographic areas. The
Company's business model does not require a significant number of remote
offices, and the Company seeks to maintain low overhead for each branch
office. In addition, the Company intends to pursue market opportunities in
eastern and central Europe and Southeast Asia through its facility in India,
its affiliate office in the U.K. and, if appropriate, the establishment of
additional offshore operations.
Pursue Selective Strategic Acquisitions. Given the highly fragmented nature
of the IT services market, together with significant barriers to entry in
major accounts, the Company believes that opportunities exist to expand
through the selective acquisition of smaller regional IT services firms with
established customers. The Company may also consider potential acquisition
candidates to expand its regional office network and augment its technical
expertise. While the Company has from time to time in the past considered
acquisition opportunities, it has never acquired a business and as of the date
of this Prospectus has no existing agreements or commitments to effect any
acquisition. See "Risk Factors--Possible Acquisitions."
THE IMR DELIVERY PROCESS
IMR applies its TSQM software engineering process across all of its services
to deliver high quality, cost-effective IT solutions to its clients. TSQM is a
set of defined software development processes, techniques and tools that are
implemented and enhanced to maximize quality in the Company's processes,
deliverables and services, and to minimize project risks. For every project,
the Company implements its two-phased TSQM software engineering process which
encompasses: (i) an extensive front-end assessment that defines the scope and
risks of the project; and (ii) the fixed-price implementation stage that is
further subdivided into smaller phases with frequent deliverables and feedback
from its clients. Continuously refined since the Company's inception, TSQM
represents the process through which the Company defines and performs
projects. Through the rigorous adherence to the TSQM process, the Company
identifies, monitors and manages the risks associated with the cost, schedule,
performance, support and delivery of projects on a fixed-price, fixed-time
frame basis. This process also allows the Company to detect, correct and
mitigate quality defects and to establish appropriate contingencies for each
project.
The TSQM process is based in part on the Institute of Electrical &
Electronics Engineers ("IEEE") based software engineering standards, Software
Engineering Institute ("SEI") software engineering process models and ISO 9001
quality processes. During each stage of a project, IMR monitors progress and
quality, including deviations from project plans, that could adversely affect
on-time delivery, compliance with project specifications and project financial
performance. The project team collects, analyzes and reports on key quality
metrics to verify compliance with quality standards used in project execution,
and the project team serves as a custodian of information regarding the
methods, techniques and tools that have been utilized to perform specified
tasks. Through this process of constant re-evaluation of the Company's
performance on each project, IMR continuously refines and enhances the TSQM
software engineering process as a means to leverage the benefit of the
Company's cumulative project experience.
The responsibilities for completion of each TSQM phase are allocated among
an on-site, off-site and offshore team to optimize cost savings and accelerate
project delivery. The actual tasks allocated to each team member are
determined principally by the amount of client interaction required at the
client site to complete the project successfully. The front-end phase, which
may include requirements analysis, high level design and technical
architecture, is completed by the on-site project manager and the project team
through interaction with the client. The fixed-price implementation phase,
which may include programming, unit testing and systems testing, is largely
performed offshore via satellite link. The off-site team at the Company's U.S.
headquarters coordinates the efforts of the on-site and offshore teams and
monitors and manages the quality of the overall project. Working regular
business hours, the on-site, off-site and offshore teams together use most
hours of the clock to deliver projects in fewer elapsed calendar days. Due to
the time difference between India and the U.S.,
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the Company can create a virtual "second shift" for its North American clients
allowing for more rapid completion of projects.
The Company's offshore software development center provides significant
opportunities to reduce costs and manage the risks of a project. The offshore
software development center often is able to use the excess capacity of a
client's existing computing facilities during off-peak hours. This allows
additional projects to be undertaken without substantial client investment in
new hardware and software. The costs of satellite communications and
infrastructure acquired by the Company at its offshore center are spread among
multiple clients and projects further reducing additional infrastructure
investment required to be made by the client. If the scope of a project is
unexpectedly expanded, the Company generally is able to draw upon its offshore
development center resources to increase project personnel. In addition, for
larger projects with critically short time frames, the offshore facility
allows the Company to parallel process various development phases to
accelerate delivery time.
SERVICES
IMR provides a broad range of IT services, including: (i) software
development; (ii) application maintenance; (iii) Year 2000 conversion; (iv)
migration and re-engineering; and (v) programming and consulting services. The
Company delivers each of these services independently or as a comprehensive
package.
Software Development Services. The Company offers two alternatives to assist
clients in developing new applications for selected client/server platforms,
other emerging technologies and IBM mainframe platforms:
. fixed-price software development in which the Company assumes total
responsibility and accountability for delivery of systems on-time and
within budget; or
. cooperative development in which the Company's consultants work side-by-
side and share responsibility for completion of a project with in-house
IT personnel to complete full life cycle development projects.
In both cases, the Company uses its TSQM software engineering process, its
on-site, off-site, offshore delivery model and satellite communications to
deliver these projects. For the year ended December 31, 1995 and the six
months ended June 30, 1996, revenues derived from software development
services were $7.8 million and $3.5 million, respectively, and represented
34.5% and 28.1%, of IMR's total revenues for such periods.
Application Maintenance Services. By assuming the responsibility for
maintenance of selected legacy application systems, the Company is able to
introduce process enhancements that improve service levels to clients
requesting modifications and on-going support. By using a variation of the on-
site, off-site, offshore delivery model, the Company provides 24-hour, 7-day
production and emergency support. On-site team members provide application
maintenance services at the client's facility. These team members carry pagers
in the event of an emergency service request and utilize home personal
computers to dial into a client's system and resolve client problems from
remote locations. Routine application maintenance services, including
modifications, enhancements and documentation, are completed utilizing
satellite telecommunications and the resources of the Company's offshore
software development center.
The Company uses its proprietary application maintenance methodology which
involves the following phases:
. Maintenance Improvement Phase. The Maintenance Improvement Phase ("MIP"),
which generally requires six to eight weeks to complete, allows the
Company to utilize the existing support infrastructure, determine the
scope of a project, establish targeted service levels and performance
metrics to be reported, and design a detailed project plan for the
duration of the outsourcing assignment. The Company uses metrics
calculations to define productivity, quality, reliability and client
satisfaction. Productivity metrics define such items as the cost and time
to perform specified functions, the hours to define the time necessary to
identify and resolve a problem, and to perform each service request.
Quality and reliability metrics identify and define the number of defects
within a project, production failure rates, the mean time between
failures and statistics on problem reports such as mean time to respond
and resolve a problem.
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Client satisfaction metrics are identified through periodic client surveys
and establish specified client service level measurements. Through the use
of metrics, the Company believes that it is better able to identify the
costs to perform contracts on a fixed-price basis, thereby enhancing the
Company's ability to estimate the fees for these contracts.
. Assimilation. The assimilation phase generally lasts for three months
during which the Company's consultants assimilate knowledge of its
client's business and software applications. This knowledge is acquired
through contact with the client's IT personnel, review of client
documentation and hands-on experience. The Company's consultants create
project management and procedures manuals, implement appropriate metrics
programs and implement process changes. During this phase, first level
support is provided by client personnel and second level support and all
systems work is provided by the Company's consultants.
. Transition. During the transition phase, which is generally completed in
approximately three months, the Company's consultants assume full
responsibility for first level support and transition certain functions
to the Company's offshore software development center. The client is
transitioned from maintenance responsibilities to more strategic systems
functions, and the Company's offshore team assumes responsibility for
full life cycle maintenance support.
. Steady State. This is the normal state of applications support where
production and emergency support, analysis and acceptance testing are
conducted on-site. Remaining activities, including routine maintenance,
enhancements and documentation, are conducted offshore.
For the year ended December 31, 1995 and the six months ended June 30, 1996,
revenues derived from application maintenance services were $4.3 million and
$3.9 million, respectively, and represented 19.1% and 31.4% of IMR's total
revenues for such periods. This increase reflects the Company's success in
securing several significant application maintenance contracts in late 1995
and early 1996.
Year 2000 Services. The Company uses its Century Change-Planning Analysis
Conversion ("CC-PACSM") methodology to provide a cost-effective solution to
the Year 2000 problem. The CC-PAC methodology defines the methods for
performing Year 2000 conversion services through four separate phases:
analysis, planning, conversion and implementation. The CC-PAC methodology,
together with the Company's proprietary Year 2000 toolset, Transform2000, and
a rigorous process approach form the Company's "total solution" to resolving
millennium problems. The Company believes that the full life cycle solution
provided by the CC-PAC methodology and use of the Transform2000 toolset
differentiates IMR from other companies by reducing costs and providing
services for all phases of a Year 2000 solution. In 1995 and the six months
ended June 30, 1996, revenues derived from Year 2000 conversion services were
$557,000 and $1.5 million, respectively, and represented 2.5% and 12.1% of
IMR's total revenues for such periods. The Company expects to continue to
derive an increasingly larger percentage of its total revenue from these
services for each of the next three years. As of the date of this Prospectus,
the Company is engaged to perform Year 2000 services for more than 20 clients,
substantially all of whom are new customers for the Company. The Company
believes that the demand for Year 2000 services will continue after the turn
of the century, although this demand is expected to begin to diminish after
the year 2000 as many Year 2000 compliance solutions are tested and
implemented for many companies. See "Risk Factors--Potential Decrease in
Services after Addressing the Year 2000 Problem."
The four phases of the CC-PAC methodology are:
. Analysis Phase. During the analysis phase, the client's entire software
applications portfolio is downloaded and, using the Transform2000
toolset, a complete inventory of all applications is produced. Through
CC-PAC, the Company also identifies date dependent applications and
determines the "failure horizon" which is the earliest point in the
future that these applications are likely to fail. The Company also
identifies the impact of millennium conversion on system objects,
including programs, copybooks and job control languages. Based on this
inventory and analysis, the Company uses Transform2000 to determine
required design modifications, code revisions and other measures that are
necessary to eliminate Year 2000 failures. The Transform2000 toolset
allows the Company to capture and store data
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elements and information regarding a client's system in a central
repository. This data can then be used to provide project analysis,
planning, conversion and implementation. Through CC-PAC, the Company also
prepares an effort estimate and initial costing estimate for the full life
cycle Year 2000 project.
. Planning Phase. Planning represents the most critical phase of a Year
2000 project. During the planning phase, a detailed plan for each
application conversion is produced which serves as a timetable for
completion and a roadmap for activities to be performed and resources and
programs to be used in the conversion. Based on business priorities and
the estimated "failure horizon," the applications are sequenced for
conversion. Through CC-PAC, the Company identifies date dependent
functions and interfaces as well as the bridging strategy, the testing
strategy and replacement strategy, if any. During planning, the Company
also identifies a pilot conversion of the characteristics of a typical
client application as a proof of concept. The analysis and planning
phases generally are provided on a combined basis and result in the
production of a pilot project in which a small number of isolated Year
2000 problems are identified and resolved.
. Conversion Phase. Based on the conversion plan adopted during the
planning phase, the client's applications are then converted using the
Transform2000 toolset and any required manual programming. The
Transform2000 toolset automates many aspects of the software conversion
process and reduces the time required to complete the phases of a
millennium conversion. Large applications are generally divided into
small modules to minimize the time period during which applications are
converted and tested and to enable staged delivery of Year 2000 compliant
modules.
. Implementation Phase. This phase involves full testing of the converted
applications as well as synchronization and re-introduction of
applications in the client's system. Unit and system testing are
conducted offshore. Final acceptance and systems testing is conducted on-
site at the client's facility. Any changes which have been made by the
client's staff are then tested for century date compliance, retrofitted
into the system and converted by the Company before final testing is
conducted. The system is then placed into production. Conversion and
implementation generally are provided under a single contract to identify
and resolve all Year 2000 problems within a designated client software
system.
Migration and Re-engineering Services. The Company's migration and re-
engineering services allow a client to migrate its legacy computing
environments to open systems platforms and client/server architectures. The
Company's Transform series of re-engineering tools automate many of the
processes required to implement advanced client/server technologies, thereby
substantially reducing the time and cost to perform these services. These
tools enable the Company to perform a source code analysis and to re-design
target databases and convert certain programming languages. If necessary, the
Company's software engineers also re-design and convert user interfaces. For
the year ended December 31, 1995 and the six months ended June 30, 1996,
revenues derived from migration and re-engineering services were $1.4 million
and $324,000, respectively, and represented 6.2% and 2.6% of IMR's total
revenues for such periods. The Company believes it will realize only moderate
revenues in the next several years from migration and re-engineering services
as clients focus financial resources on Year 2000 conversion services.
Programming and Consulting Services. The Company's senior consultants
provide services including high level process analysis and strategic technical
consulting to assist clients in the development of successful outsourcing
strategies. These strategies may include outsourcing of legacy systems
maintenance and migration to advanced client/server technologies or company-
wide enterprise systems. The Company also provides programming services at
client sites on an "as-needed" basis. The Company's programming consultants
are typically engaged on a time-and-materials basis to assist on-site with the
analysis, design and development of software applications and to augment the
client's internal IT staff. In contrast to outsourcing services, professional
programming services typically involve the performance of discrete tasks at
the specific direction of the client. The Company's objectives in providing
professional staffing services include developing an understanding of the
client's business and IT systems needs and positioning the Company to provide
consulting and outsourcing services after the Company has established a
business relationship with the client through the consulting assignment. The
Company does not generally accept professional staffing services engagements
of
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less than six months. The Company has been awarded development or application
maintenance outsourcing projects from a majority of the clients for whom it
has performed consulting services. For the year ended December 31, 1995 and
the six months ended June 30, 1996, revenues derived from programming and
consulting services were $7.1 million and $2.4 million, respectively, and
represented 31.5% and 19.1%, respectively, of IMR's total revenues for such
periods. The Company expects that revenues from programming services will
decline in the near-term as the Company allocates personnel to higher margin
projects such as Year 2000 conversion services.
CLIENTS AND REPRESENTATIVE PROJECTS
IMR provides services to large businesses, primarily Fortune 200 and
comparably sized companies with intensive information processing needs. To
date, the Company's marketing efforts have been directed to clients on the
basis of IT needs rather than industry group. Companies and clients in the
insurance, financial services, manufacturing, retail and utilities industries
have historically provided the greatest source of business opportunities for
the Company.
SOFTWARE DEVELOPMENT APPLICATION MAINTENANCE YEAR 2000 CONVERSION
SERVICES: SERVICES: SERVICES:
EBSCO Industries, Inc. Dayton Hudson Commercial Union
Ford Motor Company Corporation Insurance Companies
NOVUS Services, Inc. Michelin Tire Consolidated Edison of
Southern California Corporation New York
Edison Sears Merchandise Group John Hancock Financial
Winn Dixie Stores, Inc. SPS Payment Systems, Services
Inc. Massachusetts Mutual
Target Stores Life Insurance Company
Reliastar Life Insurance
Company
MIGRATION AND RE-ENGINEERING SERVICES: PROGRAMMING & CONSULTING SERVICES:
American Airlines Fingerhut Corporation
Detroit Edison Fleetwood Enterprises, Inc.
Hogan Systems International Paper
Southern California Edison Co. S2 Systems, Inc.
Zimmer Corporation Target Stores
During the first six months of 1996, the Company's top five clients
accounted for approximately 65.3% of revenues. NOVUS (formerly known as
Discover Card Services, Inc.) and SPS, which are affiliated companies,
together accounted for approximately 35.5% of revenues. During 1995, the
Company's top five clients accounted for approximately 65.6% of revenues.
NOVUS and SPS represented approximately 35.1% of revenues, while units of
Dayton Hudson Corporation represented approximately 12.0% of revenues. The
volume of work performed for specific clients is likely to vary from year to
year, and a significant client in one year may not use the Company's services
in a subsequent year. See "Risk Factors--Historical Reliance on Significant
Clients."
While each client engagement differs, the following examples illustrate the
types of business needs the Company has addressed:
Ford Motor Company--Vehicle Loss and Damage System. Ford Motor Company
engaged the Company to develop a vehicle loss and damage ("VLD") system for an
IBM mainframe. Formerly developed for the UNISYS platform, the VLD system was
designed to monitor and report damage rates occurring during rail and highway
transport of vehicles between Ford's assembly plants and its dealer network.
In order to complete this project, IMR modified its software development
methodology to mirror Ford's systems life cycle methodology. Ford awarded the
IMR team its "Excellence Award" and has since engaged the Company to perform
additional projects.
SPS Payment Systems--Electronic Marketing System. SPS Payment Systems, a
unit of Dean Witter Discover & Co., Inc. and a leading provider of private
label credit card services for retailers, retained IMR to
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assist in the creation of an electronic marketing system to capture and retain
transactions at the point of sale, analyze buyer behavior based on customer
demographics and store the information in a database. Working on-site in a
cooperative development environment, IMR was responsible for preparing the
detailed product definition, recommending relevant technology, developing high
level system architecture, functional specifications and technical design, and
performing systems testing, project management and implementation. The
Company's on-site personnel work together with, and report to, SPS' IT
management team. As a result of its successful completion of the electronic
marketing system, SPS engaged IMR on several additional projects, including
application maintenance outsourcing and re-design/re-engineering of their
strategic systems. The Company considers its strategic partner relationship
with SPS Payment Systems to be a model for future client relationships.
Target Stores--Year 2000 and Applications Maintenance Projects. Target
Stores, a division of Dayton Hudson Corporation, engaged IMR to perform
Target's System Limits project, a series of system enhancements involving data
field expansions and related modifications to system data, program logic,
reports and screens. The System Limits project involved 11 major computing
systems and over 3,000 programs. Target Stores was engaged in an aggressive
growth campaign, and IMR's mandate was to successfully increase field sizes to
accommodate larger stores and a greater number of inventory identification
numbers. As a part of this project, the Company expanded date fields to
accommodate date entries for the Year 2000 and thereafter. Offshore project
team members accessed Target systems through the Company's dedicated satellite
communications link with approximately 75% of the total project programming
completed offshore. Following successful completion of the Systems Limits
project, Target awarded the Company a multi-year application maintenance
outsourcing engagement. IMR performed on-site analysis of the current
maintenance for Target's financial and administrative systems. The project
objectives included elimination of current maintenance and enhancement
backlogs, improvement of user satisfaction levels, improvement of system
reliability and quality, and redeployment of in-house maintenance personnel to
new development activities. On-site IMR consultants presently provide 24-hour,
7-days a week production support and perform emergency fixes. As a result of
the Company's successful relationship with Target, the Company also has been
awarded a client/server development project, Target's In Store Information
Systems project, and an application maintenance outsourcing engagement for
Dayton Hudson Corporation.
SALES AND MARKETING
The Company markets and sells its services directly through its professional
staff and senior management operating out of its Clearwater, Florida
headquarters and through direct sales persons located in Boston, Chicago,
Dallas and Rochester and its affiliate office in London. The Company focuses
its marketing efforts on large corporations with significant IT budgets and
recurring staffing or software development needs. Marketing personnel identify
prospects and opportunities and enter the prospects into a prospect/client
database consistently maintained and updated. Direct sales representatives
utilize the database records to initiate the sales cycle from prospect
qualification to close. As a result of this marketing system, the Company
prequalifies sales opportunities, and direct sales representatives are able to
minimize the time spent on prospect qualification. Marketing programs include
direct mail campaigns, seminars, conferences and other activities intended to
generate and maintain an interest in the Company's services. At June 30, 1996,
the Company had 15 account representatives and sales support personnel. The
sales executive and technical support team define the scope, deliverables,
assumptions and execution strategies for a proposed project, develop project
estimates, prepare pricing and margin analyses, and finalize sales proposals.
Management reviews and approves the proposal, and the sales staff presents the
proposal to the client. Sales personnel remain actively involved in the
project through the execution phase. Although the Company maintains a broad
and diverse client base, the Company intends to focus its future marketing
efforts principally toward prospective clients in the financial services,
insurance, manufacturing, retail and utilities industries.
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INTELLECTUAL PROPERTY
The Company's business includes the development of software applications and
other deliverables including written specifications and documentation in
connection with specific client engagements. Ownership of software and
associated deliverables created for clients is generally retained by or
assigned to the client, and the Company does not retain an interest in such
software or deliverables. The Company also develops object-oriented software
components and libraries that can be reused in application software
development, as well as certain software toolsets and proprietary
methodologies. Many of the Company's software components, libraries, toolsets
and methodologies are developed in India and used in both the U.S. and India.
The Company retains ownership of these components, libraries, toolsets and
methodologies. Finally, the Company maintains trademarks and service marks to
identify its various service offerings. In order to protect its proprietary
rights in these various intellectual properties, the Company relies upon a
combination of copyright and trade secret laws, nondisclosure and other
contractual arrangements, and technical measures. India is a member of the
Berne Convention, an international treaty. As a member of the Berne
Convention, the government of India has agreed to recognize protections on
intellectual property conferred under the laws of foreign countries, including
the laws of the U.S. The Company believes that laws, rules, regulations and
treaties in effect in the U.S. and India are adequate to protect it from
misappropriation or unauthorized use of its intellectual property. However,
there can be no assurance that such laws will not change and, in particular,
that the laws of India will not change in ways that may prevent or restrict
the transfer of software components, libraries and toolsets from India to the
U.S. There can be no assurance that the steps taken by the Company will be
adequate to deter misappropriation of its intellectual property or that the
Company will be able to detect unauthorized use and take appropriate steps to
enforce its rights.
As the number of competitors providing IT services increases, new and
overlapping processes and methodologies used in such services will become more
pervasive. Although the Company's intellectual property has never been the
subject of an infringement claim and the Company believes that its services
and products do not infringe on the intellectual property rights of others,
there can be no assurance that such a claim will not be asserted against the
Company in the future. Assertion of such claims against the Company could
result in litigation, and there is no assurance that the Company would prevail
in such litigation or be able to obtain a license for the use of any infringed
intellectual property from a third party on commercially reasonable terms.
Furthermore, litigation, regardless of its outcome, could result in
substantial cost to the Company and could divert management's attention from
the Company's operations. Any infringement claim or litigation against the
Company could, therefore have a material adverse effect on the Company's
results of operations and financial condition. See "Risk Factors--Intellectual
Property Rights."
COMPETITION
The IT services market is highly competitive and is served by numerous
national, regional and local firms. The Company's clients generally consist of
large corporations principally in the financial services, insurance,
manufacturing, retail and utilities industries, and many of the Company's
competitors are aggressively pursuing business from those entities. In
addition to in-house MIS departments, market participants include systems
consulting and integration firms, professional services companies,
applications software firms, temporary employment agencies, professional
services divisions of large integrated manufacturing and other companies (such
as IBM and MCI), facilities management and outsourcing companies and "Big Six"
accounting firms and related entities.
The Company competes with, among others, Andersen Consulting, "Big Six"
accounting firms, Cambridge Technology Partners, Inc., Cap Gemini America,
Inc., Computer Horizons Corp., Computer Task Group, ISSC (a subsidiary of
IBM), Keane, Inc., SHL Systemhouse (a division of MCI) and Whittman-Hart, Inc.
In addition, in offering its Year 2000 services, the Company competes with
Alydaar Corp., Computer Horizons Corp., Cap Gemini America, Inc., Data
Dimensions, Inc. and ISSC.
The Company believes that many of its principal competitors have
significantly greater financial, technical and marketing resources and
generate greater revenues than IMR. The Company competes by offering a
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successful services delivery model, excellent referral base and continued
focus on responsiveness to customer needs, quality of services, competitive
prices, project management capabilities and technical expertise. See "Risk
Factors--Competition."
HUMAN RESOURCES
At September 1, 1996, the Company employed approximately 245 persons in its
U.S. headquarters and branch offices (approximately 95 of whom are U.S.
citizens or permanent residents) and approximately 340 in its offshore
software development center in India. Additionally, IMR-U.K. employs
approximately 15 persons. None of the Company's employees is subject to a
collective bargaining arrangement.
At September 1, 1996, approximately 150 of the Company's U.S. employees were
working under the H-1B, non-immigrant work permitted visa classification,
which the Company processed for those employees through the U.S. Immigration
and Naturalization Service (the "INS"). The H-1B visa classification enables
U.S. employers to hire qualified foreign workers in positions which require an
education at least equal to a U.S. Baccalaureate Degree in specialty
occupations such as software systems engineering and systems analysis. The H-
1B visa usually permits an individual to work and live in the U.S. for a
period of up to six years. There is a limit on the number of new H-1B
petitions that the INS may approve in any government fiscal year.
Historically, this limit generally has not been reached. However, the Company
believes the limit was reached in 1995 and may be reached annually hereafter.
In years in which this limit is reached, the Company may be unable to obtain
H-1B visas necessary to bring critical foreign employees to the U.S. The
Company also processes immigrant visas for lawful permanent residency
(evidenced by a card commonly referred to as the "Green Card") for employees
to fill positions for which there are no able, willing and qualified U.S.
workers available to fill the position. Compliance with existing U.S.
immigration laws, or changes in such laws making it more difficult to hire
foreign nationals or limiting the ability of the Company to retain H-1B
employees in the U.S., could require the Company to incur additional
unexpected labor costs and expenses. See "Risk Factors--Immigration Issues."
The Company believes that in both the U.S. and India there is a shortage of,
and significant competition for, IT professionals and that its future success
will depend in large part upon its ability to attract, train, motivate and
retain highly skilled employees with the advanced technical skills necessary
to perform the services offered by the Company. The Company has an active
recruitment program in the U.S., India and the U.K. and has developed a
recruiting system and database that facilitates the rapid identification of
skilled candidates. The Company also has adopted a career and education
management program working with employees to define their objectives and
career plans. Through an intensive orientation and training program, the
Company introduces new employees to the TSQM software engineering process and
the Company's services. See "Risk Factors--Competitive Market for Technical
Personnel" and "--Immigration Issues."
LEGAL PROCEEDINGS
The Company is not currently a party to any material legal proceedings.
FACILITIES
The Company leases its corporate headquarters building (approximately 24,000
square feet) in Clearwater, Florida under a lease expiring in March, 1998.
Approximately 11,000 square feet of this facility have been subleased to ABR
Information Management Services, Inc. The Company leases branch offices in
Boston, Chicago and Dallas which are used primarily for sales and marketing
purposes. The Company occupies a leased facility (approximately 50,000 square
feet) in Bangalore, India under a lease expiring in May 2005, with an option
to extend an additional five years. IMR-U.K. utilizes approximately 2,000
square feet of office space in Chesham, England under a verbal agreement by
which the Company pays Link Group for the use of a portion of their space. See
"Certain Transactions--IMR U.K. Transactions."
39
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------- --- ----------------------------------------
<S> <C> <C>
Satish K. Sanan (1).................. 48 Chairman of the Board; President and
Chief Executive Officer
Ashutosh Gupta....................... 40 President and Director, IMR-India
Michael J. Dean...................... 36 Chief Financial Officer
Kasi V. Sridharan.................... 42 Vice President-Finance
Jeffery S. Slowgrove................. 39 Treasurer; Director
Dilip Patel.......................... 38 Vice President-General Counsel;
Secretary
Philip Shipperlee.................... 49 Director; Managing Director, IMR-U.K.
Charles C. Luthin (1)(2)(3).......... 54 Director
Vincent Addonisio (1)(2)(3).......... 41 Director
</TABLE>
- --------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
Satish K. Sanan founded the Company in 1988 together with Mr. Slowgrove and
has served as President, Chief Executive Officer and a director of the Company
since its inception. Mr. Sanan also has served as a director of IMR-U.K. since
1993 and as Chairman of the Board of Directors of IMR-India since 1990. Prior
to founding the Company, he was employed by SHL Systemhouse Limited from 1980
to 1988 where he was responsible for planning, directing and controlling the
achievement of sales and delivery objectives.
Ashutosh Gupta has served as President of IMR-India since August 1995 and as
a director of IMR-India since January 1996. Prior to joining the Company, Mr.
Gupta served in various positions for Citicorp Overseas Software Limited,
located in Bombay, India from January 1988 until August 1995, including Group
Head, International Marketing.
Michael J. Dean has served as Chief Financial Officer since July 1996.
Previously, he served as Controller of the Company since July 1994. Prior to
joining the Company, Mr. Dean served for ten years as a Manager for Harper,
Van Scoik & Company, a Certified Public Accounting firm in Clearwater,
Florida. Mr. Dean is a Certified Public Accountant.
Kasi V. Sridharan has served as Vice President-Finance of the Company since
October 1995. Mr. Sridharan also has served as a director of IMR-U.K. since
March 1996 and as a director of IMR-India since April 1994. He served as Vice
President-Finance of IMR-India from April 1992 until October 1995. From
November 1988 until March 1992, Mr. Sridharan served as Chief Financial
Officer for the Centre for Development of Advanced Computing in Pune, India.
Mr. Sridharan is a Chartered Accountant.
Jeffery S. Slowgrove founded the Company in 1988 together with Mr. Sanan and
has served as Treasurer and a director of the Company since its inception. Mr.
Slowgrove also has served as a director of IMR-India since 1990.
Dilip Patel has served as Vice President-General Counsel and Secretary of
the Company since March 1996. From August 1990 until March 1996, Mr. Patel was
an attorney in the International Department of the Tampa, Florida law firm
Fowler, White, Gillen, Boggs, Villareal & Banker, P.A. From 1983 until 1988 he
practiced law as a solicitor with Cartwright, Cunningham, Haselgrove & Co. in
London, England. Mr. Patel is a member of and is Board Certified in
Immigration and Nationality law by the Florida Bar. He is admitted as a
Solicitor of the Supreme Court of England and Wales.
40
<PAGE>
Philip Shipperlee has served as a director of the Company since August 1996
and has served as the Managing Director of IMR-U.K. since 1994. Mr. Shipperlee
also is the Managing Director of The Link Group, a computer services company,
where he has served since June 1980.
Charles C. Luthin has been a director of the Company since August 1995. From
October 1994 until July 1995, he served as Vice President-Finance of the
Company. Since 1995, Mr. Luthin has served as Vice President-Finance for
Eckerd Family Youth Alternatives, a not-for-profit entity located in
Clearwater, Florida. From 1993 until 1994, Mr. Luthin served as President of
Dow Sherwood Corporation, a corporation that owns and operates restaurants,
and he currently serves on that company's board of directors. From 1989 until
1993, Mr. Luthin served as Vice President-Finance and Chief Financial Officer
of Trans-marine Management Company, providing financial management and
analysis for business interests of George M. Steinbrenner. From 1980 until
1989, Mr. Luthin served in various capacities for Walt Disney World Company,
most recently as Vice President, Finance and Planning-Parks, where he was
responsible for financial analysis and long-term planning for that company's
theme park operations.
Vincent Addonisio has been a director of the Company since August 1996. Mr.
Addonisio is a Director, Executive Vice President, Chief Financial Officer and
Treasurer of ABR Information Services, Inc., a benefits administration
outsourcing company which he joined in July 1993. Mr. Addonisio served as
Chief Financial Officer of AER Energy Resources, Inc., a battery manufacturing
company, from October 1992 until June 1993. From April 1991 until September
1992, Mr. Addonisio served as Vice President and Chief Financial Officer of IQ
Software, Inc., a software development company. From 1983 to 1991, he served
as Chief Financial Officer and Director of Proto Systems, a high technology
company.
All directors of the Company hold office until the next annual meeting of
the shareholders and the election and qualification of their successors. Upon
completion of this Offering, the Board of Directors will be divided into three
classes, each of whose members will serve for a staggered three-year term. The
Board will be comprised of two Class I directors (Messrs. Sanan and
Addonisio), two Class II directors (Messrs. Shipperlee and Luthin) and one
Class III director (Mr. Slowgrove). At each annual meeting of shareholders, a
class of directors will be elected for a three-year term to succeed the
directors of the same class whose terms are then expiring. The terms of the
initial Class I directors, Class II directors and Class III directors will
expire upon the election and qualification of successor directors at the
annual meeting of shareholders held following the end of calendar years 1997,
1998 and 1999, respectively. There are no family relationships between any of
the directors or executive officers of the Company. See "--Agreements with
Employees" and "Description of Capital Stock--Certain Articles of
Incorporation and Bylaw Provisions."
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established an Executive Committee comprised of
Messrs. Sanan, Luthin and Addonisio. Messrs. Luthin and Addonisio currently
comprise the members of the Compensation Committee and Audit Committee of the
Board of Directors. The Executive Committee is empowered to exercise all
authority of the Board of Directors of the Company, except as limited by the
Florida Business Corporation Act. Under Florida law, an Executive Committee
may not, among other things, recommend to shareholders actions required to be
approved by shareholders, fill vacancies on the Board of Directors, amend the
bylaws or approve the reacquisition or issuance of shares of the Company's
capital stock. The Compensation Committee will be responsible for reviewing
and recommending salaries, bonuses and other compensation for the Company's
executive officers. The Compensation Committee also will be responsible for
administering the Company's stock option plans and for establishing the terms
and conditions of all stock options granted under these plans. The Audit
Committee will be responsible for recommending independent auditors, reviewing
with the independent auditors the scope and results of the audit engagement,
monitoring the Company's financial policies and control procedures, and
reviewing and monitoring the provisions of nonaudit services by the Company's
auditors.
DIRECTOR COMPENSATION
Prior to completion of the Offering, the nonemployee member of the Board of
Directors of the Company, Charles C. Luthin, received compensation of $200 per
meeting for his service on the Board. Additionally, in
41
<PAGE>
February 1994, Mr. Luthin was granted an option to purchase 20,000 shares of
Common Stock, at an exercise price of $0.10 per share and in December 1995,
Mr. Luthin was granted an option to purchase 5,000 shares of Common Stock at
an exercise price of $0.50 per share. These grants were approved by the
Company's shareholders in September 1996. Following the consummation of the
Offering, the non-employee directors (including Mr. Shipperlee) will receive a
retainer of $5,000 per year for serving on the Board of Directors, plus fees
of $1,000 for each board meeting attended and $500 for each committee meeting
attended which is held independently of a board meeting. From and after the
consummation of the Offering, the nonemployee directors will be eligible to
receive options pursuant to the Company's 1996 Directors Stock Option Plan
(the "Directors Stock Option Plan"). The Directors Stock Option Plan became
effective in September 1996. A total of 150,000 shares of Common Stock have
been reserved for issuance under the Directors Stock Option Plan. The purpose
of the Directors Stock Option Plan is to promote the interests of the Company
by strengthening the Company's ability to attract and retain the services of
experienced and knowledgeable nonemployee directors ("Nonemployee Directors")
and by encouraging such directors to acquire an increased proprietary interest
in the Company.
The terms of the options granted under the Directors Stock Option Plan,
including the exercise price, dates and number of shares subject to the
options are specified in the Directors Stock Option Plan. The Directors Stock
Option Plan provides for the automatic grant of non-qualified stock options to
Nonemployee Directors. Each Nonemployee Director receives an option to
purchase 10,000 shares of Common Stock on the date of, and at a time
immediately following, every other annual meeting of the Company's
shareholders ("Bi-Annual Grant"), beginning with an initial grant of 10,000
shares to each Nonemployee Director to be made upon completion of this
Offering. The next Bi-Annual Grant will be made at the 1998 Annual Meeting.
Each Nonemployee Director who is first appointed or elected to the Board at
any time other than at an annual meeting of the Company's shareholders at
which a Bi-Annual Grant is made, will be granted an option to purchase a
number of shares of Common Stock equal to the product of (i) 10,000 multiplied
by (ii) a fraction, the numerator of which is the number of days during the
period beginning on such date and ending on the date of the next Bi-Annual
Grant, and the denominator of which is 730 (the "Interim Grant"). In addition,
upon the effective date of the Directors Stock Option Plan, each of Messrs.
Addonisio, Luthin and Shipperlee will receive an option to purchase 10,000
shares (the "Initial Grant").
Bi-Annual Grants and Interim Grants vest 50% on the date the Nonemployee
Director completes 12 months of continuous service on the Board of Directors,
and 100% on the date the Nonemployee Director completes 24 months of
continuous service on the Board of Directors. The Initial Grant will vest 50%
on the date of the annual meeting of the Company's shareholders occurring in
1997, and 100% on the date of the annual meeting of the Company's shareholders
occurring in 1998. No option is transferable by the Nonemployee Director other
than by will or laws of descent and distribution, or pursuant to a qualified
domestic relations order ("QDRO") as defined in ERISA. Each option is
exercisable, during the lifetime of the optionee, only by such optionee or by
a spouse who receives the option pursuant to a QDRO. The exercise price of all
options is equal to the fair market value of the shares on the date of grant
as defined under the Directors Stock Option Plan, and the term of each option
is ten years. The Directors Stock Option Plan will continue in effect for a
period of ten years unless sooner terminated by the Board of Directors. As of
September 1, 1996, there were no options outstanding under the Directors Stock
Option Plan, and no shares have ever been issued pursuant to the exercise of
options granted under the Directors Stock Option Plan.
42
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by the
Company in 1995 for its Chief Executive Officer and each executive officer of
the Company whose total annual salary and bonuses determined at December 31,
1995 exceeded $100,000 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
NUMBER OF
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION (1) SALARY BONUS OPTIONS COMPENSATION(2)
- ------------------------------------ --------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
Satish K. Sanan............... $ 253,285 $ 261,241 1,337,540 $58,368
Chairman of the Board;
President and
Chief Executive Officer
Jeffery W. Forsythe (2)(3).... 100,000 109,350 -- --
Former Vice President,
Operations
Andrew R. Etkind (2)(4)....... 95,000 42,500 -- --
Former Vice President--
General Counsel;
Secretary
</TABLE>
- --------
(1) Other than its Chief Executive Officer, the Company had only two executive
officers in 1995 whose salary and bonuses exceeded $100,000.
(2) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted because such perquisites and other personal benefits
constituted less than the lesser of $50,000 or 10% of the total annual
salary and bonus for the named executive officer for such year.
(3) Mr. Forsythe resigned effective December 31, 1995.
(4) Mr. Etkind resigned effective February 28, 1996.
Pursuant to an existing three-year employment agreement with the Company,
Mr. Sanan serves as Chief Executive Officer and President of the Company at a
base salary of $300,000 plus 10% of the Company's pre-tax net income. Upon the
completion of this Offering, Mr. Sanan will enter into a new employment
agreement with the Company that will supersede the existing employment
agreement. This new employment agreement is for a term expiring on December
31, 2001, and is renewable by Mr. Sanan on a year-by-year basis thereafter.
The employment agreement may be terminated by the Company only with cause.
Cause is defined as including: (i) theft or embezzlement with regard to
material property of the Company; or (ii) continued neglect by the employee in
fulfilling his duties as Chief Executive Officer of the Company as a result of
alcoholism, drug addiction, nervous breakdown or excessive unauthorized
absenteeism, after written notification from the Board of Directors of such
neglect and the employee's failure to cure within a reasonable time. Under the
employment agreement, Mr. Sanan receives a base salary of $400,000, which is
subject to annual increases at the discretion of the Compensation Committee.
The employment agreement also provides for an annual incentive bonus equal to
a percentage of pre-tax income plus additional amounts that are based upon a
percentage growth in revenues and increases in net income margin. The Company
also has agreed to maintain and to pay the premiums for life insurance
policies in the aggregate amount of $8.0 million dollars with benefits payable
to beneficiaries designated by Mr. Sanan. The anticipated annual premium will
be approximately $100,000 in the first year of the initial term of the
Employment Agreement. Mr. Sanan will receive other standard benefits made
available to other executive employees of the Company. In the event that the
Company terminates Mr. Sanan's employment without cause, Mr. Sanan will
receive a severance payment equal to three times the greater of Mr. Sanan's
current base salary or his W-2 compensation for the immediately preceding
calendar year. The employment agreement contains a noncompetition covenant for
a period of three years following termination of employment by the employee
for any reason or by the Company for cause.
43
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all individual grants of stock options during
the year ended December 31, 1995 to each of the Named Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------- POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM (2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED (1) FISCAL YEAR PER /SHARE DATE 5% 10%
- ------------------------ ----------- ------------ ---------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Satish K. Sanan......... 1,337,540 96.1% $0.10 January 1, 2005 $ 44,345 $ 97,990
</TABLE>
- --------
(1) This option was granted with an exercise price equal to the fair market
value of the Common Stock on the date of grant as determined by the Board
of Directors. The option is a nonqualified stock option, is currently
exercisable and has a ten-year term. See "Certain Transactions--Options
Issued to Mr. Sanan."
(2) The potential realizable value is calculated based on the ten-year term of
the option at the time of its grant. It is calculated by assuming that the
stock price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term of the option. The actual
realizable value of the options based on the price to public in the
Offering will substantially exceed the potential realizable value shown in
the table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table summarizes the value of the outstanding options held by
the Named Executive Officers at December 31, 1995:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-
OPTIONS AT FISCAL YEAR- MONEY OPTIONS AT
END FISCAL YEAR-END (1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Satish K. Sanan............. 1,421,210 -- $568,484 --
</TABLE>
- --------
(1) Based on the estimated fair market value of the Common Stock as of
December 31, 1995 of $0.50 per share, less the exercise price payable upon
exercise of such options. Such estimated fair market value as of December
31, 1995 is substantially lower than the price to public in the Offering.
See "Certain Transactions--Options Issued to Mr. Sanan."
EMPLOYEE BENEFIT PLANS
EMPLOYEE STOCK INCENTIVE PLAN
The Company's Stock Incentive Plan (the "Stock Option Plan") became
effective on July 15, 1996. The aggregate number of shares reserved for
issuance under the Stock Option Plan is 5,445,980 shares of which options to
acquire 5,059,120 shares are currently outstanding at a weighted average
exercise price of $0.60 per share. Options to acquire 4,500,500 shares of
Common Stock will be exercisable as of, or within 60 days of, November 1, 1996
at a weighted average exercise price of $0.34 per share. The purpose of the
Stock Option Plan is to provide incentives for officers, directors,
consultants and key employees to promote the success of the Company, and to
enhance the Company's ability to attract and retain the services of such
persons. Options granted under the Stock Option Plan may be either: (i)
options intended to qualify as "incentive stock options" under Section 422 of
the Code; or (ii) non-qualified stock options. The Stock Option Plan also
permits the grant of stock appreciation rights in connection with the grant of
stock options, and the grant of restricted stock awards. Stock options and
stock awards may be granted under the Stock Option Plan for all employees and
consultants of the Company, or of any present or future subsidiary or parent
of the Company, who are considered "key employees" or "key consultants."
44
<PAGE>
The Stock Option Plan is administered by the Board of Directors, which may,
and is expected to, delegate administrative responsibility for the Stock
Option Plan to the Compensation Committee. The Compensation Committee has the
authority to determine exercise prices applicable to the options, the eligible
officers, directors, consultants or employees to whom options may be granted,
the number of shares of the Company's Common Stock subject to each option and
the extent to which options may be exercisable. The Compensation Committee
also has the authority to determine the recipients and the terms of grants of
stock appreciation rights and restricted stock awards under the Stock Option
Plan. The Compensation Committee is empowered to interpret the Stock Option
Plan and to prescribe, amend and rescind the rules and regulations pertaining
to the Stock Option Plan. Options granted under the Stock Option Plan
generally vest over five years. No option is transferable by the optionee
other than by will or the laws of descent and distribution, and each option is
exercisable, during the lifetime of the optionee, only by such optionee. The
Compensation Committee may not require options.
Any incentive stock option that is granted under the Stock Option Plan may
not be granted at a price less than the fair market value of the Company's
Common Stock on the date of grant (or less than 110% of fair market value in
the case of holders of 10% or more of the total combined voting power of all
classes of stock of the Company or a subsidiary or parent of the Company).
Non-qualified stock options may be granted at the exercise price established
by the Compensation Committee, which may be less than the fair market value of
the Company's Common Stock on the date of grant. All grants to date have been,
and the policy of the Compensation Committee is that all future grants will be
at fair market value on the grant date.
Each option granted under the Stock Option Plan is exercisable for a period
not to exceed ten years from the date of grant (or five years in the case of a
holder of more than 10% of the total combined power of all classes of stock of
the Company or of a subsidiary or parent of the Company) and shall lapse upon
expiration of such period, or earlier upon termination of the recipient's
employment with the Company, or as determined by the Compensation Committee.
As of September 1, 1996, options to purchase 5,059,120 shares of Common
Stock were outstanding under the Stock Option Plan at a weighted average
exercise price of $0.60 per share. Except for the exercise by the Selling
Shareholders of options for the purchase of 32,750 shares of Common Stock at a
weighted average exercise price of $0.10 per share, prior to the Offering no
shares of Common Stock will have been issued upon exercise of options granted
under the Stock Option Plan. Options to acquire 4,500,500 shares of Common
Stock will be exercisable as of, or within 60 days of, November 1, 1996 at a
weighted average exercise price of $0.34 per share. Options for the purchase
of 386,860 shares of Common Stock are available for grant under the Stock
Option Plan.
EMPLOYEE STOCK PURCHASE PLAN
The Company's Employee Stock Purchase Plan (the "Stock Purchase Plan")
became effective on October 1, 1996. A total of 200,000 shares of the
Company's Common Stock have been reserved for issuance under the Stock
Purchase Plan. The Stock Purchase Plan is intended to qualify under Section
423 of the Code. An employee electing to participate in the Stock Purchase
Plan must authorize a stated dollar amount or percentage of the employee's
regular pay to be deducted by the Company from the employee's pay for the
purpose of purchasing shares of Common Stock on a quarterly basis. The price
at which employees may purchase Common Stock is 85% of the closing price of
the Common Stock on the Nasdaq National Market on the first day of the quarter
or the last day of the quarter. An employee may not sell shares of Common
Stock purchased under the Stock Purchase Plan until the later of: (i) 180 days
after the Offering; or (ii) the first day of the second Purchase Period
following the Purchase Period in which the option for such shares was granted.
Employees of the Company who have completed six full months of service with
the Company and whose customary employment is more than 20 hours per week and
five or more months per calendar year are eligible to participate in the Stock
Purchase Plan. An employee may not be granted an option under the Stock
Purchase Plan if after the granting of the option such employee would be
deemed to own 5% or more of the combined voting power of value of all classes
of stock of the Company. As of September 1, 1996, approximately 200 employees
were eligible to participate in the Stock Purchase Plan. The Stock Purchase
Plan is administered by the Compensation Committee.
45
<PAGE>
401(K) PROFIT SHARING PLAN
IMR maintains a 401(k) Profit Sharing Plan (the "401(k) Plan") which is
intended to be a tax-qualified defined contribution plan under Section 401(k)
of the Code. In general, all employees of IMR who have completed one year of
service and 1,000 hours of service are eligible to participate. The 401(k)
Plan includes a salary deferral arrangement pursuant to which participants may
contribute, subject to certain Code limitations, a maximum of 15% of their
first $15,000 in salary on a pre-tax basis. Subject to certain Code
limitations, the Company may make a matching contribution of up to $1,000 of
the salary deferral contributions of participants at a rate of 50% of the
participant's contributions, up to 4% of the participant's salary. The Company
may also make an additional contribution to the 401(k) Plan each year at the
discretion of the Board of Directors. A separate account is maintained for
each participant in the 401(k) Plan. The portion of a participant's account
attributable to his or her own contributions is 100% vested. The portion of
the account attributable to Company contributions (including matching
contributions) vests after five years of service with the Company.
Distributions from the 401(k) Plan may be made in the form of a lump sum cash
payment or in installment payments. See Note 16 to Notes to Consolidated
Financial Statements.
IMR-INDIA BENEFIT PLANS
IMR-India's Employee Share Option Policy provides for grants of options to
employees to purchase common shares of IMR-India. The maximum number of shares
that may be covered by options granted under this policy are 51,900 common
shares. Under the policy, options granted to an employee will vest upon
completion of five years of continuous employment with IMR-India or its
affiliates. The vested options are valid for exercise during the employees'
employment with IMR-India or its affiliates and for a period of six months
thereafter. Options not exercised within six months of cessation of employment
expire. On September 1, 1996, options to acquire an aggregate 20,500 common
shares were outstanding under this policy at a weighted average exercise price
of $0.12 per share.
IMR-India maintains a statutory post-employment benefit plan that provides
defined lump sum benefits to employees on termination, whether prior to or
upon retirement, based on years of service and final average compensation.
IMR-India makes annual contributions to an employees' gratuity fund
established with a government-owned insurance corporation. The contributions
are based on actuarial valuations made by the insurance corporation as of
March 31 each year. IMR-India made contributions to this plan of $6,000 for
the year ended December 31, 1995, respectively.
IMR-India maintains an employees' provident fund and pension and family
pension plans, which are statutory defined contribution retirement benefit
plans. Under the plans, employees contribute 10% of base compensation, which
is matched by a 10% contribution by IMR-India. Contributions made to the plan
by IMR-India totaled approximately $32,000, $32,000, and $10,000 for the years
ended December 31, 1995, 1994 and 1993, respectively.
AGREEMENTS WITH EMPLOYEES
The Company's software development professionals working in the U.S.,
including executive officers, are required to sign an agreement with the
Company restricting the ability of the employee to compete with the Company
during his or her employment and for a period of one year thereafter,
restricting solicitation of customers and employees following employment with
the Company, and providing for ownership and assignment of intellectual
property rights to the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, compensation of executive officers of the Company was
determined by Mr. Sanan, President and Chief Executive Officer of the Company.
Simultaneously with the completion of this Offering, the Company will
establish a Compensation Committee to review the performance of executive
officers, establish overall employee compensation policies and recommend to
the Board of Directors major compensation programs. No member of such
Compensation Committee will be an executive officer of the Company. The
Compensation Committee is composed of Messrs. Luthin and Addonisio.
46
<PAGE>
LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Amended and Restated Articles of Incorporation and Bylaws
provide that the liability of the directors for monetary damages shall be
limited to the fullest extent permissible under Florida law. This limitation
of liability does not affect the availability of injunctive relief or other
equitable remedies.
The Company's Bylaws provide that the Company will indemnify its directors
and officers to the fullest extent possible under Florida law. These
indemnification provisions require the Company to indemnify such persons
against certain liabilities and expenses to which they may become subject by
reason of their service as a director or officer of the Company or any of its
affiliated enterprises. In addition, the Company has entered into
indemnification agreements with each of its directors providing
indemnification to the fullest extent permitted by applicable law and also
setting forth certain procedures, including the advancement of expenses, that
apply in the event of a claim for indemnification.
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<PAGE>
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of the date of this
Prospectus and as adjusted to reflect the sale by the Company of the shares
offered hereby with respect to: (i) each director of the Company; (ii) each of
the Named Executive Officers; (iii) each shareholder known by the Company to
be the beneficial owner of more than 5% of the Company's Common Stock; (iv)
each Selling Shareholder; and (v) all executive officers and directors as a
group. Except as otherwise noted, the persons or entities named in the table
have sole voting and investment power with respect to all the shares of Common
Stock beneficially owned by them, subject to community property laws where
applicable. See "Risk Factors--Benefits to Principal Selling Shareholder" and
"Use of Proceeds."
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING NUMBER OF AFTER THE OFFERING
(1) SHARES TO BE (1)
NAME AND ADDRESS OF --------------------- SOLD IN THE --------------------
BENEFICIAL OWNER (2) SHARES PERCENTAGE OFFERING SHARES PERCENTAGE
- ------------------------ ---------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Satish K. Sanan (3)..... 9,474,780 90.5% 403,360 9,071,420 64.2%
Jeffery S. Slowgrove
(4).................... 756,770 11.8 75,000 681,770 7.3
Charles C. Luthin (5)... 25,000 * 2,000 23,000 *
Michael J. Dean (6)..... 10,000 * 1,000 9,000 *
Philip Shipperlee....... -- * -- -- *
Vincent Addonisio....... -- * -- -- *
All executive officers
and directors as a
group
(8 persons)............ 10,246,550 97.7 480,360 9,766,190 72.5
OTHER SELLING
SHAREHOLDERS:
Tom Spencer (7)......... 226,430 3.4 22,640 203,790 2.1
Donna M. Kapinos........ 194,590 3.0 19,460 175,130 1.9
D. P. Raju (8).......... 67,000 1.0 8,700 58,300 *
Sunil Singhal (9)....... 40,050 * 6,000 34,050 *
Aravamudhan Lakshmanan
(10)................... 35,860 * 4,600 31,260 *
Gopal Kalluri (11)...... 28,630 * 2,400 26,230 *
Anandbir Singh (12)..... 19,630 * 2,460 17,170 *
Dilip C. Kulkarni (13).. 14,250 * 1,450 12,800 *
Mark Ralls (14)......... 9,250 * 930 8,320 *
</TABLE>
- --------
* Less than 1%.
(1) Includes shares of Common Stock issuable upon the exercise of options
which are exercisable as of, or will become exercisable within 60 days
of, November 1, 1996.
(2) Except as otherwise indicated, each beneficial owner has the sole power
to vote and, as applicable, dispose of all shares of Common Stock owned
by such beneficial owner. The street address of each beneficial owner is
c/o Information Management Resources, Inc., Suite 500, 26750 U.S.
Highway 19 North, Clearwater, Florida 34621. Mr. Etkind and Mr.
Forsythe, who are Named Executive Officers, do not beneficially own any
shares of Common Stock, are no longer employed by the Company and are
not listed in the table.
(3) Includes; (i) 83,670 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 31, 2003; (ii)
1,337,540 shares issuable upon the exercise of options, exercisable at
$0.10 per share, expiring January 1, 2005; and (iii) 2,643,340 shares
issuable upon the exercise of options, at an exercise price of $0.50 per
share, expiring February 1, 2006. Also includes 720,000 shares held in
various trusts for the benefit of Mr. Sanan's children with respect to
which Mr. Sanan disclaims beneficial ownership. Assumes no exercise of
the Underwriters' over-allotment option. In the event the Underwriters'
over-allotment option is exercised in full, Mr. Sanan will sell an
additional 262,500 shares of Common Stock in the Offering.
(4) Includes 3,570 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 31, 2003. Includes
5,000 shares held by Kenneth D. Slowgrove, the father of Jeffery S.
Slowgrove, with respect to which Mr. Jeffery Slowgrove disclaims
beneficial owenrship
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<PAGE>
(5) Includes: (i) 20,000 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring February 8, 2004; and (ii)
5,000 shares issuable upon the exercise of options, at an exercise price
of $0.50 per share, expiring December 31, 2005. Excludes 720,000 shares
held in various trusts for the benefit of Mr. Sanan's children for which
Mr. Luthin acts as trustee and with respect to which Mr. Luthin
disclaims beneficial ownership.
(6) Includes 10,000 shares currently issuable upon the exercise of options,
at an exercise price of $0.10 per share, expiring August 18, 2005.
(7) Includes: (i) 216,330 shares issuable upon the exercise of options, at
an exercise price of $0.10 per share, expiring November 8, 1999; and
(ii) 10,100 shares issuable upon the exercise of options, at an exercise
price of $0.10 per share, expiring December 31, 2003.
(8) Includes: (i) 15,290 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 31, 2003; (ii)
7,710 shares issuable upon the exercise of options, at an exercise price
of $0.10 per share, expiring December 20, 2001; and (iii) 30,000 shares
presently issuable upon the exercise of an option to acquire 50,000
shares, at an exercise price of $0.10 per share, expiring July 1, 2003.
(9) Includes: (i) 10,050 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 31, 2003; and (ii)
30,000 shares issuable upon the exercise of options to acquire 50,000
shares at an exercise price of $0.10 per share, expiring July 1, 2003.
(10) Includes: (i) 7,860 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 31, 2003; and (ii)
20,000 shares issuable upon the exercise of options to acquire 30,000
shares, at an exercise price of $0.10 per share, expiring July 15, 2004.
(11) Includes: (i) 4,630 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 20, 2001; and (ii)
10,000 shares issuable upon the exercise of options to acquire 15,000
shares, at an exercise price of $0.10 per share, expiring July 15, 2004.
(12) Includes: (i) 4,630 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 20, 2001; and (ii)
10,000 shares issuable upon the exercise of options to acquire 15,000
shares, at an exercise price of $0.10 per share, expiring July 14, 2004.
(13) Includes 9,250 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 20, 2001.
(14) Includes 9,250 shares issuable upon the exercise of options, at an
exercise price of $0.10 per share, expiring December 20, 2001.
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<PAGE>
CERTAIN TRANSACTIONS
IMR-INDIA TRANSACTIONS
IMR-India was formed in 1990 by Satish K. Sanan, the Company's President and
Chief Executive Officer, and Reesan, Inc., a U.S. corporation ("Reesan"). In
December 1992, IMR-India admitted Second India as an equity investor. In
September 1993, the Company acquired a 69.3% interest in IMR-India through a
merger with Reesan. In December 1994, the Company sold a portion of its equity
interest to India Magnum. As of June 30, 1996, the Company owned approximately
34.2% of IMR-India's outstanding equity, India Magnum owned 35.1%, Mr. Sanan
owned 18.4%, Second India owned 10.5%, and the balance of approximately 1.84%
was owned by several individual shareholders.
In August 1996, the Company acquired Second India's entire interest in IMR-
India for approximately $1.8 million. Upon completion of this purchase, IMR-
India's obligation to repay a $527,000 note to Second India was cancelled. In
July and September 1996, the Company entered into agreements pursuant to
which: (i) the Company will purchase Mr. Sanan's entire equity interest in
IMR-India upon completion of this Offering for approximately $3.1 million in
cash; and (ii) the Company will purchase India Magnum's entire equity interest
in IMR-India for approximately $5.1 million in cash. The purchase price for
these acquisitions will be paid from the proceeds of the Offering. Upon
completion of these acquisitions, the Company will own approximately 98.2% of
IMR-India's equity capital with the balance owned by individual investors.
Additionally, IMR-India has granted to certain of its employees options to
acquire additional shares which, if fully vested, would, upon exercise,
represent 3.5% of IMR-India's equity and would cause the Company's equity
interest to decrease accordingly.
Under a Master Services Agreement between the Company and IMR-India, the
Company engages IMR-India to provide computer software consultants and perform
offshore development projects. For the six months ended June 30, 1996 and the
years ended December 31, 1995 and 1994, the Company paid IMR-India
approximately $6.7 million, $12.4 million and $8.3 million, respectively, for
these services. In addition, the Company acts as a sales agent for IMR-India,
and IMR-India pays the Company a commission for net service fees generated
through referrals to IMR-India, including fees generated for services
performed by IMR-India for the Company and IMR-U.K. For the six months ended
June 30, 1996 and the year ended December 31, 1995, IMR-India paid the Company
approximately $270,000 and $505,000, respectively, as commissions for
referrals.
IMR-U.K. TRANSACTIONS
On October 17, 1994, the Company entered into a Joint Venture Agreement with
Mr. Sanan, Mr. Sanan's wife, and Link Group whereby Link Group acquired a
50.0% equity interest in IMR-U.K. Mr. Philip Shipperlee, a director of the
Company, serves as Managing Director of IMR-U.K. Link Group is wholly owned by
Philip and Sheila Shipperlee. Mrs. Shipperlee also serves as Director for
Human Resources for IMR-U.K. Under the terms of this Joint Venture Agreement,
the Company owns a 39.5% interest and Satish and Anne Sanan collectively own a
10.5% interest. The remaining 50.0% interest is owned by Link Group. In
October 1994, Link Group loaned IMR-U.K. (Pounds)107,545 ($167,000), interest-
free, payable within three years of the date of the Joint Venture Agreement.
In December 1995, the Company also made a loan of (Pounds)107,545 ($167,000)
to IMR-U.K. This second loan was also interest free and repayable within three
years of the date of the Joint Venture Agreement. Repayment of either loan, in
whole or in part, may be made only if an equal amount is paid towards the
other loan. In addition, the Company agreed to write off all debts due to it
from IMR-U.K. other than for the (Pounds)107,545 loan resulting in a write-off
of $164,000. In February 1996, IMR-U.K. agreed to issue 25,000 equity shares
each to the Company and Link Group in satisfaction of (Pounds)25,000 ($39,000)
of the unpaid loans owed by IMR-U.K. to each of them.
On March 4, 1996, the Company loaned Mr. Sanan the sum of $392,500 (the
"Sanan Loan"). The purpose of the Sanan Loan was to provide Mr. Sanan with
proceeds to make a loan in the same amount to IMR-U.K. (the "U.K. Loan").
These loans were structured to comply with bank loan covenants. In June 1996,
Mr. Sanan assigned to the Company his rights under the U.K. Loan as payment in
full of his liabilities under the Sanan
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<PAGE>
Loan. The U.K. Loan is now payable by IMR-U.K. to the Company, and the Sanan
Loan is retired. A portion of the proceeds of the U.K. Loan was used by IMR-
U.K. to repay a short-term loan of (Pounds)188,000 made by Link Group. The
outstanding principal balance of the U.K. Loan bears interest at 10% per annum
and is payable in one installment of $75,000, which was due in August 1996 but
has been deferred indefinitely, and four equal installments of $79,375 payable
on June 2, 1997, December 1, 1997, June 1, 1998 and December 1, 1998,
respectively. Interest is payable quarterly. Under the terms of the U.K. Loan,
if the profit before interest or taxation of IMR-U.K. for the year ended
December 31, 1996 is less than (Pounds)197,940, then the Company will have the
option to convert a portion of the U.K. Loan into ordinary voting equity
shares of IMR-U.K. at the conversion rate of (Pounds)1 per share.
IMR-U.K. utilizes office space pursuant to an oral agreement between the
Company and Link Group. The annual rent paid to Link Group by IMR-U.K. in 1995
was approximately $30,000. The Link Group provides technical services for IMR-
U.K., as well as marketing, recruiting and accounting services. IMR-U.K. has
paid to Link Group approximately $449,000 for professional services in the
first six months of 1996, respectively. Payments made for those services in
1995 were nominal. IMR-U.K. paid Link Group $33,000 in the first six months of
1996 for administrative services. Payments for these services also were
nominal in 1995.
OPTIONS ISSUED TO MR. SANAN
On February 1, 1995, the Company granted Satish K. Sanan, the Company's
President, Chief Executive Officer and majority shareholder, an option to
purchase 2,643,340 shares of Common Stock at an exercise price of $0.50 per
share. This option was granted following the Company's repurchase of
approximately 2,646,940 shares from former shareholders of the Company for a
price of $0.50 per share. The option granted to Mr. Sanan has a ten-year term
and is currently exercisable. In January 1995, the Company granted Mr. Sanan a
ten-year option to acquire 1,337,540 shares of Common Stock at an exercise
price of $0.10 per share. This option is currently exercisable.
OTHER TRANSACTIONS
In October 1995, the Company entered a Sublease Agreement with ABR
Information Management Services, Inc. ("ABR") pursuant to which ABR subleases
from the Company 11,000 square feet of office space in the Company's
Clearwater, Florida offices through October 31, 1997. Since the commencement
of the sublease on November 1, 1995, ABR has paid to the Company approximately
$133,000 in rent plus applicable sales taxes pursuant to the sublease. Mr.
Vincent Addoniso, a director of the Company, serves as a director, Executive
Vice President, Chief Financial Officer and Treasurer of ABR.
The Company has purchased insurance on the lives of Messrs. Sanan and
Jeffery S. Slowgrove, the Company's Treasurer. A portion of the proceeds from
the insurance on the life of Mr. Sanan will inure to the benefit of certain
trusts and to Mr. Sanan's wife and a portion is required to be used to
purchase Mr. Sanan's stock following his death. The annual payment by the
Company for insurance policies on the life of Mr. Sanan was approximately
$44,000 in 1995. Following consummation of this Offering, these policies will
be maintained by the Company for the benefit of Mr. Sanan. The annual payment
by the Company for an insurance policy on the life of Mr. Slowgrove is
approximately $452. See "Management--Executive Compensation."
In 1994, Mr. Sanan made two unsecured loans to the Company, one totaling
$119,206 and bearing interest at 8% per annum and a second totaling $52,571
and bearing interest at 20% per annum. In January 1996, these loans were
consolidated into a single loan in the amount of $171,777, bearing interest at
8% per annum and payable in annual payments of $65,944. The first scheduled
payment of $65,944 was made in January 1996, and the balance of this loan,
totaling $105,000, was paid in full in September 1996. In 1995, Mr. Sanan made
an additional loan of $190,000 which was repaid, together with interest at the
rate of 8% per annum, in January 1996.
Mr. Sanan has personally guaranteed the Company's term loan and line of
credit payable to Barnett Bank and IMR-India's line of credit payable to
Canara Bank.
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<PAGE>
The Company and the shareholders of the Company immediately prior to this
Offering (the "Pre-Offering Shareholders") are parties to an agreement whereby
the Pre-Offering Shareholders have agreed to cause the Company to terminate
its S corporation election immediately upon consummation of this Offering. The
Company has agreed to indemnify the Pre-Offering Shareholders from the amount
of any increase in taxable income allocable to them in the event of any audit
of the Company's tax returns.
The Board of Directors of the Company has adopted a resolution whereby all
future transactions, including any loans from the Company to its officers,
directors, principal shareholders or affiliates, will be approved by a
majority of the Board of Directors, including a majority of the independent
and disinterested members of the Board of Directors or, if required by law, a
majority of the disinterested shareholders, and will be on terms no less
favorable to the Company than could be obtained from unaffiliated third
parties.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 40,000,000 shares of
Common Stock, par value $.10 per share, and 10,000,000 shares of preferred
stock, par value $.10 per share. As of September 1, 1996, the Company had
issued and outstanding 6,404,020 shares of Common Stock and had granted
options to purchase 5,059,120 shares of Common Stock under the Stock Option
Plan at a weighted average exercise price per share of $0.60 per share (of
which options for the purchase of 4,500,500 shares of Common Stock will be
exercisable as of, or within 60 days of, November 1, 1996 at a weighted
average exercise price of $0.61 per share). No shares of preferred stock have
been designated or issued. The following description of the capital stock of
the Company is a summary and is qualified in its entirety by the provisions of
the Company's Amended and Restated Articles of Incorporation and the Restated
Bylaws, copies of which have been filed as exhibits to the Registration
Statement of which this Prospectus is a part.
COMMON STOCK
Holders of shares of Common Stock are entitled to one vote per share for the
election of directors and all matters to be submitted to a vote of the
Company's shareholders. Subject to the rights of any holders of preferred
stock which may be issued in the future, the holders of shares of Common Stock
are entitled to share ratably in such dividends as may be declared by the
Board of Directors and paid by the Company out of funds legally available
therefor. In the event of a dissolution, liquidation or winding up of the
Company, holders of shares of Common Stock are entitled to share ratably in
all assets remaining after payment of all liabilities and liquidation
preferences, if any. Holders of shares of Common Stock have no preemptive,
subscription, redemption or conversion rights. The outstanding shares of
Common Stock are, and the shares of Common Stock to be issued by the Company
in connection with this Offering will be, duly authorized, validly issued,
fully paid and nonassessable.
PREFERRED STOCK
The Company's Amended and Restated Articles of Incorporation authorize the
issuance of preferred stock with such designations, rights and preferences as
may be determined from time to time by its Board of Directors. Accordingly,
the Company's Board of Directors is empowered, without shareholder approval,
to issue preferred stock with dividends, liquidation, conversion, voting or
other rights that could adversely affect the voting power or other rights of
the holders of Common Stock. In the event of issuance, the preferred stock
could be used, under certain circumstances, as a method of discouraging,
delaying or preventing a change in control of the Company. No shares of
preferred stock are issued or outstanding and the Company has no present plans
to issue any shares of preferred stock. See "Risk Factors--Certain Anti-
Takeover Provisions."
CERTAIN ARTICLES OF INCORPORATION AND BYLAW PROVISIONS
The Amended and Restated Articles of Incorporation provide that special
meetings of shareholders may be called only by the Chairman of the Board of
Directors (if one is so appointed), the Chief Executive Officer or, if none,
the President of the Company or by the Board of Directors. The Amended and
Restated Articles of Incorporation provide for a classified Board of Directors
and permit removal of directors only for cause upon the affirmative vote of
holders of at least 66 2/3% of the shares of capital stock of the Company
entitled to vote. See "Management--Directors and Executive Officers."
The Company's Amended and Restated Articles of Incorporation establish an
advance notice procedure for the nomination of candidates for election as
directors, as well as for other shareholder proposals to be considered at
shareholders meetings. Notice of shareholder proposals and directors
nominations must be given timely in writing to the Secretary of the Company
before the meeting at which such matters are to be acted upon or directors are
to be elected. Such notice, to be timely, must be received at the principal
executive offices of the Company with respect to shareholder proposals and
elections to be held at the annual meeting, not less than 60 days before the
date of the meeting at which the director(s) are to be elected; however, if
less than 70 days notice
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<PAGE>
or prior public disclosure of the date of the scheduled meeting is given or
made, notice by the shareholder, to be timely, must be delivered or received
not later than the close of business on the tenth day following the earlier of
the day on which notice of the date of the meeting is mailed to shareholders
or public disclosure of the date of such meeting is made.
Notice to the Company from a shareholder who intends to present a proposal
or to nominate a person for election as a director at a shareholders' meeting
must contain certain information about the shareholder giving such notice and,
in the case of director nominations, all information that would be required to
be included in a proxy statement soliciting proxies for the election of the
proposed nominee (including such person's written consent to serve as a
director if so elected). If the presiding officer at the meeting determines
that a shareholder's proposal or nomination is not made in accordance with the
procedures set forth in the Amended and Restated Articles of Incorporation,
such proposal or nomination, at the direction of such presiding officer, may
be disregarded. The notice requirement for shareholder proposals contained in
the Amended and Restated Articles of Incorporation does not restrict a
shareholder's right to include proposals in the Company's annual proxy
materials pursuant to rules promulgated under the Securities Exchange Act of
1934, as amended. In addition, the Amended and Restated Articles of
Incorporation provide that upon consummation of the Offering, shareholders may
take action only at a duly called and held meeting and may not take action by
written consent.
The Amended and Restated Articles of Incorporation provide that directors
may be removed only for cause and only by the affirmative vote, at any annual
or special meeting of the shareholders, of not less than 66 2/3% of the total
number of votes of then outstanding shares of capital stock of the Company
that are entitled to vote generally in the election of directors, voting
together as a single class, but only if notice of such proposed removal was
contained in the notice of such meeting. "For cause" means: (i) misconduct as
a director of the Company or any subsidiary of the Company which involves
dishonesty with respect to a material corporate activity or material corporate
assets; or (ii) conviction of an offense punishable by one or more years of
imprisonment (other than minor regulatory infractions and traffic violations
which do not materially and adversely effect the Company). The Board of
Directors has the power to increase or decrease the authorized number of
directors, with or without shareholder approval. Newly created directorships
resulting from any increase in the number of directors or any vacancy of the
Board of Directors may be filled by the affirmative vote of a majority of the
remaining directors then in office or, if not filled by the directors, by the
shareholders. In discharging the duties of their respective positions and in
determining what is believed to be in the best interest of the Company, the
Board of Directors, and individual directors, in addition to considering the
effects of any action on the Company or its shareholders, may, to the extent
permitted by applicable Florida law, consider the interests of the employees,
customers, suppliers and creditors of the Company and its subsidiaries, the
communities in which offices or other establishments of the Company and its
subsidiaries are located, and all other factors such directors may consider
pertinent; provided, however, that this provision of the Company's Amended and
Restated Articles of Incorporation solely grants discretionary authority to
the directors and no constituency shall be deemed to have been given any right
to consideration thereby.
The preceding provisions of the Amended and Restated Articles of
Incorporation and any related provisions of the Restated Bylaw may be changed
only upon the affirmative vote of holders of at least a 66 2/3% of the
outstanding shares of Common Stock.
The provisions of the Amended and Restated Articles of Incorporation and the
Restated Bylaws summarized in the preceding five paragraphs and the provisions
of Florida's Business Corporation Act (the "FBCA") described under "--Certain
Provisions of Florida Law," contain provisions that may have the effect of
delaying, deferring or preventing a non-negotiated merger or other business
combination involving the Company. These provisions are intended to encourage
any person interested in acquiring the Company to negotiate with and obtain
the approval of the Board of Directors in connection with the transaction.
Certain of these provisions may, however, discourage a future acquisition of
the Company not approved by the Board of Directors in which shareholders might
receive an attractive value for their shares or that a substantial number or
even a majority of the Company's shareholders might believe to be in their
best interest. As a result, shareholders who desire to
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<PAGE>
participate in such a transaction may not have the opportunity to do so. Such
provisions could also discourage bids for the Common Stock at a premium, as
well as create a depressive effect on the market price of the Common Stock.
CERTAIN PROVISIONS OF FLORIDA LAW
The Company is subject to several anti-takeover provisions under Florida law
that apply to a public corporation organized under Florida law, unless the
corporation has elected to opt out of the those provisions in its articles of
incorporation or bylaws. The Company has not elected to opt out of those
provisions. The FBCA prohibits the voting of shares in a publicly-held Florida
corporation that are acquired in a "control share acquisition" unless the
holders of a majority of the corporation's voting shares (exclusive of shares
held by officers of the corporation, inside directors or the acquiring party)
approve the granting of voting rights as to the shares acquired in the control
share acquisition. A "control share acquisition" is defined as an acquisition
that immediately thereafter entitles the acquiring party to vote in the
election of directors within each of the following ranges of voting power: (i)
one-fifth or more but less than one-third of such voting power; (ii) one-third
or more but less than a majority of such voting power; and (iii) more than a
majority of such voting power.
The FBCA also contains an "affiliated transaction" provision that prohibits
a publicly-held Florida corporation from engaging in a broad range of business
combinations or other extraordinary corporate transactions with an "interested
shareholder" unless: (i) the transaction is approved by a majority of
disinterested directors before the person becomes an interested shareholder;
(ii) the interested shareholder has owned at least 80% of the corporation's
outstanding voting shares for at least five years; or (iii) the transaction is
approved by the holders of two-thirds of the corporation's voting shares other
than those owned by the interested shareholder. An interested shareholder is
defined as a person who together with affiliates and associates beneficially
owns more than 10% of the corporation's outstanding voting shares.
LISTING
Application has been made to include the Company's Common Stock for
quotation on the Nasdaq National Market under the trading symbol "IMRI."
TRANSFER AGENT AND REGISTRAR
The transfer agent for the Company's Common Stock is American Stock Transfer
& Trust Company.
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<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this Offering, there has been no public market for the securities
of the Company.
Upon consummation of this Offering, the Company will have outstanding
9,386,590 shares of Common Stock and will have granted options for the
purchase of 5,059,120 shares of Common Stock pursuant to the Stock Option Plan
at a weighted average exercise price of $0.60 per share. Of such options
granted pursuant to the Stock Option Plan: (i) options to purchase 4,064,550
shares of Common Stock (at a weighted average exercise price of $0.36 per
share) are held by Satish K. Sanan, the Company's President, Chief Executive
Officer and majority shareholder, and are currently exercisable; and (ii)
options to purchase 435,950 shares of Common Stock (at a weighted average
exercise price of $0.12 per share) are held by other officers and employees of
the Company and are exercisable as of, or within 60 days of, November 1, 1996.
Of the 9,386,590 shares outstanding upon completion of this Offering, the
3,500,000 shares sold in this Offering will be freely tradable without
restriction or further registration under the Securities Act, unless they are
purchased by "affiliates" of the Company as that term is defined in Rule 144
under the Securities Act (which sales would be subject to certain limitations
and restrictions described below). The remaining 5,886,590 outstanding shares
of Common Stock may be sold in the public market only if registered or
pursuant to an exemption from registration such as Rule 144 or 144(k)
promulgated under the Securities Act. The holders of all remaining 5,886,590
shares (and holders of options for the purchase of 4,451,020 shares of Common
Stock which are exercisable as of, or within 60 days of, November 1, 1996)
have agreed not to offer, sell, contract to sell, grant any option to purchase
or otherwise dispose of, or agree to dispose of, any shares of Common Stock
(other than gifts) until 180 days after the date of this Prospectus without
prior written consent of Montgomery Securities. See "Underwriting." Montgomery
Securities in its sole discretion and without notice may earlier release for
sale in the public market all or any portion of the shares subject to the
lock-up agreement.
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned shares for a least two years (including the holding
period of any prior owner except an affiliate) is entitled to sell in
"brokers' transactions" or to market makers, within any three-month period a
number of shares that does not exceed the greater of: (i) 1% of the number of
shares of Common Stock then outstanding (approximately 94,000 shares
immediately after this Offering); or (ii) the average weekly trading volume in
the Common Stock during the four calendar weeks preceding the required filing
of a Form 144 with respect to such sale. Sales under Rule 144 are subject to
the availability of current public information about the Company. Under Rule
144(k), a person who is not deemed to have been an affiliate of the Company at
any time during the 90 days preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least three years, is entitled to sell
such shares without having to comply with the manner of sale, public
information, volume limitation or notice filing provisions of Rule 144. Unless
otherwise restricted, "144(k) shares" may therefore be sold immediately upon
the completion of this Offering. Under Rule 701 under the Securities Act,
persons who purchase shares upon exercise of options granted prior to this
Offering are entitled to sell such shares 90 days after this Offering in
reliance on Rule 144, without having to comply with the holding period
requirements of Rule 144 and, in the case of non-affiliates, without having to
comply with the volume limitation or notice filing provisions of Rule 144. In
addition, the Commission has published a notice of proposed rulemaking which,
if adopted, as proposed, would shorten the applicable holding period under
Rule 144(d) and 144(k) to one and two years, respectively (from current two
and three-year periods). The Company cannot predict whether such amendments
will be adopted or the effect thereof on the trading market for its Common
Stock.
After the expiration of the 180-day lock-up period, 5,886,590 shares, which
have been held for over three years, will be eligible for sale in the public
market subject to compliance with Rule 144. The Company is unable to estimate
accurately the number of "restricted" shares that will be sold under Rule 144
since this will depend in part on the market price for the Common Stock, the
personal circumstances of the seller and other factors. See "Risk Factors--
Shares Eligible for Future Sale."
56
<PAGE>
After the completion of this Offering, the Company intends to file a
Registration Statement on Form S-8 under the Securities Act to register: (i)
5,413,410 shares of Common Stock reserved for issuance under the Stock Option
Plan (the remaining 32,570 shares of Common Stock reserved for issuance under
the Stock Option Plan will be issued to the Selling Shareholders and sold in
this Offering); (ii) the 150,000 shares reserved under the Directors Stock
Option Plan, of which options for the purchase of 30,000 shares will be
granted upon consummation of the Offering; and (iii) the 200,000 shares
reserved under the Stock Purchase Plan. After the date of such filing, except
for shares held by "affiliates" of the Company as defined in Rule 144 under
the Securities Act (which are subject to the limitation and restrictions
described above), approximately 49,480 shares subject to outstanding options
will be immediately eligible for sale upon issuance. See "Management--Employee
Benefit Plans."
57
<PAGE>
UNDERWRITING
The underwriters named below (the "Underwriters") represented by Montgomery
Securities and Alex. Brown & Sons Incorporated (the "Representatives"), have
severally agreed, subject to the terms and conditions set forth in the
underwriting agreement (the "Underwriting Agreement") by and among the
Company, the Selling Shareholders and the Underwriters, to purchase from the
Company and the Selling Shareholders the aggregate number of shares of Common
Stock indicated below opposite their respective names at the initial public
offering price less the underwriting discount set forth on the cover page of
this Prospectus. The Underwriting Agreement provides that the obligations of
the Underwriters are subject to certain conditions precedent and that the
Underwriters are committed to purchase all of the shares, if any are
purchased.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Montgomery Securities..............................................
Alex. Brown & Sons Incorporated....................................
---------
Total.............................................................. 3,500,000
=========
</TABLE>
The Representatives have advised the Company and the Selling Shareholders
that the Underwriters initially propose to offer the Common Stock to the
public on the terms set forth on the cover page of this Prospectus. The
Underwriters may allow selected dealers a concession of not more than $ per
share, and the Underwriters may allow, and such dealers may reallow, a
concession of not more than $ per share to certain other dealers. After the
initial public offering, the offering price and other selling terms may be
changed by the Representatives. The Common Stock is offered subject to receipt
and acceptance by the Underwriters and to certain other conditions, including
the right to reject orders in whole or in part.
The Company and Satish K. Sanan, a Selling Shareholder, have granted the
Underwriters an option, exercisable during the 30-day period after the date of
this Prospectus, to purchase up to a maximum of 525,000 additional shares of
Common Stock in the aggregate to cover over-allotments, if any, at the same
price per share as the initial shares to be purchased by the Underwriters. To
the extent the Underwriters exercise such over-allotment option, the
Underwriters will be committed, subject to certain conditions, to purchase
such additional shares in approximately the same proportion as set forth in
the above table. The Underwriters may purchase such shares only to cover over-
allotments made in connection with this Offering.
The Company, the Selling Shareholders and the Company's officers and
directors who are also shareholders of the Company and who, immediately
following the Offering (assuming no exercise of the over-allotment option),
collectively will beneficially own approximately 5,886,590 shares of
outstanding Common Stock (and options for the purchase of 4,451,020 which will
be exercisable as of, or within 60 days of, November 1, 1996), have agreed
that for a period of 180 days after the date of this Prospectus they will not,
without the prior written consent of Montgomery Securities, directly or
indirectly, offer for sale, sell, solicit an offer to sell, contract or grant
an option to sell, pledge, transfer, establish an open put equivalent position
or otherwise dispose of any shares of Common Stock, options, warrants to
acquire shares or securities convertible into or exchangeable for equity
securities. In addition, the Company has agreed that for a period of 180 days
after the date of this Prospectus it will not, without the consent of
Montgomery Securities, directly or indirectly, issue, offer for sale, sell,
solicit an offer to sell, contract or grant an option to sell, pledge,
transfer or otherwise dispose of any shares of Common Stock, options, warrants
to acquire shares or securities convertible into or exchangeable for equity
securities, except for shares of Common Stock offered hereby and shares issued
pursuant to the Stock Option Plan, the Directors Stock Option Plan or the
Stock Purchase Plan. See "Management--Stock Option Plans," "--Stock Purchase
Plan" and "Shares Eligible for Future Sale."
58
<PAGE>
The Underwriting Agreement provides that the Company and the Selling
Shareholders will indemnify the Underwriters against certain liabilities,
including civil liabilities under the Securities Act, or will contribute to
payments the Underwriters may be required to make in respect thereof.
The Representatives have advised the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority in excess of 5% of the number of shares of Common Stock offered
hereby.
Prior to this Offering, there has been no public market for the Common
Stock. Consequently, the initial offering price will be determined through
negotiations among the Company, the Selling Shareholders and the
Representatives. Among the factors to be considered in such negotiations are
the Company's historical results of operations and financial condition,
prospects for the Company and for the industry in which the Company competes,
an assessment of the Company management, its past and present operations and
financial performance, the prospects for future earnings of the Company, the
present state of the Company's development, the general condition of the
securities markets at the time of the Offering and the market prices of and
demand for publicly traded common stocks of comparable companies in recent
periods and other factors deemed relevant. See "Risk Factors--No Prior Public
Market for Common Stock; Possible Volatility of Stock Price."
LEGAL MATTERS
The validity of the issuance of the shares of the Common Stock offered
hereby will be passed upon for the Company and the Selling Shareholders by
Morris, Manning & Martin, L.L.P., Atlanta, Georgia. Certain legal matters in
connection with this Offering will be passed upon for the Underwriters by
Latham & Watkins, Los Angeles, California.
EXPERTS
The Consolidated Financial Statements included in this Prospectus and
elsewhere in the Registration Statement have been audited by Coopers & Lybrand
L.L.P., independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of
such firm as experts in accounting and auditing. Coopers & Lybrand L.L.P. will
rely on the report of Arthur Andersen & Associates, Bombay, India, independent
public accountants with respect to their audit of IMR-India and in reliance
upon the authority of such firm as experts in accounting and auditing.
59
<PAGE>
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all
amendments, schedules and exhibits thereto, the "Registration Statement")
under the Securities Act with respect to the shares of Common Stock offered
hereby. This Prospectus, which constitutes a part of the registration
Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made
to the Registration Statement. Statements made in this Prospectus as to the
contents of any contract, agreement or other document are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. The Registration
Statement and the exhibits and schedules thereto may be inspected without
charge at the public reference facilities maintained by the Commission in Room
1024, 450 Fifth Street, N. W., Washington, D.C. 20549, and at the following
regional offices of the Commission: Seven World Trade Center, Room 1400, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.
W., Washington, D.C. 20549, Room 1024, at prescribed rates. In addition, the
Company is required to file electronic versions of these documents with the
Commission through the Commissions Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system. The Commission maintains a World Wide Web Site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
The Company intends to furnish to its shareholders annual reports containing
Consolidated Financial Statements audited by an independent public accounting
firm and quarterly reports for the first three quarters of each fiscal year
containing unaudited interim financial information.
60
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS:
Reports of Independent Accountants................................... F-2 - F-3
Consolidated Balance Sheets as of December 31, 1994, 1995 and June
30, 1996 (Unaudited)................................................ F-4
Consolidated Statements of Operations for the Years Ended December
31, 1993, 1994 and 1995 and for the Six Months Ended June 30, 1995
and 1996 (Unaudited)................................................ F-5
Consolidated Statements of Changes in Shareholders' Equity for the
Years Ended December 31, 1993, 1994 and 1995 and for the Six Months
Ended June 30, 1996 (Unaudited)..................................... F-6
Consolidated Statements of Cash Flows for the Years Ended December
31, 1993, 1994 and 1995 and for the Six Months Ended June 30, 1995
and 1996 (Unaudited)................................................ F-7
Notes to Consolidated Financial Statements........................... F-8
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Information Management Resources, Inc.
Clearwater, Florida
We have audited the accompanying consolidated balance sheets of Information
Management Resources, Inc. and subsidiary (the Company) as of December 31,
1995 and 1994, and the related consolidated statements of operations, changes
in shareholders' equity and cash flows for the years ended December 31, 1995,
1994 and 1993. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of Information Management Resources (India) Limited, a consolidated
subsidiary, constituting approximately 31% and 38% of consolidated assets as
of December 31, 1995 and 1994, respectively, and approximately 81%, 86% and
23% of consolidated cost of revenues for the years ended December 31, 1995,
1994 and 1993 (see Note 2). Those statements were audited by other auditors
whose report has been furnished to us, and our opinion, insofar as it relates
to the amounts included for Information Management Resources (India) Limited
is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the report of the other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Information
Management Resources, Inc. and subsidiary as of December 31, 1995 and 1994,
and the results of their operations and their cash flows for the years ended
December 31, 1995, 1994 and 1993 in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Tampa, Florida
September 6, 1996, except as to certain information
in Note 20, for which the date is September 12, 1996
F-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Information Management Resources (India) Limited
We have audited the accompanying balance sheets of Information Management
Resources (India) Limited (a company incorporated in India) as of December 31,
1995 and December 31, 1994, and the related statements of operations,
shareholders' equity and cash flows for the years ended December 31, 1995 and
December 31, 1994 and the four months ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Information Management
Resources (India) Limited as of December 31, 1995 and December 31, 1994, and
the results of its operations and its cash flows for the years ended December
31, 1995 and December 31, 1994 and the four months ended December 31, 1993 in
conformity with generally accepted accounting principles in the United States
of America.
ARTHUR ANDERSEN & ASSOCIATES
Bombay, India
September 6, 1996
F-3
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, PRO FORMA
----------------------- 1996 JUNE 30, 1996
1994 1995 (UNAUDITED) (UNAUDITED)
----------- ---------- ----------- -------------
(SEE NOTE 20)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equiva-
lents................... $ 1,012,897 $1,620,968 $ 939,461 $ 939,461
Accounts receivable...... 1,975,953 3,614,014 4,366,408 4,366,408
Other current assets..... 417,098 459,995 652,087 652,087
----------- ---------- ----------- -----------
Total current assets... 3,405,948 5,694,977 5,957,956 5,957,956
Property and equipment, net
of accumulated
depreciation.............. 2,470,395 1,699,084 2,070,448 2,070,448
Capitalized software costs,
net of accumulated
amortization.............. 385,603 548,691 630,152 630,152
Deposits and other assets.. 327,105 263,382 759,264 759,264
Goodwill, net of accumu-
lated amortization........ 510,245 451,370 421,933 421,933
----------- ---------- ----------- -----------
Total assets........... $ 7,099,296 $8,657,504 $ 9,839,753 $ 9,839,753
=========== ========== =========== ===========
LIABILITIES AND SHAREHOLD-
ERS' EQUITY
Current liabilities:
Revolving credit loans... $ 425,239 $ 655,466 $ 775,064 $ 775,064
Accounts payable......... 1,206,911 490,317 383,907 383,907
Accrued expenses......... 1,174,977 1,484,443 949,533 1,169,533
Current portion of long-
term debt............... 521,755 326,640 1,407,686 1,407,686
Current maturities of
capital lease obliga-
tions................... 155,907 132,642 104,412 104,412
Notes payable--sharehold-
er...................... 0 242,457 103,541 103,541
Deferred revenue......... 260,814 17,270 549,228 549,228
Deferred income taxes.... 0 0 0 257,500
----------- ---------- ----------- -----------
Total current liabili-
ties.................. 3,745,603 3,349,235 4,273,371 4,750,871
Long-term debt............. 1,960,891 1,077,077 969,300 969,300
Notes payable--sharehold-
er........................ 192,332 107,054 0 0
Capital lease obligations.. 189,463 54,514 0 0
Deferred income taxes...... 24,614 37,739 50,154 822,654
Other liabilities.......... 67,686 82,507 76,736 76,736
----------- ---------- ----------- -----------
Total liabilities...... 6,180,589 4,708,126 5,369,561 6,619,561
----------- ---------- ----------- -----------
Minority interest.......... 654,411 1,241,266 1,606,619 1,606,619
----------- ---------- ----------- -----------
Commitments and contingen-
cies (Notes 12, 14 and 21)
Shareholders' equity:
Preferred stock, $.10 par
value, 10,000,000 shares
authorized no shares
outstanding at December
31, 1995 and 1994 and
June 30, 1996........... 0 0 0 0
Common stock, $.10 par
value per share,
40,000,000 shares
authorized, 9,055,960 at
December 31, 1995 and
1994 and 9,085,960 at
June 30, 1996 issued.... 905,600 905,600 908,600 908,600
Additional paid-in capi-
tal..................... 1,167,244 1,167,244 1,167,244 1,942,898
Retained earnings (accu-
mulated deficit)........ (1,811,629) 705,956 2,192,741 167,087
Cumulative foreign
currency translation
adjustments............. 3,081 (61,938) (46,125) (46,125)
----------- ---------- ----------- -----------
264,296 2,716,862 4,222,460 2,972,460
Less treasury stock at
cost 5,000 at December
31, 1995 and 2,681,940
at June 30, 1996........ 0 (8,750) (1,358,887) (1,358,887)
----------- ---------- ----------- -----------
Total shareholders' eq-
uity.................. 264,296 2,708,112 2,863,573 1,613,573
----------- ---------- ----------- -----------
Total liabilities and
shareholders' equity.. $ 7,099,296 $8,657,504 $ 9,839,753 $ 9,839,753
=========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------- --------------------------
1993 1994 1995 1995 1996
----------- ----------- ----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................ $12,428,924 $14,101,653 $22,700,170 $ 10,574,612 $ 12,397,261
Cost of revenues........ 10,130,493 8,662,244 13,708,782 6,753,209 7,222,099
----------- ----------- ----------- ------------ ------------
Gross profit............ 2,298,431 5,439,409 8,991,388 3,821,403 5,175,162
Selling, general and
administrative
expenses............... 5,544,729 4,610,481 5,482,982 2,467,967 3,093,104
----------- ----------- ----------- ------------ ------------
Income (loss) from
operations......... (3,246,298) 828,928 3,508,406 1,353,436 2,082,058
----------- ----------- ----------- ------------ ------------
Other (expense) income:
Loss in equity
investment........... (158,546) (125,842) (110,038) (58,645) (327)
Interest expense...... (275,517) (472,606) (348,652) (196,896) (159,915)
Other................. 0 1,097,015 472,609 436,171 31,705
----------- ----------- ----------- ------------ ------------
Total other
(expense) income... (434,063) 498,567 13,919 180,630 (128,537)
----------- ----------- ----------- ------------ ------------
Income (loss) before
provision (benefit) for
income taxes and
minority interest...... (3,680,361) 1,327,495 3,522,325 1,534,066 1,953,521
Provision (benefit) for
income taxes........... (2,365) 450,504 292,747 198,202 114,228
----------- ----------- ----------- ------------ ------------
Income (loss) before
minority interest.. (3,677,996) 876,991 3,229,578 1,335,864 1,839,293
Minority interest in net
(income) loss.......... 4,762 (62,587) (711,993) (354,849) (330,356)
----------- ----------- ----------- ------------ ------------
Net income (loss)... $(3,673,234) $ 814,404 $ 2,517,585 $ 981,015 $ 1,508,937
=========== =========== =========== ============ ============
Pro forma income data
(unaudited--see Note
20):
Income before income
taxes and minority
interest............... $ 3,522,325 $ 1,953,521
----------- ------------
Total pro forma
provision for income
taxes.................. 1,197,861 679,579
----------- ------------
Pro forma net income
before minority
interest............... 2,324,464 1,273,942
Minority interest in net
income ................ (711,993) (330,356)
----------- ------------
Pro forma net income.... $ 1,612,471 $ 943,586
=========== ============
Pro forma net income per
share.................. $ 0.12 $ 0.08
=========== ============
Pro forma weighted
average common and
common stock equivalent
shares outstanding..... 13,669,275 11,273,895
=========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK
-------------------
CUMULATIVE
FOREIGN RETAINED
ADDITIONAL CURRENCY EARNINGS
PAID-IN TRANSLATION (ACCUMULATED TREASURY
SHARES AMOUNT CAPITAL ADJUSTMENT DEFICIT) STOCK TOTAL
--------- -------- ---------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1993................... 74,960 $ 75,000 $ 204,296 $ 0 $ 1,041,321 $ 0 $ 1,320,617
Retirement of common
stock previously issued
as compensation and
forfeited by
shareholder............ (3,000) (3,000) (10,500) 0 13,500 0 0
Issuance of common stock
issued in connection
with change in par
value.................. 648,000 0 0 0 0 0 0
Issuance of common stock
issued in connection
with business
combination............ 8,280,000 828,000 881,048 0 0 1,709,048
Issuance of common
stock.................. 56,000 5,600 92,400 0 0 0 98,000
Net loss................ 0 0 0 0 (3,673,234) 0 (3,673,234)
Translation
adjustments............ 0 0 0 (5,642) 0 0 (5,642)
Dividends declared ($1
per share)............. 0 0 0 0 (7,620) 0 (7,620)
--------- -------- ---------- -------- ----------- ----------- -----------
Balance, December 31,
1993................... 9,055,960 905,600 1,167,244 (5,642) (2,626,033) 0 (558,831)
Translation
adjustments............ 0 0 0 8,723 0 0 8,723
Net income.............. 0 0 0 0 814,404 0 814,404
--------- -------- ---------- -------- ----------- ----------- -----------
Balance, December 31,
1994................... 9,055,960 905,600 1,167,244 3,081 (1,811,629) 0 264,296
Repurchase of common
stock.................. 0 0 0 0 0 (8,750) (8,750)
Translation
adjustments............ 0 0 0 (65,019) 0 0 (65,019)
Net income.............. 0 0 0 0 2,517,585 0 2,517,585
--------- -------- ---------- -------- ----------- ----------- -----------
Balance, December 31,
1995................... 9,055,960 905,600 1,167,244 (61,938) 705,956 (8,750) 2,708,112
Net income for the six
months ended June 30,
1996 (unaudited)....... 0 0 0 0 1,508,937 0 1,508,937
Translation adjustment
(unaudited)............ 0 0 0 15,813 0 0 15,813
Issuance of common stock
(unaudited)............ 30,000 3,000 0 0 0 0 3,000
Repurchase of common
stock (unaudited)...... 0 0 0 0 0 (1,350,137) (1,350,137)
Dividends declared
(unaudited)............ 0 0 0 0 (22,152) 0 (22,152)
--------- -------- ---------- -------- ----------- ----------- -----------
Balance, June 30, 1996
(unaudited)............ 9,085,960 $908,600 $1,167,244 $(46,125) $ 2,192,741 $(1,358,887) $2,863,573
========= ======== ========== ======== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------ --------------------------
1993 1994 1995 1995 1996
----------- ---------- ----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operat-
ing activities:
Net income (loss)...... $(3,673,234) $ 814,404 $ 2,517,585 $ 981,015 $ 1,508,937
----------- ---------- ----------- ------------ ------------
Adjustments to
reconcile net income
(loss) to cash
provided by (used in)
operating activities:
Depreciation and amor-
tization.............. 268,663 545,696 491,085 240,868 233,453
Gain on sale of prop-
erty and equipment.... 0 (76,473) (520,672) (520,672) 0
Gain on sale of subsid-
iary.................. 0 (1,013,503) 0 0 0
Unrealized exchange
losses................ 0 4,938 62,862 0 (14,052)
Loss in equity invest-
ment.................. 158,546 125,842 110,038 58,645 327
Minority interest in
net income (loss)..... (4,762) 62,587 711,993 354,849 330,356
Deferred income taxes.. (2,365) 64,849 39,395 26,011 12,415
(Increase) decrease in
accounts receivable... 14,630 (568,910) (1,638,061) (1,357,699) (752,394)
(Increase) decrease in
other current assets.. 3,937 (160,708) (69,167) (285,070) (204,892)
Increase in deposits
and other assets...... (45,318) (65,528) (14,042) (40,111) (117,936)
(Decrease) increase in
accounts payable...... (51,130) 604,019 (716,594) (164,517) (106,409)
Increase (decrease) in
accrued expenses...... 1,295,756 (848,277) 282,439 98,393 (507,883)
Increase in other lia-
bilities.............. 3,677 45,629 14,821 (67,686) (5,771)
(Decrease) increase in
deferred revenue...... 457,787 (281,204) (243,544) 103,523 531,958
----------- ---------- ----------- ------------ ------------
Total adjustments..... 2,099,421 (1,561,043) (1,489,447) (1,553,466) (600,828)
----------- ---------- ----------- ------------ ------------
Net cash provided by
(used in) operating
activities........... (1,573,813) (746,639) 1,028,138 (572,451) 908,109
----------- ---------- ----------- ------------ ------------
Cash flows from invest-
ing activities:
Proceeds from sale of
investment in subsidi-
ary................... 0 1,883,012 2,500 2,500 0
Proceeds from sale of
property and equip-
ment.................. 0 284,004 1,388,478 1,388,478 0
Additions to capital-
ized software costs... 0 (385,603) (170,088) (170,088) (87,461)
Additions to property
and equipment......... (217,861) (312,282) (710,217) (239,986) (501,668)
Increase in equity in-
vestment.............. (200,251) (159,402) (7,746) (7,746) (392,500)
----------- ---------- ----------- ------------ ------------
Net cash provided by
(used in) investing
activities........... (418,112) 1,309,729 502,927 973,158 (981,629)
----------- ---------- ----------- ------------ ------------
Cash flows from financ-
ing activities:
Net (repayments)
borrowings from re-
volving credit line... 117,155 (138,421) 230,227 (128,577) 119,598
Proceeds from long-term
debt.................. 1,833,179 574,586 0 0 900,000
Proceeds from issuance
of common stock....... 275,653 0 0 0 3,000
Proceeds from notes
payable--shareholder.. 119,206 20,555 207,605 0 0
Proceeds from capital
lease obligation...... 0 15,107 0 0 0
Payments on long-term
debt.................. (854,460) (440,292) (1,024,881) (258,681) (1,215,865)
Payments on capital
lease obligations..... (96,487) (180,327) (157,954) (74,410) (82,744)
Payments on notes pay-
able--shareholder..... 0 0 (50,426) (13,666) (245,970)
Payment of dividends... 0 0 0 0 (22,152)
Purchase of for trea-
sury stock, at cost... 0 0 (8,750) 0 (76,667)
Increase in due to af-
filiates, net......... 1,155,711 0 0 0 0
----------- ---------- ----------- ------------ ------------
Net cash (used in)
provided by financing
activities........... 2,549,957 (148,792) (804,179) (475,334) (620,800)
----------- ---------- ----------- ------------ ------------
Effect of exchange rate
charges................ 0 (272) (118,815) 4,184 12,813
----------- ---------- ----------- ------------ ------------
Net increase in cash and
cash equivalents....... 558,032 414,026 608,071 (70,443) (681,507)
Cash and cash equiva-
lents at beginning of
year................... 40,839 598,871 1,012,897 1,012,897 1,620,968
----------- ---------- ----------- ------------ ------------
Cash and cash equiva-
lents at end of year... $ 598,871 $1,012,897 $ 1,620,968 $ 942,454 $ 939,461
=========== ========== =========== ============ ============
Supplemental disclosure
of cash flow informa-
tion:
Cash paid during the
year for interest..... $ 311,500 $ 438,100 $ 377,100 $ 196,100 $ 145,500
=========== ========== =========== ============ ============
Cash paid during the
year for income tax-
es.................... $ 31,800 $ 33,200 $ 229,500 $ 134,600 $ 60,600
=========== ========== =========== ============ ============
Supplemental schedule of
non-cash investing and
financing activities:
Net assets acquired in
connection with busi-
ness combination...... $ 1,531,395 $ 0 $ 0 $ 0 $ 0
=========== ========== =========== ============ ============
Capital lease obliga-
tions incurred for
property and equip-
ment.................. $ 226,256 $ 26,383 $ 0 $ 0 $ 0
=========== ========== =========== ============ ============
Reduction of dividends
payable from netting
receivable from
shareholder........... $ 45,028 $ 0 $ 0 $ 0 $ 0
=========== ========== =========== ============ ============
Increase in dividend
payable classified as
notes payable--share-
holder................ $ 52,571 $ 0 $ 0 $ 0 $ 0
=========== ========== =========== ============ ============
Dividends declared..... $ 7,620 $ 0 $ 0 $ 0 $ 0
=========== ========== =========== ============ ============
Retirement of common
stock previously
issued under a
stock option plan..... $ 13,500 $ 0 $ 0 $ 0 $ 0
=========== ========== =========== ============ ============
Long-term debt incurred
for repurchase of
treasury stock........ $ 0 $ 0 $ 0 $ 0 $ 1,273,470
=========== ========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS:
Information Management Resources, Inc. and subsidiary (the Company) provide
transitional software outsourcing solutions to the information technology
departments of large businesses. The Company's services are provided to a
variety of industries and customers located primarily in the United States.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation--The consolidated financial statements include
the accounts of Information Management Resources, Inc. (IMR) and its majority
owned or effectively controlled foreign subsidiary, Information Management
Resources (India) Limited, an Indian limited liability company (IMR-India).
The Company's investment in Information Management Resources (U.K.) Limited
(IMR-U.K.) is accounted for on the equity method. All significant inter-
company balances and transactions have been eliminated.
Effective September 1993, IMR acquired a 69.3% interest in IMR-India. IMR-
India was incorporated in India in June 1990. Throughout 1994, IMR had a
controlling financial interest in IMR-India. During December 1994, IMR sold a
portion of its ownership in IMR-India thereby reducing its investment from
69.3% to 34.2%. The sale resulted in net cash proceeds of approximately
$1,883,000 and resulted in a net gain of approximately $1,014,000, which is
included in other income for the year ended December 31,1994. IMR continues to
account for its investment in IMR-India utilizing the consolidation method
because effective control has been maintained through the continued direct
financial interest in IMR-India held by IMR's majority shareholder. At
December 31, 1995 and 1994, IMR's majority shareholder owned 18.4% of IMR-
India. IMR-India's financial statements are prepared in conformity with U.S.
generally accepted accounting principles.
IMR and IMR-India have an agreement under which IMR engages IMR-India to
provide computer software consultants and to perform offshore software
development services. For the years ended December 31, 1995, 1994 and the
period September 1, 1993 through December 31, 1993, approximately $12,413,000,
$8,274,000, and $2,585,000, respectively, were billed by IMR-India to IMR for
consultants and development services. IMR-India agrees to pay IMR a commission
on the net service fees, for which they invoice IMR under this agreement. For
the years ended December 31, 1995, 1994 and the period September 1, 1993
through December 31, 1993, approximately $505,000, $445,000, and $122,000 was
billed by IMR-India to IMR for commissions on net service fees and sale of
software products.
IMR also owns approximately 39.5% of IMR-U.K. Prior to November 1994, IMR
had effective control of IMR-U.K. through IMR's majority shareholder's
financial interest in IMR-U.K. Management believes that the effect of not
consolidating IMR-U.K. in the Company's financial statements for periods prior
to November 1994 is not material.
Interim Financial Information--The unaudited interim consolidated financial
statements as of June 30, 1996 and 1995 and for each of the six months then
ended include, in the opinion of management, all adjustments (consisting of
normal recurring adjustments) necessary to present fairly the Company's
consolidated financial position, results of operations, and cash flows.
Operating results for the six months ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1996.
Cash and Cash Equivalents--The Company considers all highly liquid
investments with original maturity dates of three months or less to be cash
equivalents. The Company maintains its investments at high quality financial
institutions.
Revenue Recognition--Fixed-price contract revenue is recognized using the
percentage of completion method of accounting, under which the sales value of
performance, including earnings thereon, is recognized on
F-8
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
the basis of the percentage that each contract's cost to date bears to the
total estimated cost. Any anticipated losses upon contract completion would be
accrued currently.
Unbilled accounts receivable represent revenues on contracts to be billed in
subsequent periods as per the terms of the contract. Deferred revenue
represents amounts billed in excess of revenue earned. Service revenue from
time-and-materials services is recognized as the services are provided.
Software product sales are recorded as the products are shipped to the
customers
Goodwill--Goodwill originated from the acquisition of IMR-India in September
1993 and is being amortized utilizing the straight-line basis over a 10-year
period.
Research and Development Costs--Research and development costs represent
costs incurred for new product development and are included in cost of sales
in the financial statements as incurred.
Software Products--Software products represent third-party purchases of
software held for resale and are stated at the lower of cost or market; cost
being determined on the first-in, first-out (FIFO) method. Software products
of approximately $84,000 and $17,000 at December 31, 1995 and 1994,
respectively, are included in other current assets.
Property and Equipment--Property and equipment, including property under
capital lease agreements, are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method and is charged to
income over the estimated useful lives of the respective assets. Maintenance
and repairs are expensed as incurred, while renewals and betterments are
capitalized.
Fully depreciated assets are retained in property and depreciation accounts
until they are removed from service. Cost and accumulated depreciation on
assets retired or disposed of are removed from the accounts and any gain and
losses resulting therefrom are credited or charged to operations.
Capitalized Software Costs--Capitalized software costs are recorded at cost
less accumulated amortization. Production costs for computer software that is
to be utilized as an integral part of a product or process is capitalized when
both (a) technological feasibility is established for the software and (b) all
research and development activities for the other components of the product or
process have been completed.
Amortization is charged to income based upon a revenue formula over the
shorter of the remaining estimated economic life of the product or estimated
lifetime revenue of the product.
Income Taxes--IMR elected to be taxed as a small business corporation (S
Corporation) for federal income tax purposes in the United States.
Accordingly, IMR's taxable income and tax credits, if applicable, are
generally reportable by the shareholders on their individual tax returns.
The Company utilizes the asset and liability method of accounting for income
taxes for IMR-India. Under this method, deferred income taxes are recorded to
reflect the tax consequences on future years differences between the tax basis
of assets and liabilities and their financial reporting amounts at each year
end based on enacted tax laws and statutory tax rates applicable to the
periods in which the differences are expected to affect taxable income. (See
Note 13.)
Foreign Currency Translation--The financial statements of IMR-India utilize
a functional currency which is other than the U.S. dollar and are translated
into U.S. dollars in accordance with Statement of Financial Accounting
Standards (SFAS) No. 52, "Foreign Currency Translation." Assets and
liabilities of IMR-India are translated at exchange rates in effect on the
reporting date. Income and expense items are translated at the
F-9
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
average exchange rate for the year. The resulting translation adjustments are
not included in determining net income but are accumulated as a separate
component of shareholders' equity. Foreign currency transaction gains and
losses are reported in net income but were not material to any period
presented.
Computation of Net Income per Share--Net income per common and common
equivalent shares for the year ended December 31, 1995 and for the six months
ended June 30, 1996 (unaudited) have been computed using the weighted average
number of common and common equivalent shares outstanding using the treasury
stock method, as adjusted for the common stock split described in Note 20, is
summarized as follows:
<TABLE>
<CAPTION>
1995 1996
---------- -----------
(UNAUDITED)
<S> <C> <C>
Weighted average common stock outstanding................ 9,050,960 6,404,010
Weighted average common stock equivalents................ 4,618,315 4,869,885
---------- ----------
Shares used in net income per share calculation.......... 13,669,275 11,273,895
========== ==========
</TABLE>
Pursuant to the requirements of the Securities and Exchange Commission,
common stock and common stock options issued by the Company during the twelve
months immediately preceding the initial public offering date have been
included in the calculation of the weighted average shares outstanding using
the treasury stock method based on the estimated initial public offering
price.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
New Accounting Pronouncements--In October 1995, the Financial Accounting
Standards Board issued SFAS No. 123, "Accounting for Stock Based
Compensation." With respect to stock options granted to employees, SFAS 123
permits companies to continue using the accounting method promulgated by the
Accounting Principles Board Opinion No. 25 (APB 25), "Accounting for Stock
Issued to Employees," to measure compensation or to adopt the fair value based
method prescribed by SFAS 123. If the APB 25 method is continued, pro forma
footnote disclosures are required as if SFAS 123 accounting provisions were
followed. Management has determined not to adopt the SFAS 123's accounting
recognition provisions. Accordingly, SFAS 123 will not have any impact on the
Company's financial statements, except for the addition of the required
footnote disclosures.
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," is effective for years beginning after
December 15, 1995. This statement requires that long-lived
F-10
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
assets and certain intangibles to be held and used by the Company be reviewed
for impairment. This pronouncement is not expected to have a material impact
on the financial statements of the Company.
3. ACCOUNTS RECEIVABLE:
The major classifications of accounts receivable at December 31, 1995 and
1994 were as follows:
<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Accounts receivable, trade........................ $1,303,353 $2,320,252
Unbilled accounts receivable--fixed-price con-
tracts........................................... 63,654 708,094
Unbilled accounts receivable--time-and-materials
contracts........................................ 608,946 585,668
---------- ----------
$1,975,953 $3,614,014
========== ==========
</TABLE>
4. COSTS AND ESTIMATED EARNINGS ON COMPLETED AND UNCOMPLETED CONTRACTS:
<TABLE>
<CAPTION>
1994 1995
--------- -----------
<S> <C> <C>
Costs incurred on completed and uncompleted
contracts..................................... $ 504,502 $ 4,369,463
Estimated earnings............................. 180,836 1,443,266
--------- -----------
685,338 5,812,729
Less billings to date.......................... (882,498) (5,121,905)
--------- -----------
$(197,160) $ 690,824
========= ===========
</TABLE>
The following is included in the accompanying balance sheets:
<TABLE>
<CAPTION>
1994 1995
--------- ---------
<S> <C> <C>
Unbilled accounts receivable--fixed-price con-
tracts.......................................... $ 63,654 $ 708,094
Deferred revenue--time-and-materials contracts... (260,814) (17,270)
--------- ---------
$(197,160) $ 690,824
========= =========
</TABLE>
5. OTHER CURRENT ASSETS
Other current assets at December 31, 1995 and 1994 consisted of the
following:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Employee advances....................................... $116,559 $141,044
Inventory............................................... 17,240 84,094
Prepaid expenses........................................ 257,029 234,857
Deferred income taxes................................... 26,270 0
-------- --------
$417,098 $459,995
======== ========
</TABLE>
F-11
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
6. PROPERTY AND EQUIPMENT:
The major classifications of property and equipment at December 31, 1995 and
1994 were as follows:
<TABLE>
<CAPTION>
1994 1995
---------- -----------
<S> <C> <C>
Land............................................. $ 482,081 $ 0
Building and improvements........................ 56,118 159,164
Computer equipment and software.................. 1,724,573 1,719,388
Office furniture and equipment................... 489,491 555,418
Equipment under capital leases................... 588,197 503,171
Construction in progress......................... 88,557 1,276
---------- -----------
3,429,017 2,938,417
Less accumulated depreciation.................... (958,622) (1,239,333)
---------- -----------
$2,470,395 $ 1,699,084
========== ===========
</TABLE>
The equipment under capital lease is pledged as collateral for the related
lease obligations.
The amounts expensed for maintenance and repairs for the years ended
December 31, 1995, 1994 and 1993 amounted to approximately $72,000, $62,000
and $69,000, respectively. Depreciation expense related to property and
equipment was approximately $425,000, $426,000 and $228,000 for the years
ended December 31, 1995, 1994 and 1993, respectively. Accumulated amortization
on equipment under capital leases was approximately $313,000 and $250,000 at
December 31, 1995 and 1994, respectively.
7. CAPITALIZED SOFTWARE COSTS:
Capitalized software costs at December 31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Capitalized software costs............................. $385,603 $555,691
Accumulated amortization............................... 0 (7,000)
-------- --------
$385,603 $548,691
======== ========
</TABLE>
Commencing October 1995, IMR began utilizing the software associated with
the capitalized software costs. Amortization expense related to capitalized
software costs was $7,000 in 1995. No adjustments were made during 1995, 1994
or 1993 to write down capitalized software costs to net realizable value.
8. GOODWILL:
Goodwill at December 31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1994 1995
-------- ---------
<S> <C> <C>
Goodwill............................................. $588,745 $ 588,745
Accumulated amortization............................. (78,500) (137,375)
-------- ---------
$510,245 $ 451,370
======== =========
</TABLE>
Amortization expense related to goodwill was approximately $60,000, $120,000
and $40,000 for the years ended December 31, 1995, 1994 and 1993,
respectively. Goodwill and related accumulated amortization attributable to
the portion of IMR's ownership in IMR-India that was sold in December 1994
(see Note 2) has been removed from the respective account balances as of
December 31, 1994.
F-12
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
9. ACCRUED EXPENSES:
Accrued expenses at December 31, 1995 and 1994 consisted of the following:
<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Accrued payroll..................................... $ 775,887 $ 925,489
Accrued vacation.................................... 123,958 306,433
Due to affiliate.................................... 0 27,027
Other............................................... 275,132 225,494
---------- ----------
$1,174,977 $1,484,443
========== ==========
</TABLE>
10. REVOLVING CREDIT LOANS:
IMR-India maintains an export sales accounts receivable discounting
facility. The loan may be denominated in India Rupees or U.S. dollars.
Principal payments on amounts borrowed are due within 90 days of their
respective borrowings. Interest is payable at a rate set by the Reserve Bank
of India (currently 13% for rupee denominated loans and 7.5% for dollar
denominated loans). At December 31, 1995 and 1994, approximately $655,000 and
$425,000, respectively, were due under this facility. The maximum amount
available under this facility at December 31, 1995 was approximately $567,000;
however, the bank has permitted a temporary increase in the facility borrowing
capacity for December 1995. During May 1996, IMR-India applied to the bank to
increase the credit facility to approximately $850,000. Pending action on the
application, the bank has temporarily allowed IMR-India to utilize the
additional amount of the facility. The facility is collateralized by IMR-
India's total export accounts receivable, property and equipment, and is
guaranteed by the Company's majority shareholder.
Provisions of the above credit agreement contain certain financial
covenants, the most restrictive of which are the maintenance of certain
financial ratios.
11. NOTES PAYABLE--SHAREHOLDER:
Notes payable--shareholder at December 31, 1995 and 1994 are summarized as
follows:
<TABLE>
<CAPTION>
1994 1995
--------- ---------
<S> <C> <C>
8% unsecured note payable, annual principal pay-
ments of $65,944 with interest payments commenc-
ing January 1996................................. $ 0 $ 171,777
Two 8% unsecured notes payable with principal and
interest due January 1997 (these amounts were
paid in full during 1996)........................ 0 190,000
8% unsecured note payable, annual principal in-
stallments of $23,841 plus accumulated interest.. 119,206 0
20% unsecured note payable, due May 1995.......... 52,571 0
Accrued interest on above notes................... 20,555 17,604
--------- ---------
Total notes payable--shareholder................ 192,332 379,381
Less:Advances to shareholder...................... 0 (29,870)
Current portion of note payable--shareholder...... 0 (242,457)
--------- ---------
$ 192,332 $ 107,054
========= =========
</TABLE>
F-13
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Interest expense on notes payable--shareholder for the years ended December
31, 1995, 1994 and 1993 was approximately $18,000, $21,000 and $5,000,
respectively. The 1995 current portion of notes payable--shareholder includes
the prepayment in 1996 of the two notes due January 1997.
During 1995, the Company combined the two notes payable--shareholder at
December 31, 1994 into a single note payable in the amount of $171,777.
12. LONG-TERM DEBT:
Long-term debt at December 31, 1995 and 1994 is summarized as follows:
<TABLE>
<CAPTION>
1994 1995
-------- ---------
<S> <C> <C>
Term note payable with interest payable monthly
at the financial institution's base rate plus
1.25% per annum (9.75% as of December 31, 1995),
principal payable in monthly installments of
$16,250 commencing August 1996, collateralized
by the Company's accounts receivable and equip-
ment, assignment of certain assets owned by the
majority shareholder and guaranteed by the
Company's majority shareholder.................. $ 0 $ 877,157
Line of credit with interest payable monthly at
the financial institution's base rate plus 1.00%
per annum, collateralized by the Company's ac-
counts receivable and equipment, assignment of
certain assets owned by the Company's majority
shareholder and guaranteed by the Company's ma-
jority shareholder.............................. 974,657 0
9% to 11.2% per annum rupee denominated term note
payable, interest payable quarterly, principal
payable in semiannual installments of $22,682,
due September 1996 collateralized by property
and equipment, a $100,000 time deposit of the
Company's majority shareholder and guaranteed by
the Company's majority shareholder, prepaid in
full during 1995................................ $101,458 $ 0
17.5% per annum rupee denominated term note pay-
able, monthly installments of $1,494, including
interest, due January 1998, collateralized by
real property, prepaid in full during 1995...... 45,237 0
13% per annum term notes payable, principal pay-
able in quarterly installments of $187,500 plus
interest payable semiannually due October 1995,
collateralized by property and equipment and
guaranteed by the Company's majority sharehold-
er.............................................. 375,000 0
17.5% per annum rupee denominated term note pay-
able, quarterly installments of $35,441 plus in-
terest commencing May 1996 due February 1998,
collateralized by all assets of IMR-India ex-
cluding accounts receivable, guaranteed by the
Company's majority shareholder, prepaid in full
during 1995..................................... 459,734 0
</TABLE>
F-14
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
7% per annum uncollateralized convertible note
payable to a minority shareholder of IMR-In-
dia, interest payable semiannually, principal
payable in semiannual installments of $131,640
commencing September 1996 (under circumstances
as defined in the agreement).................. 526,560 526,560
---------- ----------
2,482,646 1,403,717
Less current portion........................... 521,755 326,640
---------- ----------
$1,960,891 $1,077,077
========== ==========
</TABLE>
Principal payments for the years subsequent to 1996 are as follows:
<TABLE>
<S> <C>
1997.............................. $ 458,280
1998.............................. 326,640
1999.............................. 195,000
2000.............................. 97,157
----------
$1,077,077
==========
</TABLE>
Provisions of the 7% uncollateralized convertible note payable required the
shares of IMR-India common stock to achieve a certain value as defined in the
agreement by June 30, 1996. In the event such shares of common stock did not
achieve this value, the Note would be repayable, or the lender had the option
to convert the outstanding loan balance into 70,000 shares of IMR-India common
stock by September 30, 1996. In June 1996, the value of IMR-India shares of
common stock was achieved under an agreement for the purchase of the stock of
the lender/minority shareholder (See Note 21). Upon completion of the purchase
during August 1996, IMR-India's obligation to repay the note and the lender's
option to convert this outstanding loan balance into 70,000 shares of IMR-
India common stock were canceled, and this note was converted into additional
paid-in capital of IMR-India.
IMR maintains a line of credit, interest payable monthly at the financial
institution's base rate plus 1%, principal payable by the 15th of each month,
due April 30, 1996 and subsequently extended to May 31, 1996. The line of
credit at December 31, 1995 was $250,000 and was subsequently increased to
$1,250,000 in January 1996. During May 1996 the line of credit was refinanced
to a balance equal to 80% of the outstanding accounts receivable balance (as
defined) of IMR at a rate of LIBOR plus 1.8%. At December 31, 1995, no amount
was outstanding on the line of credit. The line of credit is collateralized by
IMR's accounts receivable, property and equipment, assignment of certain
assets owned by the majority shareholder and personal guarantee of the
majority shareholder and is cross collateralized with the term note payable.
Provisions of the line of credit and certain notes payable contain certain
financial covenants, the most restrictive of which is the maintenance of
certain financial ratios. At December 31, 1995, the Company was in compliance
with these covenants or has obtained the necessary waivers.
SFAS No. 107, "Disclosure About Fair Value of Financial Instruments,"
requires that the Company disclose estimated fair values for its financial
instruments. Fair value is defined as the price at which a financial
instrument could be liquidated in an orderly manner over a reasonable time
period under present market conditions. IMR's adjustable rate loans reprice
frequently at current market rates. The rates of IMR's fixed obligations (also
see Notes 10 and 11) approximate those rates of the adjustable loans.
Therefore, the fair value of these loans has been estimated to be
approximately equal to their carrying value.
The fair value of IMR-India's time deposits and short-term borrowings are
considered to approximate their carrying amounts because the interest rates on
these instruments are regulated by the Reserve Bank of India, the Indian
central bank, and are varied periodically to reflect market conditions.
F-15
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The fair value of IMR-India's uncollateralized convertible note payable at
December 31, 1995 cannot be practicably determined due to certain unique
features including a clause (subsequently invoked) that provided for its
cancellation. Subsequent to December 31, 1994, IMR-India has extinguished all
its long term borrowings.
13. INCOME TAXES:
The provision (benefit) for income taxes is as follows:
<TABLE>
<CAPTION>
1993 1994 1995
------- -------- --------
<S> <C> <C> <C>
Current--foreign............................... $ 0 $385,699 $250,598
Deferred--foreign.............................. (2,365) 64,805 42,149
------- -------- --------
$(2,365) $450,504 $292,747
======= ======== ========
</TABLE>
The components of the net deferred tax asset (liability) are as follows:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Current foreign:
Deferred tax asset:
India loss carryforward (included in other
current assets)................................ $ 26,270 $ 0
======== ========
Non-Current foreign:
Deferred tax asset:
Accrued expenses................................ $ 7,247 $ 8,945
Deferred tax liability:
Property and equipment.......................... (31,861) (46,684)
-------- --------
Net non-current deferred tax liability........ $(24,614) $(37,739)
======== ========
</TABLE>
IMR has elected to be taxed as a small business corporation (S Corporation)
for federal income tax purposes. Accordingly, the Company's taxable income and
tax credits are reported by the shareholders on their individual tax returns
and no provision for U.S. federal income taxes is recognized in IMR's
financial statements.
In conjunction with the initial public offering, the S Corporation election
will be terminated by the shareholders of the Company and it will change its
method of accounting for income taxes from the cash basis to the accrual
method. The corresponding adjustment will be included in taxable income over a
period not to exceed four years.
Under the Indian Income Tax Act of 1961, a substantial portion of IMR-
India's income is exempt from Indian Income Tax as profits attributable to
export operations. Accordingly, the effective tax rate imposed on IMR-India's
income is substantially less than the current statutory rate of 46%. IMR-India
also has the potential to take advantage of a tax holiday in India until 1998.
It historically has been more favorable for IMR-India to claim the tax
benefits of the export exemption incentives and as such the tax provisions
reflected for IMR-India are based upon the export exemption incentives and do
not reflect any effects of the tax holiday.
IMR has not recorded deferred income taxes applicable to undistributed
earnings of IMR-India. Those earnings are considered to be indefinitely
reinvested and, accordingly, no provision for United States federal and state
income tax has been provided thereon. Undistributed earnings amounted to
approximately $525,000 at December 31, 1995, exclusive of amounts which, if
remitted, generally would not result in any additional U.S. income taxes
because of available foreign tax credits.
F-16
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following table accounts for the difference between the actual tax
provision and the amounts obtained by applying the statutory U.S. Federal
income tax rate of 34% to the income (loss) before income taxes and minority
interest.
<TABLE>
<CAPTION>
1993 1994 1995
----------- --------- ----------
<S> <C> <C> <C>
Statutory tax provision (benefit)... $(1,251,000) $ 451,000 $1,198,000
U.S. S Corporation not subject to
federal and state income taxes..... 1,252,000 (449,000) (779,000)
Foreign withholding tax on gain
incurred by S Corporation.......... 0 365,000 0
Difference between federal and
foreign tax rates on permanently
reinvested income of foreign
subsidiary......................... 4,000 (13,000) (175,000)
Loss in foreign equity investment... 54,000 43,000 37,000
Other............................... (61,000) 54,000 12,000
----------- --------- ----------
Total provision for income taxes.. $ (2,000) $ 451,000 $ 293,000
=========== ========= ==========
</TABLE>
14. LEASES:
The Company leases certain equipment under capital leases. Future minimum
lease payments under capital leases as of December 31, 1995 are as follows:
<TABLE>
<S> <C>
1996..................................... $147,984
1997..................................... 45,564
1998..................................... 12,609
--------
Total minimum payments................... 206,157
Less amount representing interest........ 19,001
--------
Present value of minimum payments........ 187,156
Less current portion..................... 132,642
--------
Long-term lease obligation............... $ 54,514
========
</TABLE>
The Company leases office facilities and certain residential premises for
foreign employees under noncancelable operating lease agreements. Rental
expense under these leases was approximately $517,000, $406,000 and $247,000
during 1995, 1994 and 1993, respectively. Future minimum lease payments as of
December 31, 1995 for leases with noncancelable terms in excess of one year
are approximately as follows:
<TABLE>
<S> <C>
1996................................... $ 542,000
1997................................... 549,000
1998................................... 326,000
1999................................... 91,000
2000................................... 96,000
Thereafter............................. 556,000
----------
Total minimum payments............... $2,160,000
==========
</TABLE>
F-17
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
During November 1995, IMR entered into a noncancelable lease agreement to
sublease a portion of its office facilities. Rental income under this lease
was approximately $5,000 during 1995. Future minimum lease receipts as of
December 31, 1995 are approximately as follows:
<TABLE>
<S> <C>
1996..................................... $145,000
1997..................................... 140,000
--------
Total minimum receipts................. $285,000
========
</TABLE>
15. STOCK OPTIONS:
IMR has granted nonqualified stock options to certain key employees. These
options are to purchase common stock at an exercise price estimated by
management to be at least equal the fair value of the stock at the date of
grant.
A summary of the status of IMR's stock option grants is as follows:
<TABLE>
<CAPTION>
EXERCISE
SHARES PRICE RANGE
--------- -----------
<S> <C> <C>
Balance, January 1, 1993........................... 261,060 $.10
Granted............................................ 559,700 $.10
---------
Balance, December 31, 1993......................... 820,760
Granted............................................ 221,490 $.10
---------
Balance, December 31, 1994......................... 1,042,250
Granted............................................ 1,392,540 $.10
Canceled........................................... (229,340) $.10
---------
Balance, December 31, 1995......................... 2,205,450
Granted (unaudited)................................ 2,803,340 $.50
Canceled (unaudited)............................... (117,460) $.10
Exercised (unaudited).............................. (30,000) $.10
---------
Balance, June 30, 1996 (unaudited)................. 4,861,330 $.10--$.50
=========
</TABLE>
Of the options granted for the period January 1, 1996 through June 30, 1996,
2,643,340 vested immediately upon grant with the remaining 160,000 shares
vesting 20% per year for five years. During July 1996, IMR granted an
additional 277,330 options to various employees at an exercise price of $5.06
per share vesting 20% per year for five years.
IMR-India has adopted a separate Employee Share Option Policy which provides
for grants of options to employees to purchase common shares of IMR-India. The
maximum number of options that may be granted under the policy are 51,900
common shares. Under the policy, options granted to an employee will vest upon
completion of five years of continuous employment with IMR-India or its
affiliates. Vested options are valid for exercise during the employees'
employment with IMR-India or its affiliates and for a period of six months
thereafter. Options not exercised within six months of cessation of employment
expire.
F-18
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
A summary of the status of IMR-India's stock option plan is as follows:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
------ -----------
<S> <C> <C>
Balance, September 1, 1993............................ 12,000 $0.00
Granted............................................... 1,000 $0.00
------
Balance, December 31, 1993............................ 13,000
Granted............................................... 4,000 $0.00
------
Balance, December 31, 1994............................ 17,000
Granted............................................... 8,500 $0.28
------
Balance, December 31, 1995............................ 25,500
Canceled (unaudited).................................. (5,000) $0.00
------
Balance, June 30, 1996 (unaudited).................... 20,500 $0.00-$0.28
======
</TABLE>
At December 31, 1995 and 1994, vested options were 1,000 and 0,
respectively. There were no options exercisable at December 31, 1995, 1994 and
1993.
Compensation expense has been recognized on the difference between fair
value at the date of the grant and the exercise price. Compensation expense is
recognized over the life of the options. Compensation expense under this plan
for the years ended December 31, 1995 and 1994 and for the four months ended
December 31, 1993 approximated $23,600, $45,700 and $3,700, respectively.
Under IMR-India's policy, options to be granted subsequent to September 6,
1996 are to be granted at an exercise price equal to the fair market value of
the common shares of IMR-India at the time of the grant.
16. EMPLOYEE BENEFIT PLANS:
IMR implemented a 401(k) defined contribution pension plan (the Plan),
effective January 1, 1992, for employees meeting certain service requirements.
IMR will match 50% of employees' contributions, up to 4% of their pay, limited
to a maximum contribution of $1,000 per employee. Additional contributions may
be made at the discretion of management. Contributions made to the Plan by IMR
totaled approximately $19,000, $11,000 and $24,000 for the years ended
December 31,1995, 1994 and 1993, respectively.
IMR-India maintains employee benefit plans that cover substantially all
employees.
The employees' provident fund, pension and family pension plans are
statutory defined contribution retirement benefit plans. Under the plans,
employees contribute 10 percent of base compensation, which is matched by a 10
percent contribution by IMR-India. Contributions made to the plan by IMR-India
totaled approximately $32,000, $32,000, and $10,000 for the years ended
December 31, 1995, 1994 and 1993, respectively.
The gratuity plan is a statutory postemployment benefit plan providing
defined lump sum benefits based on years of service and final average
compensation. IMR-India makes annual contributions to an employees' gratuity
fund established with a government-owned insurance corporation. The
contributions are based on actuarial valuations made by the insurance
corporation as of March 31 each year. Contributions made to this plan by IMR-
India were less than $6,000 for each of the years ended December 31, 1995,
1994 and 1993.
F-19
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
17. RELATED PARTIES:
IMR-India provides software development services to IMR-UK at market rates.
During the year ended December 31, 1995, the Company recognized approximately
$109,000 of revenue from IMR-UK.
18. CONCENTRATIONS OF CREDIT RISK:
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and cash equivalents
and trade receivables. The Company maintains its cash and cash equivalents
with high credit quality financial institutions and, by policy, limits the
amount of credit exposure to any one financial institution.
Concentrations of credit risk with respect to accounts receivable is limited
due to the dispersion of the Company's customer base across different
industries and geographies. The Company's two largest customers accounted for
approximately 40%, 34% and 26% of revenue for the years ended December 31,
1995, 1994 and 1993, respectively, and 33% and 42% of accounts receivable as
of December 31, 1995 and 1994, respectively.
19. OTHER INCOME:
Other income is summarized as follows:
<TABLE>
<CAPTION>
1994 1995
---------- --------
<S> <C> <C>
Gain on disposition of property and equipment in con-
nection with relocation of IMR-India operations, net
of relocation cost of $102,058 in 1995.............. $ 71,209 $427,907
Gain on disposition of IMR-India stock............... 1,013,503 0
Interest income and other............................ 12,303 44,702
---------- --------
$1,097,015 $472,609
========== ========
</TABLE>
20. PRO FORMA DISCLOSURE (UNAUDITED):
On September 12, 1996, the Company filed Amended and Restated Articles of
Incorporation which: (i) effected a reclassification of each share of its
voting and nonvoting common stock into 10 shares of common stock, par value
$.10 per share, (ii) increased the Company's authorization of common stock to
40,00,000 shares; and (iii) created and authorized 10,000,000 shares of
preferred stock, par value $.10 per share, under terms that allow the Board of
Directors to designate one or more classes of preferred stock and to designate
the rights, privileges, preferences and limitations of each such class. All
applicable share and per share amounts in the accompanying financial
statements have been retroactively adjusted to reflect this reclassification.
The Company intends to file a registration statement with the Securities and
Exchange Commission for an initial public offering of 2,950,000 shares of its
authorized but unissued Common Stock, par value $0.10 per share.
Pro Forma Taxes--As described in Note 13, IMR had elected to be taxed as an
S Corporation under the provisions of the Internal Revenue Code. In connection
with the closing of the initial public offering, the S Corporation election
will be terminated by the shareholders and, accordingly, the S Corporation
will become subject to U.S. federal and state income taxes. Upon termination
of the S Corporation election, current and deferred income taxes reflecting
the tax effects of temporary differences between the Company's financial
statement and tax bases of certain assets and liabilities will become
liabilities of the Company. These liabilities will be reflected on the
consolidated balance sheet with a corresponding non-recurring expense in the
consolidated statement of operations at the completion of the Company's
offering.
F-20
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Deferred income taxes relate primarily to accounts receivable, accounts
payable, accrued expenses and deferred income, primarily attributable to the
use of the cash method of accounting for income tax purposes. The amount of
the deferred income tax liability (asset) computed using the asset and
liability method of accounting for income taxes approximates $1,030,000 and
$780,000 at June 30, 1996 and December 31, 1996 respectively.
The following unaudited pro forma information reflects the reconciliation
between the total statutory provision for income taxes and the total actual
provision relating to the income tax expenses that would have been incurred if
the S Corporation was subject to U.S. federal and state income taxes:
<TABLE>
<CAPTION>
1995
----------
<S> <C>
Total pro forma income taxes............................ $1,198,000
==========
Statutory tax provision (benefit)....................... $1,198,000
State taxes, net of federal benefit..................... 92,000
Divestment gain, net of foreign tax credit.............. 0
Nondeductible expenses.................................. 34,000
Difference between federal and foreign tax rates on per-
manently reinvested income of foreign subsidiary....... (175,000)
Loss in Foreign equity investment....................... 37,000
Other................................................... 12,000
----------
Total provision for income taxes...................... $1,198,000
==========
</TABLE>
The corporation has not recorded deferred income taxes applicable to
undistributed earnings of IMR-India. Those earnings are considered to be
indefinitely reinvested and, accordingly, no provision for United States
income taxes has been provided thereon. Undistributed earnings amounted to
approximately $525,000 at December 31, 1995, excluding amounts which, if
remitted, generally would not result in any additional U.S. income taxes
because of available foreign tax credits. If the earnings of IMR-India were
not indefinitely reinvested, a deferred tax liability of approximately
$200,000 would have been required.
Prior to the consummation of this offering, it is currently anticipated that
IMR will enter into an S Corporation Tax Allocation and Indemnification
Agreements (the Tax Agreements) with their current shareholders relating to
their respective income tax liabilities. Because the S Corporation will be
fully subject to corporate income taxation after the consummation of this
offering, the reallocation of income and deductions between the periods during
which the entity was treated as an S Corporation and the periods during which
the entity will be subject to corporate income taxation may increase the
taxable income of one party while decreasing that of another party.
Accordingly, the Tax Agreements are intended to include provision such that
taxes are borne by the applicable entities, on the one hand, and the
stockholder, on the other, only to the extent that such parties were required
to report the related stockholder income for tax purposes.
Pro Forma Net Income (Loss) Per Share--Weighted average common shares
outstanding includes the common share equivalents pursuant to Note 2 applying
the treasury stock method for determining common stock equivalents. Such
shares were deemed outstanding for the periods presented.
Pro Forma Shareholders Equity--The Company's presentation of unaudited pro
forma shareholder's equity at June 30, 1996 reflect the effects on historical
retained earnings of a planned distribution to the Company's shareholders
currently estimated to be $220,000 attributable to previously taxed earnings
and the recording of the deferred tax liability of $1,030,000 referred to
above as if the S Corporation election had terminated
F-21
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
immediately prior to that date. Additionally retained earnings of the Company
related to IMR after recording tax estimated dividends and deferred income
taxes referred to above, will be classified to additional paid in capital in
connection with the termination of the Company's S Corporation election. The
unaudited pro forma shareholders equity at June 30, 1996 gives effect to these
items, but does not give effect to the proceeds from this offering.
21. SUBSEQUENT EVENTS:
During January 1996, IMR entered into an agreement to repurchased 29.2%
(106,373 voting common shares and 158,321 non-voting common shares) of its
outstanding common stock from certain minority stockholders for approximately
$1,323,000 ($5 per share). The repurchase agreement required an immediate
payment of $50,000 and the execution of 7% notes payable in the aggregate
amount of $1,273,000 payable in four equal quarterly installments commencing
April 1996.
During February 1996, IMR issued a stock option to its majority shareholder
for approximately 2,640,000 shares of common stock. The exercise price was
$.50 per share, which management determined was the fair market value based on
the January 1996 stock repurchase.
During August 1996, IMR purchased 10.5% (60,000 shares) of IMR-India's
outstanding common shares from an unrelated shareholder for approximately
$1,800,000 in cash.In September 1996, IMR entered into an agreement to
purchase an additional 35.1% (200,000 shares) of IMR-India from an unrelated
private investment fund. The purchase price is $5,064,000 and closing of this
transaction is contingent upon the IMR's successful completion of its initial
public offering and a receipt of approval from the Royal Bank of India. These
purchases will be accounted for as a purchase pursuant to the provisions of
APB No. 16, "Business Combinations" and resulting goodwill will be amortized
over a 10-year period. In addition, IMR has entered into an agreement to
acquire approximately 18.4% (104,800 shares) of IMR-India from its majority
shareholder for approximately $3,129,000. This amount is to be paid in cash.
Consummation of this repurchase transaction is contingent upon the successful
completion of an initial public offering by the IMR which must occur by
December 31, 1996. The Acquisition from IMR's majority shareholder will be
accounted for as a reduction of equity.
Upon completion of the acquitions noted above by IMR of equity interests in
IMR-India, IMR will own approximately 98.2% of the outstanding common shares
of IMR-India.
In August 1996, IMR-India obtained approval of a U.S. dollar denominated
term loan of $1,300,000 from a financial institution to finance the expansion
of their facility in Bangalore, India. The loan is repayable in eight equal
semi-annual installments of $162,500 commencing September, 1997. Interest on
the loan is payable semi-annually at the rate of LIBOR plus 3% per annum. The
loan is collateralized by a first lien, on IMR-India's property and equipment
and a guarantee by the Company's majority shareholder.
F-22
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with this
Offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been au-
thorized by the Company or the Underwriters. This Prospectus does not consti-
tute an offer to sell or a solicitation of any offer to buy any securities
other than the shares of Common Stock to which it relates or an offer to, or a
solicitation of, any person in any jurisdiction where such an offer or solici-
tation would be unlawful. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create implication that there
has been no change in the affairs of the Company or that the information con-
tained herein is correct as of any time subsequent to the date hereof.
----------------
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 7
Prior S Corporation Status and Distributions............................. 13
Use of Proceeds.......................................................... 14
Dividend Policy.......................................................... 14
Capitalization........................................................... 15
Dilution................................................................. 16
Selected Consolidated Financial Data..................................... 17
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 19
Business................................................................. 28
Management............................................................... 40
Principal and Selling Stockholders....................................... 48
Certain Transactions..................................................... 50
Description of Capital Stock............................................. 53
Shares Eligible for Future Sale.......................................... 56
Underwriting............................................................. 58
Legal Matters............................................................ 59
Experts.................................................................. 59
Additional Information................................................... 60
Index to Consolidated Financial Statements............................... F-1
</TABLE>
Until , 1996, (25 days after the date of this Prospectus), all dealers
effecting transactions in the registered securities, whether or not partici-
pating in this distribution, may be required to deliver a Prospectus. This is
in addition to the obligation of dealers to deliver a Prospectus when acting
as Underwriters and with respect to their unsold allotments or subscriptions.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3,500,000 SHARES
[LOGO]
INFORMATION MANAGEMENT
RESOURCES, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
Montgomery Securities
Alex. Brown & Sons
Incorporated
, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.................... $18,043
National Association of Securities Dealers, Inc. fee................... $ 5,733
Nasdaq National Market listing fee..................................... $41,966
Florida Documentary Stamp Tax.......................................... $ *
Accountants' fees and expenses......................................... $ *
Legal fees and expenses................................................ $ *
Blue Sky fees and expenses............................................. $ *
Transfer Agent's fees and expenses..................................... $ *
Printing and engraving expenses........................................ $ *
Miscellaneous.......................................................... $ *
-------
Total Expenses......................................................... $ *
=======
</TABLE>
- --------
* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Florida Business Corporations Act, as amended (the "Florida Act"),
provides that, in general, a business Company may indemnify any person who is
or was a party to any proceeding (other than action by, or in the right of,
the Company) by reason of the fact that he or she is or was a director or
officer of the Company, against liability incurred in connection with such
proceeding, including any appeal thereof, provided certain standards are met,
including that such officer or director acted in good faith and in a manner he
or she reasonably believed to be in, or not opposed to, the best interests of
the Company, and provided further that, with respect to any criminal action or
proceeding, the officer or director had no reasonable cause to believe his or
her conduct was unlawful. In the case of proceedings by or in the right of the
Company, the Florida Act provides that, in general, a Company may indemnify
any person who was or is a party to any such proceeding by reason of the fact
that he or she is or was a director or officer of the Company against expenses
and amounts paid in settlement actually and reasonably incurred in connection
with the defense or settlement of such proceeding, including any appeal
thereof, provided that such person acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to, the best interest of the
Company, except that no indemnification shall be made in respect of any claim
as to which such person is adjudged liable unless a court of competent
jurisdiction determines upon application that such person is fairly and
reasonably entitled to indemnity. To the extent that any officers or directors
are successful on the merits or otherwise in the defense of any of the
proceedings described above, the Florida Act provides that the Company is
required to indemnify such officers or directors against expenses actually and
reasonably incurred in connection therewith. However, the Florida Act further
provides that, in general, indemnification or advancement of expenses shall
not be made to or on behalf of any officer or director if a judgment or other
final adjudication establishes that his or her actions, or omissions to act,
were material to the cause of action so adjudicated and constitute: (i) a
violation of the criminal law, unless the director or officer had reasonable
cause to believe his or her conduct was lawful or had no reasonable cause to
believe it was unlawful; (ii) a transaction from which the director or officer
derived an improper personal benefit; (iii) in the case of a director, a
circumstances under which the director has voted for or assented to a
distribution made in violation of the Florida Act or the Company's Articles of
Incorporation or (iv) willful misconduct or a conscious disregard for the best
interests of the Company in a proceeding by or in the right of the Company to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder. Article IX of the Company's Restated Bylaws provides that the
Company shall indemnify any director or officer or any former director or
officer to the fullest extent permitted by law.
Section 11 of the Underwriting Agreement filed as Exhibit 1.1 hereto also
contains certain provisions pursuant to which certain officers, directors and
controlling persons of the Company may be entitled to be indemnified by the
underwriters named therein.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
During the past three years, the Registrant has issued the securities set
forth below which were not registered under the Securities Act.
1. In October 1993, the Registrant issued an aggregate of 479,920 shares of
Common Stock for a purchase price of $1.75 per share to seven individual
investors.
2. In June 1996, the Registrant issued 257,100 shares of Common Stock for an
aggregate purchase price of $3,000 pursuant to the exercise of an option to
acquire such shares. The Registrant repurchased the 251,700 shares immediately
following the issuance thereof.
3. In July 1996, the Company issued an aggregate of 752,880 shares of Common
Stock for an aggregate purchase price of $8,785 pursuant to the exercise of
options to acquire such shares. The Registrant repurchased the 75,288 shares
immediately following the issuance thereof.
4. In September 1996, the Company issued 6,404,200 shares of its Common
Stock in connection with the completion of a stock reclassification whereby
each outstanding share of voting common stock and nonvoting common stock was
reclassified into ten shares of Common Stock.
5. During the past three years, the Company has issued options to acquire an
aggregate 4,698,070 shares of Common Stock at exercise prices which
represented the fair market value per share on the date of grant and which
ranged from $.10 to $5.06 per share.
The sale and issuance of shares listed above were exempt from registration
under the Securities Act by virtue of Sections 3(a), 3(b) and 4(a) of the
Securities Act and in reliance on Rule 701 and Regulation D promulgated
thereunder.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Articles of Incorporation of the Registrant.
3.2 Restated Bylaws of the Registrant.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
Certificate of Incorporation and Restated Bylaws of the Registrant
defining rights of the holders of Common Stock of the Registrant.
4.2* Specimen Stock Certificate.
5.1* Opinion of Morris, Manning & Martin, L.L.P., Counsel to the
Registrant, as to the legality of the shares being registered.
10.1 Memorandum and Articles of Association of IMR-India.
10.2 Articles of Association of IMR-U.K.
10.3 Joint Venture Agreement dated October 17, 1994 among the Registrant,
Satish K. Sanan, Anne Sanan and The Link Group; as amended pursuant to
Amendment to Joint Venture Agreement dated December 11, 1995 and
Second Amendment to Joint Venture Agreement dated February 29, 1996.
10.4** Master Services Agreement dated April 1, 1996 between the Registrant
and IMR-India.
10.5** Master Services Agreement dated April 1, 1996 between IMR-U.K. and
IMR-India.
10.6 Share Purchase Agreement dated July 22, 1996 between the Registrant
and Second India.
10.7 Share Purchase Agreement dated July 4, 1996 between the Registrant and
Satish K. Sanan.
10.8 Share Purchase Agreements dated September 12, 1996 between the
Registrant and India Magnum.
10.9** Master Services Agreement for Information Technology Professional and
related schedules between the Registrant and Dayton Hudson
Corporation.
10.10** Master Services Agreement and related schedules between the Registrant
and Dean Witter Discover & Co., Inc.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.11 [Reserved]
10.12** Master Agreement for Computer Consulting and Programming Services and
related schedules between the Registrant and Target Stores.
10.13 Revolving Line of Credit Business Loan Agreement dated June 5, 1996
between the Registrant and Barnett Bank of Pinellas County and related
Promissory Note, Commercial Security Agreement and Continuing
Unlimited Commercial Guaranty, each dated June 5, 1996.
10.14 Prinicipal Plus Interest Business Loan Agreement dated June 5, 1996
between the Registrant and Barnett Bank of Pinellas County and related
Promissory Note, Commercial Security Agreement and Continuing
Unlimited Commercial Guaranty each dated June 5, 1996.
10.15* Form of Employment Agreement between Registrant and Satish K. Sanan.
10.16 Form of Employment Agreement for Executive Officers.
10.17 401(k) Profit Sharing Plan effective January 1, 1992 and Amendment
thereto effective January 1, 1994.
10.18 Stock Incentive Plan effective July 15, 1996.
10.19 Form of Directors Stock Option Plan.
10.20 Form of Employee Stock Purchase Plan.
10.21 Lease Agreement dated March 22, 1993 between the Registrant and ABR
Plymouth Plaza, Ltd. regarding 22,578 square feet of office space
located at 26750 U.S. Highway 19 North, Clearwater, Florida; First
Amendment to Lease Agreement dated October 18, 1995 and Second
Amendment to Lease Agreement dated December 11, 1995.
10.22 Sub-Lease Agreement dated October 17, 1995 between the Registrant and
ABR Information Services, Inc. regarding 11,289 square feet of office
space located at 26750 U.S. Highway 19 North, Clearwater, Florida.
10.23 Stockholders' Agrement dated July 1, 1994.
10.24* Form of Termination of Stockholders' Agreement.
10.25 Form of Indemnification Agreement.
10.26* Form of S Corporation Termination, Tax Allocation and Indemnification
Agrement.
10.27 Loan Agreement between IMR-India and Canara Bank and related
documents.
10.28 Loan Agreement between IMR-India and Exim Bank of India and related
documents.
21.1 List of Subsidiaries.
23.1 Consent of Coopers & Lybrand, L.L.P.
23.2 Consent of Arthur Andersen & Associates.
23.3* Consent of Morris, Manning & Martin, L.L.P. (included in Exhibit 5.1).
24.1 Powers of Attorney (included on signature page).
27.1 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment
** Confidential treatment has been requested with respect to portions of these
documents.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the
II-3
<PAGE>
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(c) The Registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.
(ii) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CLEARWATER, STATE OF
FLORIDA ON THE 12TH DAY OF SEPTEMBER, 1996.
Information Management Resources,
Inc.
/s/ Satish K. Sanan
By: _________________________________
SATISH K. SANAN
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS SATISH K. SANAN AND DILIP PATEL, AND EACH OF
THEM, HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, WITH FULL POWER OF
SUBSTITUTION AND RESUBSTITUTION FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN
ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS (INCLUDING POST-
EFFECTIVE AMENDMENTS) TO THIS REGISTRATION STATEMENT, AND ANY SUBSEQUENT
REGISTRATION STATEMENTS PURSUANT TO RULE 462 OF THE SECURITIES ACT AND TO FILE
THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION
THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID
ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM, FULL POWER AND AUTHORITY TO DO
AND PERFORM EACH AND EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN
AND ABOUT THE PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS HE MIGHT OR
COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT EACH OF SAID
ATTORNEY-IN-FACT OR HIS SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO
BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON
THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Satish K. Sanan President; Chief September 12,
- ------------------------------------- Executive Officer 1996
SATISH K. SANAN (Principal
Executive Officer)
and Director
/s/ Jeffrey S. Slowgrove Treasurer; Director September 12,
- ------------------------------------- 1996
JEFFERY S. SLOWGROVE
/s/ Kasi V. Stridharan Vice President-- September 12,
- ------------------------------------- Finance (Principal 1996
KASI V. SRIDHARAN Accounting Officer)
/s/ Michael J. Dean Chief Financial September 12,
- ------------------------------------- Officer (Principal 1996
MICHAEL J. DEAN Financial Officer)
/s/ Philip Shipperlee Managing Director, September 12,
- ------------------------------------- IMR-U.K.; Director 1996
PHILIP SHIPPERLEE
/s/ Charles C. Luthin Director September 12,
- ------------------------------------- 1996
CHARLES C. LUTHIN
/s/ Vincent Addonisio Director September 12,
- ------------------------------------- 1996
VINCENT ADDONISIO
II-5
<PAGE>
EXHIBIT 1.1
_______________ SHARES
INFORMATION MANAGEMENT RESOURCES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
__________, 1996
MONTGOMERY SECURITIES
ALEX. BROWN & SONS, INC.
As Representatives of the several Underwriters
c/o MONTGOMERY SECURITIES
600 Montgomery Street
San Francisco, California 94111
Dear Sirs:
SECTION 1. Introduction. Information Management Resources,
------------
Inc., a Florida corporation (the "Company), proposes to issue and sell
__________ shares of its authorized but unissued Common Stock, ____ par value
per share (the "Common Stock"), and certain shareholders of the Company named in
Schedule B annexed hereto (the "Selling Shareholders") propose to sell an
aggregate of __________ shares of the Company's issued and outstanding Common
Stock to the several underwriters named in Schedule A annexed hereto (the
"Underwriters"), for whom you are acting as Representatives. Said aggregate of
__________ shares are herein called the "Firm Common Shares." In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
__________ additional shares of Common Stock (the "Optional Common Shares"), as
provided in Section 5 hereof. The Firm Common Shares and, to the extent such
option is exercised, the Optional Common Shares are hereinafter collectively
referred to as the "Common Shares."
You have advised the Company and the Selling Shareholders that
the Underwriters propose to make a public offering of their respective portions
of the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and each of the Selling Shareholders hereby confirm
their respective agreements with respect to the purchase of the Common Shares by
the Underwriters as follows:
<PAGE>
SECTION 2. Representations and Warranties of the Company and the
-----------------------------------------------------
Selling Shareholders. The Company and each of the Selling Shareholders
- ---------------------
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-________) with
respect to the Common Shares has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The Company has prepared and has filed or
proposes to file prior to the effective date of such registration statement
an amendment or amendments to such registration statement, which amendment
or amendments have been or will be similarly prepared. There have been
delivered to you two signed copies of such registration statement and
amendments, together with two copies of each exhibit filed therewith.
Conformed copies of such registration statement and amendments (but without
exhibits) and of the related preliminary prospectus have been delivered to
you in such reasonable quantities as you have requested for each of the
Underwriters. The Company will next file with the Commission one of the
following: (i) prior to effectiveness of such registration statement, a
further amendment thereto, including the form of final prospectus or (ii) a
final prospectus in accordance with Rules 430A and 424(b) of the Rules and
Regulation. As filed, the final prospectus shall include all Rule 430A
Information and, except to the extent that you shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the date and time that this Agreement was executed and
delivered by the parties hereto, or, to the extent not completed at such
date and time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary Prospectus)
as the Company shall have previously advised you in writing would be
included or made therein.
The term "Registration Statement" as used in this Agreement shall mean such
registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall
also mean such registration statement as so amended; provided, however,
that such term shall also include (i) all Rule 430A Information deemed to
be included in such registration statement at the time such registration
statement becomes effective as provided by Rule 430A of the Rules and
Regulations and (ii) any registration statement filed pursuant to 462(b) of
the Rules and Regulations relating to the Common Shares. The term
"Preliminary Prospectus" shall mean any preliminary prospectus referred to
in the preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall
mean (i) the prospectus relating to the Common Shares in the form in which
it is first filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations or (ii) if no filing pursuant to Rule 424(b) of the Rules
and Regulations is required, shall mean the form of final prospectus
included in the Registration Statement at the time such registration
statement becomes effective together with the Preliminary Prospectus
included in the Registration Statement at the time it becomes effective.
The term "Rule 430A Information" means information with respect to the
Common Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A of
the Rules and Regulations.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus has
conformed to the requirements of the Act and the Rules and Regulations and,
as of its date, has not included any untrue statement
2
<PAGE>
of a material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and at the time the Registration Statement
becomes effective, and at all times subsequent thereto up to and including
each Closing Date hereinafter mentioned, the Registration Statement and the
Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by the
Act and the Rules and Regulations and will in all material respects conform
to the requirements of the Act and the Rules and Regulations, and neither
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, will include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, no
representation or warranty contained in this subsection 2(b) shall be
applicable to information contained in or omitted from any Preliminary
Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter,
directly or through the Representatives, specifically for use in the
preparation thereof.
(c) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than Information Management
Resources-India, a ___________ organized under the laws of India ("IMR-
India"), and Information Management Resources-U.K., a _______________
organized under the laws of the United Kingdom ("IMR-UK" and, together with
IMR-India, the "IMR Affiliates"). The Company and each of the IMR
Affiliates have been duly incorporated and are validly existing as
[corporations] in good standing under the laws of their respective
jurisdictions of incorporation, with full power and authority (corporate
and other) to own and lease their properties and conduct their respective
businesses as described in the Prospectus; the Company owns beneficially
and of record _________% [of the capital stock] of IMR-India and _______ %
[of the capital stock of IMR-UK]; all such shares of capital stock are
owned free and clear of all claims, liens, charges and encumbrances,
equities, claims, security interests, voting trusts, restrictions or other
defects of title of any nature whatsoever; the Company and each of the IMR
Affiliates are in possession of and operating in compliance with all
authorizations, licenses, permits, consents, certificates and orders
material to the conduct of their respective businesses, all of which are
valid and in full force and effect; the Company and each of the IMR
Affiliates are duly qualified to do business and in good standing as
foreign corporations in each jurisdiction in which the ownership or leasing
of properties or the conduct of their respective businesses requires such
qualification, except for jurisdictions in which the failure to so qualify
would not have a material adverse effect upon the Company or any IMR
Affiliate; and no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification.
(d) The Company has an authorized and outstanding capital stock as
set forth under the heading "Capitalization" in the Prospectus; the issued
and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and conform to the description
thereof contained in the Prospectus. All issued and outstanding shares of
capital stock of the IMR Affiliates have been duly authorized and validly
issued and are fully paid and nonassessable. Except as disclosed in or
contemplated by the Prospectus and the financial statements of the Company,
and the related notes thereto, included in the Prospectus, neither the
Company nor any IMR Affiliate has outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any
3
<PAGE>
contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The
description of the stock option, stock bonus and other stock plans or
arrangements maintained by the Company and each IMR Affiliate, and of the
options or other rights granted and exercised thereunder, set forth in the
Prospectus accurately and fairly presents the equity securities issued
pursuant to, as well as the other information required to be shown in
respect of, such plans, arrangements, options and rights.
(e) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth
in this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Common Shares
by the Company pursuant to this Agreement. No shareholder of the Company
has any right which has not been waived to require the Company to register
the sale of any shares owned by such shareholder under the Act in the
public offering contemplated by this Agreement. No further approval or
authority of the shareholders or the Board of Directors of the Company will
be required for the transfer and sale of the Common Shares to be sold by
the Selling Shareholders or the issuance and sale of the Common Shares to
be sold by the Company as contemplated herein.
(f) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. Each
of this Agreement, the S Corporation Termination, Tax Allocation and
Indemnification Agreement, dated as of _________________, 1996 (the "Tax
Agreement"), and the [describe IMR India share repurchase agreements] (the
"IMR-India Repurchase Agreements" and, collectively with the Tax Agreement,
the "Ancillary Agreements") have been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with the terms
of such agreements. The making and performance of this Agreement and each
of the Ancillary Agreements by the Company and the consummation of the
transactions contemplated herein and therein will not violate any
provisions of the certificate of incorporation or bylaws, or other
organizational documents, of the Company or any IMR Affiliate, and will not
conflict with, result in the breach or violation of, or constitute, either
by itself or upon notice or the passage of time or both, a default under
any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company or any IMR
Affiliate is a party or by which the Company or any IMR Affiliate or any of
its respective properties may be bound or affected, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or
any regulatory body, administrative agency or other United States or
foreign governmental body applicable to the Company or any IMR Affiliate or
any of its respective properties. No consent, approval, authorization or
other order of any United States or foreign court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the
transactions herein or therein contemplated, except for compliance with the
Act, the Blue Sky laws applicable to the public offering of the Common
Shares by the several Underwriters, the clearance of such offering with the
National Association of Securities Dealers, Inc. (the "NASD") and, with
respect to the IMR-India Repurchase Agreements, the approval of the Reserve
Bank of India (which has been obtained).
(g) Coopers & Lybrand LLP and Arthur Andersen LLP, each of whom has
expressed its opinion with respect to the financial statements and
schedules filed with the Commission as a part of the Registration Statement
and included in the Prospectus and in the Registration Statement, are
independent accountants as required by the Act and the Rules and
Regulations.
4
<PAGE>
(h) The financial statements and schedules of the Company and
_______________, and the related notes thereto, included in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and _______________ as of the respective
dates of such financial statements and schedules, and the results of
operations and changes in financial position of the Company and
_______________ for the respective periods covered thereby. Such
statements, schedules and related notes have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
as certified by the independent accountants named in subsection 2(g). No
other financial statements or schedules are required to be included in the
Registration Statement. The selected financial data set forth in the
Prospectus under the captions "Capitalization" and "Selected Financial
Data" fairly present the information set forth therein on the basis stated
in the Registration Statement.
(i) Except as disclosed in the Prospectus, and except as to defaults
which individually or in the aggregate would not be material to the
Company, neither the Company nor any IMR Affiliate is in violation or
default of any provision of its certificate of incorporation or bylaws, or
other organizational documents, or is in breach of or default with respect
to any provision of any agreement, judgment, decree, order, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other instrument
to which it is a party or by which it or any of its properties are bound;
and there does not exist any state of facts which constitutes an event of
default on the part of the Company or any IMR Affiliate as defined in such
documents or which, with notice or lapse of time or both, would constitute
such an event of default.
(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been described or filed as required. The contracts so described
in the Prospectus are accurate and complete; all such contracts are in full
force and effect on the date hereof; and neither the Company nor any IMR
Affiliate, nor, to the best of the Company's knowledge, any other party is
in breach of or default under any of such contracts.
(k) There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company or any IMR Affiliate is or may be a party or of which property
owned or leased by the Company or any IMR Affiliate is or may be the
subject, or related to environmental, intellectual property or
discrimination matters, which actions, suits or proceedings might,
individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement and the Ancillary Agreements or
result in a material adverse change in the condition (financial or
otherwise), properties, business, results of operations or prospects of the
Company and the IMR Affiliates; and no labor disturbance by the employees
of the Company or any IMR Affiliate exists or is imminent which might be
expected to affect adversely such condition, properties, business, results
of operations or prospects. Neither the Company nor any IMR Affiliate is a
party or subject to the provisions of any material injunction, judgment,
decree or order of any court, regulatory body, administrative agency or
other United States or foreign governmental body.
(l) The Company or the applicable IMR Affiliate has good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except (i) those, if any, reflected in such financial statements
(or elsewhere in the Prospectus), or (ii) those which are not material in
amount and do not adversely affect the use made and proposed to be made of
such property by the Company and the IMR Affiliates. The Company or
5
<PAGE>
the applicable IMR Affiliate holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to the business of the Company. Except as disclosed in the
Prospectus, the Company owns or leases all such properties as are necessary
to its operations as now conducted or as proposed to be conducted.
(m) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) neither the Company nor
any IMR Affiliate has incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary course
of business or which could result in a material reduction in the future
earnings of the Company and the IMR Affiliates; (ii) neither the Company
nor any IMR Affiliate has sustained any material loss or interference with
their respective businesses or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance; (iii) the
Company has not paid or declared any dividends or other distributions with
respect to its capital stock and the Company and the IMR Affiliates are not
in default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock (other
than upon the sale of the Common Shares hereunder and upon the exercise of
options described in the Registration Statement) or indebtedness material
to the Company and the IMR Affiliates (other than in the ordinary course of
business); and (v) there has not been any material adverse change in the
condition (financial or otherwise), business, properties, results of
operations or prospects of the Company and the IMR Affiliates.
(n) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and the IMR Affiliates have sufficient intellectual
property rights (including, without limitation, trademarks, trade names,
patent rights, mask works, copyrights and licenses), approvals and
governmental authorizations to conduct their businesses as now conducted;
the expiration of any intellectual property rights (including, without
limitation, trademarks, trade names, patent rights, mask works, copyrights
and licenses), approvals or governmental authorizations would not have a
material adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of the Company or the IMR
Affiliates; and the Company has no knowledge of any infringement by it or
the IMR Affiliates of intellectual property rights (including, without
limitation, trademarks, trade name rights, patent rights, mask works,
copyrights or licenses), trade secret or other similar rights of others,
and there is no claim being made against the Company or the IMR Affiliates
regarding trademark, trade name, patent, mask work, copyright, license,
trade secret or other infringement of intellectual property rights which
could have a material adverse effect on the condition (financial or
otherwise), business, results of operations or prospects of the Company and
the IMR Affiliates.
(o) The Company has not been advised, and has no reason to believe,
that either it or any IMR Affiliate is not conducting their respective
businesses in compliance with all applicable laws, rules and regulations of
the jurisdictions in which any of them is conducting business, including,
without limitation, all applicable local, state, (United States and
foreign) and federal and foreign environmental, intellectual property and
anti-discrimination laws and regulations; except where failure to be so in
compliance would not materially adversely affect the condition (financial
or otherwise), business, results of operations or prospects of the Company
and the IMR Affiliates.
(p) The Company and the IMR Affiliates have filed all necessary
federal, state, local and foreign income and franchise tax returns and have
paid all taxes shown as due thereon; and the Company has no knowledge of
any tax deficiency which has been or might be asserted or
6
<PAGE>
threatened against the Company or any IMR Affiliate which could materially
and adversely affect the business, operations or properties of the Company
and the IMR Affiliates.
(q) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not distribute prior to
the First Closing Date any offering material in connection with the
offering and sale of the Common Shares other than the Prospectus, the
Registration Statement and the other materials permitted by the Act.
(s) Each of the Company and the IMR Affiliates maintains insurance of
the types and in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the IMR Affiliates against
theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect.
(t) Each of the Company and the IMR Affiliates has such permits,
licenses, franchises and authorizations of United States and foreign
governmental or regulatory authorities ("Permits") as are necessary to own,
lease and operate its respective properties and to conduct its respective
businesses; each of the Company and the IMR Affiliates has fulfilled and
performed all of its material obligations with respect to such Permits and
no event has occurred which allows, or after notice or lapse of time would
allow, for revocation or termination thereof or results, or would result,
in any other material impairment of the rights of the holder of any such
Permit.
(u) The Company has filed a registration statement (the "1934 Act
Registration Statement") pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to register the
Common Stock, which such 1934 Act Registration Statement has been declared
effective by the Commission; and the Company has filed an application to
admit the Common Shares on the NASDAQ National Market and has received
notification that the listing has been approved, subject only to formal
notice of issuance.
(v) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission.
(w) Neither the Company nor any IMR Affiliate has at any time during
the last five years (i) made any unlawful contribution to any candidate for
United States or foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any United
States or foreign governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States and any other applicable
jurisdiction.
(x) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
SECTION 3. Representations, Warranties and Covenants of the Selling
--------------------------------------------------------
Shareholders.
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(a) Each of the Selling Shareholders represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Shareholder has, and on the First Closing
Date [and the Second Closing Date hereinafter mentioned] will have,
good and marketable title to the Common Shares proposed to be sold by
such Selling Shareholder hereunder on such Closing Date and full
right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver such Common Shares hereunder, free and
clear of all liens, encumbrances, equities, security interests, voting
trusts, restrictions and other adverse claims of any nature
whatsoever; and upon delivery of and payment for such Common Shares
hereunder, the Underwriters will acquire good and marketable title
thereto, free and clear of all liens, encumbrances, equities, claims,
restrictions, security interests, voting trusts, restrictions or other
defects of title of any nature whatsoever.
(ii) Such Selling Shareholder has executed and delivered a
Power of Attorney and caused to be executed and delivered on his
behalf a Custody Agreement (hereinafter collectively referred to as
the "Shareholders Agreement") and in connection herewith such Selling
Shareholder further represents, warrants and agrees that such Selling
Shareholder has deposited in custody, under the Shareholders
Agreement, with the agent named therein (the "Agent") as custodian,
certificates in negotiable form for the Common Shares to be sold
hereunder by such Selling Shareholder, for the purpose of further
delivery pursuant to this Agreement. Such Selling Shareholder agrees
that the Common Shares to be sold by such Selling Shareholder on
deposit with the Agent are subject to the interests of the Company and
the Underwriters, that the arrangements made for such custody are to
that extent irrevocable, and that the obligations of such Selling
Shareholder hereunder shall not be terminated, except as provided in
this Agreement or in the Shareholders Agreement, by any act of such
Selling Shareholder, by operation of law, by the death or incapacity
of such Selling Shareholder or by the occurrence of any other event.
If the Selling Shareholder should die or become incapacitated, or if
any other event should occur, before the delivery of the Common Shares
hereunder, the documents evidencing Common Shares then on deposit with
the Agent shall be delivered by the Agent in accordance with the terms
and conditions of this Agreement as if such death, incapacity or other
event had not occurred, regardless of whether or not the Agent shall
have received notice thereof. This Agreement and the Shareholders
Agreement have been duly executed and delivered by or on behalf of
such Selling Shareholder and the form of such Shareholders Agreement
has been delivered to you.
(iii) The performance of this Agreement, the Shareholders
Agreement and the Ancillary Agreements to which such Selling
Shareholder is a party and the consummation of the transactions
contemplated herein and therein will not result in a breach or
violation by such Selling Shareholder of any of the terms or
provisions of, or constitute a default by such Selling Shareholder
under, any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement
or instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder or any of its properties is bound, any
statute, or any judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to such Selling
Shareholder or any of its properties.
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(iv) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Shares.
(v) Each Preliminary Prospectus and the Prospectus, insofar as
it has related to such Selling Shareholder has conformed in all
material respects to the requirements of the Act and the Rules and
Regulations and has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein not misleading in light of the circumstances under
which they were made; and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, as it relates to
such Selling Shareholder, will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(vi) Such Selling Shareholder is not aware that any of the
representations or warranties set forth in Section 2 above is untrue
or inaccurate in any material respect.
(b) Each of the Selling Shareholders agrees with the Company and the
Underwriters not to offer to, directly or indirectly, sell, sell or
contract to sell or otherwise dispose of any shares of Common Stock or
securities convertible into or exchangeable for any shares of Common Stock,
for a period of 180 days after the first date that any of the Common Shares
are released by you for sale to the public, without the prior written
consent of Montgomery Securities, which consent may be withheld at the sole
discretion of Montgomery Securities.
SECTION 4. Representations and Warranties of the Underwriters. The
--------------------------------------------------
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company and to the Selling Shareholders that the information set forth (i)
on the cover page of the Prospectus with respect to price, underwriting
discounts and commissions and terms of offering and (ii) under "Underwriting" in
the Prospectus was furnished to the Company by and on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement and the
Prospectus and is correct in all material respects. The Representatives
represent and warrant that they have been authorized by each of the other
Underwriters as the Representatives to enter into this Agreement on its behalf
and to act for it in the manner herein provided.
SECTION 5. Purchase, Sale and Delivery of Common Shares. On the basis of
--------------------------------------------
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, (i) the Company agrees to issue and
sell to the Underwriters __________ of the Firm Common Shares, and (ii) the
Selling Shareholders agree, severally and not jointly, to sell to the
Underwriters in the respective amounts set forth in Schedule B hereto, an
aggregate of __________ of the Firm Common Shares. The Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Shareholders, respectively, the number of Firm Common Shares described below.
The purchase price per share to be paid by the several Underwriters to the
Company and to the Selling Shareholders, respectively, shall be $___ per share.
The obligation of each Underwriter to the Company shall be to purchase from the
Company that number of full shares which (as nearly as practicable, as
determined by you) bears to __________ the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares. The obligation of each
Underwriter to the Selling
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Shareholders shall be to purchase from the Selling Shareholders that number of
full shares which (as nearly as practicable, as determined by you) bears to
__________ the same proportion as the number of shares set forth opposite the
name of such Underwriter in Schedule A hereto bears to the total number of Firm
Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of Montgomery
Securities, 600 Montgomery Street, San Francisco, California (or such other
place as may be agreed upon by the Company and the Representatives) at such time
and date, not later than the third (or, if the Firm Common Shares are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act after 4:30 P.M. Washington
D.C. time, the fourth) full business day following the first date that any of
the Common Shares are released by you for sale to the public, as you shall
designate by at least 24 hours prior notice to the Company (or at such other
time and date, not later than one week after such third or fourth full business
day, as the case may be, as may be agreed upon by the Company and the
Representatives) (the "First Closing Date"); provided, however, that if the
Prospectus is at any time prior to the First Closing Date recirculated to the
public, the First Closing Date shall occur upon the later of the third or
fourth, as the case may be, full business day following the first date that any
of the Common Shares are released by you for sale to the public or the date that
is 48 hours after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by or on
behalf of the Company and the Selling Shareholders to you, for the respective
accounts of the Underwriters with respect to the Firm Common Shares to be sold
by the Company and by the Selling Shareholders against payment by you, for the
accounts of the several Underwriters, of the purchase price therefor by wire
transfer of immediately available funds to an account designated by the Company
and to an account designated by the Agent (each such wire transfer shall be in
proportion to the number of Firm Common Shares to be sold by the Company and the
Selling Shareholders, respectively). The certificates for the Firm Common Shares
shall be registered in such names and denominations as you shall have requested
at least two full business days prior to the First Closing Date, and shall be
made available for checking and packaging on the business day preceding the
First Closing Date at a location in New York, New York, as may be designated by
you. Time shall be of the essence, and delivery at the time and place specified
in this Agreement is a further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company [and the Selling Shareholders] hereby grant[s] an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
__________ Optional Common Shares at the purchase price per share to be paid for
the Firm Common Shares, for use solely in covering any over-allotments made by
you for the account of the Underwriters in the sale and distribution of the Firm
Common Shares. The option granted hereunder may be exercised at any time (but
not more than once) within 30 days after the first date that any of the Common
Shares are released by you for sale to the public, upon notice by you to the
Company [and the Agent] setting forth the aggregate number of Optional Common
Shares as to which the Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered and
the time and place at which such certificates will be delivered. Such time of
delivery (which may not be earlier than the First Closing Date), being herein
referred to as the "Second Closing Date," shall be determined by you, but if at
any time other than the First Closing Date shall not be earlier than three nor
later than five full business days after delivery of such notice of exercise.
The number of Optional Common Shares to be purchased by each Underwriter shall
be determined by multiplying the number of Optional Common Shares to be sold by
the Company pursuant to such notice of exercise by a fraction, the numerator of
which is the number of Firm Common Shares to be purchased by such Underwriter as
set forth opposite its name in
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Schedule A and the denominator of which is __________ (subject to such
adjustments to eliminate any fractional share purchases as you in your
discretion may make). Certificates for the Optional Common Shares will be made
available for checking and packaging on the business day preceding the Second
Closing Date at a location in New York, New York, as may be designated by you.
The manner of payment for and delivery of the Optional Common Shares shall be
the same as for the Firm Common Shares purchased from the Company [and the
Selling Shareholders] as specified in the two preceding paragraphs. At any time
before lapse of the option, you may cancel such option by giving written notice
of such cancellation to the Company [and the Agent]. If the option is cancelled
or expires unexercised in whole or in part, the Company will promptly deregister
under the Act the number of Option Shares as to which the option has not been
exercised.
You have advised the Company and the Selling Shareholders that each Underwriter
has authorized you to accept delivery of its Common Shares, to make payment and
to receipt therefor. You, individually and not as the Representatives of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by you by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose to make a
public offering of their respective portions of the Common Shares as soon after
the effective date of the Registration Statement as in the judgment of the
Representatives is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the final Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and agrees
------------------------
that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date
that this Agreement is executed and delivered by the parties hereto, to
become effective. If the Registration Statement has become or becomes
effective pursuant to Rule 430A of the Rules and Regulations, or the filing
of the Prospectus is otherwise required under Rule 424(b) of the Rules and
Regulations, the Company will file the Prospectus, properly completed,
pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company will promptly advise
you in writing (i) of the receipt of any written or oral comments of the
Commission or its staff, (ii) of any written or oral request of the
Commission or its staff for amendment of or supplement to the Registration
Statement (either before or after it becomes effective), any Preliminary
Prospectus or the Prospectus or for additional information, (iii) when the
Registration Statement shall have become effective, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the institution of any proceedings for
that purpose. If the Commission shall enter any such stop order at any
time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment. The Company will not file any
amendment or supplement to the Registration Statement (either before or
after it becomes effective), any Preliminary Prospectus or the Prospectus
of which you have not been furnished with a copy a reasonable time prior to
such filing or to which you reasonably object or which is not in compliance
with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration
Statement or the Prospectus which in
11
<PAGE>
your judgment may be necessary or advisable to enable the several
Underwriters to continue the distribution of the Common Shares and will use
its best efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply with the provisions
of Rule 430A of the Rules and Regulations with respect to information
omitted from the Registration Statement in reliance upon such Rule.
(c) If, at any time within the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the
Common Shares is required to be delivered under the Act, any event occurs
as a result of which the Prospectus, including any amendments or
supplements, would include an untrue statement of a material fact, or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or if it is necessary at any
time to amend the Prospectus, including any amendments or supplements, to
comply with the Act or the Rules and Regulations, the Company will promptly
advise you thereof and will promptly prepare and file with the Commission,
at its own expense, an amendment or supplement which will correct such
statement or omission or an amendment or supplement which will effect such
compliance and will use its best efforts to cause the same to become
effective as soon as possible; and, in case any Underwriter is required to
deliver a prospectus after such nine-month period, the Company upon
request, but at the expense of such Underwriter, will promptly prepare such
amendment or amendments to the Registration Statement and such Prospectus
or Prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45 days after the end
of the first quarter ending after one year following the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security
holders an earnings statement (which need not be audited) covering a period
of 12 consecutive months beginning after the effective date of the
Registration Statement which will satisfy the provisions of the last
paragraph of Section 11(a) of the Act.
(e) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the nine-month period referred to in
Section 10(a)(3) of the Act, will furnish to you and the Selling
Shareholders or mail to your order copies of the Registration Statement,
the Prospectus, the Preliminary Prospectus and all amendments and
supplements to any such documents in each case as soon as available and in
such quantities as you and the Selling Shareholders may request, for the
purposes contemplated by the Act.
(f) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions
from the application of) the Blue Sky laws of such United States and
foreign jurisdictions as you designate, will comply with such laws and will
continue such qualifications, registrations and exemptions in effect so
long as reasonably required for the distribution of the Common Shares. The
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction where
it is not presently qualified or where it would be subject to taxation as a
foreign corporation. The Company will advise you promptly of the suspension
of the qualification or registration of (or any such exemption relating to)
the Common Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification,
registration or exemption, the Company, with your cooperation, will use its
best efforts to obtain the withdrawal thereof.
12
<PAGE>
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request of the Representatives, to
each of the other Underwriters: (i) as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
consolidated balance sheet of the Company as of the close of such fiscal
year and consolidated statements of income, shareholders' equity and cash
flows for the year then ended and the opinion thereon of the Company's
independent public accountants; (ii) as soon as practicable after the
filing thereof, copies of each proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Report on Form 8-K or other report filed by
the Company with the Commission, the National Association of Securities
Dealers, Inc. (the "NASD") or any securities exchange; and (iii) as soon as
available, copies of any report or communication of the Company mailed
generally to holders of its Common Stock.
(h) During the period of 180 days after the first date that any of
the Common Shares are released by you for sale to the public, without the
prior written consent of Montgomery Securities (which consent may be
withheld at the sole discretion of the Montgomery Securities), the Company
will not other than pursuant to outstanding stock options disclosed in the
Prospectus, directly or indirectly, issue, offer, sell, grant options to
purchase or otherwise dispose of any of the Company's equity securities or
any other securities convertible into or exchangeable with its Common Stock
or other equity security.
(i) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or register its
Common Stock for sale in non-issuer transactions under (or obtain
exemptions from the application of) the Blue Sky laws of the State of
California (and thereby permit market making transactions and secondary
trading in the Company's Common Stock in California), will comply with such
Blue Sky laws and will continue such qualifications, registrations and
exemptions in effect for a period of five years after the date hereof.
(k) The Company will use its best efforts to cause the Common Stock
to be admitted for quotation on the NASDAQ National Market or listed on a
national securities exchange.
You, on behalf of the Underwriters, may, in your sole discretion,
waive in writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
SECTION 7. Payment of Expenses. Whether or not the transactions
-------------------
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company and, unless otherwise paid by the Company, the Selling
Shareholders agree to pay in such proportions as they may agree upon among
themselves all costs, fees and expenses incurred in connection with the
performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel and the Company's independent accountants, (v) all costs
and expenses incurred in connection with the preparation, printing, filing,
shipping and distribution of the Registration Statement,
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each Preliminary Prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for herein,
this Agreement, the Agreement Among Underwriters, the Selected Dealers
Agreement, the Underwriters' Questionnaire, the Underwriters' Power of Attorney
and the preliminary and final Blue Sky memorandum, (vi) all filing fees,
attorneys' fees and expenses incurred by the Company or the Underwriters in
connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the United States and foreign Blue Sky laws designated by your
pursuant to Section 6(f), (vii) the filing fee of the NASD and the related fees
and expenses of counsel to the Underwriters in connection with the NASD's review
of the Underwriting arrangements contemplated hereby, and (viii) all other fees,
costs and expenses referred to in Item 13 of the Registration Statement. The
Underwriters may deem the Company to be the primary obligor with respect to all
costs, fees and expenses to be paid by the Company and by the Selling
Shareholders. Except as provided in this Section 7, Section 9 and Section 11
hereof, the Underwriters shall pay all of their own expenses, including the fees
and disbursements of their counsel (excluding those relating to qualification,
registration or exemption under the Blue Sky laws, the Blue Sky memorandum and
the NASD's review of underwriting arrangements referred to above). This Section
7 shall not affect any agreements relating to the payment of expenses between
the Company and the Selling Shareholders.
The Selling Shareholders will pay (directly or by reimbursement) all fees and
expenses incident to the performance of their obligations under this Agreement
which are not otherwise specifically provided for herein, including but not
limited to (i) any fees and expenses of counsel for such Selling Shareholders;
(ii) any fees and expenses of the Agent; and (iii) all expenses and taxes
incident to the sale and delivery of the Common Shares to be sold by such
Selling Shareholders to the Underwriters hereunder.
SECTION 8. Conditions of the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the several Underwriters to purchase and pay for the Firm Common
Shares on the First Closing Date and the Optional Common Shares on the Second
Closing Date, if any, shall be subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Shareholders herein
set forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company
officers and the Selling Shareholders made pursuant to the provisions hereof, to
the performance by the Company and the Selling Shareholders of their respective
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., (or, in the case of a registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations relating to the Common Shares,
not later than 10 P.M.), Washington, D.C. Time, on the date of this
Agreement, or at such later time as shall have been consented to by you; if
the filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) of the Rules and Regulations, the Prospectus shall
have been filed in the manner and within the time period required by Rule
424(b) of the Rules and Regulations; and prior to such Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or, to the knowledge of the Company , the
Selling Shareholders or you, shall be contemplated by the Commission or its
staff; and any request of the Commission or its staff for inclusion of
additional information in the Registration Statement, or otherwise, shall
have been complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as of
which information is given in the Registration Statement and Prospectus,
(i) there shall not have been any change in the capital stock other than
pursuant to the exercise of outstanding options disclosed in the Prospectus
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of the Company or any IMR Affiliate or any material change in the
indebtedness (other than in the ordinary course of business) of the Company
or any IMR Affiliate, (ii) except as set forth or contemplated by the
Registration Statement or the Prospectus, no material verbal or written
agreement or other transaction shall have been entered into by the Company
or any IMR Affiliate, which is not in the ordinary course of business or
which could result in a material reduction in the future earnings of the
Company and the IMR Affiliates, (iii) no loss or damage (whether or not
insured) to the property of the Company or any IMR Affiliates shall have
been sustained which materially and adversely affects the condition
(financial or otherwise), business, results of operations or prospects of
the Company and the IMR Affiliates, (iv) no legal or governmental action,
suit or proceeding affecting the Company or any IMR Affiliates which is
material to the Company and the IMR Affiliate or which affects or may
affect the transactions contemplated by this Agreement shall have been
instituted or threatened, and (v) there shall not have been any material
change in the condition (financial or otherwise), business, management,
results of operations or prospects of the Company and the IMR Affiliates
which makes it impractical or inadvisable in the judgment of the
Representatives to proceed with the public offering or purchase the Common
Shares as contemplated hereby.
(c) There shall have been furnished to you, as Representatives of the
Underwriters, on each Closing Date, in form and substance satisfactory to
you, except as otherwise expressly provided below:
(i) An opinion of Morris, Manning & Martin LLP, counsel for
the Company and the Selling Shareholders, addressed to the
Underwriters and dated the First Closing Date, or the Second Closing
Date [(in the latter case with respect to the Company only)], as the
case may be, in the form of Schedule C hereto, to the effect that:
(1) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Florida, is duly qualified to do business as a
foreign corporation and is in good standing in all other
jurisdictions where the ownership or leasing of properties or the
conduct of its business requires such qualification, except for
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company, and has full corporate
power and authority to own its properties and conduct its
business as described in the Registration Statement;
(2) The authorized, issued and outstanding capital
stock of the Company is as set forth under the caption
"Capitalization" in the Prospectus; all necessary and proper
corporate proceedings have been taken in order to authorize
validly such authorized Common Stock; all outstanding shares of
Common Stock (including the Firm Common Shares and any Optional
Common Shares) have been duly and validly issued, are fully paid
and nonassessable, have been issued in compliance with federal
and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for
or purchase any securities and conform to the description thereof
contained in the Prospectus; without limiting the foregoing,
there are no preemptive or other rights to subscribe for or
purchase any of the Common Shares to be sold by the Company
hereunder;
(3) The Company owns beneficially and of record
_________% [of the capital stock] of IMR-India and _______ % [of
the capital stock] of IMR-UK;
15
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all such shares of capital stock are owned free and clear of all
liens, encumbrances, equities, claims, security interests, voting
trusts, restrictions or other defects of title of any nature
whatsoever;
(4) The certificates evidencing the Common Shares to be
delivered hereunder are in due and proper form under Florida law,
and when duly countersigned by the Company's transfer agent and
registrar and delivered to you or upon your order against payment
of the agreed consideration therefor in accordance with the
provisions of this Agreement, the Common Shares represented
thereby will be duly authorized and validly issued, fully paid
and nonassessable, will not have been issued in violation of or
subject to any preemptive rights or other rights to subscribe for
or purchase securities and will conform in all material respects
to the description thereof contained in the Prospectus;
(5) Except as disclosed in or specifically contemplated
by the Prospectus, to the best of such counsel's knowledge, there
are no outstanding options, warrants or other rights calling for
the issuance of, and no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or any security
convertible into or exchangeable for capital stock of the
Company;
(6) The Registration Statement has become effective
under the Act, no stop order suspending the effectiveness of the
Registration Statement or preventing the use of the Prospectus
has been issued and, to the best of such counsel's knowledge, no
proceedings for that purpose have been instituted or are pending
or contemplated by the Commission or its staff; any required
filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) of the Rules and Regulations has been made in the
manner and within the time period required by such Rule 424(b);
(7) The 1934 Act Registration Statement has become
effective under the Exchange Act.
(8) The Registration Statement, the Prospectus and each
amendment or supplement thereto (except for the financial
statements and schedules included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Rules
and Regulations;
(9) To the best of such counsel's knowledge, there are
no franchises, leases, contracts, agreements or documents of a
character required to be disclosed in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement which are not disclosed or filed, as required;
(10) To the best of such counsel's knowledge, there are
no legal or governmental actions, suits or proceedings pending or
threatened against the Company or any IMR Affiliate which are
required to be described in the Prospectus which are not
described as required;
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(11) The statements set forth in the Prospectus under
the headings "______________________," "____________________"
and "_______________________" and Items 14 and 15 of the
Registration Statement, insofar as such statements constitute a
summary of the terms of legal matters, documents, agreements or
other instruments or governmental, regulatory or other legal
proceedings, are fair and accurate in all material respects;
(12) The Company has full right, power and authority to
enter into this Agreement and each of the Ancillary Agreements
and to sell and deliver the Common Shares to be sold by it to the
several Underwriters; this Agreement and each of the Ancillary
Agreements has been duly and validly authorized by all necessary
corporate action by the Company, has been duly and validly
executed and delivered by and on behalf of the Company, and is a
valid and binding agreement of the Company enforceable in
accordance with its terms, except as enforceability may be
limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors'
rights generally and except as to those provisions of this
Agreement relating to indemnity or contribution for liabilities
arising under the Act as to which no opinion need be expressed;
and no approval, authorization, order, consent, registration,
filing, qualification, license or permit of or with any court,
regulatory, administrative or other governmental body is required
for the execution and delivery of this Agreement and the
Ancillary Agreements by the Company or the consummation of the
transactions contemplated herein or therein, except such as have
been obtained and are in full force and effect under the Act and
such as may be required under applicable Blue Sky laws in
connection with the purchase and distribution of the Common
Shares by the Underwriters, the clearance of such offering with
the NASD and, with respect to the IMR-India Repurchase
Agreements, the approval of the Reserve Bank of India (which has
been obtained);
(13) The execution and performance of this Agreement and
the Ancillary Agreements and the consummation of the transactions
contemplated herein and therein will not conflict with, result in
the breach of, or constitute, either by itself or upon notice or
the passage of time or both, a default under, any agreement,
mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument known to such counsel to which the
Company or any IMR Affiliate is a party or by which the Company
or any IMR Affiliate may be bound or affected which is material
to the Company or violate any of the provisions of the
certificate of incorporation or bylaws, or other organizational
documents, of the Company or, so far as is known to such counsel,
violate any statute, judgment, decree, order, rule or regulation
of any court or governmental body having jurisdiction over the
Company or any of its property;
(14) The Company is not in violation of its certificate
of incorporation or bylaws, or other organizational documents, or
to the best of such counsel's knowledge, in breach of or default
with respect to any provision of any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other
instrument known to such counsel to which the Company is a party
or by which it or any of its properties may be bound or affected,
except where such default would not materially adversely affect
the Company; and, to the best of such
17
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counsel's knowledge, the Company is in compliance with all laws,
rules, regulations, judgments, decrees, orders and statutes of
any court or jurisdiction to which they are subject, except where
noncompliance would not materially adversely affect the Company;
(15) To the best of such counsel's knowledge, no holders
of securities of the Company have rights to the registration of
shares of Common Stock or other securities, because of the filing
of the Registration Statement by the Company or the offering
contemplated hereby, except for rights fully satisfied or
effectively waived;
(16) To the best of such counsel's knowledge, this
Agreement, the Ancillary Agreements and the Shareholders
Agreement have been duly authorized, executed and delivered by or
on behalf of each of the Selling Shareholders party thereto; the
Agent has been duly and validly authorized to act as the
custodian of the Common Shares to be sold by each such Selling
Shareholder; and the performance of this Agreement and the
Shareholders Agreement and the consummation of the transactions
herein contemplated by the Selling Shareholders party thereto
will not result in a breach of, or constitute a default under,
any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other
agreement or instrument to which any of the Selling Shareholders
is a party or by which any of the Selling Shareholders party
thereto or any of their properties may be bound, or violate any
statute, judgment, decree, order, rule or regulation known to
such counsel of any court or governmental body having
jurisdiction over any of the Selling Shareholders or any of their
properties; and to the best of such counsel's knowledge, no
approval, authorization, order or consent of any court,
regulatory body, administrative agency or other governmental body
is required for the execution and delivery of this Agreement, the
Ancillary Agreements or the Shareholders Agreement or the
consummation by the Selling Shareholders of the transactions
contemplated by this Agreement, except such as have been obtained
and are in full force and effect under the Act and such as may be
required under the rules of the NASD and applicable Blue Sky laws
and, with respect to the IMR-India Repurchase Agreements, the
approval of the Reserve Bank of India (which has been obtained);
(17) To the best of such counsel's knowledge, the
Selling Shareholders have full right, power and authority to
enter into this Agreement and the Shareholders Agreement and to
sell, transfer and deliver the Common Shares to be sold on such
Closing Date by such Selling Shareholders hereunder and good and
marketable title to such Common Shares so sold, free and clear of
all liens, encumbrances, equities, claims, security interests,
voting trusts, restrictions or other defects of title of any
nature whatsoever, has been transferred to the Underwriters (whom
counsel may assume to be bona fide purchasers) who have purchased
such Common Shares hereunder;
(18) To the best of such counsel's knowledge, this
Agreement, the Ancillary Agreements and the Shareholders
Agreement are valid and binding agreements of each of the Selling
Shareholders party thereto in accordance with their respective
terms, except as enforceability may be limited by general
equitable
18
<PAGE>
principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally
and except with respect to those provisions of this Agreement
relating to indemnities or contributions for liabilities under
the Act, as to which no opinion need be expressed;
(19) No transfer taxes are required to be paid in
connection with the sale and delivery of the Common Shares to the
Underwriters hereunder.
In rendering such opinion, such counsel may rely as to matters of local
law, on opinions of local counsel, and as to matters of fact, on
certificates of the Selling Shareholders and of officers of the Company and
of governmental officials, in which case their opinion is to state that
they are so doing and that the Underwriters are justified in relying on
such opinions or certificates and copies of said opinions or certificates
are to be attached to the opinion. Such counsel shall also include a
statement to the effect that nothing has come to such counsel's attention
that would lead such counsel to believe that either at the effective date
of the Registration Statement or at the applicable Closing Date the
Registration Statement or the Prospectus, or any such amendment or
supplement, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(ii) An opinion of ____________________, counsel for IMR-
India, addressed to the Underwriters and dated the First Closing Date,
or the Second Closing Date, as the case may be, in the form of
Schedule D hereto, to the effect that:
(1) IMR-India has been duly organized and is validly
existing as a [______________] in good standing under the laws of
India;
(2) IMR-India has ________ [shares] of [type of] stock
authorized, ________ of which are issued and outstanding; all
necessary and proper corporate proceedings have been taken in
order to authorize validly such authorized stock; all outstanding
shares of [type of] stock have been duly and validly issued, are
fully paid and nonassessable, have been issued in compliance with
Indian law, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase
any securities;
(3) The Company owns beneficially and of record _______
shares of [type of] stock of IMR-India, free and clear of all
liens, encumbrances, equities, claims, security interests, voting
trusts, restrictions of any nature or other defects of title of
any nature whatsoever;
(4) The [describe transactions contemporaneous with
offering or other material transaction] and the consummation of
the transactions contemplated hereby and by the Ancillary
Agreements will not result in a breach of, or constitute a
default under, any indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise,
license or other agreement or instrument to which any of IMR-
India is a party or by which any of its properties may be bound,
or violate any statute, judgment, decree, order, rule or
regulation known to such counsel of any court or governmental
body having jurisdiction over IMR-India or any of its properties;
and to the best of such counsel's knowledge, no approval,
authorization, order or consent of any court,
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<PAGE>
regulatory body, administrative agency or other governmental body
is required for [describe transactions contemporaneous with
offering or other material transaction] the execution and
delivery of this Agreement, the Ancillary Agreements or the
Shareholders Agreement or the consummation by the Selling
Shareholders of the transactions contemplated herein and therein,
except as have been made or obtained;
(5) IMR-India has such Permits as are necessary to own,
lease and operate its respective properties and to conduct its
businesses; IMR-India has fulfilled and performed all of its
material obligations with respect to such Permits and no event
has occurred which allows, or after notice or lapse of time would
allow, for revocation or termination thereof or results, or would
result, in any other material impairment of the rights of the
holder of any such Permit.
(6) The statements set forth in the Prospectus under
the headings "_________________________," "___________________"
and "________________________," insofar as such statements
constitute a summary of the terms of legal matters, documents,
agreements or other instruments or governmental, regulatory or
other legal proceedings, are fair and accurate in all material
respects.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of the Company and of governmental officials,
in which case their opinion is to state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opinion.
(iii) An opinion of ____________________, counsel for the
Company, addressed to the Underwriters and dated the First Closing
Date, or the Second Closing Date, as the case may be, in the form of
Schedule E hereto, to the effect that:
(1) IMR-UK has been duly organized and is validly
existing as a [__________] in good standing under the laws of the
United Kingdom;
(2) IMR-UK has ________ [shares] of [type of] stock
authorized, ________ of which are issued and outstanding; all
necessary and proper corporate proceedings have been taken in
authorized stock; all outstanding shares of [type of] stock have
been duly and validly issued, are fully paid and nonassessable,
have been issued in compliance with UK law, were not issued in
violation of or subject to any preemptive rights or other rights
to subscribe for or purchase any securities;
(3) The Company owns beneficially and of record _______
shares of [type of] stock of IMR-UK, free and clear of all liens,
encumbrances, equities, claims, security interests, voting
trusts, restrictions or other defects of title whatsoever;
(4) The [describe transactions contemporaneous with
offering or other material transaction] and the consummation of
the transactions contemplated hereby and by the Ancillary
Agreements will not result in a breach of, or
20
<PAGE>
constitute a default under, any indenture, mortgage, deed of
trust, trust (constructive or other), loan agreement, lease,
franchise, license or other agreement or instrument to which any
of IMR-UK is a party or by which any of its properties may be
bound, or violate any statute, judgment, decree, order, rule or
regulation known to such counsel of any court or governmental
body having jurisdiction over IMR-UK or any of its properties;
and to the best of such counsel's knowledge, no approval,
authorization, order or consent of any court, regulatory body,
administrative agency or other governmental body is required for
[describe transactions contemporaneous with offering or other
material transaction] the execution and delivery of this
Agreement or the Shareholders Agreement, the Ancillary Agreements
or the consummation by the Selling Shareholders of the
transactions contemplated herein and therein, except as have been
made or obtained;
(5) IMR-UK has such Permits as are necessary to own,
lease and operate its respective properties and to conduct its
respective businesses; each of the Company and the IMR Affiliates
has fulfilled and performed all of their material obligations
with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, for
revocation or termination thereof or results, or would result, in
any other material impairment of the rights of the holder of any
such Permit;
(6) The statements set forth in the Prospectus under
the headings "________________________," "___________________"
and "________________________," insofar as such statements
constitute a summary of the terms of legal matters, documents,
agreements or other instruments or governmental, regulatory or
other legal proceedings, are fair and accurate in all material
respects.
In rendering such opinion, such counsel may rely as to matters of
fact, on certificates of the officers of the Company and of
governmental officials, in which case their opinion is to state that
they are so doing and that the Underwriters are justified in relying
on such opinions or certificates and copies of said opinions or
certificates are to be attached to the opinion.
(iv) Such opinion or opinions of Latham & Watkins, counsel for
the Underwriters, dated the First Closing Date or the Second Closing
Date, as the case may be, with respect to such legal matters relating
to this Agreement, the Registration Statement and the Prospectus and
other related matters as you may reasonably require, and the Company
and the Selling Shareholders shall have furnished to such counsel such
documents and shall have exhibited to them such papers and records as
they may reasonably request for the purpose of enabling them to pass
upon such matters. In connection with such opinions, such counsel may
rely on representations or certificates of officers of the Company and
governmental officials.
(v) A certificate of the Company executed by the chief
executive officer and the chief financial or accounting officer of the
Company, dated the First Closing Date or the Second Closing Date, as
the case may be, to the effect that:
21
<PAGE>
(1) The representations and warranties of the Company
set forth in Section 2 of this Agreement are true and correct as
of the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied on or prior to such
Closing Date;
(2) The Commission has not issued any order preventing
or suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best of
the knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under
the Act;
(3) Each of the respective signers of the certificate
has carefully examined the Registration Statement and the
Prospectus; in his opinion and to the best of his knowledge, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contain all statements required to be stated
therein regarding the Company and the IMR Affiliates; and neither
the Registration Statement nor the Prospectus nor any amendment
or supplement thereto includes any untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction
or event has occurred which should have been set forth in an
amendment to the Registration Statement or in a supplement to or
amendment of any prospectus which has not been disclosed in such
a supplement or amendment;
(5) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, there
has not been any material adverse change or a development
involving a material adverse change in the condition (financial
or otherwise), business, properties, results of operations,
management or prospects of the Company and the IMR Affiliates;
and no legal or governmental action, suit or proceeding is
pending or threatened against the Company or any IMR Affiliate
which is material to the Company and the IMR Affiliates whether
or not arising from transactions in the ordinary course of
business, or which may adversely affect the transactions
contemplated by this Agreement; since such dates and except as so
disclosed, neither the Company nor any IMR Affiliate has entered
into any verbal or written agreement or other transaction which
is not in the ordinary course of business or which could result
in a material reduction in the future earnings of the Company or
incurred any material liability or obligation, direct, contingent
or indirect, made any change in its capital stock, made any
material change in its short-term debt or funded debt or
repurchased or otherwise acquired any of the Company's capital
stock; and the Company has not declared or paid any dividend, or
made any other distribution, upon its outstanding capital
22
<PAGE>
stock payable to shareholders of record on a date prior to the
First Closing Date or Second Closing Date; and
(6) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus and
except as disclosed in or contemplated by the Prospectus, the
Company and the IMR Affiliates have not sustained a material loss
or damage by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(vi) On the First Closing Date [or the Second Closing Date, as
the case may be,] a certificate, dated such Closing Date and addressed
to you, signed by or on behalf of each of the Selling Shareholders to
the effect that the representations and warranties of such Selling
Shareholder in this Agreement are true and correct, as if made at and
as of the First Closing Date [or the Second Closing Date, as the case
may be], and such Selling Shareholder has complied with all the
agreements and satisfied all the conditions on his part to be
performed or satisfied prior to the First Closing Date [or the Second
Closing Date, as the case may be].
(vii) On the date before this Agreement is executed and also on
the First Closing Date and the Second Closing Date letters addressed
to you, as Representatives of the Underwriters, from each of Coopers &
Lybrand LLP and Arthur Andersen LLP, the first one to be dated the day
before the date of this Agreement, the second one to be dated the
First Closing Date and the third one (in the event of a Second
Closing) to be dated the Second Closing Date, in form and substance
satisfactory to you.
(viii) (a) the Ancillary Agreements shall have been executed by
all parties thereto and shall be effective and (b) the transactions
contemplated by the IMR-India Repurchase Agreements shall have been
consummated.
(ix) On or before the First Closing Date, letters from each of
the Selling Shareholders, each holder of one percent or more of the
Company's Common Stock and each director and officer of the Company,
in form and substance satisfactory to you, confirming that for a
period of 180 days after the first date that any of the Common Shares
are released by you for sale to the public, such person will not
directly or indirectly sell or offer to sell or otherwise dispose of
any shares of Common Stock or any right to acquire such shares without
the prior written consent of Montgomery Securities, which consent may
be withheld at the sole discretion of Montgomery Securities.
All such opinions, certificates, letters and documents shall be in compliance
with the provisions hereof only if they are satisfactory to you and to Latham &
Watkins, counsel for the Underwriters. The Company shall furnish you with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as you request. Any certificate signed by any officer of the Company
and delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the Underwriters as
to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification by you as Representatives to the
Company and the Selling Shareholders without liability on the part of any
Underwriter, the Company or the Selling Shareholders, except for the expenses to
be paid or reimbursed
23
<PAGE>
by the Company and by the Selling Shareholders pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses. Notwithstanding any
---------------------------------------
other provisions hereof, if this Agreement shall be terminated by you pursuant
to Section 8, or if the sale to the Underwriters of the Common Shares at the
First Closing is not consummated because of any refusal, inability or failure on
the part of the Company or the Selling Shareholders to perform any agreement
herein or to comply with any provision hereof, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses that
shall have been reasonably incurred by you and them in connection with the
proposed purchase and the sale of the Common Shares, including but not limited
to fees and disbursements of counsel, printing expenses, travel expenses,
postage, telegraph charges and telephone charges relating to the offering
contemplated by the Prospectus. Any such termination shall be without liability
of any party to any other party except that the provisions of this Section,
Section 7 and Section 11 shall at all times be effective and shall apply.
SECTION 10. Effectiveness of Registration Statement. You, the Company and
---------------------------------------
the Selling Shareholders will use your and its and their best efforts to cause
the Registration Statement to become effective, to prevent the issuance of any
stop order suspending the effectiveness of the Registration Statement and, if
such stop order be issued, to obtain as soon as possible the lifting thereof.
SECTION 11. Indemnification.
---------------
(a) The Company and each of the Selling Shareholders, jointly
and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the
Act against any losses, claims, damages, liabilities or expenses, joint or
several, to which such Underwriter or such controlling person may become
subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them not
misleading, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company or the
Selling Shareholders contained herein or any failure of the Company or the
Selling Shareholders to perform their respective obligations hereunder or
under law; and will reimburse each Underwriter and each such controlling
person for any legal and other expenses as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that
neither the Company nor the Selling Shareholders will be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with the information
furnished to the Company pursuant to Section 4 hereof. The Company and the
Selling Shareholders may agree, as among themselves and without limiting
the rights of the Underwriters under this Agreement, as to the respective
amounts of such liability for which they each shall be responsible. In
addition to their other obligations under this Section 11(a), the
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<PAGE>
Company and the Selling Shareholders agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, or any inaccuracy in the representations and
warranties of the Company or the Selling Shareholders herein or failure to
perform its obligations hereunder, all as described in this Section 11(a),
it will reimburse each Underwriter on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's or the Selling
Shareholders' obligation to reimburse each Underwriter for such expenses
and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the Company together with interest,
compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing)
announced from time to time by Bank of America NT&SA, San Francisco,
California (the "Prime Rate"). Any such interim reimbursement payments
which are not made to an Underwriter within 30 days of a request for
reimbursement, shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement will be in addition to any liability
which the Company or the Selling Shareholders may otherwise have.
(b) Each Underwriter will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Shareholders and each
person, if any, who controls the Company or any Selling Shareholder within
the meaning of the Act, against any losses, claims, damages, liabilities or
expenses to which the Company, or any such director, officer, Selling
Shareholder or controlling person may become subject, under the Act, the
Exchange Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with the information furnished to the
Company pursuant to Section 4 hereof; and will reimburse the Company, or
any such director, officer, Selling Shareholder or controlling person for
any legal and other expense reasonably incurred by the Company, or any such
director, officer, Selling Shareholder or controlling person in connection
with investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. In addition to its other
obligations under this Section 11(b), each Underwriter severally agrees
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
this Section 11(b) which relates to information furnished to the Company
pursuant to Section 4 hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director, controlling person or Selling
Shareholder) on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial
25
<PAGE>
determination as to the propriety and enforceability of the Underwriters'
obligation to reimburse the Company (and, to the extent applicable, each
officer, director, controlling person or Selling Shareholder) for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the
Company (and, to the extent applicable, each officer, director, controlling
person or Selling Shareholder) shall promptly return it to the Underwriters
together with interest, compounded daily, determined on the basis of the
Prime Rate. Any such interim reimbursement payments which are not made to
the Company within 30 days of a request for reimbursement, shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party for contribution or otherwise than under the indemnity agreement
contained in this Section or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends
to seek indemnity from an indemnifying party, the indemnifying party will
be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be a conflict between the
positions of the indemnifying party and the indemnified party in conducting
the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses
of more than one separate counsel, approved by the Representatives in the
case of paragraph (a), representing the indemnified parties who are parties
to such action) or (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 11 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of any losses, claims, damages, liabilities
or expenses referred to herein (i) in such proportion as is appropriate to
reflect the relative benefits
26
<PAGE>
received by the Company, the Selling Shareholders and the Underwriters from
the offering of the Common Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, the Selling
Shareholders and the Underwriters in connection with the statements or
omissions or inaccuracies in the representations and warranties herein
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The respective
relative benefits received by the Company, the Selling Shareholders and the
Underwriters shall be deemed to be in the same proportion, in the case of
the Company and the Selling Shareholders as the total price paid to the
Company and to the Selling Shareholders, respectively, for the Common
Shares sold by them to the Underwriters (net of underwriting commissions
but before deducting expenses) bears to the total price to the public set
forth on the cover page of the Prospectus, and in the case of the
Underwriters as the underwriting commissions received by them bears to the
total price to the public set forth on the cover page of the Prospectus.
The relative fault of the Company, the Selling Shareholders and the
Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or
the alleged inaccurate representation and/or warranty relates to
information supplied by the Company, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth in subparagraph (c) of
this Section 11, any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or
claim. The provisions set forth in subparagraph (c) of this Section 11 with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this subparagraph (d); provided, however,
that no additional notice shall be required with respect to any action for
which notice has been given under subparagraph (c) for purposes of
indemnification. The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to
this Section 11 were determined solely by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 11, no Underwriter shall be
required to contribute any amount in excess of the amount of the total
underwriting commissions received by such Underwriter in connection with
the Common Shares underwritten by it and distributed to the public. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 11 are several in
proportion to their respective underwriting commitments and not joint.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections
11(a) and 11(b) hereof, including the amounts of any requested
reimbursement payments and the method of determining such amounts, shall be
settled by arbitration conducted under the provisions of the Constitution
and Rules of the Board of Governors of the New York Stock Exchange, Inc. or
pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for
arbitration or written notice of intention to arbitrate, therein electing
the arbitration tribunal. In the event the party demanding arbitration does
not make such designation of an arbitration tribunal in such demand or
notice, then the party responding to said demand or notice is authorized
27
<PAGE>
to do so. Such an arbitration would be limited to the operation of the
interim reimbursement provisions contained in Sections 11(a) and 11(b)
hereof and would not resolve the ultimate propriety or enforceability of
the obligation to reimburse expenses which is created by the provisions of
such Sections 11(a) and 11(b) hereof.
SECTION 12. Default of Underwriters. It shall be a condition to this
-----------------------
Agreement and the obligation of the Company and the Selling Shareholders to sell
and deliver the Common Shares hereunder, and of each Underwriter to purchase the
Common Shares in the manner as described herein, that, except as hereinafter in
this paragraph provided, each of the Underwriters shall purchase and pay for all
the Common Shares agreed to be purchased by such Underwriter hereunder upon
tender to the Representatives of all such shares in accordance with the terms
hereof. If any Underwriter or Underwriters default in their obligations to
purchase Common Shares hereunder on either the First or Second Closing Date and
the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase on such Closing Date does not exceed
10% of the total number of Common Shares which the Underwriters are obligated to
purchase on such Closing Date, the non-defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the Common Shares which such defaulting Underwriters agreed but failed
to purchase on such Closing Date. If any Underwriter or Underwriters so default
and the aggregate number of Common Shares with respect to which such default
occurs is more than the above percentage and arrangements satisfactory to the
Representatives and the Company for the purchase of such Common Shares by other
persons are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Selling Shareholders, except for the expenses to be paid by the
Company and the Selling Shareholders pursuant to Section 7 hereof and except to
the extent provided in Section 11 hereof.
In the event that Common Shares to which a default relates are to be purchased
by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days in
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 13. Effective Date. This Agreement shall become effective
--------------
immediately as to Sections 7, 9, 11, 14 and 16 and, as to all other provisions,
(i) if at the time of execution of this Agreement the Registration Statement has
not become effective, at 2:00 P.M., California time, on the first full business
day following the effectiveness of the Registration Statement, or (ii) if at the
time of execution of this Agreement the Registration Statement has been declared
effective, at 2:00 P.M., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the Company
or by release of any of the Common Shares for sale to the public. For the
purposes of this Section 13, the Common Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
SECTION 14. Termination. Without limiting the right to terminate this
-----------
Agreement pursuant to any other provision hereof:
28
<PAGE>
(a) This Agreement may be terminated by the Company by notice
to you and the Selling Shareholders or by you by notice to the Company and
the Selling Shareholders at any time prior to the time this Agreement shall
become effective as to all its provisions, and any such termination shall
be without liability on the part of the Company or the Selling Shareholders
to any Underwriter (except for the expenses to be paid or reimbursed by the
Company and the Selling Shareholders pursuant to Sections 7 and 9 hereof
and except to the extent provided in Section 11 hereof) or of any
Underwriter to the Company or the Selling Shareholders (except to the
extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York Stock
Exchange or on the American Stock Exchange or in the over the counter
market by the NASD, or trading in securities generally shall have been
suspended on either such Exchange or in the over the counter market by the
NASD, or a general banking moratorium shall have been established by
federal, New York, California or Indian authorities, (ii) if an outbreak of
major hostilities or other national or international calamity or any
substantial change in political, financial or economic conditions shall
have occurred or shall have accelerated or escalated to such an extent, as,
in the judgment of the Representatives, to affect adversely the
marketability of the Common Shares, (iii) if any adverse event shall have
occurred or shall exist which makes untrue or incorrect in any material
respect any statement or information contained in the Registration
Statement or Prospectus or which is not reflected in the Registration
Statement or Prospectus but should be reflected therein in order to make
the statements or information contained therein not misleading in any
material respect, or (iv) if there shall be any action, suit or proceeding
pending or threatened, or there shall have been any development or
prospective development involving particularly the business or properties
or securities of the Company or any IMR Affiliate or the transactions
contemplated by this Agreement, which, in the reasonable judgment of the
Representatives, may materially and adversely affect the Company's business
or earnings and makes it impracticable or inadvisable to offer or sell the
Common Shares. Any termination pursuant to this subsection (b) shall
without liability on the part of any Underwriter to the Company or the
Selling Shareholders or on the part of the Company or the Selling
Shareholders to any Underwriter (except for expenses to be paid or
reimbursed by the Company and the Selling Shareholders pursuant to Sections
7 and 9 hereof and except to the extent provided in Section 11 hereof.
SECTION 15. Failure of the Selling Shareholders to Sell and Deliver. If
-------------------------------------------------------
one or more of the Selling Shareholders shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Shareholders at the First Closing Date under the terms of this Agreement, then
the Underwriters may at their option, by written notice from you to the Company
and the Selling Shareholders, either (i) terminate this Agreement without any
liability on the part of any Underwriter or, except as provided in Sections 7, 9
and 11 hereof, the Company or the Selling Shareholders, or (ii) purchase the
shares which the Company and other Selling Shareholders have agreed to sell and
deliver in accordance with the terms hereof. In the event of a failure by one
or more of the Selling Shareholders to sell and deliver as referred to in this
Section, either you or the Company shall have the right to postpone the Closing
Date for a period not exceeding seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected.
29
<PAGE>
SECTION 16. Representations and Indemnities to Survive Delivery. The
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Shareholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Shareholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 17. Notices. All communications hereunder shall be in writing
-------
and, if sent to the Representatives shall be mailed, delivered or telegraphed
and confirmed to you at 600 Montgomery Street, San Francisco, California 94111,
Attention: __________, with a copy to Latham & Watkins, 633 West Fifth Street,
Suite 4000, Los Angeles, California 90071, Attention:
__________________________; and if sent to the Company or the Selling
Shareholders shall be mailed, delivered or telegraphed and confirmed to the
Company at Information Management Resources, Inc., 26750 U.S. Highway 19 North,
Suite 500, Clearwater, Florida 34621, with a copy to Morris, Manning & Martin
LLP, 1600 Atlanta Financial Center, 3343 Peachtree Road, N.W., Atlanta, Georgia
30326, Attention: _______________ The Company, the Selling Shareholders or you
may change the address for receipt of communications hereunder by giving notice
to the others.
SECTION 18. Successors. This Agreement will inure to the benefit of and
----------
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 12 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 11, and in each case their
respective successors, personal representatives and assigns, and no other person
will have any right or obligation hereunder. No such assignment shall relieve
any party of its obligations hereunder. The term "successors" shall not include
any purchaser of the Common Shares as such from any of the Underwriters merely
by reason of such purchase.
SECTION 19. Representation of Underwriters. You will act as
------------------------------
Representatives for the several Underwriters in connection with all dealings
hereunder, and any action under or in respect of this Agreement taken by you
jointly or by Montgomery Securities, as Representatives, will be binding upon
all the Underwriters.
SECTION 20. Partial Unenforceability. The invalidity or unenforceability
------------------------
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 21. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of California.
SECTION 22. General. This Agreement constitutes the entire agreement of
-------
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
30
<PAGE>
In this Agreement, the masculine, feminine and neuter genders and the singular
and the plural include one another. The section headings in this Agreement are
for the convenience of the parties only and will not affect the construction or
interpretation of this Agreement. This Agreement may be amended or modified,
and the observance of any term of this Agreement may be waived, only by a
writing signed by the Company, the Selling Shareholders and you.
Any person executing and delivering this Agreement as Attorney-in-fact for [the]
[a] Selling Shareholder[s] represents by so doing that he has been duly
appointed as Attorney-in-fact by such Selling Shareholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-fact to
take such action. Any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Shareholders.
* * * *
31
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed copies hereof, whereupon it will
become a binding agreement among the Company, the Selling Shareholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
Information Management Resources, Inc.
By:__________________________
Satish K. Sanan
President and
Chief Executive Officer
Selling Shareholders
By:__________________________
(Attorney-in-fact)
By:__________________________
(Attorney-in-fact)
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
the date first above written.
MONTGOMERY SECURITIES
ALEX. BROWN & SONS, INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A
By: MONTGOMERY SECURITIES
By:______________________________
Partner
32
<PAGE>
SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
- ------------------- ---------------
Montgomery Securities ...............
Alex. Brown & Sons, Inc..............
______
TOTAL ...................... ======
33
<PAGE>
SCHEDULE B
Number of Firm
Common Shares to
be Sold by Selling
Name of Selling Shareholder Shareholders
- --------------------------- ------------
TOTAL ......................
======
34
<PAGE>
SCHEDULE C
Form of Opinion of
Morris, Manning & Martin LLP
U.S. Counsel to the Company
35
<PAGE>
SCHEDULE D
Form of Opinion of
____________________________
India Counsel to the Company
36
<PAGE>
SCHEDULE E
Form of Opinion of
___________________________
U.K. Counsel to the Company
37
<PAGE>
EXHIBIT 3.1
FIRST AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
INFORMATION MANAGEMENT RESOURCES, INC.
In accordance with Section 607.1007 of the Florida Business Corporation
Act, the Florida Statutes, as hereafter amended and modified (the "FBCA"), the
Board of Directors of INFORMATION MANAGEMENT RESOURCES, INC., a Florida
corporation (the "Corporation"), hereby amends and restates in its entirety the
Articles of Incorporation of the Corporation as follows:
ARTICLE I
Name
----
The name of the Corporation is: Information Management Resources, Inc.
ARTICLE II
Principal Address
-----------------
The street address of the principal office and the mailing address of the
Corporation is: 26750 U.S. Highway 19 North, Suite 500, Clearwater, Florida
34621.
ARTICLE III
Purposes
--------
The Corporation may engage in the transaction of any or all lawful business
for which corporations may be incorporated under the laws of the State of
Florida.
ARTICLE IV
Capital Stock
-------------
4.1. Authorized Shares. The total number of shares of all classes of
-----------------
capital stock that the Corporation shall have the authority to issue shall be
50,000,000 shares, of which 40,000,000 shares shall be common stock, having a
par value of $.10 per share (referred to in these First Amended and Restated
Articles of Incorporation as "Common Stock") and 10,000,000 shares shall be
preferred stock, having a par value of $.10 per share (referred to in these
First Amended and Restated Articles of Incorporation as "Preferred Stock"). The
Board of Directors is expressly authorized, pursuant to Section 607.0602 of the
FBCA, to provide for the classification and reclassification of any unissued
shares of Common Stock or Preferred Stock and the issuance thereof in one or
more classes or series without the approval or the shareholders of the
Corporation, all within the limitations set forth in Section 607.0601 of the
FBCA.
<PAGE>
4.2. Common Stock.
------------
(a) Relative Rights. The Common Stock shall be subject to all of the
---------------
rights, privileges, preferences and priorities of the Preferred Stock as may be
set by the Board of Directors and hereafter filed as Articles of Amendment to
these First Amended and Restated Articles of Incorporation pursuant to Section
607.0602 of the FBCA. Except as otherwise provided in these First Amended and
Restated Articles of Incorporation, each share of Common Stock shall have the
same rights as and be identical in all respects to all the other shares of
Common Stock.
(b) Voting Rights. Each holder of Common Stock shall, except as
-------------
otherwise provided by the FBCA, be entitled to one vote for each share of Common
Stock held by such holder.
(c) Dividends. Whenever there shall have been paid, or declared and
---------
set aside for payment, to the holders of the shares of any class of stock having
preference over the Common Stock as to the payment of dividends, the full amount
of dividends and of sinking fund or retirement payments, if any, to which such
holders are respectively entitled in preference to the Common Stock, then the
holders of record of the Common Stock and any class or series of stock entitled
to participate therewith as to dividends, shall be entitled to receive
dividends, when, as, and if declared by the Board of Directors, out of any
assets legally available for the payment of dividends thereon.
(d) Dissolution, Liquidation, Winding Up. In the event of any
------------------------------------
dissolution, liquidation, or winding up of the Corporation, whether voluntary or
involuntary, the holders of record of the Common Stock then outstanding, and all
holders of any class or series of stock entitled to participate therewith in
whole or in part, as to the distribution of assets, shall become entitled to
participate in the distribution of assets of the Corporation remaining after the
Corporation shall have paid, or set aside for payment, to the holders of any
class of stock having preference over the Common Stock in the event of
dissolution, liquidation, or winding up, the full preferential amounts (if any)
to which they are entitled, and shall have paid or provided for payment of all
debts and liabilities of the Corporation.
4.3. Preferred Stock.
---------------
(a) Issuance, Designations, Powers, Etc. Subject to the limitations
-----------------------------------
prescribed by the FBCA and the provisions of these First Amended and Restated
Articles of Incorporation, the Board of Directors is expressly authorized, to
provide, by resolution and by filing Articles of Amendment to these First
Amended and Restated Articles of Incorporation (which, pursuant to Section
607.0602(4) of the FBCA shall be effective without shareholder action), for the
issuance from time to time of the shares of the Preferred Stock in one or more
series, to establish from time to time the number of shares to be included in
each such series, and to fix the designations, preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption relating to the shares of
each such series. The authority of the Board of Directors with respect to each
series of Preferred Stock shall include, but not be limited to, setting or
changing the following:
-2-
<PAGE>
(i) the dividend rate, if any, on shares of such series, the
times of payment and the date from which dividends shall be
accumulated, if dividends are to be cumulative:
(ii) whether the shares of such series shall be redeemable and,
if so, the redemption price and the terms and conditions of such
redemption;
(iii) the obligation, if any, of the Corporation to redeem
shares of such series pursuant to a sinking fund;
(iv) whether shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or classes and,
if so, the terms and conditions for such conversion or exchange,
including the price or prices or the rate or rates of conversion or
exchange and the terms of adjustment, if any;
(v) whether the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and, if so,
the extent of such voting rights;
(vi) the rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation; and
(vii) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such
series.
(b) Dissolution, Liquidation, Winding Up. In the event of any
------------------------------------
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of Preferred Stock of each series shall be entitled to
receive only such amount or amounts as shall have been fixed by the Articles of
Amendment to these First Amended and Restated Articles of Incorporation or by
the resolution or resolutions of the Board of Directors providing for the
issuance of such series.
4.4. Shares Acquired by the Corporation. Shares of Common Stock that have
----------------------------------
been acquired by the Corporation shall become treasury shares and may be resold
or otherwise disposed of by the Corporation for such consideration as shall be
determined by the Board of Directors, unless or until the Board of Directors
shall by resolution provide that any or all treasury shares so acquired shall
constitute authorized, but unissued shares.
4.5. No Preemptive Rights. Except as the Board of Directors may otherwise
--------------------
determine, no shareholder of the Corporation shall have any preferential or
preemptive right to subscribe for or purchase form the Corporation any new or
additional shares of capital stock, or securities convertible into shares of
capital stock, of the Corporation, whether now or hereafter authorized.
4.6. Reclassification of Existing Voting and Nonvoting Common Stock.
--------------------------------------------------------------
Effective upon the filing of record of these First Amended and Restated Articles
of Incorporation, each issued and outstanding share of the Corporation's voting
common stock and nonvoting common
-3-
<PAGE>
stock, each having a par value of $.10 per share, shall be reclassified as ten
(10) fully paid and nonassessible shares of the Corporation's Common Stock, par
value $.10 per share. From and after such time, each certificate representing
shares of the Corporation's voting common stock and nonvoting common stock shall
thereafter be deemed to represent solely the right to receive the number of
shares of the Corporation's Common Stock, par value $.10 per share, determined
in the manner set forth above.
ARTICLE V
Registered Office and Agent
---------------------------
The Corporation designates 26750 U.S. Highway 19 North, Suite 500,
Clearwater, Florida 34621 as the street address of the registered office of the
Corporation and names Dilip Patel, Esq. the Corporation's registered agent at
that address to accept service of process within this state.
ARTICLE VI
Board of Directors
------------------
6.1. Classification. Except as otherwise provided in these First Amended
--------------
and Restated Articles of Incorporation or any Articles of Amendment filed
pursuant to Section 4.3 hereof relating to the rights of the holders of any
class of or series of Preferred Stock, voting separately by class or series, to
elect additional directors under specified circumstances, the number of
directors of the Corporation shall be as fixed from time to time by or pursuant
to these First Amended and Restated Articles of Incorporation or by bylaws of
the Corporation (the "Bylaws"). The directors, other than those who may be
elected by the holders of any class or series of Preferred Stock voting
separately by class or series, shall be classified, with respect to the time for
which they severally hold office, into three classes, Class I, Class II and
Class III, each of which shall be as nearly equal in number as possible, and
shall be adjusted from time to time in the manner specified in the Bylaws to
maintain such proportionality. Each initial director in Class I shall hold
office for a term expiring at the 1997 annual meeting of the shareholders; each
initial director in Class II shall hold office for a term expiring at the 1998
annual meeting of the shareholders; and each initial director in Class III shall
hold office for a term expiring at the 1999 annual meeting of the shareholders.
Notwithstanding the foregoing provisions of this Section 6.1, each director
shall serve until such director's successor is duly elected and qualified or
until such director's earlier death, resignation or removal. At each annual
meeting of the shareholders, the successors to the class of directors whose term
expires at that meeting shall be elected to hold office for a term expiring at
the annual meeting of the shareholders held in the third year following the year
of their election and until their successors shall have been duly elected and
qualified or until such director's earlier death, resignation or removal.
6.2. Removal.
-------
(a) Removal For Cause. Except as otherwise provided pursuant to the
-----------------
provisions of these First Amended and Restated Articles of Incorporation or
Articles of Amendment relating
-4-
<PAGE>
to the rights of the holders of any class or series of Preferred Stock, voting
separately by class or series, to elect directors under specified circumstances,
any director or directors may be removed from office at any time, but only for
cause (as defined in Section 6.2(b) hereof) and only by the affirmative vote, at
any annual or special meeting of the shareholders, of not less than sixty-six
and two-thirds percent (66-2/3%), of the total number of votes of the then
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, but
only if notice of such proposed removal was contained in the notice of such
meeting. At least thirty (30) days prior to such annual or special meeting of
shareholders, written notice shall be sent to the director or directors whose
removal will be considered at such meeting.
(b) "Cause" Defined. For the purposes of this Section 6.2, "cause"
---------------
shall mean (i) misconduct as a director of the Corporation or any subsidiary of
the Corporation which involves dishonesty with respect to a material corporate
activity or material corporate assets, or (ii) conviction of an offense
punishable by one (1) or more years of imprisonment (other than minor regulatory
infractions and traffic violations which do not materially and adversely affect
the Corporation).
(c) Vacancies. Newly created directorships resulting from any
---------
increase in the number of directors or any vacancy of the Board of Directors
resulting from death, resignation, disqualification, removal or otherwise, may
be filled only by affirmative vote of a majority of the remaining directors then
in office, even though less than a quorum, or by a sole remaining director, or,
if not filled by the directors, by the shareholders. Any director so elected
shall hold office until the next election of the class for which such director
shall have been elected and until such director's successor shall have been
elected and qualified or until any such director's earlier death, resignation or
removal.
6.3. Change of Number of Directors. The Board of Directors shall have
-----------------------------
the power to increase or decrease the authorized number of directors, with or
without shareholder approval. In the event of any increase or decrease in the
authorized number of directors, the newly created or eliminated directorships
resulting from such increase or decrease shall be apportioned by the Board of
Directors among the three classes of directors so as to maintain such classes as
nearly equal as possible. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.
6.4. Directors Elected by Holders of Preferred Stock. Notwithstanding
-----------------------------------------------
the foregoing, whenever the holders of any one or more classes or series of
Preferred Stock issued by the Corporation shall have the right, voting
separately by class or series, to elect one or more directors at an annual or
special meeting of shareholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of these First Amended and Restated Articles of Incorporation, as amended
by Articles of Amendment applicable to such classes or series of Preferred
Stock, and such directors so elected shall not be divided into classes pursuant
to this Article VI unless expressly provided by the Articles of Amendment
applicable to such classes or series of Preferred Stock.
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<PAGE>
6.5. Personal Liability of Directors. No director of the Corporation
-------------------------------
shall be personally liable to the Corporation or its shareholders for monetary
damages for breach of duty of care or other duty as a director, except as
provided by Section 607.0831 of the FBCA. If the FBCA is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the FBCA, as amended.
In the event that any of the provisions of this Article (including any provision
within a single sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, the remaining provisions are severable
and shall remain enforceable to the fullest extent permitted by law.
6.6. Exercise of Business Judgment. In discharging the duties of their
-----------------------------
respective positions and in determining what is believed to be in the best
interests of the Corporation, the Board of Directors, and individual directors,
in addition to considering the effects of any action on the Corporation or its
shareholders, may consider the interests of the employees, customers, suppliers
and creditors of the Corporation and its subsidiaries, the communities in which
offices or other establishments of the Corporation and its subsidiaries are
located, and all other factors such directors consider pertinent; provided,
however, that this provision solely grants discretionary authority to the
directors and no constituency shall be deemed to have been given any right to
consideration thereby.
6.7. Directors. The number of directors constituting the Board of
---------
Directors as of the date of adoption of these First Amended and Restated
Articles of Incorporation is five (5). The number of directors may be increased
or decreased from time to time as provided in these First Amended and Restated
Articles of Incorporation or by the Bylaws, but in no event shall the number of
directors be less than three (3). The names and addresses of the directors as
of the date of adoption of these First Amended and Restated Articles of
Incorporation are:
Class I
-------
Satish K. Sanan 26759 U.S. Highway 19 North, Suite 500
Clearwater, Florida 34621
Vincent Addonisio 26759 U.S. Highway 19 North, Suite 500
Clearwater, Florida 34621
Class II
--------
Philip Shipperlee 26759 U.S. Highway 19 North, Suite 500
Clearwater, Florida 34621
Charles Luthin 26759 U.S. Highway 19 North, Suite 500
Clearwater, Florida 34621
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Class III
---------
Jeffery Slowgrove 26759 U.S. Highway 19 North, Suite 500
Clearwater, Florida 34621
ARTICLE VII
Action By Shareholders
----------------------
7.1. Annual Meetings. At an annual meeting of the shareholders of the
---------------
Corporation, only such business shall be conducted, and only such proposals
shall be acted upon, as shall have been brought before the annual meeting (a)
by, or at the direction of, the Board of Directors, or (b) by any shareholder of
the Corporation who complies with the notice procedures set forth in the Bylaws
and the requirements of Rule 14a-8 promulgated under the Securities Exchange Act
of 1934, as amended.
7.2. Special Meetings. Special meetings of the shareholders of the
----------------
Corporation may be called at any time by (a) the Board of Directors; (b) the
Chairman of the Board of Directors (if one is so appointed); (c) the President
of the Corporation; or (d) the holders of not less than fifty (50%) of all the
votes entitled to be cast on any issue proposed to be considered at the proposed
special meeting, if such shareholders sign, date and deliver to the
Corporation's Secretary one or more written demands for the meeting describing
the purpose or purposes for which it is to be held. Special meetings of the
shareholders of the Corporation may not be called by any other person or
persons.
7.3. Shareholder Action Without a Meeting. Any action required or
------------------------------------
permitted to be taken at an annual or special meeting of shareholders of the
Corporation may be taken without a meeting, without prior notice, and without a
vote if the action is taken in the manner set forth under Section 607.0704 of
the FBCA, as the same may be hereafter amended or superseded.
ARTICLE VIII
Amendments
----------
8.1. Articles of Incorporation. Notwithstanding any other provision of
-------------------------
these First Amended and Restated Articles of Incorporation or the Bylaws of the
Corporation (and notwithstanding that a lesser percentage may be specified by
law) the affirmative vote of sixty-six and two-thirds percent (66-2/3%) of the
total number of votes of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required (unless separate voting by classes
is required by the FBCA, in which event the affirmative vote of sixty-six and
two-thirds percent (66-2/3%) of the number of shares of each class or series
entitled to vote as a class shall be required), to amend or repeal, or to adopt
any provision inconsistent with the purpose or intent of, Articles [IV], VI,
VII, VIII or this Article IX of these First Amended and Restated Articles of
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<PAGE>
Incorporation. Notice of any such proposed amendment, repeal or adoption shall
be contained in the notice of the meeting at which it is to be considered.
Subject to the provisions set forth herein, the Board of Directors shall have
the right to amend, alter, repeal or rescind any provision contained in these
First Amended and Restated Articles of Incorporation in the manner now or
hereafter prescribed by law.
8.2. Bylaws. The Board of Directors shall have the power to amend or
------
repeal the Bylaws in such manner as shall be prescribed by the Bylaws, and
nothing herein shall serve to limit such power. The shareholders of the
Corporation may adopt or amend a provision to the Bylaws which fixes a greater
quorum or voting requirement for shareholders (or voting groups of shareholders)
than is required by the FBCA. The adoption or amendment of a bylaw that adds,
changes or deletes a greater quorum or voting requirement for shareholders must
meet the same quorum or voting requirement and be adopted by the same vote and
voting groups required to take action under the quorum or voting requirement
then in effect or proposed to be adopted, whichever is greater.
IN WITNESS WHEREOF, Information Management Resources, Inc. has caused these
First Amended and Restated Articles of Incorporation to be executed, its
corporate seal to be affixed, and its seal and execution hereof to be attested,
all by its duly authorized officers, this 12th day of September, 1996.
INFORMATION MANAGEMENT
RESOURCES, INC.
By: /s/ Satish K. Sanan
----------------------------------
Satish K. Sanan, President
Attest: /s/ Jeffrey S. Slowgrove
-------------------------------------
Jeffrey S. Slowgrove, Treasurer
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<PAGE>
EXHIBIT 3.2
AMENDED AND RESTATED BYLAWS
OF
INFORMATION MANAGEMENT RESOURCES, INC.,
a Florida Corporation
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I. OFFICES................................................... 1
SECTION 1. REGISTERED OFFICE......................................... 1
-----------------
SECTION 2. OTHER OFFICES............................................. 1
-------------
ARTICLE II. MEETINGS OF SHAREHOLDERS................................. 1
SECTION 1. PLACE OF MEETING.......................................... 1
----------------
SECTION 2. TIME OF MEETING........................................... 1
---------------
SECTION 3. SPECIAL MEETINGS.......................................... 1
----------------
SECTION 4. NOTICE OF MEETINGS........................................ 2
------------------
SECTION 5. WAIVER OF NOTICE.......................................... 2
----------------
SECTION 6. VOTING LIST............................................... 2
-----------
SECTION 7. VOTING GROUP.............................................. 3
------------
SECTION 8. QUORUM.................................................... 3
------
SECTION 9. VOTE REQUIRED FOR ACTION.................................. 4
------------------------
SECTION 10. VOTING................................................... 4
------
SECTION 11. ACTION OF SHAREHOLDERS WITHOUT A MEETING................. 4
----------------------------------------
SECTION 12. RECORD DATE.............................................. 4
-----------
SECTION 13. PROXIES.................................................. 5
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SECTION 14. CONDUCT OF MEETING....................................... 5
------------------
SECTION 15. ADJOURNMENTS............................................. 5
------------
SECTION 16. SHAREHOLDER PROPOSALS AT ANNUAL MEETINGS................. 5
----------------------------------------
SECTION 17. NOTICE OF SHAREHOLDER NOMINEES........................... 7
------------------------------
SECTION 18. INSPECTORS OF ELECTION................................... 7
----------------------
ARTICLE III. BOARD OF DIRECTORS...................................... 8
SECTION 1. GENERAL POWERS............................................ 8
--------------
SECTION 2. NUMBER OF DIRECTORS AND TERM OF OFFICE.................... 8
--------------------------------------
SECTION 3. REMOVAL................................................... 8
-------
SECTION 4. RESIGNATION............................................... 9
-----------
SECTION 5. VACANCIES................................................. 9
---------
SECTION 6. COMPENSATION.............................................. 9
------------
SECTION 7. REGULAR MEETINGS.......................................... 9
----------------
SECTION 8. SPECIAL MEETINGS.......................................... 9
----------------
SECTION 9. NOTICE OF MEETINGS........................................ 9
------------------
SECTION 10. WAIVER OF NOTICE......................................... 10
----------------
SECTION 11. PLACE OF MEETINGS........................................ 10
-----------------
SECTION 12. PARTICIPATION BY CONFERENCE TELEPHONE.................... 10
-------------------------------------
SECTION 13. QUORUM................................................... 10
------
SECTION 14. VOTING................................................... 10
------
SECTION 15. MINUTES.................................................. 11
-------
SECTION 16. ACTION WITHOUT A MEETING................................. 11
------------------------
SECTION 17. ADJOURNMENTS............................................. 11
------------
SECTION 18. GENERAL POWERS OF DIRECTORS.............................. 11
---------------------------
SECTION 19. SPECIFIC POWERS OF DIRECTORS............................. 11
----------------------------
SECTION 20. DIRECTOR CONFLICTS OF INTEREST........................... 12
------------------------------
ARTICLE IV. COMMITTEES............................................... 12
SECTION 1. APPOINTING COMMITTEES..................................... 12
---------------------
SECTION 2. POWERS OF COMMITTEES...................................... 12
--------------------
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 3. Committee Meetings, Quorum and Voting..................... 13
Section 4. Removal from Committees................................... 13
Section 5. Appointment of Executive Committee........................ 13
Section 6. Procedures of Executive Committee......................... 13
Section 7. Compensation Committee.................................... 14
Section 8. Audit Committee........................................... 14
Section 9. Other Committees.......................................... 14
Section 10. Alternative Members...................................... 14
ARTICLE V. OFFICERS.................................................. 15
Section 1. Number.................................................... 15
Section 2. Election and Term......................................... 15
Section 3. Removal................................................... 15
Section 4. Resignation............................................... 15
Section 5. Vacancies................................................. 15
Section 6. Salaries.................................................. 15
Section 7. Chairman of the Board..................................... 16
Section 8. President................................................. 16
Section 9. Vice Presidents........................................... 16
Section 10. Secretary................................................ 16
Section 11. Treasurer................................................ 17
Section 12. Assistants and Acting Officers........................... 17
Section 13. Duties of Officers May Be Delegated...................... 18
ARTICLE VI........................................................... 18
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS AND DOCUMENTS............... 18
Section 1. Execution of Contracts and Documents...................... 18
Section 2. Checks and Drafts......................................... 18
Section 3. Deposits.................................................. 19
Section 4. Proxies................................................... 19
ARTICLE VII. DISTRIBUTIONS........................................... 19
Section 1. Authorization or Declaration.............................. 19
Section 2. Record Date With Respect to Distributions and Share
Dividends................................................. 19
ARTICLE VIII. CAPITAL STOCK.......................................... 19
Section 1. Authorization and Issuance of Shares...................... 19
Section 2. Capital Stock............................................. 20
Section 3. Record of Shareholders.................................... 20
Section 4. Lost, Stolen or Destroyed Certificates.................... 21
Section 5. Transfer of Shares........................................ 21
Section 6. Duty of Corporation to Register Transfer.................. 21
Section 7. Registered Shareholders................................... 21
Section 8. Stock Regulations......................................... 22
ARTICLE IX. INDEMNIFICATION.......................................... 22
Section 1. Definitions............................................... 22
Section 2. Indemnification........................................... 23
Section 3. Determination and Authorization of Indemnification........ 24
Section 4. Advances for Expenses..................................... 25
Section 5. Court-Ordered Indemnification and Advances for Expenses... 26
Section 6. Insurance................................................. 26
Section 7. Severability.............................................. 26
</TABLE>
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<TABLE>
<S> <C>
ARTICLE X. EMERGENCY POWERS......................................... 27
Section 1. Power to Adopt............................................ 27
Section 2. Lines of Succession of Officers or Agents................. 27
Section 3. Change of Office.......................................... 27
Section 4. Effect of Bylaws.......................................... 27
Section 5. Notices................................................... 27
Section 6. Quorum.................................................... 27
Section 7. Liability................................................. 28
ARTICLE XI. GENERAL PROVISIONS....................................... 28
Section 1. Fiscal Year............................................... 28
Section 2. Corporate Seal............................................ 28
Section 3. Books and Records......................................... 28
Section 4. Annual Financial Statements............................... 28
Section 5. Inspection of Books and Records........................... 28
Section 6. Conflict with Articles of Incorporation................... 29
Section 7. Adoption of Amendments to Incentive Stock Option Plans.... 29
Section 8. Reference to Code Sections................................ 29
ARTICLE XII. AMENDMENTS.............................................. 29
</TABLE>
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<PAGE>
AMENDED AND RESTATED BYLAWS OF
INFORMATION MANAGEMENT RESOURCES, INC.
ARTICLE I.
Offices
Section 1. Registered Office. The registered office shall be in the City
-----------------
of Clearwater, State of Florida, County of Pinellas. The Board of Directors from
time to time may change the address of the registered office, which may be, but
need not be, the principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at such
-------------
other places both within and without the State of Florida as the Board of
Directors may from time to time determine and the business of the Corporation
may require or make desirable.
ARTICLE II.
Meetings of Shareholders
Section 1. Place of Meeting. All meetings of the Shareholders may be held
----------------
either within or without the State of Florida, but in the absence of notice to
the contrary Shareholders' meetings shall be held at the principal office of the
Corporation.
Section 2. Time of Meeting. The Annual Meeting of the Shareholders shall
---------------
be held annually within six (6) months after the end of each fiscal year of the
Corporation at such time and place as may be designated in the notice of the
Annual Meeting. Failure to hold the Annual Meeting as aforesaid shall not work a
forfeiture or dissolution of the Corporation nor shall such failure affect
otherwise valid corporate acts.
Section 3. Special Meetings. Special Meetings may be called only as
----------------
provided in the Articles of Incorporation. If the Corporation's Articles of
Incorporation (hereinafter the "Articles of Incorporation") shall not set forth
provisions governing the right to call Special Meetings, then Special Meetings
may be called only by the Chief Executive Officer, a majority of the Board or a
majority of the members of the Executive Committee. If the Corporation has more
than 100 Shareholders then, in addition to the foregoing, a Special Meeting can
be called by request of Shareholders holding no less than sixty-six and two-
thirds percent (66-2/3%) of the shares of the Corporation's issued shares that
are entitled to vote on the matters to be considered at such Special Meeting.
Special Meetings of the Shareholders of the Corporation may not be called by any
person, group or entity other than those specifically enumerated in this
Section 3.
Section 4. Notice of Meetings. The Corporation shall give notice stating
------------------
the date, time and place of each Shareholders' Meeting, whether special or
annual, not less than ten (10) nor more than sixty (60) days before the date of
the meeting, and shall be in writing unless oral notice is reasonable under the
circumstances, and may be communicated in person, by telephone, telegraph,
facsimile, electronic mail or other form of wire or wireless communication, or
by mail
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<PAGE>
or private carrier, to each Shareholder of record entitled to vote at such
meeting, at such address as last appears on the books of the Corporation. In the
case of an Annual Meeting, the notice need not state the purpose or purposes of
the meeting unless the Articles of Incorporation or the Florida Business
Corporation Act (the "Act") requires the purpose or purposes to be stated in the
notice of the meeting. In the case of a Special Meeting, the notice of the
meeting must include a description of purpose or purposes for which the meeting
is called. Notice of any adjourned meeting need not be given otherwise than by
announcement at the meeting, at which the adjournment is taken; provided
however, if a new record date for the adjourned meeting is or must be fixed
pursuant to Section 15 of this Article II, notice of the adjourned meeting shall
be given to persons who are Shareholders as of the new record date.
Notwithstanding the other provisions of this Section, no notice of a
meeting of Shareholders need be given to a Shareholder if: (1) an annual report
and proxy statement for two consecutive annual meetings of Shareholders, or (2)
all, and at least two, checks and payment of dividends or interest on securities
during a twelve-month period have been sent by first-class, United States mail,
addressed to the Shareholder at his or her address as it appears on the share
transfer books of the Corporation, and returned undeliverable. The obligation
of the Corporation to give notice of a Shareholders' meeting to any such
Shareholder shall be reinstated once the Corporation has received a new address
for such Shareholder for entry on its share transfer books.
Section 5. Waiver of Notice. Any Shareholder may waive notice of any
----------------
meeting, whether special or annual, either before, at or after the meeting, and
a Shareholder's attendance at a meeting, either in person or by proxy, shall of
itself constitute a waiver of notice and waiver of any and all objections to the
date, time, place, manner of calling, or consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, except when the Shareholder attends the meeting solely for the purpose
of stating such objection. Unless required by the Act, neither the business
transacted nor the purpose of the meeting need be specified in the waiver of
notice.
Section 6. Voting List.
-----------
(a) Shareholder List. After fixing a record date for a meeting of the
----------------
Shareholders in accordance with Section 12 of this Article II, the Corporation
will cause to be prepared a complete alphabetical list of Shareholders entitled
to notice of a Shareholders' meeting, with the address of and the number and
class and series, if any, of shares held by each. Such list shall be available
for inspection by any Shareholder for a period of ten days prior to the meeting
or such shorter time as exists between the record date and the meeting date, and
continuing through the meeting, at the Corporation's principal office at a place
identified in the meeting notice in the City where the meeting will be held, or
at the offices of the Corporation's transfer agent or Registrar, if any. A
Shareholder or his or her agent may, on written demand, inspect the list,
subject to the requirements of the Act, during regular business hours and at his
or her expense, during the period that it is available for inspection pursuant
to this Section. A Shareholder's written demand to inspect the list shall
describe with reasonable particularity the purpose for inspection of the list,
and the Corporation may deny the demand to inspect the list if the
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<PAGE>
Secretary determines that the demand was not made in good faith and for a proper
purpose or if the list is not directly connected with the purpose stated in the
Shareholder's demand, all subject to the requirements of Section 607.1602(3) of
the Act. Notwithstanding anything herein to the contrary, the Corporation shall
make the Shareholder list available at any annual meeting or special meeting of
the Shareholders and any Shareholder or his or her agent or attorney may inspect
the list at any time during the meeting or any adjournment thereof.
(b) Prima Facie Evidence. The Shareholder list is prima facie evidence of
--------------------
the identity of Shareholders entitled to examine the Shareholder list or to vote
at a meeting of Shareholders.
(c) Failure to Comply. If the requirements of this Section have not been
-----------------
substantially complied with, or if the Corporation refuses to allow a
Shareholder or his or her agent or attorney to inspect the Shareholder list
before or at the meeting, on the demand of any Shareholder, in person or by
proxy, who failed to get such access, the meeting shall be adjourned until such
requirements are complied with.
(d) Validity of Action Not Affected. Refusal or failure to prepare or make
-------------------------------
available the Shareholder list shall not affect the validity of any action taken
at a meeting of Shareholders.
Section 7. Voting Group. A Voting Group means all shares of one or more
------------
classes or series that under the Articles of Incorporation or the Act are
entitled to vote and be counted together collectively on a matter at a meeting
of the Shareholders. All shares entitled by the Articles of Incorporation or the
Act to vote generally on the matter are for that purpose a single Voting Group.
Section 8. Quorum. Shares entitled to vote as a separate Voting Group may
------
take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Unless the Articles of Incorporation provide
otherwise, the presence, in person or by proxy, of not less than thirty-three
and one-third percent (33) of the votes entitled to be cast on the matter by the
Voting Group constitutes a quorum of that Voting Group for action on that
matter. Once a share is represented for any purpose at a meeting other than
solely to object to holding the meeting or transacting business at the meeting,
it is deemed present for quorum purposes for the remainder of the meeting and
for any adjournment of that meeting unless a new record date is or must be set
for that adjourned meeting.
Section 9. Vote Required for Action. If a quorum exists, action on a
------------------------
matter (other than the election of directors) by a Voting Group is approved if
the votes cast within the Voting Group favoring the action exceed the votes cast
opposing the action, unless the Articles of Incorporation, these Bylaws or the
Act requires a greater number of affirmative votes. If the Articles of
Incorporation or the Act provide for voting by two or more Voting Groups on a
matter, action on that matter is taken only when voted upon by each of those
Voting Groups counted separately. Action may be taken by one Voting Group on a
matter even though no action is taken by another Voting Group entitled to vote
on the matter. With regard to the election of directors, unless otherwise
provided in the Articles of Incorporation, if a quorum
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<PAGE>
exists, action on the election of directors is taken by a plurality of the votes
cast by the shares entitled to vote in the election.
Section 10. Voting. Except as otherwise provided for in the Articles of
------
Incorporation, each outstanding share having voting rights shall be entitled to
one vote on each matter submitted to a vote at a Shareholders' meeting.
Outstanding shares of preferred stock, if any, shall have the voting rights set
forth within the Corporation's Articles of Incorporation or as set by resolution
of the Board of Directors, as the case may be. Voting on all matters may be by
voice vote or by show of hands unless any qualified voter, prior to the voting
on any matter, demands vote by ballot, in which case each ballot shall state the
name of the Shareholder voting and the number of shares voted by such
Shareholder, and if the ballot be cast by proxy, it shall also state the name of
the proxy.
Section 11. Action of Shareholders Without a Meeting. Any action required
----------------------------------------
or permitted to be taken at an annual or special meeting of Shareholders of the
Corporation may be taken without a meeting, without prior notice, and without a
vote if the action is taken in the manner set forth under Section 607.0704 of
the Act, as the same may be hereafter amended or superseded.
Section 12. Record Date. For the purpose of determining Shareholders
-----------
entitled to notice of or to vote at any meeting of Shareholders or any
adjournment thereof, or in order to make a determination of Shareholders for any
other proper purpose, the Board of Directors of the Corporation may fix in
advance a date as the record date not more than seventy (70) days before the
meeting or action requiring a determination of Shareholders. When a
determination of Shareholders entitled to notice of or to vote at any meeting of
Shareholders has been made as provided in this Section 12, such determination
shall apply to any adjournment and reconvened meeting thereof, unless the Board
of Directors sets a new record date under this section for the reconvened
meeting. If the adjournment is for a date more than 120 days after the date
fixed for the original meeting, a new record date must be fixed.
Section 13. Proxies. A Shareholder entitled to vote pursuant to Section 10
-------
of this Article II may vote in person or by proxy executed in writing by the
Shareholder or by his attorney-in-fact. A proxy shall not be valid after eleven
(11) months from the date of its execution, unless such instrument provides for
a longer period. If the validity of any proxy is questioned, it must be
submitted to the Secretary of the Shareholders' meeting for examination or to a
proxy officer or committee appointed by the person presiding at the meeting. The
Secretary of the meeting or, if appointed, the proxy officer or committee, shall
determine the validity of any proxy submitted and reference by the Secretary in
the minutes of the meeting to the regularity of a proxy shall be received as
prima facie evidence of the facts stated for the purpose of establishing the
presence of a quorum at such meeting and for all other purposes.
Section 14. Conduct of Meeting. The Chairman of the Board of Directors,
------------------
and if there be none, or in his or her absence, the President, and in his or her
absence the Vice Presidents, in the order provided by these Bylaws, and in their
absence, any person chosen by the Shareholders present, shall call a
Shareholders' meeting to order and shall act as presiding officer of the
-4-
<PAGE>
meeting, and the Secretary of the Corporation shall act as secretary of all
meetings of the Shareholders, but in the absence of the Secretary, the presiding
officer may appoint any other person to act as secretary of the meeting. The
presiding officer of the meeting shall have broad discretion in determining the
order of business at a Shareholders' meeting. The presiding officer's authority
to conduct the meeting shall include, but in no way be limited to, recognizing
Shareholders entitled to speak, calling for the necessary reports, stating
questions and putting them to a vote, calling for nominations, and announcing
the results of voting. The presiding officer also shall take such actions as are
necessary and appropriate to preserve order at the meeting. Rules of
Parliamentary Procedure need not be observed in the conduct of the Shareholders'
meeting.
Section 15. Adjournments. Any meeting of the Shareholders, whether or not
------------
a quorum is present, may be adjourned by the holders of a majority of the voting
shares represented at the meeting to be reconvened at a specific time and place.
If notice of the adjourned meeting was properly given, it shall not be necessary
to give any notice of the reconvened meeting or of the business to be
transacted, if the date, time and place of the reconvened meeting are announced
at the meeting which was adjourned and before adjournment. At any such
reconvened meeting at which a quorum is present or represented, any business may
be transacted which could have been transacted at the meeting which was
adjourned.
Section 16. Shareholder Proposals at Annual Meetings.
----------------------------------------
(a) Business may be properly brought before an Annual Meeting of
Shareholders by a Shareholder only upon the Shareholder's timely notice thereof
in writing to the Secretary of the Corporation. To be timely, a Shareholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Corporation not less than sixty (60) days prior to the meeting as
originally scheduled; provided, however, that in the event that less than
seventy (70) days notice or prior public disclosure of the date of the meeting
is given or made to Shareholders, notice by the Shareholder to be timely must be
so received not later than the close of business on the tenth (10th) day
following the earlier of the day on which such notice of the date of the meeting
was mailed or the date on which such public disclosure was made.
(b) The Shareholder's notice to the Secretary of the Corporation shall set
forth as to each matter the Shareholder proposes to bring before the Annual
Meeting: (i) a brief description of the proposal desired to be brought before
the Annual Meeting and the reasons for conducting such business at the Annual
Meeting, (ii) the name and address, as they appear on the Corporation's books,
of the Shareholder proposing such business and any other Shareholders known by
such Shareholder to be supporting such proposal, (iii) the class and number of
shares of the Corporation's stock that are beneficially owned by the Shareholder
on the date such Shareholder gives notice to the Secretary of the Corporation,
and the number of shares of the Corporation's capital stock that are
beneficially owned on such date by any other Shareholder known to be supporting
such proposal, and (iv) any financial interest of the Shareholder in such
proposal.
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<PAGE>
(c) The Chairman or other presiding officer of the Annual Meeting shall
determine and declare at the Annual Meeting whether the Shareholder proposal was
made in accordance with the terms of this Section 16. If such Chairman or other
presiding officer determines that such Shareholder proposal was not made in
accordance with the terms of this Section 16, he or she shall so declare at the
Annual Meeting and such proposal shall not be acted upon at such Annual Meeting.
(d) This provision shall not prevent the consideration and approval or
disapproval at the Annual Meeting of reports of officers, directors and
committees of the Board of Directors, but in connection with such reports, no
new business shall be acted upon at such Annual Meeting unless stated, filed and
received as herein provided.
(e) For purposes of this Section 16, any adjournment(s) or postponement(s)
of the original meeting whereby the meeting will reconvene within ninety (90)
days from the original date shall be deemed for purposes of notice to be a
continuation of the original meeting and no business may be brought before any
such reconvened meeting unless pursuant to a notice of such business which was
timely for the meeting on the date originally scheduled. Such Shareholder's
notice to the Secretary shall set forth (i) as to each matter the Shareholder
proposed to bring before the Annual Meeting, a brief description of the business
desired to be brought before the meeting, (ii) the name and address, as they
appear on the Corporation's books, of the Shareholder proposing such business,
(iii) the class and number of shares of the Corporation which are beneficially
owned by the Shareholder, and (iv) a complete and accurate description of any
material interest of the Shareholder in such proposed business.
(f) Notwithstanding the foregoing, nothing in this Section 16 shall be
interpreted or construed to require the inclusion of information about any such
proposal in any proxy statement distributed by the Corporation at the direction
of or on behalf of the Corporation.
Section Notice of Shareholder Nominees.
------------------------------
(a) Nominations of persons for election to the Board of Directors shall be
made only at an Annual or Special Meeting of the Shareholders called for that
purpose and only (i) by or at the direction of the Board of Directors or (ii) by
any Shareholder entitled to vote for the election of directors at the meeting
who complies with the notice procedures set forth in Section 16 of this Article
II for Annual Meetings. Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to timely notice in
writing to the Secretary of the Corporation. To be timely, a Shareholder's
notice shall be delivered to or mailed and received at the principal executive
offices of the Corporation not less than sixty (60) days prior to the meeting;
provided, however, that in the event that less than seventy (70) days notice of
the date of the meeting is given or made to Shareholders, notice by the
Shareholder to be timely must be so received not later than the close of
business on the tenth (10th) day following the earlier of the day on which such
notice of the date of the meeting was mailed or the date on which such public
disclosure was made.
(b) The Shareholder's notice to the Corporation pursuant to this Section 17
shall set forth: (i) as to each person that the Shareholder proposes to nominate
for election or reelection as
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a director, (1) the name, age, business address and residence address of such
proposed nominee, (2) the principal occupation or employment of such proposed
nominee, (3) the class and number of shares of capital stock of Corporation
which are beneficially owned by such proposed nominee, and (4) any other
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Schedule 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
(ii) as to the Shareholder giving such notice, (1) the name and address, as they
appear on the Corporation's books, of such Shareholder, (2) the class and number
of shares of the Corporation's stock that are beneficially owned by the
Shareholder on the date of such notice. The Corporation may require any proposed
nominee to furnish such other information as may be reasonably required by the
Corporation to determine the eligibility of such proposed nominee to serve as a
director of the Corporation.
(c) The presiding officer of the meeting shall determine and declare at the
meeting whether the nomination was made in accordance with the terms of this
Section 17. If the presiding officer determines that a nomination was not made
in accordance with the terms of this Section 17, he or she shall so declare at
the meeting that any such defective nomination shall be disregarded.
Section 18. Inspectors of Election. Inspectors of election may be
----------------------
appointed by the Board of Directors to act at any meeting of Shareholders at
which any vote is taken. If inspectors of election are not so appointed, the
presiding officer of the meeting may, and on the request of any Shareholder
shall, make such appointment. Each inspector, before entering upon the discharge
of his or her duties, shall take and sign an oath to faithfully execute the
duties of inspector at such meeting with strict impartiality and according to
the best of his or her ability. The inspectors of election shall determine the
number of shares outstanding, the voting rights with respect to each, the shares
represented at the meeting, the existence of a quorum, and the authenticity,
validity, and effect or proxies; receive votes, ballots, consents, and waivers;
hear and determine all challenges and questions arising in connection with the
vote; count and tabulate all votes, consents and waivers; determine and announce
the result; and do such acts as are proper to conduct the election or vote with
fairness to all Shareholders. No inspector, whether appointed by the Board of
Directors or by the person acting as presiding officer of the meeting, need be a
Shareholder. The inspectors may appoint and retain other persons or entities to
assist the inspectors in the performance of their duties. Upon request of the
person presiding at the meeting, the inspectors shall make a report in writing
of any challenge, question, or matter determined by them and execute a
certificate of any fact found by them.
ARTICLE III.
Board of Directors
Section 1. General Powers. All corporate powers shall be exercised by or
--------------
under the authority of, and the business and affairs of the Corporation shall be
managed under the direction of, the Board of Directors. In addition to the
powers and authority expressly conferred upon it by these Bylaws, the Board of
Directors shall exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law, by any legal agreement among
Shareholders, by
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the Articles of Incorporation, or by these Bylaws directed or required to be
exercised or done by the Shareholders.
Section 2. Number of Directors and Term of Office. The number of directors
--------------------------------------
of the Corporation shall not be less than one (1) nor more than fifteen (15),
the precise number to be fixed by resolution of the Board of Directors from time
to time. The directors shall be divided into three classes in accordance with
the Articles of Incorporation. Except as provided in Section 5 of this Article
III, a director shall be elected by the affirmative vote of a plurality of the
shares represented at the meeting of Shareholders at which the director stands
for election and entitled to elect such director. The number of directors may be
increased or decreased from time to time as provided by these Bylaws and in the
Articles of Incorporation; provided, however, that the total number of directors
at any time shall not be less than one (1); and provided further, that no
decrease in the number of directors shall have the effect of shortening the term
of an incumbent director. Each director shall serve until his successor is
elected and qualified or until his earlier resignation, retirement,
disqualification, removal from office, or death.
Section 3. Removal. The entire Board of Directors or any individual
-------
director may be removed from the office only in the manner set forth in the
Articles of Incorporation.
Section 4. Resignation. Directors may resign at any time by delivering
-----------
written notice to the Board of Directors or its chairman (if any) or to the
corporation. A director's resignation is effective when the notice is delivered
unless the notice specifies a later effective date.
Section 5. Vacancies. A vacancy occurring on the Board of Directors may
---------
be filled by the Board of Directors in the manner set forth in the Articles of
Incorporation. The Board of Directors shall have the power to increase or
decrease the authorized number of directors, with or without Shareholder
approval, and to fill any such newly created directorships in the manner set
forth in the Articles of Incorporation.
Section 6. Compensation. The Board of Directors, irrespective of any
------------
personal interest of any of its members, may establish reasonable compensation
of all directors or services to the Corporation as directors, officers, or
otherwise, or may delegate such authority to an appropriate committee. Such
compensation may be comprised of cash, property, stock, options to acquire
stock, or such other assets, benefits or consideration as such directors shall
deem, in the exercise of their sole discretion, to be reasonable and appropriate
under the circumstances. The Board of Directors also shall have authority to
provide for or delegate an authority to an appropriate committee to provide for
reasonable pensions, disability or death benefits, and other benefits or
payments, to directors, officers, and employees and to their families,
dependents, estates, or beneficiaries on account of prior services rendered to
the Corporation by such directors, officers, and employees.
Section 7. Regular Meetings. The first meeting of each newly elected
----------------
Board of Directors shall follow immediately after the Annual Meeting of the
Shareholders and be held at the same place as the Annual Meeting of the
Shareholders, or may be held at such time and place as shall be fixed by the
consent in writing of all the directors. In addition, the Board of Directors
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may, by resolution providing for the date, time and place, schedule other
meetings to occur at regular intervals throughout the year.
Section 8. Special Meetings. Special meetings of the Board of Directors
----------------
may be called by the Chairman of the Board (if any), the Corporation's Chief
Executive Officer, or not less than one-third (1/3) of the members of the Board
of Directors. The person or persons calling the meeting may affix any place,
either within or without the State of Florida, as the place for holding any
special meeting of the Board of Directors, and if no other place is affixed, the
place of the meeting shall be the principal office of the Corporation in the
State of Florida.
Section 9. Notice of Meetings. Unless the Articles of Incorporation
------------------
provide otherwise, regular meetings of the Board of Directors may be held
without notice of the date, time, place or purpose of the meeting. Unless the
Articles of Incorporation provide otherwise, every Special Meeting shall be
preceded by at least two (2) days notice of the date, time and place of the
meeting. Such notice shall be in writing unless oral notice is reasonable under
the circumstances, and may be communicated in person, by telephone, telegraph,
facsimile, electronic mail, telecopy, or other forms of wire or wireless
communication, or by mail or private carrier. Such notice need not specify the
purpose of the Special Meeting of the Board unless required by the Articles of
Incorporation.
Section 10. Waiver of Notice. A director may waive notice of any meeting
----------------
either before or after the meeting stated in the notice. Except as specified
herein, the waiver must be in writing, signed by the director entitled to
notice, and delivered to the Corporation for inclusion in the minutes or filing
with the corporate records. A director's attendance at or participation in a
meeting waives any required notice to the director of the meeting unless the
director at the beginning of the meeting (or promptly upon arrival) objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
Section 11. Place of Meetings. The directors may hold their meetings at
-----------------
the principal office of the Corporation or at such other place or places, either
in the State of Florida or elsewhere, as they may from time to time determine.
Section 12. Participation by Conference Telephone. Unless the Articles of
-------------------------------------
Incorporation provide otherwise, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee thereof, by means of telephone
conference or similar communications equipment, provided that all directors
participating in the meeting can simultaneously hear each other during the
meeting. A director participating in a meeting by this means is deemed to be
present in person at the meeting.
Section 13. Quorum. Unless a greater number is required by the Articles
------
of Incorporation or the Act, a majority of the directors in office immediately
before the meeting begins shall constitute a quorum of the Board of Directors.
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Section 14. Voting. If a quorum is present when a vote is taken, the
------
affirmative vote of a majority of the directors present is the act of the Board
of Directors unless the Articles of Incorporation, the Act or these Bylaws
require the vote of a greater number of directors.
Section 15. Minutes. The Secretary of the Corporation shall act as
-------
secretary of all meetings of the Board of Directors but in the absence of the
secretary, the presiding officer may appoint any other person present to act as
secretary of the meeting. Minutes of any regular or special meeting of the Board
of Directors shall be prepared and distributed to each director.
Section 16. Action Without a Meeting. Unless the Articles of
------------------------
Incorporation provide otherwise, action required or permitted to be taken at a
meeting of the Board of Directors, or of any committee thereof, may be taken
without a meeting if the action is taken by all members of the Board of
Directors, or of such committee, as the case may be. The action must be
evidenced by one or more written consents describing the action taken, signed by
each director, or each committee member, as the case may be, and delivered to
the Corporation for inclusion in the minutes or filing with the corporate
records.
Section 17. Adjournments. Whether or not a quorum is present to organize
------------
a meeting, any meeting of directors (including an adjourned meeting) may be
adjourned by a majority of the directors present, to reconvene at a specific
time and place. At any reconvened meeting any business may be transacted that
could have been transacted at the meeting that was adjourned. If notice of the
adjourned meeting was properly given, it shall not be necessary to give any
notice of the reconvened meeting or of the business to be transacted, if the
date, time and place of the reconvened meeting are announced at the meeting that
was adjourned.
Section 18. General Powers of Directors. The Board of Directors shall
---------------------------
have, in addition to such powers as are herein expressly conferred on it and all
such powers as may be conferred on it by law, all such powers as may be
exercised by the Corporation, subject to the provisions of the Articles of
Incorporation and the Act.
Section 19. Specific Powers of Directors. The Board of Directors shall
----------------------------
also have power:
(a) to purchase or otherwise acquire property, rights, or privileges for
the Corporation, which the Corporation has power to make, at such prices and on
such terms as the Board of Directors may deem proper;
(b) to pay for such property, rights or privileges in whole or in part with
money, stocks, bonds, debentures or other securities of the Corporation, or by
the delivery of other property of the Corporation;
(c) to create, make and issue mortgages, bonds, deeds of trust, trust
agreements and negotiable or transferable instruments and securities, secured by
mortgages or otherwise, and to do every act and thing necessary to effectuate
the same;
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(d) to elect the corporate officers and fix their salaries, to appoint
employees and trustees, and to dismiss them at its discretion, to fix their
duties and emoluments, and to change them from time to time, and to require
security as it may deem proper;
(e) to confer on any officer of the Corporation the power of selecting,
discharging or suspending such employees; and
(f) to determine by whom and in what manner the Corporation's bills, notes,
receipts, acceptances, endorsements, checks, releases, contracts, or other
documents shall be signed.
Section 20. Director Conflicts of Interest. No contract or other
------------------------------
transaction between the Corporation and one or more of its directors or any
other corporation, firm, affiliate, or entity in which one or more of its
directors are directors or officers or are financially interested will be either
void or voidable because of such relationship or interest, because such director
or directors are present at the meeting of the Board of Directors or a committee
thereof which authorizes, approves, or ratifies such contract or transaction, or
because the votes of such director or directors are counted for such purpose,
if:
(a) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves, or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors, all in the manner
provided by law; or
(b) the fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve, or ratify such
contract or transaction by vote or written consent, all in the manner provided
by law; or
(c) the contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board of Directors, a committee,
or the shareholders.
ARTICLE IV.
Committees
Section 1. Appointing Committees. Unless the Articles of Incorporation
---------------------
provide otherwise, the Board of Directors may create one (1) or more committees
and appoint members of the Board of Directors to serve on them. Each committee
may have one or more members, who serve at the pleasure of the Board of
Directors.
Section 2. Powers of Committees. To the extent specified by the Board of
--------------------
Directors or in the Articles of Incorporation, each committee may exercise the
authority granted to the Board of Directors, except that a committee may not:
(a) approve or propose to Shareholders action that the Act requires to be
approved by Shareholders;
(b) fill vacancies on the Board of Directors or on any of its committees;
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(c) adopt, amend, or repeal the Bylaws;
(d) authorize or approve the reacquisition of shares unless pursuant to a
general formula or a method specified by the Board of Directors; or
(e) authorize or approve the issuance or sale or a contract for the sale of
shares, or determine the designation and relative rights, preferences, and
limitations of a voting group except that the Board of Directors may authorize a
committee (or a senior executive officer of the Corporation) to do so within
limits specifically prescribed by the Board of Directors.
Section 3. Committee Meetings, Quorum and Voting. Except as set forth
-------------------------------------
with respect to the Executive Committee in Section 6 below, Sections 9, 10, 11,
12, 13, 14, 15, 16 and 17 of Article III of these Bylaws which govern meetings,
adjournments of meetings, actions without meeting, notice and waiver of notice,
and quorum and voting requirements of the Board of Directors, apply to
committees and their members.
Section 4. Removal from Committees. The Board of Directors shall have
-----------------------
power at any given time to remove any member of any committee, with or without
cause, and to fill vacancies in and to dissolve any such committee.
Section 5. Appointment of Executive Committee. The Board of Directors may
----------------------------------
by resolution adopted by a majority of the full Board of Directors appoint an
Executive Committee consisting of not less than three (3) directors who shall
serve until such time as their successors are elected to the Executive Committee
or such time as such person ceases being a member of the Board of Directors or
the Executive Committee. The Executive Committee shall to the extent provided in
such resolution have all of the powers and authority of the Board of Directors,
except as otherwise provided by these Bylaws or by law. Such Executive Committee
shall not have the power to amend or repeal any resolution of the Board of
Directors which by its terms is not subject to amendment or repeal by the
Executive Committee.
Section 6. Procedures of Executive Committee. The Executive Committee
---------------------------------
shall meet from time to time on call of the Corporation's Chief Executive
Officer or of any two (2) or more members of the Executive Committee. Meetings
of the Executive Committee may be held at such place or places as the Executive
Committee shall determine or as may be specified or fixed in the respective
notices or waivers of such meetings. The Executive Committee may fix its own
rules of procedure, including provisions for notice of its meetings. It shall
keep minutes of its proceedings which shall be reviewed by the Board of
Directors and inserted with the Corporation's records, and all such proceedings
shall be subject to revision or alteration by the Board of Directors except to
the extent that action shall have been taken pursuant to or in reliance upon
such proceedings prior to any such revision or alteration.
Section 7. Compensation Committee. The Board of Directors may, from time
----------------------
to time by a majority vote of the directors, elect one or more directors as a
Compensation Committee to serve until its authority is revoked or its membership
is changed by a majority vote of the directors. The Compensation Committee shall
have such power and authority with regard to compensation issues as are granted
to the Committee by the Board of Directors from time to
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time, including responsibility for recommendations to the Board of Directors
regarding compensation for key employees or key consultants of the Company,
including annual bonus compensation and stock grants to such persons.
Section 8. Audit Committee. The Board of Directors may, from time to time
---------------
by a majority vote of the directors, elect two or more members of the Board of
Directors to serve as an Audit Committee. The members of the Audit Committee
shall serve until the authority of the Audit Committee is revoked or its
membership is changed by a majority vote of the Board of Directors. The Board of
Directors may designate persons other than members of the Board of Directors to
serve as non-voting members of the Audit Committee. The Audit Committee shall
have such power and authority with regards to accounting and financial reporting
issues as are granted to the Committee by the Board of Directors from time to
time, including making recommendations regarding the Company's independent
accountants, the annual audit of the Company's financial statements and the
Company's internal accounting practices and policies.
Section 9. Other Committees. The Board of Directors, by resolution
----------------
adopted by a majority of the full Board of Directors, may designate one or more
additional committees of the Board of Directors, each committee to consist of
one (1) or more directors of the Corporation, which shall have such name or
names and shall have and may exercise such powers of the Board of Directors in
the management of the business and affairs of the Corporation, except as
otherwise provided by these Bylaws or by law, as may be determined from time to
time by resolution of the Board of Directors. The Board of Directors may also
appoint other committees which do not exercise any of the authority of the Board
of Directors, but which are fact finding, planning or advisory in nature. Such
additional committees may have members who are not directors.
Section 10. Alternative Members. The Board of Directors, by resolution
-------------------
adopted in accordance with Section 1 of Article IV of these Bylaws, may
designate one or more directors as alternate members of any such committee, who
may act in the place of any absent member or members at any meeting of such
committee.
ARTICLE V.
Officers
Section 1. Number. The officers of the Corporation shall be designated
------
and elected by the Board of Directors, or appointed by the Chief Executive
Officer, with such responsibilities and duties as may be designated by the Board
of Directors consistent with this Article V. The Board of Directors shall elect
at least one officer who shall be responsible for preparing minutes of the
directors' and Shareholders' meetings and for authenticating records of the
Corporation. Any two or more offices may be held by the same person. No officer
need be a Shareholder.
Section 2. Election and Term. All officers shall be appointed by the
-----------------
Board of Directors or by a duly appointed officer pursuant to this Article V and
shall serve at the pleasure of the Board of Directors and the appointing
officers as the case may be.
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Section 3. Removal. The Board of Directors may remove any officer and,
-------
unless restricted by the Board of Directors, an officer may remove any officer
or assistant officer appointed by that officer, at any time, with or without
cause and notwithstanding the contract rights, if any, of the officer removed.
The appointment of an officer does not of itself create contract rights.
Section 4. Resignation. An officer may resign at any time by delivering
-----------
notice to the corporation. The resignation shall be effective when the notice is
delivered, unless the notice specifies a later effective date and the
corporation accepts the later effective date. If a resignation is made effective
at a later date and the Corporation accepts the future effective date, the
pending vacancy may be filled before the effective date but the successor may
not take office until the effective date.
Section 5. Vacancies. A vacancy in any principal office because of death,
---------
resignation, removal, disqualification, or otherwise, shall be filled as soon
thereafter as practicable by the Board of Directors for the unexpired portion of
the term.
Section 6. Salaries. The salaries and compensation of all officers
--------
appointed by the Board of Directors shall be fixed by the Board of Directors or
a committee of the Board of Directors, unless the directors delegate such power
to any officer or officers.
Section 7. Chairman of the Board. Unless the Board of Directors
---------------------
determines otherwise, the Chairman of the Board, if one shall so be elected,
shall preside at all meetings of the Board. The Chairman shall have such other
powers and duties as may be specifically designated by the Board of Directors
and, if so designated, may serve as President.
Section 8. President.
---------
(a) Unless the Board of Directors shall designate that the Chairman shall
also be the Chief Executive Officer, then the President shall be the Chief
Executive Officer of the Corporation, and shall be elected by the Board of
Directors. In the absence or disability of a Chairman of the Board of the
Corporation, or at the direction of the Board of Directors, the President shall
also serve as a Chairman of the Board of the Corporation. The President shall
preside at all meetings of the Shareholders; and, in the absence of the
Chairman, he shall preside at all meetings of the Board of Directors if the
Board so requests. He shall have general and active management of the business
of the Corporation, and shall exercise general supervision and administration
over all of its affairs with power to make all contracts in the conduct of the
regular and ordinary business of the Corporation, and shall see that all orders
and resolutions of the Board of Directors are carried into effect.
(b) The President shall execute deeds, bonds, notes, mortgages and other
contracts on behalf of the Corporation.
(c) The President shall be ex-officio a member of all standing committees
and shall have the general powers and duties of supervision and management of
the Corporation.
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(d) The President may appoint and discharge agents and employees of the
Corporation and fix their compensation subject to the general supervisory power
of the Board of Directors, and do and perform such other duties as from time to
time may be assigned to him by the Board of Directors and as may be authorized
by law.
Section 9. Vice Presidents. The Board may elect one or more Vice
---------------
Presidents who shall have such duties as are assigned by the electing or
appointing party. The Vice President, if one shall so be elected, shall act in
the absence or disability of the President. If there is more than one (1) Vice
President, then the one designated by the Board of Directors shall act in the
absence or disability of the President.
Section 10. Secretary. The Secretary, if one shall so be elected, shall
---------
keep accurate records of the acts and proceedings of all meetings of
Shareholders, directors and committees of directors. The Secretary shall give,
or cause to be given, notice of all meetings of the Shareholders and any
meetings of the Board of Directors, and other notices required by law or these
Bylaws, and shall perform such other duties as may be prescribed by the Board of
Directors or President, under whose supervision the Secretary shall be. The
Secretary shall keep in safe custody the seal of the Corporation, and the
Secretary or any other officer may affix the same to any instrument requiring it
and, when so affixed, it may be attested by the Secretary's signature or by the
signature of an Assistant Secretary. Notwithstanding the foregoing, unless
otherwise required by law or the Act, the seal of the Corporation need not be
affixed to any documents or instruments, nor must the Secretary or Assistant
Secretary attest any such document or instrument. In the absence or disability
of the Secretary or at the direction of the President, any Assistant Secretary
or other officer designated by the Board of Directors may perform the duties and
exercise the powers of the Secretary.
Section 11. Treasurer.
---------
(a) The Treasurer, if one shall so be elected, shall have custody of and be
responsible for all funds and securities, receipts and disbursements of the
Corporation, and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation, and shall deposit or cause
to be deposited, all monies and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors.
(b) The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors or by the President, taking proper vouchers
for such disbursements, and shall render to the President and directors,
whenever they may require it, an account of all transactions as Treasurer and of
the financial condition of the Corporation, and at the regular meeting of the
Board of Directors next preceding the Annual Shareholders' Meeting, a like
report for the preceding year.
(c) The Treasurer shall keep an account of stock registered and transferred
in such manner and subject to such regulations as the Board of Directors may
prescribe.
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(d) The Treasurer shall give the Corporation a bond, if required by the
Board of Directors, in such sum and in form and with security satisfactory to
the Board of Directors for the faithful performance of the duties of the office
and the restoration to the Corporation in case of the Treasurer's death,
resignation or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in the possession of the Treasurer, belonging to
the Corporation. The Treasurer shall perform such other duties as the Board of
Directors may from time to time prescribe or require.
Section 12. Assistants and Acting Officers. The Board of Directors shall
------------------------------
have the power to elect one or more Assistant Secretaries and Assistant
Treasurers who shall perform such duties and have such authority as shall from
time to time be delegated or assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors. The Board of
Directors shall have the power to appoint, or authorize any duly elected officer
of the Corporation to appoint, any person to act as assistant to any officer, or
as agent for the Corporation in his or her stead, or to perform the duties of
such officer whenever for any reason it is impractical for such officer to act
personally. Such assistant or acting officer or other agent so appointed by the
Board of Directors or an authorized officer shall have the power to perform all
the duties of the office to which he or she is so appointed to be an assistant,
or as to which he or she is so appointed to act, except as such power may be
otherwise defined or restricted by the Board of Directors or the appointing
officer.
Section 13. Duties of Officers May Be Delegated. In case of the absence
-----------------------------------
of any officer of the Corporation, or for any other reason that the Board of
Directors may deem sufficient, the Board may delegate, for the time being, the
powers or duties, or any of them, of such officer to any other officer or to any
director or employee of the Corporation, provided a majority of the entire Board
of Directors concurs.
ARTICLE VI.
Contracts, Checks, Drafts, Bank Accounts and Documents
Section 1. Execution of Contracts and Documents. The Board of Directors,
------------------------------------
except as otherwise provided in these Bylaws, may authorize any officer or
officers or agent or agents of the Corporation to enter into any contract or
execute and deliver any instrument in the name and on behalf of the Corporation,
and such authority may be general or confined to specific instances. Unless
otherwise specifically determined by the Board of Directors or otherwise
required by law, formal contracts, promissory notes and other evidences of
indebtedness, deeds of trust, mortgages and corporate instruments or documents
requiring the corporate seal, and certificates for shares of stock owned by the
Corporation shall be executed, signed or endorsed by the President (or any Vice
President) and by the Secretary (or any Assistant Secretary) or the Treasurer
(or any Assistant Treasurer). The Board of Directors may, however, authorize any
one of these officers to sign any of such instruments, for and on behalf of the
Corporation, without necessity of countersignature; may designate officers or
employees of the Corporation, other than those named above, who may, in the name
of the Corporation, sign such instruments; and may authorize the use of
facsimile signatures for any of such persons. No officer, agent or employee
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shall have any power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or to render it liable for damages, whether
monetary or otherwise, for any purpose or for any amount except as specifically
authorized in these Bylaws or by the Board of Directors or an officer or
committee with the power to grant such authority.
Section 2. Checks and Drafts. All checks, drafts or other orders for the
-----------------
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by the President or such other person or persons
and in such manner as shall, from time to time, be determined by the Board of
Directors.
Section 3. Deposits. All funds of the Corporation shall be deposited to
--------
the credit of the Corporation under such conditions and in such banks, trust
companies or other depositories as the Board of Directors may designate or as
may be designated by an officer or officers or agent or agents of the
Corporation to whom such power may, from time to time, be determined by the
Board of Directors.
Section 4. Proxies. Unless otherwise provided by the Board of Directors,
-------
the President may from time to time appoint an attorney or attorneys or agent or
agents of the Corporation in the name and on behalf of the Corporation to cast
the vote which the Corporation may be entitled to cast as a Shareholder or
otherwise in any other Corporation any of the stock or other securities of which
is held by the Corporation, at meetings of the holders of the stock or other
securities of such other Corporation, and may instruct the person or persons so
appointed as to the manner of casting such vote or giving such consent, and may
execute or cause to be executed in the name and on behalf of the Corporation
such written proxies or other instruments as the President may deem necessary or
proper in the premises.
ARTICLE VII.
Distributions
Section 1. Authorization or Declaration. Unless the Articles of
----------------------------
Incorporation provide otherwise, the Board of Directors from time to time in its
discretion may authorize or declare distributions or share dividends in
accordance with the Act.
Section 2. Record Date With Respect to Distributions and Share Dividends.
-------------------------------------------------------------
For the purpose of determining Shareholders entitled to a distribution (other
than one involving a purchase, redemption, or other reacquisition of the
Corporation's shares) or a share dividend, the Board of Directors may fix a date
as the record date. If no record date is fixed by the Board of Directors, the
record date shall be determined in accordance with the provisions of the Act.
ARTICLE VIII.
Capital Stock
Section 1. Authorization and Issuance of Shares. In accordance with the
------------------------------------
Act, the Board of Directors may authorize shares of any class or series provided
for in the Articles of Incorporation to be issued for any consideration valid
under the provisions of the Act. Before the Corporation issues shares, the Board
of Directors shall determine that the consideration received
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<PAGE>
or to be received for the shares to be issued is adequate. The determination by
the Board of Directors is conclusive insofar as the adequacy of the
consideration for the issuance of shares relates to whether the shares are
validly issued, fully paid and nonassessible. The Corporation may place in
escrow shares issued for future services or benefits for a promissory note, or
make other arrangements to restrict the transfer of the shares, and may credit
distributions in respect of the shares against their purchase price, until these
services are performed, the note is paid or the benefits are received. If these
services are not performed, the note is not paid, or the benefits are not
received, the Corporation may cancel, in whole or in part, these shares escrowed
or restricted and the distribution credited. To the extent provided in the
Articles of Incorporation, the Board of Directors shall determine the
preferences, limitations, and relative rights of the shares.
Section 2. Capital Stock. All shares issued by the Corporation shall be
-------------
evidenced by a certificate or certificates. Each certificate of stock of the
Corporation shall be numbered, shall be entered in the books of the Corporation,
and shall be signed, either manually or in facsimile, by any one of the
President, a Vice President, the Secretary, or the Treasurer or such other
officer or officers as designated to sign such certificates, from time to time,
by the Board of Directors. In any case in which any officer or officers who
shall have signed, or whose facsimile signature or signatures shall have been
used on, any such certificate or certificates shall cease to be such officer or
officers of the Corporation, whether because of death, resignation or otherwise,
before such certificate or certificates shall have been delivered by the
Corporation, such certificate or certificates may nevertheless be delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature shall have been used thereon had not ceased to be such
officer or officers. If a share certificate is signed in facsimile, then it
shall be countersigned by a transfer agent or registered by a registrar other
than the Corporation itself or an employee of the Corporation. The corporate
seal need not be affixed to the share certificate. Each certificate representing
shares shall set forth upon the face thereof:
(a) The name of the Corporation;
(b) That the Corporation is organized under the laws of the State of
Florida;
(c) The name of the person to whom issued; and
(d) The number and class of shares and the designation of the series, if
any, such certificate represents.
Section 3. Record of Shareholders. The Corporation shall keep a record of
----------------------
the Shareholders of the Corporation which readily shows, in alphabetical order
or by alphabetical index, and by classes of stock, the names of the
Shareholders, including those Shareholders entitled to vote, with the address of
and the number of shares held by each.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of Directors
--------------------------------------
may direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its
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discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his or her legal
representative, to advertise the same in such manner as it shall require or give
the Corporation a bond in such sum as it may direct as indemnity against any
claim that may be made against the Corporation with respect to the certificate
alleged to have been lost, stolen or destroyed.
Section 5. Transfer of Shares. Transfers of shares shall be made upon the
------------------
transfer books of the Corporation, kept at the office of the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate, or by an attorney lawfully constituted in writing; and before a
new certificate is issued, the old certificate shall be surrendered for
cancellation or in the case of a certificate alleged to have been lost, stolen
or destroyed, the provisions of Section 4 of this Article VIII shall have been
complied with. The face or reverse side of each certificate representing shares
shall bear a conspicuous notation as required by the Act or the Articles of
Incorporation of the restrictions imposed by the Corporation upon the transfer
of such shares.
Section 6. Duty of Corporation to Register Transfer. Notwithstanding any
----------------------------------------
of the provisions of Section 5 of this Article VIII, the Corporation is under a
duty to register the transfer of its shares only if:
(a) the share certificate is endorsed by the appropriate person or persons;
and
(b) reasonable assurance is given that these endorsements are genuine and
effective; and
(c) the Corporation has no duty to inquire into adverse claims or has
discharged any such duty; and
(d) any applicable law relating to the collection of taxes has been
complied with; and
(e) the transfer is in fact rightful or is to a bona fide purchaser.
Section 7. Registered Shareholders. Prior to due presentation for
-----------------------
transfer of registration of its shares, the Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the person
exclusively entitled to vote the shares, to receive any dividend or distribution
with respect to the shares, and for all other purposes; and, accordingly, the
Corporation shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law.
Section 8. Stock Regulations. The Board of Directors shall have the power
-----------------
and authority to make all such further rules and regulations not inconsistent
with law as they may deem expedient concerning the issue, transfer, and
registration of shares of the Corporation.
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ARTICLE IX.
Indemnification
Section 1. Definitions. As used in this Article IX, the term:
-----------
(a) "Agent" includes any volunteer.
(b) "Corporation" includes, in addition to the Corporation, any domestic or
foreign constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, officer, employee, or agent of a constituent corporation, or is or was
serving at the request of a constituent corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, is in the same position under this Article with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(c) "Director" means an individual who is or was a director of the
Corporation or an individual who, while a director of the Corporation, is or was
serving at the Corporation's request as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic Corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise. A director is
considered to be serving an employee benefit plan at the Corporation's request
if his duties to the Corporation also impose duties on, or otherwise involve
services by, him to the plan or to participants in or beneficiaries of the plan.
Director includes, unless the context requires otherwise, the estate or personal
representative of a director.
(d) "Expenses" include counsel fees, including those for appeal.
(e) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), and reasonable expenses actually incurred with respect to a
proceeding.
(f) "Not opposed to the best interest of the Corporation" describes the
actions of a person who acts in good faith and in a manner he reasonably
believes to be in the best interests of the participants and beneficiaries of an
employee benefit plan.
(g) "Officer" means an individual who is or was an officer of the
Corporation or an individual who, while an officer of the Corporation, is and
was serving at the Corporation's request as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic Corporation,
partnership, joint venture, trust, employee benefit plan, or other enterprise.
An officer is considered to be serving an employee benefit plan at the
Corporation's request if his duties to the Corporation also impose duties on, or
otherwise involve services by, him to the plan or to participants in or
beneficiaries of the plan. Officer includes, unless the context requires
otherwise, the estate or personal representative of an officer.
(h) "Other enterprises" includes employee benefit plans.
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(i) "Party" includes an individual who was, is, or is threatened to be made
a named defendant or respondent in a proceeding.
(j) "Proceeding" means any threatened, pending, or completed action, suit,
or other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
(k) "Serving at the request of the Corporation" includes any service as a
director, officer, employee, or agent of the Corporation that imposes duties on
such persons, including duties relating to an employee benefit plan and its
participants or beneficiaries.
Section 2. Indemnification.
---------------
(a) The Corporation shall indemnify any person who was or is a party to any
proceeding (other than an action by, or in the right of, the Corporation), by
reason of the fact that he is or was a director, officer, employee, or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against liability incurred in connection
with such proceeding, including any appeal thereof, if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, or conviction or
upon a plea of nolo contendre or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(a) The Corporation, by action of its Board of Directors, may indemnify any
person who was or is a party to any proceeding (other than an action by, or in
the right of, the Corporation), by reason of the fact that he is or was an
employee or agent of the Corporation or is or was serving at the request of the
Corporation as an employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise against liability incurred in connection
with such proceeding, including any appeal thereof, if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, or conviction or
upon a plea of nolo contendre or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(c) The Corporation shall indemnify any person, who was or is a party to
any proceeding by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses and amounts paid in settlement not exceeding, in
the
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judgment of the Board of Directors, the estimated expense of litigating the
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including any appeal thereof.
Such indemnification shall be provided if such person acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the Corporation, except that no indemnification shall be made under this
subsection in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
(d) To the extent that a director, officer, employee, or agent of the
Corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsections (a), (b) or (c) of this Section 2, or in
defense of any claim, issue, or matter therein, he shall be indemnified against
expenses actually and reasonably incurred by him in connection therewith.
Section 3. Determination and Authorization of Indemnification.
--------------------------------------------------
(a) Any indemnification under Section 2(a), (b) or (c), unless pursuant to
a determination by a court, shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee, or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in Section 2(a), (b) or (c).
(b) The determination specified in subsection (a) of this Section 3 shall
be made:
(i) By the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such proceeding;
(ii) If such a quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the Board of Directors (in which
directors who are parties may participate) consisting solely of two or more
directors not at the time parties to the proceeding;
(iii) By independent legal counsel:
(x) Selected by the Board of Directors prescribed in paragraph
(i) or the committee prescribed in paragraph (ii); or
(y) If a quorum of the directors cannot be obtained for
paragraph (i) and the committee cannot be designated under paragraph (ii),
selected by majority vote of the full Board of Directors (in which directors who
are parties may participate); or
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(iv) By the Shareholders by a majority vote or a quorum consisting of
Shareholders who were not parties to such proceeding or, if no such quorum is
obtainable, by a majority vote of Shareholders who were not parties to such
proceeding.
(c) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (b)(iii)
shall evaluate the reasonableness of expenses and may authorize indemnification.
Section 4. Advances for Expenses.
---------------------
(a) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the Corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the Corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the Board of Directors deems appropriate.
(b) The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and the Corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any agreement, vote of Shareholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:
(i) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his conduct was lawful or had
no reasonable cause to believe his conduct was unlawful;
(ii) A transaction from which the director, officer, employee, or agent
derived an improper personal benefit;
(iii) In the case of a director, a circumstance under which the
liability provisions of Section 607.0834 of the Act are applicable; or
(iv) Willful misconduct or a conscious disregard for the best interests
of the Corporation in a proceeding by or in the right of the Corporation to
procure a judgment in its favor or in a proceeding by or in the right of a
Shareholder.
(c) Indemnification and advancement of expenses as provided in this section
shall continue as, unless otherwise provided when authorized or ratified, to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person, unless otherwise provided when authorized or ratified.
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Section 5. Court-Ordered Indemnification and Advances for Expenses.
-------------------------------------------------------
Notwithstanding the failure of the Corporation to provide indemnification, and
despite any contrary determination of the Board of Directors or of the
Shareholders in the specific case, a director, officer, employee, or agent of
the Corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting the
proceeding, to the circuit court, or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice that it
considers necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that:
(a) The director, officer, employee, or agent is entitled to mandatory
indemnification under subsection (d) of Section 2, in which case the court shall
also order the Corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the exercise
by the Corporation of its power pursuant to subsection (b) of Section 4; or
(c) The director, officer, employee, or agent is fairly and reasonably
entitled to indemnification or advancement of expenses, or both, in view of all
the relevant circumstances, regardless of whether such person met the standard
of conduct set forth in subsections (a), (b) or (c) of Section 2, or subsection
(b) of Section 4.
Section 6. Insurance. The Corporation shall have the power to purchase
---------
and maintain insurance on behalf of any person who is or was a director,
officer, employee, or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of this
Article.
Section 7. Severability. In the event that any of the provisions of this
Article IX is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, the remaining provisions of this Article IX shall
remain enforceable to the fullest extent permitted by law.
ARTICLE X.
Emergency Powers
Section 1. Power to Adopt. Unless the Articles of Incorporation provide
--------------
otherwise, the Board of Directors may adopt bylaws to be effective only in an
emergency, which bylaws shall be subject to amendment or repeal by the
Shareholders. An emergency exists for purposes of this Section if a quorum of
the directors cannot readily be assembled because of some
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catastrophic event. The emergency bylaws may make any provision that may be
practical and necessary for the circumstances of the emergency.
Section 2. Lines of Succession of Officers or Agents. The Board of
-----------------------------------------
Directors, either before or during any such emergency, may provide, and from
time to time modify, lines of succession in the event that during such an
emergency any or all officers or agents of the Corporation shall for any reason
be rendered incapable of discharging their duties.
Section 3. Change of Office. The Board of Directors, either before or
----------------
during any such emergency, may, effective in the emergency, change the head
office or designate several alternative head offices or regional offices, or
authorize the officers so to do.
Section 4. Effect of Bylaws. To the extent not inconsistent with any
----------------
emergency bylaws so adopted, these Bylaws shall remain in effect during any such
emergency and, upon its termination, the emergency bylaws shall cease to be
operative.
Section 5. Notices. Unless otherwise provided in emergency bylaws, notice
-------
of any meeting of the Board of Directors during any such emergency may be given
only to such of the directors as it may be feasible to reach at the time, and by
such means as may be feasible at the time, including publication, radio or
television.
Section 6. Quorum. To the extent required to constitute a quorum at any
------
meeting of the Board of Directors during any such emergency, the officers of the
Corporation who are present shall, unless otherwise provided in the emergency
bylaws, be deemed, in order of rank and within the same rank and order of
seniority, directors for such meeting.
Section 7. Liability. Corporate action taken in good faith in accordance
---------
with the emergency bylaws binds the Corporation and may not be used to impose
liability on a corporate director, officer, employee or agent.
ARTICLE XI.
General Provisions
Section 1. Fiscal Year. The Board of Directors is authorized to designate
-----------
and change the fiscal year of the Corporation from time to time as it deems
appropriate.
Section 2. Corporate Seal. The seal of the Corporation shall be in such
--------------
form as the Board of Directors shall approve from time to time. The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. In the event it is inconvenient to use such a seal at
any time, the signature of the Corporation followed by the word "Seal" enclosed
in parentheses shall be deemed the seal of the Corporation.
Section 3. Books and Records.
-----------------
(a) The corporation shall keep as permanent record minutes of all meetings
of the shareholders and Board of Directors, a record of all actions taken by the
Shareholders or Board
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of Directors without a meeting, and a record of all actions taken by Committee
of the Board of Directors in place of the Board of Directors on behalf of the
Corporation.
(b) The Corporation shall maintain accurate accounting records.
(c) The Corporation shall keep a copy of all written communications within
the preceding three years to all Shareholders generally or to all Shareholders
of a class or series, including the financial statements required to be
furnished by the Act, and a copy of its most recent annual report delivered to
the Department of State.
Section 4. Annual Financial Statements. In accordance with the Act, the
---------------------------
Corporation shall prepare and furnish to Shareholders such financial statements
as may be required by the Act.
Section 5. Inspection of Books and Records. The Board of Directors shall
-------------------------------
have power to determine which accounts, books and records of the corporation
shall be opened to the inspection of Shareholders, except those as may by law
specifically be made open to inspection, and shall have power to fix reasonable
rules and regulations not in conflict with the applicable law for the inspection
of accounts, books and records which by law or by determination of the Board of
Directors shall be open to inspection.
Section 6. Conflict with Articles of Incorporation. In the event that any
---------------------------------------
provision of these Bylaws conflicts with any provision of the Articles of
Incorporation, the Articles of Incorporation shall govern.
Section 7. Adoption of Amendments to Incentive Stock Option Plans. In
------------------------------------------------------
addition to the rights of the Board of Directors to approve the adoption of
amendments to any incentive stock option plans of the Corporation which qualify
under Section 422A of the Internal Revenue Code of 1986, as amended, the
Shareholders of the Corporation may approve any such amendment by written
consent as provided in the Act, the Articles of Incorporation, or these Bylaws.
Section 8. Reference to Code Sections. Any reference to any Section or
--------------------------
Article of the Florida Business Corporation Act contained herein shall be
interpreted to include any Section or Article which amends or supersedes such
Section or Article.
ARTICLE
Amendments
Except as otherwise provided in these Bylaws, the Board of Directors shall
have power to alter, amend or repeal these Bylaws or adopt new Bylaws by
majority vote of all of the directors. The Shareholders may prescribe by
expressing in the action they take in adopting any Bylaw or Bylaws that the
Bylaw or Bylaws so adopted shall not be altered, amended or repealed by the
Board of Directors. Notwithstanding anything herein to the contrary, the
provisions of Articles IX or XII, or of Sections 3, 16 or 17 of Article II, or
Sections 2, 5, and 6 of Article III, of these Bylaws shall not be altered,
amended or repealed, and no provision inconsistent therewith
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shall be adopted, without the affirmative vote of a majority of the entire Board
of Directors or of the holders of at least sixty-six and two-thirds percent (66-
2/3%) of the shares of the Corporation held by each Voting Group entitled to
vote generally in the election of directors.
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EXHIBIT 10.1
MEMORANDUM & ARTICLES OF ASSOCIATION
OF
INFORMATION MANAGEMENT RESOURCES
(INDIA) LIMITED
<PAGE>
Co. No. 19138
[Section 18(3) of Companies Act, 1956]
CERTIFICATE OF REGISTRATION OF THE ORDER
OF COURT CONFIRMING TRANSFER OF THE
REGISTERED OFFICE FROM ONE STATE
TO ANOTHER
The INFORMATION MANAGEMENT RESOURCES (INDIA) LIMITED having by special
resolution altered the provisions of its Memorandum of Association with respect
to the place of the registered office by changing it from the state of
Maharashtra to the state of Karnataka and such alteration having been confirmed
by an order of Company Law Board, Western Region Bench, Bombay bearing date the
3rd day of November, 1995.
I hereby certify that a certified copy of the said order has this day been
registered.
Given under my hand at Bangalore this Ninth day of November One Thousand Nine
Hundred Ninety Five.
\s\ V. Screenivasa Rao
(V. Screenivasa Rao).
Registrar Of Companies
Karnataka, Bangalore.
J.S.C.-6
-2-
<PAGE>
No. 11-56755
FRESH CERTIFICATE OF INCORPORATION
CONSEQUENT ON CHANGE OF NAME
IN THE OFFICE OF THIS REGISTRAR OF COMPANIES, MAHARASHTRA,
BOMBAY,
In the matter of REESAN INFORMATION MANAGEMENT RESOURCES (INDIA)
PRIVATE LIMITED
I hereby approve and signify in writing under Section 21 of the Companies
Act, 1956 (Act of 1956) read with the Government of India, Department of Company
Affairs, Notification No. G.S.R. 507E dated the 24th June 1985 the change of
name of the Company:
from REESAN INFORMATION MANAGEMENT RESOURCES (INDIA)
PRIVATE LIMITED
to INFORMATION MANAGEMENT RESOURCES (INDIA) PRIVATE
LIMITED
and I hereby certify that REESAN INFORMATION MANAGEMENT RESOURCES (INDIA)
PRIVATE LIMITED which was originally incorporated on Fifth day of June, 1990
under the Companies Act, 1956 and under the name REESAN INFORMATION MANAGEMENT
RESOURCES (INDIA) PRIVATE LIMITED having duly passed the necessary resolution in
terms of section 21 of the Companies Act, 1956 the name of the said Company is
this day changed to INFORMATION MANAGEMENT RESOURCES (INDIA) PRIVATE LIMITED and
this certificate is issued pursuant to Section 23(1) of the said Act. [The term
"Private" has been crossed out]
GIVEN UNDER MY HAND AT BOMBAY this TWELFTH Day of November One Thousand
Nine Hundred Ninety Three.
\s\ S. K. Mandal
(S.K. MANDAL)
ADDL. REGISTRAR OF COMPANIES
MAHARASHTRA, BOMBAY
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No. 11-56755
FRESH CERTIFICATE OF INCORPORATION
CONSEQUENT ON CHANGE OF NAME
IN THE OFFICE OF THIS REGISTRAR OF COMPANIES, MAHARASHTRA
BOMBAY.
In the matter of REESAN INFORMATION MANAGEMENT RESOURCES (INDIA)
PRIVATE LIMITED
I hereby approve and signify in writing under Section 21 of the Companies
Act, 1956 (Act of 1956) read with the Government of India, Department of Company
Affairs, Notification No. G.S.R. 507E dated the 24th June 1985 the change of
name of the Company:
from REESAN INFORMATION MANAGEMENT RESOURCES (INDIA)
PRIVATE LIMITED
to INFORMATION MANAGEMENT RESOURCES (INDIA) PRIVATE
LIMITED
and I hereby certify that REESAN INFORMATION MANAGEMENT RESOURCES (INDIA)
PRIVATE LIMITED which was originally incorporated on the FIFTH day of JUNE, 1990
under the Companies Act, 1956 and under the name REESAN INFORMATION MANAGEMENT
RESOURCES (INDIA) PRIVATE LIMITED having duly passed the necessary resolution in
terms of section 21 of the Companies Act, 1956 the name of the said Company is
this day changed to INFORMATION MANAGEMENT RESOURCES (INDIA) PRIVATE LIMITED and
this certificate is issued pursuant to Section 23(1) of the said Act.
GIVEN UNDER MY HAND AT BOMBAY this TWELFTH Day of November, One Thousand
Nine Hundred Three.
\s\ S. K. Mandal
(S.K. MANDAL)
ADDL. REGISTRAR OF COMPANIES
MAHARASHTRA, BOMBAY
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Form. I.. R.
CERTIFICATE OF INCORPORATION
No. 11-56755 of 1990
I hereby certify that REESAN INFORMATION MANAGEMENT RESOURCES (INDIA)
PRIVATE LIMITED is this day Incorporated under the Companies Act 1956 (No. 1 of
1956) and that the Company is limited.
Given under my hand at BOMBAY this FIFTH day of JUNE, One Thousand Nine
Hundred and Ninety.
\s\ B. L. Panigar
(B.L. PANIGAR)
Addl. Registrar of Companies
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<PAGE>
MEMORANDUM OF ASSOCIATION
OF
INFORMATION MANAGEMENT RESOURCES (INDIA) LIMITED
I. The name of the Company is INFORMATION MANAGEMENT RESOURCES (INDIA)
LIMITED.
II. The Registered Office of the Company will be situated in the state of
Karnataka.
III. The objects for which the Company is established are:
A. THE MAIN OBJECTS OF THE COMPANY TO BE PURSUED BY IT ON ITS INCORPORATION
ARE AS FOLLOWS:
1. To engage in and to carry on the business of systems development and
consulting activities in all and any information management and technology
areas, including, software development, software maintenance, software
conversion/rewrite and software re-engineering of projects and products of
any and all description, using, subscribing for and availing satellite-link
and any and all kinds of data communication devices executable both in
India and abroad.
2. To engage in and to carry on the business of analysis, designing,
developing, improving, modifying, customizing, contracting, marketing,
selling, representing, licensing, import and export of software and program
products of any and all description.
B. OBJECTS ANCILLARY OR INCIDENTAL TO THE ATTAINMENT OF THE MAIN OBJECTS:
3. To purchase, sell, develop or otherwise deal in computer software and
hardware including programs, systems, data and other facilities relating to
computer operations and data processing equipments of all kinds.
4. To manufacture, purchase, sell or otherwise transfer, lease, import,
export, hire, license, use, dispose of, operate, fabricate, construct,
distribute, assemble, design, charter, acquire, market, recondition, work
upon or otherwise, generally deal in any electronic, electrical, mechanical
and electromechanical product, machine, apparatus appliance, systems,
software procedures, peripheral products, computers, tabulators, data
processing machines and systems and components thereof, electronic
calculators, electric and electromechanical accounting systems, terminal
products and systems, machines for registering, data preparation,
recording, perforating, tabulating, sorting, printing, typewriting,
products which possess an internal intelligence for recognizing and
correlating any type of data or information to be processed, recognition
and memory systems, optical scanning machine, transmission lines,
transmission equipment, terminals, copying, reproducing and distributing
machines, cheque signing, protecting and disbursing equipment, machines for
facsimile reproduction, facsimile transmission and word processing,
facilities and accessories and devices of all kinds and for all purposes
and any products and component parts thereof or materials or articles used
in connection therewith and any and all other machinery, appliances,
apparatus, devices, materials, substances, business forms and supplies,
articles or things of a character similar or analogous to the foregoing or
any of them or connected therewith.
5. To establish, maintain and conduct training schools, courses and programs
in connection with the use, purchase, sale, import, export, license,
distribution, design, manufacture or rental of the aforesaid types of
machines, apparatus, appliances, systems and merchandise and of articles
required in the use thereof or used in connection therewith.
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6. To provide consultancy services related to the preparation and maintenance
of accounting, statistical, scientific or mathematical information and
reports, data processing, programming, collecting, storing, processing and
transmitting information and data of every kind and description, systems,
analysis and machine services for solving or aiding commercial, industrial,
scientific and research problems and for all other related business.
7. To engage in and conduct the business of research; to carry on
investigations and experiments of all kinds, to originate, develop and
improve any discoveries, inventions, processes and formulae, particularly
to manufacture, purchase or otherwise acquire, own, hold, operate, sell or
otherwise transfer, lease, license the use of, distribute or otherwise
dispose of and generally to deal in, property of every kind and
description, including without limitation to the generality of the
foregoing, electronic, electrical and mechanical devices, apparatus,
appliances and machines and parts thereof especially for the creation,
reproduction, amplification, reception, transmission and retention, of
sound, signals, communications and also for all other processes, matters
and things.
8. To acquire and undertake the whole or any part of the goodwill, business,
concern, undertaking, property, rights, assets and liabilities of any
person, firm, association, society, company or corporation carrying on any
business which the Company is authorized to carry on or possessed of
property suitable for the purpose of this Company and to pay for the same
by shares or debentures of this Company, or by cash or otherwise, or partly
in one way and partly in another or others, and to conduct, expand and
develop or wind-up and liquidate such business and to purchase and take
steps for the acquisition of existing and new licenses in connection with
any such business.
9. To establish, promote, form, subsidize, aid, acquire, organize, or be
interested in any other company or companies, having similar objects or
partnership for the purpose of acquiring all or any of the undertaking,
property and liabilities of the company.
10. To enter into partnership or into any agreement for sharing profits, union
of interest, co-operation, joint venture, reciprocal, concession, license
or otherwise, with any person, firm association, society. company or
corporation carrying on or engaged in or about to carry on or engage in any
business or transaction which the Company is authorized to carry on and to
give any person, firm, or company, special rights, licenses and privileges
in connection with the above.
11. To take or otherwise acquire and hold, sell, exchange, mortgage, charge or
otherwise deal with shares or stock of any other company having objects
altogether or in part similar to those of the company.
12. To amalgamate with any other Company having objects altogether or in part
similar to those of the Company or otherwise.
13. To invest, surplus funds in any shares (whether fully or partly-paid),
stocks, debentures, debenture stock, obligations or other securities in or
of any other company, or which are issued by any authority whether
sovereign, governmental, corporate, municipal, local or otherwise, in India
or elsewhere, or apply for and hold units of the Unit Trust of India issued
by them under any of their schemes and to cause the same or any of them to
be vested in or held by a nominee or nominees for and on behalf of the
Company.
14. To enter into negotiations with companies and other persons and acquire by
grant, purchase, lease, barter, license or otherwise, other rights and
benefits and to obtain financial and / or technical collaboration,
technical information, know-how and expert advice for the conduct of the
Company's business.
15. To apply for, purchase or otherwise acquire and protect, prolong and renew,
whether in India or elsewhere, any patents, patent rights, brevets
d'invention, recipes, trademarks, concessions, formulae, licenses, designs
and the like conferring any exclusive or non-exclusive or limited right of
use, or any secret or other information as to any invention, process or
privilege which may seem capable of being used for any of the purposes of
the Company, to use, exercise, develop, manufacture under, or grant license
or privileges in
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respect of or otherwise to turn to account the property, rights or
information, use or license so acquired, and to subsidize, take part in or
assist in any experiments investigations and researches likely to prove
beneficial to the Company.
16. To purchase, take in exchange or on lease, rent, hire, lease out, occupy,
allow to be occupied or otherwise and use any freehold, leasehold or other
immovable property and any lands, forests, plantations, estates, shops,
warehouses, showrooms, workshops, offices, buildings, premises, works,
plant and machinery, stock-in-trade, waterways, easements or other rights
or interests in any land, buildings and premises or any other immovable or
movable, real or personal property or right which the Company may think
necessary or convenient for the purpose of its business and as to any real
property, either in consideration of a gross sum or of a rent charged in
cash, services or kind or on perpetual lease rent or partly in one way and
partly in another or others.
17. To improve, manage, develop, mortgage, charge, sell, transfer, exchange,
lease, under-lease, surrender or otherwise deal with, dispose of or turn to
account, all or any part of the business, immovable or movable property,
rights and effects for the time being of the Company in such manner, on
such terms and for such purposes as the Company may think fit and as to any
sale or real property either in consideration of a gross sum or of a rent
or otherwise and to sell, transfer or dispose of the whole undertaking of
the Company or any part thereof, for cash or such other consideration as
the Company may think fit, and in particular for shares, debentures or
securities of any other company having objects altogether or in part
similar to those of the Company, or otherwise.
18. To borrow, raise and secure the payment and repayment of money for any of
the purposes of the Company's business or otherwise, in such manner as the
Company shall think fit, and in particular, by the issue of redeemable
preference shares, mortgage debentures or debenture stock, perpetual or
otherwise and issuable or payable at par, or at a premium, or discount and
repayable by periodical drawings or otherwise, to bearer or otherwise,
charged upon all or any of the Company's undertaking and/or property, both
present and future and movable or immovable, or by other obligations or
securities of the Company or by mortgage or charge on al I or any part of
the property of the Company present and future, movable or immovable
including its uncalled capital or without any charge, and to purchase
redeem or pay off, cancel and discharge any such securities, subject to
provisions of Section 58A and directives of Reserve Bank of India.
19. To receive money on deposit from and to lend monies to any person, Firm,
Association, Society, Company or Corporation at interest or otherwise and
on such terms and on such security as may seem expedient or without any
security and in accordance with and so far as allowed by law and in
particular to members or customers and others having or likely to have
dealings with the Company, provided that the Company shall not carry on any
banking business as defined by the Banking Regulation Act, 1949, subject to
provisions of Section 58A and directives of Reserve Bank of India.
20. To draw, make, accept, endorse, discount, execute, retire, discharge,
negotiate, issue and honour bills of exchange, cheques, promissory notes,
bills of lading, dock and warehouse warrants, rail receipts, air and/or
motor way bills and other negotiable, semi-negotiable or transferable
instruments or securities.
21. To open and operate current, overdraft, loan, cash credit, or deposit
account or accounts with any bank, company firm or person.
22. To lend out, deposit, invest and deal with the monies of the Company not
immediately required with or without interest or security, in such manner
and upon such terms as may from time to time be determined by the
Directors.
23. To incur debts and obligations for the conduct of any business of the
Company, and to purchase or hire goods, materials or machinery on credit or
otherwise for any business or purpose of the Company.
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24. To guarantee the payment of money, unsecured or secured by or payable under
or in respect of bonds, debentures, debenture stocks, contracts, mortgages,
charges, obligations and other securities of any company or of any
authority, Central, State, Municipal, Local or otherwise, or of any person
whomsoever, whether incorporated or not and generally to transact all kinds
of guarantee business, to guarantee the issue of or not and generally to
transact all kinds of guarantee business, to guarantee the issue of or the
payment of interest on debentures, debenture stocks or other securities or
obligations of any company or association, and to pay or provide for
brokerage, commission and underwriting in respect of any such issue.
25. On any land or waterways, purchased, leased or otherwise acquired, to
erect, build, construct, improve, maintain, develop, alter, enlarge, pull
down, replace, work or manage, any buildings, houses, mills, factories,
works, engine houses, boiler houses, shops, workshops, offices, warehouses,
showrooms, refreshment rooms, lavatories and other conveniences, cottages
and any other buildings with engines, boilers, lights and power generating
plant and other fixtures and fittings and apparatus for working and turning
machinery and for the comfort and accommodation of working people and
roadways, branches or sidings and other works and conveniences which may
seem calculated directly or indirectly to advance the Company's interest
and to contribute to, subsidize or otherwise assist or take part in the
construction, improvement, maintenance, working, management carrying out or
control, thereof.
26. To establish maintain and conduct or discontinue or close agencies and
branches and appoint representatives, agents, stockists, distributors,
dealers and brokers in any part of the world for the conduct of the
business of the Company.
27. To employ or otherwise appoint technical experts, engineers, mechanics,
foremen, skilled, semiskilled and unskilled labour for any of the purposes
of the business of the Company.
28. To establish, provide, maintain and conduct or otherwise subsidize research
laboratories, experimental stations, workshops and libraries for
scientific, industrial and technical researches experiments and tests of
all kinds and to undertake and carry out research and investigations, to
process, improve and invent new and better techniques and methods of
manufacturing any products and improving or securing any process or
processes, patent or patents copyrights which the Company may acquire or
deal with and to promote studies, researches, surveys and investigations,
both scientific and technical, by providing, subsidizing, endowing or
assisting laboratories, schools, colleges, universities, workshops,
libraries, lectures, meetings, exhibitions and conference, and by providing
for the remuneration of scientists, scientific or technical personnel or
teachers, research workers, and inventors or otherwise generally to
encourage, promote and reward studies, researches, experiments, tests and
inventions of any kind which may be considered likely to assist any of the
business of the Company.
29. To adopt such means of making known any goods and products dealt in by the
Company and the services provided by the Company as may seem expedient; to
purchase and exhibit works of art or interest, to register and establish
and protect trade marks, to publish books and periodicals, to grant prizes
and awards and to participate in national and international exhibitions and
in other similar manner.
30. To continue, establish and support or aid in the establishment or support
of co-operative societies, associations and other institutions, funds,
trusts, amenities and conveniences and at its discretion to grant bonuses,
pensions and allowances and to make payment towards insurance and to
subscribe or guarantee money for charitable or benevolent objects also to
remunerate by cash or other assets or by the allotment of shares credited
as fully or partly paid up or in any other manner (so far as by law
allowed) any party for services rendered or to be rendered in placing or
assisting to place any shares in the Company's capital or any debentures,
debenture-stock or other securities of the Company or in or about the
formation or promotion of the Company or the conduct of any of its
business.
31. To contribute, promote, donate, subscribe, support or aid or otherwise
assist or guarantee money to any charitable, benevolent, religious,
scientific, national, public or other institutions, funds or objects or for
any
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exhibition or for any public, and to become a member of any business,
trade, commercial and/or industrial association, institution or
organisation for promotion of the Company's interest or otherwise.
32. To provide for the welfare of any of the employees or past employees of the
Company including Directors or ax-Directors and the wives, widow families,
dependents or connections of such persons by grants of money, donations,
allowances, bonuses or other payments from time to time; or by creating and
from time to time subscribing to provident and other funds, institutions,
associations or trusts, and by providing, subscribing or contributing
towards places of recreations, schools and other educational institutions,
hospitals, dispensaries, medical and other attendances or building of
dwelling houses or quarters or in similar other manner as the Company may
think fit.
33. To create any Depreciation Fund, Reserve Fund, Sinking Fund, Insurance Fund
or any other Special Fund, whether for depreciation or for repairing,
improving, extending or maintaining any of the property of the Company or
for any other purpose conducive to the interest of the Company.
34. To reserve, to distribute or to place as bonus shares among the members, or
otherwise to apply as the Company may from time think fit, any monies
received by way of premium on shares or debentures issued at a premium by
the Company and any monies received in respect of dividends accrued on
forfeited shares and monies arising from the sale of forfeited shares by
the Company.
35. Subject to the provisions of the Companies Act, 1956, to distribute among
the members in specie in the event of winding up.
36. To refer any claims, demands, disputes or any other question by or against
the Company or in which the Company is interested or concerned and whether
between the Company and the member or members or his or their
representatives or between the Company and third parties to arbitration in
India or at any place outside India and to observe, perform and to do all
acts, deeds, matters and things to carry out or enforce the awards.
37. To pay all or any expenses incurred in connection with the formation,
promotion or incorporation of this Company or any other company or of any
incidental to the winding up of any Company the whole or part of the
property whereof is acquired by this Company.
38. To procure the incorporation, registration or other recognition of the
Company in any country, state or place and to establish and regulate
agencies for the purpose of the Company's business and to apply or join in
applying to any parliament, local government, municipal or other authority
or body for any rights or privileges that may see, conducive to the
Company's objects or any of them and to oppose any proceedings or
applications which may seem calculated directly or indirectly to prejudice
the Company's interests.
39. To do the above things in all or any of the States in India and/or in any
part of the world and either as principals, agents, contractors, trustees
or otherwise and by or through trustees, attorneys, agents or otherwise and
either alone or in conjunction with others and to do all such other things
as are conducive or incidental for the attainment of the above objects or
any of them.
(C) OTHER OBJECTS:
40. To manufacture, assemble, purchase, import, export, lease or otherwise
acquire and to sell, hire, distribute, use, deal in and otherwise dispose
of plant, machinery, equipment, materials, necessary things and apparatus
of every description for industrial, commercial and domestic use for or
appertaining to wireless transmitting and receiving sets, telegraphy,
telephony, radio and television receiving and broadcasting sets, cameras
and equipment, gramophones, phonographs, radiograms, tape and wire
recorders, transmission lines, terminals, machines for facsimile
transmission, mechanical and/or electrical reproduction of sound, stereo
and hi-fi systems and equipment, gramophone, records and discs, disc-
cassettes, microphones, loud-speakers, word processing equipment,
typewriters, speaker systems, ear-phones, head-phones, and
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cassettes and cartridges thereof, audio visual and electronic equipment of
every sort and kind and other media for the recording, receiving,
amplifying, transmitting, and reproduction of sound and all materials,
accessories and articles of every kind and character used in connection
therewith.
41. To manufacture, produce, buy, sell, and to otherwise acquire and dispose of
and to otherwise deal with optical, photo-electric, photo chemical and
photographic equipment including projectors, diascopes, video recording and
reproducing apparatus and equipment.
42. To advice on, assist in or arrange explorations, surveys, experiments,
researches and scientific and other studies. To render other special
services, including but not limited to services in respect of the
cultivation, marketing, transportation, sale, storage, preservation and
promotion of agricultural produce and product and the mechanization of
agricultural operations.
43. To produce, manufacture, service, repair, maintain and otherwise deal in
domestic electrical appliances including fans, refrigerators, cold storage
equipment, air-conditioners, air-coolers, cookers, ovens and other cooking
appliances, mixers, grinders and liquidisers.
44. To manufacture, put up and use telephones, telegraphs (wireless or
otherwise), dynamos, motors and all apparatus now known or that may
hereafter be invented, connected with the generation, accumulation,
distribution, supply and employment of electricity or any power that can be
used as a substitute thereof including all cables, wires, appliances for
connecting apparatus at a distance with other apparatus and including the
formation of exchanges or centres.
45. To carry on the business of manufacturers of all types of machinery,
instruments, appliances and components in the field of electrical,
mechanical or chemical engineering.
46. To generate, transmit, distribute and supply electricity and to produce,
buy, sell or otherwise deal with generators, transformers, insulation
materials, insulators, armatures, commutators, boilers, pumps, turbines,
engines, circuit breakers, accumulators and all apparatus and ancillaries
in relation thereto.
47. To carry on the business of mechanical, electrical, civil, aeronautical,
marine, metallurgical, mining, chemical, engineers and fabricators,
contractors, technical consultants, architects, tool makers, ferrous and
non-ferrous meltors, smelters, alloyers, forging manufacturers and
processors, rollers and re-rollers, annealors, enamelors, electroplators,
welders and hardware manufacturers.
48. To carry on the business of mechanical engineers, and manufacturers,
dealers, indentors and agents of machinery tool makers, brass founders,
metal workers, millwrights, machinists, iron and steel makers and
convertors, smiths, metallurgists, water supply engineers, gas makers and
merchants and to buy, sell, whether outright or on hire purchase,
manufacture, repair, convert, alter, let on hire, and deal in machinery,
implements, rolling stock and hardwares of all kinds.
49. To manufacture, produce, buy, sell, import, export, process and otherwise
deal in medical, anatomical, orthopaedic, prosthetic, prophylactic,
hospital aids and appliances, instruments whether surgical, scientific,
mathematical, industrial surveying and drawing instruments or otherwise,
appliances, equipment of all kinds including weighing machines and devices
for measuring, indicating, recording and regulating pressure temperature,
rate of flow and levels as well as others items, products, goods materials,
and things produced, manufactured, utilized or required in miscellaneous
mechanical and engineering industries including plastic injection and/or
moulded goods and the like.
50. To carry on the business of manufacturers, buyers, sellers, exporters and
importers and dealers in paper of all kinds, and articles made from paper
or pulp, and materials used in the manufacture or treatment of paper,
including cardboard, mill board, packing paper and wall and ceiling paper.
51. To carry on the business of manufacturers, makers of, buyers, sellers,
exporters, importers and dealers in and to obtain, exchange and let on hire
containers, packages, receptacles, packing materials, and all kinds of
other articles, materials, substances and things.
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IV. The liability of the Members is limited
V. The Authorised Share Capital of the Company is AMENDED VIDE ANNUAL
Rs.2,00,00,000/- (Rupees Two crores only) divided GENERAL MEETING OF
into 18,00,000/- Equity Shares of Rs. 10/- each and SEPTEMBER 30, 1992
200,000 Non-Voting Equity Shares of Rs. 10/- each
with power to increase and reduce the capital for
the time being into several classes and to attach
thereto respectively such preferential, deferred,
qualified, or special rights, privileges or
conditions as may be determined or in accordance
with the Articles of Association of the Company and
to vary, modify or abrogate any such rights,
privileges or conditions in such manner as may for
the time being provided by the Articles of
Association of the Company.
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We, the several persons, whose names and addresses and descriptions are
hereunder subscribed, are desirous of being formed into a Company in
pursuance of this Memorandum of Association and we respectively agree to
take the number of shares in the Capital of the Company set opposite to our
respective names.
<TABLE>
<CAPTION>
Signature, names Signature, Name,
addresses, description & Number of shares by address, description &
occupation of Subscriber. each subscriber occupation of WITNESS
- --------------------------------------------------------------------------------
<S> <C> <C>
Sd/ Sd/
NIRMAL KUMAR DATTA SANJIV PIYUSH JHAVERI
S/O. NIRAD BARAN DATTA 100 (ONE HUNDRED) S/O PIYUSH JAYANTILAL
FLAT NO. l EQUITY SHARES JHAVERI
SURAT BAHAR 6 STANROSE APPT.
17, VICTOR BUNDER ROAD OFF VEER SAVARKAR MARG
COLABA PARABHADEVI
Bombay - 400005 BOMBAY - 40025
OCCUPATION: OCCUPATION:
BUSINESS EXECUTIVE CHARTERED ACCOUNTANT
WITNESS TO ALL
Sd/
PRAFULL GANDHI
S/O RAMJIBHAI GANDHI
14, TARDEO COURT
1ST FLOOR 100 (ONE HUNDRED)
NEAR BHATIA HOSPITAL EQUITY SHARES.
TARDEO ROAD
BOMBAY - 400007
OCCUPATION: 200 (TWO HUNDRED)
CHARTERED ACCOUNTANT EQUITY SHARES.
- --------------------------------------------------------------------------------
</TABLE>
BOMBAY:
DATED: this 23rd day of May 1990.
8
<PAGE>
ARTICLES OF ASSOCIATION
OF
INFORMATION MANAGEMENT RESOURCES (INDIA) LIMITED
INTERPRETATION
1. The regulations in Table "A" in the first Schedule to the Companies Act,
1956, shall apply to the Company except so far as the same are repealed or
contained in these Articles.
2. In these Articles
"the Act" means the Companies Act, 1956.
"The Company" means INFORMATION MANAGEMENT RESOURCES (INDIA) LIMITED
"Directors" means the Directors for the time being of the Company or as the
case may be the Directors assembeled at a Board.
"month" means Calendar month.
"the seal" means the Common Seal of the Company.
Expressions referring to writing shall, unless the contrary intention
appears, be construed as words in visible few
Words importing the masculine gender also include the feminine gender.
Words importing persons shall include juristic as well as natural persons.
Unless the context otherwise requires, words or expressions contained in
these Articles shall bear the same meaning as in the Act.
3. THE COMPANY IS A LIMITED COMPANY AND ACCORDINGLY:
(a) The right to transfer shares is restricted in manner hereinafter
prescribed.
(b) The number of members of the Company (exclusive of persons who are in the
employment of the Company; and persons who, having been formerly in the
employment of the Company, were members of the Company while in that
employment and have continued to be members after the employment ceased)
shall be limited to fifty. Provided that where two or more persons hold one
or more shares in the Company jointly they shall for the purpose of this
Article be treated as a single member.
(c) Any invitations to the public to subscribe for any shares in, or debentures
of the Company is prohibited.
SHARES
4. The Authorized Share Capital of the Company is AMENDED VIDE
2,00,00,000 (Rupees Two Crores) divided into ANNUAL GENERAL
18,00,000 Equity Shares of Rs. 10 each and 200,000 MEETING OF
Non - Voting Equity Shares of Rs. 10/- each. The SEPTEMBER 30, 1992.
board of Directors shall have power to increase and
redistribute share capital in accordance with the
regulations of the Company and the legislative
provisions for the time being in force in that
behalf.
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5. Subject to the approval of Government and other concerned authorities the
Company shall enter into Collaboration agreements with M/s.ReeSan Inc.,
USA, and Information Management Resources Inc., USA, for provision of
financial support, marketing support, and 100% buy back of the products and
services of the Company. The Company shall also allot shares to M/s. ReeSan
Inc. USA, and Information Management Resources Inc., USA, as well as their
Associates as may be permitted by the Government and other concerned
authorities.
6. Except as required by law, no person shall be recognized by the Company and
shall not be bound by or be compelled in any way to recognize (even when
having notice thereof ) any equitable, contingent future or partial
interest in any share or any interest in any fractional part of share or
(except only as by these Articles or by law otherwise provide) any other
rights in respect of any share except an absolute right to the entirety
thereof in the registered holder.
7. (1) Every person whose name is entered as member in the register of
members shall be entitled without payment to receive within three
months after allotment or within two months after the application for
the registration of transfer (or within such other period as the
conditions of issue shall provide)
(a) One Certificate for all his shares without payment; or
(b) Several Certificates each for one or more of the shares, upon
payment of two rupees for every certificate after the first;
(2) Every certificate shall be under the seal and shall specify the
shares to which it relates, and the amount paid up thereon.
(3) In respect of any share or shares held jointly by several persons,
the Company shall not be bound to issue more than one certificate, and
delivery of a certificate for a share to one of several joint holders
shall be sufficient delivery to all such holders.
8. If a share certificate be defaced, lost or destroyed, it may be renewed on
payment of fees of Rupees two or such less sum and on such terms (if any)
as to evidence and indemnity and the payment of out of pocket expenses of
the Company of investigating the evidence as the Directors think fit.
9. The Company may exercise the power of paying commissions conferred by
Section 76, provided that the rate per cent on the amount of commission
paid or agreed to be paid shall be disclosed in the manner required by that
section.
The Company may also, on any issue of shares, pay such brokerage as may be
lawful.
CALLS ON SHARES
10. (a) The Board may from time to time, make calls upon the members in
respect of any monies unpaid on their shares (whether on account of
the nominal value of the shares or by way of Premium) and not by the
conditions of allotment thereof made Payable at fixed times.
(b) Each member shall, subject to receiving at least fourteen days
notice specifying the time or times and place of payment, pay to the
Company, at the time or times and place so specified, the amount
called on his Shares.
(c) A call may be revoked or postponed at the discretion of the Board.
11. A call may be deemed to have been made at the time when the resolution of
the Board authorizing the call was passed and may be required to be paid by
installments.
l2. The joint holders of a share shall be jointly and severally liable to pay
all calls in respect thereof.
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13. If any member fails to pay call due from him on the day appointed for
payment thereof, or any such extension thereof as aforesaid, he shall be
liable to pay interest on the same from the day appointed for the payment
thereof to the time of actual payment at such rate as shall from time to
time be fixed by the Board of Directors, but nothing in this Article shall
render it compulsory upon Board of Directors to demand or recover any
interest from any such member.
14. Any sum which by the terms of issue of a share becomes payable on allotment
or at any fixed date, whether on account of the nominal value of the share
or by way of premium, shall for the purposes of these regulations, be
deemed to be a call duly made end payable on the date on which by the terms
of issue such sum becomes payable.
In case of non-payment of such sum, all the relevant provisions of these
regulations as to payment of interest and expenses forfeiture or otherwise
shall apply as if such sum had become payable by virtue of a call duty made
and notified.
15 (a) The instrument of transfer of any share in the Company shall be
excused by or on behalf of both the transferor and transferee.
(b) The transferor shall be deemed to remain a holder of the share until
the name of the transferee is entered in the register of members in
respect thereof.
16. Subject to the provisions of Section 108, shares in the Company shall be
transferred in form No. 7B in Annexure "A" of the Companies (Central
Government) General Rules and Forms, 1956 or any amendment of modifications
or replacement thereof.
17. The Directors may, subject to the right of appeal conferred by the Act at
their own absolute and uncontrolled discretion and without assigning any
reason, decline to register or acknowledge any transfer of any shares, in
the Company to any person of whom they do not approve and in particular,
may so decline in any case in which the Company has a lien upon the shares
or any of them. The registration of a transfer shall be conclusive evidence
of the approval by the Directors of the transferee but so far only as
regards the share or shares in respect of which the transfer is so
registered and not further or otherwise and not so as to debar the
Directors from declining to register any subsequent or other transfer or
other shares applied for in the name of such transferee.
NOTICE BY MEMBER DESIRING TO TRANSFER SHARE
18. The person proposing to transfer any share (hereinafter called the
"proposing transferor") shall give notice in writing (hereinafter called a
"transfer notice") to the Company that he desires to transfer the same.
Such notice shall specify the sum he fixes as the fair value, and shall
constitute the Company his agent for the sale of the shares to any member
of the Company or person selected as aforesaid willing to purchase the
share (hereinafter called the "purchasing member") at the price so fixed,
or at the option of the purchasing member, at the fair price to be
determined as hereinafter provided.
19. The shares specified in any transfer notice given to the Company as
aforesaid shall be offered by the Company in the first place to the
members, other than the proposing transferor as nearly as may be in the
proportion to the existing shares, held by them respectively and the offer
shall in each case limit time within which the same, if not accepted, will
be deemed to be declined, and may notify to the members that any member who
desires an allotment of shares in excess of his proportion should in his
reply state how many excess shares he desires to have and if all members do
not claim their proportions, the unclaimed shares shall be issued for
satisfying the claims in excess if any shares shall not be capable, without
fractions of being offered to the members in proportion to their existing
holdings, the same shall be offered to the members, or some of them in such
proportions or in such manner as may be determined by lots to be drawn
under the direction of the Directors.
MEMBER BOUND TO TRANSFER SHARES SO OFFERED UPON PAYMENT OF FAIR VALUE.
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20. If the Company shall, within the space of twenty-eight days after being
served with a transfer notice, finds a "purchasing member" and shall give
notice thereof to the proposing transferor, he shall be bound upon payment
of the fair value as fixed in accordance with Article 21 to transfer the
share to the purchasing member.
21. In any case the proposing transferor, after having become bound as
aforesaid, make default in transferring the share, the Company may receive
the purchase money, and the proposing transferor shall be deemed to have
appointed any Director as his agent to execute a transfer of the shares to
the purchasing member or person selected as aforesaid, and upon the
execution of such transfer, the Company shall hold the purchase-money in
trust for the "proposing transferor". The receipt of the Company for the
purchase-money shall be good discharge to the purchasing member or person
selected as aforesaid and after his name had been entered in the register
in purporting exercise of the above power the validity of the proceedings
shall not be questioned by any person.
AUDITORS TO CERTIFY FAIR VALUE
22. In case any difference arises between the proposing transfer and the
purchasing member as to the fair value of a share, the Company's auditors
for the time being in consultation with the Board of Directors shall on the
application of either party certify in writing the sum which in their
opinion is the fair value, and such sum shall be deemed to be the fair
value, and in so certifying, the Company's auditors shall be considered to
the acting as experts and not as arbitrators, and accordingly the Indian
Arbitration Act, 1949 shall not apply.
PROCEDURE IN CASE OF COMPANY UNABLE TO FIND PURCHASER
23. If the Company shall not, within the space of twenty-eight days after being
served with a transfer notice, find a purchasing member and this notice in
the manner aforesaid, the proposing transfer or shall at any time within
one month after the expiry of twenty-eight days be at liberty subject as
hereinafter provided, to sell and transfer the shares to any person subject
to the provision of Clause 6 and at any price, subject to the previous
consent of the Board of Directors which shall not be unreasonably withheld.
LIEN ON SHARES
24. The Company shall have first and paramount lien.
(a) On every share (not being a fully-paid share) for all monies
(whether presently payable or not) called or payable at a fixed time,
in respect of that share; and
(b) On all shares (not being fully-paid shares) standing registered in
the name of single person for all monies presently payable by him or
his estate to the Company;
Provided that the Board of Directors may at any time declare any share to
be wholly or in part exempt from the provisions of this clause.
25. The Company's lien, if any, on a share shall extend to all dividends
payable thereon.
26. The Company may sell, in such manner as the Board thinks fit, any shares on
which the Company has a lien:
Provided that no sale shall be made:
(a) Unless a sum in respect of which lien exists is presently payable;
or
(b) Until the expiration of fourteen days after a notice in writing
stating and demanding payment ofsuch part of the amount in respect of
which the lien exists as is presently payable, has been
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given to the registered holder for the time being of the share or the
person entitled thereto by reason of his death or insolvency.
27. (a) To give effect to any such sale, the Board may authorize some person
to transfer the shares sold to the purchaser thereof.
(b) The purchaser shall be registered as the holder of the shares
comprised in any such transfer.
(c) The purchaser shall not be bound to see to the application of the
purchase money, nor shall his title to the shares be affected by any
irregularity or invalidity in the proceedings in reference to the
sale.
28. (a) The proceeds of the sale shall be received by the Company and applied
in payment of such part of the amount in respect of which the lien
exists as if presently payable.
(b) The residue, if any, shall, subject to a like lien for sums not
presently payable as existed upon the shares before the sale, be paid
to the person entitled to the shares at the date of the sale.
TRANSFER OR TRANSMISSION OF SHARES
29. (a) On the death of a member, the survivor or survivors where the member
was a joint holder, and his legal representatives where he was a sole
holder, shall be the only person recognized by the Company as having
any title to his interest in the shares.
(b) Nothing in clause (a) shall release the estate of a deceased joint
holder from any liability in respect of any share which had been
jointly held by him with other persons.
30. (a) Any person becoming entitled to a share in consequence of the death or
insolvency of a member may, upon such evidence being produced as may
from time to time properly be required by the Board and subject as
hereinafter provided, elect, either:
(i) to be registered himself as holder of the share; or
(ii) to make such transfer of the share as the deceased or insolvent
member could have made.
(b) The board shall, in either case, have the same right to decline or
suspend registration as it would have had, if the deceased or
insolvent member had transferred the share before his death or
insolvency.
31. (a) If the person so becoming entitled to shall elect to be registered as
holder of the share himself, he shall deliver or send to the Company a
notice in writing signed by him stating that he so elects.
(b) If the person aforesaid shall elect to transfer the share, he shall
testify his election by executing a transfer of the share.
(c) All the limitations, restrictions and provisions of these regulations
relating to the right to transfer and the registration of transfers of
shares shall be applicable to any such notice or transfer as aforesaid
as if the death or insolvency of the member had not occurred and the
notice or transfer were a transfer signed by that member.
32. A person becoming entitled to a share by a reason of the death or
insolvency of the holder shall be entitled to the same dividends and other
advantages to which he would be entitled to if he were the registered
holder of the share, except that he shall not, before being registered as a
member in respect of the share, be entitled in respect of it to exercise
any right conferred by membership in relation to meetings of the Company.
Provided that the Board may, at any time, give notice requiring any such
person to elect either to be registered himself or to transfer the share,
and if the notice is not complied with within ninety days, the Board may
thereafter withhold payment of all dividends, bonuses or other monies
payable in respect of the share, until the requirements of the notice have
been complied with.
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33. Subject to these Articles, shares may be transferred to any person other
than to an infant, bankrupt or person of unsound mind.
34. The Company shall provide a book to be called the "Register of Transfers",
which shall be kept by the Secretary under the control of Directors, and in
which shall be entered the particulars of every transfer or transmission of
every share.
35. The transferor shall be deemed to remain the holder of the share until the
name of the transferee is entered in the register of members in respect
thereof.
FORFEITURE OF SHARES
36. If a member fails to pay any call, or installment of a call, on the day
appointed for payment thereof, the Board may, at any time thereafter during
such time as any part of the call or installment remains unpaid serve a
notice on him requiring payment of so much of the call or installment as is
unpaid together with any interest which may have accrued.
37. The notice aforesaid shall:
(a) Name a further day (not being earlier than the expiry of fourteen days
from the date of service of the notice) on or before which the
payment required by the notice is to be made; and
(b) State that in the event of non-payment on or before the day so named,
the shares in respect of which the call was made, will be liable to be
forfeited.
38. If the requirement of any such notice as aforesaid are not complied with
any share in respect of which the notice has given may at any time
thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the Board to that effect.
39. (a) A forfeited share may be sold or otherwise disposed of on such terms
and in such manner as the Board thinks fit
(B) At any time before a sale or disposal as aforesaid, the Board may
cancel the forfeiture on such terms as it thinks fit.
40. (a) A person whose shares have been forfeited shall cease to be member in
respect of the forfeited shares but shall, notwithstanding the
forfeiture, remain liable to pay to the Company all monies which, at
the date of forfeiture, were presently payable by him to the Company
in respect of the shares.
(b) The liability of such person shall cease if and when the Company shall
have received payment in full of all such monies in respect of the
shares.
41. (a) A duly verified declaration in writing that the declarant is a
Director, the Manager or the secretary, of the Company and that a
share in the Company has been duly forfeited on a date stated in the
declaration, shall be conclusive evidence of the facts therein stated
as against all persons claiming to be entitled to the share.
(b) The Company may receive the consideration, if any, given for the share
on any sale or disposal thereof and may execute a transfer of the
share in favour of the person to whom the share is sold or disposed
of.
(c) The transferee shall thereupon be registered as the holder of the
share.
(d) The transferee shall not be bound to see to the application of the
purchase money, if any, nor shall his title to the share be affected
by any irregularity or invalidity in the proceedings in reference to
the forfeiture, sale or disposal of the shares.
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42. The provisions of these regulations as to forfeiture shall apply in the
case of non-payment of any sum which by the terms of issue of a share
becomes payable at a fixed time, whether on account of the nominal value
of the share or by way of premium, as if the same had been payable by
virtue of a call duly made and notified.
FOREIGN REGISTER
43. The company may exercise powers conferred on it by sections 157 and 158
with regard to the keeping of a Foreign Register; and the Board may
(subject to the provisions of those sections) make and vary such
regulations as it may think fit respecting the keeping of any such
register.
ALTERATION OF CAPITAL
44. The Company may from time to time by ordinary resolution increase the
authorized share capital by such sum to be divided into shares of such
amount as may be specified in the resolution.
45. The Company may by ordinary resolution:
(a) Consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares.
(b) Subdivide its existing shares or any of them into shares of smaller
amount than is fixed by the memorandum subject, nevertheless, to the
provisions of Clause (b) of subsection (1) of Section 94:
(c) Cancel any shares which at the date of the passing of the resolution,
have not been taken or agreed to betaken by any person.
46. The Company may by special resolution reduce in any manner and with subject
to any incident authorized and consent required by law:
(a) its share capital;
(b) any capital redemption reserve account or;
(c) any share premium account.
GENERAL MEETINGS
47. (a) General Meetings shall be called and held and the proceedings thereat
regulated in accordance with the provisions of the Act and these
Articles.
(b) with the consent of all members who are entitled to receive notice of
a meeting or to attend or vote at any such meeting, a meeting may be
convened by a shorter notice than 14 days or without notice as such
members may approve.
48. The directors may whenever think fit, convene an extraordinary general
meeting, and extraordinary general meeting shall also be convened on such
requisition, or in default, may be convened by such requisitionists, as
provided by the Act.
49. No business shall be transacted at any general meeting unless a quorum of
members is precept.
50. The chairman, if any, of the Board of Directors, shall preside as chairman
at every general meeting of the Company, or if there is no such chairman or
if he shall not be present within fifteen minutes after the time appointed
for the holding of the meeting or is unwilling to act, the Directors
present shall elect one of their member to be the chairman of the meeting.
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51. If at any meeting no Director is willing to act as Chairman or if no
Director is present within fifteen minutes after the time appointed for
holding the meeting, the members present shall choose one of their Members
to be Chairman of the meeting.
52. (a) The Chairman may with the consent of any meeting at which a quorum
is present and shall if so directed, by the meeting adjourn the
meeting from time to time and place to place.
(b) No business shall be transacted at any adjourned meeting other than
the business left unfinished at the meeting from which the adjournment
took place.
(c) It shall not be necessary to give any notice of an adjournment or
business to be transacted at an adjourned meeting.
53. In the case of an equality of votes, whether on a show of hands or on
a poll, the Chairman of the meeting at which the show of hands takes
place, or at which the poll demanded, shall be entitled to second or
casting vote.
54. Any business other than that upon which a poll has been demanded may be
proceeded with pending the taking of the poll.
VOTES OF MEMBERS
55. Subject to any rights or restrictions for the time being attached to any
classes of shares.
(a) On show of hands, every member present in person shall have one vote,
and
(b) On a poll, the voting rights of members shall be as laid down in
section 87.
56. In the case of joint holders, the vote of the senior who tenders a vote,
whether in person or by proxy shall be accepted to the exclusion of the
votes of the other joint holders.
57. For this purpose, seniority shall be determined by the order in which the
name stands in the register of members.
58. A member of unsound mind, or in respect of whom an order has been made by
any court having jurisdiction in lunacy, may vote, whether on a show of
hand or on a poll, by the committee or other legal guardian, and any such
committee or guardian may, on a poll, vote by proxy.
59. No member shall be entitled to vote at any general meeting unless all calls
or other sums presently payable by him in respect of shares in the company
have been paid.
60. (a) No objection shall be raised to the qualification of any voter except
at the meeting or adjourned meeting at which the vote objected to is
given or tendered and every vote not disallowed at such meeting shall
be valid for all purposes.
(b) Any such objection made in due time shall be referred to the Chairman
of the meeting, whose decision shall he final and conclusive.
61. The instrument appointing a proxy and the power of attorney or other
authority, shall be deposited at the Registered Office of the Company
not less than 48 hours before the time for holding the meeting at
which the person named in the instrument proposes to vote; and in
default the instrument of proxy shall not be treated as valid.
62. An instrument appointing a proxy shall be in either of the forms in
Schedule IX to the Act or a form as near thereto as circumstances admit.
63. A vote given hi accordance with terms of an instrument of proxy shall be
valid, notwithstanding the previous death or insanity of the principal of
the revocation of the proxy or of the authority under which the proxy was
executed, or the transfer of the shares in respect of which the proxy is
given.
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AUDIT
64. Once at least in every year, the Accounts of the Company shall be examined
and the correctness of the Profit and Loss account and Balance Sheet
ascertained by one or more Auditors as provided in the act.
BOARD OF DIRECTORS
65. Unless otherwise determined by a General Meeting, the number of Directors
shall not be less than 2 nor more than ten. The first Directors of the
company are:
(1) Mr. Nirmal K. Datta
(2) Mr. Prafull R. Gandhi
Each of them shall hold the Office of a Director for life or until he/she
voluntarily resigns or the Office of a Director shall become vacant
under the provisions of Section 283 of the Companies Act. In the event
of a vacancy occurring among the aforesaid permanent Directors, the
Company shall have the power from time to time to appoint any other
person or persons to hold office as a Director for life.
66. The remuneration of the Directors shall be such as may be from time to time
be determined by the Company in general meeting. The directors may also be
paid all traveling, hotel and other expenses properly incurred by them in
attending meeting of the Directors or any committee of the Directors of -
general meetings or the Company or otherwise in connection with the
business of the Company.
67. If any Director shall perform extra or special service or shall make any
special exertion in going or residing abroad or attempting to secure for
the company contracts, rights, privileges and information or otherwise
howsoever for any of the purposes of the Company, the Company shall
remunerate such Director in such manner as the Board may determine and
such remuneration may be either by a fixed salary or a percentage of profit
or otherwise as may be authorized by the Board of Directors.
68. The Directors shall have power to appoint any person to be a Director,
either to fill a casual vacancy or as an addition to the existing
Directors, but so that the total number of Directors shall not at any time
exceed the number fixed by or in accordance with these Articles. Any
Director so appointed shall hold office only until the next following
annual general meeting and shall then be eligible for reelection but shall
not be taken into account in determining the Directors who are to retire by
rotation at such meeting.
69. The Company may by ordinary resolution of which special notice has been
given in accordance with the Act, remove any Director before the expiration
of his period of office notwithstanding anything in these articles or in
any agreement between the Company and such Director, such removal shall be
without prejudice to any claim such Directors may have for damages for
breach of any contract of service between him and the company.
70. The Company may by ordinary resolution appoint another person in place of
a Director removed from office under the immediately preceding articles
and without prejudice to powers of the Directors to appoint persons to be
Directors, the Company in general meeting may appoint any person to be a
Director either to fill a casual vacancy or as an additional Director.
71. No shareholding qualification of. directors shall be required.
71. A. "In consideration of sanctioning/subscription of long term loans and/or
private placement of shares in the capital of the Company by financial
institutions, investment funds and banks the Company shall agree to appoint
one Director each from such institutions, funds and banks as Institutional
Director/Nominee Director, if such appointment forms part of the loan
agreement and/or the private placement of shares in the capital of the
Company.
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Such Institutional Director/Nominee Director shall not be liable to retire
by rotation. The financial institutions, investment funds and banks may at
any time and from time to time remove the nominee or nominees appointed by
them and on a vacancy being caused in such office from any cause, whether
by resignation, death, removal or otherwise, appoint another or others in
his/their place by sending appropriate notice in writing to the Company and
the Company shall agree to such change/changes.
Each such Institutional/Nominee Director shall be entitled to the same
rights and privileges and be subject to the same obligations as any other
Director of the Company."
POWERS AND DUTIES OF DIRECTORS
72. The business of the Company shall be managed by the Directors, who may
exercise all such powers of the Company as are not, by the Act or by these
Articles, required to be exercised by the Company in general meeting.
73. The Directors may from time to time and at any time by power of attorney
appoint any Company, firm or person or body of persons, whether nominated
directly or indirectly by the Directors, to be attorney or attorneys of the
Company for such purposes and with such powers, authorities and discretions
(not exceeding those vested in or exercisable by the Directors under these
Articles) and for such period and subject to such conditions as they may
think fit, and any such powers of attorney may contain such provisions for
the protections and convenience of persons dealing with any such attorney
as the directors may think fit and may also authorize any such attorney to
delegate all or any of the powers, authorities and discretions, vested in
him.
74. All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments, and all receipts for monies paid to the Company,
shall be signed, drawn, accepted, endorsed, or otherwise executed, as the
case may be, in such manner as the Directors shall from time to time by
resolution determine.
75. The powers of the Directors to pay or provide for gratuities, pensions,
allowances or other benefits to persons who are or have been officers or
employees of the Company or the dependents of such persons shall include
power in the case of any Director or former Director who holds or has held
some other office or place of profit with the Company to pay or provide for
him or any of his dependents a gratuity or pension or allowance or life
assurance or other benefits, and any such Director may be admitted to or
continued in membership of any scheme or fund instituted or established or
financed or contributed to by the Company for the provision of any such
benefits for officers or employees of the Company or their dependents and
the Directors may pay any contributions payable by the Company under the
rules of any such scheme or fund in respect of his membership thereof or
pay any premiums for the purchase or provision of any such benefits.
PROCEEDINGS OF DIRECTORS MEETING
76. The Directors may meet together for the dispatch of business, adjourn and
otherwise regulate their meetings as they think fit. Questions arising at
any meeting shall be decided by a majority of votes. In case of an equality
of votes, the Chairman shall have a second or casting vote. A Director may,
and the Manager or Secretary on the requisition of a Director shall, at any
time summon a meeting of the Board.
77. The continuing Directors may act notwithstanding any vacancy in their body,
but, if and so long as their number is reduced below the number fixed by
the Act as the necessary quorum of Directors, the continuing Directors or
Director may act for the purpose of increasing the number of Directors to
that number or of summoning a general meeting of the Company but for no
other purpose.
78. Subject to the provisions of the Act, the Board may appoint an alternate
Director. The Directors remuneration shall continue to be paid to him
during the appointment of his alternate.
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79. The Directors may elect a Chairman of their meetings and determine the
period for which he is to hold office; but if no such Chairman is elected
or if at any meeting the Chairman is not present within fifteen minutes
after the time appointed for holding the same, the Director present may
choose one of their member to be Chairman of the meeting.
80. The Directors may delegate any of their powers to committees consisting of
such member or members of their body as they think fit; any committee so
formed shall in the exercise of the powers so delegated confirm to any
regulations that may be imposed on it by the Directors.
81. A committee may elect a Chairman of its meetings, if no such Chairman is
elected, or if any meeting the Chairman is not present within fifteen
minutes after the time appointed for holding the same, the members present
may choose one of their member to be Chairman of the meeting.
82. A committee may meet and adjourn as it thinks proper. Questions arising at
any meeting shall be determined by a majority of votes of the members
present and in the case of equality of votes the Chairman shall have a
second or casting vote.
83. A resolution in writing, signed by all the Directors shall be as valid and
effectual as if it has been passed at a meeting of the Directors duly
convened and held, provided that the signature of an alternate Director
instead of that of the Director by whom he was appointed shall suffice for
the purpose of this Article.
MANAGER OR SECRETARY
84. The Directors may appoint a Secretary or Manager for such term, at such
remuneration and upon search conditions as they think fit; and any Manager
or Secretary so appointed may be removed, by them.
85. A provision of the Act or these Articles requiring or authorizing a thing
to be done by or to a Director and the Manager or Secretary shall not be
satisfied by its being done by or to the same person acting both as
Director and as or in place of the Manager or Secretary.
THE SEAL
86. The Directors shall provide for the safe custody of the seal, which shall
only be used by the authority of the Directors or of a committee of the
Directors authorized by the Directors in that behalf and every instrument
to which the seal shall be affixed shall be signed by two Directors or by
one Director and the secretary or by one Director and some other person
appointed by the Directors for the purpose.
DIVIDENDS AND RESERVE
87. The Company in general meeting may declare dividends, but no dividend shall
exceed the amount recommended by the Board.
88. The Board may from time to time pay to the members such interim dividends
as appear to it be justified by the profits of the Company.
89. (a) The Board may before recommending any dividend set aside out
of the profits of the Company such sums as it thinks proper
as a reserve or reserves which shall at the discretion of
the Board be applicable for the purpose to which the profits
of the Company may be properly applied including provision
for meeting contingencies or for equalizing dividends; and
pending such application may at the like discretion either
be employed in the business of the Company or be invested in
such investment (other than shares of the Company) as the
Board may from time to time think fit).
(b) The Board may also carry forward any profits which it may
think prudent not to divide, without setting them aside as a
reserve.
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90. (a) Subject to the rights of persons, if any entitled to shares with
special rights as to dividends, all dividends shall be declared and
paid according to the amounts paid or credited as paid on the shares
in respect whereof the dividend is paid, but if and so long as nothing
is paid upon any of the shares in the Company, dividends may be
declared and paid according to the amounts of the shares.
(b) No amount paid or credited as paid on a share in advance of calls
shall be treated for the purposes of this regulation as paid on the
share.
(c) All dividends shall be apportioned and paid proportionately to the
amounts paid or credited as paid on the shares during any portion or
portions of the period in respect of which the dividend is paid; but
if any share is issued on terms providing that it shall rank for
dividends as from a particular date such shares shall rank for
dividend accordingly.
91. The Board may not deduct from any dividend payable to any member all
sums of money, if any, presently payable by him to the Company on
account of calls or otherwise in relation to the share of the Company,
except his/her consent.
92. Any dividend, interest or other monies payable in cash in respect of shares
may be paid by cheque or warrant sent through the post directed to the
registered address of the holder or in the case of joint holders to the
registered address of that one of the joint holders who is first named on
the register of members, or to such person and to such address as the
holder or joint holders may in writing direct.
93. Any one of two or more joint holders of a share may give effectual receipts
for any dividends, bonuses or other monies payable in respect of such
share.
94. Notice of any dividend that may have been declared shall be given to the
persons entitled to share therein the manner mentioned in the Act.
CAPITALIZATION OF PROFITS
95. (1) The Company in general meeting may, upon the recommendation of the
Board. resolve
(a) that it is desirable to capitalize any part of the amount for the
time being standing to the credit of any of the Company's reserve
accounts, or to the credit of the Profit and Loss account or
otherwise available for distribution; and
(b) that such sum be accordingly set free for distribution in the manner
specified in clause (2) amongst the members who would have been
entitled thereto, if distributed by way of dividend and in the same
proportions.
(2) The sum aforesaid shall not be paid in cash but shall be applied
subject to the provision contained in clause (3) in or towards
(a) paying up any amounts for the time being unpaid on any shares held
by such members respectively;
(b) paying up in full, unissued shares of the Company to be allotted and
distributed, credited as fully paid-up to and amongst such members
in the proportions aforesaid; or
(c) partly in the way specified in sub-clause (a) and partly in that
specified in sub-clause (b)
(3) A share premium account and a capital redemption reserve account may,
for the purposes of this regulation, only be applied in the paying up
of unissued shares to be issued to members of the Company as fully
paid bonus shares.
(4) The Board shall give effect to the resolution passed by the Company in
pursuance of this regulation.
96. (I) Whenever such a resolution as aforesaid shall have been passed the
Board shall
12
<PAGE>
(a) make all appropriation and application of the undivided profit
resolved to be capitalized thereby and all allotments and issues of
fully paid shares if any; and
(b) generally do all acts and things required to give effect thereto.
(2) The Board shall have full power
(a) to make such provision, by the issue of fractional certificates or
by payment in cash or otherwise as it thinks fit, for the case of
shares or debentures becoming distributable in fractions; and also
(b) to authorize any person to enter, on behalf of all the members
entitled thereto, into an agreement with the Company providing for
the allotment to them respectively, credited as fully paid-up, of
any further shares to which they may be entitled upon such
capitalization, or (as the case may require) for the payment of by
the Company on their behalf, by the application thereto of their
respective proportions of the profits resolved to be capitalized of
the amounts or any part of the amounts remaining unpaid on their
existing shares.
(3) Any agreement made under such authority shall be effective and binding
on all such members.
BORROWING POWERS
97. The Directors may from time to time borrow, raise, receive payment of any
sum or sums of money on deposit at interest or otherwise for the purpose of
the Company in such manner as they shall think fit.
98. The Directors may raise and secure the repayment of such sum or sums in
such manner and upon such terms and conditions in all respects as they
think fit and in particular by the issue of bonds, perpetual or redeemable
debentures of the Company or by the creation of debenture stock charged
upon all or any part of the assets of the Company (both present and future)
including its uncalled capital for the time being or by making, drawing,
accepting or endorsing on behalf of the Company any promissory notes or
bills of exchange or other negotiable instruments or giving or issuing any
other security of the Company or by mortgage or charge or pledge of any
loan, buildings, machinery, plant, goods or the property both present and
future. Whenever any uncalled capital of the Company is included in or
charged by any mortgage or other security, such mortgage or security may
include an authority to the person in whose favour the same is executed or
any other person trust for him to make calls on the members in respect of
such uncalled capital and the provisions hereinbefore contained in regard
to calls shall mutatis mutandis apply to calls made under such authority
and such authority may be made exercisable either conditionally or
unconditionally and either presently or contingently and either to the
exclusion of the Directors power or otherwise and shall be assignable if
expressed so to be.
WINDING UP
99. If the Company shall be wound-up, the assets available for distribution
amongst the members shall (subject to any rights attached to any new class
of shares hereafter created) be applied, in repayment of the capital paid
up on the ordinary shares and any balance shall be distributed amongst the
holders thereof in proportion to the number of ordinary shares held by them
respectively.
100. (1) If the Company shall be bound up liquidator may, with the sanction of
a special resolution of the Company and any other sanction required by
the Act, divide among the members, in specie or
(2) For the abovesaid purpose, the liquidator may set such value as he
deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried out as between the
members or different classes of members.
(3) The liquidator may, with the like sanction, vest the whole or any part
of such assets in trustees upon such trusts for the benefit of the
contributories as the liquidator, with the like sanction shall think
fit but so that no member shall be compelled to accept any shares or
other securities whereon there is any liability.
13
<PAGE>
INDEMNITY
101. Every Director, Manager, Auditor, Secretary and other Of fleer for the time
being of the Company shall be indemnified out of the assets of the Company
against any liability incurred by him in defending any proceedings, whether
civil or criminal, in which judgement is given in his favour or in which he
is acquitted or in connection with any application under the Act in which
relief is granted to him by the court.
We, the several persons, whose names and addresses and descriptions are
hereunder subscribed, are desirous of being formed into a Company in
pursuance of this Memorandum of Association and we respectively agree to
take the number of shares in the Capital of the Company set opposite to our
respective names.
<TABLE>
<CAPTION>
Signature, names Number of shares by Signature, Name,
addresses, description & each subscriber address, description &
occupation of Subscriber. occupation of WITNESS
- --------------------------------------------------------------------------------
<S> <C> <C>
100 (ONE HUNDRED)
Sd/ EQUITY SHARES Sd/
NIRMAL KUMAR DATTA SANJIV PIYUSH JHAVERI
S/O. NIRAD BARAN DATTA S/O PIYUSH JAYANTILAL
FLAT NO. l JHAVERI
SURAT BAHAR 6 STANROSE APPT.
17, VICTOR BUNDER ROAD OFF VEER SAVARKAR MARG
COLABA PARABHADEVI
Bombay - 400005 BOMBAY - 40025
OCCUPATION: OCCUPATION:
BUSINESS EXECUTIVE CHARTERED ACCOUNTANT
WITNESS TO ALL
Sd/
PRAFULL GANDHI
S/O RAMJIBHAI GANDHI 100 (ONE HUNDRED)
14, TARDEO COURT EQUITY SHARES.
1ST FLOOR
NEAR BHATIA HOSPITAL
TARDEO ROAD
BOMBAY - 400007
------------------
OCCUPATION: 200 (TWO HUNDRED)
CHARTERED ACCOUNTANT EQUITY SHARES.
- --------------------------------------------------------------------------------
</TABLE>
BOMBAY:
DATED: this 23rd day of May 1990.
14
<PAGE>
EXHIBIT 10.2
THE COMPANIES ACT 1985
__________
PRIVATE COMPANY LIMITED BY SHARES
__________
ARTICLES OF ASSOCIATION
of
INFORMATION MANAGEMENT RESOURCES (U.K.) LIMITED
(adopted by special resolution passed on __________, 1994)
__________
PRELIMINARY
1. In these Articles "Table A" means Table A in the Schedule to the Companies
(Tables A to F) Regulations 1985 and "the Act" means the Companies Act 1985
including any statutory modification or re-enactment thereof for the time
being in force.
2. The regulations contained in Table A shall apply to the Company save
insofar as they are excluded or modified by or inconsistent with the
Articles hereinafter contained and such regulations and articles shall be
the Articles of the Company. References herein to "Regulations" are to
regulations of Table A.
3. Regulations 3, 24, 40, 50, 64, 65-67 inclusive, 73-80 inclusive, 94, 96,
97, 101, 118, the third sentence of Regulation 88 and the last sentence of
each of Regulations 84 and 112 and the words "within the United Kingdom"
contained in Regulations 116 shall not apply.
SHARE CAPITAL
4. Each of the shares issued prior to _______, 1994 shall be designated an "A"
share by the directors and each share issued after the adoption of this
Article shall be designated an "A" share or a "B" share by the directors
immediately following its issue in accordance with the following
provisions:
Page 1
<PAGE>
(i) any share issued to a person who holds one or more "A" shares but no
"B" shares at the time o the issue of such share shall be designated
an "A" share;
(ii) any share issued to a person holds one or more "B" shares but no "A"
shares at the time of the issue of such shares shall be designated a
"B" share;
(iii) in every other case the designation shall be at the discretion of
the directors.
5. Except as expressly provided to the contrary in these Articles, the "A"
shares and the "B" shares shall rank and be treated pari passu in all
respects.
6. The lien conferred by Regulation 8 shall attach to fully paid shares and to
all shares registered in the name of any person indebted or under liability
to the Company whether he be the sole registered holder of such shares or
one of two or more joint holders and shall extend to all moneys payable by
him or his estate to the Company.
TRANSFER OF SHARES
7. The directors may, in their absolute discretion and without giving any
reason for doing so, decline to register the transfer of any share, whether
or not a fully paid share.
PURCHASE OF OWN SHARES
8. Regulation 35 shall be modified by the deletion of the words "otherwise
than out of distributable profits of the Company or the proceeds of a fresh
issue of shares" and the substitution for them of the words "whether out of
its distributable profits or out of the proceeds of a fresh issue of shares
or otherwise."
PROCEEDINGS AT GENERAL MEETINGS
9. No business shall be transacted at any meeting unless a quorum is present.
A quorum shall be not less than two person entitled to vote upon the
business to be transacted, one of whom must be a holder of "A" shares or a
proxy or duly authorized representative of such holder and one of whom must
be a holder of "B" shares or a proxy or duly authorized representative of
such holder.
10. If within half an hour from the time appointed for the meeting a quorum is
not present, the meeting, if convened upon the requisition of members,
shall be dissolved. In any other case it shall stand adjourned to the same
day in the next week, at the same time and place or to such other day and
at such other time an [sic] place as the directors may determine. If at
any adjourned meeting a quorum is not present within half an hour from the
time appointed for that meeting, the meeting shall be dissolved.
Page 2
<PAGE>
APPOINTMENT AND REMOVAL OF DIRECTORS
11. Unless and until the Company in general meeting shall otherwise determine,
the number of directors shall be four.
12. The directors shall be such persons as are appointed in accordance with the
following provisions:
(a) the holders of a majority in number of the issued "A" shares shall
be entitled to appoint two directors by notice to the Company signed
by the holders of a majority in number of the issued "A" shares or
their duly authorized representatives deposited at the registered
office of the Company;
(b) the holders of the majority in number of the issued "B" shares shall
be entitled to appoint two directors by notice to the Company signed
by the holders of a majority in number of the issued "B" shares or
their duly authorized representatives deposited at the registered
office of the Company.
(c) each director so appointed by the holders of the majority in number
of the issued "A" shares shall be designated an "A" director and
each director so appointed by the holders of the majority in number
of the issued "B" shares shall be designated a "B" director.
(d) the holders of a majority in number of the issued "A" shares may at
any time remove or replace any "A" director by notice signed and
deposited as described in paragraph (a) above;
(e) the holders of a majority in number of the issued "B" shares may at
any time remove or replace any "B" director by notice signed and
deposited as described in paragraph (b) above.
ALTERNATE DIRECTORS
13. Any director (other than an alternate director) may appoint any other
director or any other person approved by the directors and willing to act
to be an alternate director and may remove from office an alternate
director so appointed by him. Al alternate director may represent one or
more directors. An alternate director shall forthwith cease to be an
alternate director if his appointor ceases for any reason to be a director.
14. An alternate director shall be entitled:
(a) to receive notice of all meetings of directors and of all committees
of directors of which his appointor is a member and to attend any
such meeting;
Page 3
<PAGE>
(b) to one vote for every director whom he represents who is not
personally present, in addition to his own vote (if any) as a
director at any meeting of the directors or of any committee of
directors; and
(c) to sign a resolution in writing of the directors on behalf of every
director whom he represents as well as on his own account if he
himself is a director;
provided that paragraphs (b) and (c) above shall only entitle an alternate
director to vote or sign resolutions which his appointor is entitled to
vote on or sign.
15. An alternate director shall be entitled generally to perform all the
functions of his appointer [sic] as a director in his absence but shall not
as an alternate director be entitled to receive any remuneration from the
Company, save that he may be paid by the Company that part (if any) of the
remuneration otherwise payable to his appointor as his appointor may by
notice in writing to the Company from time to time direct.
DELEGATION OF DIRECTORS' POWERS
16. The directors may delegate any of their powers to committees consisting of
such person (whether directors or not) as they think fit. References in
these Articles to a committee of directors shall include a committee of
persons as referred to in this Article and references to a director as a
member of such a committee shall include a person as so referred.
Regulation 72 shall be modified accordingly.
PROCEEDINGS OF DIRECTORS
17. No business shall be transacted at any meeting of the directors unless a
quorum is present. For these purposes a quorum shall be not less than two
directors, one of whom must be an "A" Director (as defined in Article 12)
or his alternate and one of whom must always be a "B" Director (as defined
in Article 12) or his alternate.
18. A director absent or intending to be absent from the United Kingdom may
the directors during his absence to send notices of meetings of the
directors to him at such address within the United Kingdom or elsewhere as
he may give to the Company for this purpose.
19. A director (including in alternate director) who to his knowledge is in any
way, whether directly or indirectly, interested in a contract or proposed
contract (within the meaning of Section 317 of the Act) with the Company
shall declare the nature of his interest at a meeting of the directors in
accordance with that section. Subject, where applicable, to such
disclosure a director may vote and count in the quorum at a meeting of
directors or of a committee of directors on any resolution concerning a
matter in which he has,
Page 4
<PAGE>
directly or indirectly, an interest or duty which is material and which
conflicts or may conflict with the interests of the Company.
20. The directors may dispense with the keeping of attendance books for
meetings of the directors or committees of the directors. Regulation 100
shall be modified accordingly.
21. Any director (including an alternate director) may participate in a meeting
of the directors or a committee of the directors of which he is a member by
means of a conference telephone or similar communicating equipment whereby
all persons participating in the meeting can hear each other. A person so
participating shall be deemed to be present in person at such meeting and
shall be entitled to vote or be counted in quorums accordingly. Such
meeting shall be deemed to take place where the largest group of those
participating is assembled, or, if there is no such group, where the
chairman of the meeting then is.
BORROWING POWERS
22. The directors may exercise all the powers of the Company to borrow or raise
money and to mortgage or charge its undertaking, property and uncalled
capital and subject to Section 80 of the Act, to issue debentures,
debenture stock and other securities as security for any debt, liability or
obligation of the Company or of any third party.
THE SEAL
23. In addition to its powers under Section 36A of the Act, the Company may
have a seal and the directors shall provide for the safe custody of such
seal. The directors shall determine who may sign any instrument to which
the seal is affixed and unless otherwise so determined it shall be signed
by a director. The obligation under Regulation 6 of Table A relating to the
sealing of share certificates shall only apply if the Company has a seal.
INSURANCE AND INDEMNITY
24. The Company shall be entitled to purchase and maintain insurance for any
officer or auditor of the Company against any liability attaching to such
persons in respect of any negligence, default, breach of duty or breach of
trust of which he may be guilty in relation to the Company.
25. Subject to the provisions of the Act, the Company may indemnify every
director, auditor or other officer of the Company against all costs,
charges, losses, expenses and liabilities incurred by him in defending any
proceedings, whether civil or criminal, which relate to anything done or
omitted to be done or alleged to have been done or omitted to be done by
him as an officer or auditor of the Company and in which judgment was given
in his favour (or the proceedings are otherwise disposed of without any
finding or admission of any material breach of duty on his part) or in
which he is acquitted or in connection with
Page 5
<PAGE>
any application under section 144(3) or (4) or Section 727 of the Act in
which relief is granted to him by the court.
- -------------------------------------
NAMES AND ADDRESSES OF SUBSCRIBERS
- -------------------------------------
TRAVERS SMITH LIMITED
of Snow Hill
London EC1A 2AL
Peter D. Hill
TRAVERS SMITH SECRETARIES LIMITED
of Snow Hill
London EC1A 2AL
Peter D. Hill
---------
TOTAL SHARES TAKEN 2
- -------------------------------------
Dated the 23rd day of September, 1992
WITNESS to the above signatures:
Ruth Patricia Bracken
10 Snow Hill
London EC1A 2AL
Solicitor's clerk
Page 6
<PAGE>
EXHIBIT 10.3
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT is made as of the 17th day of October, 1994
among INFORMATION MANAGEMENT RESOURCES, INC., a corporation incorporated under
the laws of Florida whose principal place of business is at 26750 U.S. Highway
19 North, Suite 500, Clearwater, Florida 34621, United States of America ("IMR-
U.S.") SATISH K. SANAN an individual residing at 163 Wood Creek Drive, Safety
Harbor Florida 34695, United States of America ("MR. SANAN"), ANNE SANAN an
individual residing at 163 Wood Creek Drive, Safety Harbor, Florida 34695,
United States of America ("MRS. SANAN") and THE LINK GROUP OF COMPANIES LIMITED,
a company incorporated under the laws of England whose principal place of
business is at Link House, St. Mary's Way, Chesham. Bucks HP5 1 HR. Great
Britain, ("Link").
WHEREAS, the parties wish to venture together to provide offshore software
consulting and development services to customers in the United Kingdom and
Europe; and
WHEREAS, IMR-U.S. owns 79% of the issued share capital of Information
Management Resources (U.K.) Limited, a company incorporated under the laws of
England ("IMR-U.K.") and the remaining issued share capital of IMR-U.K. is owned
20% by MR. SANAN, the President and majority shareholder of IMR-U.S., and 1% by
MRS. SANAN; and
WHEREAS, the parties desire that Link shall acquire an interest in IMR-U.K.
and that IMR-U.K. shall be the vehicle through which the parties shall provide
offshore software consulting and development services to customers in the United
Kingdom and Europe.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. PURCHASE BY LINK OF IMR-U.K. SHARES
-----------------------------------
(a) Immediately following the signature of this Agreement, IMR-U.S.
shall procure that all necessary steps shall be taken to amend IMR-
U.K.'s Memorandum and Articles of Association to adopt the form
attached hereto as Exhibit A and to increase the authorized share
---------
capital of IMR-U.K. from (Pounds)1,000 to (Pounds)2,000 divided
into 1,000 A Shares of (Pounds)1 each and 1.000 B Shares of
(Pounds)1 each. The fees and expenses of such amendment and
increase in share capital shall be shared equally by the parties.
(b) The Ordinary Shares of (Pounds)1 in IMR-U.K. held by IMR-U.S., MR.
SANAN and MRS. SANAN shall be redesignated as A Shares of (Pounds)1
each
(c) Immediately following the effective date of the increase in the
authorized share capital of IMR-U.K., Link shall apply for one
thousand (1,000) B Shares of (Pounds)1 each in the capital of IMR-
U.K.
<PAGE>
(d) The purchase price to be paid by Link for such 1,000 B Shares of
(Pounds)1 each in IMR-U.K. shall be (Pounds)1,000, which shall be
paid in cash to IMR-U.K. at the time the shares are issued.
(e) Following the acquisition by Link of such 1,000 shares in IMR-U.K.,
the shareholdings in IMR-U.K. will be as follows:
<TABLE>
<CAPTION>
SHAREHOLDER NO. OF PERCENTAGE
SHARES OWNED
OWNED
<S> <C> <C>
IMR-U.S. 790 39.5%
MR. . SANAN 200 10.0%
MRS. SANAN 10 .5%
Link 1,000 50.0%
TOTAL 2,000 100.0%
</TABLE>
(f) IMR-U.S. shall be responsible for payment of all liabilities
incurred by IMR-U.K. prior to the date on which Link acquires
shares in IMR-U.K. and IMR-U.S. shall indemnify IMR-U.K. against
any liability for such liabilities.
2. ADDITIONAL FINANCING
--------------------
(a) During the six month period following the acquisition of shares in
IMR-U.K by Link, Link shall make a loan to IMR-U.K. in the amount
of at least (Pounds)107,545. Such loan shall be paid to IMR-U.K. in
instalments so as to achieve the objectives set forth in Exhibit B
---------
hereto at the times set out therein. Link shall use its reasonable
endeavours to achieve the said objectives within the budget in
Exhibit B
(b) If at any time during the Relevant Period IMR-U. K. incurs an
operating deficit, Link shall promptly make an interest free loan
or loans to IMR-U.K. in an amount sufficient to fund such deficit.
As used herein, the term "Relevant Period" shall mean the twelve-
month period which comprises the seventh through the eighteenth
months following the date on which Link acquires shares in IMR-U.K.
(c) The loan provided for in paragraph (a) of this Clause 2 shall be
interest-free and with a repayment date of three years from the
date hereof, subject to mutual agreement by Link and IMR-U.S. to an
earlier repayment. Such loan shall be repaid only when there are
sufficient distributable profits to pay a dividend to IMR-U.S. as
provided for in Clause 5(e) hereof. [To the left of paragraph (c)
"amended 12/11/95" is written by hand.]
--
<PAGE>
(d) The loans provided for in Clause 2(b) are short term loans and
shall be repaid as soon as IMR UK has the funds to repay them
without adversely affecting the trading position of IMR UK.
(e) On any winding-up of IMR UK neither IMR US or Link shall have any
obligation to pay any loan outstanding from IMR UK to the other. It
is agreed that on any such winding-up that to the extent that any
loan is repaid to Link an equal sum will be dividended to IMR US.
If a surplus remains after repaying all loans to Link and after an
equal amount is dividended to IMR US the remaining monies will be
distributed to link and IMR US equally. [To the left of paragraph
(e) "deleted 12/11/95" is written by hand.]
(f) If IMR-U.S. purchases Link's shares in IMR-UK then it is agreed
that the outstanding balance of the loan described in paragraph (a)
of this Clause 2 shall be forgiven by Link
3. ORGANIZATION OF IMR-U.K.
------------------------
The parties shall use their respective best endeavors to procure that
immediately following the acquisition by Link of shares in IMR-U.K: [The
word "best" has been deleted by hand and replaced with the word
"reasonable".]
(a) MR. SANAN and Jeffery S. Slowgrove shall be appointed by IMR-U.S.
as A Directors of IMR-U.K. and Philip Shipperlee and Sheila
Shipperlee shall be appointed as B Directors of IMR-U.K. and Sheila
Shipperlee will be appointed as Joint Secretary with Andrew Etkind.
(b) The registered office of IMR-U.K. shall be moved to 100 Grays Inn
Road, London, WC1X 8BY, Great Britain.
(c) Arram Berlyn Gardner shall be appointed as auditors of IMR-U.K.
4. BUSINESS OF IMR-U.K.
--------------------
(a) IMR-U.K. shall engage in the business of marketing and providing
offshore software consulting and development activities to
customers in the United Kingdom and Europe.
(b) IMR-U.K. shall subcontract to Information Management Resources
(India) Ltd. ("IMR-India") an Indian company which is a subsidiary
of IMR-U.S, all of its requirements for offshore work and, for this
purpose, IMR-U.K. shall enter into a Master Services Agreement with
IMR-India in the form attached as Exhibit C hereto.
---------
<PAGE>
(c) The initial location of IMR-U.K.'s principal office shall be at the
Chesham, England offices of Link.
(d) IMR US will on the execution of this document enter into a know-how
license agreement with IMR UK in the form attached as Exhibit E
hereto.
5. CONDUCT OF IMR-U.K.'S BUSINESS
------------------------------
(a) The Business of IMR-U.K. shall be conducted under the control of
the Board of Directors of the Company (the "Board"). Meetings of
the Board shall be held at least quarterly. Unless otherwise agreed
by the Board, meetings of the Board shall be held in the United
Kingdom but Directors residing outside the United Kingdom may
participate by means of a conference telephone. Philip Shipperlee
shall act as Managing Director and shall have day-to-day
responsibility for the operations of IMR-U. K The Managing Director
will provide a written monthly management report to the Board.
(b) The following matters shall required approval of the Board:
(i) Expenditure of funds of IMR-U.K. in excess of (Pounds)10,000
for one transaction;
(ii) The assumption or incurrence of indebtedness by IMR-U.K.
except to trade creditors in the ordinary course of
business;
(iii) Payment of fees, salaries, compensation or any other
payments to any shareholder or director of IMR-U.K.;
(iv) Approval of the initial budget and business plan and of all
subsequent annual budgets and business plans;
(v) Submission of any proposal to shareholders, including
proposals for any increase in the authorized capital of IMR-
U.K. for the declaration of dividends, for the merger of
IMR-U.K. with any other entity or for the sale of all or
substantially all of IMR-U.K. assets;
(vi) Investments in or guarantees of obligations of other
entities;
(vii) Granting of any security interest, lien or charge over any
asset of IMR-U.K.
(viii) Entry into any agreement outside the ordinary course of
business;
(ix) Any other matters as the Board may agree from time to time
or as may be required by applicable law.
--
<PAGE>
(c) IMR-U. K. shall adopt and follow United Kingdom generally accepted
accounting principles. IMR-U. K. shall retain an independent
accounting firm, chosen by agreement of the parties, to audit its
financial statements on an annual basis.
(d) The Board shall (subject to the need to respond to changing
business requirements) manage IMR-U.K's business during the 18
month period commencing on the date on which Link becomes a
shareholder in accordance with the business plan attached as
Exhibit D hereto.
---------
(e) The dividend policy of IMR-U.K. shall be determined by its
Directors and shareholders in accordance with its Articles of
Association provided, however, that the parties shall each use
their respective voting rights to ensure that, at the time that all
or any part of the loan made by Link to IMR-U.K. pursuant to
Section 2(a) hereof is repaid, IMR-U.S. will be paid a dividend in
an amount equal to the loan amount repaid to Link and Link shall
waive its right to a dividend at such time in order to permit the
payment of such dividend to IMR-U.S. only. [To the left of this
paragraph "amended 12/11/96" is written by hand.]
(f) Except as provided for in paragraph (e) of this Clause 5, A Shares
and B Shares the capital of IMR-U.K. shall be treated equally for
dividend purposes.
6. DISPOSAL OF SHARES
------------------
(a) As used herein, the term "Affiliate" shall mean any person,
corporation or other entity that directly or indirectly controls,
or is controlled by, or is under common control with, a party. MR.
SANAN and MRS. SANAN shall be deemed to be Affiliates of IMR-U.S.
(b) Neither party shall (while the other party or any Affiliate of any
other party owns any shares of IMR-U.K.) sell, transfer, assign or
pledge any of its shares in IMR-U.K. or any legal or beneficial
interest therein except in accordance with the following provisions
of this Clause 6. For the purpose of this Clause 6 Clause 7, Clause
9 and Clause 10 following IMR-U.S., MR. SANAN and MRS. SANAN shall
be deemed to be one party.
(c) Each party shall be entitled to transfer any of its shares in IMR-
U.K. to any Affiliate of such party provided that:
(i) such Affiliate shall enter into a Deed in favor of the other
party containing provisions mutatis mutandis identical to
----------------
those in this Clause 6; and
--
<PAGE>
(ii) such party shall not thereafter do, or permit anything to be
done, to cause such Affiliate to cease to be its Affiliate
while such Affiliate owns shares in IMR-U.K.
(d) A party (the "Offeror") who desires to dispose of all, but not less
than all, of its shares in IMR-U.K., to a bona fide independent
third party shall give a notice (the "Disposal Notice") to the
other (the "Offeree"). The Disposal Notice shall specify the number
of shares the Offeror intends to dispose of (the "Offered Shares"),
identify and give the address of the proposed purchaser, and
indicate the price and terms of payment.
(e) Upon receipt of a Disposal Notice, the Offeree shall have the
exclusive first option, but not the obligation, to purchase all,
but not less than all, of the Offered Shares at the price and upon
the payment terms specified in the Disposal Notice. The Offeree
shall give notice (the "Counter Notice") of its election to
exercise its option to purchase the Offered Shares within forty-
five (45) days after the Offeree receives the Disposal Notice.
If no Counter Notice is given by the Offeree within such forty-five
(45) day period, the Offeror shall be entitled to transfer the
Offered Shares to the bona fide independent third party at the
price, and upon the payment terms, specified in the Disposal
Notice. If a Counter Notice is given within the forty-five (45) day
period, the Offeree shall purchase, and the Offeror shall sell, the
Offered Shares at the price and upon the payment terms specified in
the Disposal Notice. Such sale and purchase shall be completed
within thirty (30) days after receipt by the Offeror of the Counter
Notice.
7. DEADLOCK
--------
(a) In the event that the Board is unable to reach agreement to take
action with respect to any matter listed in Clause 5(b) hereof or
with respect to any other material matter, either party may give
notice in writing ("Deadlock Notice") of such occurrence. Upon
delivery of a Deadlock Notice, the parties shall in good faith take
such steps as they deem appropriate with a view to resolving the
deadlock.
(b) If the parties are unable to resolve a deadlock within thirty (30)
days after delivery of a Deadlock Notice, either party may give
written notice to the other offering to buy all of such other
party's shares in IMR-U.K. at a price per share specified in such
notice or to sell all of its shares in IMR-U.K. to the other party
at such price per share which notice when served on IMR-U.S., MR.
SANAN or MRS. SANAN shall include an obligation to buy or sell all
of the shares of IMR-U.S., MR. SANAN and MRS. SANAN. Within thirty
(30) days after receipt of such notice, the other
--
<PAGE>
party shall give written notice to the first party of such other
party's decision either to sell its shares or to purchase the first
party's shares at the price per share specified in the first
party's notice. The purchase or sale shall take place for cash
within not more than ninety (90) days of such other party's notice.
In the event that the other party fails to give notice to the first
party of the other party's decision within the period specified
above, the other party shall be deemed to have agreed to sell its
shares to the first party at the price specified in the first
party's notice.
8 CONFIDENTIAL INFORMATION
------------------------
(a) All confidential business information, including, without
limitation, methodologies, know-how, customer lists and financial
information (hereinafter refereed to as "Confidential Information")
obtained by any party (the "Receiving Party") from another (the
"Disclosing Party") pursuant to this Agreement or in connection
with the transactions hereby contemplated shall remain the property
of the Disclosing Party. Unless such Confidential Information was
previously known to the Receiving Party free of any obligation owed
to the Disclosing Party to keep it confidential, such Confidential
Information shall be kept confidential by the Receiving Party
unless such information:
(i) is or becomes generally publicly available through no
wrongful act of the Receiving Party;
(ii) is independently developed by the Receiving Party; or
(iii) is received by the Receiving Party from a third party who
was free to disclose it.
(b) With respect to the other party's Confidential Information, the
Receiving Party hereby agrees that, during the term of this
Agreement and for a period of ten (10) years thereafter, it shall
not use or commercialize such Confidential Information except for
the purposes of this Agreement and shall not disclose such
Confidential Information to any person or entity, except to its own
employees having a "need to know".
9. TERM
----
(a) This Agreement shall remain in effect until:
(i) the dissolution of IMR-U.K.;
(ii) the sale or transfer by either party of all of the shares in
IMR-U. K. owned by such party and its Affiliates in
accordance with the provisions of this Agreement; or
--
<PAGE>
(iii) termination pursuant to Clause 10 hereof.
(b) The obligations of the parties under Clauses 8, 11 and 12 hereof
shall survive the termination of this Agreement.
10. TERMINATION
-----------
(a) In the event that a party (the "Defaulting Party") commits a
material breach of this Agreement and such breach (if remediable)
is not remedied within sixty (60) days after receipt by the
Defaulting Party from the other party of notice of such breach, the
non-defaulting party shall (in addition to any other rights and
remedies available to it) have the option to purchase all of the
shares in IMR-U.K. held by the Defaulting Party and any Affiliate
of the Defaulting party (and the Defaulting Party shall have the
obligation to sell such shares) at the Transfer Price (as defined
in paragraph (d) of this Clause 10).
(b) In the event that:
(i) a court of competent jurisdiction shall enter a decree or
order, not stayed within 60 days from the date of entry
thereof, appointing a trustee or receiver of either party or
any substantial part of its property, or shall approve a
petition for or effecting an arrangement in bankruptcy, a
reorganization pursuant to a bankruptcy act or other
judicial modification or alteration of the rights of
creditors of such other party;
(ii) any party shall itself file such petition or take or consent
to any other action seeking any such judicial decree or
order, or shall make an assignment for the benefit of its
creditors, or shall admit in writing its inability to pay
its debts generally as they become due; or
(iii) any court of competent jurisdiction shall enter a decree or
order adjudicating any party as bankrupt or insolvent, the
other party shall (in addition to any other rights and
remedies available to it) have the option to purchase all of
the shares in IMR-U. K. held by the first party and any
Affiliate of the first party (and the first party shall have
the obligation to sell such shares) at the Transfer Price.
(c) In the event that control of either party shall change, the other
party shall, upon written notice to the first party given not more
than sixty (60) days after such other party becomes aware of the
change, have the right to purchase all of the shares in IMR-U.K.
owned by the first party, and any Affiliate of the first party, at
the Transfer Price. A change in control of a party shall be deemed
to have occurred upon the acquisition by any person (or group of
persons) of more than 50% of the outstanding voting shares of such
party.
--
<PAGE>
(d) As used herein, the term "Transfer Price" shall mean the price
determined by IMR-U.K.'s independent accounting firm as the fair
market price between a willing buyer and a willing seller of the
shares to be acquired. Such independent accounting firm shall act
as experts and not as arbitrators and their decision shall be final
and binding as to all matters referred to them. The party
purchasing shares at the Transfer Price shall be entitled to deduct
from such price all sums properly payable to it by the other party
by way of damages for breach plus the fees of the independent
accounting firm for determining the Transfer Price.
11. CESSATION OF USE OF "INFORMATION MANAGEMENT RESOURCES" NAME
-----------------------------------------------------------
If at any time, and for any reason, (whether pursuant to Clause 6, Clause
7 or Clause 10 of this Agreement or otherwise) Link acquires all the
shares in IMR-U.K. held by IMR-U.S. and any Affiliate of IMR-U.S., Link
shall, within thirty (30) days of such acquisition, (i) cause IMR-U.K. to
change its name so us to remove the words "Information Management
Resources" from its name, and (ii) cease using the name "Information
Management Resources" or the abbreviation "IMR" as a trade or corporate
name in any manner.
12. PERFORMANCE OF EXISTING CONTRACTS
---------------------------------
In the event that (a) Link acquires all the shares in IMR-U.K. held by
IMR-U.S. and/or any Affiliate of IMR-U.S. or (b) this Agreement expires
or is terminated (otherwise than because of a material breach of this
Agreement by Link or the bankruptcy of Link), IMR-U.S. and its Affiliates
shall continue to perform in accordance with the terms and conditions of
any contracts which were entered into between (i) IMR-U.K. or any
customer of IMR-U.K. and (ii) IMR-U.S. or such Affiliates of IMR-U.S.
prior to the date of such acquisition, expiration or termination.
13. NOTICES
-------
All notices or other communications provided for or required hereunder
shall be given in writing by pre-paid registered air mail or by personal
delivery as follows:
If to Link:
Philip Shipperlee
Managing Director
The Link Group of Companies Limited
Link House, St. Mary's Way
--
<PAGE>
Chesham, Bucks HP5 1 HR
Great Britain
If to IMR-U.S.
MR. SANAN
President and CEO
Information Management Resources, Inc.
26750 U.S. Highway 19 North
Suite 500
Clearwater, Florida 34621
USA
or to such other address as either of the parties shall substitute as its
address for the receipt of notice given as required herein.
14. MISCELLANEOUS
-------------
(a) This Agreement shall be governed by and construed in accordance
with the laws of England (excluding any rules of choice of law or
conflict of laws).
(b) The parties agree that any legal proceedings brought by Link
against IMR relating in any way to this Agreement shall be brought
in the Sixth Judicial Circuit of the State of Florida or in the
United States District Court for the Middle District of Florida
(Tampa Division).
(c) The parties agree that any legal proceedings brought by IMR against
Link relating in any way to this Agreement shall be brought in the
courts of England.
(d) Notwithstanding anything contained in paragraphs (b) or (c) of this
Clause 14, a party shall be permitted to raise any counterclaim it
may have against the other party in any court in which the other
party has instituted a legal action against such party.
(e) This Agreement, together with the Exhibits attached hereto,
constitutes the entire agreement of the parties relating to the
subject matter hereof and
--
<PAGE>
supersedes any previous oral or written agreement or understanding
on the matter.
(f) This Agreement may be modified or amended only by a written
document duly signed on behalf of the party against whom
enforcement is sought.
(g) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their permitted assigns. Except as
specifically permitted herein, neither this Agreement nor any
rights or obligations hereunder may be transferred or assigned by
either party without the other party's written consent.
(h) Any neuter personnel pronouns shall be deemed to mean the
corresponding masculine or feminine personnel pronoun as the
context requires
(i) The failure of either party to insist, in any one or more
instances, upon the performance of any of the terms, covenant or
conditions of this Agreement or to exercise any rights hereunder,
shall not be construed as a waiver by such party of its right to
insist upon the performance of such term covenant or condition.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
INFORMATION MANAGEMENT RESOURCES, INC.
By: \s\ Satish K. Sanan
Satish K. Sanan
President & CEO
THE LINK GROUP OF COMPANIES LIMITED
By: \s\ Philip Shipperlee
Philip Shipperlee
Managing Director
BY: \s\ Satish Sanan
Satish K. Sanan
--
<PAGE>
BY: \s\ Anne Sanan
Anne Sanan
--
<PAGE>
DATED December 11 1995
----------------------
INFORMATION MANAGEMENT RESOURCES INC. (1)
SATISH K. SANAN (2)
ANNE SANAN (3)
THE LINK GROUP OF COMPANIES LIMITED (4)
________________________________________________________________________________
AMENDMENT TO JOINT VENTURE AGREEMENT
________________________________________________________________________________
Tarlo Lyons
Watchmaker Court
33 St John's Lane
London EC1M 4DB
<PAGE>
THIS AMENDMENT AGREEMENT is made as of the 11th day of December 1995 among
(1) INFORMATION MANAGEMENT RESOURCES INC a corporation incorporated under the
laws of Florida whose principal place of business is at 26750 US Highway 19
North, Suite 500, Clearwater, Florida 34621 United States of America ("IMR-
U.S.")
(2) SATISH K. SANAN an individual residing at 163 Woodcreek Drive Safety Harbor
Florida 34695 United States of America ("Mr. Sanan")
(3) ANNE SANAN an individual residing at 163 Woodcreek Drive Safety Harbor
Florida 34595 United States of America ("Mrs. Sanan")
(4) THE LINK GROUP OF COMPANIES LIMITED a company incorporated under the laws
of England whose principal place of business is at Link House St Mary's Way
Chesham Bucks HP5 1 HR Great Britain ("Link")
WHEREAS
A. The parties entered into a Joint Venture Agreement on the 17th day of
October 1994 (the "Agreement").
B. The parties desire to vary that Agreement in accordance with the terms and
conditions set out herein.
NOW THEREFORE the parties hereto intending to be legally bound agree as follows:
1. This agreement is supplemental to the Agreement and, unless the context
requires to the contrary, all terms defined in the Agreement shall have the
same meaning herein.
2. Clause 2(c) of the Agreement shall be deleted and replaced with the
following clause:
"The loans from Link to IMR-U.K. and from IMR-U.S. to IMR-U.K. (both of
which are for (Pounds)107,545) shall be interest free and with a repayment
date of 3 years from the 17th of October 1994, subject to a mutual
agreement by Link and IMR-U.S. to an earlier repayment. Any repayment (in
whole or in part) of either loan will only be made if an equal amount is
paid towards the other loan."
3. Clause 2(e) shall be deleted in its entirety.
4. Clause 5(e) shall be deleted and replaced with the following clause:
"The dividend policy of IMR-U.K. shall be determined by its Directors and
shareholders in accordance with its Articles of Association."
<PAGE>
5. IMR-U.S. hereby agrees to write off all debts due to it from IMR-U.K.
except for the sum of (Pounds)107,545, which sum shall be dealt with in
accordance with the amended provisions of the Agreement.
IN WITNESS whereof the parties hereto have executed this Agreement as of the
date first above written.
By: \s\ Satish K. Sanan
Satish K. Sanan
President & CEO
THE LINK GROUP OF COMPANIES LIMITED
By: \s\ Philip Shipperlee
Philip Shipperlee
Managing Director
By: \s\ Satish K. Sanan
Satish K. Sanan
By: \s\ Anne Sanan
Anne Sanan
--
<PAGE>
SECOND AMENDMENT TO JOINT VENTURE AGREEMENT
THIS SECOND AMENDMENT TO JOINT VENTURE AGREEMENT is made as of this 29th
day of February, 1996 among:
(1) INFORMATION MANAGEMENT RESOURCES, INC., a corporation incorporated
under the laws of Florida whose principal place of business is at
26750 U.S. Highway 19 North, Suite 500, Clearwater, Florida 34621,
United States of America ("IMR-U.S.");
(2) SATISH K. SANAN, an individual residing at 163 Woodcreek Drive, Safety
Harbor, Florida 34695, United States of America ("Mr. Sanan");
(3) ANNE SANAN, an individual residing at 163 Woodcreek Drive, Safety
Harbor, Florida 34695, United States of America ("Mrs. Sanan");
(4) THE LINK GROUP OF COMPANIES LIMITED, a company incorporated under the
laws of England whose principal place of business is at Link House,
St. Mary's Way, Chesham, Bucks HP5 1HR, Great Britain ("Link"); and
(5) INFORMATION MANAGEMENT RESOURCES (U.K.) LIMITED, a company
incorporated under the laws of England whose principal place of
business is at Link House, St. Mary's Way, Chesham, Bucks, HP5 1HR,
Great Britain ("IMR-U.K.").
WHEREAS:
(A) The parties entered into a Joint Venture Agreement on the 17th day of
October, 1994 (the "Agreement");
(B) The parties entered into an Amendment to the Agreement on the 11th day
of December, 1995 (the "First Amendment");
(C) The parties desire to amend further the Agreement in accordance with
the terms and conditions set forth herein;
(D) Link and IMR-U.S. have each made a loan of (Pounds)107,545 to IMR-U.K.
as referred to in Clause 2(c) of the Agreement (as amended by the
First Amendment); and
(E) Link and IMR-U.S. each desire to convert a portion of such
indebtedness owed to them by IMR-U.K. into equity.
NOW, THEREFORE, the parties hereto intending to be legally bound agree as
follows:
1. This Second Amendment is supplemental to the Agreement and, unless the
context requires to the contrary, all terms defined in the Agreement
shall have the same meaning herein.
<PAGE>
SECOND AMENDMENT TO JOINT VENTURE AGREEMENT
2. It is hereby agreed that:
2.1 an amount of (Pounds)25,000 is presently due to each of Link and
IMR-U.S. in respect of each of the two loans referred to in
Recital (D) above;
2.2 IMR-U.K. shall as soon as possible allot to IMR-US. 25,000 'A'
shares of (Pounds)1 each and to Link 25,000 'B' shares of
(Pounds)1 each in the capital of IMR-U.K. all such shares
credited as fully paid up;
2.3 against the allotments referred to in Clause 2.2 IMR-U.S. shall
accept the said 'A' shares in full satisfaction and discharge of
the said amount presently due to it of (Pounds)25,000 and all
claims and demands in respect thereof;
2.4 against the allotments referred to in Clause 2.2, Link shall
accept the said 'B' shares in full satisfaction and discharge of
the said amount presently due to it of (Pounds)25,000 and all
claims and demands in respect thereof;
2.5 following such allotments and discharges, an amount of
(Pounds)82,545 shall remain outstanding and payable by IMR-U.K.
to each of Link and IMR-U.S. as set forth in Clause 2(c) of the
Agreement as amended by the First Amendment; and
2.6 the parties shall take such steps as lie within their respective
powers to give effect to this Clause 2, including effecting any
required increase in the authorized share capital of IMR-U.K.
3. On the terms, and subject to the conditions set forth herein, Mr.
Sanan agrees to lend to IMR-U.K. on March 4, 1996 the sum of Three
Hundred and Ninety-Two Thousand Five Hundred United States Dollars
(U.S. $392,500) (the "Loan"). A portion of the Loan will be used by
IMR-U.K. on receipt to repay a short term loan of (Pounds)188,000 made
by Link to IMR-U.K.
4. The outstanding principal balance of the Loan from time to time shall
bear interest at the rate of ten percent (10%) per annum from the date
of advance. Interest shall be payable quarterly with the first
interest payment being due and payable on July 1, 1996.
5. The principal balance of the Loan shall be due and payable as follows:
one installment of Seventy Five Thousand United States Dollars (U.S.
$75,000) payable on August 5, 1996 and four equal installments of
Seventy Nine Thousand Three Hundred and Seventy Five United States
Dollars (U.S. $79,375) with the first such installment payable on June
2, 1997, the second such installment payable on December 1, 1997, the
third such installment payable on June 1, 1998 and the fourth such
installment payable on December 1, 1998.
6. The Loan shall be evidenced by a promissory note executed by IMR-U.K.
in the form attached as Exhibit A (the "Note").
-2-
<PAGE>
SECOND AMENDMENT TO JOINT VENTURE AGREEMENT
7. All or a portion of Mr. Sanan's rights, benefits and obligations under
the Loan and the Note may be assigned by Mr. Sanan to IMR-U.S. (but
not further or otherwise) and the parties hereto agree to execute all
such further documents, and to cause IMR-U.K. to execute all such
further documents, as may be necessary so that IMR-U.S. may assume
such rights, benefits and obligations as if it were an original lender
under the Loan and the Note.
8. The payment of the principal of, and interest on, the Loan will be
subordinated in right of payment to the prior payment in full of the
principal and interest on any and all indebtedness of IMR-U.K.
outstanding on the date hereof (except for the two loans of
(Pounds)82,545 each referred to in Clause 2 of this Second Amendment).
All such indebtedness incurred prior to the date hereof, (except for
the two loans of (Pounds)82,545 each referred to in Clause 2 of this
Second Amendment) and all renewals extensions and refundings thereof,
shall be Senior Indebtedness unless the terms of the instrument
creating or evidencing such indebtedness expressly provides that such
indebtedness is not superior in right of payment to the payment of
principal and interest under the Loan.
9. Prepayment of the Loan is not permitted prior to the expiry of the
Conversion Period (as defined in Clause 15 below). After such date,
the Loan may be prepaid in full or in part without penalty.
10. In the event that the profit before interest and taxation of IMR-U.K.
for the year ended December 31, 1996, as stated in the audited
financial statements of IMR-U.K. for such period, is less than
(Pounds)197,940 Mr. Sanan shall have the option to convert all or a
portion of the Loan into ordinary voting shares of (Pounds)1 each of
IMR-U.K. (the "Conversion Option").
11. If the profit before interest and taxation of IMR-U.K. for the year
ended December 31, 1996 is between (Pounds)0 and (Pounds)123,714, the
Conversion Option shall be exercisable such that Mr. Sanan shall have
the right to convert all of the then outstanding balance of the Loan
into that number of newly issued ordinary voting shares of IMR-U.K.
which will increase the total combined shareholding of Mr. Sanan, Mrs.
Sanan and IMR-U.S. to seventy-five percent (75%) of the issued and
outstanding ordinary voting shares of IMR-U.K. after giving effect to
the issuance of such new shares, provided that IMR-U.K. shall in no
circumstances be obliged to issue shares at a discount.
12. If the profit before interest and taxation of IMR-U.K. for the year
ended December 31, 1996 is between (Pounds)123,714 and
(Pounds)197,940, the Conversion Option shall be exercisable such that
Mr. Sanan shall have the right to convert all of the then outstanding
balance of the Loan into that number of newly issued ordinary voting
shares of IMR-U.K. which will increase the total combined shareholding
of Mr. Sanan, Mrs. Sanan and IMR-U.S. to sixty percent (60%) of the
issued and outstanding ordinary voting shares of IMR-U.K. after effect
to the issuance
-3-
<PAGE>
SECOND AMENDMENT TO JOINT VENTURE AGREEMENT
of such new shares, provided that IMR-U.K. shall in no circumstances
be obliged to issue at a discount.
13. The Conversion Option shall not be exercisable if the profit before
interest and taxation of IMR-U.K. for the year ended December 31, 1996
is (Pounds)197,940 or greater.
14. If IMR-U.K. incurs a loss before interest and taxation in the year
ended December 31, 1996, Clause 11 of this Second Amendment shall
apply but only US $158,750 of the then outstanding balance of the Loan
shall be converted into equity, provided that IMR-U.K. shall in no
circumstances be obliged to issue shares at a discount. Any unpaid
balance of the Loan remaining after exercise of the Conversion Option
shall continue to bear interest at the rate of ten percent (10%) per
annum on the outstanding balance thereof from time to time payable
quarterly and such unpaid balance shall be repaid in four equal semi-
annual installments.
15. The Conversion Option shall be exercisable by Mr. Sanan during the
forty-five (45) day period beginning on the date when Mr. Sanan
receives the financial statements of IMR-U.K. for the year ended
December 31, 1996 certified by the independent auditors retained by
IMR-U.K. (such period being called "the Conversion Period"). If the
financial statements of IMR-U.K. for the year ended December 31, 1996
are not certified by such independent auditors on or before April 30,
1997, (except because of any delay or default on the part of IMR-U.S.
and/or Mr. Sanan and/or Mrs. Sanan and/or any 'A' Director), the
Conversion Option shall become immediately exercisable by Mr. Sanan in
accordance with Clause 11 of this Second Amendment and the profit
before interest and taxation of IMR-U.K. for the year ended December
31, 1996 shall be deemed to be less than (Pounds)123,713 for the
purpose of Clause 11 hereof.
16. In order to exercise the Conversion Option, Mr. Sanan shall deliver
to IMR-U.K. written notice of his desire to exercise the Conversion
Option. IMR-U.K. shall issue to Mr. Sanan the number of shares
required to be issued pursuant to the Conversion Option within ten
(10) days of receipt of such notice. At the time share certificates
representing such shares are delivered to Mr. Sanan, Mr. Sanan shall
surrender the Note to IMR-U.K. and IMR-U.K. shall deliver to Mr. Sanan
a new promissory note for any unpaid balance of the Loan. Unless Mr.
Sanan shall have given written notice to IMR-U.K. that he does not
wish to exercise the Conversion Option, the Conversion Option shall be
deemed to have been exercised by Mr. Sanan at the end of the forty-
five day period referred to in Clause 15 of this Second Amendment.
17. Promptly following the execution of this Second Amendment, the
authorized share capital of IMR-U.K. shall be increased to make
available for issuance a sufficient number of ordinary shares to
provide for the maximum number of shares which may be required to be
issued upon exercise of the Conversion
-4-
<PAGE>
SECOND AMENDMENT TO JOINT VENTURE AGREEMENT
Option. IMR-U.K. covenants that, until such time as the Conversion
Option is exercised or the right to exercise the Conversion Option
lapses, IMR-U.K. will reserve from its authorized and unissued share
capital a sufficient number of ordinary shares to provide for the
maximum number of shares which may be required to be issued upon
exercise of the Conversion Option.
18. In the event that the Conversion Option is exercised and Mr. Sanan, or
Mr. Sanan and IMR-U.S. together, thereby acquire more than 50% of the
outstanding voting shares of IMR-U.K., Clause 7 of the Agreement shall
be automatically deleted and of no further force or effect.
19. IMR-U.K. agrees that its execution of this Second Amendment shall
constitute full authority to its officers who are charged with the
duty of executing share certificates to execute and deliver the
necessary shares certificates required to be issued upon exercise of
the Conversion Option.
-5-
<PAGE>
SECOND AMENDMENT TO JOINT VENTURE AGREEMENT
20. Except as expressly amended herein, all provisions of the Agreement,
as amended by the First Amendment, shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Second Amendment to
Joint Venture Agreement as of the date first above written.
INFORMATION MANAGEMENT RESOURCES, INC.
By: \s\ Satish K. Sanan
--------------------------
Satish K. Sanan
President & CEO
By: \s\ Andrew R. Etkind
--------------------------
Andrew R. Etkind L.S.
Secretary
\s\ Satish K. Sanan
--------------------------
Satish K. Sanan
\s\ Anne Sanan
-------------------------
Anne Sanan
THE LINK GROUP OF COMPANIES LTD.
By: \s\ Philip Shipperlee
--------------------------
Philip Shipperlee
Managing Director
By: \s\ Sheila Shipperlee
-------------------------
Sheila Shipperlee Common Seal
Secretary
INFORMATION MANAGEMENT RESOURCES (U.K.) LIMITED
By: \s\ Philip Shipperlee
-------------------------
Philip Shipperlee
Managing Director
By: \s\ Sheila Shipperlee Common Seal
---------------------
Sheila Shipperlee
Secretary
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EXHIBIT A
INFORMATION MANAGEMENT RESOURCES (U.K.) LTD.
10% CONVERTIBLE SUBORDINATED NOTE
1. General
-------
FOR VALUE RECEIVED, the undersigned Information Management Resources
(U.K.) Ltd. (the "Company"), a company incorporated under the laws of
England, hereby promises to pay to the order of Satish K. Sanan or his
assignee the principal amount of THREE HUNDRED AND NINETY TWO THOUSAND FIVE
HUNDRED UNITED STATES DOLLARS (U.S. $392,500), repayment of principal as
follows: one installment of SEVENTY FIVE THOUSAND UNITED STATES DOLLARS
(U.S. $75,000) payable on August 5, 1996 and four equal, semi-annual
installments of SEVENTY NINE THOUSAND THREE HUNDRED AND SEVENTY FIVE UNITED
STATES DOLLARS (U.S. $79,375) with the first such installment payable on
June 2, 1997 and the last such installment payable on December 1, 1998,
together with interest on the unpaid balance from the date hereof at the
rate of ten percent (10%) per annum, payable quarterly commencing on July
1, 1996. Interest will be computed on the basis of a 360 day year of twelve
30-day months.
2. Conversion Option
-----------------
(a) In the event that the profit before interest and taxation of the
Company for the year ended December 31, 1996, as stated in the
audited financial statements of the Company for such period, is
less than (Pounds)197,940, the holder of this Note shall have the
option to convert all or a portion of the Note into ordinary
voting shares of (Pounds)1 each of IMR-U.K. (the "Conversion
Option").
(b) As used herein, the term "Affiliate" shall mean any person who is
the spouse of a holder of this Note and any corporation of which
more than 50% of the shares is owned by a holder of this Note.
(c) If the profit before interest and taxation of the Company for the
year ended December 31, 1996 is between (Pounds)0 and
(Pounds)123,714, the Conversion Option shall giving be
exercisable such that the holder of this Note shall have the
right to convert all of the Note into that number of newly issued
ordinary voting shares of the Company which will increase the
total combined shareholding of the holder of this Note and any of
his Affiliates to seventy five percent (75%) of the issued and
outstanding ordinary voting shares of the Company after giving
effect to the issuance of such new shares, provided that the
Company shall in no circumstances be obliged to issue shares at a
discount.
(d) If the profit before interest and taxation of the Company for the
year ended December 31, 1996 is between (Pounds)123,714 and
(Pounds)197,940, the Conversion Option shall be exercisable such
that the holder of this Note shall have the right to convert all
of the Note into that number of newly issued ordinary shares of
the Company which will increase the total combined shareholding
of the holder of this Note and any of his Affiliates to sixty
percent (60%) of the issued and
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outstanding ordinary shares of the Company after giving effect to
the issuance of such new shares, provided that the Company shall
in no circumstances be obliged to issue shares at a discount.
(e) The Conversion Option shall not be exercisable if the profit
before interest and taxation of the Company for the year ended
December 31, 1996 is (Pounds)197,940 or greater.
(f) If the Company incurs a loss before interest and taxation in the
year ended December 31, 1996, subparagraph (c) of this Note shall
apply but only US $158,750 of the then outstanding balance of the
Note shall be converted into equity, provided that the Company
shall in no circumstances be obliged to issue shares at a
discount. Any unpaid balance of the Note remaining after exercise
of the Conversion Option shall continue to bear interest at the
rate of ten percent (10%) per annum on the outstanding balance
thereof from time to time payable quarterly and such unpaid
balance shall be repaid in four equal semi-annual installments.
(g) The Conversion Option shall be exercisable by the holder of this
Note during the forty-five (45) day period beginning on the date
when such holder receives the financial statements of the Company
for the year ended December 31, 1996 certified by the independent
auditors retained by the Company (such period being called "the
Conversion Period"). If the financial statements of the Company
for the year ended December 31, 1996 are not certified by such
independent auditors on or before April 30, 1997, (except because
of any delay or default on the part of the holder and/or any
Affiliate of the holder and/or any 'A' Director of the Company),
the Conversion Option shall become immediately exercisable by the
holder of this Note in accordance with subparagraph (c) of this
Note and the profit before interest and taxation of IMR-U.K. for
the year ended December 31, 1996 shall be deemed to be less that
(Pounds)123,714 for the purpose of subparagraph (c) hereof.
(h) In order to exercise the Conversion Option, the holder of this
Note shall deliver to the Company written notice of his desire to
exercise the Conversion Option. The Company shall issue to the
holder of this Note the number of shares required to be issued
pursuant to the Conversion Option within ten (10) days of receipt
of such notice. At the time share certificates representing such
shares are delivered to the holder of this Note, such holder
shall surrender the Note to the Company and the Company shall
deliver to such holder a new promissory note for any unpaid
balance of the Note. Unless the holder of this Note shall have
given written notice to the Company that such holder does not
wish to exercise the Conversion Option, the Conversion Option
shall be deemed to have been exercised by such holder at the end
of the forty-five day period referred to in subparagraph (g)
above.
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(i) Upon any partial conversion of this Note into shares of the
Company pursuant to the Conversion Option, a new promissory note
shall be issued by the Company to the holder for the remaining
principal balance.
3. Prepayment
----------
Prepayment of this Note is not permitted prior to expiry of the
Conversion Period (as defined in Clause 2(g) above). After such date, the
Note may be prepaid in whole or in part without penalty. In the case of
partial prepayment, the amount and other details thereof shall be noted on
this Note.
4. Subordination
-------------
The payment of the principal of, and interest on, the Note will be
subordinated in right of payment to the prior payment in full of the
principal and interest on any and all indebtedness of the Company
outstanding on the date hereof except for loans of (Pounds)82,545 each made
to the Company by Information Management Resources, Inc. and the Link Group
of Companies Ltd., respectively. All such indebtedness incurred prior to
the date hereof, and all renewals extensions and refundings thereof, shall
be Senior Indebtedness unless the terms of the instrument creating or
evidencing such indebtedness expressly provides that such indebtedness is
not superior in right of payment to the payment of principal and interest
under the Note.
5. Defaults and Remedies
---------------------
In the event of default by the Company for 30 days in the payment of
principal or interest under this Note or the continuation of involuntary
bankruptcy or insolvency of the Company for a period of ninety (90) days,
or assignment by the Company for the benefit of creditors or appointment of
a receiver, liquidator or other legal custodian for the Company or its
assets, then the unpaid principal amount of this Note and all accrued
interest hereon shall, at the option of the holder of this Note, be
immediately due and payable. The Company, as maker of this Note, hereby
waves demand, presentment, notice of acceleration, diligence in collection,
notice of protest and protest as to this Note and as to each and every
installment of principal and interest due hereunder.
6. Miscellaneous
-------------
(a) This Note may be modified or amended only by an agreement in
writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
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(b) This Note shall be governed by, and interpreted in accordance
with, the laws of England.
INFORMATION MANAGEMENT RESOURCES (U.K.) LTD.
By: \s\ Philip Shipperlee
--------------------------
Philip Shipperlee
Managing Director
\s\ Sheila Shipperlee Common Seal
--------------------------
Sheila Shipperlee
Secretary
Dated: March 4, 1996
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EXHIBIT 10.4
MASTER SERVICES AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 1st day of April, 1996, between
Information Management Resources, Inc., a corporation incorporated under the
laws of Florida, with offices at 26750 U.S. Highway 19 N, Suite 500, Clearwater,
Florida 34621, United States, ("IMR-U.S."), and Information Management Resources
(India) Ltd., a corporation incorporated under the laws of India, with offices
at 38/1, Naganathapura Village, Singasandra Post, Bangalore 560068, India,
("IMR-India").
WHEREAS, IMR-India is in the business of providing software consulting, design,
and programming and associated services;
WHEREAS, IMR-U.Srequires such services for its own use and for its customers and
agrees to engage IMR-India to perform contract services on the terms and subject
to the conditions set forth herein;
WHEREAS, IMR-U.S. and IMR-India had entered into a Master Services Agreement
dated April 1, 1994, and it is desired to terminate that Agreement and replace
it with this agreement.
NOW, THEREFORE, IMR-U.S. and IMR-India mutually agree as follows:
1. SERVICES TO BE PERFORMED BY IMR-INDIA:
--------------------------------------
IMR-U.S. hereby retains IMR-India to perform, and IMR-India hereby agrees
to perform, software consulting, design and programming services and
associated services in support of designated projects as requested by IMR-
U.S. IMR-India shall devote sufficient time and effort and shall allocate
sufficient personnel and resources to designated projects as may be
required for successful completion thereof. IMR-India shall conduct and
conclude project activities in a professional manner. Unless otherwise
agreed to by the parties, all services hereunder shall be performed at IMR-
India's facilities. During the term of this Agreement, IMR-U.S. agrees that
IMR-India shall have the right of first refusal on every off-shore
assignment as well as on all on-site consultancy services which IMR-U.S.
does not itself perform.
2. FACILITIES:
-----------
All on-site work in the United States shall be performed at either IMR-
U.S.' or its customer's facilities unless otherwise mutually agreed. For
all on-site project assignments in the United States, IMR-U.S. or its
customer will provide at no cost to IMR-India safe and adequate working
space and facilities together with clerical, typing, technical publication
services, machine time, keypunch services and related services and supplies
necessary to support assigned IMR-India personnel. IMR-India personnel
shall observe the security and safety policies of IMR-U.S. and its
customers. For services to be performed in India, all such facilities will
be provided by IMR-India.
3. TERM AND TERMINATION:
---------------------
This Agreement shall commence on the date hereof and shall continue for a
period of 5 years subject to termination by either party. This Agreement
may be terminated by either party, at any time by giving three (3) months
prior written notice to the other party. In the event of such termination.
IMR-U.S. agrees to pay IMR-India, as provided herein, for services rendered
up to the date of termination.
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<PAGE>
MASTER SERVICES AGREEMENT
4. ASSIGNMENT OF PERSONNEL:
------------------------
IMR-India shall use its best efforts to furnish competent personnel to
fulfill its obligations. The assignment of personnel shall be at IMR-
India's sole discretion. IMR-U.S. shall have the right, at any time, to
request removal of any IMR-India employee whom IMR-U.S. deems to be
unsatisfactory or who fails to adhere to IMR-U. S' or its customers'
reasonable requests. Upon such request for removal of an employee, IMR-
India shall use all reasonable efforts to promptly provide a substitute who
has appropriate skills and training. If, during the first thirty (30) days
of a project assignment, IMR-U.S. or its customer, notifies IMR-India that
it finds specific personnel to be unsuitable, IMR-India will not charge for
the thirty (30) days such personnel worked on the Project Assignment and,
if requested by IMR-U.S., shall replace such personnel at no charge to IMR-
U.S. or its customers.
IMR-India will use its best efforts to assign personnel approved by IMR-
U.S. or its customers within a period of 24 weeks from receipt of a written
request from IMR-U.S.. The availability of personnel in the United States
will, however, be subject to the availability of suitable visa and/or work
permits for the United States.
5. IMMIGRATION VISA PROCESSING:
----------------------------
IMR-India will obtain necessary visas for the personnel IMR-India assigns
to IMR-U.S. or its customers. For this purpose, IMR-U.S. will provide
suitable documents and assistance whenever required. IMR-U.S. will be
responsible for obtaining any required visa extensions in the United
States. IMR-India will render assistance to IMR-U.S. for obtaining Indian
visas if IMR-U.S.' or its customer's personnel are required to visit India.
Fees associated with processing of visa documentation including legal fees,
visa fees, credential evaluation fees, INS fees, and visa extension fees
will be paid by IMR-India for short-term assignments and by IMR-U.S. for
long-term assignments. IMR-India will reimburse IMR-U.S. for any such fees
paid by IMR-U.S. on behalf of IMR-India in the case of short-term
assignments.
6. INCOMPLETE PROJECT ASSIGNMENTS:
-------------------------------
If an assigned IMR-India employee leaves a specific project prior to
completion of such project without the prior written approval of IMR-U.S.,
then IMR-India shall use its best efforts to re-assign an equally qualified
employee to IMR-U.S. or its customer. IMR-India shall reimburse IMR-U.S.
for all cash advances made to any such employee (for travel and living
expenses) by IMR-U.S. on behalf of IMR-India.
7. IMMIGRATION LAW COMPLIANCE:
---------------------------
IMR-India warrants, represents and agrees that it will not assign any
person to perform work under this Agreement who is an unauthorized alien
under the Immigration Reform and Control Act of 1986 or its implementing
regulations.
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<PAGE>
MASTER SERVICES AGREEMENT
In the event any employee of IMR-India working under this Agreement is
discovered to be an unauthorized alien, IMR-India at its own cost, will
immediately replace such employee with an employee who is not an
unauthorized alien.
IMR-India shall indemnify and hold IMR-U.S. and its customers harmless from
and against any and all liabilities, damages, losses or expenses (including
attorney fees) arising out of any breach by IMR-India of this Paragraph 7.
8. PROPRIETARY RIGHTS:
-------------------
All right, title, and interest in and to the programs, systems, data, or
materials owned by IMR-India or in the possession of IMR-India prior to the
execution of this Agreement hereto and used by IMR-India in the performance
of this Agreement shall remain the exclusive property of IMR-India.
All right, title and interest in and to any programs, systems, data, and
materials furnished to IMR-India by IMR-U.S. or any of its customers are
and shall remain the property of IMR-U.S. or such customer and shall be
immediately returned to IMR-U.S. or such customer upon request of IMR-U.S.
or such customer.
All work product, software, or other copyrightable material resulting from
the performance of any services by IMR-India hereunder, constitute "work
made for hire" under the Federal copyright laws (17 United States Code Sec.
101) and shall be owned exclusively by IMR-U.S. or IMR-U.S.' customer, as
applicable. IMR-India agrees to promptly execute all such documents and
instruments as may be requested by IMR-U.S. or any of IMR-U.S.' customers
in order to vest in or assign to IMR-U.S. or such customer, ownership of
copyright and all other rights in such work product, software or other
copyrightable material.
9. PRIOR RELATIONSHIP RIGHTS:
--------------------------
IMR-India acknowledges that penetrating a major account represents a
significant investment in marketing and sales by IMR-U.S., and that the
loss of any such account would be detrimental to IMR-U.S.' current and
future business and profit.
During the term of this Agreement, IMR-India will respect IMR-U.S.'
priority right of relationship with the end user or customers introduced by
IMR-U.S. If the identity of the end user or customer is made known to IMR-
India by IMR-U.S. IMR-India will not, for a period of two (2) years after
the completion of the project assignment for such customer or the
expiration of this Agreement, whichever is later, directly or indirectly or
through its agents or representatives/sub-representatives solicit the same
end user or customer for business without IMR-U.S.' prior written approval.
10. CONFIDENTIAL INFORMATION:
-------------------------
A) ACKNOWLEDGMENT OF CONFIDENTIALITY. Each party hereby acknowledges
that it may be exposed to confidential and proprietary information of
the other party
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MASTER SERVICES AGREEMENT
including, without limitation, software and other technical
information (including functional and technical specifications,
designs, drawings, analysis, research, processes, computer programs,
methods, ideas, "know how" and the like), business information (sales
and marketing research, materials, plans, accounting and financial
information, personnel records and the like) and other information
designated as confidential expressly or by the circumstances in which
it is provided ("Confidential Information"). Confidential Information
does not include (i) information already known or independently
developed by the recipient; (ii) information in the public domain
through no wrongful act of the recipient, or (iii) information
received by the recipient from a third party who was free to disclose
it. IMR-India also acknowledges that it may be exposed to Confidential
Information of customers of IMR-U.S.
(b) COVENANT NOT TO DISCLOSE. With respect to the other party's
Confidential Information, and in the case of IMR-India, with respect
to the Confidential Information of IMR-U.S.' customers, the recipient
hereby agrees that during the term of this Agreement and at all times
thereafter it shall not use, commercialize or disclose such
Confidential Information to any person or entity, except to its own
employees having a "need to know' (and who are themselves bound by
similar nondisclosure restrictions), and to such other recipients as
the other party, and in the case of customers' Confidential
Information, such customer, may approve in writing, provided, that all
such recipients shall have first executed a confidentiality agreement
in a form acceptable to the owner of such information. Neither IMR-
India nor any recipient shall alter or remove from any software or
associated documentation owned or provided by IMR.-U.S. or any of its
customers any proprietary, copyright, trademark or trade secret
legend. Each party shall use at least the same degree of care in
safeguarding the other party's Confidential Information and, in the
case of IMR-India, the Confidential Information of IMR-U.S.'
customers, as it uses in safeguarding its own comparable Confidential
Information.
11. INJUNCTIVE RELIEF:
------------------
The parties acknowledge that violation by IMR-India of the provisions of
Paragraph 8 ("Proprietary Rights") or either party of the provisions of
Section 10 ("Confidential Information") would cause irreparable harm to the
non-breaching party which is not adequately compensable by monetary
damages. In addition to other relief, it is agreed that the non-breaching
party shall be entitled to seek injunctive relief to prevent any actual or
threatened violation of such provisions.
12. PRICES:
-------
IMR-India shall be compensated for all services performed on a time and
materials basis pursuant to this Agreement at the rates set forth in
Schedule Number 1 attached hereto. Such Schedule may be amended from time
to time by mutual agreement of the parties. In the case of projects to be
undertaken on a fixed price basis, IMR-India shall be
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MASTER SERVICES AGREEMENT
compensated for its services at the prices set forth in a separate Schedule
to be attached to this Agreement with respect to each such fixed price
project. IMR-U.S. shall not pay for any services outside the scope of this
Agreement unless IMR-U.S. has authorized these additional services in
advance.
13. CERTAIN OUT-OF-POCKET COSTS:
----------------------------
Except as otherwise set forth in this Agreement, or in any Schedule hereto,
prices set for IMR-India's services include all of IMR-India's reasonable
out-of-pocket costs for travel (air & cab fare, lodging, auto rental, per
diem, etc.), overnight courier and telephone, etc. Any other expenses not
covered will be billed to IMR-U.S. at IMR-India's actual cost.
14. WARRANTIES:
-----------
(a) GOOD AND WORKMANLIKE MANNER. IMR-India represents and warrants that
all services performed hereunder will be performed to the best of its
ability in a good and workmanlike manner.
(b) NON-INFRINGEMENT WARRANTY. IMR-India represents and warrants that the
software created by IMR-India pursuant to this Agreement, will not
infringe or misappropriate any United States or foreign copyright,
trademark, or patent, or the trade secrets of any third persons. Upon
being notified of such a claim, IMR-India shall (i) defend through
litigation or obtain through negotiation the right of IMR-U.S. and any
applicable customer, to continue using the software; (ii) rework the
software so as to make it non-infringing while preserving the original
functionality, or (iii) replace the software with functionally
equivalent software. If IMR-U.S. determines that none of the foregoing
alternatives provide an adequate remedy, IM-U.S. may terminate all or
any part of this Agreement and, in addition to other relief, recover
amounts paid hereunder.
(c) PERFORMANCE WARRANTY. IMR-India warrants that all software created by
it pursuant to this Agreement will perform as specified in the
appropriate project proposal submitted by IMR-U.S. to its customer for
the period specified in such proposal.
(d) OPTIONAL ON-GOING MAINTENANCE OPTION. IMR-India shall provide
additional on-going maintenance services to IMR-U.S. and its customers
in connection with software developed by IMR-India pursuant to this
Agreement. The fees for such maintenance services shall be negotiated
between the parties.
15. LIMITATION OF LIABILITIES:
--------------------------
(a) DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, IMR-INDIA
DOES NOT MAKE ANY WARRANTY. EXPRESS OR IMPLIED, WITH RESPECT TO THE
SERVICES RENDERED HEREUNDER OR THE SOFTWARE DEVELOPED HEREUNDER
INCLUDING, WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR
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MASTER SERVICES AGREEMENT
FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL IMR-INDIA BE
LIABLE FOR CONSEQUENTIAL,, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES,
REGARDLESS OF WHETHER IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
(b) TOTAL LIABILITY. IMR-India's liability hereunder for damages for any
claim arising out of the Agreement or any services performed hereunder
shall not exceed the total amount paid to IMR-India for the applicable
project.
16. NOTICES:
--------
Notices sent to either party shall be effective upon delivery when
delivered in person or transmitted by telecopier ("fax") machine, or one
(1) day after being sent by overnight courier, or two (2) days after being
sent by first class mail postage prepaid to the address set forth below, or
at such other address as the parties may from time to time give notice:
IMR-U.S. Address: IMR-India Address:
26750 U.S. Highway 19 N 38/1 Naganathapura
Suite 500 Singasandra Post
Clearwater, Florida 34621 Bangalore 560 068
Attn: Satish K. Sanan Attn: Ashutosh Gupta
President & CEO Director & President
Facsimile: (813) 791-8152 Facsimile: (80) 559-3803
A facsimile of this Agreement and notices generated in good form by a fax
machine (as well as a photocopy thereof) shall be treated as "original"
documents admissible into evidence unless a document's authenticity is
genuinely placed in question.
17. DEFAULT:
--------
Either party may be declared in default of this Agreement if it breaches
any material provision hereof and fails within thirty (30) days after
receipt of notice of default to correct such default or to commence
corrective action reasonably acceptable to the other party and proceed with
due diligence to completion. Either party shall be in default hereof if it
becomes insolvent, makes an assignment for the benefit of its creditors, a
receiver is appointed or a petition in Bankruptcy is filed with respect to
the party and is not dismissed within thirty (30) days.
18. CHOICE OF LAW AND VENUE:
------------------------
This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Florida. The parties agree that the
exclusive jurisdiction and venue with respect to any legal proceedings
arising under this Agreement shall be in the Sixth Judicial Circuit of the
State of Florida or in the United States District Court for the
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MASTER SERVICES AGREEMENT
Middle District of Florida (Tampa Division). The parties further agree that
the mailing of any process shall constitute valid and effective service
against them.
19. INDEPENDENT CONTRACTOR STATUS:
------------------------------
The parties are and shall remain independent contractors and nothing herein
shall be deemed to cause this Agreement to create an agency, employment,
partnership, joint venture or other relationship between the parties.
IMR-India assumes full responsibility for the payment of all salaries,
travel and living expenses, federal and state taxes, and employment
benefits of all personnel engaged by it. IMR-India is not -and shall not
represent itself as authorized to act on behalf of IMR-U.S. or its
customers. IMR-India's employees shall not be entitled to any of the
benefits that IMR-U.S. provides for IMR-U.S.' employees.
20. INSURANCE:
----------
IMR-India will maintain comprehensive general liability, medical,
automotive liability and property damage insurance covering the activities
of the IMR-India's personnel assigned under this Agreement.
For short-term on-location assignments in the United States, IMR-India will
be fully responsible for arranging, at its own expense, such life, health
and other forms of insurance as it considers appropriate for its employees
and their dependents, covering the period of their stay at IMR-U.S.' or its
customer's site. If requested by IMR-India or its personnel, IMR-U.S. shall
render assistance in obtaining such insurance. IMR-India's personnel on
short-term assignments in the U.S. will not be eligible to participate in
the life or health insurance scheme available to IMR-U.S.' or its
customer's employees.
Whenever required, IMR-India's personnel will submit proof of such
insurance coverage to IMR-U.S. or its customers. If IMR-U.S. arranges and
pays for temporary medical insurance for IMR-India's employees or their
dependents on behalf of IMR-India, IMR-India will reimburse IMR-U.S. for
such costs.
IMR-U.S. will be responsible for arranging, at its expense, such life,
health and other forms of insurance as it considers appropriate for IMR-
India employees, and their dependents, who are on long-term assignments in
the United States.
21. PAYMENT OF CONTRACTORS PERSONNEL:
---------------------------------
IMR-India agrees to be solely responsible for all salaries and other
compensation of all IMR-India employees, agents or subcontractors who
provide services to IMR-U.S. hereunder and work on designated projects.
IMR-India further agrees that it will be solely responsible for making all
necessary deductions and withholdings from its employees' salaries and
other compensation, and for the payment of any and all contributions, taxes
and assessments and agrees to comply with all other requirements of the
Federal Social Security, State Unemployment Compensation and Federal
Withholding of Income Tax
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MASTER SERVICES AGREEMENT
laws on all salary and other compensation of said employees or
subcontractors. Without prejudice to IMR-India's obligations as set forth
in this Paragraph 21, IMR-U.S. may provide payroll services to IMR-India as
agent for India.
22. INVOICING AND PAYMENT
---------------------
In the case of services performed on a time and materials basis, IMR-India
shall submit monthly invoices for the services performed by IMR-India's
employees pursuant to this Agreement. In the case of services performed on
a fixed-price basis, IMR-India shall submit invoices to IMR-U.S. at the
times, and in the amounts set forth in the appropriate Schedule hereto.
IMR-U.S. agrees to pay all invoices properly submitted by IMR-India within
one hundred and eighty (180) days of receipt by IMR-U.S. of such invoices.
23. RELOCATION EXPENSES FOR NEW ASSIGNMENTS:
----------------------------------------
When a project in the United States to which an IMR-India employee has been
assigned is successfully completed, IMR-U.S. may offer to IMR-India a new
assignment for such employee in a different location in the United States.
Should the new assignment be acceptable to IMR-India and its employee, then
IMR-India will be fully responsible for all relocation expenses including
cancellation of apartment leases, relocation expenses associated with
movement of household goods, automobile, etc., and temporary accommodation
for the employee in the new location. If such expenses are paid to the
employee by IMR-U.S. on behalf of IMR-India as an advance, then IMR-India
will reimburse all such costs incurred by IMR-U.S.
24. GENERAL EXPENSE REIMBURSEMENT:
------------------------------
To assist IMR-India in its business operations in the United States and
with general administrative matters, IMR-U.S. may incur expenses on behalf
of IMR-India subject to the prior approval of IMR-India. All such expenses
incurred by IMR-U.S. on behalf of IMR-India will be fully reimbursed to
IMR-U.S. by IMR-India.
25. TAXATION:
---------
IMR-U.S. undertakes no liability for taxes (including income tax), duties,
or other contributions payable by IMR-India on payments made under this
Agreement. In addition to submission of properly completed invoices, IMR-
India shall submit a properly completed IRS Form 4224 ("Exemption from
Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States") with a valid United States Tax
Identification Number. In the absence of submission of a properly completed
IRS Form 4224 by IMR-India, IMR-U.S. shall be required to withhold a
percentage of tax (as advised by the Internal Revenue Service) from IMR-
India's invoices on IMR-India's income effectively connected with the
conduct of a trade or business in the United States.
26. NONEXCLUSIVE AGREEMENT:
-----------------------
-8-
<PAGE>
MASTER SERVICES AGREEMENT
It is agreed by the parties hereto that this is not an exclusive agreement
and that IMR-U.S. has the right to use or contract for the use of similar
services from other contractors or providers. Likewise, IMR-India has the
right to provide and contract to provide similar services to other clients.
27. NO VOLUME GUARANTEE:
--------------------
Other than services specified on an applicable Schedule to this Agreement,
it is understood that no promises or representations whatsoever have been
made as to the potential amount of business IMR-India can expect at any
time during the term of this Agreement. IMR-India agrees that it is solely
responsible for any expenses incurred by it related to this Agreement and
agrees that IMR-U.S. shall not be obligated for any expense incurred by
IMR-India in connection with any change in the number of IMR-India's
employees utilized, or expenditures made by IMR-India in additional
facilities or equipment.
28. SECURITY, NO CONFLICTS:
-----------------------
IMR-India agrees that IMR-India's employees, representatives, and agents,
upon entering IMR-U.S.' or its customers' premises shall, if required, sign
in at the facility "SIGN-IN LOG" and, if applicable, shall wear visible
identification. IMR-India's employees, representatives and agents shall be
subject at all times to IMR-U.S.' and its customers' security policies and
procedures. Each party agrees to inform the other of any information made
available to the other that is classified or restricted data, agrees to
comply with the security requirements imposed by any state or local
government, or by the United States Government, and shall return all such
material upon request. Each party warrants that its participation in this
Agreement does not create any conflict of interest prohibited by the United
States Government or any other domestic or foreign government and shall
promptly notify the other party if any such conflict arises during the term
of this Agreement.
29. BINDING EFFECT:
---------------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
30. NONWAIVER:
----------
The failure of either party to insist, in any one or more instances, upon
the performance of any of the terms, covenants, or conditions of this
Agreement or to exercise any right hereunder, shall not be construed as a
waiver or relinquishment of the future performance of any rights, and the
obligations of the party with respect to such future performance shall
continue in full force and effect.
Upon termination or expiration of this Agreement, IMR-India agrees to
immediately return to IMR-U.S. all papers, materials, and other properties
of IMR-U.S. held by IMR-India relating to the services performed hereunder.
-9-
<PAGE>
MASTER SERVICES AGREEMENT
32. INVALID PROVISION:
------------------
Should any part of this Agreement, for any reason, be declared invalid,
such decision shall not affect the validity of any remaining portion. Such
remaining portion shall remain in force and effect as if this Agreement had
been executed with the invalid provision eliminated.
33. FORCE MAJEURE:
--------------
IMR-India does not undertake any responsibility if it is prevented from
performing its obligations hereunder due to sickness, accident, death of
its personnel or any other cause beyond the control of IMR-India, inclusive
but not restricted to, any enactment, both present or future, as may be
passed by the respective governments of the United States or India.
34. AMENDMENT:
----------
This Agreement may only be amended in writing signed by duly authorized
representatives of each of the parties, which amendment shall be attached
to and incorporated into this Agreement.
35. SECTION HEADINGS:
-----------------
Section headings have been included in this Agreement merely for
convenience or reference. They are -not to be considered part of, or to be
used in interpreting this Agreement.
36. COUNTERPARTS:
-------------
This Agreement may be executed in two counterparts, both of which taken
together shall constitute one single agreement between the parties.
37. ENTIRE AGREEMENT:
-----------------
This Agreement contains the entire agreement of the parties relating to the
subject matter hereof and supersedes all prior written or oral agreements
with respect thereto. For the avoidance of doubt, it is specifically agreed
that the prior Agreement between the parties hereto dated April 1, 1994, is
hereby specifically terminated.
-10-
<PAGE>
MASTER SERVICES AGREEMENT
IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have
caused this Agreement to be executed by their duly authorized representatives.
For: For:
Information Management Resources, Inc. Information Management Resources
("IMR-U.S.") (India) Ltd. ("IMR-India")
By: /s/ Satish K. Sanan By: /s/ Ashutosh Gupta
--------------------------------- ------------------------------
Satish K. Sanan Ashutosh Gupta
President & CEO President & Director
-11-
<PAGE>
SCHEDULE 1
TO
MASTER SERVICES AGREEMENT
DATED AS OF APRIL 1, 1996
BY AND BETWEEN
INFORMATION MANAGEMENT RESOURCES, INC.
AND
INFORMATION MANAGEMENT RESOURCES (INDIA) LTD.
<TABLE>
<CAPTION>
------------------------------------------------
ON-SITE RATES
----------------------------------------------------------------------
LEVEL MANAGEMENT
SERVICE INDIA CHARGES TOTAL BILLING
CHARGES $ $ $
<S> <C> <C> <C>
----------------------------------------------------------------------
Developer/Programmer [*] [*] [*]
----------------------------------------------------------------------
Designer/Developer/SPA [*] [*] [*]
----------------------------------------------------------------------
Consultant/Project
Manager [*] [*] [*]
----------------------------------------------------------------------
</TABLE>
Note: Employees on short-term for a period for less than 6 months will be paid
at the above rates.
Note: The cost of travel and visa charges will be borne by IMR-U.S. for short-
term employees.
<TABLE>
<CAPTION>
--------------------------------------------
OFF SHORE RATES
--------------------------------------------
TYPE OF PROJECT RATE/HOUR
$
<S> <C>
--------------------------------------------
Development [*]
--------------------------------------------
Maintenance [*]
--------------------------------------------
Migration [*]
--------------------------------------------
Year 2000 [*]
--------------------------------------------
</TABLE>
Note: On-site short-term travel expenses will be borne by IMR-U.S. IMR-India
will be paid at the above rates per hour for short-term employees in the U.S.
[*] THIS INFORMATION IS REDACTED FOR CONFIDENTIALITY PURPOSES
-12-
<PAGE>
EXHIBIT 10.5
MASTER SERVICES AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 1st day of April, 1996, between
Information Management Resources (U.K.) Limited, a company incorporated under
the laws of England ("IMR-U.K."), and Information Management Resources (India)
Limited, a corporation incorporated under the laws of India, with offices
located at 38/1, Naganathapura Village, Singasandra Post, Bangalore 560068,
India, ("IMR-India").
WHEREAS, IMR-India is in the business of providing software consulting, design,
and programming services and associated services;
WHEREAS, IMR-U.K. requires such services for its own use and for its customers
and agrees to engage IMR-India to perform contract services on the terms and
subject to the conditions set forth herein;
WHEREAS, IMR-U.S. and IMR-India had entered into a Master Services Agreement
dated November 11, 1994, and it is desired to terminate that Agreement and
replace it with this agreement.
NOW, THEREFORE, IMR-U.K. and IMR-India mutually agree as follows:
1. SERVICES TO BE PERFORMED BY IMR-INDIA:
-------------------------------------
IMR-U.K. hereby retains IMR-India to perform, and IMR-India hereby agrees
to perform, all such offshore software consulting, design and programming
services and associated services in support of designated projects as may
be required by IMR-U.K. and its customers. IMR-India shall devote
sufficient time and effort and shall allocate sufficient personnel and
resources to designated projects as may be required for successful
completion thereof. IMR-India shall conduct and conclude project
activities in a professional manner consistent with current IMR-U.K.
methodologies and procedures and/or, as may be required, the methodologies
and procedures of IMR-U.K.'s customers. During the term of this Agreement,
IMR-U.K. agrees that it will not contract with any person, firm or
corporation other than IMR-India for off-shore software consultancy, design
or programming services unless this Agreement shall have become non-
exclusive pursuant to Section 8(d) hereof.
2. FACILITIES:
----------
All on-site work for IMR-U.K.'s customers shall be performed at either IMR-
U.K.'s facility or its customer's facilities unless otherwise mutually
agreed. For all on-site project assignments, IMR-U.K. or its customer will
provide at no cost to IMR-India safe and adequate working space and
facilities together with clerical, typing, technical publication services,
machine time, keypunch services and related services and supplies necessary
to support assigned IMR-India personnel. IMR-India personnel shall conform
to the security, work and safety policies of IMR-U.K. and its customers.
For services to be performed in India, all such facilities will be provided
by IMR-India.
3. TERM AND TERMINATION:
---------------------
This Agreement shall commence on the date hereof and shall continue for
five (5) years unless terminated by either party giving three (3) months
written notice to the other party. In the event of such termination, IMR-
U.K. agrees to pay IMR-India, as provided herein, for services rendered up
to the date of termination.
4. ASSIGNMENT OF PERSONNEL:
------------------------
IMR-India shall use its best efforts to furnish competent personnel to
fulfill its obligations. The assignment of personnel shall be at IMR-
India's sole discretion, subject to the final approval of IMR-U.K. IMR-
U.K. shall have the right, at any time, to request removal of any IMR-India
employee whom IMR-U.K. deems to be unsatisfactory or who fails to adhere to
-1-
<PAGE>
MASTER SERVICES AGREEMENT
IMR-India will use its best efforts to assign personnel approved by IMR-
U.K. or its customers within a period of 2-4 weeks from receipt of a
written request from IMR-U.K.. The availability of personnel for on-site
work will, however, be subject to the availability of suitable visas and/or
work permits.
5. WORK PERMITS:
-------------
IMR-U.K. will assist IMR-India in obtaining necessary visas and/or work
permits for the personnel IMR-India assigns to IMR-U.K. or its customers.
IMR-India will render assistance to IMR-U.K. for obtaining Indian visas if
IMR-U.K.'s or its customer's personnel are required to visit India.
6. INCOMPLETE PROJECT ASSIGNMENTS:
-------------------------------
If an assigned IMR-India employee leaves a specific project prior to
completion of such project without the prior written approval of IMR-U.K.,
then IMR-India shall use its best efforts to re-assign an equally qualified
employee to IMR-U.K. or its customer.
7. PROPRIETARY RIGHTS:
-------------------
All right, title, and interest in and to the programs, systems, data, or
materials owned by IMR-India or in the possession of IMR-India prior to the
execution of this Agreement hereto and used by IMR-India in the performance
of this Agreement shall remain the exclusive property of IMR-India.
All right, title and interest in and to any programs, systems, data, and
materials furnished to IMR-India by IMR-U.K. or any of its customers are
and shall remain the property of IMR-U.K. or such customer and shall be
immediately returned to IMR-U.K. or such customer upon request of IMR-U.K.
or such customer.
All work product, software, or other copyrightable material resulting from
the performance of any services by IMR-India hereunder shall be owned
exclusively by IMR-U.K. or IMR-U.K.'s customer, as applicable. IMR-India
agrees to promptly execute all such documents and instruments as may be
requested by IMR-U.K. or any of IMR-U.K.'s customers in order to vest in or
assign to IMR-U.K. or such customer, ownership of copyright and all other
rights in such work product, software or other copyrightable material.
8. PRIOR RELATIONSHIP RIGHTS:
--------------------------
(a) IMR-India acknowledges that penetrating a major account represents a
significant investment in marketing and sales by IMR-U K., and that
the loss of any such account would be detrimental to IMR-U.K.'s
current and future business and profit.
(b) During the term of this Agreement, IMR-India will respect IMR-U.K.'s
priority right of relationship with the end user or customers
introduced by IMR-U.K. IMR-India agrees not to contact any of IMR-
U.K.'s customers without IMR-U.K.'s express written consent. If the
identity of the end user or customer is made known to IMR-India by
IMR-U.K., IMR-India will not, for a period of one (1) year after the
completion of the project assignment for such customer or the
expiration of this Agreement, whichever is later, directly or
indirectly or through its agents or representatives/sub-
representatives solicit the same end user or customer for business
without IMR-U.K.'s prior written approval.
(c) Subject to Paragraph (d) of this Section 8, IMR-India will not sell
its services direct to persons, firms or companies in the United
Kingdom without first giving IMR-U.K. in writing the option to
contract with such parties on behalf of IMR-India. If IMR-U.K.
desires to exercise such option, IMR-India will not contract directly
with any such person, firm or company. If IMR-U.K. does not exercise
such option within two (2) weeks of receipt of the written notice from
IMR-India, IMR-India may contract directly with such person, firm or
company.
(d) If at any time Information Management Resources, Inc. ("IMR-U.S.") or
its Affiliates cease to own at least fifty percent (50%) of the
outstanding voting shares of IMR-U.K., Paragraph (c) of this Section 2
shall cease to be applicable and shall have no further force and
effect as of the date
-2-
<PAGE>
MASTER SERVICES AGREEMENT
which is six (6) months after the date on which IMR-U.S. and its
Affiliates cease to own such percentage of the outstanding voting
shares of IMR-U.K.
As used herein the term "Affiliate" shall mean any person, company or other
entity that directly or indirectly controls, or is controlled by, or is
under common control with, IMR-U.S.
9. CONFIDENTIAL INFORMATION:
------------------------
(a) ACKNOWLEDGMENT OF CONFIDENTIALITY. Each party hereby acknowledges
that it may be exposed to confidential and proprietary information of
the other party including, without limitation, software and other
technical information (including functional and technical
specifications, designs, drawings, analysis, research, processes,
computer programs, methods, ideas, "know how" and the like), business
information (sales and marketing research, materials, plans,
accounting and financial information, personnel records and the like)
and other information designated as confidential expressly or by the
circumstances in which it is provided ("Confidential Information").
Confidential Information does not include (i) information already
known or independently developed by the recipient; (ii) information in
the public domain through no wrongful act of the recipient, or (iii)
information received by the recipient from a third party who was free
to disclose it. IMR-India also acknowledges that it may be exposed to
Confidential Information of customers of IMR-U.K.
(b) COVENANT NOT TO DISCLOSE. With respect to the other party's
Confidential Information, and in the case of IMR-India, with respect
to the Confidential Information of IMR-U.K.'s customers, the recipient
hereby agrees that during the term of this Agreement and at all times
thereafter it shall not use, commercialize or disclose such
Confidential Information to any person or entity, except to its own
employees having a "need to know" (and who are themselves bound by
similar nondisclosure restrictions), and to such other recipients as
the other party, and in the case of customers' Confidential
Information, such customer, may approve in writing, provided, that all
such recipients shall have first executed a confidentiality agreement
in a form acceptable to the owner of such information. Neither IMR-
India nor any recipient shall alter or remove from any software or
associated documentation owned or provided by IMR-U.K. or any of its
customers any proprietary, copyright, trademark or trade secret
legend. Each party shall use at least the same degree of care in
safeguarding the other party's Confidential Information and, in the
case of IMR-India, the Confidential Information of IMR-U.K.'s
customers, as it uses in safeguarding its own comparable Confidential
Information.
10. INJUNCTIVE RELIEF:
------------------
The parties acknowledge that violation by IMR-India of the provisions of
Paragraph 7 ("Proprietary Rights") or violation by either party of, the
provisions of Section 9 ("Confidential Information") would cause
irreparable harm to the non-breaching party which is not adequately
compensable by monetary damages. In addition to other relief, it is agreed
that the non-breaching party shall be entitled to seek injunctive relief to
prevent any actual or threatened violation of such provisions.
11. PRICES:
-------
The hourly rates for services performed by IMR-India for IMR-U.K. on a time
and materials basis are set forth in Schedule 1 attached hereto. Such rates
are valid for a period of one year commencing on the date of this
Agreement. Thereafter, a new rate schedule shall be negotiated between the
parties and attached to this Agreement provided that IMR-India agrees to
offer commercially competitive rates to IMR-U.K.. In the case of work
performed by IMR-India for IMR-U.K. on a fixed-price turnkey basis, IMR-
India shall quote a fixed price based upon the above hourly rates and the
parties shall negotiate and enter into a separate delivery and payment
schedule for each fixed price project, which schedule shall be attached to
this Agreement.
-3-
<PAGE>
MASTER SERVICES AGREEMENT
12. WARRANTIES:
-----------
(a) GOOD AND WORKMANLIKE MANNER. IMR-India represents and warrants that
all services performed hereunder will be performed to the best of its
ability in a good and workmanlike manner,
(b) NON-INFRINGEMENT WARRANTY. IMR-India represents and warrants that the
software created by IMR-India pursuant to this Agreement will not
infringe or misappropriate any United Kingdom or foreign copyright,
trademark, or patent, or the trade secrets of any third persons. Upon
being notified of such a claim, IMR-India shall (i) defend through
litigation or obtain through negotiation the right of IMR-U.K. and any
applicable customer, to continue using the software, (ii) rework the
software so as to make it non-infringing while preserving the original
functionality, or (iii) replace the software with functionally
equivalent software. If IMR-U.K. determines that none of the foregoing
alternatives provide an adequate remedy, IMR-U.K. may terminate all or
any part of this Agreement and, in addition to other relief, recover
amounts paid hereunder.
(c) PERFORMANCE WARRANTY. IMR-India warrants that all software created by
it pursuant to this Agreement will perform as specified in the
appropriate project proposal submitted by IMR-U.K. to its customer for
the period specified in such proposal.
(d) OPTIONAL ON-GOING MAINTENANCE OPTION. IMR-India shall provide
additional on-going maintenance services to IMR-U.K. and its customers
in connection with software developed by IMR-India pursuant to this
Agreement. The fees for such maintenance services shall be negotiated
between the parties on an arms-length basis.
13. LIMITATION OF LIABILITIES:
-------------------------
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, IMR-INDIA DOES NOT MAKE ANY
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES RENDERED
HEREUNDER, OR THE SOFTWARE DEVELOPED HEREUNDER, INCLUDING, WITHOUT
LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE. IN NO EVENT SHALL IMR-INDIA BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES, REGARDLESS OF
WHETHER IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
14. NOTICES:
-------
Notices sent to either party shall be effective upon delivery when
delivered in person or transmitted by telecopier ("fax") machine, or two
(2) days after being sent by overnight courier, or seven (7) days after
being sent -by first class mail postage prepaid to the address set forth
below, or at such other address as the parties may from time to time give
notice-.
IMR-U.K. Address: IMR-India Address:
Link House 38/1, Singasandra Post
St. Mary's Way Naganathapura
Chesham, Bucks HP5 1 HR Bangalore 5560068
Great Britain India
Attn: Philip Shipperlee Attn: Ashutosh Gupta
Managing Director Director & President
Facsimile: (0494) 791059 Facsimile: (22) 837-6518 [This
number is deleted and the number
(80) 5532850 is handwritten
here.]
15. DEFAULT:
-------
-4-
<PAGE>
MASTER SERVICES AGREEMENT
Either party may be declared in default of this Agreement if it breaches
any material provision hereof and fails within thirty (30) days after
receipt of notice of default to correct such default or to commence
corrective action reasonably acceptable to the other party and proceed with
due diligence to completion. Either party shall be in default hereof if it
becomes insolvent, makes an assignment for the benefit of its creditors, a
receiver is appointed or a petition in Bankruptcy is filed with respect to
the party and is not dismissed within thirty (30) days.
16. GOVERNING LAW:
-------------
This Agreement shall be governed by and construed in accordance with
the laws of England,
17. INDEPENDENT CONTRACTOR STATUS:
-----------------------------
The parties are and shall remain independent contractors and nothing herein
shall be deemed to cause this Agreement to create an agency, employment,
partnership, joint venture or other relationship between the parties.
IMR-India assumes full responsibility for the payment of all salaries,
travel and living expenses, pay holding taxes, and employment benefits of
all personnel engaged by it. IMR-India is not and shall not represent
itself as authorized to act on behalf of IMR-U.K. or its customers. IMR-
India's employees shall not be entitled to any of the benefits that IMR-
U.K. provides for IMR-U.K.'s employees.
18. INSURANCE:
---------
IMR-India will maintain comprehensive general liability, professional
indemnity, medical, automotive liability and property damage insurance
covering the activities of the IMR-India personnel assigned under this
Agreement.
For short-term assignments at IMR-U.K. customers' locations, IMR-India will
be fully responsible for arranging, at its own expense, such life, health
and other forms of insurance as it considers appropriate for its employees
and their dependents, covering the period of their stay at IMR-U.K.'s or
its customer's site. If requested by IMR-India or its personnel, IMR-U.K.
shall render assistance in obtaining such insurance. IMR-India's personnel
on short-term assignments in the U.K. will not be eligible to participate
in the life or health insurance scheme available to IMR-U.K.'s or its
customer's employees.
Whenever required, IMR-India's. personnel will submit proof of such
insurance coverage to IMR-U.K. or its customers. If IMR-U.K. arranges and
pays for temporary medical insurance for IMR-India's employees or their
dependents on behalf of IMR-India, IMR-India will reimburse IMR-U.K. for
such costs.
IMR-U.K. will be responsible for arranging, at its expense, such life,
health and other forms of insurance as it considers appropriate for IMR-
India's employees, and their dependents, who are on long-term assignments
in the United Kingdom.
19. PAYMENT OF CONTRACTOR'S PERSONNEL:
---------------------------------
IMR-India agrees to be solely responsible for all salaries and other
compensation of all IMR-India employees, agents or subcontractors who
provide services to IMR-U.K. hereunder and work on designated projects.
IMR-India further agrees that it will be solely responsible for making all
necessary deductions and withholdings from its employees' salaries and
other compensation, and for the payment of any and all contributions, taxes
and assessments and agrees to comply with all other requirements of United
Kingdom taxation and national insurance laws and regulations on all salary
and other compensation of said employees or subcontractors. Without
prejudice to IMR-India's obligations as set forth in this Paragraph 19,
IMR-U.K. may provide payroll services to IMR-India as agent for IMR-India.
20. INVOICING AND PAYMENT:
---------------------
-5-
<PAGE>
MASTER SERVICES AGREEMENT
In the case of services performed on a time and materials basis, IMR-India
shall submit monthly invoices for the services performed by IMR-India's
employees pursuant to this Agreement. In the case of services performed on
a fixed-price basis, IMR-India shall submit invoices to IMR-U.K. at the
times, and in the amounts set forth in the appropriate Schedule hereto.
IMR-U.K. agrees to pay all invoices properly submitted by IMR-India within
ninety (90) days of receipt by IMR-U.K. of such invoices.
To assist IMR-India in its business operations in the United Kingdom and
with general administrative matters, IMR-U.K. may incur expenses on behalf
of IMR-India subject to the prior approval of IMR-India. All such expenses
incurred by IMR-U.K. on behalf of IMR-India will be fully reimbursed to
IMR-U.K. by IMR-India.
22. SECURITY, NO CONFLICTS:
----------------------
IMR-India agrees that IMR-India's employees, representatives, and agents,
upon entering IMR-U.K.'s or its customers' premises shall, if required,
sign in at the facility "SIGN-IN LOG" and, if applicable, shall wear
visible identification. IMR-India's employees, representatives and agents
shall be subject at all times to IMR-U.K.'s and its customers' security
policies and procedures. Each party agrees to inform the other of any
information made available to the other that is classified or restricted
data, agrees to comply with the security requirements imposed by any state
or local government, or by the United Kingdom or any other foreign
Government, and shall return all such material upon request.
23. BINDING EFFECT:
--------------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
24. NONWAIVER:
---------
The failure of either party to insist, in any one or more instances, upon
the performance of any of the terms, covenants, or conditions of this
Agreement or to exercise any right hereunder, shall not be construed as a
waiver or relinquishment of the future performance of any rights, and the
obligations of the party with respect to such future performance shall
continue in full force and effect.
25. RIGHTS UPON TERMINATION:
-----------------------
Upon termination or expiration of this Agreement, IMR-India agrees to
immediately return to IMR-U.K. all papers, materials, and other properties
of IMR-U.K.. held by IMR-India relating to the services performed
hereunder. IMR-India will continue to provide services (in exchange for
payment) until all projects current at the date of termination are
finished.
26. INVALID PROVISION:
-----------------
Should any part of this Agreement, for any reason, be declared invalid,
such decision shall not affect the validity of any remaining portion. Such
remaining portion shall remain in force and effect as if this Agreement had
been executed with the invalid provision eliminated.
27. FORCE MAJEURE:
-------------
IMR-India does not undertake any responsibility if it is prevented from
performing its obligations hereunder due to sickness, accident, death of
its personnel or any other cause beyond the control of IMR-India, including
but not restricted to, any enactment, both present or future, as may be
passed by the respective governments of the United Kingdom or India.
28. AMENDMENT:
---------
This Agreement may only be amended in writing signed by duly authorized
representatives of each of the parties, which amendment shall be attached
to and incorporated into this Agreement.
-6-
<PAGE>
29. SECTION HEADINGS:
----------------
Section headings have been included in this Agreement merely for
convenience or reference, They are not to be considered part of, or to be
used in interpreting this Agreement.
30. COUNTERPARTS:
------------
This Agreement may be executed in two counterparts, both of which taken
together shall constitute one single agreement between the parties.
31. ENTIRE AGREEMENT:
----------------
This Agreement contains the entire agreement of the parties relating to the
subject matter hereof and supersedes all prior written or oral agreements
with respect thereto. For the avoidance of doubt, it is specifically agreed
that the prior Agreement between parties hereto dated November 11, 1994, is
hereby specifically terminated.
IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have
caused this Agreement to be executed by their duly authorized representatives.
For: For:
INFORMATION MANAGEMENT INFORMATION MANAGEMENT
RESOURCES (U.K.) LTD. RESOURCES, INC.
By: \s\ Philip Sipperlee By: \s\ Ashutosh Gupta
--------------------------- ------------------------------
Philip Shipperlee Ashutosh Gupta
Managing Director Director and President
-7-
<PAGE>
SCHEDULE 1
TO
MASTER SERVICES AGREEMENT
DATED AS OF APRIL 1, 1996
BY AND BETWEEN
INFORMATION MANAGEMENT RESOURCES (U.K.) LIMITED
AND
INFORMATION MANAGEMENT RESOURCES (INDIA) LIMITED
<TABLE>
<CAPTION>
------------------------------------------
OFF-SHORE RATES
--------------------------------------------------------------------------
LEVEL MAINFRAME CLIENT-SERVER
<S> <C> <C>
--------------------------------------------------------------------------
Developer/Programmer [*] [*]
--------------------------------------------------------------------------
Designer/Developer/SPA [*] [*]
--------------------------------------------------------------------------
Consultant/Project Manager [*] [*]
--------------------------------------------------------------------------
</TABLE>
Note: Employees on short-term for a period for less than 6 months will be paid
at the above rates.
Note: The cost of travel and visa charges will be borne by IMR-U.K. for short-
term employees.
<TABLE>
<CAPTION>
-------------------------------------------------------------
LONG-TERM ON-SITE RATES
-------------------------------------------------------------------------------------------
LEVEL MANAGEMENT INDIA CHARGES TOTAL BILLING
SERVICE CHARGES
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Developer/Programmer [*] [*] [*]
-------------------------------------------------------------------------------------------
Designer/Developer/SPA [*] [*] [*]
-------------------------------------------------------------------------------------------
Consultants/Project Manager [*] [*] [*]
-------------------------------------------------------------------------------------------
</TABLE>
Note: Cost of visa charges in India and travel expenses will be borne by IMR-
India.
-8-
<PAGE>
EXHIBIT 10.6
[FIFTY RUPEES STAMP PAPER]
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made this 22 day of July, 1996 among SECOND INDIA INVESTMENT
FUND B.V., incorporated under the laws of the Netherlands and having its
registered office at EMMAPLEIN 5, Post Box 75215, 1070 AE, Amsterdam, The
Netherlands, hereinafter called "The Fund" (which expression shall unless
repugnant to the context or meaning thereof, be deemed to include its successors
and assigns) of the First Part;
INFORMATION MANAGEMENT RESOURCES, INC., 26750 U.S. Highway 19 North, Suite 500,
Clearwater, Florida 34621-3442, USA, a company registered in the State of
Florida, United States of America, hereinafter referred to as "IMR-U.S." (which
expression shall unless repugnant to the context or meaning thereof , be deemed
to include its successors and assigns) of the Second Part;
INFORMATION MANAGEMENT RESOURCES (INDIA) LIMITED, a company formerly known as
REESAN INFORMATION MANAGEMENT RESOURCES (India), Private Ltd, which company was
incorporated in India as a Private Limited company under the Companies Act of
1956 and became a deemed Public Limited company by virtue of Section 43-A (1A)
and having its registered office at Building 38/1 Naganathapura Singasandra Post
Bangalore 560 068, India hereinafter referred to as "IMR-India" (which
expression shall unless repugnant to the context or meaning thereof , be deemed
to include its successors and assigns) of the Third Part;
WHEREAS:
A. By an Investment Agreement ("Investment Agreement") dated October 1, 1992
between The Fund and IMR-India, The Fund invested a total of Rs. 25 million
in IMR-India of which Rs. 16 million was an unsecured loan and Rs. 9
million was a subscription for 60,000 equity shares of IMR-India of Rs. 10
each at Rs. 150 per share; and
B. The Investment Agreement provided that if Capitalization (as defined in the
Investment Agreement) was not achieved before June 30, 1996 at a value of
over Rs. 600 million then the Fund would have an option to convert the Rs.
16 million loan into additional equity of IMR-India; and
C. Pursuant to a US Conversion Option Agreement which was Annexure 2 to the
Investment Agreement, The Fund had an option to convert its equity in IMR-
India into equity of Reesan Inc., a U.S. company incorporated under the
laws of the State of Florida, USA; and
D. Reesan Inc., merged into IMR-US with the consent of the Fund , and
E. At the time of the merger of Reesan Inc. into IMR-US, The Fund was offered
an option to convert its IMR-India holding into IMR-US shares, but no new
U.S. conversion option agreement was executed between the Fund and IMR-US;
and
F. A Supplemental Agreement signed by John Levack for The Fund on the 29th day
of November 1994 and attached to a fax from him to Satish Sanan on the 29th
day of November 1994 clarified and restated the main provisions of the
Investment Agreement necessary due to evolution in the business - but
within the terms of the Investment Agreement; and
G. Capitalization as defined in the Investment Agreement occurred for IMR-
India because The Fund received an offer from IMR-US to purchase all of
the Fund's Shares in IMR-India at a price of Rs. 1,060 per share which
capitalizes IMR-India in excess of Rs. 600 million.
1 of 5
<PAGE>
NOW THIS AGREEMENT WITNESSES AND IT IS AGREED BY AND AMONG THE PARTIES AS
FOLLOWS:
1. The Fund agrees to sell to IMR-US its 60,000 equity shares of Rs.10 each in
IMR-India ("the Shares") and IMR-US agrees to purchase the Shares for a
consideration of Rs .63, 600,000 calculated at the rate of Rs. 1,060 per
share. Closing or completion of the sale and purchase will occur on a date
(" the Closing Date"), within 5 days following the satisfactory fulfillment
of the condition stated in Clause 2 below.
2. This Agreement is subject to approval by the Reserve Bank of India. The
purchase and sale of the Shares as contemplated herein shall be completed
on the Closing Date only after issue of appropriate approvals from the
Reserve Bank of India for the transfer to occur.
3. On the Closing Date, in exchange for all certificates representing the
Shares, a properly executed transfer deed in favor of IMR-US, and a
certificate from the Indian Tax Authority certifying that there is no
obligation on IMR-US to withhold any part of the consideration on account
of The Fund's tax liability such certificate being known in India as a No
Objection Certificate, "The NOC"), IMR-US shall pay the Fund a sum of Rs.
63, 600,000 in U.S. dollars at the prevailing currency exchange rate on the
date of payment, to the Fund's bank account in the Netherlands by wire
transfer. In the event that the NOC is not available on the Closing Date,
then closing can still occur on the basis that twenty (20%) percent of the
consideration shall be withheld by IMR-US. The withheld amount shall be
paid by IMR-US to The Fund only if the NOC is provided to IMR-US before
IMR-US pays the withheld amount on account of taxes to the Indian Tax
Authorities. In the event that IMR-US pays any such amount to the Indian
Tax Authorities, it shall forthwith provide the Fund with the appropriate
Tax Deduction Certificate and any further information or evidence that the
Fund may reasonably require to enable it to obtain credit for the tax
withheld.
4. Completion of the share transfer will result in full and final settlement
of all issues between the Fund, IMR-India and IMR-US arising out of or as a
consequence of the Investment Agreement and in particular, the option to
convert the loan into equity, any IMR-India obligation to repay the loan,
and any option to convert the Fund's IMR-India shares into IMR-US shares
(to the extent that it may be deemed to exist) will all be canceled.
Following completion, neither the Fund, nor any other Second India
Investment Fund company will have any interest of any nature whatsoever in
IMR-India or IMR-US either as an equity holder or as a debt holder or
otherwise.
5. In the event that closing does not take place within 30 days of the date
of execution of this Purchase Agreement, IMR-US will, within 7 days
thereafter, deposit either, a) the purchase price if the NOC is provided,
or b) 80% of the Purchase if the NOC is not provided, in an escrow account
with Travers Smith Braithwaithe, ("The Escrow Agent") the fund's legal
advisor, pending closing. On confirmation that the deposit has been made,
the Fund will execute a Power of Attorney or proxy authorizing IMR-US to
vote the shares.
6. All parties meaning IMR-US, IMR-India and the Fund will use their best
endeavors to obtain the appropriate approvals as quickly as possible.
7. The Fund represents and warrants to IMR-US and to IMR-India that it has
full power and authority to execute, deliver, and carry out the terms of
this agreement.
8. The Fund represents and warrants to IMR-US and IMR-India that: (i) as of
the date hereof the Fund has the unrestricted power and the unqualified
right to sell, assign, and deliver to IMR-US and IMR-India good, valid, and
marketable title to the shares, free and clear of any liens, claims,
encumbrances and equitable rights, (ii) on completion of this Agreement,
the Fund will neither own nor hold any shares, warrants, convertible
security, or any right, contractual or otherwise, to purchase or acquire,
any additional interests in IMR-US or IMR-India.
2 of 5
<PAGE>
9. IMR-US represents and warrants to the Fund that it has full power and
authority to execute, deliver and carry out the terms of this agreement.
10. IMR-US and IMR-India represent and warrant to the Fund that as of the date
hereof: (i) IMR-US is not an Indian resident company and (ii) IMR-US is not
acquiring any IMR-India shares at this time at a value higher than Rs.1,060
per share.
11. The Fund does hereby remise, release, acquit and forever discharge IMR-US
and IMR-India, any parent company, subsidiaries and affiliates, and their
directors, officers, agents, representatives, and employees of and from all
manner of actions, causes of action, suits, debts, covenants, trespasses,
contracts, agreements, damages, judgments, liabilities, losses, costs,
expenses (including, but not limited to, attorney's fees) and claims of any
nature whatsoever, in law or equity in relation to the Investment Agreement
and the Fund's investment in IMR-India whether or not now or hereafter
known, suspected or claimed, which the Fund ever had, now has, or which it
hereafter can, shall or may have or allege against IMR-US or IMR-India, any
parent company, subsidiaries, or affiliates, or their directors, officers,
agents, representatives, or employees or by reason or any manner, cause or
thing from the beginning of the world to the date hereof.
12. This Agreement shall be governed by and construed in accordance with the
law of India.
IN WITNESS WHEREOF the Parties have caused this Agreement to be executed the day
and year first hereinabove mentioned.
SIGNED AND DELIVERED
for and on behalf of
INFORMATION MANAGEMENT
RESOURCES, INC.
By: \s\ Satish K. Sanan
---------------------------------
Satish K. Sanan, President & CEO
in the presence of : \s\ Dilip Patel
---------------------------------
SIGNED AND DELIVERED
for and on behalf of
SECOND INDIA INVESTMENT FUND B.V.
By: \s\ Brian Human
---------------------------------
in the presence of : \s\
---------------------------------
SIGNED AND DELIVERED
for and on behalf of
INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
By: \s\ Satish K. Sanan
---------------------------------
Satish K. Sanan, Chairman & CEO
in the presence of: \s\ Dilip Patel
---------------------------------
3 of 5
<PAGE>
EXHIBIT 10.7
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made this Fourth day of July, 1996, between SATISH K. SANAN,
an individual residing at 163 Woodcreek Drive, Safety Harbor, Florida 34621,
USA, hereafter referred to as the "Seller" (which expression shall unless
repugnant to the context or meaning thereof, be deemed to include his successors
and assigns) of the one part; and,
INFORMATION MANAGEMENT RESOURCES, INC., a company registered in the State of
Florida, United States of America, having its principal office at 26750 U.S.
Highway 19 North, Suite 500, Clearwater, Florida 34621-3442 USA, hereinafter
referred to as "Purchaser" (which expression shall unless repugnant to the
content or meaning thereof, be deemed to include its successors and assigns) of
the other Part;
WHEREAS:
A. The Purchaser owns 104,800 equity shares ("the IMR-India Shares") of Rs. 10
each of INFORMATION MANAGEMENT RESOURCES (INDIA) LIMITED, a company
formerly known as REESAN INFORMATION MANAGEMENT RESOURCES (India). Private
Ltd., which company was incorporated in India as a Private Limited company
under the Companies Act of 1956 and became a deemed Public Limited company
by virtue of Section 43-A(1A) and having its registered office at Building
38/1 Naganathapura Singasandra Post Bangalore 560 068, India hereinafter
referred to as "IMR-India", and,
B. The Seller wishes to sell and the Purchaser wishes to purchase the IMR-
India Shares at a price of Rs. 1,060 per share.
NOW THIS AGREEMENT WITNESSES AND IT IS AGREED BY AND AMONG THE PARTIES AS
FOLLOWS:
1. Seller agrees to sell the Shares to Purchaser and Purchaser agrees to
purchase the Shares for a consideration of Rs. 111,088,000 calculated at
the rate of Rs. 1,060 per share subject to and conditional on the terms
hereof.
2. This Agreement is subject to and conditional upon the registration
statement filed with the United States Securities and Exchange Commission
("SEC') by the Purchaser for an initial public offering ("IPO") of its
Common Stock being declared effective by the SEC.
3. The consideration of Rs. 111,088,000 is to be paid out of the IPO proceeds
received by Purchaser.
4. This Agreement is also subject to approval by the Reserve Bank of India.
The purchase and sale of the Shares as contemplated herein shall be
completed on the Closing Date (as defined below) only after issue of
appropriate approvals from the Reserve Bank of India for transfer to occur.
Both parties will use their best endeavors to obtain the appropriate
approval from the Reserve Bank of India as quickly as possible.
<PAGE>
5. Closing or completion of the sale and purchase of the Shares shall occur on
a date ("the Closing Date") on whichever is the later of:
(a) 15 days following approval of the Reserve Bank of India
as stated above, or
(b) On the effective date of the registration statement filed with the
United States Securities and Exchange Commission by the Purchaser for
an initial public offering of its Common Stock.
PROVIDED THAT if either the Reserve Bank of India approval or the effective
date of the IPO registration statement does not occur before December
31, 1996, either party may terminate this Agreement by providing 14
days written notice to the other party.
6. On the Closing Date, in exchange for all certificates representing the
Shares, a properly executed transfer deed in favor of Purchaser, documents
evidencing proper execution of the transfer deed and if applicable a
certificate from the Indian Tax Authority certifying that there is no
obligation on Purchaser to withhold any part of the consideration on
account of Seller's tax liability (such certificate being known in India as
a No Objection Certificate, "THE NOC"), Purchaser shall pay on the Closing
Date or within 30 days thereafter, to the Seller, by wire transfer to
Seller's bank account, a sum of Rs. 111,088,000 less any withholding taxes
which may apply.
7. The Seller and the Purchaser will use their best endeavors to obtain the
appropriate approvals as quickly as possible.
8. The Seller represents and warrants to the Purchaser that he has full power
and authority to execute, deliver, and carry out the terms of this
agreement.
9. The Seller represents and warrants to the Purchaser that the Seller has the
unrestricted power and the unqualified right to sell, assign, and deliver
to the Purchaser a good, valid and marketable title to the shares, free and
clear of any liens, claims, encumbrances and equitable rights.
-2-
<PAGE>
IN WITNESS WHEREOF the Parties have caused this Agreement to be executed
the day and year first hereinabove mentioned.
SIGNED AND DELIVERED
by SATISH K. SANAN:
\s\ Satish K. Sanan
----------------------------------
in the presence of: \s\
----------------------------------
SIGNED AND DELIVERED
for and on behalf of
INFORMATION MANAGEMENT
RESOURCES, INC.
By: \s\ Dilip Patel
----------------------------------
Dilip Patel, Vice President and
General Counsel
in the presence of: \s\
----------------------------------
-3-
<PAGE>
EXHIBIT 10.8
September 12, 1996
Information Management Resources, Inc.
26750 U.S. Highway 19 North,
Suite 500,
Clearwater, Florida 34621-3442
USA
Dear Sir,
Pursuant to an Agreement dated November 22, 1994 between IMR-US, IMF, Mr. Sanan
and IMR - India (hereinafter "the Investment Agreement") IMF is the owner of and
is well and sufficiently entitled to Two Hundred Thousand (200,000) equity
shares of Rs.10.00 each of IMR - India (hereinafter called "the Shares") and has
agreed to sell to IMR-US and IMR-US has agreed to purchase the Shares for the
consideration and subject to the terms and conditions as stated below:
1. IMF agrees to sell the Shares to IMR-US and IMR-US agrees to purchase the
Shares for a consideration of Rs. 180,000,000 calculated at the rate of
Rs.900 per share subject to and conditional on the terms hereof. On receipt
of this letter, IMR-US shall pay to IMF the sum of Rs. 70,000 as a deposit
which shall be applied at closing to the total consideration to be paid for
the Shares.
2. This transaction is subject to and conditional upon the completion by IMR-
US of an initial public offering ("IPO") of its common stock pursuant to a
registration statement filed with the United States Securities and Exchange
Commission.
3. The consideration of Rs. 180,000,000 is to be paid out of the IPO
proceeds received by IMR-US.
4. This transaction is also subject to approval by the Reserve Bank of India.
The purchase and sale of the Shares as contemplated herein shall be
completed on the Closing Date (as defined below) only after issue of
appropriate approvals from the Reserve Bank of India for the transfer to
occur. All parties will use their best endeavors to obtain the appropriate
approval from the Reserve Bank of India as quickly as possible.
5. Closing or completion of the sale and purchase of the Shares shall occur on
a date ("the Closing Date") on whichever is the later of:
(a) 15 days following approval of the Reserve Bank of India as stated
above, or
<PAGE>
(b) 30 days following the successful completion by IMR-US of an initial
public offering of its Common Stock pursuant to a registration
statement filed with the United States Securities and Exchange
Commission.
PROVIDED THAT if both the Reserve Bank of India approval and successful
completion of the initial public offering of the Common Stock of IMR-US
pursuant to a registration statement filed with the United States
Securities and Exchange Commission do not occur before December 31, 1996,
either party may terminate this Agreement by providing 14 days written
notice to the other party. In the event of such termination, the Deposit
shall be returned by IMF to IMR.
6. On the Closing Date, in exchange for all certificates representing the
Shares, a properly executed transfer deed in favor of IMR-US, documents
evidencing proper execution of the transfer deed and if applicable a
certificate from the Indian Tax Authority certifying that there is no
obligation on IMR-US to withhold any part of the consideration on account
of IMF's tax liability (such certificate being known in India as a No
Objection Certificate, "The NOC"), IMR-US shall pay IMF, by wire transfer
to IMF's bank account a sum of Rs. 180,000,000 less any withholding taxes
which may apply and less the Deposit.
7. We confirm that IMF has full power and authority to execute, deliver, and
carry out the terms of this Agreement. IMF will execute and deliver any
additional documents necessary and sufficient to transfer to IMR-US good,
valid, and indefensible title to the Shares.
8. We confirm that: (I) as of the date hereof IMF has the unrestricted power
and the unqualified right to sell, assign, and deliver to IMR-US a good,
valid, and marketable title to the Shares, free and clear of any liens,
claims, encumbrances and equitable rights (ii) on completion of this
Agreement, IMF will neither own nor hold any shares, warrants, or
securities convertible into or any right, to purchase or acquire, any
equity interest in IMR-India.
9. IMF agrees and confirms that on completion of the sale of the Shares, Mr.
Sanan, IMR-US and IMR-India will be released and discharged from all
obligations, causes of action, suits, debts, covenants and liabilities
and claims of any nature in relation to the Investment Agreement.
We seek your confirmation to the above.
Yours very truly,
Vinod Sethi
Managing Director
<PAGE>
EXHIBIT 10.9
MASTER AGREEMENT FOR INFORMATION
TECHNOLOGY PROFESSIONAL SERVICES
CONTRACT NO. 960009
THIS MASTER AGREEMENT FOR INFORMATION TECHNOLOGY PROFESSIONAL SERVICES
(this "Agreement"), is made as of February 9, 1996, by and between DAYTON HUDSON
CORPORATION, ON BEHALF OF THE CORPORATION, ITS OPERATING DIVISIONS AND ITS
MAJORITY-OWNED SUBSIDIARIES (collectively, the "DHC Group" or "Customer") and
INFORMATION MANAGEMENT RESOURCES, INC. ("Vendor")
RECITALS
A. Dayton Hudson Corporation ("DHC") is a Minnesota corporation. As it is
currently structured, DHC has two operating divisions, the Department Stores
Division ("DHCDSD") and Target Stores ("Target") and a number of majority-owned
subsidiaries, among them Mervyn's ("Mervyn's"). DHCDSD and Target, together
with any other operating divisions of DHC as may from time to time exist, are
hereinafter collectively referred to as the "Operating Divisions". Mervyn's,
together with any other majority-owned subsidiaries of DHC as may from time to
time exist, are hereinafter collectively referred to as the "Majority-Owned
Subsidiaries". DHC, its Operating Divisions and its Majority-Owned Subsidiaries
are hereinafter collectively referred to as "Customer" or the "DHC Group".
B. IMR is a Florida corporation.
--------
C. DHC, on behalf of the DHC Group, desires to retain the Vendor to
perform services in accordance with the terms and conditions of this Agreement.
D. The Vendor desires to perform these services in accordance with the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises exchanged herein and for
other good and valuable consideration, the receipt and sufficiency of which the
parties hereby acknowledge, the parties agree as follows:
1. PURPOSE OF AGREEMENT. The purpose of this Agreement is to set forth the
--------------------
terms and conditions under which the Vendor will provide information
technology professional services to Customer.
2. SCOPE OF AGREEMENT. This Agreement covers all services and work provided
------------------
or produced by the Vendor pursuant to any Request for Services issued by
Customer and accepted by the Vendor during the term of this Agreement.
3. REQUEST FOR SERVICES. Customer shall issue a Request for Services (a
--------------------
"Request for Services") using a copy of the form attached as Exhibit A
whenever it wishes to use the Vendor's services. The Request for Services
shall provide the following information:
a. The name and address of the Customer employee who will have
administrative responsibility with respect to the Request for Services
(the "Customer Representative");
b. The name and address of the "Vendor Representative" (as defined in
Section 6 below);
c. A detailed description of the services to be performed (the
"Authorized Services");
d. A schedule listing the names of the individuals who will perform the
Authorized Services (the "Vendor's Personnel") and indicating with
respect to each:
1
<PAGE>
i) whether the individual will be performing Authorized Services
within the United States, and if so, whether the individual is (a) a
U.S. citizen, (b) has a Green Card, or (c) has an H1B Visa;
ii) whether the individual will be performing Authorized Services
off-shore;
iii) whether the individual is (a) the Vendor's employee (W-2
employee if on shore, or the equivalent if off-shore), or (b) the
Vendor's subcontractor;
e. A fee schedule, fixed price or other relevant information regarding
charges for performance of Authorized Services;
f. A list of any expenses for which the Vendor will be reimbursed by
Customer (the "Reimbursable Expenses");
g. A start date or start date parameters and other relevant information
regarding hours, schedules, completion dates, etc.; and
h. Any special terms and conditions that shall apply to the services
covered by the Request for Services.
The Vendor shall indicate its acceptance of a particular Request for
Services by signing that Request for Services and returning it to the Customer
Representative.
Upon the acceptance of a Request for Services by the Vendor, that Request
for Services shall be incorporated into and made a part of this Agreement, and
all of the terms and conditions of this Agreement shall apply to the performance
of the Authorized Services described in that Request for Services, EXCEPT THAT
ANY SPECIAL TERMS AND CONDITIONS EXPRESSLY SET FORTH IN THAT REQUEST FOR
SERVICES SHALL GOVERN OVER THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT.
ANY SUCH SPECIAL TERMS AND CONDITIONS SHALL APPLY ONLY TO THE AUTHORIZED
SERVICES DESCRIBED IN THAT PARTICULAR REQUEST FOR SERVICES AND SHALL HAVE NO
APPLICATION TO SERVICES PROVIDED BY THE VENDOR PURSUANT TO OTHER REQUEST FOR
SERVICES.
4. AMENDMENT OF REQUEST FOR SERVICES. Notwithstanding anything to the
---------------------------------
contrary set forth in Section 31 of this Agreement, certain information set
forth on a Request for Services may be amended as follows:
a. The name and/or address of the Customer Representative may be changed
by giving oral or written notice to the Vendor Representative;
b. The name and/or address of the Vendor Representative may be changed by
giving oral or written notice to the Customer Representative; and
c. Start dates, completion dates and other scheduling information may be
amended by verbal agreement between the Vendor Representative and the
Customer Representative.
All other changes to the Request for Services must be made in writing
as provided in Section 31 of this Agreement.
5. RIGHT TO REJECT VENDOR'S PERSONNEL. Customer reserves the right to reject
----------------------------------
any of the Vendor's Personnel, at Customer's sole and absolute discretion,
under, but not limited to, the conditions listed below. If any individual
is rejected, the Vendor may replace that individual. Customer reserves the
right to reject any individual with one day's notice.
2
<PAGE>
a. Schedules are not reasonably met and/or reasonable progress is not
being made on assignments;
b. The individual is not fully qualified in the skills he or she was
professed to possess;
c. The individual's work is of poor quality and/or requires frequent or
substantial rework;
d. The individual interacts poorly with the rest of the project members;
or
e. The individual poses a security risk or a threat to the safety of
others.
6. VENDOR REPRESENTATIVE. The Vendor shall designate one of its employees to
---------------------
act as the Vendor Representative (the "Vendor Representative") with respect
to each Request for Services. The Vendor Representative shall be available
to Customer on a priority basis during the Vendor's regular business hours.
The Vendor Representative's function shall be to ensure good communication
between Customer and the Vendor and "total quality" customer service.
7. PAYMENT. Customer shall pay the Vendor for the Authorized Services provided
-------
by the endor at the rates or as otherwise set forth in the applicable
Request for Services. In addition, Customer shall reimburse the Vendor for
any reasonable expenses of the type(s) listed in the Request for Services
as "Reimbursable Expenses" and for any other expenses approved in writing
by Customer. Customer shall pay invoices submitted in accordance with
Section 8 within thirty (30) days of Customer's receipt of such invoices.
Customer shall pay interest at a rate of 1 1/2% per month on any amounts
not paid within such 30-day period.
8. INVOICING. The Vendor shall invoice Customer for services as rendered, but
---------
no more often than every two weeks. Each invoice shall identify the project
by the date and number of the Request for Services. The invoice shall show
(a) the tasks performed, (b) the names of the person(s) working on each
task, and (c) if the Vendor is being paid an hourly rate, the applicable
hourly rates and the number of hours each person worked on each task.
Reimbursable Expenses must be itemized and accompanied by reasonable backup
documentation.
9. CONFlDENTIALITY.
---------------
a. Definition of "Confidential Information". The term "Confidential
----------------------------------------
Information" means all information relating to the Customer's
business, including all data, records, reports, drawings, tapes,
specifications, formulas, research, interpretations, forecasts,
proposals, business strategies, business plans and analysis, trade
secrets, financial information, statistical information, personnel
information, information about marketing and sales, information about
products or pricing, information about customers or potential
customers, information about vendors or potential vendors, information
about systems, including communication and information systems, and
information about the capabilities of or plans for existing or future
technology used in Customer's business (including any such information
supplied to the Customer by a third-party and marked "confidential" or
containing a notice of copyright or patent, e.g., third party
software), EXCEPT THAT THE TERM DOES NOT INCLUDE:
i) information that is publicly available at the time it is
disclosed to the Vendor or which, through no act or omission of
the Vendor, becomes publicly available before the Vendor
discloses it to a third-party;
ii) information that the Vendor already rightfully possessed
independent of any obligation of confidentiality before the
information was disclosed by Customer:
iii) information that the Vendor rightfully receives without
obligation of confidentiality from any third-party; or
3
<PAGE>
iv) information independently developed by an employee, subcontractor
or consultant of the Vendor having no knowledge of the
disclosures hereunder.
b. Accidental Disclosures Covered by this Agreement. The Vendor
------------------------------------------------
understands that the Customer wishes to protect the confidentiality of
Confidential Information that is accidentally disclosed to the Vendor,
for example, because the Vendor overhears a conversation or happens to
see documents in work areas while visiting the Customer's offices.
Accordingly, the parties agree that the obligations of confidentiality
created under this Agreement apply to Confidential Information that is
accidentally disclosed to the Vendor.
c. Obligation Of Confidentiality. The Vendor agrees to treat, and by
-----------------------------
instruction or agreement, cause its employees, agents and
subcontractors to treat, all Confidential Information as confidential,
to disclose such information only to those employees, agents and
subcontractors who have a legitimate business need to know in order to
perform the Authorized Services, and to take strict precautions
against the disclosure of such information to all other persons, both
during and after the performance of the Authorized Services. Upon the
termination of this Agreement, for any reason whatsoever, the Vendor
shall promptly return to Customer all copies of Confidential
Information furnished by Customer and all materials prepared for or in
connection with the Authorized Services. Confidential Information
disclosed pursuant to this Agreement shall continue to be subject to
the terms of this Agreement for five (5) years following its
disclosure to Vendor. This obligation of confidentiality shall survive
termination of this Agreement.
10. PROPRIETARY RIGHTS. For the purposes of this Agreement, the term "Work"
------------------
shall mean any program, whether in the source code or object code version,
together with and including any algorithm, flowchart, schematic, diagram,
specification, annotation, or other documentation connected therewith,
and/or any invention, data, reports, analysis, product and/or any other
copyrightable, patentable or trademarkable "thing" which Vendor conceives
or originates, either individually or jointly, and which arises out of the
performance of this Agreement. Customer and the Vendor agree that all Work
shall be considered "work-made-for-hire" within the meaning and purview of
Section 101 of the Copyright Act of 1976, 17 U.S.C. (S) 101, and ownership
of the entire right, title and interest in the Work, including, but not
limited to, any copyrights therein, shall reside in Customer. If the Work
does not qualify as a work-made-for hire under 17 U.S.C. (S) 101, then the
Vendor hereby irrevocably transfers, assigns and conveys the entire right,
title and interest in the Work, including, but not limited to, the
exclusive copyright ownership thereof, the right to register and renew the
copyrights throughout the world, and rights under the Universal Copyright
Convention and the Berne Convention (throughout the world and for the
entire duration of the copyright) to Customer.
Without limiting the foregoing, the Vendor agrees to disclose promptly any
such work to Customer and to furnish to Customer any instruments that
Customer may from time to time request to confirm its ownership of all the
foregoing rights. The Vendor will assist Customer in obtaining patents,
copyrights, or proof of exclusive ownership in any and all countries on
such invention, work or product.
The Vendor warrants and represents that all persons who perform any portion
of the Authorized Services at the direction of the Vendor are either:
a. the Vendor's employees (W-2 employees if working on-shore or the
equivalent if working off-shore) and doing so in the course of their
employment with Vendor: or
b. the Vendor's subcontractors and doing so pursuant to written
agreements with Vendor in the form attached to this Agreement as
Exhibit C, confirming and effecting an assignment of all rights in and
to the Work, including, but not limited, to any copyrights therein, to
Customer.
4
<PAGE>
IF THE PERSON IS NOT THE VENDOR'S EMPLOYEE AS DEFINED IN THE PREVIOUS
SENTENCE, THE VENDOR MUST DELIVER TO CUSTOMER A FULLY EXECUTED ASSIGNMENT
OF COPYRIGHT IN THE FORM OF EXHIBIT C BEFORE THE PERSON BEGINS WORK.
11. INDEPENDENT CONTRACTOR RELATIONSHIP.
-----------------------------------
a. Independent Contractor Relationship. By this Agreement, Customer and
-----------------------------------
the Vendor intend to create an independent contractor relationship. As
such, Customer is interested only in the results of the Vendor's
performance and not the method or manner of performance. Therefore,
while the Vendor's Personnel shall perform the Authorized Services in
accordance with and to Customer standards and specifications, the
Vendor retains sole and exclusive control over the method and manner
in which the Authorized Services are performed.
b. Vendor Warranties with Respect to Vendor's Responsibilities as an
-----------------------------------------------------------------
Employer. The Vendor warrants and represents that it, and not
--------
Customer, is the employer of the Vendor's employees and that it is
solely responsible for complying with all laws, rules and regulations
of any governmental authority having appropriate jurisdiction relating
to such employment, including, but not limited to, immigration,
taxation, worker compensation and unemployment compensation.
The Vendor warrants and represents that it is aware of and in
compliance with all laws, rules, regulations and requirements of any
governmental authority having appropriate jurisdiction with respect to
the Vendor's Personnel and with any contractual obligations to which
it may be subject relating to the Vendor's Personnel.
The Vendor agrees and acknowledges that Customer has no obligation
whatsoever to provide liability or health insurance, or any other
benefit provided to Customer employees for the Vendor or the Vendor's
Personnel, and neither the Vendor nor any of the Vendor's Personnel
shall claim benefits under applicable unemployment or workers'
compensation laws from Customer for any injuries sustained by the
Vendor or any of the Vendor's Personnel while performing the
Authorized Services.
If any court or administrative tribunal or agency with appropriate
jurisdiction determines that any employment relationship has been or
will be established by the performance of this Agreement,
notwithstanding anything to the contrary set forth in Section 15, the
Vendor shall reimburse and indemnify Customer for costs and expenses
of any nature arising out of or relating to such a determination
and/or Customer's defense of such a determination, including, but not
limited to, tax withholding and insurance claims in the nature of
unemployment compensation and/or workers' compensation imposed by any
level of government and reasonable attorneys' fees and costs of suit.
The Vendor shall also indemnify and hold harmless Customer against any
claim brought by any of the Vendor's Personnel that is related in any
way to services or work performed under this Agreement, except to the
extent such claim arises out of Customer's gross negligence or willful
misconduct.
c. Vendor Warranties with Respect to Vendor Personnel Working Off-Shore
--------------------------------------------------------------------
or Who Are Not United States Citizens. The Vendor warrants and
-------------------------------------
represents that throughout the term of this Agreement, the Vendor
shall comply with all applicable laws, rules and regulations of any
governmental authority or any country having authority over such
matters with respect to the performance of any part of the Authorized
Services "off shore" and/or by persons who are not citizens of the
United States, whether "off-shore" or within the United States. The
Vendor further warrants and represents that the Vendor shall require
and verify that any subcontractor has complied with all applicable
laws, rules and regulations of any governmental authority or any
country having authority over such matters with respect to the
performance of any part of the Authorized Services "off-shore" and/or
by persons who are not citizens of the United States, whether "off-
shore" or
5
<PAGE>
within the United States. Without limiting the foregoing, the Vendor
warrants and represents that any person performing any part of the
Authorized Services will have the appropriate visa and work papers
before beginning work.
Notwithstanding anything to the contrary set forth in Section 15 of
this Agreement, the Vendor shall indemnify and hold Customer harmless
against any and all losses, liabilities, judgments, awards,
settlements, damages, costs and expenses, including without
limitation, legal fees and expenses, arising out of or related to the
breach of the warranties set forth in the previous paragraph; provided
that Customer notifies the Vendor promptly in writing of the claim and
provided that the Vendor may fully participate in the defense and/or
agrees to any settlement of such claim.
d. Vendor's Personnel Not Agents of Customer. Neither the Vendor nor any
-----------------------------------------
of the Vendor's Personnel shall have the right to purchase goods or
services in the name of Customer, execute or make contracts in the
name of Customer, or obligate Customer in any way. The Vendor shall
ensure that the Vendor's Personnel are aware that they are not agents,
employees, and/or legal representatives of Customer and may not
represent themselves as such.
e. Agreement Is Non-Exclusive. Customer does not agree to use the Vendor
--------------------------
exclusively or to provide any minimum amount of work. The Vendor and
any of its employees or subcontractors are free to contract to
perform similar services to others during the term of this Agreement,
subject to the obligation of confidentiality set forth in Section 9
and Customer's proprietary rights as set forth in Section 10.
12. INFRINGEMENT. The Vendor warrants and represents that neither the Vendor
-------------
nor any of the Vendor's Personnel will infringe upon or violate the patent,
copyright, trademark, trade secret or other proprietary right of any third
party in connection with the performance of services under this Agreement.
Notwithstanding anything to the contrary set forth in Section 15, the
Vendor shall indemnify and hold Customer harmless against any and all
losses, liabilities, judgments, awards, settlements, damages, costs and
expenses, including without limitation, legal fees and expenses arising out
of or related to any claim that the services performed pursuant to this
Agreement infringe upon any trademark, copyright, patent, trade secret or
similar intellectual property right of any third party; provided that
Customer notifies the Vendor promptly in writing of the claim and provided
that the Vendor may fully participate in the defense and/or agrees to any
settlement of such claim.
13. OTHER WARRANTIES. The Vendor warrants and represents that any services
----------------
performed by the Vendor, its employees and/or subcontractors pursuant to
this Agreement shall be (a) performed in a professional and workmanlike
manner; (b) performed in compliance with all applicable federal, state and
local government laws, regulations, and requirements, and (c) performed by
adequately trained, competent personnel.
14. DISCLAIMER OF IMPLIED WARRANTIES. THERE ARE NO REPRESENTATIONS OR
--------------------------------
WARRANTIES, EXPRESS OR IMPLIED, ORAL OR WRITTEN, IN FACT, ARISING BY
OPERATION OF LAW OR OTHERWISE EXCEPT AS RECITED EXPRESSLY IN THE BODY OF
THIS AGREEMENT AND DESIGNATED AS REPRESENTATIONS OR WARRANTIES, AND THE
PARTIES HERETO AGREE SPECIFICALLY THAT THERE ARE NO OTHER IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
15. LIMITATION OF LIABILITY.
-----------------------
a. Vendor's Liability. IN NO EVENT SHALL THE VENDOR BE LIABLE FOR ANY
------------------
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING OUT OF
THE VENDOR'S ENGAGEMENT UNDER THIS AGREEMENT, INCLUDING, WITHOUT
6
<PAGE>
LIMITATION, ANY LOST PROFITS OR REVENUES, LOSS OF USE OF ANY SOFTWARE
OR ANY HARDWARE, OR LOSS OF DATA, EVEN IF THE VENDOR IS INFORMED OF
THE POSSIBILITY OF SUCH DAMAGES, WHETHER CLAIMED UNDER CONTRACT, TORT
OR ANY OTHER LEGAL THEORY, UNLESS SUCH DAMAGES ARE THE RESULT OF THE
VENDOR'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED, HOWEVER,
NOTHING HEREIN SHALL LIMIT (i) THE VENDOR'S OBLIGATION TO INDEMNIFY
CUSTOMER FOR CLAIMS OF INFRINGEMENT PURSUANT TO SECTION 12 OR FOR
EMPLOYMENT RELATED CLAIMS PURSUANT TO SECTION 11, (ii) THE VENDOR'S
LIABILITY FOR THE COST OF RECOVERING DATA OR THE COST OF SUBSTITUTE
SOFTWARE OR HARDWARE, OR (iii) THE VENDOR'S LIABILITY FOR DAMAGE TO
REAL OR TANGIBLE PERSONAL PROPERTY OR FOR PERSONAL INJURY OR DEATH. If
any of the limitations on the liability of the Vendor contained in
this paragraph are found to be invalid or unenforceable for any reason
by a court of competent jurisdiction, Customer hereby expressly agrees
that the maximum aggregate liability of the Vendor under such
circumstance for liabilities that otherwise would have been limited
shall not exceed the aggregate fees paid by Customer to the Vendor
pursuant to the applicable Request for Services.
b. Customer's Liability. IN NO EVENT SHALL CUSTOMER BE LIABLE FOR ANY
--------------------
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, ARISING
DIRECTLY OR INDIRECTLY OUT OF CUSTOMER'S BREACH OF THIS AGREEMENT,
EVEN IF CUSTOMER IS INFORMED OF THE POSSIBILITY OF SUCH DAMAGES,
WHETHER CLAIMED UNDER CONTRACT, TORT OR ANY OTHER LEGAL THEORY, UNLESS
SUCH DAMAGES ARE THE RESULT OF CUSTOMER'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT; PROVIDED HOWEVER THAT NOTHING HEREIN SHALL LIMIT
CUSTOMER'S LIABILITY FOR DAMAGE TO REAL OR TANGIBLE PERSONAL PROPERTY
OR FOR PERSONAL INJURY OR DEATH. If any of the limitations on the
liability of Customer contained in this Agreement are found to be
invalid or unenforceable for any reason by a court of competent
jurisdiction, the Vendor hereby expressly agrees that the maximum
aggregate liability of Customer under such circumstance for
liabilities that otherwise would have been limited shall not exceed
the aggregate fees paid by Customer to the Vendor pursuant to the
applicable Request for Services.
16. INSURANCE. In addition to any other insurance requirements set forth in
---------
Section 10 of this Agreement, the Vendor shall maintain (and cause its
subcontractors, if any, to maintain) the following insurance coverages in
full force and effect throughout the term of this Agreement:
a. Workers' Compensation Insurance as may be from time to time required
--------------------------------
under applicable federal laws and the laws of the state(s) or country
in which the Authorized Services are performed.
b. Employer's Liability Insurance with limits of not less than $1,000,000
-------------------------------
each accident, $1,000,000 disease - policy limit, and $1,000,000
disease - each employee.
c. Commercial General Liability Insurance (including contractual
---------------------------------------
liability to cover the indemnity provisions set forth in this
Agreement) with limits of not less than $5,000,000 general aggregate
and $1,000,000 each occurrence (including personal and advertising
injury).
d. Automobile Liability Insurance (including owned, non-owned and hired)
-------------------------------
with limits of not less than One Million Dollars ($1,000,000) combined
single limit.
The foregoing insurance shall contain a provision whereby the insurer
agrees to give Customer thirty (30) days' written notice before the
insurance is canceled or altered in such a way that it no longer satisfies
the requirements set forth in this Section 16. The foregoing insurance
shall be written on an occurrence basis and shall include Dayton Hudson
Corporation, DHCDSD, Target and Mervyn's as additional insureds. The Vendor
shall furnish current certificates evidencing that the foregoing insurance
is being maintained by
7
<PAGE>
Vendor. Delivery of a certificate to Customer which is not in full
compliance with this Agreement shall not be deemed to waive the Vendor's
obligations. All of the insurance policies required to be obtained pursuant
to this Agreement shall be with companies licensed to do business in the
state where the Authorized Services will be performed and either (i) rated
no less than X as to financial rating and no less than A- as to Policy
Holder's Rating in the current edition of Best's Insurance Guide (or with
an association of companies each of the members of which are so rated) or
(ii) having a parent company's debt to policyholder surplus ratio of 1:1.
17. ADHERENCE TO LAWS. Vendor agrees that in carrying out its duties and
-----------------
responsibilities under this Agreement, it will neither undertake nor cause,
nor permit to be undertaken, any activity which either (1) is illegal under
any laws, decrees, rules or regulations in effect in either the United
States or in the country in which Authorized Services are being performed;
or (2) would have the effect of causing Customer to be in violation of any
laws, decrees, rules or regulations in effect in the United States or in
the country in which the Authorized Services are being performed.
18. USE OF CUSTOMER'S NAME. The Vendor shall not use Customer's name,
----------------------
trademarks, service marks or logo in any advertisements or materials of a
promotional nature or in soliciting other clients without first obtaining
Customer's written permission which may be withheld at Customer's sole
discretion.
19. TERM OF AGREEMENT. This Agreement shall take effect on the Effective Date,
-----------------
as defined in Section 33 below, and shall remain in effect until terminated
by one of the parties pursuant to Section 20 below.
20. TERMINATION OF AGREEMENT. Customer may terminate this Agreement or any
------------------------
Request for Services, with or without cause and at its sole discretion,
upon written notice to the Vendor. The foregoing notwithstanding, if
Customer breaches this Agreement or any of the special terms or conditions
of any Request for Services, the Vendor shall have cause to terminate this
Agreement and may terminate this Agreement or any Request for Services upon
seven (7) days written notice to Customer unless the event(s) giving rise
to the breach have been remedied or rectified within that seven-day period
(or if the breach if of a type cannot be remedied in seven days, unless
Customer has begun to remedy the breach and pursues such remedy
continuously and diligently). Customer's sole obligation to the Vendor upon
termination of this Agreement shall be payment to the Vendor for such
Authorized Services as have been completed prior to date of termination.
21. FORCE MAJEURE. Any delay or failure of performance of either party to this
-------------
Agreement shall not constitute a breach or default of the Agreement, or
give rise to any claims for damages, if and to the extent that such delay
or failure is caused by an occurrence beyond the control of the party
affected, including, but not limited to, acts of governmental authorities,
acts of God, the discovery of materially different site conditions, wars,
riots, rebellions, sabotage, fire, explosions, accidents, floods, strikes,
lockouts, or changes in laws, regulations, or ordinances. In the event
that a party intends to invoke this force majeure provision, that party
shall provide prompt notice to the other party as soon as possible after
the occurrence of the event giving rise to the claim of force majeure.
22. NOTICE. All notices, demands and requests required or permitted to be given
------
under this Agreement or subsequent Request for Services must be in writing
and must be delivered personally, by facsimile transmission or telecopy (in
which event, the notice shall be confirmed by overnight delivery), by
nationally recognized overnight courier or sent by United States certified
mail, return receipt requested, postage prepaid and addressed to the
parties at their respective addresses set forth below (or at the address
set forth on the applicable Request for Services), and the same shall be
effective upon receipt if delivered personally, or on the next business day
if sent by overnight courier or by facsimile transmission or telecopy, or
three (3) business days after deposit in the mail if mailed. The initial
addresses of the parties shall be:
To Vendor: Information Management Resources, Inc.
--------------------------------------
26750 US Highway 19 North, Suite 500
------------------------------------
Clearwater, FL 34621-3442
--------------------------
8
<PAGE>
Attn: Satish Sanan
------------------
To Customer: Customer Stores
South Sixth Street
Minneapolis, Minnesota 55402
Attn: IS Technical Resource Manager
Upon at least ten (10) days' prior written notice, each party shall have
the right to change its address to any other address within the United
States of America.
23. NO WAIVER. Except as expressly set forth in this Agreement, the failure of
---------
either party at any time to require performance by the other party of any
provision of this Agreement shall in no way affect the right of such party
to require performance of that provision. Any waiver by either party of any
breach of any provision of this Agreement shall not be construed as a
waiver of any continuing or succeeding breach of such provision, a waiver
of the provision itself, or a waiver of any right under this Agreement.
24. CONSTRUCTION. The rule of strict construction shall not apply to this
------------
Agreement. This Agreement has been prepared by Customer and its
professional advisors and reviewed and modified by the Vendor and its
professional advisors. Customer, the Vendor, and their separate advisors
believe that this Agreement is the product of all of their efforts, that it
expresses their agreement, and that it should not be interpreted in favor
of or against either Customer or the Vendor merely because of their efforts
in preparing it.
25. CAPTIONS, GENDER, NUMBER AND LANGUAGE OF INCLUSION. The captions are
--------------------------------------------------
inserted in this Agreement only for convenience of reference and do not
define, limit, or describe the scope or intent of any provisions of this
Agreement. Unless the context clearly requires otherwise, the singular
includes the plural, and vice versa, and the masculine, feminine, and
neuter adjectives include one another. As used in this Agreement, the word
"including" shall mean "including but not limited to".
26. EXHIBITS. The following exhibits shall be deemed incorporated into this
--------
Agreement in their entirety:
Exhibit A Sample Request for Services Form
Exhibit B Confidentiality Agreement
Exhibit C Work Made for Hire and Assignment of Copyright
Agreement
27. COSTS OF LITIGATION. If a dispute should arise relating to the performance
-------------------
of the services to be provided under this Agreement, and should that
dispute result in litigation, the prevailing party shall be entitled to
recover all reasonable costs incurred in the defense or prosecution of the
claim, including, without limitation, court costs and reasonable attorneys'
fees.
28. EQUITABLE RELIEF. In the event Vendor breaches, or threatens to breach any
----------------
of the covenants expressed herein, the damages to Customer will be great
and irreparable and difficult to quantify; therefore, Customer may apply to
a court of competent jurisdiction for injunctive or other equitable relief
to restrain such breach or threat of breach, without disentitling Customer
from any other relief in either law or equity.
29. RIGHT TO OFFSET. To the extent Vendor is required under this Agreement to
---------------
defend, hold harmless or indemnify Customer, Customer shall, in addition to
whatever other remedies are available to Customer, have the right to offset
against any fees owed Vendor under this Agreement the amount of any
indemnification to which Customer is entitled under this Agreement.
30. GOVERNING LAW. The validity, performance and construction of this Agreement
-------------
shall be governed and interpreted in accordance with the laws of the State
of Minnesota.
9
<PAGE>
31. ENTIRE AGREEMENT/AMENDMENT. This Agreement contains the entire
--------------------------
understanding and agreement between the parties with respect to the subject
matter hereof and supersedes all previous communications, negotiations and
agreements, whether oral or written, between the parties with respect to
such subject matter. No addition to or modifications of this Agreement or
waiver of any provisions of this Agreement shall be binding on either party
unless made in writing and executed on behalf of Customer and Vendor.
32. SEVERABILITY/SURVIVAL. Every section, term and provision of this Agreement
---------------------
is severable from the others. Any future determination by a court or other
authority having jurisdiction over the parties or this Agreement that a
particular section, term, or provision of this Agreement is invalid, void,
illegal, or unenforceable shall not affect the validity and enforceability
of the remaining sections, terms, or provisions. The provisions of Sections
9 through 18 and all of the warranties and representations expressly set
forth herein shall survive the termination of this Agreement.
33. EFFECTIVE DATE. For the purposes of this Agreement, the term "Effective
--------------
Date" shall mean the date set forth on the second line of this Agreement.
34. AUTHORITY. Customer and the Vendor each warrant and represent to the other
---------
that the individuals executing this Agreement have the full capacity,
right, power and authority to execute and deliver this Agreement, and all
required actions and approvals therefor have been duly taken and obtained.
The individuals signing this Agreement and all other documents executed or
to be executed pursuant hereto on behalf of any party are and shall be duly
authorized to sign the same on that party's behalf and to bind that party
thereto.
35. ADDITIONAL OR CONTRARY TERMS AND PROVISIONS, IF ANY. Any additional or
---------------------------------------------------
contrary terms and provisions set forth in a rider dated as of the date of
this Agreement, signed by both parties, and attached hereto shall be
incorporated herein and shall govern over any contrary terms and provisions
set forth above.
10
<PAGE>
IN WITNESS WHEREOF, the parties have each executed this Agreement by
their duly authorized representatives on the date(s) shown below.
VENDOR: CUSTOMER:
DAYTON HUDSON CORPORATION, ON BEHALF OF THE
CORPORATION, ITS OPERATING DIVISIONS AND ITS
INFORMATION MANAGEMENT MAJORITY-OWNED SUBSIDIARIES
RESOURCES, INC.
By: /s/ Satish K. Sanan By: /s/ Brigid Bonner
------------------------- -------------------------------------------
Name: Satish K. Sanan Name: Brigid Bonner
----------------------- -----------------------------------------
Title President & CEO Title: Director, Planning and Infrastructure
----------------------- ----------------------------------------
Date: May 17, 1996 Date: May 15, 1996
----------------------- -----------------------------------------
11
<PAGE>
EXHIBIT A
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
VENDOR:
DATE OF RFS:
CONTRACT NO.:
DATE OF MASTER AGMT.:
RFS NO:
Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and
conditions of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE TARGET REPRESENTATIVE
- --------------------------------------------------------------------------------
NAME: NAME:
TITLE: TITLE:
ADDRESS: ADDRESS:
PHONE NO.: PHONE NO.:
FAX NO.: FAX NO.:
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
(Provide a detailed description of services to be performed and the
deliverables.)
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE START DATE (OR START DATE PERIMETERS) AND OTHER
OR OTHER INFORMATION SCHEDULING INFORMATION:
REGARDING CHARGES FOR
SERVICES:
- --------------------------------------------------------------------------------
(Attach additional sheets (Attach additional sheets if necessary.)
if necessary.)
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES: INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
(Attach additional sheets
if necessary.)
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
(Attach additional sheets if necessary.)
- --------------------------------------------------------------------------------
12
<PAGE>
VENDOR'S PERSONNEL
================================================================================
Provide the following information with respect to each individual
performing Authorized Services. (Attach additional sheets as necessary.)
================================================================================
Name:________________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:________________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:________________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:________________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:________________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
13
<PAGE>
VENDOR DAYTON HUDSON CORPORATION, ON BEHALF OF
THE CORPORATION, ITS OPERATING DIVISIONS
AND ITS MAJORITY-OWNED SUBSIDIARIES
- ------------------------------- By:
------------------------------------
By: Its:
---------------------------- -----------------------------------
Its: Date:
--------------------------- ----------------------------------
Date:
--------------------------
14
<PAGE>
ADDITIONAL VENDOR'S PERSONNEL
================================================================================
Provide the following information with respect to each individual
performing Authorized Services. (Attach additional sheets as necessary.)
================================================================================
Name:__________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:__________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:__________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:__________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name:__________________________
[ ] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [ ] H1B Visa
[ ] Working Off-Shore
[ ] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
-15-
<PAGE>
VENDOR DAYTON HUDSON CORPORATION, ON BEHALF OF
THE CORPORATION, ITS OPERATING DIVISIONS
AND ITS MAJORITY-OWNED SUBSIDIARIES
- ------------------------------- By:
------------------------------------
By: Its:
---------------------------- -----------------------------------
Its: Date:
--------------------------- ----------------------------------
Date:
--------------------------
-16-
<PAGE>
EXHIBIT B
CONFIDENTIALITY AGREEMENT
My name is ______________________________________________. My mailing
address is ______________________________________________________________. I am
an employee or a subcontractor of __________________________________________
(the "Vendor").
The Vendor has assigned me to perform services for Dayton Hudson
Corporation, and/or one of its operating divisions or majority-owned
subsidiaries ("Customer"). In the course of my work, I will have access to
proprietary, secret and confidential information relating to Customer. Customer
could suffer irreparable harm if any of this information were disclosed to
Customer's competitors or other third parties. As a material inducement for
Customer to allow me access to such information, I hereby agree as follows:
1. The term "Confidential Information" means all information relating to the
Customer's business, including all data, records, reports, drawings, tapes,
specifications, formulas, research, interpretations, forecasts, proposals,
business strategies, business plans and analysis, trade secrets, financial
information, statistical information, personnel information, information
about marketing and sales, information about products or pricing,
information about customers or potential customers, information about
vendors or potential vendors, information about systems, including
communication and information systems, and information about the
capabilities of or plans for existing or future technology used in
Customer's business (including any such information supplied to the
Customer by a third-party and marked "confidential" or containing a notice
of copyright or patent, e.g., third-party software), EXCEPT THAT THE TERM
DOES NOT INCLUDE:
a. information that is publicly available or which, through no act or
omission of mine or the Vendor, becomes publicly available before it
is disclosed to a third-party;
b. information that the Vendor or I already rightfully possessed
independent of any obligation of confidentiality before the
information was disclosed by Customer;
c. information that the Vendor or I rightfully receive without obligation
of confidentiality from any third-party; or
d. information independently developed by an employee, subcontractor or
consultant of the Vendor having no knowledge of the disclosures
hereunder.
2. I understand that Customer wishes to protect the confidentiality of
Confidential Information that is accidentally disclosed to me, for example,
because I overhear a conversation or happen to see documents in work areas
while visiting the Customer's offices. Accordingly, I agree that the
obligations of confidentiality created under this Agreement apply to
Confidential Information that is accidentally disclosed to me.
3. I will not copy, disclose, provide or otherwise make available to anyone
any Confidential Information, except to Customer employees or my direct
supervisor and then only to the extent necessary to perform the services I
have been assigned to perform. I will take all appropriate steps to protect
the confidentiality and security of the Confidential Information.
4. As soon as I have completed my assignment, I will return to Customer all
copies of any Confidential Information furnished to me by Customer and all
copies of any materials prepared by or for me in connection with my
assignment.
5. I understand that if I violate the terms of this Agreement, I may be
removed from the project and Customer may take legal action against me.
-17-
<PAGE>
6. My obligations with respect to the confidentiality and security of the
Confidential Information shall survive even after I finish my assignment
for Customer and even after my relationship with the Vendor comes to an
end.
Signature: ____________________________________
Date. ____________________________________
-18-
<PAGE>
EXHIBIT C
WORK MADE FOR HIRE AND
ASSIGNMENT OF COPYRIGHT AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of _______, 1996, by
and between Dayton Hudson Corporation on behalf of the corporation, its
operating divisions and its majority-owned subsidiaries ("Customer") (the
"Vendor") and , the Vendor's subcontractor (the "Subcontractor").
WHEREAS, Customer and the Vendor have entered into that certain Master
Agreement for Information Technology Professional Services dated _____________
(the "Master Agreement"); and
WHEREAS, Customer has issued and the Vendor has accepted that certain
Request for Services No. ____ dated _________ (the "RFS"), pursuant to which the
Vendor has agreed to perform certain Authorized Services and produce certain
Work for certain consideration payable to the Vendor by Customer; and
WHEREAS, the Vendor has commissioned the Subcontractor to perform all or
part of the Authorized Services and to produce all or part of the Work for
certain consideration payable to the Subcontractor by the Vendor; and
WHEREAS, the Subcontractor has agreed to perform such Authorized Services
and produce such Work; and
WHEREAS, the Parties intend that Customer shall own the entire right, title
and interest in the Work produced by the Subcontractor, including but not
limited to the copyright therein;
NOW THEREFORE, the parties expressly agree as follows:
1. As used in this Agreement, the term "Authorized Services" shall mean the
services described in the RFS. As used in this Agreement the term "Work"
shall mean any program, whether in the source code or object code version,
together with and including any algorithm, flowchart, schematic, diagram,
specification, annotation, or other documentation connected therewith,
and/or any product and/or any other copyrightable, patentable or
trademarkable thing which Subcontractor conceives or originates, either
individually or jointly, and which arises out of the performance of the
Authorized Services.
2. Any Work produced by the Subcontractor shall be considered a "work made for
hire" under the Copyright Act of 1976, 17 U.S.C. (S)101, and ownership of
the entire right, title and interest in such Work, including but not
limited to any copyrights therein, shall reside in Customer.
3. If the Work produced by the Subcontractor cannot be considered a work made
for hire under 17 U.S.C. (S)101, then the parties agree that the entire
right, title and interest in such Work, including but not limited to any
copyrights therein, the right to register and renew the copyrights
throughout the world and rights under the Universal Copyright Convention
and the Berne Convention, shall be and hereby are assigned (throughout the
world and for their entire duration) by the Subcontractor to Customer.
VENDOR: SUBCONTRACTOR:
By: By:
Name: Name:
Title Title
Date Date
-19-
<PAGE>
CUSTOMER:
DAYTON HUDSON CORPORATION, ON BEHALF OF
THE CORPORATION, ITS OPERATING DIVISIONS
AND ITS MAJORITY-OWNED SUBSIDIARIES
By:
Name:
Title
Date
-20-
<PAGE>
RIDER DATED FEBRUARY 9, 1996
TO MASTER AGREEMENT FOR INFORMATION
TECHNOLOGY PROFESSIONAL SERVICES
A. A clause regarding, TERMS OF RIDER GOVERN, is added to this Agreement as
---------------------
follows:
The terms and conditions of this Rider govern over any contrary terms and
conditions set forth in the Master Agreement for Information Technology
Professional Services.
B. A clause regarding, CERTIFICATE, is added to this Agreement as follows:
-----------
Vendor will provide, prior to execution of this Agreement, but in no event
later than forty-five (45) days after the effective date of this Agreement,
a letter signed by Vendor's general counsel or an officer or general
partner of Vendor to the following effect:
"I am the [Officer - Title] of INFORMATION MANAGEMENT RESOURCES, INC.
("IMR"). IMR is aware of requirements imposed on employers by immigration
laws and regulations. IMR and its subcontractor, INFORMATION MANAGEMENT
RESOURCES PRIVATE LIMITED, INC. ("IMR, INDIA"), have in place procedures
for complying with such laws and regulations. To the best of my knowledge,
IMR and IMR, INDIA, are in substantial compliance with all such applicable
laws.
In my position at IMR, I would be aware of any complaints, claims,
citations, or investigations against IMR or IMR, INDIA, with regard to
immigration matters. I can confirm that to the best of my knowledge no such
events have occurred in the past 12 months.
C. A clause regarding, DOCUMENTATION, is added to this Agreement as follows:
-------------
Vendor will prepare on an ongoing basis and promptly deliver to Customer
all source code, programmer's notes, comments, and any other documentation
reasonably necessary to allow a reasonably skilled computer programmer to
continue to support and maintain the computer programs furnished by Vendor
under the Request for Services. All such documentation will be furnished in
English.
D. A clause regarding VENDOR STAFFING is added to this Agreement as follows:
---------------
Vendor warrants that it currently has and will continue to retain
sufficient personnel and other resources as necessary to perform the
services required under each Request for Services within the time periods
set forth in the applicable Request for Services. Vendor shall ensure the
continuity of Vendor's employees assigned to perform services under any
Request for Services.
E. A clause regarding, EXPORT REGULATIONS, is added to this Agreement as
------------------
follows:
Vendor acknowledges its obligations to control access to technical data
under the US export laws and regulations and agrees to adhere to such laws
and regulations with regard to any technical data received under this
Agreement.
F. A clause regarding; ACCESS, is added to this Agreement as follows:
------
Customer may, from time to time, notify Vendor of Customer employee and
agents who are to have access fights to facilities where Vendor is
performing services under this Agreement. All such persons will have
reasonable access to all personnel, equipment, software, and systems for
which work is being performed for Customer under this Agreement.
G. A clause regarding, QUALIFICATIONS, is added to this Agreement as follows:
--------------
Vendor hereby represents and warrants to Customer that all statements and
materials regarding its qualifications to perform the work contemplated
under this Agreement are true and correct and are not misleading or
incomplete for any reason including by reason of omission. Vendor
recognizes and agrees that Customer may immediately terminate this
Agreement if Vendor has misstated its qualifications to
<PAGE>
perform the work contemplated under this Agreement or otherwise breached
its representations and warranties set forth in this Agreement.
H. A clause regarding, MORAL RIGHTS, is added to this Agreement as follows:
------------
Vendor irrevocably waives its moral rights in any work created, developed,
or furnished under this Agreement.
I. Section 9. CONFIDENTIALITY, is amended by adding the following:
---------------
D. All applications created by the Vendor will comply with DHC's
Information Security Standards and will be consistent with DHC's
Information Security Architecture. Compliance with these requirements will
be verified by the DHC-IS Information Security Group. This section 9(D)
will become effective as of the date DHC-IS delivers to Vendor copies of
DHC's Information Security Standards and DHC's Information Security
Architecture.
E. Customer hereby agrees to protect Vendor's Confidential Information to
the same extent as Vendor is obliged to protect Customer's Confidential
Information as set out in subclauses A, B and C of Section 9. Where the
context requires, the word Customer is to be read as Vendor and vice versa.
F. Vendor will comply with and cause its personnel to comply with
Customer's security procedures.
J. Section 11(c), Vendor Warranties with Respect to Vendor Personnel Working
----------------------------------------------------------
Off-Shore or Who Are Not United States Citizens, is amended by adding the
-----------------------------------------------
following:
Customer shall permit and provide reasonable assistance to Vendor to post
at the work site any notices as required to comply with any government law
or regulation.
K. Section 16(b), Employers Liability Insurance, is hereby deleted and
-------------------------------
replaced with the following language:
Employers Liability Insurance with limits of not less than $500,000 each
-----------------------------
accident, $500,000 disease, policy limit and $500,000 disease -- each
employee.
L. Section 28, EQUITABLE RELIEF, is hereby deleted and replaced with the
----------------
following language:
In the event either party breaches or threatens to breach any of the
covenants expressed herein, the damages to the other party will be great
and irreparable and difficult to quantify; therefore, the non-breaching
party may apply to a court of competent jurisdiction for injunctive or
other equitable relief to restrain such breach or threat of breach, without
disentitling the non-breaching party from any other relief in either law or
equity.
M. Section 20, TERMINATION OF AGREEMENT, is amended by deleting the first and
------------------------
last sentences and substituting the following language in its place:
Customer may terminate this Agreement or any Request for Services, without
cause and at its sole discretion, upon fourteen (14) days written notice to
the Vendor. In the event Customer terminates this Agreement or any Request
for Services without cause, Customer's sole obligations to Vendor shall be
(i) to pay Vendor for such Authorized Services as have been completed prior
to the date of termination and (ii) if Customer requests that Vendor stop
work before the end of the notice period or perform less work during the
notice period than Vendor would have performed had the Agreement and/or
Request for Services not been terminated, then to pay Vendor at the
applicable daily rate(s) for any work that would have been completed during
the fourteen-day notice period had Customer not terminated this Agreement
and/or the Request for Services. Customer may terminate this Agreement or
any Request for Services in the event of a breach of this Agreement,
including without limitation, a breach of security, effective immediately
upon written notice to Vendor. If Customer terminates this Agreement or any
Request for Services with cause, Customer's sole obligation to Vendor shall
be to pay Vendor for such Authorized Services as have been completed prior
to the date of termination.
N. A clause regarding, NONSOLICITATION, is added to this Agreement as follows:
---------------
Customer and Vendor agree that during the term of the Request for
Services and for a period of one (1) year after termination of the Request
for Services, neither party shall directly or indirectly solicit, hire or
2
<PAGE>
otherwise retain as an employee or independent contractor an employee or
former employee of the party who performed Authorized Services (in the case
of the Vendor's employees) or who was part of the project team (in the case
of the Customer's employees), UNLESS that party first obtains the other
party's written permission.
O. A section regarding, COST ESTIMATES AND PROPOSED SCHEDULES, is added to
---------------------------------------
this Agreement as follows:
THIS SECTION APPLIES ONLY TO "TIME AND MATERIALS" PROJECTS FOR WHICH AN
ESTIMATE IS PROVIDED OR TO ESTIMATES OF REIMBURSABLE EXPENSES. Any cost
estimate (as opposed to a fixed price) and any proposed schedule set forth
in any Request for Services are for Customer's budgeting and planning
purposes and shall be made in good faith based upon the information
available to Vendor at the time the Request for Services was accepted.
Vendor shall use its best efforts to perform the Authorized Services at or
below the estimated cost and in accordance with the proposed schedule.
Vendor shall promptly notify Customer of any circumstances that may affect
the cost estimate or the proposed schedule. Upon Customer's receipt of such
notice (and provided Customer does not elect to cancel the Request for
Services pursuant to Section 20 of this Agreement), the parties shall
promptly execute an amended Request for Services revising the description
of services and/or the estimated cost of services and/or the proposed
schedule in a manner reasonably acceptable to both parties. Customer shall
have no obligation pay amounts in excess of the proposed cost estimate set
forth in any given Request for Services unless Vendor has provided Customer
notice of the circumstances giving rise to the increase and an opportunity
to amend or cancel the Request for Services.
P. A section, INDEMNITY, is added to the Agreement as follows:
---------
Notwithstanding anything to the contrary set forth in Section 15 of this
Agreement, IMR shall indemnify and hold Customer harmless against any and
all losses, liabilities, judgments, awards, settlements, damages, costs and
expenses, including without limitation, legal fees and expenses, arising
out of or related to any act or omission by IMR, INDIA that would be a
breach of this Agreement or the applicable Request for Services if it were
committed by IMR itself; provided that Customer notices the Vendor promptly
in writing of the claim and provided that the Vendor agrees to any
settlement of such claim.
<TABLE>
<CAPTION>
VENDOR: CUSTOMER:
<S> <C>
INFORMATION DAYTON HUDSON CORPORATION, ON BEHALF OF THE
MANAGEMENT CORPORATION, ITS OPERATING DIVISIONS AND ITS
RESOURCES, INC. MAJORITY-OWNED SUBSIDIARIES
By: \s\Satish K. Sanan By: \s\ Brigid Bonner
-------------------- -----------------------------------------
Name: Satish K. Sanan Name: Brigid Bonner
------------------- ----------------------------------------
Title: President & CEO Title: Director of Infrastructure and Planning
------------------ ---------------------------------------
and Change Management
---------------------------------------
Date: May 17, 1996 Date: May 24, 1996
------------------ ------------------
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 8/16/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0021
The Vendor hereby agrees to provide the following individuals to perform
the Authorized Services described below in accordance with the terms and
conditions of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Beth McMillan
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 304-0454 CC-06B
Fax #: (813) 791-8152 Fax #:
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
[*]
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Beth McMillan, CC-06B
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] = Information redacted for confidentiality purposes.
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services. (Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0021
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On behalf of the
Information Management Resources, Corporation, Its Operating Divisions and Its
Inc. Majority-Owned Subsidiaries
By: /s/ Satish K. Sanan By: /s/ Randy Kirihara
----------------------------- -------------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
------------------------ --------------------------------
Title: President - CEO Title: Technical Resources Manager
----------------------- -------------------------------
Date: August 28, 1996 Date:
------------------------ --------------------------------
(Approved by IMR Legal Dept.)
DP /s/ DP
-----------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 7/30/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0020
The Vendor hereby agrees to provide the following individuals to perform
the Authorized Services described below in accordance with the terms and
conditions of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Julie Burkhardt
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 304-4705 CC-05A
Fax #: (813) 791-8152 Fax #: (612) 304-5472
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Please refer to RFS #950013-0001 for details.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
Please refer to RFS #950013-0001 for details
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
Please refer to RFS #950013-0001 for details
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Julie Burkhardt, CC-05A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services. (Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0020
- --------------------------------------------------------------------------------
Name: [*] Rate: $0.00
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On behalf of the
Information Management Resources, Corporation, Its Operating Divisions and Its
Inc. Majority-Owned Subsidiaries
By: /s/ Satish K. Sanan By: /s/ Randy Kirihara
------------------------------ ---------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
---------------------------- -------------------------------
Title: President - CEO Title: Technical Resources Manager
--------------------------- ------------------------------
Date: August 28, 1996 Date:
---------------------------- -------------------------------
(Approved by IMR Legal Dept.)
DP /s/ DP
--------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 7/30/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0019
[Handwritten: "Revised"]
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Jan Haupert
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 304-4546 CC-05A
Fax #: (813) 791-8152 Fax #: (612) 304-0455
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Jan Haupert, CC-05A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services. (Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0019
- --------------------------------------------------------------------------------
Name: [*] [*]
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On behalf of the
Information Management Resources, Corporation, Its Operating Divisions and Its
Inc. Majority-Owned Subsidiaries
By: /s/ Satish K. Sanan By: /s/ Randy Kirihara
----------------------------- ---------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
--------------------------- -------------------------------
Title: President - CEO Title: Technical Resources Manager
-------------------------- ------------------------------
Date: August 28, 1996 Date:
--------------------------- -------------------------------
(Approved by IMR Legal Dept.)
DP /s/ DP
--------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 7/5/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0016
The Vendor hereby agrees to provide the following individuals to perform
the Authorized Services described below in accordance with the terms and
conditions of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Judy Mader
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 304-6319 CC-36A
Fax #: (813) 791-8152 Fax #: (612) 304-6414
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*] to [10/30/96 is deleted and replaced with [*]]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
Please refer to RFS #950013-0001 for details
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Judy Mader, CC-36A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0016
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On behalf of the
Information Management Corporation, Its Operating Divisions and Its
Resources, Inc. Majority-Owned Subsidiaries
By: \s\ Satish K. Sanan By: \s\ Randy Kirihara
----------------------------- --------------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
------------------------ ---------------------------------
Title: President - CEO Title: Technical Resources Manager
----------------------- --------------------------------
Date: August 28, 1996 Date:
------------------------ ---------------------------------
(Approved by IMR Legal Dept.)
DP \s\ DP
--------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 6/28/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0015
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Jacque Osmian
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O. Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 304-3267 CC-05A
Fax #: (813) 791-8152 Fax #: (612) 304-5472
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
Rate for this contractor is [*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Jacque Osmian, CC-05A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0015
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
------------------
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation,
Information Management Resources, Inc. Target Stores Division
By: /s/ Satish K. Sanan By: /s/ Randy Kirihara
------------------------- ----------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
------------------ ---------------------------
Title: President & CEO Title:Technical Resources Manager
------------------ ---------------------------
Date: July 15, 1996 Date:
------------------ --------------------------
[Stamped: Approved by IMR Legal Depart.
DP /s/ DP ]
--------------------------
[*] Information redacted for Confidentiality Purposes.
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 6/28/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0015
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Jacque Osmian
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 304-3267 CC-05A
Fax #: (813) 791-8152 Fax #: (612) 304-5472
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
Rate for this contractor is [*].
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Jacque Osmian, CC-05A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality purposes.
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0015
Name: [*] Rate: [*]
---------------------
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On
behalf of the Corporation
Information Management Resources, Inc. Its Operating Divisions and
Its Majority-Owned Subsidiaries
By: \s\ Satish K. Sanan By:\s\ Randy Kirihara
------------------------------ ---------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
------------------------- ----------------------------
Title:President & CEO Title:Technical Resources Manager
------------------------ ---------------------------
Date: July 15, 1996 Date:
------------------------- ----------------------------
[Stamped: Approved by IMR Legal Depart.
DP \s\ DP ]
-----------------------------
[*] Information redacted for Confidentiality purposes.
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 6/25/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: [*]
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Cindy Meyers
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 304-4811 CC-06D
Fax #: (813) 791-8152 Fax #: (612) 304-3671
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
Rate for this contractor is [Handwritten: [*] ____ sks \s\ sks]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Cindy Meyers, CC-06D
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0014
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On
behalf of the Corporation
Information Management Resource', Inc. Its Operating Divisions and
Its Majority-Owned Subsidiaries
By: \s\ Satish K. Sanan By: \s\ Randy Kirihara
------------------------------ ---------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
------------------------- ----------------------------
Title:President & CEO Title:Technical Resources Manager
------------------------ ---------------------------
Date: July 15, 1996 Date:
------------------------- ----------------------------
[Stamped: Approved by IMR Legal Depart.
DP \s\ DP ]
-----------------------------
[*] INFORMATION REDACTED FOR CONFIDENTIALITY PURPOSES.
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 5/31/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: [*]
[Handwritten: Revised \s\ sks]
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Tom Spencer Name: Deb Bauman
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 335-0572 CC-05A
Fax #: (813) 791-8152 Fax #: (612) 304-5472
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Maintenance of Department Store Division (DSD) Financial and Administrative
Systems. See attachment A for scope of definition, deliverables and assumptions.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
This contract has a fixed price of [*]. Payments will be made to IMR in
accordance with the following schedule:
February 1996 -January 1997 (Year 1)--Twelve (12) equal payments of [*]
are due on the first of each month.
February 1997 -January 1998 (Year 2)--Two (2) payments of [*] and Ten
(10) equal payments of [*] are due on the first of each month.
February 1998 -January 1999 (Year 3)--Twelve (12) equal payments of [*]
are due on the first of each month.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
This project will start around [*] and end around [*]. [*] and
[*] will start on [*].
Two additional vendor personnel will be assigned on-site for approximately four
(4) months at the beginning of the project.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
Additional expenses will only be approved in writing by the Customer's Project
Manager.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
Vendor Personnel working on this project could change throughout the duration of
this project and will be listed on an additional Request for Services as changes
occur.
A ninety (90) day written notice must be given to terminate this contract during
the first (1) year. A thirty (30) day written notice must be given to terminate
this contract during years two (2) and three (3).
Specific On-Site personnel will be assigned based on mutual agreement between
Customer and Vendor. Offshore personnel will be assigned at Vendor's discretion.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Deb Bauman, CC-05A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 5/31/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0013
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Tom Spencer Name: Deb Bauman
Title: Vice President Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 335-0572 CC-05A
Fax #: (813) 791-8152 Fax #: (612) 335-5472
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0013
- --------------------------------------------------------------------------------
Name: [*] Rate: $0.00
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[X] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Name: [*] Rate: $0.00
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[X] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Name: [*] Rate: $0.00
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X]HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Name: [*] Rate: $0.00
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[X] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Name: [*] Rate: $0.00
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X]HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0013
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On behalf of the
Information Management Corporation Its Operating Divisions and Its
Resources, Inc. Majority-Owned Subsidiaries
By: /s/ Satish K. Sanan By: \s\ Randy Kirihara
-------------------------- -----------------------------------
Name: Satish K. Sanan Name: Randy Kirihara
--------------------- ------------------------------
Title: President & CEO Title: Technical Resources Manager
-------------------- -----------------------------
Date: July 23, 1996 Date:
--------------------- ------------------------------
[Stamped: Approved by IMR Legal Depart.
DP \s\ DP ]
-------------------
<PAGE>
ATTACHMENT A
<PAGE>
ATTACHMENT A
DSD Financial and Administrative Systems Maintenance
Authorized Services
RFS Number
---------------
SCOPE DEFINITION
Vendor will be responsible for providing production support, maintenance and
enhancements for the following DHC Department Stores Division (DSD)
applications:
. [*]
. [*]
. [*]
. [*]
. [*]
It is anticipated that changes to the portfolio of applications will occur
during the lifetime of this agreement. These changes will be supported through
execution of a Change Control process. Given that the overall size of the
application portfolio does not change substantially in terms of programs, jobs,
databases, and function points, there should be no financial impact. However,
time for assimilation of new applications into the project will need to be
scheduled. Change in skill-set requirements may create a need for change in
personnel assignments or for training of existing team members. If this type of
change is necessary, six months lead time, for planning purposes, is necessary
in order to preclude potential financial impact.
The Maintenance Improvement Plan, dated November 28, 1995 serves as the
baseline assessment of DHC's environment, productivity, workloads and problem
rates for the applications within the scope of this agreement. The resource plan
as per Attachment B defines the DHC resource requirements and displacement
schedule. DHC reserves the right to change applications within the scope of this
agreement if there is a business need. DHC and Vendor would then renegotiate
contract.
Except for terms expressly stated herein, Vendor reserves the right to
revalidate all assumptions and findings of the Maintenance Improvement Plan and
re-establish the baseline within one month of commencement of services under
this agreement. However, DHC must agree with the re-established baseline.
[*] Information redacted for Confidentiality Purposes
1
<PAGE>
ATTACHMENT A
DSD Financial and Administrative Systems Maintenance
Authorized Services
RFS Number
---------------
DELIVERABLES
Vendor will strive to achieve DHC's maintenance outsourcing objectives as
described in the Vendor's Maintenance Improvement Plan (referenced above)
provided sufficient work is supplied by DHC and provided DHC complies with the
assumptions as listed herein
Vendor will be responsible for providing system documentation on all systems
being supported. This includes: system narratives and flows, job and program
flows and dependencies. This documentation will become the property of DHC. The
degree to which Vendor improves upon current documentation will be for the sole
purpose of meeting Vendor's commitments under this agreement. All new systems or
programs developed by Vendor under this agreement will adhere to DHC
documentation standards.
PROJECT ASSUMPTIONS:
The following project assumptions have been considered in estimating the
costs, timeframes and labor hours associated with this project. During the term
of this project, a Change Control mechanism will be in place to address new
requirements and/or change of scope.
General:
. The project scope for this project includes production support,
maintenance and enhancements of those systems identified in this
Attachment. This includes:
- Coordination and ownership of all recovery efforts as expected
of the application support group based on roles and
responsibilities as defined for the current DHC organization
- Consultants to clients and other systems personnel for support
systems
- Attend level of service (LOS) meetings and communicate LOS
issues to all affected parties
- Follow DHC procedures for turnover of new systems
- Meet monthly with clients to prioritize work
- Meet Disaster Recovery Plan (DRP) requirements subject to an
assessment of current compliance to these requirements by each
application and a mutually agreeable schedule for achieving
compliance utilizing resource hours from the ISIM workload
budget under this agreement
- Responsible for all activities currently being completed by DHC
personnel
2
<PAGE>
ATTACHMENT A
DSD Financial and Administrative Systems Maintenance
Authorized Services
RFS Number
----------------
. [*]
. On-site activities will be conducted at DHC's [*] location. Any travel
and living expenses incurred by Vendor staff in support of this effort
outside of the [*] metro area will be billed at Vendor's actual cost.
Vendor will cover costs associated with travel among DHC's metropolitan
[*] locations.
. DHC personnel will remain principally responsible for managing
maintenance workloads until Vendor completes assimilation and transition
phases for each application, based on the Phasing strategy as indicated
in the Project Plan provided here.
. DHC's personnel will remain assigned to their current maintenance
activities in a full time capability through a date mutually agreed upon
by Vendor and DHC, with DHC staff contributing mutually agreed upon
productive hours.
. Vendor will partner with other areas of IS when needed for problems and
recoveries.
. Revisions to this contract will be approved by Group Manager-
Administration Systems, Technical Resources Manager and Vendor.
DHC will provide:
. Beepers, terminals for home access, etc. that will be required by the
Vendor on-site team to provide production support. This equipment will
be provided at no cost to Vendor. This equipment will be provided to
five Vendor employees.
. All hardware and software required to support the project at no cost to
Vendor. Vendor is required to adhere to the current levels of computer
resource usage.
. Access to DHC's facilities through the network 24 hours a day, seven
days a week except for scheduled shutdowns for maintenance.
. Functional and technical expertise, as required, to support the entire
project effort.
[*] Information redacted for Confidentiality Purposes
3
<PAGE>
ATTACHMENT A
DSD Financial and Administrative Systems Maintenance
Authorized Services
RFS Number
-----------------
. All existing application documentation, systems standards, procedures
and management protocols.
. Technical support such as database administration, operating systems
support and TP administration as and when required.
. System connectivity before the commencement of offshore work.
. Office facilities such as office space, furniture, office supplies,
telephone/fax facilities for the Vendor on-site team (at no cost to
Vendor).
. Building and system access 24 hours a day and seven days a week.
. Vendor will prioritize all user requests in the monthly meeting. If
there is a conflict with the previously agreed upon resource plan for
either on-site or offshore workloads, DHC IS Management will help
prioritize requests.
Vendor will provide:
. Satellite communications from its offshore locations to Clearwater,
Florida where the link will tie into the network
. Production support on-site and on-call [*] 24 hours a day and
seven days a week.
. Services, as described herein, for a period of three years.
. Mutually agreed upon service levels for production support.
. Estimated person hours to be delivered:
<TABLE>
<CAPTION>
IMR IMR IMR
On-Site Offshore TOTAL
- -------------------------------------------------------------------
<S> <C> <C> <C>
Year 1 [*] [*] [*]
- -------------------------------------------------------------------
Year 2 [*] [*] [*]
- -------------------------------------------------------------------
Year 3 [*] [*] [*]
- -------------------------------------------------------------------
TOTAL [*] [*] [*]
- -------------------------------------------------------------------
</TABLE>
[*] Information redacted for Confidentiality Purposes
4
<PAGE>
ATTACHMENT A
DSD Financial and Administrative Systems Maintenance
Authorized
RFS Number
--------------
VENDOR PERFORMANCE MONITORING AND RIGHT TO TERMINATE
Status meetings and discussions will be held with the Group Manager -
Administration Systems, as deemed necessary by DHC. In those status meetings and
discussions, the DHC Group Manager expects proactive system maintenance and
discussion of alternatives for problem resolution. Ownership of problem
resolution, with cooperation from DHC, will reside with the Vendor.
Monthly meetings and/or conference calls will be conducted to monitor
Vendor's progress toward achievement of the objectives listed in the
"Deliverables" section of this document. These meetings/conference calls will
include (as a minimum) the DHC project manager and the Vendor on-site manager.
Additional Vendor and DHC personnel will participate as required. A quarterly
performance review will also be conducted by the same personnel.
DHC may elect to shift priorities from time to time and redistribute
resource loading. Vendor will undertake these as a change in scope without
impact to financial terms, provided that the shift in workload does not require
a shift between on-site and offshore workloads.
If the quarterly performance review indicates a shortfall in Vendor's
performance at any time, DHC has determined that Vendor's performance level is
deficient and notifies Vendor in writing of such deficiency, then Vendor must
take immediate action and demonstrate immediate and substantial improvement.
Additionally, if the quarterly performance review indicates a shortfall against
projected performance, then Vendor must fully recover the shortfall within the
next 90 day period, in additional to producing the scheduled volume of work for
the next period. If after 90 days, the shortfall has not been recovered, DHC
reserves the right to withhold 30% of the upcoming monthly payments until
workload is back on schedule.
If for any reason this contract is terminated, DHC requires that Vendor
implement a back out transition plan equal in duration to the start up
transition plan. In the event that a back out transition plan is implemented
Vendor will retain the appropriate resources to accomplish, the plan and will
bill DHC at the rates listed below for hours expended abler the effective date
of termination notice and through the end of the back out transition period.
<TABLE>
<CAPTION>
Back Out Transition Hourly Rates
<S> <C> <C>
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
</TABLE>
[*] Information redacted for Confidentiality Purposes
5
<PAGE>
ATTACHMENT B
<PAGE>
ATTACHMENT B
RESOURCE PLAN
[FINANCIAL SYSTEMS TIMELINE CHART INCLUDED IN DOCUMENT]
<PAGE>
ATTACHMENT C
<PAGE>
ATTACHMENT C
PROJECT PLAN
[DHC-DSD MAINTENANCE PROJECT PLAN INCLUDED IN DOCUMENT]
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 5/20/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0011
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Julie Burkhardt
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN
Phone #: (813) 797-7080 55440-1392
Fax #: (813) 791-8152 Phone #: (612) 304-4705
CC-05A
Fax #: (612) 304-5472
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance on the Price Changes system. Please refer to
RFS#960009-0002 for details.
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
This project is under a [*]. Please refer to RFS #96009-0002 for details.
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Julie Burkhardt, CC-05A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
RFS No: 960009 - 0011
- --------------------------------------------------------------------------------
Name: [*] Rate: $0.00
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On
Information Management Resources, Inc. behalf of the Corporation, Its
Operating Divisions and Its
Majority-Owned Subsidiaries
By: \s\ Satish K. Sanan By: \s\ Randy Kirihara
---------------------- ----------------------------
Name: Satish K. Sanan Name: Randy Kirihara
-------------------- --------------------------
Title: President & CEO Title: Technical Resources Manager
------------------- -------------------------
Date: May 31, 1996 Date:
-------------------- --------------------------
[Stamped: Approved by IMR Legal Depart.
DP \s\ DP ]
---------------------------------
-3-
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 4/8/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 007
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Denny Fox
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O. Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN
Phone #: (813) 797-7080 55440-1392
Fax #: (813) 791-8152 Phone #: (612) 304-4733
CC-06F
Fax #: (612) 304-5472
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
Rate for this contractor is [*]
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
Denny Fox, CC-06F
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
- --------------------------------------------------------------------------------
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc. RFS No: 960009 - 0007
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On
behalf of the Corporation
Information Management Resources, Inc. Its Operating Divisions and
Its Majority-Owned Subsidiaries
By: \s\ Satish K. Sanan By: \s\ Randy Kirihara
---------------------- ----------------------------
Name: Satish K. Sanan Name: Randy Kirihara
-------------------- --------------------------
Title: President & CEO Title: Technical Resources Manager
------------------- -------------------------
Date: April 24, 1996 Date:
-------------------- --------------------------
[Stamped: Approved by IMR Legal Depart.
DP \s\ DP ]
---------------------------------
-5-
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR SERVICES ("RFS")
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc.
Date of This RFS: 2/27/96 Date of Master Agmt: 2/9/96
Contract Number: M960009 RFS No: 960009 - 0003
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Gloria Jansen
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 700 Nicollet Mall
Suite 500 Minneapolis, MN 55402-0000
Clearwater, FL 34621-3442
Phone #: DSD
Phone #: (813) 797-7080 Fax #:
Fax #: (813) 791-8152
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR
SERVICES:
- --------------------------------------------------------------------------------
Rate for this contractor is [*]
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL TERMS AND CONDITIONS:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
- --------------------------------------------------------------------------------
[*]
- --------------------------------------------------------------------------------
-6-
[*] Information redacted for Confidentiality Purposes
<PAGE>
- --------------------------------------------------------------------------------
VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Review the following information with respect to each individual performing
Authorized Services.
(Attach additional sheets as necessary.)
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc. RFS No: 960009 - 0003
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
[X] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [X] HB1 Visa
[_] Working Off-Shore
[X] Vendor's Employee (W-2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation, On
behalf of the Corporation
Information Management Resources, Inc. Its Operating Divisions and
Its Majority-Owned Subsidiaries
By: \s\ Satish K. Sanan By: \s\ Randy Kirihara
---------------------- ----------------------------
Name: Satish K. Sanan Name: Randy Kirihara
-------------------- --------------------------
Title: President & CEO Title: Technical Resources Manager
------------------- -------------------------
Date: March 12, 1996 Date:
-------------------- --------------------------
-7-
[*] Information redacted for Confidentiality Purposes
<PAGE>
EXHIBIT 10.10
MASTER SERVICES AGREEMENT
- --------------------------------------------------------------------------------
THIS AGREEMENT ("Agreement") is made as of the 29th day of September 1993
between Dean Witter, Discover & Co. ("Customer") and Information Management
Resources, Inc. ("Contractor").
WHEREAS, Contractor is in the business of undertaking custom software
development, conversion, rewrite and re-engineering projects and selling
professional consulting, software design, programming and associated services;
WHEREAS, Customer wishes to retain Contractor to undertake various projects from
time to time as mutually agreed.
NOW THEREFORE, Customer and Contractor mutually agree as follows:
1. DEFINITIONS:
-----------
A. Schedule - Shall mean and refer to documents referencing this
Agreement and specifying work to be accomplished by Contractor and to
be paid for by Customer. Schedules shall, once executed, become a part
of this Agreement and they shall define the scope of work to be
accomplished in conjunction with a specific project and provide a fee
for accomplishment of this work. Project details concerning
methodologies, deliverables and project plans shall be provided in the
project Proposal (if applicable) which shall be attached to the
corresponding Schedule.
B. Proposal - Shall mean and refer to the project Proposal which shall
provide specific project details and shall be prepared and submitted
by Contractor and accepted by Customer. The Proposal shall be attached
to the appropriate Schedule and shall provide specific project
methodologies, deliverables and project plans. The Proposal shall be
attached to an appropriate Schedule and shall be made part of this
Agreement upon acceptance by Customer.
C. Custom Work Product - Shall mean the resulting software and related
documentation created by Contractor after the effective date of this
Agreement on behalf of Customer and in furtherance of attached
Proposals.
2. PROJECT UNDERTAKING:
-------------------
Customer hereby retains Contractor and Contractor hereby agrees to perform
certain professional services in support of designated projects as
described more fully in the appropriate attached Schedule and Proposal.
Contractor shall commit and utilize sufficient resources to meet the
milestones and to complete designated
-1-
<PAGE>
MASTER SERVICES AGREEMENT
- --------------------------------------------------------------------------------
projects within the timetables set forth in attached Proposals. Contractor
shall notify Customer of any circumstances, when and as they arise, that
reasonably may be anticipated to lead to any material deviation from the
development timetable as set forth in the applicable Proposal. Contractor
shall devote sufficient time and effort and shall allocate sufficient
personnel and resources to the designated project as may be required for
successful completion thereof. Contractor shall conduct and conclude
project activities in a professional manner. Unless otherwise agreed to by
the parties, all work will be performed at Contractor's facilities.
3. CHANGE MANAGEMENT:
-----------------
Any change(s) to the scope of work defined in a Schedule and/or Proposal
attached hereto must be initiated through a change control request.
Contractor will promptly size, and perform any necessary cost and
scheduling analysis occasioned by the change(s) and thereafter provide to
Customer a revised Schedule. If the change(s) is (are) acceptable to both
parties and do (does) not adversely impact the existing Schedule or fixed
price in the Proposal, then the change(s) will be carried out at no
additional cost to Customer; otherwise, the parties will enter into a
subsequent agreement covering the incorporation of the change(s). If
change(s) represent(s) a reduction in the original scope of work,
Contractor will adjust the project price and Schedule accordingly based
on a subsequent mutual Agreement reducing the price and/or scheduled
timeframes.
4. TERM AND TERMINATION:
--------------------
The term of this Agreement ("Term") shall commence on September 29, 1993,
or sooner if agreed to by the parties, and shall continue in full force and
effect until all projects are completed and the Custom Work Product has
been tested and accepted by Customer. This Agreement may be terminated by
either party, without cause, upon thirty (30) calendar days' written
notice. In the event of termination by Customer other than for a material
breach of this Agreement by Contractor, and in the event of termination by
Contractor because of Customer's material breach of this Agreement,
Contractor shall be entitled to receive payment for all services performed
up to the effective date of termination at the applicable labor rates set
forth in the Schedule or, in the case of a Schedule providing for services
at a fixed price, at Contractor's then current labor rates. Contractor
shall be entitled to payment for services performed during the thirty day
notice period. Customer shall also reimburse Contractor for the following
expenses in the event of early termination of this Agreement by Customer
without cause: (i) up to 20 days of billable time (assuming eight billable
hours per day) for any resources which Contractor has committed to projects
for Customer and which resources cannot reasonably be assigned to projects
for other customers within
-2-
<PAGE>
MASTER SERVICES AGREEMENT
- --------------------------------------------------------------------------------
such time period; and (ii) any additional travel and living expenses
incurred by Contractor as a result of such early termination including,
without limitation, any costs associated with breaking apartment leases
for resources assigned to Customer's projects and up to 30 days temporary
lodging for such resources.
5. PRICES:
------
Contractor shall be compensated for all services performed within the scope
of this Agreement at the price set forth in the Schedules and Proposals
attached hereto. The prices stated for services include all taxes, except
that Customer shall pay any state and local sales or use tax imposed
thereon. Customer shall not pay for any services outside the scope of this
Agreement unless Customer has authorized these additional services in
advance in writing.
6. CERTAIN OUT-OF-POCKET COSTS:
---------------------------
Except as otherwise set forth in this Agreement, prices quoted for services
include all of Contractor's reasonable out-of-pocket costs for travel (air
& cab fare, lodging, auto rental, per diem, etc.), overnight courier and
telephone, etc. Any other expenses not covered in the proposal will be
billed to Customer at Contractor's actual cost. All such out-of-pocket
expenses must be approved in writing by Customer.
7. INVOICES & PAYMENT:
------------------
All services rendered hereunder shall be invoiced as provided in the
payment schedule set forth in the Proposal. Payment shall be made within
thirty (30) days after date of invoice. Any payment not made when due shall
be subject to a service charge at the rate of one and one-half percent
(1-1/2%) per month or, if less, the highest rate permitted by applicable
law. Customer shall be entitled to a one percent (1%) discount on any
amount invoiced to Customer by Contractor for services performed hereunder
(except for amounts invoiced for out-of-pocket expenses) provided said
amount is paid by Customer within two business days after Customer's
receipt of the invoice either by wire transfer of immediately available
funds to Contractor's bank account or by delivery of Customer's check to
Contractor within such time period. Customer reserves the right to set off
against Contractor any amount owed by Contractor to Customer. As a
precondition to final payment or at any time thereafter, Contractor shall
upon request execute a standard "Release of Liens."
-3-
<PAGE>
MASTER SERVICES AGREEMENT
- --------------------------------------------------------------------------------
8. TESTING AND ACCEPTANCE:
----------------------
The Proposal is divided into delivery milestones, each of which requires
the delivery by Contractor of one or more deliverables on specific delivery
dates. For purposes of this Agreement, a delivery milestone date means the
date a deliverable is delivered to and received by Customer. Specific
acceptance criteria will be mutually identified by Contractor and Customer
prior to the start of each delivery milestone, and will be used to guide
the acceptance of milestones and to ensure accurate on-time deliverables.
For each delivery milestone, Customer will have a mutually agreed upon
period, as stated in the Proposal, after receipt of all deliverables for
that milestone in which to review, perform acceptance tests and accept or
reject the deliverables (the "Milestone Acceptance Period"). During the
Milestone Acceptance Period, Customer shall promptly notify Contractor of
any problems with or failures of the deliverables and shall provide
Contractor with any available evidence thereof. Contractor shall use its
best efforts to promptly correct the problem at no charge to Customer. If,
in Customer's judgment, such problem or failure prevents further testing of
the deliverable, the Milestone Acceptance Period shall be suspended until
such time as the correction is delivered to Customer. If Customer must
repeat any previously tested portions of the deliverables due to such
problem or failure, Customer and Contractor shall agree on a mutually
acceptable extension of the Milestone Acceptance Period to repeat the
affected tests.
After all the deliverables have been received by Customer, Customer shall
have a mutually agreed upon period as stated in the Proposal to review,
perform acceptance testing and accept or reject the Custom Work Product as
a whole (the "Final Acceptance Period"). During the Final Acceptance
Period, Customer shall promptly notify Contractor of any problems with or
failures of the Custom Work Product and shall provide Contractor with any
available evidence thereof. Contractor shall use its best efforts to
promptly correct the problem at no charge to Customer, If, in Customer's
judgment, such problem or failure prevents further testing of the Custom
Work Product, the Final Acceptance Period shall be suspended until such
time as the correction is delivered to Customer. If Customer must repeat
any previously tested portions of the Custom Work Product due to such
problem or failure, Customer and Contractor shall agree on a mutually
acceptable extension of the Final Acceptance Period to repeat the affected
tests. If Contractor fails to remedy any defect or problem within 60 days
of Customer's notice to Contractor and due to said error or defect the
Custom Work Product materially and substantially fails to comply with the
established specifications and acceptance criteria, then Customer may
terminate this Agreement and Contractor shall pay to Customer the lesser of
(i) the cost of fixing the error or defect, or (ii) all monies previously
paid by Customer hereunder.
-4-
<PAGE>
MASTER SERVICES AGREEMENT
- --------------------------------------------------------------------------------
9. NON-SOLICITATION OF EMPLOYEES:
-----------------------------
Customer acknowledges that personnel to be provided by Contractor
represent a significant investment in recruitment and training, the
loss of which would be detrimental to Contractor's current and future
business and profits.
In consideration of the foregoing, Customer agrees that for the term of
this Agreement and for a period of one (1) year after its termination,
Customer will not directly or indirectly:
a) recruit, hire, engage or attempt to recruit, hire or engage, discuss
employment with, or otherwise utilize the services in any capacity of any
person who shall have been an employee, agent of or consultant to
Contractor at any time during the term of this Agreement; or
b) induce any person who shall have been an employee, agent of or
consultant to Contractor at any time during the term of this Agreement
to terminate his or her relationship with Contractor or any related
company or introduce such person to any potential employer.
Customer acknowledges that any breach of this Agreement, including this
Section 9, would cause Contractor irreparable damage for which any remedies
at law would be inadequate and that Contractor shall have the right to
obtain, in addition to all other remedies, such injunctive and other
equitable relief from a Court of competent jurisdiction as may be necessary
or appropriate to prevent any violation of this Agreement.
In case any Contractor personnel are deputized by Customer to work for any
of Customer's customers, Customer shall obtain from Customer's customer and
provide to Contractor a written non-solicitation agreement similar in
contents to this Section 9.
10. PROPRIETARY RIGHTS TO SOFTWARE:
------------------------------
Customer shall own all right, title and interest to all Custom Work Product
and Documentation. Contractor expressly acknowledges and agrees that all
such Custom Work Product and Documentation (whether performed by Contractor
and/or its subcontractors, be they domestic or foreign) constitutes "work
made for hire" under the Federal copyright laws (17 U.S.C. Sec. 101) owned
exclusively by Customer and, alternatively, hereby irrevocably assigns all
ownership or other rights it might have in Custom Work Product and
Documentation to Customer. Contractor shall execute and, if necessary,
shall cause its subcontractors to execute any documents required by
Customer to perfect such ownership. Contractor shall
-5-
<PAGE>
MASTER SERVICES AGREEMENT
---------------------------------------------------------------------------
not license, sell, display or otherwise make available to third parties the
Custom Work Product or any documentation referring or relating to the
Custom Work Product without prior written approval from Customer. Upon
termination hereof, Contractor shall turn over to Customer or destroy, at
Customer's request, all copies of Custom Work Product and Documentation.
11. CONFIDENTIAL INFORMATION:
------------------------
(a) Acknowledgement of Confidentiality. Each party hereby acknowledges
that it may be exposed to confidential and proprietary information of
the other party including, without limitation, Custom Work Product,
embedded software (if any) and other technical information (including
functional and technical specifications, designs, drawings, analysis,
research, processes, computer programs, methods, ideas, "know how" and
the like), business information (sales and marketing research,
materials, plans, accounting and financial information, personnel
records and the like) and other information designated as confidential
expressly ("Confidential Information"). Confidential information does
not include (i) information already known or independently developed
by the recipient; (ii) information in the public domain through no
wrongful act of the recipient, or (iii) information received by the
recipient from a third party who was free to disclose it.
(b) Covenant Not to Disclose. With respect to the other party's
Confidential Information, the recipient hereby agrees that during the
Term and at all times thereafter it shall not use, commercialize or
disclose such confidential information to any person or entity, except
to its own employees having a "need to know" (and who are themselves
bound by similar nondisclosure restrictions), and to such other
recipients as the other party may approve in writing, provided, that
all such recipients shall have first executed a confidentiality
agreement in a form acceptable to the owner of such information.
Neither Contractor nor any recipient may alter or remove from any
software or associated documentation owned or provided by Customer any
proprietary, copyright, trademark or trade secret legend. Each party
shall use at least the same degree of care in safeguarding the other
party's Confidential Information as it uses in safeguarding its own
comparable Confidential Information. This paragraph shall survive the
termination of this Agreement and for a period of three years
thereafter and shall be binding on each party and its respective
successors and assigns.
(c) Contractor shall not refer to or reference its work hereunder for any
Project or Custom Work Product in any of its advertisements or
solicitations without Customer's prior written approval.
-6-
<PAGE>
MASTER SERVICES AGREEMENT
- -------------------------------------------------------------------------------
12. INJUNCTIVE RELIEF:
-----------------
The parties acknowledge that violation by Contractor of the provisions of
Section 10 ("Proprietary Rights to Software") or by either party of the
provisions of Section 11 ("Confidential Information") would cause
irreparable harm to the non-breaching party which is not adequately
compensable by monetary damages. In addition to other relief, it is agreed
that the non-breaching party shall be entitled to seek injunctive relief to
prevent any actual or threatened violation of such provisions.
13. WARRANTIES:
----------
(a) GOOD AND WORKMANLIKE MANNER. Contractor represents and warrants to
Customer that all Services provided hereunder will be performed to the best
of its ability in a good and workmanlike manner.
(b) NON-INFRINGEMENT WARRANTY. Contractor represents and warrants to
Customer that the Custom Work Product and any embedded software, when
properly used as contemplated herein, will not infringe or misappropriate
any United States copyright, trademark, patent, or the trade secrets of any
third persons. Upon being notified of such a claim, Contractor shall with
due diligence use its best efforts to (i) defend through litigation or
obtain through negotiation the right of Customer to continue using the
Custom Work Product; (ii) rework the Custom Work Product so as to make it
non-infringing while preserving the original functionality, or (iii)
replace the Custom Work Product with functionally equivalent software, all
at no cost to Customer. If Customer determines that none of the foregoing
alternatives provide an adequate remedy, Customer may terminate all or any
part of this Agreement and, in addition to other relief, recover all
amounts paid hereunder.
(c) PERFORMANCE WARRANTY. Contractor warrants that the Custom Work Product
and any embedded software will perform as specified in the appropriate
project Proposal attached hereto for the period specified in such project
Proposal.
(d) OPTIONAL ON-GOING MAINTENANCE OPTION. If required by Customer,
Contractor shall provide additional on-going maintenance services pursuant
to a separate maintenance agreement in order to fix future problems and
enhance the Custom Work Product. The fees for such maintenance services
shall be negotiated between the parties.
-7-
<PAGE>
MASTER SERVICES AGREEMENT
- -------------------------------------------------------------------------------
14. LIMITATION OF LIABILITY
-----------------------
(a) DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, CONTRACTOR
DOES NOT MAKE ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
SERVICES RENDERED HEREUNDER, OR THE CUSTOM WORK PRODUCT, INCLUDING, WITHOUT
LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE. IN NO EVENT SHALL CONTRACTOR BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL SPECIAL OR INDIRECT DAMAGES, REGARDLESS OF
WHETHER IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) TOTAL LIABILITY. Contractor's liability hereunder for damages for any
claim arising out of the Agreement or any services performed hereunder
shall not exceed the total amount paid to Contractor under the
applicable Schedule.
15. NOTICES:
-------
Notices sent to either party shall be effective upon delivery when
delivered in person or transmitted by telecopier ("fax") machine, and shall
be effective one (1) day after being sent by overnight courier, or two (2)
days after being sent by first class mail postage prepaid to the address
set forth below, or at such other address as the parties may from time to
time give notice:
Customer Address: Contractor Address:
2500 Lake Cook Road 26750 U.S. Highway 19N, Suite 500
Riverwoods, Illinois 60015 Clearwater, Florida 34621
Mike Dunetts Satish K. Sanan
President
Facsimile: (708) 405-3053 Fax: (813) 791-8152
A facsimile of this Agreement and notices generated in good form by a fax
machine (as well as a photocopy thereof) shall be treated as "original"
documents admissible into evidence unless a document's authenticity is
genuinely placed in question.
-8-
<PAGE>
MASTER SERVICES AGREEMENT
- -------------------------------------------------------------------------------
16. DEFAULT:
-------
Either party may be declared in default of this Agreement if it breaches
any material provision hereof and fails within thirty (30) days after
receipt of written notice of default to correct such default or to commence
corrective action reasonably acceptable to the other party and proceed with
due diligence to completion. Either party shall be in default hereof if it
becomes insolvent, makes an assignment for the benefit of its creditors, a
receiver is appointed or a petition in bankruptcy is filed with respect to
the party and is not dismissed within thirty (30) days.
17. DISPUTES, CHOICE OF LAW:
-----------------------
Except for certain emergency judicial relief authorized under Section 11
("Injunctive Relief") which may be brought at any time, the parties agree
that all disputes between them shall first be subject to the procedures in
Section 15 ("Default") and then shall be submitted for informal resolution
to Customer's chief operating officer. If the parties are still unable to
reconcile their differences, the dispute may then be taken to court by
either party. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Florida. The parties
agree that the exclusive jurisdiction and venue with respect to any legal
proceedings arising under this Agreement shall be in the Sixth Judicial
Circuit of the State of Florida or in the United States District Court for
the Middle District of Florida (Tampa Division). The parties further agree
that the mailing of any process shall constitute valid and effective
service against them.
18. INDEPENDENT CONTRACTOR STATUS:
-----------------------------
It is understood and agreed that Contractor is retained only for the
purposes and to the extent set forth in this Agreement, and that the
relationship of Contractor and Contractor's employees, agents or
subcontractors to Customer during the term of this Agreement shall be that
of independent contractors. All persons shall at all times be the employees
or agents of Contractor. Contractor shall have the sole and exclusive
control over its employees or subcontractors who provide services to
Customer hereunder, and over the labor and employee relations policies and
policies relating to wages, hours, working conditions, or other conditions
of its employees, agents or subcontractors. Contractor shall have the sole
and exclusive right to hire, transfer, suspend, layoff, recall, assign,
discipline, adjust grievances and discharge said employees or
subcontractors.
-9-
<PAGE>
MASTER SERVICES AGREEMENT
- -------------------------------------------------------------------------------
19. PAYMENT OF CONTRACTOR'S PERSONNEL:
---------------------------------
Contractor agrees to be solely responsible for all salaries and other
compensation of all Contractor employees, agents or subcontractors who
provide services to Customer hereunder and work on designated projects.
Contractor further agrees that it will be solely responsible for making all
necessary deductions and withholdings from its employees' salaries and
other compensation, and for the payment of any and all contributions, taxes
and assessments and agrees to comply with all other requirements of the
Federal Social Security, State Unemployment Compensation and Federal
Withholding of Income Tax laws, and any other laws or regulations, be they
domestic or foreign, that may apply on all salary and other compensation of
said employees or subcontractors.
20. NONEXCLUSIVE AGREEMENT:
----------------------
It is agreed by the parties hereto that this is not an exclusive agreement
and that Customer has the right to use or contract for the use of similar
services from other contractors or providers. Likewise, Contractor has the
right to provide and contract to provide similar services to other clients
provided such services are not in violation of Customer's proprietary
rights in and to the Custom Work Product or in breach of any warranty
granted herein.
21. NO VOLUME GUARANTEE:
-------------------
Other than services specified on an applicable Schedule and/or Proposal it
is understood that no promises or representations whatsoever have been made
as to the potential amount of business Contractor can expect at any time
during the term of this Agreement. Contractor represents and warrants that
Contractor is solely responsible for any expenses incurred by it related to
this Agreement and agrees that Customer shall not be obligated for any
expense incurred by Contractor in connection with any change in the number
of Contractor's employees utilized, or expenditures made by Contractor for
additional facilities or equipment unless approved in writing, in advance,
by the Customer.
22. SECURITY, NO CONFLICTS:
----------------------
Contractor agrees that Contractor's employees, representatives, and agents,
upon entering Customer's premises shall, if required, sign in at the
facility "SIGN-IN LOG" and, if applicable, shall wear visible
identification specifying Contractor's name. Contractor's employees,
representatives and agents shall be subject at all times to Customer's
security policies and procedures.
-10-
<PAGE>
MASTER SERVICES AGREEMENT
- -------------------------------------------------------------------------------
Each party agrees to inform the other of any information made available to
the other that is classified or restricted data, agrees to comply with the
security requirements imposed by any state or local government, or by the
United States Government, and shall return all such material upon request.
Each party warrants that its participation in this Agreement does not
create any conflict of interest prohibited by the United States Government
or any other domestic or foreign government and shall promptly notify the
other party if any such conflict arises during the Term.
23. INSURANCE:
---------
Contractor shall maintain at its own expense (1) Worker's Compensation
Insurance and Employer's Liability Insurance. Limits of liability shall be
statutory limits under the Worker's Compensation and not less than $500,000
under the Employer's Liability portion. (2) Commercial General Liability
Insurance, including Contractual Liability coverage to cover the indemnity
provisions of this Agreement, with limits of not less than $1,000,000
combined single limits for bodily injury and property damage. (3)
Automobile Liability Insurance with limits of not less than $1,000,000
combined single limits for bodily injury and property damage. Customer
shall be named as an additional insured on Contractor's insurance policy
(except for Worker's Compensation) and a certificate of insurance shall be
provided to Customer confirming the above-referenced coverages.
24. ASSIGNABILITY:
-------------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. With the
exception of an assignment by Customer to its parent or subsidiary
corporations, no other assignment hereof by either party shall be of any
force or effect except with the prior written consent of the other party.
25. NONWAIVER:
---------
The failure of either party to insist, in any one or more instances, upon
the performance of any of the terms, covenants, or conditions of this
Agreement or to exercise any right hereunder, shall not be construed as a
waiver or relinquishment of the future performance of any rights, and the
obligations of the party with respect to such future performance shall
continue in full force and effect.
-11-
<PAGE>
MASTER SERVICES AGREEMENT
- -------------------------------------------------------------------------------
26. RIGHTS UPON TERMINATION:
-----------------------
Upon termination or other expiration of this Agreement, Contractor agrees
to immediately return to Customer all papers, materials, and other
properties of Customer held by Contractor relating to the services
performed hereunder.
27. INVALID PROVISION:
-----------------
Should any part of this Agreement, for any reason, be declared invalid,
such decision shall not affect the validity of any remaining portion. Such
remaining portion shall remain in force and effect as if this Agreement had
been executed with the invalid provision eliminated.
28. FORCE MAJEURE:
-------------
It is expressly agreed that Contractor shall not be liable for any damages
or delays or failure in performance under this Agreement caused by acts or
conditions beyond its reasonable control or without Contractor's fault or
negligence. Such acts or causes shall include, but not be limited to, acts
of God, Customer's failure to furnish necessary information, failure or
delays in transportation and communication; failure to act or delays caused
by governmental authorities and delays in obtaining the governmental
approvals for visas or similar conditions. Delays in delivery due to force
majeure events shall automatically extend delivery milestone dates for a
period equal to the duration of such events. Any warranty period affected
by a force majeure event shall likewise be extended for a period equal to
the duration of such event.
29. SECTION HEADINGS:
----------------
Section headings have been included in this Agreement merely for
convenience or reference. They are not to be considered part of, or to be
used in interpreting this Agreement.
30. AUTHORIZATION FOR INCLUSION ON CUSTOMER LIST:
--------------------------------------------
Customer authorizes Contractor to include their name, contact information
and other mutually-agreed-to information in Contractor's customer list and
other documents unless Customer notifies Contractor otherwise within thirty
(30) days of execution of this Agreement.
31. MISCELLANEOUS:
-------------
This Agreement, and accompanying Schedules and/or Proposals, constitute the
-12-
<PAGE>
MASTER SERVICES AGREEMENT
- --------------------------------------------------------------------------------
entire agreement between the parties with respect to the subject matter
hereof and these documents supersede all other communications, whether
written or oral. This Agreement may be modified or amended only by a
writing signed by the party against whom enforcement is sought. Except as
specifically permitted herein, neither this Agreement nor any rights or
obligations hereunder may be transferred or assigned by one party without
the other party's prior written consent and any attempt to the contrary
shall be void. Waiver of any provision hereof in one instance shall not
preclude enforcement thereof on future occasions. Headings are for
reference purposes only and have no substantive Effect.
32. COUNTERPARTS:
------------
This Agreement may be executed in two counterparts, both of which taken
together shall constitute one single Agreement between the parties.
IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have
caused this Agreement to be executed by their duly authorized representatives.
For: For:
Dean Witter, Discover & Co. Information Management Resources, Inc.
("Customer") ("Contractor")
By: \s\ William Floyd By: \s\ Satish K. Sanan
------------------------- ---------------------------
Printed Name: William Floyd Printed Name: Satish K. Sanan
--------------- -----------------
Title: Vice President Title: President
---------------------- ------------------------
Date: 10/19/93 Date: September 29, 1993
-13-
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 12/11/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- --------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
-------------------- ------------------
Title: President & CEO Title: Systems Manager
------------------- -----------------
Date: December 21, 1995 Date: 12/11/95
-------------------- ------------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
-----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures Send Invoices to:
to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 12/11/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
--------------------
Title: President & CEO Title: Systems Manager
-------------------
Date: December 21, 1995 Date: 12/11/95
--------------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A Approvals:
to:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures
to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 11/9/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: December 1, 1995 Date: 11/9/95
----------------
================================================================================
Reason for this Schedule A:
New Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 11/7/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3E
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: November 16, 1995 Date: 11/7/95
-----------------
================================================================================
Reason for this Schedule A:
New Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 11/7/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title:President & CEO Title: Systems Manager
---------------
Date: November 16, 1995 Date: 11/7/95
-----------------
================================================================================
Reason for this Schedule A:
New Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 11/1/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ David Nootbaar
---------------------- ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: David Nootbaar
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: December 1, 1995 Date: 11/1/95
----------------
================================================================================
Reason for this Schedule A:
New Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director:/s/ Darrel Anderson
-------------------
Contract Programmer Coordinator Darrel Anderson
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o David Nootbaar
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 10/18/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2E
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Bob Foley
---------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Bob Foley
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: October 31, 1995 Date: 10/18/95
----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Chuck Johnson
Contract Programmer Coordinator -----------------
708-405-2984 Chuck Johnson
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Bob Foley
2500 Lake Cook Road 3C 2500 Lake Cook Road 2E
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 10/18/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: October 31, 1995 Date: 10/18/95
----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
708-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
Discover Card Services, Inc. Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 10/18/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2E
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Dan McCue
---------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Dan McCue
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: October 31, 1995 Date: 10/18/95
----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director:\s\ Darrel Anderson
Contract Programmer Coordinator -------------------
708-405-2984 Darrel Anderson
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Dan McCue
2500 Lake Cook Road 3C 2500 Lake Cook Road 2E
Riverwoods, IL 60015 Riverwoods, IL 60015
Discover Card Services, Inc. Riverwoods, IL 60615
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 10/3/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2E
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Ira Shapiro
------------------- ---------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Ira Shapiro
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: October 26, 1995 Date: 10/3/95
----------------
================================================================================
Reason for this Schedule A:
New Contractor
(Replacing Open Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Becky Ellsworth
-------------------
Contract Programmer Coordinator Becky Ellsworth
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Ira Shapiro
2500 Lake Cook Road 3C 2500 Lake Cook Road 2E
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 9/11/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3E
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Sharon C. Griffin
------------------- ---------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Sharon Griffin
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: October 2, 1995 Date: 9/11/95
---------------
================================================================================
Reason for this Schedule A:
New Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Larry Holstein
------------------
Contract Programmer Coordinator Larry Holstein
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Sharon Griffin
2500 Lake Cook Road 3C 2500 Lake Cook Road 2E
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 9/19/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: N/A [handwritten]
------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Pat Medo
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: September 22, 1995 Date: 9/19/95
------------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director:\s\ Richard J. Reese
--------------------
Contract Programmer Coordinator Rick Reese
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Pat Medo
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 9/6/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Specialist
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3E
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\Jeffery Slowgrove By: \s\ Janet Foster
-------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Jeffery Slowgrove Name: Janet Foster
-----------------
Title: Treasurer Title: Systems Manager
---------
Date: September 11, 1995 Date: 9/6/95
------------------
================================================================================
Reason for this Schedule A:
New Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
---------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3E
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 8/1/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title:President & CEO Title:Systems Manager
---------------
Date: August 18, 1995 Date: 8/1/95
---------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
---------------
Contact Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
Dated 7/31/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road 3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
---------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
----------------------
Title: President & CEO Title:Systems Manager
----------------------
Date: August 10, 1995 Date: 7/31/95
----------------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Discover Card Services, Inc. Discover Card Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 10/2/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Glenn Schneider
-------------------- -------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Glenn Schneider
--------------------
Title:President & CEO Title: Systems Manager
--------------------
Date: January 10, 1996 Date: 10/2/95
----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Laura Carey
---------------
Contract Programmer Coordinator Laura Carey
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Glenn Schneider
2500 Lake Cook Road 3C 2500 Lake Cook Road 3N
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 8/02/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Jeffery Slowgrove By: \s\ Dee Dee Quinn
------------------------ -----------------
(Authorized Signature) (Project Manager)
Name: Jeffery Slowgrove Name: Dee Dee Quinn
-----------------
Title:Treasurer Title: Systems Manager
---------
Date: August 13, 1996 Date: 8/02/96
---------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Richard Prange ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Richard Prange c/o Dee Dee Quinn
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 7/1/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Jeffery Slowgrove By: \s\ Mary Fisher
--------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Jeffery Slowgrove Name: Mary Fisher
-----------------
Title: Treasurer Title: Systems Manager
---------
Date: August 13, 1996 Date: 7/1/96
---------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Rich Prange ITG Director: \s\ Chuck Johnson
Contract Programmer Coordinator -----------------
847-405-2984 Chuck Johnson
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Rich Prange c/o Mary Fisher
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
53
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 6/28/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Jeffery Slowgrove By: \s\ Mary Fisher
--------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Jeffery Slowgrove Name: Mary Fisher
-----------------
Title: Treasurer Title: Systems Manager
---------
Date: August 13, 1996 Date: 6/28/96
---------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Rich Prange ITG Director: \s\ Chuck Johnson
Contract Programmer Coordinator -----------------
847-405-2984 Chuck Johnson
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Rich Prange c/o Mary Fisher
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
54
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 7/1/96
Between
IMR (Vendor)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
[*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Rick Egbert
------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Rick Egbert
---------------
Title: President/CEO Title: Systems Manager
-------------
Date: July 17, 1996 Date: 7/1/96
-------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Rich Prange ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
847-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Rich Prange c/o Rick Egbert
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
55
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 7/1/96
Between
IMR (Vendor)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
[*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Rick Egbert
------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Rick Egbert
---------------
Title: President/CEO Title: Systems Manager
-------------
Date: July 17, 1996 Date: 7/1/96
-------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Rich Prange ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
847-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Rich Prange c/o Rick Egbert
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
56
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 5/1/96
Between
Information Management Resources, Inc. (Vendor)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Jodi Windy
------------------- --------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Jodi Windy
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: May 28, 1996 Date: 5/1/96
------------
================================================================================
Reason for this Schedule A:
New Contractor/Returning Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Chuck Johnson
-----------------
Contract Programmer Coordinator Chuck Johnson
847-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc Novus Services, Inc.
c/o Ed Fox c/o Jodi Windy
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 4/19/96
Between
Information Management Resources, Inc. (Vendor)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: [not signed]
------------------- ----------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: May 13, 1996 Date: 4/19/96
------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
847-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 4/19/96
Between
Information Management Resources, Inc. (Vendor)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Dee Dee Quinn
------------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Dee Dee Quinn
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: May 13, 1996 Date: 4/19/96
------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
847-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Dee Dee Quinn
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 4/19/96
Between
Information Management Resources, Inc. (Vendor)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Consultant
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Dee Dee Quinn
----------------------- -------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Dee Dee Quinn
---------------------
Title: President & CEO Title: Systems Manager
--------------------
Date: May 13, 1996 Date: 4/19/96
---------------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
847-405-2984 Janet Foster
Return Schedule A with Original Signatures
to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Dee Dee Quinn
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 4/19/96
Between
Information Management Resources, Inc. (Vendor)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Frank Robinson
----------------------- --------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Frank Robinson
---------------------
Title: President & CEO Title: Systems Manager
--------------------
Date: May 13, 1996 Date: 4/19/96
---------------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
847-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Frank Robinson
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 2/21/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
[*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ David Nootbaar
------------------------ --------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: David Nootbaar
-----------------------
Title: President & CEO Title: Systems Manager
----------------------
Date: April 17, 1996 Date: 2/21/96
-----------------------
================================================================================
Reason for this Schedule A:
New Contractor
(Replacing Open Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Darrel Anderson
-------------------
Contract Programmer Coordinator Darrel Anderson
847-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o David Nootbaar
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 3/15/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2E
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Ira Shapiro
------------------------ ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Ira Shapiro
----------------------
Title: President & CEO Title: Systems Manager
---------------------
Date: April 17, 1996 Date: 3/15/96
----------------------
===============================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
===============================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Becky Ellsworth
Contract Programmer Coordinator ------------------
847-405-2984 Becky Ellsworth
Return Schedule A with Original Signatures
to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Ira Shapiro
2500 Lake Cook Road 3C 2500 Lake Cook Road 2E
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 2/21/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
[*]
Term Start Date: [*]
Term End Date:
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ David Nootbaar
------------------------ --------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: David Nootbaar
----------------------
Title: President & CEO Title: Systems Manager
---------------------
Date: April 17, 1996 Date: 2/21/96
---------------------
===============================================================================
Reason for this Schedule A:
New Contractor
(Replacing Open Contractor Position)
===============================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Darrel Anderson
Contract Programmer Coordinator -------------------
847-405-2984 Darrel Anderson
Return Schedule A with Original Signatures Send Invoices to:
to: Novus Services, Inc.
Novus Services, Inc. c/o David Nootbaar
c/o Ed Fox 2500 Lake Cook Road 2C
2500 Lake Cook Road 3C Riverwoods, IL 60015
Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 2/26/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Rick Egbert
------------------------ ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Rick Egbert
------------------------
Title: President & CEO Title: Systems Manager
------------------------
Date: March 12, 1996 Date: 2/26/96
------------------------
================================================================================
Reason for this Schedule A:
New Contractor/Returning Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
847-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Rick Egbert
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 2/26/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ David Nootbaar
------------------- ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: David Nootbaar
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: March 12, 1996 Date: 2/26/96
--------------
================================================================================
Reason for this Schedule A:
Change in Rate for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Darrel Anderson
Contract Programmer Coordinator -------------------
847-405-2984 Darrel Anderson
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o David Nootbaar
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 2/22/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Specialist
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: [not signed]
------------------- ----------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: March 12, 1996 Date: 2/22/96
--------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
847-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 2/21/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Janet Foster
------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: March 12, 1996 Date: 2/21/96
--------------
================================================================================
Reason for this Schedule A:
New Contractor/Returning Contractor
(Replacing Open Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
708-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 2/9/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
[*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ David Nootbaar
------------------- ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: David Nootbaar
---------------
Title: President/CEO Title: Systems Manager
-------------
Date: February 26, 1996 Date: 2/9/96
-----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Darrel Anderson
Contract Programmer Coordinator ---------------
708-405-2984 Darrel Anderson
Return Schedule A with Original Signatures Send Invoices to:
to: Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o David Nootbaar
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 1/31/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: [not signed]
------------------- ------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster (D.P. Raju)
---------------
Title: President/CEO Title: Systems Manager
-------------
Date: February 26, 1996 Date: 1/31/96
-----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
708-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Janet Foster (D.P. Raju)
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 1/23/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3N
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Glenn Schneider
------------------- -------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Glenn Schneider
---------------
Title: President/CEO Title: Systems Manager
-------------
Date: February 26, 1996 Date: 1/23/96
-----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Laura Carey
Contract Programmer Coordinator ---------------
708-405-2984 Laura Carey
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Glenn Schneider
2500 Lake Cook Road 3C 2500 Lake Cook Road 3N
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 1/23/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ [not signed]
------------------- ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: February 26, 1996 Date: 1/23/96
-----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
----------------
Contract Programmer Coordinator Janet Foster
708-405-2984
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 1/23/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ [not signed]
------------------- ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Janet Foster
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: January 26, 1996 Date: 1/23/96
-----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ------------
708-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Janet Foster
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 1/15/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Dee Dee Quinn
--------------- -----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Dee Dee Quinn
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: February 26, 1996 Date: 1/15/96
-----------------
================================================================================
Reason for this Schedule A:
New Contractor/Returning Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
708-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Dee Dee Quinn
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 1/15/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ David Nootbaar
------------------- ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Dave Nootbaar
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: January 25, 1996 Date: 1/15/96
-----------------
================================================================================
Reason for this Schedule A:
New Contractor/Returning Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Darrel Anderson
Contract Programmer Coordinator ---------------
708-405-2984 Darrel Anderson
Return Schedule A with Original
signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Dave Nootbaar
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 1/11/96
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: /s/ Satish K. Sanan By: /s/ Joseph P. Bonefas
------------------- -------------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Joe Bonefas
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: January 26, 1996 Date: 1/11/96
----------------
================================================================================
Reason for this Schedule A:
New Contractor/Returning Contractor
(Filling New Contractor Position)
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: /s/ Robert R. Stormoen
Contract Programmer Coordinator -----------------------
708-405-2984 Bob Stormoen
1-16-96 [handwritten]
Return Schedule A with Original Send Invoices to:
Signatures to: Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Joe Bonefas
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 12/20/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Vendor's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
3C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Rick Egbert
------------------------ ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Rick Egbert
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: January 25, 1996 Date: 12/20/95
----------------
===============================================================================
Reason for this Schedule A:
New Contractor/Returning Contractor
(Filling New Contractor Position)
===============================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Janet Foster
Contract Programmer Coordinator ----------------
708-405-2984 Janet Foster
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Rick Egbert
2500 Lake Cook Road 3C 2500 Lake Cook Road 3C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 12/19/95
Between
Information Management Resources, Inc. (Programmer)
And
DISCOVER CARD SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Sr. Systems Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2C
Riverwoods, IL 60015
Information Management Resources, Inc. DISCOVER CARD SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Mary C. Fisher
--------------------- ------------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Mary Fisher
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: January 25, 1996 Date: 12/19/95
----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Chuck Johnson
Contract Programmer Coordinator -----------------
708-405-2984 Chuck Johnson
Return Schedule A with Original Signatures to: Send Invoices to:
Novus Services, Inc. Novus Services, Inc.
c/o Ed Fox c/o Mary Fisher
2500 Lake Cook Road 3C 2500 Lake Cook Road 2C
Riverwoods, IL 60015 Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 12/13/95
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2E
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Kari Kinder
------------------------ ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Kari Kinder
---------------
Title: President & CEO Title: Systems Manager
---------------
Date: January 10, 1996 Date: 12/13/95
----------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
Change in Manager
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Becky Ellsworth
Contract Programmer Coordinator -------------------
708-405-2984 Becky Ellsworth
Return Schedule A with Original Send Invoices to:
Signatures to: Novus Services, Inc.
Novus Services, Inc. c/o Kari Kinder
c/o Ed Fox 2500 Lake Cook Road 2E
2500 Lake Cook Road 3C Riverwoods, IL 60015
Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
SCHEDULE A TO PROFESSIONAL SERVICES AGREEMENT
---------------------------------------------
SCOPE OF SERVICES
-----------------
Dated 12/11/95
Between
Information Management Resources, Inc. (Programmer)
And
NOVUS SERVICES, INC.
This schedule defines the scope of consulting services to be provided by
Programmer's Consultant.
Consultant: [*]
Social Security Number: [*]
Job Title: Systems Staff Programmer
Rate per hour: [*]
Term Start Date: [*]
Term End Date: [*]
Location: 2500 Lake Cook Road
2E
Riverwoods, IL 60015
Information Management Resources, Inc. NOVUS SERVICES, INC.
By: \s\ Satish K. Sanan By: \s\ Dan McCue
------------------------ ----------------
(Authorized Signature) (Project Manager)
Name: Satish K. Sanan Name: Dan McCue
------------------------
Title: President & CEO Title: Systems Manager
------------------------
Date: January 10, 1996 Date: 12/11/95
------------------------
================================================================================
Reason for this Schedule A:
Change in Term for Existing Contractor
Change in Rate
Change in Manager
================================================================================
Immediately FAX Signed Schedule A to: Approvals:
Ed Fox ITG Director: \s\ Darrel Anderson
Contract Programmer Coordinator -------------------
708-405-2984 Darrel Anderson
Return Schedule A with Original Send Invoices to:
Signatures to: Novus Services, Inc.
Novus Services, Inc. c/o Dan McCue
c/o Ed Fox 2500 Lake Cook Road 2E
2500 Lake Cook Road 3C Riverwoods, IL 60015
Riverwoods, IL 60015
[*] Information Redacted for Confidentiality Purposes
<PAGE>
EXHIBIT 10.10
SCHEDULE NO. 3
TO
MASTER SERVICES AGREEMENT
DATED SEPTEMBER 29, 1993
BY AND BETWEEN
DEAN WITTER, DISCOVER AND CO. ("CUSTOMER")
AND
INFORMATION MANAGEMENT RESOURCES. INC. ("CONTRACTOR")
This Schedule is made and entered into on this 8th day of August, 1996, by and
between DEAN WITTER, DISCOVER AND CO., ("Customer") and INFORMATION MANAGEMENT
RESOURCES, INC. ("Contractor") to set forth the terms and conditions for
completion of the Merchant External Reporting System (MERS) Project ("Project").
This Schedule is hereby approved by Customer and Contractor and is made part of
the above referenced Agreement.
1.0 Description of the Project:
--------------------------
The project being addressed by this Schedule is the Merchant External
Reporting System (MERS) Project as described in Contractor's proposal dated
August 8, 1996 ("Proposal").
2.0 Definition of Work Product:
---------------------------
The work product to be delivered by Contractor is specified in Section 3.0
of the Proposal.
3.0 Commencement and Completion:
---------------------------
Contractor will start work as soon as this Schedule has been executed by
both Customer and Contractor. This Project shall be deemed complete when
Customer has received all deliverables as specified in the Proposal and
when ten (10) weeks of acceptance test support has been completed by
Contractor. As specified in the Proposal and subject to the assumptions
stated therein, Contractor will complete this Project within thirty-three
(33) elapsed calendar weeks of the Project start date.
1
<PAGE>
4.0 Compensation:
-------------
In consideration for performance of services as specified in the Proposal,
Contractor shall receive payments as listed below.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
Milestone # Milestone Description Payment Amount
- ---------------------------------------------------------------------
<C> <S> <C>
1 Upon Contract Execution [*]
- ---------------------------------------------------------------------
2 Upon Delivery of detailed Project Plan [*]
- ---------------------------------------------------------------------
3 Upon Delivery of Architecture Design [*]
Specification and Group 1 Program
Specifications
- ---------------------------------------------------------------------
4 Upon Delivery of Group 2 Program [*]
Specifications and Completion of Coding
for Group 1 Programs
- ---------------------------------------------------------------------
5. Upon Completion of Coding for Group 2 [*]
Programs and Unit Testing of All
Programs
- ---------------------------------------------------------------------
6. Upon Completion of system Testing and [*]
Delivery of Code for Acceptance Testing
- ---------------------------------------------------------------------
7. Five (5) Weeks After Start of [*]
Acceptance Testing
- ---------------------------------------------------------------------
8 Ten (10) Weeks After Start of [*]
Acceptance Testing
- ---------------------------------------------------------------------
TOTAL PAYMENTS [*]
- ---------------------------------------------------------------------
</TABLE>
This includes labor, travel and living expenses. However, it does not
include any federal, local or state taxes which may apply.
5.0 Additional Terms:
-----------------
Section 6.2 of the Proposal entitled "Payment Terms" shall be revised to
read "[*] days" instead of "[*] days."
The ninth line of the first paragraph in Section 4. entitled "Term and
Termination", of the Master Services Agreement referenced in this Schedule
No. 3 shall be revised for the purposes of this Project to read, "payment
for all services requested by Customer to be performed ..."
[*] Information redacted for Confidentiality Purposes
2
<PAGE>
The third sentence in Section 7. entitled, "Invoices And Payment" of the
Master Services Agreement referenced in this Schedule No. 3 shall be
revised for the purposes of this Project to read "Any payment for an
invoice which has not been reasonably disputed and not made when due shall
be subject to a service charge at the rate of one and one half percent (1
1/2%) per month, or if less, the highest rate permitted by applicable law."
For the purposes of this Project, delete the words "without prior written
approval from Customer" from the fourth sentence in Section 10. entitled
"Proprietary Rights to Software" of the Master Services Agreement.
IN WITNESS WHEREOF, the parties have caused this Schedule No. 3 to the Master
Services Agreement dated September 29, 1993 to be executed by their duly
authorized representative.
For: For:
Dean Witter, Discover and Co. Information Management Resources, Inc.
("Customer") (IMR), ("Contractor")
By: By:
/s/ Dilip Patel
- ------------------------------- --------------------------------------
Printed Name: Printed Name: DILIP PATEL
- ------------------------------- --------------------------------------
Title: Title: Vice President-General Counsel
3
<PAGE>
EXHIBIT 10.12
MASTER AGREEMENT FOR COMPUTER CONSULTING
AND PROGRAMMING SERVICES
(ON-SHORE/OFF-SHORE)
CONTRACT NUMBER M950013
-------
THIS MASTER AGREEMENT FOR COMPUTER PROGRAMMING SERVICES (this "Agreement"),
is made as of April 25, 1995, by and between Target Stores, a division of DAYTON
HUDSON CORPORATION ("Target"), a Minnesota corporation, and INFORMATION
-----------
MANAGEMENT RESOURCES, INC. (the "Vendor"), a Florida corporation.
- -------------------------- -------
1. PURPOSE OF AGREEMENT. The purpose of this Agreement is to set forth
--------------------
the terms and conditions under which the Vendor will provide computer consulting
and programing services to Target.
2. SCOPE OF AGREEMENT. This Agreement covers all services and work
------------------
provided or produced by the Vendor pursuant to any Request for Services issued
by Target and accepted by the Vendor during the term of this Agreement.
3. REQUEST FOR SERVICES. Target shall issue a Request for Services (a
--------------------
"Request for Services") using a copy of the form attached as Exhibit A whenever
it wishes to use the Vendor's services. The Request for Services shall provide
the following information.
a. The name and address of the Target employee who will have
administrative responsibility with respect to the Request for
Services (the "Target Representative");
b. The name and address of the Vendor's "Vendor Representative" (as
defined in Section 5 below);
c. A description of the services to be performed (the "Authorized
Services");
d. A schedule listing the names of the individuals who will perform
the Authorized Services (the "Vendor's Personnel"), and
indicating with respect to each:
(1) whether the individual is an employee (W-2 employee if on-
shore, or equivalent if off-shore) or a subcontractor;
(2) whether the individual will be working on-shore, off-shore
or both;
(3) whether the individual is a U.S. citizen or not; and
(4) if the individual is a non-citizen and will be working on-
shore, whether the individual has a green card or an HB1
visa;
e. A fee schedule, fixed price or other relevant information
regarding charges for performance of Authorized Services
f. A list of any expenses for which the Vendor will be reimbursed by
Target (the "Reimbursable Expenses"); and
g. A start date or start date perimeters and other relevant
information regarding hours, schedules, completion dates, etc.
Notwithstanding anything to the contrary set forth in Section 26 of this
Agreement, the information set forth on the Request for Services may be modified
as follows:
a. The name and/or address of the Target Representative may be
changed by giving oral or written notice to the Vendor
Representative;
b. The name and/or address of the Vendor Representative may be
changed by giving oral or written notice to the Target
Representative;
c. The Authorized Services may only be amended in writing as
provided in Section 26;
1
<PAGE>
d. The schedule listing Vendor's Personnel may only be amended in
writing as provided in Section 26;
e. The list of Reimbursable Expenses may only be amended in writing
as provided in Section 26:
f. The fee schedule and other information regarding changes for the
performance of Authorized Services may only be amended in writing
as provided in Section 26; and
g. Start dates, completion dates and other scheduling information
may be modified by oral or written agreement between the Vendor
Representative and the Target Representative.
The Vendor shall indicate its acceptance of a particular Request for
Services by signing that Request for Services and returning it to the Target
Representative.
Upon the acceptance of a Request for Services by the Vendor, that Request
for Services shall be incorporated into and made a part of this Agreement, and
all of the terms and conditions of this Agreement shall apply to the performance
of the Authorized Services described in that Request for Services, EXCEPT THAT
ANY SPECIAL TERMS AND CONDITIONS EXPRESSLY SET FORTH IN THAT REQUEST FOR
SERVICES SHALL GOVERN OVER THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT.
Any such special terms and conditions shall apply only to the Authorized
Services described in that particular Request for Services and shall have no
application to services provided by the Vendor pursuant to other Request for
Services.
4. RIGHT TO REJECT VENDOR'S PERSONNEL. Target reserves the right to
----------------------------------
reject any of the Vendor's Personnel, at Target's sole and absolute discretion,
under, but not limited to, the conditions listed below. If any individual is
rejected, the Vendor may replace that individual. Target reserves the right to
reject any individual with one day's notice.
a. Schedules are not reasonably met and/or reasonable progress is
not being made on assignments. The definition of reasonable
progress is at Target's discretion.
b. The individual is not fully qualified in the skills he or she was
professed to possess.
c. The individual's work is of poor quality and/or requires frequent
or substantial rework.
d. The individual interacts poorly with the rest of the project
members. This includes both Target and vendor project members.
e. The individual violates any Target policy which would result in a
Phase 1 Warning, Phase 2 Warning, or termination for a Target
employee.
f. The individual refuses to sign a Confidentiality Agreement in the
form attached as Exhibit C.
g. The individual refuses to sign a Work Made for Hire/Assignment of
Copyright Agreement in the form attached as Exhibit B.
5. VENDOR REPRESENTATIVE. The Vendor shall designate one of its employees
---------------------
to act as the Vendor Representative (the "Vendor Representative") with respect
to each Request for Services. The Vendor Representative shall be available to
Target on a priority basis during the Vendor's regular business hours. The
Vendor Representative's function shall be to ensure good communication between
Target and the Vendor and "total quality" customer service
6. PAYMENT. Target shall pay the Vendor for the Authorized Services
-------
provided by the Vendor at the rates or as otherwise set forth in the applicable
Request for Services. In addition, Target shall reimburse the Vendor for any
reasonable expenses of the type(s) listed in the Request for Services as
"Reimbursable Expenses" and for any other expenses approved in writing by
Target. Target shall pay invoices submitted in accordance with Section 7 within
[*] of Target's receipt of such invoices. Target shall pay interest at a rate of
[*] on any amounts not paid within such [*].
7. INVOICING. The Vendor shall invoice Target for services as rendered,
---------
but no more often than every two weeks. Each invoice shall identify the project
by the date and number of the Request for Services. The invoice shall show the
tasks performed, the names of the person(s) working on each task, the number of
hours each person worked on each
[*] Information redacted for Confidentiality Purposes.
2
<PAGE>
task, and the applicable hourly rates. Reimbursable Expenses must be itemized
and accompanied by reasonable backup documentation.
8. CONFIDENTIALITY. As used in this Agreement, the term "Confidential
---------------
Information" refers to all information relating to Target's business, including,
but not limited to, all data, reports, drawings, tapes, formulas,
interpretations, forecasts, business plans and analysis, records, trade secrets,
proposals, information regarding systems, including communication and
information systems, information regarding the capabilities of or plans for
existing or future technology used in Target's business (including any such
information supplied to Target by a third-party and marked "confidential" or
containing a notice of copyright or patent, i.e., third-party software),
information regarding, existing and future stores, information regarding
customers, information regarding employees, information regarding products, and
information regarding pricing; EXCEPT that the term "Confidential Information"
does not include information that:
a. is publicly available or which becomes publicly available,
through no act or omission of the Vendor, before it is disclosed
to a third-Party;
b. the Vendor already rightfully possessed before the information
was disclosed by Target;
c. the Vendor rightfully receives without obligation of
confidentiality from any third-party; or
d. was independently developed by an employee, subcontractor or
consultant of the Vendor having no knowledge of the disclosures
hereunder.
The Vendor agrees to treat and by instruction or Agreement cause its
employees, agents and subcontractors to treat, all Confidential Information as
confidential, to disclose such information only to those employees, agents and
subcontractors who have a legitimate business need to know in order to perform
the Authorized Services, and to take strict precautions against the disclosure
of such information to all other persons, both during and after the performance
of the Authorized Services. Upon the termination of this Agreement, for any
reason whatsoever, the Vendor shall promptly return to Target all copies of
Confidential Information furnished by Target and all materials prepared for or
in connection with the Authorized Services. Confidential Information disclosed
pursuant to this Agreement shall continue to be subject to the terms of this
Agreement for five (5) years following its disclosure to Vendor. This
obligation of confidentiality shall survive termination of this Agreement.
9. PROPRIETARY RIGHTS. For the purposes of this Agreement, the term
------------------
"Work" shall mean any program, whether in the source code or object code
version, together with and including any algorithm, flowchart, schematic,
diagram, specification, annotation, or other documentation connected therewith,
and/or any product and/or any other thing produced as a result of the
performance of the Authorized Services. All Work shall be considered "work made
for hire" under the Copyright Act of 1976, 17 U.S.C. Sec. 101, and ownership of
the entire right, title and interest in the Work, including, but not limited to,
any copyrights therein, shall reside in Target. If the Work cannot be
considered a work made for hire under 17 U.S.C. Sec. 101, then the parties agree
that the entire right, title and interest in the Work, including but not limited
to any copyrights therein, the right to register and renew the copyrights
throughout the world, and rights under the Universal Copyright Convention and
the Berne Convention, shall be and hereby are assigned (throughout the world and
for the entire duration of the copyright) by Vendor to Target.
Vendor warrants and represents that all persons who perform all or any
portion of the Authorized Services at the direction of Vendor, are either (a)
the Vendor's employees (W-2 employees if working on-shore or the equivalent if
working off-shore) and doing so in the course of their employment with Vendor,
or (b) the Vendor's subcontractors and doing so pursuant to written agreements
with Vendor in the form attached to this Agreement as Exhibit B, confirming and
effecting an assignment of all rights in and to the Work, including, but not
limited, to any copyrights therein, to Target. IF THE PERSON IS NOT THE
VENDOR'S EMPLOYEE AS DEFINED IN THE PREVIOUS SENTENCE, THE VENDOR MUST DELIVER
TO TARGET A FULLY EXECUTED ASSIGNMENT OF COPYRIGHT IN THE FORM OF EXHIBIT B
BEFORE THE PERSON BEGINS WORK.
10. INDEPENDENT CONTRACTOR. By this Agreement, Target and the Vendor
----------------------
intend to create an independent contractor relationship. As such, Target is
interested only in the results of the Vendor's performance and not the method or
manner of performance. Therefore, while the Vendor's Personnel shall perform
the Authorized Services in accordance with and to Target standards and
specifications, the Vendor retains sole and exclusive control over the method
and manner in which the Authorized Services are performed. All Authorized
Services performed and Work produced pursuant to this Agreement are subject to
Target's right of inspection and must meet with Target's approval.
3
<PAGE>
The Vendor warrants and represents that it, and not Target, is the employer
of the Vendor's employees and that it is solely responsible for complying with
all laws, rules and regulations of any governmental authority having appropriate
jurisdiction relating to such employment, including, but not limited to,
immigration, taxation, worker compensation and unemployment compensation.
The Vendor warrants and represents that it is aware of and in compliance
with all laws, rules, regulations and requirements of any governmental authority
having appropriate jurisdiction with respect to the Vendor's Personnel and with
any contractual obligations to which it may be subject relating to the Vendor's
Personnel.
The Vendor agrees and acknowledges that Target has no obligation whatsoever
to provide liability or health insurance, or any other benefit provided to
Target employees for the Vendor or the Vendor's Personnel, and neither the
Vendor nor any of the Vendor's Personnel shall claim benefits under applicable
unemployment or workers' compensation laws from Target for any injuries
sustained by the Vendor or any of the Vendor's Personnel while performing the
Authorized Services.
If any court or administrative tribunal or agency with appropriate
jurisdiction determines that any employment relationship has been or will be
established by the performance of this Agreement; notwithstanding anything to
the contrary set forth in Section 13, this Agreement (including any outstanding
Requests for Services) shall immediately and automatically terminate and,
notwithstanding anything to the contrary set forth in Section 13, the Vendor
shall reimburse and indemnify Target for costs and expenses of any nature
arising out of or relating to such a determination and/or Target's defense of
such a determination, including, but not limited to, tax withholding and
insurance claims in the nature of unemployment compensation and/or workers'
compensation imposed by any level of government and reasonable attorneys' fees
and costs of suit. The Vendor shall also indemnify and hold harmless Target
against any claim brought by any of the Vendor's Personnel that is related in
any way to services or work performed under this Agreement, except to the extent
such claim arises out of Target's gross negligence or willful misconduct.
The Vendor warrants and represents that throughout the term of this
Agreement, the Vendor shall comply with all applicable laws, rules and
regulations of any governmental authority or any country having authority over
such matters with respect to the performance of any part of the Authorized
Services "off-shore" and/or by persons who are not citizens of the United
States, whether "off-shore" or within the United States. The Vendor further
warrants and represents that the Vendor shall require and verify that any
subcontractor has complied with all applicable laws, rules and regulations of
any governmental authority or any country having authority over such matters
with respect to the performance of any part of the Authorized Services "off-
shore" and/or by persons who are not citizens of the United States, whether
"off-shore" or within the United States. Without limiting the foregoing, the
Vendor warrants and represents that any person performing any part of the
Authorized Services will have the appropriate visa and work papers before
beginning work.
Notwithstanding anything to the contrary set forth in Section 13 of this
Agreement, the Vendor shall indemnify and hold Target harmless against any and
all losses, liabilities, judgments, awards, settlements, damages, costs and
expenses, including without limitation, legal fees and expenses, arising out of
or related to the breach of the warranties set forth in the previous paragraph;
provided that Target notifies the Vendor promptly in writing of the claim and
provided that the Vendor may fully participate in the defense and/or agrees to
any settlement of such claim.
Neither the Vendor nor any of the Vendor's Personnel shall have the right
to purchase goods or services in the name of Target, execute or make contracts
in the name of Target, or obligate Target in any way. The Vendor shall ensure
that the Vendor's Personnel are aware that they are not agents, employees,
and/or legal representatives of Target and may not represent themselves as such.
Target does not agree to use the Vendor exclusively or to provide any
minimum amount of work. The Vendor and any of its employees or subcontractors
are free to contract to perform similar services to others during the term of
this Agreement, subject to the obligation of confidentiality set forth in
Section 8 and Target's proprietary rights as set forth in Section 9.
11. WARRANTIES. The Vendor warrants and represents that neither the
----------
Vendor nor any of the Vendor's Personnel will infringe upon or violate the
patent, copyright, trademark, trade secret or other proprietary right of any
third party in connection with the performance of services under this Agreement.
The Vendor warrants and represents that any services performed by the
Vendor, its employees and/or subcontractors pursuant to this Agreement shall be
(a) performed in a professional and workmanlike manner; (b)
4
<PAGE>
performed in compliance with all applicable federal, state and local government
laws, regulations, and requirements, and (c) performed by adequately trained,
competent personnel.
Notwithstanding anything to the contrary set forth in Section 13, the
Vendor shall indemnify and hold Target harmless against any and all losses,
liabilities, judgments, awards, settlements, damages, costs and expenses,
including without limitation, legal fees and expenses arising out of or related
to any claim that the services performed pursuant to this Agreement infringe
upon any trademark, copyright, patent, trade secret or similar intellectual
property right of any third party;provided that Target notifies the Vendor
promptly in writing of the claim and provided that the Vendor may fully
participate in the defense and/or agrees to any settlement of such claim.
THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, ORAL OR
WRITTEN, IN FACT, ARISING BY OPERATION OF LAW OR OTHERWISE EXCEPT AS RECITED
EXPRESSLY IN THE BODY OF THIS AGREEMENT AND DESIGNATED AS REPRESENTATIONS OR
WARRANTIES, AND THE PARTIES HERETO AGREE SPECIFICALLY THAT THERE ARE NO OTHER
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12. USE OF TARGET'S NAME. The Vendor shall not use Target's name,
--------------------
trademarks, service marks or logo in any advertisements or materials of a
promotional nature or in soliciting other clients without first obtaining
Target's written permission which may be withheld at Target's sole discretion.
13. LIMITATION OF LIABILITY.
-----------------------
a. Vendor's Liability. IN NO EVENT SHALL THE VENDOR BE LIABLE
------------------
FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES
ARISING OUT OF THE VENDOR'S ENGAGEMENT UNDER THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, ANY COSTS, EXPENSES OR LIABILITIES
INCURRED AS A RESULT OF LOST PROFITS OR REVENUES, LOSS OF USE OF ANY
SOFTWARE OR ANY HARDWARE, LOSS OF DATA, THE COST OF RECOVERING SUCH
DATA, OR THE COST OF SUBSTITUTE SOFTWARE, EVEN IF THE VENDOR IS
INFORMED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER CLAIMED UNDER
CONTRACT, TORT OR ANY OTHER LEGAL THEORY, UNLESS SUCH DAMAGES ARE THE
RESULT OF THE VENDOR'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT;
PROVIDED, HOWEVER, NOTHING HEREIN SHALL LIMIT THE VENDOR'S OBLIGATION
TO INDEMNIFY TARGET FOR CLAIMS OF INFRINGEMENT PURSUANT TO SECTION 11
OR FOR EMPLOYMENT RELATED CLAIMS PURSUANT TO SECTION 10. If any of the
limitations on the liability of the Vendor contained in this paragraph
are found to be invalid or unenforceable for any reason by a court of
competent jurisdiction, Target hereby expressly agrees that the
maximum aggregate liability of the Vendor under such circumstance for
liabilities that otherwise would have been limited shall not exceed
the aggregate fees paid by Target to the Vendor pursuant to the
applicable Request for Services.
b. Target's Liability. IN NO EVENT SHALL TARGET BE LIABLE FOR ANY
------------------
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, ARISING
DIRECTLY OR INDIRECTLY OUT OF TARGET'S BREACH OF THIS AGREEMENT, EVEN
IF TARGET IS INFORMED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER
CLAIMED UNDER CONTRACT, TORT OR ANY OTHER LEGAL THEORY, UNLESS SUCH
DAMAGES ARE THE RESULT OF TARGET'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. If any of the limitations on the liability of Target
contained in this Agreement are found to be invalid or unenforceable
for any reason by a court of competent jurisdiction, the Vendor hereby
expressly agrees that the maximum aggregate liability of Target under
such circumstance for liabilities that otherwise would have been
limited shall not exceed the aggregate fees paid by Target to the
Vendor pursuant to the applicable Request for Services.
14. INSURANCE. In addition to any other insurance requirements set forth
---------
in Section 10 of this Agreement, the Vendor shall maintain (and cause its
subcontractors, if any, to maintain) the following insurance coverages in full
force and effect throughout the term of this Agreement:
a. Workers' Compensation Insurance as may be from time to time
--------------------------------
required under applicable federal laws and the laws of the
state(s) or country in which the Authorized Services are
performed.
b. Employer's Liability Insurance with limits of not less than
-------------------------------
$300,000.00 each accident, $300,000.00 disease - policy limit,
and $300,000.00 disease - each employee.
5
<PAGE>
c. Commercial General Liability Insurance (including contractual
---------------------------------------
liability to cover the indemnity provisions set forth in this
Agreement) with limits of not less than $5,000,000 - general
aggregate, $5,000,000 products - completed operations aggregate,
$1,000,000 personal and advertising injury, $1,000,000 each
occurrence, and no separate limits with respect to fire damage or
medical expenses.
d. Automobile Liability Insurance (including owned, non-owned and
-------------------------------
hired) with limits of not less than One Million Dollars
($1,000,000.00) combined single limit.
The foregoing insurance shall contain a provision whereby the insurer
agrees to give Target thirty (30) days' written notice before the insurance is
canceled or materially altered. The foregoing insurance shall be written on an
occurrence basis and shall include Dayton Hudson Corporation and Target as
additional insureds. The Vendor shall furnish current certificates evidencing
that the foregoing insurance is being maintained by Vendor. Delivery of a
certificate to Target which is not in full compliance with this Agreement shall
not be deemed to waive the Vendor's obligations. All of the insurance policies
required to be obtained pursuant to this Agreement shall be with companies
either rated no less than X as to financial rating and no less than A- as to
Policy Holder's Rating in the current edition of Best's Insurance Guide (or with
an association of companies each of the members of which are so rated) or having
a parent company's debt to policyholder surplus ratio of 1:1.
15. INTENTIONALLY DELETED.
---------------------
16. TERM OF AGREEMENT. This Agreement shall take effect on the Effective
-----------------
Date, as defined in Section 28 below, and shall remain in effect until
terminated by one of the parties pursuant to Section 17 below.
17. TERMINATION OF AGREEMENT. Target may terminate this Agreement or any
------------------------
Request for Services, with or without cause and at its sole discretion, upon
written notice to the Vendor. The Vendor may terminate this Agreement, without
cause and at its sole discretion, upon sixty (60) days written notice to Target.
The foregoing notwithstanding, if Target breaches this Agreement or any of the
special terms or conditions of any Request for Services, the Vendor shall have
cause to terminate this Agreement and may terminate this Agreement or any
Request for Services upon seven (7) days written notice to Target unless the
event(s) giving rise to the breach have been remedied or rectified within that
seven-day period or unless the Vendor revokes its notice in writing.
Target's sole obligation to the Vendor upon termination of this Agreement
shall be payment to the Vendor for such Authorized Services as has been
completed prior to date of termination.
18. FORCE MAJEURE. Any delay or failure of performance of either party to
-------------
this Agreement shall not constitute a breach or default of the Agreement, or
give rise to any claims for damages, if and to the extent that such delay or
failure is caused by an occurrence beyond the control of the party affected,
including, but not limited to, acts of governmental authorities, acts of God,
the discovery of materially different site conditions, wars, riots, rebellions,
sabotage, fire, explosions, accidents, floods, strikes, lockouts, or changes in
laws, regulations, or ordinances, In the event thata party intends to invoke
this force majeure provision, that party shall provide prompt notice to the
other party as soon as possible after the occurrence of the event giving rise to
the claim of force majeure.
19. NOTICE. All notices, demands and requests required or permitted to be
------
given under this Agreement or subsequent Request for Services must be in writing
and must be delivered personally, by facsimile transmission or telecopy (in
which event, the notice shall be confirmed by overnight delivery), by nationally
recognized overnight courier or sent by United States certified mail, return
receipt requested, postage prepaid and addressed to the parties at their
respective addresses set forth below (or at the address set forth on the
applicable Request for Services), and the same shall be effective upon receipt
if delivered personally, or on the next business day if sent by overnight
courier or by facsimile transmission or telecopy, or three (3) business days
after deposit in the mail if mailed. The initial addresses of the parties shall
be
To Vendor: Information Management Resources. Inc.
--------------------------------------
26750 U.S. Highway 19 North, Suite 500
--------------------------------------
Clearwater, Florida 34621-3442
------------------------------
Attn: Thomas Spencer
--------------------
To Target: Target Stores
33 South Sixth Street
6
<PAGE>
Minneapolis, Minnesota 55402
Attn: IS Technical Resource Manager
Upon at least ten (10) days' prior written notice, each party shall have the
right to change its address to any other address within the United States of
America.
20. NO WAIVER. Except as expressly set forth in this Agreement, the
---------
failure of either party at any time to require performance by the other party of
any provision of this Agreement shall in no way affect the right of such party
to require performance of that provision. Any waiver by either party of any
breach of any provision of this Agreement shall not be construed as a waiver of
any continuing or succeeding breach of such provision, a waver of the provision
itself, or a waiver of any right under this Agreement.
21. CONSTRUCTION. The rule of strict construction shall not apply to this
------------
Agreement. This Agreement has been prepared by Target and its professional
advisors and reviewed and modified by the Vendor and its professional advisors.
Target, the Vendor, and their separate advisors believe that this Agreement is
the product of all of their efforts, that it expresses their agreement, and that
it should not be interpreted in favor of or against either Target or the Vendor
merely because of their efforts in preparing it.
22. CAPTIONS, GENDER, NUMBER AND LANGUAGE OF INCLUSION. The captions are
--------------------------------------------------
inserted in this Agreement only for convenience of reference and do not define,
limit, or describe the scope or intent of any provisions of this Agreement.
Unless the context clearly requires otherwise, the singular includes the plural,
and vice versa, and the masculine, feminine, and neuter adjectives include one
another. As used in this Agreement, the word "including" shall mean "including,
but not limited to".
23. EXHIBITS. The following exhibits shall be deemed incorporated into
--------
this Agreement in their entirety:
Exhibit A Sample Request for Services Form
Exhibit B Authorized Services Made for Hire Agreement and Assignment
of Copyright
Exhibit C Confidentiality Agreement
24. COSTS OF LITIGATION. If a dispute should arise relating to the
-------------------
performance of the services to be provided under this Agreement, and should that
dispute result in litigation, the prevailing party shall be entitled to recover
all reasonable costs incurred in the defense or prosecution of the claim,
including, without limitation, court costs and reasonable attorneys' fees.
25. GOVERNING LAW. The validity, performance and construction of this
-------------
Agreement shall be governed and interpreted in accordance with the laws of
Minnesota.
26. ENTIRE AGREEMENT/AMENDMENT. This Agreement contains the entire
--------------------------
understanding and agreement between the parties with respect to the subject
matter hereof and supersedes all previous communications, negotiations and
agreements, whether oral or written, between the parties with respect to such
subject matter. No addition to or modifications of this Agreement or waiver of
any provisions of this Agreement shall be binding on either party unless made in
writing and executed on behalf of Target and Vendor.
27. SEVERABILITY/SURVIVAL. Every section, term and provision of this
---------------------
Agreement is severable from the others. Any future determination by a court or
other authority having jurisdiction over the parties or this Agreement that a
particular section, term, or provision of this Agreement is invalid, void,
illegal, or unenforceable shall not affect the validity and enforceability of
the remaining sections, terms, or provisions. The provisions of Sections 8
through 15 and all of the warranties and representations expressly set forth
herein shall survive the termination of this Agreement.
28. EFFECTIVE DATE. For the purposes of this Agreement, the term
--------------
"Effective Date" shall mean the date set forth on the second line of this
Agreement.
29. ADDITIONAL OR CONTRARY TERMS AND PROVISIONS, IF ANY. Any additional
---------------------------------------------------
or contrary terms and provisions set forth in a rider dated as of the date of
this Agreement, signed by both parties, and attached hereto shall be
incorporated herein and shall govern over any contrary terms and provisions set
forth above.
7
<PAGE>
30. AUTHORITY. Target and the Vendor each warrant and represent to the
---------
other that the individuals executing this Agreement have the full capacity,
right, power and authority to execute and deliver this Agreement, and all
required actions and approvals therefor have been duly taken and obtained. The
individuals signing this Agreement and all other documents executed or to be
executed pursuant hereto on behalf of any party are and shall be duly authorized
to sign the same on that party's behalf and to bind that party thereto.
IN WITNESS WHEREOF, the parties have each executed this Agreement by their
duly authorized representatives on the date(s) shown below.
THE VENDOR: TARGET:
DAYTON HUDSON CORPORATION
INFORMATION MANAGEMENT RESOURCES, INC. TARGET STORES DEIVISION
By: /s/ Satish K. Saran By: /s/ Thomas Jeffery
-------------------------- -----------------------------
Name: Satish K. Sanan Name: Thomas Jeffery
--------------------------
Title: President & CEO Title: Senior Vice President
--------------------------
Date: May 15, 1995 Date: 5/11/95
-------------------------- -----------------------------
Approved by IMR Legal Dept.
ARE_________
8
<PAGE>
EXHIBIT A
REQUEST FOR SERVICES
RFS NUMBER _________
VENDOR: ________________________________________
DATE OF THIS REQUEST FOR SERVICES: ________________________________________
DATE OF MASTER AGREEMENT: ________________________________________
CONTRACT NUMBER: ________________________________________
The Vendor hereby agrees to provide the following individuals to perform
the Authorized Services described below in accordance with the terms and
conditions of the Master Agreement as amended by this Request for Services.
================================================================================
VENDOR REPRESENTATIVE TARGET REPRESENTATIVE
================================================================================
Name: ___________________________ Name: ________________________________
Title: ___________________________ Title:: ________________________________
Address: _______________________ Address: _____________________________
__________________________________ ________________________________________
__________________________________ ________________________________________
Phone #: _______________________ Phone #: _____________________________
Fax #: _______________________ Fax #: _____________________________
================================================================================
================================================================================
AUTHORIZED SERVICES
(Provide a brief description of the project and the services to be performed.)
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE START DATE (OR START DATE PERIMETERS)
OR OTHER INFORMATION AND OTHER SCHEDULING INFORMATION:
REGARDING CHARGES FOR
SERVICES:
(Attach additional sheets
if necessary.) (Attach additional sheets if necessary.)
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES: SPECIAL INSTRUCTIONS:
(Attach additional sheets
if necessary.)
- --------------------------------------------------------------------------------
INVOICE SHOULD BE
ADDRESSED TO:
(Attach additional sheets if necessary.)
================================================================================
9
<PAGE>
================================================================================
VENDOR'S PERSONNEL
================================================================================
Provide the following information respect to each individual
performing Authorized Services.
(Attach additional sheets as necessary.)
================================================================================
Name: _________________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor
(Attach signed Assignment of Copyright)
================================================================================
Name: _________________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor
(Attach signed Assignment of Copyright)
================================================================================
Name: _________________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor
(Attach signed Assignment of Copyright)
================================================================================
Name: _________________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor
(Attach signed Assignment of Copyright)
================================================================================
Name: _________________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor
(Attach signed Assignment of Copyright)
================================================================================
VENDOR DAYTON HUDSON CORPORATION,
TARGET STORES DIVISION
______________________________________
By: __________________________________ By: ________________________________
Name: ________________________________ Name: ______________________________
Date: ________________________________ Date: ______________________________
10
<PAGE>
================================================================================
ADDITIONAL VENDOR'S PERSONNEL
================================================================================
VENDOR:
- --------------------------------------------------------------------------------
RFS NO.:
- --------------------------------------------------------------------------------
DATE OF RFS:
================================================================================
Name: _______________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name: _______________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name: _______________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name: _______________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
Name: _______________________________________
[_] Working in U.S. (Attach signed Confidentiality Agreement)
[_] U.S. Citizen [_] Green Card [_] HB1 Visa
[_] Working Off-Shore
[_] Vendor's Employee (W2 or Equivalent)
[_] Vendor's Contract Employee or Subcontractor (Attach signed Assignment of
Copyright)
================================================================================
11
<PAGE>
EXHIBIT B
WORK MADE FOR HIRE AND
ASSIGNMENT OF COPYRIGHT AGREEMENT
THIS AGREEMENT is made and entered into this ___, day of
______________, 19___ by and between Target Stores, a division of Dayton
Hudson Corporation ("Target") ___________________________________________
(the "Vendor") and _________________________________________, the
Vendor's subcontractor (the "Subcontractor") .
WHEREAS, Target and the Vendor have entered into that certain
Master Agreement for Computer Consulting and Programming Services dated
_____ (the "Master Agreement"); and
WHEREAS, Target has issued and the Vendor has accepted that
certain Request for Services No. _________ dated __________ (the "RFS"),
pursuant to which the Vendor has agreed to perform certain Authorized
Services and produce certain Work for certain consideration payable to the
Vendor by Target: and
WHEREAS, the Vendor has commissioned the Subcontractor to perform
all or part of the Authorized Services and to produce all or part of the
Work for certain consideration payable to the Subcontractor by the Vendor;
and
WHEREAS, the Subcontractor has agreed to perform such Authorized
Services and produce such Work; and
WHEREAS, the Parties intend that Target shall own the entire
right, title and interest in the Work produced by the Subcontractor,
including but not limited to the copyright therein;
NOW THEREFORE, the parties expressly agree as follows:
1. As used in this Agreement, the term "Authorized Services" shall mean
the services described in the RFS. As used in this Agreement the term
"Work" shall mean any program, whether in the source code or object
code version, together with and including any algorithm, flowchart,
schematic, diagram, specification, annotation, or other documentation
connected therewith, and/or any product and/or any other thing
produced as a result of the Authorized Services.
2. Any Work produced by the Subcontractor shall be considered a "work
made for hire" under the Copyright Act of 1976, 17 U.S.C. Sec. 101,
and ownership of the entire right, title and interest in such Work,
including but not limited to any copyrights therein, shall reside in
Target.
-12-
<PAGE>
3. If the Work produced by the Subcontractor cannot be considered a work
made for hire under 17 U.S.C. Sec. 101, then the parties agree that
the entire right, title and interest in such Work, including but not
limited to any copyrights therein, the right to register and renew the
copyrights throughout the world and rights under the Universal
Copyright Convention and the Berne Convention, shall be and hereby are
assigned (throughout the world and for the entire duration of the
copyright) by the Subcontractor to Target.
VENDOR SUBCONTRACTOR
______________________________ _________________________________
By:___________________________ By:______________________________
Name:___________________ Name:_____________________
Title:__________________ Title:____________________
Date:_________________________ Date:____________________________
TARGET
_________________________________
By: _____________________________
Name:______________________
Title:_____________________
Date:____________________________
-13-
<PAGE>
EXHIBIT C
CONFIDENTIALITY AGREEMENT
My name is _________________________________________________. My
mailing address is _____________________________________________. I am an
employee or a subcontractor of ______________________________________( the
"Vendor").
The Vendor has assigned me to perform services for Dayton Hudson
Corporation, Target Stores Division ("Target"). In the course of my work, I
will have access to proprietary, secret and confidential information
relating to Target. Target could suffer irreparable harm if any of this
information were disclosed to Target's competitors or other third parties.
As a material inducement for Target to allow me access to such information,
I hereby agree as follows:
1 . As used in this Agreement, the term "Confidential Information"
refers to all information relating to Target's business, including, but not
limited to, all data, reports, drawings, tapes, formulas, interpretations,
forecasts, business plans and analysis, records, trade secrets, proposals,
information regarding systems, including communication and information
systems, information regarding the capabilities of or plans for existing or
future technology used in Target's business (including any such information
supplied to Target by a third-party and marked "confidential" or containing
a notice of copyright or patent, e.g., third-party software), information
regarding existing and future stores, information regarding customers,
information regarding employees, information regarding products, and
information regarding pricing; EXCEPT that the term "Confidential
Information" does not include information that:
a. is publicly available or which becomes publicly available,
through no act or omission of the Vendor, before it is
disclosed to a third-party;
b. the Vendor already rightfully possessed before the
information was disclosed by Target;
c. the Vendor rightfully receives without obligation of
confidentiality from any third-party; or
d. was independently developed by an employee, subcontractor
or consultant of the Vendor having no knowledge of the
disclosures hereunder.
-14-
<PAGE>
The Vendor agrees to treat and by instruction or Agreement cause its
employees, agents and subcontractors to treat, all Confidential Information
as confidential, to disclose such information only to those employees,
agents and subcontractors who have a legitimate business need to know in
order to perform the Authorized Services, and to take strict precautions
against the disclosure of such information to all other persons, both
during and after the performance of the Authorized Services. Upon the
termination of this Agreement, for any reason whatsoever, the Vendor shall
promptly return to Target all copies of Confidential Information furnished
by Target and all materials prepared for or in connection with the
Authorized Services. Confidential Information disclosed pursuant to this
Agreement shall continue to be subject to the terms of this Agreement for
five (5) years following its disclosure to Vendor. This obligation of
confidentiality shall survive termination of this Agreement.
2. I will not copy, disclose, provide or otherwise make available to
anyone any Confidential Information, except to Target employees or my
direct supervisor and then only to the extent necessary to perform the
services I have been assigned to perform. I will take all appropriate steps
to protect the confidentiality and security of the Confidential
Information.
3. As soon as I have completed my assignment, I will return to
Target all copies of any Confidential Information furnished to me by Target
and all copies of any materials prepared by or for me in connection with my
assignment.
4. I understand that if I violate the terms of this Agreement, I may
be removed from the project and Target may take legal action against me.
5. My obligations with respect to the confidentiality and security
of the Confidential Information shall survive even after I finish my
assignment for Target and even after my relationship with the Vendor comes
to an end.
Signature:_____________________________
Date:__________________________________
-15-
<PAGE>
RIDER DATED April 25, 1995
TO MASTER AGREEMENT FOR COMPUTER CONSULTING
AND PROGRAMMING SERVICES
A. Section 14, INSURANCE, is deleted and replaced with the following.
---------
In addition to any other insurance requirements set forth in Section 10 of
this Agreement, the Vendor shall maintain (and cause its subcontractors, if
any, to maintain) the following insurance coverages in full force and
effect throughout the term of this Agreement:
a. Workers' Compensation Insurance as may be from time to time
--------------------------------
required under applicable federal laws and the laws of the
state(s) or country in which the Authorized Services are
performed.
b. Employer's Liability Insurance with limits of not less than
-------------------------------
$300,000.00 each accident, $300,000.00 disease - policy
limit, and $300,000.00 disease - each employee.
c. Commercial General Liability Insurance (including
---------------------------------------
contractual liability tocover the indemnity provisions set
forth in this Agreement) with limits of not less than
$4,000,000 general aggregate, $4,000,000 products completed
operations aggregate, $1,000,000 personal and advertising
injury, $1,000,000 each occurrence, and separate limits with
respect to $50,000 fire damage and $5,000 medical expenses.
d. Automobile Liability Insurance (including owned, non-owned
-------------------------------
and hired) with limits of not less than One Million Dollars
($1,000,000.00) combined single limit.
The foregoing insurance shall contain a provision whereby the insurer
agrees to give Target thirty (30) days' written notice before the insurance
is canceled or materially altered. The foregoing insurance shall be written
on an occurrence basis and shall include Dayton Hudson Corporation and
Target as additional insureds. The Vendor shall furnish current certifi-
cates evidencing that the foregoing insurance is being maintained by
Vendor. Delivery of a certificate to Target which is not in full compliance
with this Agreement shall not be deemed to waive the Vendor's obligations.
All of the insurance policies required to be obtained pursuant to this
Agreement shall be with companies either rated no less than X as to
financial rating and no less than A- as to Policy Holder's Rating in the
current edition of Best's Insurance Guide (or with an association of
companies each of the members of which are so rated) or having a parent
company's debt to policyholder surplus ratio of 1:1.
-16-
<PAGE>
RIDER DATED April 25, 1995
TO MASTER AGREEMENT FOR COMPUTER CONSULTING
AND PROGRAMMING SERVICES
B. Section 15, Intentionally Deleted, is deleted and replaced with the
---------------------
following.
Target agrees that, unless otherwise agreed to by the parties in writing,
during the term of the Request for Services and for a period of one (1)
year after termination of the Request for Services, Target shall not
directly or indirectly solicit, hire or otherwise retain as an employee or
independent contractor an employee or former employee of the Vendor who
performed Authorized Services, UNLESS, Target first obtains the Vendors
Written permission.
VENDOR: TARGET:
Information Management DAYTON HUDSON CORPORATION
Resource, Inc. TARGET STORES DIVISION
By: /s/ Satish K. Sanan By: /s/ Thomas A. Jeffery
------------------------ -----------------------
Name: Satish K. Sanan Name: Thomas A. Jeffery
------------------
Title: President & CEO Title: Senior Vice President
------------------
Date: May 15, 1995 Date 5/11/95
----------------------- -----------------------
Approved by IMR Legal Dept.
ARE _______
-17-
<PAGE>
AMENDMENT NO. 1
MASTER AGREEMENT FOR COMPUTER CONSULTING
AND PROGRAMMING SERVICES
CONTRACT NUMBER M940049
-------
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which the
parties hereby acknowledge, that certain Master Agreement for Computer
Consulting and Programming Services dated August 8, 1994, by and between Target
Stores, a division of DAYTON HUDSON CORPORATION ("Target"), a Minnesota
corporation and INFORMATION MANAGEMENT RESOURCES. INC. (the "Vendor"), a Florida
---------------------------------------
corporation (together with any previous amendments thereto, the "Master
Agreement") is hereby amended as follows:
1. The Vendor warrants and represents to Target that it will not subcontract
any services performed by the Vendor for Target, except to the Vendor's Indian
subsidiary, Information Management Resources (India) Ltd., and that every
individual provided to Target by the Vendor will be a full-time employee of the
Vendor.
The terms of this Amendment shall govern over any contrary term or
provision set forth in the Master Agreement. The parties acknowledge that the
Master Agreement, as amended herein, remains in full force and effect. This
Amendment shall become effective on the date on which it is signed by the last
party to execute this Amendment.
VENDOR: TARGET:
INFORMATION MANAGEMENT RESOURCES, DAYTON HUDSON CORPORATION, TARGET
INC. STORES DIVISION
By: /s/ Jeffery S. Slowgrove By: /s/ Thomas A Jeffery
------------------------ --------------------
Name: Jeffery S. Slowgrove Name: Thomas A. Jeffery
-------------------- -----------------
Title: Treasurer Title: Senior Vice President
--------- ---------------------
Date: 11/21/94 Date: November 15, 1994
-------- -----------------
Approved by IMR Legal Dept.
ARE ARE
---
Master.Am version 11/03/94
<PAGE>
REQUEST FOR SERVICES ("RFS")
Vendor: Information Management Resources, Inc.
Date of This RFS: 12/30/99 Date of Master Agmt: 4/25/95
Contract Number: M950013 RFS No: 950013 - 0002
The Vendor hereby agrees to provide the following individuals to perform
the Authorized Services described below in accordance with the terms and
conditions of the Master Agreement as amended by this Request for Services.
- --------------------------------------------------------------------------------
VENDOR REPRESENTATIVE DHC REPRESENTATIVE
- --------------------------------------------------------------------------------
Name: Mark Ralls Name: Deb Bauman
Title: Title: Project Manager
Address: 26750 US Highway 19 North Address: 33 South Sixth Street
Suite 500 P.O. Box 1392
Clearwater, FL 34621-3442 Minneapolis, MN 55440-1392
Phone #: (813) 797-7080 Phone #: (612) 335-0572 CC-05A
Fax #: (813) 791-8152 Fax #: (612) 335-5472
- --------------------------------------------------------------------------------
AUTHORIZED SERVICES:
- --------------------------------------------------------------------------------
Programming assistance on the Target Outsourcing Project with IMR.
- --------------------------------------------------------------------------------
FEE SCHEDULE, FIXED PRICE OR OTHER INFORMATION REGARDING CHARGES FOR SERVICES:
- --------------------------------------------------------------------------------
This project is a fixed bid.
- --------------------------------------------------------------------------------
START DATE (OR START DATE PERIMETERS) AND OTHER SCHEDULING INFORMATION:
- --------------------------------------------------------------------------------
9/11/95 to 6/98
- --------------------------------------------------------------------------------
REIMBURSABLE EXPENSES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS:
- --------------------------------------------------------------------------------
Please refer to RFS #950013-0001 for details on the project. The same details
and guideline apply to this request as request 0001.
- --------------------------------------------------------------------------------
INVOICE SHOULD BE ADDRESSED TO:
Deb Bauman, CC-05A
33 South Sixth Street
P.O. Box 1392
Minneapolis, MN 55440-1392
<PAGE>
- --------------------------------------------------------------------------------
ADDITIONAL VENDOR'S PERSONNEL
- --------------------------------------------------------------------------------
Vendor: Information Management Resources, Inc. RFS No: 950013 - 0002
Date of RFS: 12/30/99 Date: 9/7/95
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
[x] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [x] HB1 Visa
[ ] Working Off-Shore
[x] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment
of Copyright)
- --------------------------------------------------------------------------------
Name: [*] Rate: [*]
Contractor Removed
[x] Working in U.S. (Attach signed Confidentiality Agreement)
[ ] U.S. Citizen [ ] Green Card [x] HB1 Visa
[ ] Working Off-Shore
[x] Vendor's Employee (W-2 or Equivalent)
[ ] Vendor's Contract Employee or Subcontractor (Attach signed Assignment
of Copyright)
- --------------------------------------------------------------------------------
Vendor: Dayton Hudson Corporation,
Information Management Resources, Inc. Target Stores Division
By: /s/ Andrew R. Etkind By: /s/ Randy Kirihara
-------------------------------------- ----------------------------------
Name: Andrew R. Etkind Name: Randy Kirihara
--------------------------------- -----------------------------
Title: Vice President, General Counsel Title: Technical Resources Manager
------------------------------- ----------------------------
Date: September 15, 1995 Date: 9/11/95
------------------------------- -----------------------------
[Stamp: Approved by IMR Legal Dept.
ARE \s\ARE
------
[*] Information redacted for Confidentiality Purposes.
<PAGE>
MASTER AGREEMENT FOR COMPUTER CONSULTING
AND PROGRAMMING SERVICES
CONTRACT NUMBER 940049
------
THIS MASTER AGREEMENT FOR COMPUTER PROGRAMMING SERVICES (this "Agreement"),
is made as of August 8, 1994, by and between Target Stores, a division of
--------
DAYTON HUDSON CORPORATION ("Target"), a Minnesota corporation, and Information
-----------
Management Resources. Inc. (the "Vendor"), a Florida corporation.
- --------------------------- -------
1. PURPOSE OF AGREEMENT. The purpose of this Agreement is to set forth the
--------------------
terms and conditions under which the Vendor will provide computer consulting and
programming services to Target.
2. SCOPE OF AGREEMENT. This Agreement covers all services provided by the
------------------
Vendor pursuant to any Request for Services issued by Target and accepted by the
Vendor during the term of this Agreement.
3. REQUEST FOR SERVICES. Target shall issue a Request for Services (a
--------------------
"Request for Services") using a copy of the form attached as Exhibit A whenever
it wishes to use the Vendor's services. The Request for Services shall provide
the following information:
a. the name and address of the Target employee who will
have administrative responsibility with respect to the Request for
Services (the "Project Manager");
b. the name and address of the designated "Account Representative"
(as defined in Section 5 below):
c. a general description of the services to be performed (together
with all products and proceeds of such services. the "Authorized
Services"):
d. a list of the names of the individuals the Vendor will provide to
perform the Authorized Services, indicating whether each individual is
an employee of the Vendor or a subcontractor (the "Vendor's
Personnel");
e. a fee schedule;
f. a list of any expenses for which the Vendor will be reimbursed by
Target (the "Reimbursable Expenses"); and
g. a start date and/or other information regarding hours, schedules,
completion dates. etc.
The Vendor shall indicate its acceptance of a particular Request for
Services by signing that Request for Services and returning it to the Project
Manager.
Upon the acceptance of a Request for Services by the Vendor, that Request
for Services shall be incorporated into and made a part of this Agreement, and
all of the terms and conditions of this Agreement shall apply to the performance
of the Authorized Services described in that Request for Services, except that
any special terms and conditions expressly set forth in that Request for
Services shall govern over the terms and conditions set forth in this Agreement.
Any such special terms and conditions shall apply only to the Authorized
Services described in that particular Request for Services and shall have no
application to services provided by the Vendor pursuant to other Request for
Services.
- 1 - version 05/12/94
<PAGE>
4. RIGHT TO REJECT VENDOR'S PERSONNEL. Target reserves the right to
----------------------------------
reject any of the Vendor's Personnel, at Target's sole and absolute discretion,
under, but not limited to, the conditions listed below. If any individual is
rejected, the Vendor may replace that individual. Target reserves the right to
reject any individual with one day's notice.
(a) Schedules are not reasonably met and/or reasonable progress is not
being made on assignments. The definition of reasonable progress is at
Target's discretion.
(b) The individual is not fully qualified in the skills he or she was
professed to possess.
(c) The individual's work is of poor quality and/or requires frequent
or substantial rework.
(d) The individual interacts poorly with the rest of the project
members. This includes both Target and vendor project members.
(e) The individual violates any Target policy which would result in a
Phase 1 Warning, Phase 2 Warning, or termination for a Target
employee.
(f) The individual refuses to sign a Confidentiality Agreement in the
form attached as Exhibit C.
(g) The individual refuses to sign a Work Made for Hire/Assignment of
Copyright Agreement in the form attached as Exhibit B.
5. ACCOUNT REPRESENTATIVE. The Vendor shall designate one of its
----------------------
employees to act as Target's Account Representative (the "Account
Representative") with respect to each Request for Services. The Account
Representative shall be available to Target on a priority basis during the
Vendor's regular business hours. The Account Representative's function shall be
to ensure good communication between Target and the Vendor and "total quality"
customer service.
6. PAYMENT. Target shall pay the Vendor for the Authorized Services
-------
provided by the Vendor at the rates set forth in the applicable Request for
Services. In addition, Target shall reimburse the Vendor for any reasonable
expenses of the type(s) listed in the Request for Services as "Reimbursable
Expenses" and for any other expenses approved in writing by Target. Target shall
pay invoices submitted in accordance with Section 7 within [*] days of
Target's receipt of such invoices. Target shall pay interest at a rate of [*]
[*] per month on any amounts not paid within such [*] period.
7. INVOICING. The Vendor shall invoice Target for services as rendered,
---------
but no more often than every two weeks. Each invoice shall identify the project
by the date and number of the Request for Services. The invoice shall show the
tasks performed, the names of the person(s) working on each task, the number of
hours each person worked on each task, and the applicable hourly rates.
Reimbursable Expenses must be itemized and accompanied by reasonable backup
documentation.
8. CONFIDENTIALITY. The term "Confidential Information" refers to all
---------------
data, reports, drawings, tapes, formulas, interpretations, forecasts, business
plans and analysis, records, trade secrets, proposals, information regarding
systems, including communication and information systems, information regarding
customers, information regarding employees, information regarding products,
information regarding pricing, and all other information reflecting upon or
concerning Target, unless such information has been published by Target in
publicly available documents. The Vendor agrees to treat, and to cause its
employees and subcontractors to treat, all Confidential Information as
confidential and to take strict precautions against disclosure of such
information to third parties, both during and after the term of this Agreement.
Upon the termination of this Agreement, for any reason
-2- version 05/12/94
[*] Information redacted for Confidentiality Purposes.
<PAGE>
whatsoever, the Vendor shall promptly return to Target all copies of
Confidential Information furnished by Target and all materials prepared for or
in connection with the Authorized Services. This obligation of confidentiality
shall survive termination of this Agreement.
9. PROPRIETARY RIGHTS. All Authorized Services shall be considered work
-------------------
made for hire under the Copyright Act of 1976, 17 U.S.C. Sec. 101, and
ownership of the entire right, title and interest in the Authorized Services,
including, but not limited to, any copyrights therein, shall reside in Target.
If the Authorized Services cannot be considered a work made for hire under 17
U.S.C. Sec. 101, then the parties agree that the entire right, title and
interest in the Authorized Services, including but not limited to any copyrights
therein, the right to register and renew the copyrights throughout the world,
and rights under the Universal Copyright Convention and the Berne Convention,
shall be and hereby are assigned by Vendor to Target.
Vendor warrants and represents that all persons who perform all or any
portion of the Authorized Services at the direction of Vendor, are either (a)
the Vendor's W-2 employees and doing so in the course of their employment with
Vendor, or (b) the Vendor's subcontractors and doing so pursuant to written
agreements with Vendor in the form attached to this Agreement as Exhibit B,
confirming and effecting an assignment of all rights in and to the Authorized
Services, including, but not limited, to any copyrights therein, to Target. IF
THE PERSON IS NOT THE SUBCONTRACTOR'S W-2 EMPLOYEE, THE VENDOR MUST DELIVER TO
TARGET A FULLY EXECUTED ASSIGNMENT OF COPYRIGHT IN THE FORM OF EXHIBIT B BEFORE
THE PERSON BEGINS WORK.
10. INDEPENDENT CONTRACTOR. By this Agreement, Target and the Vendor
----------------------
intend to create an independent contractor relationship. As such, Target is
interested only in the results of the Vendor's performance and not the method or
manner of performance. Therefore, while the Vendor's Personnel. shall perform
the Authorized Services in accordance with and to Target standards and
specifications, the Vendor retains sole and exclusive control over the method
and manner in which the Authorized Services are performed. All Authorized
Services performed pursuant to this Agreement are subject to Target's right of
inspection and must meet with Target's approval.
The Vendor warrants and represents that it, and not Target, is the employer
of the Vendor's employees and that it is solely responsible for complying with
all laws, rules and regulations relating to such employment, including, but not
limited to, immigration, taxation, worker compensation, unemployment
compensation, and Occupational Safety and Health Administration laws, rules and
regulations.
The Vendor warrants and represents that it is aware of and in compliance
with all federal, state and local laws, rules, regulations and requirements with
respect to the Vendor's Personnel and with any contractual obligations to which
it may be subject relating to the Vendor's Personnel.
The Vendor agrees and acknowledges that Target has no obligation whatsoever
to provide liability or health insurance, or any other benefit provided to
Target employees for the Vendor or the Vendor's Personnel, and neither the
Vendor nor any of the Vendor's Personnel shall claim benefits under applicable
unemployment or workers' compensation laws from Target for any injuries
sustained by the Vendor or any of the Vendor's Personnel while performing the
Authorized Services.
If any court or administrative tribunal or agency with appropriate
jurisdiction determines that any employment relationship has been or will be
established by the performance of this Agreement, notwithstanding anything to
the contrary set forth in Section 13, this Agreement (including any outstanding
Requests for Services) shall immediately and automatically terminate and,
notwithstanding anything to the contrary set forth in Section 13, the Vendor
shall reimburse and indemnify Target for costs and expenses of any nature
arising out of or relating to such a determination and/or Target's defense of
such a determination, including, but not limited to, tax withholding and
insurance claims in the nature of unemployment compensation and/or workers'
compensation imposed by any level of government and reasonable attorneys' fees
and costs of suit. The Vendor shall also indemnify and
-3-
<PAGE>
hold harmless Target against any claim brought by any of the Vendor's Personnel
that is related in any way to services or work performed under this Agreement.
Neither the Vendor nor any of the Vendor's Personnel shall have the right
to purchase goods or services in the name of Target, execute or make contracts
in the name of Target, or obligate Target in any way. The Vendor shall ensure
that the Vendor's Personnel are aware that they are not agents, employees, or
legal representatives of Target and may not represent themselves as such.
Target does not agree to use the Vendor exclusively or to provide any
minimum amount of work. The Vendor and any of its employees or subcontractors
are free to contract to perform similar services to others during the term of
this Agreement.
11. WARRANTIES. The Vendor warrants and represents that neither the
----------
Vendor nor any of the Vendor's Personnel will infringe upon or violate the
patent, copyright, trademark, trade secret or other proprietary right of any
third party in connection with the performance of services under this Agreement.
The Vendor warrants and represents that any services performed by the
Vendor, its employees and/or subcontractors pursuant to this Agreement shall be
(a) performed in a professional and workmanlike manner; (b) performed in
compliance with all applicable federal, state and local government laws,
regulations, and requirements, and (c) performed by adequately trained,
competent personnel, all of whom are familiar with the relevant aspects of
Target's operations.
Notwithstanding anything to the contrary set forth in Section 13, the
Vendor shall indemnify and hold Target harmless against any and all losses,
liabilities, judgments, awards, settlements, damages, costs and expenses,
including without limitation, legal fees and expenses arising out of or related
to any claim that the services performed pursuant to this Agreement infringe
upon any trademark, copyright, patent, trade secret or similar intellectual
property right of any third party; provided that Target notifies the Vendor
promptly in writing of the claim and provided that the Vendor may fully
participate in the defense and/or agrees to any settlement of such claim.
THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, ORAL OR
WRITTEN, IN FACT, ARISING BY OPERATION OF LAW OR OTHERWISE EXCEPT AS RECITED
EXPRESSLY IN THE BODY OF THIS AGREEMENT AND DESIGNATED AS REPRESENTATIONS OR
WARRANTIES, AND THE PARTIES HERETO AGREE SPECIFICALLY THAT THERE ARE NO OTHER
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12. USE OF TARGET'S NAME. The Vendor shall not use Target's name in any
--------------------
advertisements or materials of a promotional nature or in soliciting other
clients without first obtaining Target's written permission which may be
withheld at Target's sole discretion.
13. LIMITATION OF LIABILITY.
------------------------
a. Vendor's Liability. IN NO EVENT SHALL THE VENDOR BE LIABLE FOR
------------------
ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING OUT OF
THE VENDOR'S ENGAGEMENT UNDER THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, ANY COSTS, EXPENSES OR LIABILITIES INCURRED AS A RESULT OF LOST
PROFITS OR REVENUES, LOSS OF USE OF ANY SOFTWARE OR ANY HARDWARE, LOSS OF
DATA, THE COST OF RECOVERING SUCH DATA, OR THE COST OF SUBSTITUTE SOFTWARE,
EVEN IF THE VENDOR IS INFORMED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER
CLAIMED UNDER CONTRACT, TORT OR ANY OTHER LEGAL THEORY, UNLESS SUCH DAMAGES
ARE THE RESULT OF THE VENDOR'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT;
PROVIDED, HOWEVER, NOTHING HEREIN SHALL LIMIT THE VENDOR'S OBLIGATION TO
INDEMNIFY TARGET FOR CLAIMS OF INFRINGEMENT PURSUANT TO SECTION 11 OR FOR
EMPLOYMENT RELATED CLAIMS PURSUANT TO SECTION 10. If any of the limitations
on
-4- version 05/12/94
<PAGE>
the liability of the Vendor contained in this paragraph are found to
be invalid or unenforceable for any reason by a court of competent
jurisdiction, Target hereby expressly agrees that the maximum aggregate
liability of the Vendor under such circumstance for liabilities that
otherwise would have been limited shall not exceed the aggregate fees paid
by Target to the Vendor pursuant to the applicable Request for Services.
b. Target's Liability. IN NO EVENT SHALL TARGET BE LIABLE FOR ANY
-------------------
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, ARISING DIRECTLY
OR INDIRECTLY OUT OF TARGET'S BREACH OF THIS AGREEMENT, EVEN IF TARGET IS
INFORMED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER CLAIMED UNDER
CONTRACT, TORT OR ANY OTHER LEGAL THEORY, UNLESS SUCH DAMAGES ARE THE
RESULT OF TARGET'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. If any of the
limitations on the liability of Target contained in this Agreement are
found to be invalid or unenforceable for any reason by a court of competent
jurisdiction, the Vendor hereby expressly agrees that the maximum aggregate
liability of Target under such circumstance for liabilities that otherwise
would have been limited shall not exceed the aggregate fees paid by Target
to the Vendor pursuant to the applicable Request for Services.
14. NONSOLICITATION. Target agrees that, unless otherwise agreed to by
---------------
the parties in writing, during the term of the Request for Services and for a
period of one (1 ) year after termination of the Request for Services, Target
shall not directly or indirectly solicit, hire or otherwise retain as an
employee or independent contractor an employee or former employee of the Vendor
who performed Authorized Services, UNLESS Target first obtains the Vendor's
written permission.
15. TERM OF AGREEMENT. This Agreement shall take effect on the Effective
-----------------
Date, as defined in Section 27 below, and shall remain in effect until
terminated by one of the parties pursuant to Section 16 below.
16. TERMINATION OF AGREEMENT. Target may terminate this Agreement or any
------------------------
Request for Services, with or without cause and at its sole discretion, upon
written notice to the Vendor. The Vendor may terminate this Agreement, without
cause and at its sole discretion, upon sixty (60) days written notice to Target.
The foregoing notwithstanding, if Target breaches this Agreement or any of the
special terms or conditions of any Request for Services, the Vendor shall have
cause to terminate this Agreement and may terminate this Agreement or any
Request for Services upon seven (7) days written notice to Target unless the
event(s) giving rise to the breach have been remedied or rectified within that
seven-day period or unless the Vendor revokes its notice in writing.
Target's sole obligation to the Vendor upon termination of this Agreement
shall be payment to the Vendor for such Authorized Services as has been competed
prior to date of termination.
17. FORCE MAJEURE. Any delay or failure of performance of either party to
-------------
this Agreement shall not constitute a breach or default of the Agreement, or
give rise to any claims for damages, if and to the extent that such delay or
failure is caused by an occurrence beyond the control of the party affected,
including, but not limited to, acts of governmental authorities, acts of God,
the discovery of materially different site conditions, wars, riots, rebellions,
sabotage, fire, explosions, accidents, floods, strikes, lockouts, or changes in
laws, regulations, or ordinances. In the event that a party intends to invoke
this force majeure provision, that party shall provide prompt notice to the
other party as soon as possible after the occurrence of the event giving rise to
the claim of force majeure.
18. NOTICE. All notices, demands and requests required or permitted to be
------
given under this Agreement or subsequent Request for Services must be in writing
and must be delivered personally, by facsimile transmission or telecopy (in
which event, the notice shall be confirmed by overnight delivery), by nationally
recognized overnight courier or sent by United States certified mail, return
receipt requested, postage prepaid and addressed to the parties at their
respective addresses
-5- version 05/12/94
<PAGE>
set forth below (or at the address set forth on the applicable Request for
Services), and the same shall be effective upon receipt if delivered personally,
or on the next business day if sent by overnight courier or by facsimile
transmission or telecopy, or three (3) business days after deposit in the mail
if mailed. The initial addresses of the parties shall be:
To Vendor: Information Management Resources, Inc.
--------------------------------------
26750 U.S. Highway 19 North, Suite 500
--------------------------------------
Clearwater, Florida 34621-3442
To Target: Target Stores
33 South Sixth Street
Minneapolis, Minnesota 55402
Attn. Sue Mechelke (CC-36C)
------------- ---
Upon at least ten (10) days' prior written notice, each party shall have the
right to change its address to any other address within the United States of
America.
19. NO WAIVER. Except as expressly set forth in this Agreement, the
---------
failure of either party at any time to require performance by the other party of
any provision of this Agreement shall in no way affect the right of such party
to require performance of that provision. Any waiver by either party of any
breach of any provision of this Agreement shall not be construed as a waiver of
any continuing or succeeding breach of such provision, a waver of the provision
itself, or a waiver of any right under this Agreement.
20. CONSTRUCTION. The rule of strict construction shall not apply to
------------
this Agreement. This Agreement has been prepared by Target and its professional
advisors and reviewed and modified by the Vendor and its professional advisors.
Target, the Vendor, and their separate advisors believe that this Agreement is
the product of all of their efforts, that it expresses their agreement, and that
it should not be interpreted in favor of or against either Target or the Vendor
merely because of their efforts in preparing it.
21. CAPTIONS, GENDER. NUMBER AND LANGUAGE OF INCLUSION. The captions are
--------------------------------------------------
inserted in this Agreement only for convenience of reference and do not define,
limit, or describe the scope or intent of any provisions of this Agreement.
Unless the context clearly requires otherwise, the singular includes the plural,
and vice versa, and the masculine, feminine, and neuter adjectives include one
another. As used in this Agreement, the word "including" shall mean "including,
but not limited to".
22. EXHIBITS. The following exhibits shall be deemed incorporated into
--------
this Agreement in their entirety:
Exhibit A Sample Request for Services Form
Exhibit B Authorized Services Made for Hire Agreement and Assignment of
Copyright
Exhibit C Confidentiality Agreement
23. COSTS OF LITIGATION. If a dispute should arise relating to the
-------------------
performance of the services to be provided under this Agreement, and should that
dispute result in litigation, the prevailing party shall be entitled to recover
all reasonable costs incurred in the defense or prosecution of the claim,
including, without limitation, court costs and reasonable attorneys' fees.
-6- version 05/12/94
<PAGE>
24. GOVERNING LAW. The validity, performance and construction of this
-------------
Agreement shall be governed and interpreted in accordance with the laws of the
State of Minnesota.
25. ENTIRE AGREEMENT. This Agreement contains the entire understanding
----------------
and agreement between the parties with respect to the subject matter hereof and
supersedes all previous communications, negotiations and agreements, whether
oral or written, between the parties with respect to such subject matter. No
addition to or modifications of this Agreement or waiver of any provisions of
this Agreement shall be binding on either party unless made in writing and
executed by Target.
26. SEVERABILITY/SURVIVAL. Every section, term and provision of this
---------------------
Agreement is severable from the others. Any future determination by a court or
other authority having jurisdiction over the parties or this Agreement that a
particular section, term, or provision of this Agreement is invalid, void,
illegal, or unenforceable shall not affect the validity and enforceability of
the remaining sections, terms, or provisions. The provisions of Sections 8
through 14 and all of the warranties and representations expressly set forth
herein shall survive the termination of this Agreement.
27. EFFECTIVE DATE. For the purposes of this Agreement, the term
--------------
"Effective Date" shall mean the later of the signature dates set forth below.
28. ADDITIONAL OR CONTRARY TERMS AND PROVISIONS, IF ANY. Any additional
---------------------------------------------------
or contrary terms and provisions set forth in a rider dated as of the date of
this Agreement, signed by both parties, and attached hereto shall be
incorporated herein and shall govern over any contrary terms and provisions set
forth above.
29. AUTHORITY. Target and the Vendor each warrant and represent to the
---------
other that the individuals executing this Agreement have the full capacity,
right, power and authority to execute and deliver this Agreement, and all
required actions and approvals therefor have been duly taken and obtained. The
individuals signing this Agreement and all other documents executed or to be
executed pursuant hereto on behalf of any party are and shall be duly authorized
to sign the same on that party's behalf and to bind that party thereto.
IN WITNESS WHEREOF, the parties have each executed this Agreement by their
duly authorized representatives on the date(s) shown below.
VENDOR: TARGET:
INFORMATION MANAGEMENT RESOURCES, DAYTON HUDSON CORPORATION, TARGET
INC. STORES DIVISION
By: /s/ Jeffery Slowgrove By: /s/ Thomas A. Jeffery
--------------------- ---------------------
Name: Jeffery Slowgrove Name: Thomas A. Jeffery
------------------- -------------------
Title: Treasurer Title: Senior Vice President,
----------- Information Services
--------------------
Date: August 9, 1994
--------------
Date: 8/8/94
------
Approved by IMR Legal Dept.
-7- version 05/12/94
<PAGE>
EXHIBIT A
REQUEST FOR SERVICES
RFS NUMBER ________________
VENDOR:__________________________________ DATE OF MASTER AGREEMENT:__________
DATE OF THIS REQUEST FOR SERVICES:_______ CONTRACT NUMBER:______________
The Vendor hereby agrees to provide the following individuals to perform the
Authorized Services described below in accordance with the terms and conditions
of the Master Agreement as amended by this Request for Services.
VENDOR'S REPRESENTATIVE TARGET'S REPRESENTATIVE
ACCOUNT REPRESENTATIVE: PROJECT MANAGER:
Name:__________________________ Name:_____________________________
Title: __________________________ Title: _____________________________
Address:__________________________ Address:_____________________________
__________________________ _____________________________
__________________________ _____________________________
__________________________ _____________________________
Phone #:__________________________ Phone #:_____________________________
Fax #:__________________________ Fax #:_____________________________
AUTHORIZED SERVICES
(Provide a brief description of the project and the services to be performed)
================================================================================
NAMES OF INDIVIDUALS WHOSE SERVICES WILL BE PROVIDED
________________________________________ [_] employee [_] subcontractor
________________________________________ [_] employee [_] subcontractor
________________________________________ [_] employee [_] subcontractor
________________________________________ [_] employee [_] subcontractor
(Indicate whether each individual is the Vendor's W-2 employee or contractor.
A properly executed Work Made for Hire/Assistant of Copyright Agreement must
be delivered to Target before any subcontractor can begin work.)
================================================================================
FEE SCHEDULE: REIMBURSABLE EXPENSES:
(Attach additional sheets if (Attach additional sheets if
necessary.) necessary.)
- --------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS: START DATE AND OTHER
SCHEDULING INFORMATION:
(Attach additional sheets if (Attach additional sheets if
necessary.) necessary.)
================================================================================
<PAGE>
VENDOR:
DAYTON HUDSON CORPORATION, TARGET
________________________________ STORES DIVISION
By: ____________________________ By: ________________________________
Name: _____________________ Name: _________________________
Title: _____________________ Title: _________________________
Date _____________________ Date _________________________
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<PAGE>
EXHIBIT 10.13
BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$5,000,000.00 06-05-1996 02600080333 A100 36 408
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan
or item.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: Information Management Resources, Inc. Lender: BARNETT BANK OF PINELLAS COUNTY
26750 U.S. Highway 19N, #500 P.O. BOX 122880
Clearwater, FL 34621 ST. PETERSBURG, FL 33733-2288
====================================================================================================================================
</TABLE>
THIS BUSINESS LOAN AGREEMENT between Information Management Resources, Inc.
("Borrower") and BARNETT BANK OF PINELLAS COUNTY ("Lender") is made and executed
on the following terms and conditions. Borrower has received prior commercial
loans from Lender or has applied to Lender for a commercial loan or loans or
other financial accommodations, including those which may be described on any
exhibit or schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." Borrower understands and agrees that: (a) in
granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (c) all such Loans shall
be and shall remain subject to the following terms and conditions of this
Agreement.
TERM. This Agreement shall be effective as of June 5, 1996, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to this Business Loan Agreement from
time to time.
Borrower. The word "Borrower" means Information Management Resources, Inc.
CERCLA. The Word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
Collateral. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future, and whether granted in the form of a security interest,
mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge,
lien or title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether created
bylaw, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations and published
interpretations thereof.
Event of Default. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"EVENTS OF DEFAULT."
GAAP. The word "GAAP" means generally accepted accounting principles
consistently applied.
Grantor. The word "Grantor" means and includes without limitation each and
all of the persons or entities granting a Security Interest in any Collateral
for the Indebtedness, including without limitation all Borrowers granting such
a Security Interest.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in connection
with any indebtedness.
Indebtedness. The word "Indebtedness" means and includes without limitation
all Loans, together with all other obligations, debts and liabilities of
Borrower to Lender, or any one or more of them, as well as all claims by
Lender against Borrower, or any one or more of them; whether now existing,
contemporaneously with or hereafter incurred or created and any renewals,
modifications, extensions, substitutions or consolidations thereof, voluntary
or involuntary incurred, secured or unsecured, absolute or contingent,
liquidated or unliquidated; determined or undetermined, whether Borrower may
be liable individually or jointly with others, or primarily or secondarily, or
as guarantor, surety, or otherwise; whether recovery upon the indebtedness may
be or hereafter may become barred by any stature of limitations; and whether
such Indebtedness may be or hereafter may become otherwise unenforceable.
Lender. The word "Lender" means BARNETT BANK OF PINELLAS COUNTY, its
successors and assigns.
Loan. The word "Loan" or "Loans" means and includes any and all loans,
advances, interest, costs, fees, documentary stamp tax and/or intangible
taxes, debts, overdraft indebtedness, leases, drafts, letters of credit,
credit cards, and business services from Lender to Borrower, whether now
existing, contemporaneously with, or hereafter incurred or created and any
renewals, modification, extensions, substitutions or consolidations thereof,
and however evidenced, including without limitation those loans and financial
accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.
Note. The word "Note" means Borrower's promissory note or notes, if any,
evidencing Borrower's Loan obligations in favor of Lender, as well as any
renewal, extension, modification, consolidation, substitute, replacement or
refinancing note or notes therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
interests securing indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either not yet due or being contested
in good faith; (c) liens of materialmen, mechanics, warehousemen, or
carriers, or other like liens arising in the ordinary course of business and
securing obligations which are not yet delinquent; (d) purchase money liens
or purchases money security interests upon or in any property acquired or held
by Borrower in the ordinary course of business to secure indebtedness
outstanding on the date of this Agreement or permitted to be incurred under
the paragraph of this Agreement titled "Indebtedness and Liens"; (e) liens
and security interests which, as of this Agreement, have been disclosed to and
approved by the Lender
<PAGE>
06-05-96 BUSINESS LOAN AGREEMENT Page 2
Loan No 02600080333 (Continued)
================================================================================
in writing; and (f) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
net value of Borrower's assets.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the indebtedness.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements, understandings
or other agreements, whether created by law, contract, or otherwise,
evidencing, governing, representing, or creating a Security Interest.
Security Interest. The words "Security Interest" mean and include without
limitation any type of collateral security, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt, lien
or title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether created by
law, contract, or otherwise.
SARA. The word "SARA" means the Superfund Amendments and Reauthorization Act
of 1986 as now and hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the Initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender in form satisfactory to
Lender the following documents for the Loan: (a) the Note, (b) Security
Agreements granting to Lender security interests in the Collateral, (c)
Financing Statements perfecting Lender's Security Interests; (d) evidence of
insurance as required below; and (e) any other documents required under this
Agreement or by Lender or its counsel, including without limitation any
guaranties described below.
Borrower's Authorization. Borrower shall have provided in form and substance
satisfactory to Lender properly certified, resolutions, duly authorizing the
execution and delivery of this Agreement, and Note and the Related Documents,
and such other authorizations and other documents and instruments as Lender or
its counsel, in their sole discretion, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in
this Agreement or any Related Document.
Representation and Warranties. The representations and warranties set forth
in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and of all times any indebtedness exists:
Organization. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the state of Borrower's
incorporation and is validly existing and in good standing in all states in
which Borrower is doing business. Borrower has the full power and authority
to own its properties and to transact the businesses in which it is presently
engaged or presently proposes to engage. Borrower a[missing text] duly
qualified as a foreign corporation and is in good standing in all states in
which the failure to so qualify would have a material adverse effect to its
business or financial condition.
Authorization. The execution, delivery, and performance of this Agreement and
all Related Documents by Borrower, to the extent to be executed, delivered or
performed by Borrower, have been duly authorized by all necessary action by
Borrower; do not require the consent or approval of any other person,
regulatory authority or governmental body; and do not conflict with, result in
a violation of, or constitute a default under (a) any provision of its
articles of incorporation or organization, or bylaws, or any agreement or
other instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower.
Financial Information. Each financial statement of Borrower and each
information, exhibit or report supplied to Lender by Borrower, its agents or
accountants truly and completely disclosed Borrower's financial condition as
of the date of the statement in accordance with GAAP, and there has been no
material adverse change in Borrower's financial or business condition or
operations subsequent to the date of the most recent financial statement
supplied to Lender and none are imminent or threatened. Borrower has no
material contingent obligations except as disclosed in such financial
statements. Borrower acknowledges and agrees that Lender is relying on all
such financial information in entering into, continuing, renewing or extending
any Loan.
Legal Effect. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not presently
due and payable, Borrower owns and has good title to all of Borrower's
properties free and clear of all Security Interests, and has not executed any
security documents or financing statements relating to such properties. All
of Borrower's properties are titled in Borrower's legal name, and Borrower has
not used, or filed a financing statement under, any other name for at least
the last five (5) years. Additionally, Borrower and Borrower's real and
personal properties comply fully with all laws, ordinances, statutes, codes
and requirements of the Americans with Disabilities Act of 1990.
Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the 'CERCLA," "SARA," the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq.,, or
other applicable state or Federal laws, rules, or regulations adopted pursuant
to any of the foregoing. Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (a) During the period of
Borrower's ownership, lease or use of any real or personal properties and the
Collateral, there has been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any hazardous waste or
substance by any person on, under, or about any of the properties, (b)
Borrower has no knowledge of, or reason to believe that there has been (i) any
use, generation, manufacture, storage, treatment, disposal, release, or
threatened release of any hazardous waste or substance by any prior owners or
occupants
<PAGE>
06-05-96 BUSINESS LOAN AGREEMENT Page 3
Loan No. 02600080333 (Continued)
================================================================================
of any of the properties or the Collateral, or (ii) any actual or threatened
litigation or claims of any kind by any person relating to such matters, (c)
neither Borrower nor any tenant, contractor, agent or other authorized user of
any of the properties or the Collateral shall use, generate, manufacture,
store, treat, dispose of, or release any hazardous waste or substance on,
under, or about any of the properties or the Collateral, any such activity
shall be conducted in compliance with all applicable federal, state, and local
laws, regulations, and ordinances, including without limitation those laws,
regulations and ordinances described above. Borrower authorizes Lender and its
agents to enter upon the properties to make such inspections and tests as
Lender may deem appropriate to determine compliance of the properties with
this section of the Agreement. Any inspections or tests made by Lender shall
be a Borrower's expenses and for Lender's purposes only and shall not be
construed to create any responsibility or liability on the part of Lender to
Borrower or to any other person. The representations and warranties contained
herein are based on Borrower's due diligence in investigating the Collateral
and the properties for hazardous wastes and substances. Borrower hereby (a)
releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes liable for cleanup or other costs
under any such laws, and (b) agrees to fully and promptly pay, perform,
discharge and defend, indemnify and hold harmless Lender against any and all
claims, orders, demands, causes of action, proceedings, judgments, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release occurring prior to Borrower's
ownership or interest in the properties or the Collateral, whether or not the
same was or should have been known to Borrower. The provisions of this section
of the Agreement, including the obligation to indemnify, shall survive the
payment of the indebtedness and the termination or expiration of this
Agreement and shall not be affected by Lender's acquisition of any interest in
any of the properties, whether by foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other has occurred which may
materially adversely affect Borrower's financial condition or properties,
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all tax returns and reports of
Borrower that are or were required to be filed, and all taxes, assessments and
other governmental charges have been paid in full, except those presently
being or to be contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided.
Lien Property. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of Borrower's Loan and
Note, that would be prior or that may in any way be superior to Lender's
Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note and Security Agreements directly or
indirectly securing repayment of Borrower's Loan and Note are binding upon
Borrower as well as upon Borrower's successors, representatives and assigns,
and are legally enforceable in accordance with their respective terms.
Permits. Borrower possesses and will continue to possess all permits,
licenses, copyrights, trademarks, trade names, patents and rights thereto to
conduct its business and its business does not conflict or violate any valid
rights of others with respect to the foregoing.
Commercial Purposes. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes and will not purchase or carry margin
stock (within the meaning of Regulations G, T and U of the Board of Governors
of the Federal Reserve System).
Employee Benefit Plans. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined in ERISA) has occurred with respect to any
such plan, (ii) Borrower has not withdrawn from any such plan or initiated
steps to do so, and (iii) no steps have been taken to terminate any such plan.
Location of Borrower's Offices and Records. The chief place of business of
Borrower and the office or offices where Borrower keeps its records concerning
the Collateral is located at 26750 U.S. Highway 19 N, #500, Clearwater, FL
34621.
Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all information
hereafter furnished by or on behalf of Borrower to Lender will be, true and
accurate in every material respect on the date as of which such information is
dated or certified; and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading.
Survival of Representations and Warranties. Borrower understands and agrees
that Lender, without independent investigation, is relying upon the above
representations and warranties in making the above referenced Loan to
Borrower. Borrower further agrees that the foregoing representations and
warranties shall be continuing in nature and shall remain in full force and
effect until such time as Borrower's Indebtedness shall be paid in full, or
until this Agreement shall be terminated in the manner provided above,
whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Deposit Accounts. Maintain its primary banking accounts with Lender.
Litigation. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all litigation and claims
and all threatened litigation and claims affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or the
financial condition of any Guarantor.
Updates. Promptly inform Lender in writing of details of all litigation,
legal or administrative proceedings, investigation or other action of similar
nature, pending or threatened against Borrower, at any time during the term of
this Agreement, which in part or in whole may or will render any of the above
representations and warranties no longer true, accurate and correct in each
and every respect. Borrower will bring such details to Lender's attention, in
writing, within thirty (30) days from the date Borrower acquires knowledge of
same.
Financial Records. Maintain its books and records in accordance with GAAP and
permit Lender to examine and audit Borrower's books and records at all
reasonable times.
Financial Statements. Furnish Lender with, as soon as available, but in no
event later than ninety (90) days after the end of each fiscal year,
Borrower's balance sheet and income statement, statement of cash flow and
notes to statements for the year ended, audited by a certified public
accountant satisfactory to Lender, and, as soon as available, but in no event
later than thirty (30) days after the end of each fiscal quarter, Borrower's
balance sheet and profit and loss statement for the period ended, prepared and
certified as correct to the best knowledge and belief by Borrower's chief
financial officer or other officer or person acceptable to Lender. All
financial reports required to be provided under this Agreement
<PAGE>
06-05-96 BUSINESS LOAN AGREEMENT Page 4
Loan No. 02600080333 (Continued)
================================================================================
shall be prepared in accordance with GAAP and certified by Borrower as being
true and correct. Provide to Lender annually for each individual Borrower and
Guarantor, if any, signed and dated personal financial statements on Lender's
forms and, immediately after filing, the personal income tax return filed for
the past calendar year. Simultaneously with the financial information required
herein of Borrower, the same information of all corporate or partnership
guarantors, if any, prepared in accordance with GAAP.
Promptly after the furnishing thereof, provide Lender with copies of any
statement or report furnished to any other party pursuant to the terms of any
indenture, loan, credit, or similar agreement and not otherwise required to be
furnished to Lender pursuant to any other section of this Agreement.
Promptly after the sending or filing thereof, provide Lender with copies of
all proxy statements, financial statements and reports which Borrower sends to
its stockholders, and copies of all regular, periodic, special reports, and
all registration statements which Borrower files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange.
Additional Information. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables, inventory
schedules, budgets, forecasts, tax returns, and other reports with respect to
Borrower's financial condition and business operations as Lender may request
from time to time.
Financial Covenants and Ratios. Comply with the following covenants and
ratios:
Tangible Net Worth. Maintain a minimum Tangible Net Worth of not less
than:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
As of 12/31/96 $4,500,000.00
Leverage Ratio. Maintain a ratio of Total Liabilities to Tangible Net Worth of less than:
Period Ratio
------ -----
At all Times 1.75 to 1.00
Current Ratio. Maintain a ratio of Current Assets to Current Liabilities in excess of:
Period Ratio
------ -----
At all Times 1.15 to 1.00
Cash Flow Requirements. Maintain Cash Flow at not less than the following level:
Period Requirement
------ -----------
As of 12/31/96 1.25 to 1.00
</TABLE>
For purposes of this Agreement and to the extent the following terms are
utilized in this Agreement, the term "Tangible Net Worth" shall mean
Borrower's total assets excluding all intangible assets determined in
accordance with GAAP (i.e. goodwill, trademarks, patents, copyrights,
organizational expenses, and similar intangible items, but including
leaseholds and leasehold improvements at book value) of Borrower less total
Debt. The "Debt" shall be determined in accordance with GAAP. The term
"Subordinated Debt" shall mean indebtedness and liabilities of Borrower which
have been subordinated by written agreement to indebtedness owned by Borrower
to Lender in form and substance acceptable to Lender. The term "Working
Capital" shall mean Borrower's current assets at lower of cost or current
market value less amounts due from any officer, director, shareholder or any
entity related by common control or ownership, excluding prepaid expenses,
less Borrower's current liabilities. The term "Liquid Assets" shall mean
Borrower's cash on hand, marketable securities, bank deposits and Borrower's
receivables. The term "Cash Flow" shall mean net income after taxes, and
exclusive of extraordinary gains and income, plus depreciation and
amortization. The term "Senior Debt" shall mean Debt less Subordinated Debt.
The term "Capital Funds" shall mean Tangible Net Worth plus Subordinated Debt.
Except as provided above, all computations made to determine compliance with
the requirements contained in this paragraph shall be made in accordance with
GAAP and certified by Borrower as being true and correct.
Insurance. Maintain fire and other risk insurance, business interruption,
theft, public liability insurance, and such other insurance in such amounts
and covering such risks as are usually covered by businesses engaged in the
same or a similar business and similarly situated with respect to Borrower's
properties and operations, in form, coverages and with insurance companies
reasonably acceptable to Lender. Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates of insurance
in form satisfactory to Lender, including stipulations that coverages will not
be cancelled or diminished without at least thirty (30) days' prior written
notice to Lender. In connection with all policies covering assets in which
Lender holds or is offered a security interest for the Loans, Borrower will
provide Lender with such loss payable or other endorsements as Lender may
require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the policy; (d) the
properties insured; (e) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those values; and
(f) the expiration date of the policy. In addition, upon request of Lender
(however not more often than annually), Borrower will have an independent
appraiser satisfactory to Lender determine, as applicable, the actual cash
value or replacement cost of any Collateral. The cost of such appraisal shall
be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, on Lender's forms, and in the
amount and by the guarantor named below:
Guarantor Amount
--------- ------
Satish K. Sanan Unlimited
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection
with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
<PAGE>
06-05-96 BUSINESS LOAN AGREEMENT Page 5
Loan No 02600080333 (Continued)
================================================================================
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness
and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon
Borrower or its properties, income, or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might become a
lien or charge upon any of Borrower's properties, income, or profits.
Provided however, Borrower will not be required to pay and discharge any such
assessment, tax, charge, levy, lien or claim so long as (a) the legality of
the same shall be contested in good faith by appropriate proceedings, and (b)
Borrower shall have established on its books adequate reserves with respect to
such contested assessment, tax, charge, levy, lien, or claim in accordance
with generally accepted accounting practices. Borrower, upon demand of
Lender, will furnish to Lender evidence of payment of the assessments, taxes,
charges, levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender at any time a written statement of
any assessments, taxes, charges, levies, liens and claims against Borrower's
properties, income, or profits.
Performance. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in the Related Documents in a timely manner,
and promptly notify Lender if Borrower learns of the occurrence of any event
which constitutes an Even of Default under this Agreement or under any of the
Related Documents.
Operations. Substantially maintain its present executive and management
personnel; conduct its business affairs in a reasonable and present manner and
in compliance with all applicable federal, state and municipal laws,
ordinances, rules and regulations respecting its properties, charters,
businesses and operations, including without limitation, compliance with the
Americans With Disabilities Act and with all minimum funding standards and
other requirements of ERISA and other laws applicable to Borrower's employee
benefit plans, and continue to engage in an efficient and economical manner in
a business of the same general type as now conducted by it, provided, however,
that nothing contained in this Agreement shall prevent Borrower from
discontinuing any part of Borrower's business, if in Borrower's opinion, this
discontinuance is in the best interests of Borrower and not disadvantageous to
Lender.
Maintenance. Maintain, keep and preserve Borrower's buildings and properties
and every part thereof in good repair, working order, and condition and from
time to time make all needful and proper repairs, renewals, replacements,
additions, betterments and improvements thereto, so that at all times the
efficiency thereof shall be fully preserved and maintained, ordinary wear and
tear excepted.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts and records and
to make copies and memoranda of Borrower's books, accounts and records. If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free access to
such records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower's expense, and discuss the affairs,
finances and accounts of Borrower with Lender.
Compliance Certificate. Unless waived in writing by Lender, provide Lender
upon Lender's request a compliance certificate executed by Borrower's chief
financial officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying that, as
of the date of the certificate, no default or Event of Default has occurred,
or has occurred and is continuing under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects
with all environmental protection federal, state and local laws, statutes,
regulations and ordinances; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part or on the part of
any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of
a permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or
not there is damage to the environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing statements,
instruments, documents and other agreements as Lender or its attorneys may
reasonably request to evidence and secure the Loans and to perfect all
Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
Indebtedness and Liens. (a) Except for trade debt incurred in the normal
course of business, and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness of borrowed money, including capital
leases, (b) sell, transfer, mortgage, assign, pledge, lease, grant a security
interest in or encumber any of Borrower's assets, or (c) sell with recourse
any of Borrower's accounts, except to Lender and except for Borrower's
accounts as allowed as a permitted lien.
Continuity of Operations. (a) Engage in any business activities substantially
different than those in which Borrower is presently engaged, (b) cease
operations, wind up, liquidate, merge, reorganize, transfer, acquire or
consolidate with any other entity, change ownership, dissolve, transfer or
sell or acquire Collateral or assets out of the ordinary course of business,
or (c) pay, declare, set aside, or allocate any dividends in cash or other
property, on Borrower's stock (however, if Borrower is a Subchapter S
corporation, Borrower may make distributions to each shareholder which is
necessary to pay for any personal income tax liability incurred by that
shareholder as a direct result of profits generated by the Subchapter S
corporation) or purchase or retire any of Borrower's outstanding shares or
alter or amend Borrower's capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any interest in any other enterprise
or entity, or (c) assume, endorse, be liable for or incur any agreement or
obligation as surety or guarantor.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower whether under this Agreement or under any other agreement, Lender shall
have no obligation to make Loan Advances or to disburse Loan proceeds if: (a)
Borrower or any Guarantor is in default under the terms of this Agreement or any
of the Related Documents or any other agreement that Borrower or any Guarantor
has with Lender; (b) Borrower or any Guarantor becomes insolvent, files a
petition in bankruptcy or similar proceeding, or is adjudged a bankrupt; (c)
there occurs a material adverse change in Borrower's financial condition, in the
financial condition of any Guarantor, or in the value of any Collateral securing
any Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit, modify
or revoke such Guarantor's guaranty of the Loan or any other loan with Lender;
or (e) Lender in good faith deems itself insecure even though no Event of
Default shall have occurred.
ADDITIONAL ADVANCES. Advances to affiliates will not exceed $700,000.00 in
Aggregate for year end 12/31/96.
<PAGE>
06-05-96 BUSINESS LOAN AGREEMENT Page 6
Loan No 02600080333 (Continued)
================================================================================
RIGHT OF SETOFF. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge, withdraw or setoff all sums owing on this Agreement
against any and all the accounts set forth below in the Accounts section without
prior demand or notice to Borrower.
ACCOUNT. Borrower grants to Lender a contractual possessory security interest
in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
of Borrower's right, title and interest in and to, Borrower's deposits, accounts
(whether checking, savings, or some other account), or securities now or
hereafter in the possession of or on deposit with Lender or with any Barnett
Banks, Inc. affiliate or subsidiary including without limitation all accounts
held jointly with someone else and all accounts Borrower may open in the future,
excluding however all IRA, Keogh, and trust accounts.
EVENTS OF DEFAULT. If any of the following events shall occur each shall
constitute an Event of Default under this Agreement:
Default on Indebtedness. An event of default as defined in any Loan or Note
or demand for full payment of any Loan or Note.
Other Defaults. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition contained
in this Agreement or in any of the Related Documents, or failure of Borrower
to comply with or to perform any other term, obligation, covenant or condition
contained in any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation, or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any Security
Agreement to create a valid and perfected Security Interest) at any time and
for any reason.
Insolvency. The dissolution or termination of Borrower's existence as a going
business, insolvency, appointment of a receiver for any part of Borrower's
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
Creditor Proceedings. commencement of foreclosure proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any
creditor of Borrower, any creditor of any grantor of collateral for the Loan.
This includes a garnishment, attachment, or levy on or of any of Borrower's
deposit accounts with Lender.
Forfeiture. The filing of formal charges under any federal or state law
against any Borrower which forfeiture is the penalty. However, this Event of
Default shall not apply if there is a good faith dispute by Borrower as to the
validity or reasonableness of the claim which is the basis of the proceeding,
and if Borrower gives Lender written notice of the proceeding and furnishes
reserves or a surety bond for the proceeding satisfactory to Lender.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the indebtedness or such Guarantor dies or becomes
incompetent.
Insecurity. Lender, in good faith, deems itself insecure.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate, and, at Lender's
option, all Indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an Event of Default
of the type described in the "Insolvency" subsection above, such acceleration
shall be automatic and not optional. In addition, Lender shall have all the
rights and remedies provided in the Related Documents or available at law, in
equity, or otherwise. Except as may be prohibited by applicable law, all of
Lender's rights and remedies shall be cumulative and may be exercised singularly
or concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take
action to perform an obligation of Borrower or of any Grantor shall not affect
Lender's right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Agreement and supersedes all prior understandings and
correspondence, oral or written, with respect to the subject matter hereof.
No alteration of or amendment to this Agreement shall be effective unless
given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.
Continuing Agreement. This Agreement is a continuing agreement and shall
continue in effect notwithstanding that from time to time, no indebtedness may
exist.
Consent to Loan Participation. Borrower agrees and consents to Lender's sale
or transfer, whether now or later, of one or more participation interests in
the Loans to one or more purchasers, whether related or unrelated to Lender,
Lender may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Lender may
have about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests will be considered as the absolute owners of such
interests in the Loans and will have all the rights granted under the
participation agreement or agreements governing the sale of such participation
interests. Borrower further waives all rights of offset or counterclaim that
it may have now or later against Lender or against any purchaser of such a
participation interest and unconditionally agrees that either Lender or such
purchaser may enforce Borrower's obligation under the Loans irrespective of
the failure or insolvency of any holder of any interest in the Loans.
Borrower further agrees that the purchaser of any such participation interests
may enforce its interests irrespective of any personal claims or defenses that
Borrower may have against Lender.
<PAGE>
06-05-96 BUSINESS LOAN AGREEMENT Page 7
Loan No 02600080333 (Continued)
===============================================================================
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's out-
of-pocket expenses, including reasonable attorneys' fees, incurred in
connection with the preparation, execution, enforcement and collection of this
Agreement or in connection with the Loans made pursuant to this Agreement.
Lender may pay someone else to help collect the Loans and to enforce this
Agreement, and Borrower will pay that amount. This includes, subject to any
limits under applicable law, Lender's reasonable attorneys' fees and Lender's
legal expenses, whether or not there is a lawsuit, including reasonable
attorneys' fees for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated post-
judgment collection services. Borrower also will pay any court costs, in
addition to all other sums provided by law.
Notices. All notices required to be given under this Agreement shall be given
in writing and shall be effective when actually delivered or when deposited
with a nationally recognized overnight courier or deposited in the United
States registered or certified mail, first class, postage prepaid, return
receipt requested, addressed to the party to whom the notice is to be given at
the address shown above; notification by facsimile is specifically not
allowed. Any party may change its address for notices under this Agreement by
giving formal written notice to the other parties, specifically that the
purpose of the notice is to change the party's address. To the extent
permitted by applicable law, if there is more than one Borrower, notice to any
Borrower will constitute notice to all Borrowers. For notice purposes,
Borrower agrees to keep Lender informed at all times of Borrower's current
address(es).
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in
all other respects shall remain valid and enforceable.
Successors and Assigns. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
Survival. All warranties, representations, and covenants made by Borrower in
this Agreement or in any certificate or other instrument delivered by Borrower
to Lender under this Agreement shall be considered to have been relied upon by
Lender and will survive the making of the Loan delivery to Lender of the
Related Documents, regardless of any investigation made by Lender or on
Lender's behalf.
Time. Time is of the essence in the performance of this Agreement.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate
as a waiver of such right or any other right. A waiver by Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Grantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting
of such consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required, and in all
cases such consent may be granted or withheld in the sole discretion of
Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
JUNE 5, 1996.
BORROWER:
Information Management Resources, Inc.
By:/s/ Satish K. Sanan
-----------------------------------
Satish K. Sanan, President
LENDER:
BARNETT BANK OF PINELLAS COUNTY
By:/s/
-----------------------------------
Authorized Officer
<PAGE>
REVOLVING LINE OF CREDIT
PROMISSORY NOTE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$5,000,000 06-05-96 02600080333 A100 36 408
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: Information Management Resources, Inc. Lender: BARNETT BANK OF
26750 U.S. Highway 19 N, Suite 500 PINELLAS COUNTY
Clearwater, FL 34621 P.O. Box 12288
ST. PETERSBURG, FL 3733-1288
====================================================================================================================================
Principal Amount: $5,000,000.00 Date of Note: June 5, 1996
</TABLE>
PROMISE TO PAY. Information Management Resources, Inc., jointly and severally
if more than one ("Borrower"), promises to pay to BARNETT BANK OF PINELLAS
COUNTY ("Lender"), or order, in lawfully obtained money of the United States of
America, on demand, the principal amount of Five Million & 00/100 dollars
($5,000,000.00) or so much as may be outstanding, together with interest on the
unpaid balance of principal advanced from the date(s) of disbursement until paid
in full as set forth herein. The principal amount of this Note may be advanced,
paid and readvanced in full or part during the term of this Note provided no
event of default or demand for payment exists hereunder.
PAYMENT. Borrower will pay this loan immediately Lender's demand. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due as
of each payment date, beginning July 5, 1996, with all subsequent interest
payments to be due on the same day of each month after that. Interest on this
Note is computed on a 365/360 simple interest basis; that is, by applying the
ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the
principal balance is outstanding. This Note is due and payable on demand and
subject to being called at any time upon actual demand by Lender. The inclusion
of an interest payment schedule is merely to provide terms for payment in the
absence of actual demand and does not affect or impair Lender's absolute right
to demand payment of this Note at any time. Borrower agrees that Lender may
delay demand until, or make demand at anytime before, any interest payment date.
Borrower will pay Lender at Lender's address shown above or at such other place
as Lender may designate in writing. Payments shall be allocated between
principal, interest, costs, fees, if any, in the discretion of Lender. Any
payment to be debited from Borrower's designated account will be debited on the
scheduled due date; however, if the scheduled due date is on a weekend or a
holiday, the payment will be debited on the next non-weekend/holiday day.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the Libor
Rate (as defined herein) (the "Index"). The index is not necessarily the lowest
rate charged by Lender on its loans. If the Index becomes unavailable during
the term of this loan, Lender may designate a substitute index after notice to
Borrower. Borrower understands that Lender may make loans based on other rates
as well. The interest rate change will not occur more often than each 1 month
period. The interest rate shall change on the first Business Banking Day of
each Interest Period. For purposes hereof, the following terms shall have the
following meanings: (a) "Business Banking Day" shall mean each day other than a
Saturday, a Sunday or any holiday on which commercial banks in Jacksonville,
Florida are closed for business; (b) "Interest Period" shall mean (i) initially,
the period commencing the Date of Note and ending the day immediately preceding
the first Interest Rate Change Date or (ii) subsequently, the period commencing
any Interest Rate Change Date and ending on the day immediately preceding the
next subsequent Interest Rate Change Date; (c) "Interest Rate Change Date" shall
mean the first Business Banking Day of each 1 month period; (d) "Libor Rate"
shall mean the offered rate for deposits in United States in the London
Interbank market for a 1 month period which appears on the Reuters Screen LIBO
page as of 11:00 a.m. (London time) on the day that is two London Banking Days
preceding the first Business Banking Day of each Interest Period. If at least
two such rates appear on the Reuters Screen LIBO page, the rate will be the
arithmetic mean of such offered rates; (e) "London Banking Day" shall mean each
day other than a Saturday, a Sunday or any holiday on which commercial banks in
London, England are closed for business. The interest rate to be applied to the
unpaid balance of this Note will be at per annum rate o f1.800 percentage points
over the Index. Lender will tell Borrower the current Index rate upon
Borrower's request. NOTICE: Under no circumstances will the effective rate of
interest on this Note be more than the maximum rate allowed by applicable law.
Upon demand for payment of this Note, the interest rate on this
<PAGE>
Note to be applied to the unpaid balance of principal, unpaid accrued interest
costs an fees, to be applicable until paid in full, will be the highest interest
rate permitted by applicable law.
PREPAYMENT. Borrower may pay all or a portion of the amount owed earlier than
it is due. Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower's obligation to continue to make payments of
accrued unpaid interest. Rather, they will reduce the principal balance due.
LOAN FEE. A non-refundable, non-prorated loan fee of .250% of the original
principal amount may be charged at Lender's discretion each annual anniversary
from the Date of Note and thereafter. The loan fee may be modified from time to
time by Lender without prior or concurrent notice to Borrower.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $100.00,
whichever is greater.
DEFAULT. At the option of Lender, and without any way limiting its right to
demand payment in full of this Note if it is due and payable on demand, the Note
shall become immediately due and payable without prior notice or demand upon the
occurrence of any of the following events of default: (a) Borrower fails to
make any payment when due; (b) Borrower breaks any written promise Borrower has
made to Lender, or Borrower fails to perform promptly at the time and strictly
in the manner provided in this Note or in any written agreement related to this
Note, or in any other written agreement or loan Borrower has with Lender,
contingent or absolute, due or to become due, now or hereafter existing; (c) A
breach of any term or condition of any security agreement, pledge agreement,
mortgage loan agreement or any other agreement related to or securing this Note
regardless if said document is executed by Borrower, any guarantor or a third-
party not liable for this Note, upon which a cure period, if any, contained in
said agreement has expired; (d) suspension, liquidation, sale or transfer of
Borrower's business or assets; (e) Any representation, warranty, statement or
report made or furnished to Lender by Borrower or on Borrower's behalf is false,
or misleading in any material respect; (f) Borrower becomes insolvent, a
receiver is appointed for any part of Borrower's property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced either
by Borrower or against Borrower under any bankruptcy or insolvency laws; (g) any
creditor tries to take any of Borrower's property on or in which Lender has a
lien or security interest. This includes a garnishment of any of Borrower's
accounts with Lender; (h) Failure of Borrower to furnish Lender within thirty
(30) days after written request by Lender, current financial statements,
including income tax returns, in form satisfactory to Lender or to permit
inspection of any of Borrower's books or records; (i) The issuance of any tax
levy or lien against Borrower's failure to pay, withhold, collect or remit any
tax when assessed or due; (j) The filing of formal charges under any federal or
state law against Borrower or Borrower's assets which forfeiture is a potential
penalty; (k) Any of the events described in this default section occurs with
respect to any guarantor of this Note; (l) Lender in good faith deems itself
insecure.
LENDER'S RIGHTS. If this Note is due and payable on demand it is subject to
being called at any time upon actual demand by Lender. The inclusion of a
payment schedule is merely to provide terms for payment in the absence of actual
demand and does not effect or impair Lender's absolute right to demand payment
of this Note at any time. Borrower agrees that Lender may delay demand until,
or make demand at anytime before, any payment date specified in the demand
payment section of this Note. Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid interest, costs and
fees immediately due, without notice, and then Borrower will pay that amount.
Upon default, or if this Note is not paid at the final maturity, Lender, at its
option, may add any unpaid accrued interest, costs and fees to principal and
such sum will bear interest therefrom until paid at final maturity, Lender, at
its option, may add any unpaid accrued interest, costs and fees to principal and
such sum will bear interest therefrom until paid, at the rate provided in this
Note but in no event at an effective total interest rate on this Note greater
than the rate permitted by applicable law. Lender may hire or pay someone else
to help collect this Note if Borrower does not pay. Borrower also will pay
Lender the amount of these costs and expenses, which includes subject to any
limits under applicable law, Lender's reasonable attorneys' fees and Lender's
legal expenses whether or not there is a lawsuit, including reasonable
attorneys' fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums
provided by law. This Note shall be governed by and construed in accordance
with the laws of the State of Florida.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
-2-
<PAGE>
RIGHT OF SETOFF. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge, withdraw or setoff all sums owing on this Note
against any and all the accounts set forth below in the Accounts section without
prior demand or notice to Borrower.
ACCOUNTS. Borrower grants to Lender a contractual possessory security interest
in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
of Borrower's right, title and interest in and to, Borrower's deposits, accounts
(whether checking, savings, or some other account), or securities now or
hereafter in the possession of or on deposit with Lender or with any Barnett
Banks, Inc. affiliate or subsidiary including without limitation all accounts
held jointly with someone else and all accounts Borrower may open in the future,
excluding however all IRA, Keogh, and trust accounts.
GARNISHMENT. Borrower consents to the issuance of a continuing writ of
garnishment or attachment against Borrower's disposable earnings, in accordance
with Section 222.11, Florida Statutes, in order to satisfy, in whole or in part,
any money judgment entered in favor of Lender.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions from Borrower's accounts may be requested
orally or in writing by Borrower or by an Authorized person. Lender may, but
need not, require that all oral requests be confirmed in writing. Borrower
agrees to be liable for all sums either: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of Borrower's
accounts with Lender. The unpaid balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to advance
funs under this Note if: (a) Borrower or any guarantor is in default under the
terms of this Note or any agreement that Borrower or any guarantor has with
Lender, including any agreement made in connection with the signing of this
Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (e) Lender in good faith deems itself
insecure under this Note or any other agreement between Lender and Borrower.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Lender's right to
declare payment of this Note on its demand. If any part of this Note cannot be
enforced, this fact will not affect the rest of the Note. Borrower does not
agree or intend to pay, and Lender does not agree or intend to contract for,
charge, collect, take reserve or receive (collectively referred to herein as
"charge or collect"), any amount in the nature of interest or in the nature of a
fee for this loan, which would in any way or event (including demand,
prepayment, or acceleration) cause Lender to charge or collect more for this
loan than the maximum Lender would be permitted to charge or collect by federal
law or the law of the State of Florida (as applicable). Any such excess
interest or unauthorized fee shall, instead of anything stated to the contrary,
be applied first to reduce the principal balance of this loan, and when the
principal has been paid in full, be refunded to Borrower. Lender may delay or
forgo enforcing any of its rights or remedies under this Note without losing
them. Borrower and any other person who signs, guarantees or endorses this
Note, to the extent allowed by law, waive presentment, demand for payment,
protest and notice of dishonor and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note.
Upon any change in the terms of this Note, and unless otherwise expressly stated
in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All rights,
powers, privileges and immunities herein granted to Lender shall extend to its
successors and assigns and any other legal holder of this Note. All rights,
powers, privileges and immunities of Borrower hereunder may not in any way be
assigned, transferred or sold. Lender at any time is authorized to correct
patent errors herein. All such parties agree that Lender may renew, modify,
substitute, consolidate or extend (repeatedly an for any length of time) this
loan, or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender's security interest in the collateral; and take
any other action deemed necessary by Lender without the consent of or notice to,
acknowledgment or agreement by anyone. All such parties also agree that Lender
may modify this loan without the consent of or notice to anyone other than the
party with whom the modification is made. This Note constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Note and supersedes all prior understandings and correspondence, oral or
written, with respect to the subject matter hereof. No alteration of or
amendment to this Note shall be effective unless given in writing and signed by
Lender. Borrower acknowledges that this Note evidences a loan made primarily
for business, commercial or agricultural purposes and not primarily for
personal, family or household purposes. When this Note becomes due, by default,
demand or maturity, Lender may, at its option, demand, sue for, collect, or make
any compromise or settlement it deems desirable with reference to any collateral
pledged or granted for this Note. Lender shall not be bound to take any steps
necessary to preserve any rights in any such collateral or of any income of any
such on the collateral as to the preservation of any rights pertaining to any
such collateral beyond safe custody. Borrower authorizes Lender to exchange
Lender's deposit, credit and borrowing information about
-3-
<PAGE>
Borrower with third parties. Borrower agrees to indemnify and hold Lender
harmless against liability for the payment for documentary stamp and intangible
taxes (including interest and penalties) (if applicable), which may be
determined to be payable with respect to this transaction. If this Note is
renewed, modified, extended, substituted or consolidated, although Lender is
under no duty to do so, Lender may, without Borrower's or any guarantor's
consent: (a) advance the maximum amount of principal then available the day
prior to said occurrence, (b) deposit said amount in Borrower's account with
Lender the day priro to said occurrence, (c) withdraw said amount from
Borrower's account with Lender the day after said occurrence, and (d) apply said
amount to the principal amount then outstanding. Said procedures are intended to
minimize Borrower's documentary stamp and/or intangible tax liabilities (if
applicable) although Borrower will be fully responsible for accured interest
amount owed to Lender, then Borrower acknowledges and agrees that there are no
claims, setoffs, avoidances, counterclaims or defenses or rights to claims,
setoffs, avoidances, counterclaims or defenses to enforcement of this Note.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
Information Management Resources, Inc.
By: \s\Satish K. Sanan
------------------
Satish K. Sanan, President
================================================================================
THIS INSTRUMENT WAS MADE, EXECUTED, AND DELIVERED OUTSIDE THE STATE OF FLORIDA,
AND NO FLORIDA DOCUMENTARY STAMP TAX IS DUE HEREON, IN ACCORDANCE WITH F.A.C.
12B-4.0053(35).
-4-
<PAGE>
STATE OF GEORGIA:
COUNTY OF FULTON
The foregoing instrument has been acknowledged before me on this 5th day of
June, 1996 by Satish K. Sanan, as President of INFORMATION MANAGEMENT RESOURCES,
INC., a Florida corporation on behalf of the corporation, (_______) who is
personally known to me of ( X ) who has provided driver's license as
-----
identification.
My Commission Expires:
(seal)
\s\ Sharon L. Thode
-------------------------------
Notary Public: Sharon L. Thode
Notary Public, Fulton County, Georgia
My Commission Expires April 16, 2002
-5-
<PAGE>
CONTINUING UNLIMITED COMMERCIAL GUARANTY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A100 36 408
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: Information Management Resources, Inc. Lender: Barnett Bank of Pinellas County
26750 U.S. Highway 19 N., #500 P.O. Box 1288
Clearwater, FL 34621 St. Petersburg, FL 33733-2288
Guarantor: Satish K. Sanan
163 Woodcreek Drive N.
Safety Harbor, FL 34695
===========================================================================================
</TABLE>
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, and for the
purpose(s) of inducing BARNETT BANK OF PINELLAS COUNTY ("Lender") to extend,
make, renew, modify and/or continue to extend, make, renew or modify the
Indebtedness (as that term is defined below), Satish K. Sanan ("Guarantor")
absolutely and unconditionally guarantees and promises to pay to Lender or its
order, on demand, in lawfully obtained legal tender of the United States of
America, the Indebtedness of Information Management Resources, Inc. ("Borrower")
to Lender on the terms and conditions set forth in this Guaranty. Under this
Guaranty, the liability of Guarantor is unlimited and the obligations of
Guarantor are continuing.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word "Borrower" means Information Management Resources, Inc.
--------
Guarantor. The word "Guarantor" means Satish K. Sanan.
---------
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for
--------
the benefit of Lender dated June 5, 1996.
Indebtedness. The word "Indebtedness" means and includes any and all of
------------
Borrower's liabilities, obligations debts, and Indebtedness to Lender, as
well now existing, or hereinafter incurred or created and any renewals,
modifications, extensions, substitutions or consolidations thereof,
including, without limitation, all loans, advances, interest, costs,
documentary stamp and/or intangible taxes, debts, overdraft Indebtedness,
letters of credit, credit card Indebtedness, lease obligations, business
services, other obligations and liabilities of Borrower, secured or
unsecured absolute or contingent, liquidated or unliquidated, determined or
undetermined; whether Borrower may be liable individually or jointly with
others, or primarily or secondarily, or as guarantor or, surely; whether
direct or indirect; whether guaranteed or secured; whether recovery on the
Indebtedness may be or may become barred and unenforceable against Borrower
for any reason whatsoever; and whether the Indebtedness arises from
transactions which may be voidable on account of infancy insanity, ultra
vires, or otherwise.
Lender. The word "Lender means BARNETT BANK OF PINELLAS COUNTY, its
------
successors and assigns.
Related Documents. The words "Related Documents" mean and include without
-----------------
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages deed
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
<PAGE>
NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open
and continuous for so long as this Guaranty remains in force. Guarantor
intends to guarantee at all times the performance and prompt payment when
due, whether at maturity or earlier by reason of acceleration or otherwise,
of all Indebtedness.
DURATION OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of any acceptance by Lender, or any notice to
Guarantor or to Borrower, and will continue in full force until all
Indebtedness incurred or contracted before receipt by Lender of any written
notice of revocation shall have been fully and finally paid and satisfied
and all other obligations of Guarantor under this Guaranty shall have been
performed in full. If Guarantor elects to revoke this Guaranty, Guarantor
may only do so in writing. Guarantor's written notice of revocation must be
delivered to Lender at the address of Lender listed above or such other
place as Lender may designate in writing. This Guaranty may be revoked only
with respect to Indebtedness incurred or contracted by Borrower, or
acquired by Lender thirty (30) days or more after the date on which written
notice of revocation is actually received by Lender. No notice of
revocation hereof shall be effective as to any Indebtedness: (a) existing
at the date of receipt of such notice; (b) incurred or contracted by
Borrower, or acquired by Lender, within thirty (30) days after receipt of
such notice; (c) now existing or hereafter created pursuant to or evidenced
by a loan agreement or commitment under which Borrower is or may become
obligated to Lender; or (d) renewals, extensions, consolidations,
substitutions, and refinancings of the foregoing. Any revocation of this
Guaranty by less than all guarantors of the Indebtedness shall not affect
the liability hereunder of the remaining guarantors as to any present or
future transactions or Indebtedness. The death of any guarantor of the
Indebtedness shall not operate as a revocation of liability hereunder of
the estate of any such guarantor as to transactions entered into or
Indebtedness created subsequent to such death until actual receipt by
Lender of written notice of the death of such guarantor. Guarantor waives
notice of revocation given by any other guarantor of the Indebtedness. Any
payment by Guarantor with respect to the Indebtedness guaranteed shall not
reduce the maximum obligation hereunder, unless written notice to that
effect be actually received by Lender at or prior to the time of such
payment. This Guaranty shall bind the estate of Guarantor as to
Indebtedness created both before and after the death or incapacity of
Guarantor, regardless of Lender's actual notice of Guarantor's death.
Subject to the foregoing, Guarantor's executor or administrator or other
legal representative may terminate this Guaranty in the same manner in
which Guarantor might have terminated it and with the same effect. Release
of any other guarantor or termination of any other guaranty of the
Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by lender from any one or more Guarantors
shall not affect the liability of any remaining Guarantors under this
Guaranty. It is anticipated that fluctuations may occur in the aggregate
amount of Indebtedness covered by this Guaranty, and it is specifically
acknowledged and agreed by Guarantor that reductions in the amount of
Indebtedness, even to zero dollars ($0.00), prior to written revocation of
this Guaranty by Guarantor shall not constitute a termination of this
Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,
successors and assigns so long as any of the guaranteed Indebtedness
remains unpaid and even though the Indebtedness guaranteed may from time to
time be zero dollars ($0.00). This Guaranty and Guarantor's obligations
hereunder remains fully enforceable irrespective of any claim, defense or
counterclaim which Borrower may assert on the Indebtedness, including but
not limited to failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction, and
usury, same [SOME ?] of which Guarantor hereby waives along with any
standing by Guarantor to assert any said claim, defense or counterclaim. In
the event that any bankruptcy, insolvency, receivership, or similar
proceeding is instituted by or against Guarantor in the event that
Guarantor becomes insolvent, makes an assignment for the benefit of
creditors, or attempts to effect a composition with creditors, or in the
event of the death of Guarantor, then, at Lender's election, without notice
or demand, the obligations of Guarantor created hereunder shall become due,
payable, and enforceable against Guarantor, whether or not any Indebtedness
is then due and payable.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, without notice or demand and without
lessening Guarantor's liability under this Guaranty, from time to time: (a)
prior to revocation as set forth above, to make one or more additional
secured or unsecured loans to Borrower, to lease equipment or other goods
to Borrower, or otherwise to extend additional credit to Borrower; (b) to
alter, supplement, compromise, modify, renew, extend, terminate,
accelerate, waive or otherwise change one or more times the time for
payment or other terms, conditions or provisions of the Indebtedness or any
part of the Indebtedness, including increases or decreases of the rate of
interest on the Indebtedness; extensions and modifications may be repeated
and may be for longer than the original term; (c) to take and hold security
for the payment of this Guaranty or the Indebtedness, and release,
surrender, deal with, abstain from taking, take,
-2-
<PAGE>
substitute, exchange, enforce, waive, fail or decide not to perfect, and
release any such security, with or without the substitution of new
collateral and without application of any security proceeds to the
Indebtedness; (d) to release, substitute, add, agree not to sue, or deal
with any one or more of Borrower's sureties, endorsers, or other guarantors
on any terms or in any manner Lender may chose; (e) to determine how, when
and what application of payments and credits shall be made on the
Indebtedness; (f) to apply such security and direct the order or manner of
sale thereof, including without limitation, any nonjudicial sale permitted
by the terms of the controlling security agreement or deed of trust, as
Lender in its discretion may determine; (g) to sell, transfer, assign, or
grant participations in all or any part of the Indebtedness; (h) to assign
or transfer this Guaranty in whole or in part; (i) to not resort to,
enforce or exhaust any of Lender's remedies against Borrower or any other
party who may be liable for payment of the Indebtedness or not resort to,
marshall, enforce, finalize, or exhaust, in part or in whole, any of its
remedies against any collateral given or held as security for this Guaranty
or the Indebtedness; or (j) to accept partial payments of account of the
Indebtedness.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that: (a) no representations or agreements of any kind
have been made to Guarantor which would limit or qualify in any way the
terms of this Guaranty; (b) this Guaranty is executed at Borrower's request
and not at the request of Lender; (c) Guarantor has not and will not,
without the prior written consent of Lender, sell, lease, assign, encumber,
hypothecate, transfer, or otherwise dispose of all or substantially all of
Guarantor's assets, or any interest therein; (d) Guarantor has, to its own
satisfaction, independently investigated (and relies exclusively on): (i)
Borrower's credit history; (ii) Borrower's payment history with Lender, if
any; (iii) Borrower's past, current and projected financial condition; and
(iv) the sufficiency of collateral, if any, supporting Borrower's
Indebtedness; (e) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information provided to Lender is true and correct in all
material respects and fairly presents the financial condition of Guarantor
as of the dates thereof, and no material adverse change has occurred in the
financial condition of guarantor since the date of the financial
statements; and (f) Guarantor has established adequate means of obtaining
from Borrower on a continuing basis information regarding Borrower's
financial condition. Guarantor agrees to keep adequately informed from such
means of any facts, events, or circumstances which might in any way affect
Guarantor's risks under this Guaranty, and Guarantor further agrees that,
absent a request for information, Lender shall have no obligation to
disclose to Guarantor any information or documents acquired by lender in
the course of its relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (a) to continue lending money or to
extend other credit to Borrower; (b) to make any presentment, protest,
demand, or notice of any kind, including notice of any nonpayment of the
Indebtedness or of any nonpayment related to any collateral, or notice of
any action or nonaction on the part of Borrower, Lender, any surety,
endorser, or other guarantor in connection with the Indebtedness or in
connection with the creation of new or additional loans or obligations; (c)
to resort for payment, enforce or exhaust any remedy or to proceed directly
or at once against any person, including Borrower or any other guarantor;
(d) to proceed directly against, enforce or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (e) to
pursue any other remedy within Lender's power; (f) to commit any act or
omission of any kind, or at any time, with respect to any matter
whatsoever; or to proceed directly against, enforce or exhaust any remedies
against Borrower, any other guarantor, or any other person. Additionally,
Guarantor hereby waives any right to assert against Lender any defense
(legal or equitable), setoff, counterclaim, and/or claim of any kind or
value (a) that Guarantor may now or have against Borrower in any way or
manner or (b) arising directly or indirectly from the present or future
lack of perfection, sufficiency, validity, and/or enforceability of
Lender's lien on any collateral or security for the Indebtedness or any
guaranty or agreement of any other guarantor.
Guarantor also waives any and all rights or defenses arising by reason of
(a) any "one action" or "anti-deficiency" law or any other law which may
prevent Lender from bringing any action, including a claim for deficiency,
against Guarantor, before or after Lender's commencement or completion of
any foreclosure action, either judicially or by exercise of a power of
sale; (b) any election of remedies by lender which destroys or otherwise
adversely affects Guarantor's subrogation rights or Guarantor's rights to
proceed against Borrower for reimbursement, including without limitation,
any loss of rights Guarantor may suffer by reason of any law limiting,
qualifying, or discharging the Indebtedness; (c) any disability or other
defense of Borrower, of any other guarantor, or of any other person, or by
reason of the cessation of Borrower's liability from any cause whatsoever,
other than payment in full in legal
-3-
<PAGE>
tender, of the Indebtedness; (d) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of any collateral for
the Indebtedness; (e) any statute of limitations, if at any time any action
or suit brought by Lender against Guarantor is commenced there is
outstanding Indebtedness of Borrower to Lender which is not barred by any
applicable statute of limitations; or (f) any defenses given to guarantors
at law or in equity other than actual payment and performance of the
Indebtedness. If payment is made by Borrower, whether voluntarily or
otherwise, or by any third party, on the Indebtedness and thereafter Lender
is forced to remit the amount of that payment to Borrower's trustee in
bankruptcy or to any similar person under any federal or state bankruptcy
law or law for the relief of debtors, the Indebtedness shall be considered
unpaid for the purpose of enforcement of this Guaranty. This provisions
shall survive termination of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether
such claim, demand or right may be asserted by Borrower, the Guarantor, or
both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's
full knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
RIGHT OF SETOFF. Guarantor authorizes Lender, to the extent permitted by
applicable law, to charge, withdraw or setoff all sums owning on the
Indebtedness against any and all the accounts set forth below in the
Accounts section without prior demand or notice to Guarantor.
ACCOUNTS. Guarantor grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers
to Lender all of Guarantor's right, title and interest in and to,
Guarantor's deposits, accounts (whether checking, savings, or some other
account), or securities now or hereafter in the possession of or on deposit
with Lender or with any Barnett Banks, Inc. affiliate or subsidiary
including without limitation all accounts held jointly with someone else
and all accounts Guarantor may open in the future, excluding however all
IRA, Keogh, and trust accounts.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter
created, shall be prior to any claim that Guarantor may now have or
hereafter acquire against Borrower, whether or not Borrower becomes
insolvent. Guarantor hereby expressly subordinates any claim Guarantor may
have against Borrower, upon any account whatsoever, to any claim that
Lender may now or hereafter have against Borrower. In the event of
insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment
of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or
acquire against Borrower or against any assignee or trustee in bankruptcy
of Borrower; provided however, that such assignment shall be effective only
for the purpose of assuring to Lender full payment in legal tender of the
Indebtedness. If Lender so requests any notes or credit agreements now or
hereafter evidencing any debts or obligations of Borrower to Guarantor
shall be marked with a legend that the same are subject to this Guaranty
and shall be delivered to Lender. Guarantor agrees, and Lender hereby is
authorized, in the name of Guarantor, from time to time to execute and file
financing statements and continuation statements and to execute such other
documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this
Guaranty.
FINANCIAL INFORMATION. If Guarantor is an individual, Guarantor shall
provide to Lender annually, signed and dated personal financial statements
on Lender's forms and, immediately after filing, Guarantor's personal
income tax return filed for the past calendar year. If Guarantor is a non-
individual, notwithstanding anything else contained in any document
executed in conjunction with the Indebtedness, at a minimum Guarantor shall
provide to Lender annually, or more often if requested by Lender,
Guarantor's balance sheet and income statement, statement of cash flow and
notes to statements certified as correct to the best knowledge and belief
by Guarantor's chief financial officer or other officer or person
acceptable to Lender.
-4-
<PAGE>
GARNISHMENT. Guarantor consents to the issuance of a continuing writ of
garnishment or attachment against Guarantor's disposable earnings, in accordance
with Section 222.11, Florida Statutes, in order to satisfy, in whole or in part,
any money judgment entered in favor of Lender.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendments. This Guaranty, together with any Related Documents, constitutes
----------
the entire understanding and agreement of the parties as to the matters set
forth in this Guaranty and supersedes all prior understandings and
correspondence, oral or written, with respect to the subject matter hereof.
No alteration of or amendment to this Guaranty shall be effective unless
given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Applicable Law. This Guaranty shall be governed by and construed in
--------------
accordance with the laws of the State of Florida.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of
-------------------------
Lender's costs and expenses, including reasonable attorneys' fees and
Lender's legal expenses, incurred in connection with the Indebtedness, this
Guaranty, or the enforcement of this Guaranty. Lender may pay someone else
to help enforce this Guaranty, and Guarantor shall pay the costs and
expenses of such enforcement. Costs and expenses include Lender's
reasonable attorneys' fees and legal expenses whether or not there is a
lawsuit, including reasonable attorneys' fees and legal expenses for
bankruptcy proceedings (and including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Guarantor also shall pay all court costs and such
additional fees as may be directed by the court.
Notices. All notices required to be given by either party to the other
-------
under this Guaranty shall be in writing, notification by telefacsimile is
specifically not allowed, and, except for revocation notices by Guarantor,
shall be effective when actually delivered or when deposited with a
nationally recognized overnight courier, or when deposited in the United
States mail, first class postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above or to such other
addresses as either party may designate to the other in writing. All
revocation notices by Guarantor shall be in writing and shall be effective
only upon delivery to Lender as provided above in the section titled
"DURATION OF GUARANTY." If there is more than one Guarantor, notice to any
Guarantor will constitute notice to all Guarantors. For notice purposes,
Guarantor agrees to keep Lender informed at all times of Guarantor's
current address.
Interpretation. In all cases where there is more than one Borrower or
--------------
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and only one
or more of them. The words "Guarantor," "Borrower," and "Lender" include
the heirs, successors, assigns, and transferees of each of them. Caption
headings in this Guaranty are for convenience purposes only and are not to
be used to interpret or define the provisions of this Guaranty. If a court
of competent jurisdiction finds any provision of this Guaranty to be
invalid or unenforceable as to any person or circumstance, such finding
shall not render that provision invalid or unenforceable as to any other
persons or circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. If any one or more of Borrower
or Guarantor are corporations or partnerships, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the
officers, directors, partners, or agents acting or purporting to act on
their behalf, and any Indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.
Time. Time is of the essence of all requirements of Guarantor herein.
----
Waiver. Lender shall not be deemed to have waived any rights under this
------
Guaranty unless such waiver is given in writing and signed by lender. No
delay or omission on the part of Lender in exercising any right
-5-
<PAGE>
shall operate as a waiver of such right or any other right. A waiver by
lender of a provision of this Guaranty shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty. No prior waiver by
lender, nor any course of dealing between Lender and Guarantor, shall
constitute a waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Guaranty, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED JUNE 5, 1996.
GUARANTOR:
X \s\ Satish K. Sanan
- --------------------------------
Satish K. Sanan
===============================================================================
THIS INSTRUMENT WAS MADE, EXECUTED, AND DELIVERED OUTSIDE THE STATE OF FLORIDA,
AND NO FLORIDA DOCUMENTARY STAMP TAX IS DUE HEREON IN ACCORDANCE WITH F.A.C.
12B-4.053(35).
-6-
<PAGE>
STATE OF GEORGIA )
COUNTY OF FULTON )
The foregoing instrument has been acknowledged before me on this 5 day of
June, 1996 by Satish K. Sanan (__), who is personally known to me or (X) has
-
provided driver's license as identification.
----------------
My Commission Expires: \s\ Sharon L. Thode
-------------------------------
Notary Public Sharon L. Thode
---------------
(seal)
Notary Public, Fulton County, Georgia
My Commission Expires April 16, 2000
-7-
<PAGE>
EXHIBIT 10.14
BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$900,000.00 06-05-1996 06-05-2001 02600080333 A100 36 408
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan
or item.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: Information Management Resources, Inc. Lender: BARNETT BANK OF PINELLAS COUNTY
26750 U.S. Highway 19N, #500 P.O. BOX 122880
Clearwater, FL 34621 ST. PETERSBURG, FL 33733-2288
====================================================================================================================================
</TABLE>
THIS BUSINESS LOAN AGREEMENT between Information Management Resources, Inc.
("Borrower") and BARNETT BANK OF PINELLAS COUNTY ("Lender") is made and executed
on the following terms and conditions. Borrower has received prior commercial
loans from Lender or has applied to Lender for a commercial loan or loans or
other financial accommodations, including those which may be described on any
exhibit or schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." Borrower understands and agrees that: (a) in
granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (c) all such Loans shall
be and shall remain subject to the following terms and conditions of this
Agreement.
TERM. This Agreement shall be effective as of June 5, 1996, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to this Business Loan Agreement from
time to time.
Borrower. The word "Borrower" means Information Management Resources, Inc.
CERCLA. The Word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
Collateral. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future, and whether granted in the form of a security interest,
mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge,
lien or title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether created
bylaw, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations and published
interpretations thereof.
Event of Default. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"EVENTS OF DEFAULT."
GAAP. The word "GAAP" means generally accepted accounting principles
consistently applied.
Grantor. The word "Grantor" means and includes without limitation each and
all of the persons or entities granting a Security Interest in any Collateral
for the Indebtedness, including without limitation all Borrowers granting such
a Security Interest.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in connection
with any indebtedness.
Indebtedness. The word "Indebtedness" means and includes without limitation
all Loans, together with all other obligations, debts and liabilities of
Borrower to Lender, or any one or more of them, as well as all claims by
Lender against Borrower, or any one or more of them; whether now existing,
contemporaneously with or hereafter incurred or created and any renewals,
modifications, extensions, substitutions or consolidations thereof, voluntary
or involuntary incurred, secured or unsecured, absolute or contingent,
liquidated or unliquidated; determined or undetermined, whether Borrower may
be liable individually or jointly with others, or primarily or secondarily, or
as guarantor, surety, or otherwise; whether recovery upon the indebtedness may
be or hereafter may become barred by any stature of limitations; and whether
such Indebtedness may be or hereafter may become otherwise unenforceable.
Lender. The word "Lender" means BARNETT BANK OF PINELLAS COUNTY, its
successors and assigns.
Loan. The word "Loan" or "Loans" means and includes any and all loans,
advances, interest, costs, fees, documentary stamp tax and/or intangible
taxes, debts, overdraft indebtedness, leases, drafts, letters of credit,
credit cards, and business services from Lender to Borrower, whether now
existing, contemporaneously with, or hereafter incurred or created and any
renewals, modification, extensions, substitutions or consolidations thereof,
and however evidenced, including without limitation those loans and financial
accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.
Note. The word "Note" means Borrower's promissory note or notes, if any,
evidencing Borrower's Loan obligations in favor of Lender, as well as any
renewal, extension, modification, consolidation, substitute, replacement or
refinancing note or notes therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
interests securing indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either not yet due or being contested
in good faith; (c) liens of materialmen, mechanics, warehousemen, or
carriers, or other like liens arising in the ordinary course of business and
securing obligations which are not yet delinquent; (d) purchase money liens
or purchases money security interests upon or in any property acquired or held
by Borrower in the ordinary course of business to secure indebtedness
outstanding on the date of this Agreement or permitted to be incurred under
the paragraph of this Agreement titled "Indebtedness and Liens"; (e) liens
and security interests which, as of this Agreement, have been disclosed to and
approved by the Lender
1
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06-05-96 BUSINESS LOAN AGREEMENT Page 2
Loan No 02600080333 (Continued)
- -------------------------------------------------------------------------------
in writing; and (f) those liens and security interests
which in the aggregate constitute an immaterial and insignificant monetary
amount with respect to the net value of Borrower's assets.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the indebtedness.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements, understandings
or other agreements, whether created by law, contract, or otherwise,
evidencing, governing, representing, or creating a Security Interest.
Security Interest. The words "Security Interest" mean and include without
limitation any type of collateral security, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt, lien
or title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether created by
law, contract, or otherwise.
SARA. The word "SARA" means the Superfund Amendments and Reauthorization Act
of 1986 as now and hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the Initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender in form satisfactory to
Lender the following documents for the Loan: (a) the Note, (b) Security
Agreements granting to Lender security interests in the Collateral, (c)
Financing Statements perfecting Lender's Security Interests; (d) evidence of
insurance as required below; and (e) any other documents required under this
Agreement or by Lender or its counsel, including without limitation any
guaranties described below.
Borrower's Authorization. Borrower shall have provided in form and substance
satisfactory to Lender properly certified, resolutions, duly authorizing the
execution and delivery of this Agreement, and Note and the Related Documents,
and such other authorizations and other documents and instruments as Lender or
its counsel, in their sole discretion, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in
this Agreement or any Related Document.
Representation and Warranties. The representations and warranties set forth
in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and of all times any indebtedness exists:
Organization. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the state of Borrower's
incorporation and is validly existing and in good standing in all states in
which Borrower is doing business. Borrower has the full power and authority
to own its properties and to transact the businesses in which it is presently
engaged or presently proposes to engage. Borrower a[missing text] duly
qualified as a foreign corporation and is in good standing in all states in
which the failure to so qualify would have a material adverse effect to its
business or financial condition.
Authorization. The execution, delivery, and performance of this Agreement and
all Related Documents by Borrower, to the extent to be executed, delivered or
performed by Borrower, have been duly authorized by all necessary action by
Borrower; do not require the consent or approval of any other person,
regulatory authority or governmental body; and do not conflict with, result in
a violation of, or constitute a default under (a) any provision of its
articles of incorporation or organization, or bylaws, or any agreement or
other instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower.
Financial Information. Each financial statement of Borrower and each
information, exhibit or report supplied to Lender by Borrower, its agents or
accountants truly and completely disclosed Borrower's financial condition as
of the date of the statement in accordance with GAAP, and there has been no
material adverse change in Borrower's financial or business condition or
operations subsequent to the date of the most recent financial statement
supplied to Lender and none are imminent or threatened. Borrower has no
material contingent obligations except as disclosed in such financial
statements. Borrower acknowledges and agrees that Lender is relying on all
such financial information in entering into, continuing, renewing or extending
any Loan.
Legal Effect. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not presently
due and payable, Borrower owns and has good title to all of Borrower's
properties free and clear of all Security Interests, and has not executed any
security documents or financing statements relating to such properties. All
of Borrower's properties are titled in Borrower's legal name, and Borrower has
not used, or filed a financing statement under, any other name for at least
the last five (5) years. Additionally, Borrower and Borrower's real and
personal properties comply fully with all laws, ordinances, statutes, codes
and requirements of the Americans with Disabilities Act of 1990.
Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the 'CERCLA," "SARA," the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq.,, or
other applicable state or Federal laws, rules, or regulations adopted pursuant
to any of the foregoing. Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (a) During the period of
Borrower's ownership, lease or use of any real or personal properties and the
Collateral, there has been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any hazardous waste or
substance by any person on, under, or about any of the properties, (b)
Borrower has no knowledge of, or reason to believe that there has been (i) any
use, generation, manufacture, storage, treatment, disposal, release, or
threatened release of any hazardous waste or substance by any prior owners or
occupants
2
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06-05-96 BUSINESS LOAN AGREEMENT Page 3
Loan No 02600080333 (Continued)
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of any of the properties or the Collateral, or (ii) any actual or
threatened litigation or claims of any kind by any person relating to such
matters, (c) neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the properties or the Collateral shall use,
generate, manufacture, store, treat, dispose of, or release any hazardous
waste or substance on, under, or about any of the properties or the
Collateral, any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations, and ordinances,
including without limitation those laws, regulations and ordinances described
above. Borrower authorizes Lender and its agents to enter upon the properties
to make such inspections and tests as Lender may deem appropriate to determine
compliance of the properties with this section of the Agreement. Any
inspections or tests made by Lender shall be a Borrower's expenses and for
Lender's purposes only and shall not be construed to create any responsibility
or liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower's due
diligence in investigating the Collateral and the properties for hazardous
wastes and substances. Borrower hereby (a) releases and waives any future
claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (b) agrees
to fully and promptly pay, perform, discharge and defend, indemnify and hold
harmless Lender against any and all claims, orders, demands, causes of action,
proceedings, judgments, losses, liabilities, damages, penalties, and expenses
which Lender may directly or indirectly sustain or suffer resulting from a
breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened release
occurring prior to Borrower's ownership or interest in the properties or the
Collateral, whether or not the same was or should have been known to Borrower.
The provisions of this section of the Agreement, including the obligation to
indemnify, shall survive the payment of the indebtedness and the termination
or expiration of this Agreement and shall not be affected by Lender's
acquisition of any interest in any of the properties, whether by foreclosure
or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other has occurred which may
materially adversely affect Borrower's financial condition or properties,
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all tax returns and reports of
Borrower that are or were required to be filed, and all taxes, assessments and
other governmental charges have been paid in full, except those presently
being or to be contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided.
Lien Property. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of Borrower's Loan and
Note, that would be prior or that may in any way be superior to Lender's
Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note and Security Agreements directly or
indirectly securing repayment of Borrower's Loan and Note are binding upon
Borrower as well as upon Borrower's successors, representatives and assigns,
and are legally enforceable in accordance with their respective terms.
Permits. Borrower possesses and will continue to possess all permits,
licenses, copyrights, trademarks, trade names, patents and rights thereto to
conduct its business and its business does not conflict or violate any valid
rights of others with respect to the foregoing.
Commercial Purposes. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes and will not purchase or carry margin
stock (within the meaning of Regulations G, T and U of the Board of Governors
of the Federal Reserve System).
Employee Benefit Plans. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined in ERISA) has occurred with respect to any
such plan, (ii) Borrower has not withdrawn from any such plan or initiated
steps to do so, and (iii) no steps have been taken to terminate any such plan.
Location of Borrower's Offices and Records. The chief place of business of
Borrower and the office or offices where Borrower keeps its records concerning
the Collateral is located at 26750 U.S. Highway 19 N, #500, Clearwater, FL
34621.
Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all information
hereafter furnished by or on behalf of Borrower to Lender will be, true and
accurate in every material respect on the date as of which such information is
dated or certified; and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading.
Survival of Representations and Warranties. Borrower understands and agrees
that Lender, without independent investigation, is relying upon the above
representations and warranties in making the above referenced Loan to
Borrower. Borrower further agrees that the foregoing representations and
warranties shall be continuing in nature and shall remain in full force and
effect until such time as Borrower's Indebtedness shall be paid in full, or
until this Agreement shall be terminated in the manner provided above,
whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Deposit Accounts. Maintain its primary banking accounts with Lender.
Litigation. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all litigation and claims
and all threatened litigation and claims affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or the
financial condition of any Guarantor.
Updates. Promptly inform Lender in writing of details of all litigation,
legal or administrative proceedings, investigation or other action of similar
nature, pending or threatened against Borrower, at any time during the term of
this Agreement, which in part or in whole may or will render any of the above
representations and warranties no longer true, accurate and correct in each
and every respect. Borrower will bring such details to Lender's attention, in
writing, within thirty (30) days from the date Borrower acquires knowledge of
same.
Financial Records. Maintain its books and records in accordance with GAAP and
permit Lender to examine and audit Borrower's books and records at all
reasonable times.
Financial Statements. Furnish Lender with, as soon as available, but in no
event later than ninety (90) days after the end of each fiscal year,
Borrower's balance sheet and income statement, statement of cash flow and
notes to statements for the year ended, audited by a certified public
accountant satisfactory to Lender, and, as soon as available, but in no event
later than thirty (30) days after the end of each fiscal quarter, Borrower's
balance sheet and profit and loss statement for the period ended, prepared and
certified as correct to the best knowledge and belief by Borrower's chief
financial officer or other officer or person acceptable to Lender. All
financial reports required to be provided under this Agreement
3
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06-05-96 BUSINESS LOAN AGREEMENT Page 4
Loan No 02600080333 (Continued)
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shall be prepared in accordance with GAAP and certified by Borrower as being
true and correct. Provide to Lender annually for each individual Borrower and
Guarantor, if any, signed and dated personal financial statements on Lender's
forms and, immediately after filing, the personal income tax return filed for
the past calendar year. Simultaneously with the financial information
required herein of Borrower, the same information of all corporate or
partnership guarantors, if any, prepared in accordance with GAAP.
Promptly after the furnishing thereof, provide Lender with copies of any
statement or report furnished to any other party pursuant to the terms of any
indenture, loan, credit, or similar agreement and not otherwise required to be
furnished to Lender pursuant to any other section of this Agreement.
Promptly after the sending or filing thereof, provide Lender with copies of
all proxy statements, financial statements and reports which Borrower sends to
its stockholders, and copies of all regular, periodic, special reports, and
all registration statements which Borrower files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange.
Additional Information. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables, inventory
schedules, budgets, forecasts, tax returns, and other reports with respect to
Borrower's financial condition and business operations as Lender may request
from time to time.
Financial Covenants and Ratios. Comply with the following covenants and
ratios:
Tangible Net Worth. Maintain a minimum Tangible Net Worth of not less
than:
<TABLE>
<CAPTION>
Period Amount
------ -------------
<S> <C>
As of 12/31/96 $4,500,000.00
Leverage Ratio. Maintain a ratio of Total Liabilities to
Tangible Net Worth of less than:
Period Ratio
------ -------------
At all Times 1.75 to 1.00
Current Ratio. Maintain a ratio of Current Assets to
Current Liabilities in excess of:
Period Ratio
------ -------------
At all Times 1.15 to 1.00
Cash Flow Requirements. Maintain Cash Flow at not less
than the following level:
Period Requirement
------ -------------
As of 12/31/96 1.25 to 1.00
</TABLE>
For purposes of this Agreement and to the extent the following terms are
utilized in this Agreement, the term "Tangible Net Worth" shall mean
Borrower's total assets excluding all intangible assets determined in
accordance with GAAP (i.e. goodwill, trademarks, patents, copyrights,
organizational expenses, and similar intangible items, but including
leaseholds and leasehold improvements at book value) of Borrower less total
Debt. The "Debt" shall be determined in accordance with GAAP. The term
"Subordinated Debt" shall mean indebtedness and liabilities of Borrower which
have been subordinated by written agreement to indebtedness owned by Borrower
to Lender in form and substance acceptable to Lender. The term "Working
Capital" shall mean Borrower's current assets at lower of cost or current
market value less amounts due from any officer, director, shareholder or any
entity related by common control or ownership, excluding prepaid expenses,
less Borrower's current liabilities. The term "Liquid Assets" shall mean
Borrower's cash on hand, marketable securities, bank deposits and Borrower's
receivables. The term "Cash Flow" shall mean net income after taxes, and
exclusive of extraordinary gains and income, plus depreciation and
amortization. The term "Senior Debt" shall mean Debt less Subordinated Debt.
The term "Capital Funds" shall mean Tangible Net Worth plus Subordinated Debt.
Except as provided above, all computations made to determine compliance with
the requirements contained in this paragraph shall be made in accordance with
GAAP and certified by Borrower as being true and correct.
Insurance. Maintain fire and other risk insurance, business interruption,
theft, public liability insurance, and such other insurance in such amounts
and covering such risks as are usually covered by businesses engaged in the
same or a similar business and similarly situated with respect to Borrower's
properties and operations, in form, coverages and with insurance companies
reasonably acceptable to Lender. Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates of insurance
in form satisfactory to Lender, including stipulations that coverages will not
be cancelled or diminished without at least thirty (30) days' prior written
notice to Lender. In connection with all policies covering assets in which
Lender holds or is offered a security interest for the Loans, Borrower will
provide Lender with such loss payable or other endorsements as Lender may
require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the policy; (d) the
properties insured; (e) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those values; and
(f) the expiration date of the policy. In addition, upon request of Lender
(however not more often than annually), Borrower will have an independent
appraiser satisfactory to Lender determine, as applicable, the actual cash
value or replacement cost of any Collateral. The cost of such appraisal shall
be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, on Lender's forms, and in the
amount and by the guarantor named below:
Guarantor Amount
--------- ------
Satish K. Sanan Unlimited
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection
with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
4
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06-05-96 BUSINESS LOAN AGREEMENT Page 5
Loan No 02600080333 (Continued)
- -------------------------------------------------------------------------------
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness
and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon
Borrower or its properties, income, or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might become a
lien or charge upon any of Borrower's properties, income, or profits.
Provided however, Borrower will not be required to pay and discharge any such
assessment, tax, charge, levy, lien or claim so long as (a) the legality of
the same shall be contested in good faith by appropriate proceedings, and (b)
Borrower shall have established on its books adequate reserves with respect to
such contested assessment, tax, charge, levy, lien, or claim in accordance
with generally accepted accounting practices. Borrower, upon demand of
Lender, will furnish to Lender evidence of payment of the assessments, taxes,
charges, levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender at any time a written statement of
any assessments, taxes, charges, levies, liens and claims against Borrower's
properties, income, or profits.
Performance. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in the Related Documents in a timely manner,
and promptly notify Lender if Borrower learns of the occurrence of any event
which constitutes an Even of Default under this Agreement or under any of the
Related Documents.
Operations. Substantially maintain its present executive and management
personnel; conduct its business affairs in a reasonable and present manner and
in compliance with all applicable federal, state and municipal laws,
ordinances, rules and regulations respecting its properties, charters,
businesses and operations, including without limitation, compliance with the
Americans With Disabilities Act and with all minimum funding standards and
other requirements of ERISA and other laws applicable to Borrower's employee
benefit plans, and continue to engage in an efficient and economical manner in
a business of the same general type as now conducted by it, provided, however,
that nothing contained in this Agreement shall prevent Borrower from
discontinuing any part of Borrower's business, if in Borrower's opinion, this
discontinuance is in the best interests of Borrower and not disadvantageous to
Lender.
Maintenance. Maintain, keep and preserve Borrower's buildings and properties
and every part thereof in good repair, working order, and condition and from
time to time make all needful and proper repairs, renewals, replacements,
additions, betterments and improvements thereto, so that at all times the
efficiency thereof shall be fully preserved and maintained, ordinary wear and
tear excepted.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts and records and
to make copies and memoranda of Borrower's books, accounts and records. If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free access to
such records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower's expense, and discuss the affairs,
finances and accounts of Borrower with Lender.
Compliance Certificate. Unless waived in writing by Lender, provide Lender
upon Lender's request a compliance certificate executed by Borrower's chief
financial officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying that, as
of the date of the certificate, no default or Event of Default has occurred,
or has occurred and is continuing under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects
with all environmental protection federal, state and local laws, statutes,
regulations and ordinances; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part or on the part of
any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of
a permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or
not there is damage to the environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing statements,
instruments, documents and other agreements as Lender or its attorneys may
reasonably request to evidence and secure the Loans and to perfect all
Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
Indebtedness and Liens. (a) Except for trade debt incurred in the normal
course of business, and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness of borrowed money, including capital
leases, (b) sell, transfer, mortgage, assign, pledge, lease, grant a security
interest in or encumber any of Borrower's assets, or (c) sell with recourse
any of Borrower's accounts, except to Lender and except for Borrower's
accounts as allowed as a permitted lien.
Continuity of Operations. (a) Engage in any business activities substantially
different than those in which Borrower is presently engaged, (b) cease
operations, wind up, liquidate, merge, reorganize, transfer, acquire or
consolidate with any other entity, change ownership, dissolve, transfer or
sell or acquire Collateral or assets out of the ordinary course of business,
or (c) pay, declare, set aside, or allocate any dividends in cash or other
property, on Borrower's stock (however, if Borrower is a Subchapter S
corporation, Borrower may make distributions to each shareholder which is
necessary to pay for any personal income tax liability incurred by that
shareholder as a direct result of profits generated by the Subchapter S
corporation) or purchase or retire any of Borrower's outstanding shares or
alter or amend Borrower's capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any interest in any other enterprise
or entity, or (c) assume, endorse, be liable for or incur any agreement or
obligation as surety or guarantor.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower whether under this Agreement or under any other agreement, Lender shall
have no obligation to make Loan Advances or to disburse Loan proceeds if: (a)
Borrower or any Guarantor is in default under the terms of this Agreement or any
of the Related Documents or any other agreement that Borrower or any Guarantor
has with Lender; (b) Borrower or any Guarantor becomes insolvent, files a
petition in bankruptcy or similar proceeding, or is adjudged a bankrupt; (c)
there occurs a material adverse change in Borrower's financial condition, in the
financial condition of any Guarantor, or in the value of any Collateral securing
any Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit, modify
or revoke such Guarantor's guaranty of the Loan or any other loan with Lender;
or (e) Lender in good faith deems itself insecure even though no Event of
Default shall have occurred.
ADDITIONAL ADVANCES. Advances to affiliates will not exceed $700,000.00 in
Aggregate for year end 12/31/96.
5
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06-05-96 BUSINESS LOAN AGREEMENT Page 6
Loan No 02600080333 (Continued)
- -------------------------------------------------------------------------------
RIGHT OF SETOFF. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge, withdraw or setoff all sums owing on this Agreement
against any and all the accounts set forth below in the Accounts section without
prior demand or notice to Borrower.
ACCOUNT. Borrower grants to Lender a contractual possessory security interest
in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
of Borrower's right, title and interest in and to, Borrower's deposits, accounts
(whether checking, savings, or some other account), or securities now or
hereafter in the possession of or on deposit with Lender or with any Barnett
Banks, Inc. affiliate or subsidiary including without limitation all accounts
held jointly with someone else and all accounts Borrower may open in the future,
excluding however all IRA, Keogh, and trust accounts.
EVENTS OF DEFAULT. If any of the following events shall occur each shall
constitute an Event of Default under this Agreement:
Default on Indebtedness. An event of default as defined in any Loan or Note
or demand for full payment of any Loan or Note.
Other Defaults. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition contained
in this Agreement or in any of the Related Documents, or failure of Borrower
to comply with or to perform any other term, obligation, covenant or condition
contained in any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation, or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any Security
Agreement to create a valid and perfected Security Interest) at any time and
for any reason.
Insolvency. The dissolution or termination of Borrower's existence as a going
business, insolvency, appointment of a receiver for any part of Borrower's
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
Creditor Proceedings. Commencement of foreclosure proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any
creditor of Borrower, any creditor of any grantor of collateral for the Loan.
This includes a garnishment, attachment, or levy on or of any of Borrower's
deposit accounts with Lender.
Forfeiture. The filing of formal charges under any federal or state law
against any Borrower which forfeiture is the penalty. However, this Event of
Default shall not apply if there is a good faith dispute by Borrower as to the
validity or reasonableness of the claim which is the basis of the proceeding,
and if Borrower gives Lender written notice of the proceeding and furnishes
reserves or a surety bond for the proceeding satisfactory to Lender.
Events Affecting Guarantor. Any of the preceding events occurs with respect to
any Guarantor of any of the indebtedness or such Guarantor dies or becomes
incompetent.
Insecurity. Lender, in good faith, deems itself insecure.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate and, at Lender's
option, all Indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an Event of Default
of the type described in the "Insolvency" subsection above, such acceleration
shall be automatic and not optional. In addition, Lender shall have all the
rights and remedies provided in the Related Documents or available at law, in
equity, or otherwise. Except as may be prohibited by applicable law, all of
Lender's rights and remedies shall be cumulative and may be exercised singularly
or concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take
action to perform an obligation of Borrower or of any Grantor shall not affect
Lender's right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Agreement and supersedes all prior understandings and
correspondence, oral or written, with respect to the subject matter hereof.
No alteration of or amendment to this Agreement shall be effective unless
given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.
Continuing Agreement. This Agreement is a continuing agreement and shall
continue in effect notwithstanding that from time to time, no indebtedness may
exist.
Consent to Loan Participation. Borrower agrees and consents to Lender's sale
or transfer, whether now or later, of one or more participation interests in
the Loans to one or more purchasers, whether related or unrelated to Lender,
Lender may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Lender may
have about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests will be considered as the absolute owners of such
interests in the Loans and will have all the rights granted under the
participation agreement or agreements governing the sale of such participation
interests. Borrower further waives all rights of offset or counterclaim that
it may have now or later against Lender or against any purchaser of such a
participation interest and unconditionally agrees that either Lender or such
purchaser may enforce Borrower's obligation under the Loans irrespective of
the failure or insolvency of any holder of any interest in the Loans.
Borrower further agrees that the purchaser of any such participation interests
may enforce its interests irrespective of any personal claims or defenses that
Borrower may have against Lender.
<PAGE>
06-05-96 BUSINESS LOAN AGREEMENT Page 7
Loan No 02600080333 (Continued)
- --------------------------------------------------------------------------------
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's out-
of-pocket expenses, including reasonable attorneys' fees, incurred in
connection with the preparation, execution, enforcement and collection of this
Agreement or in connection with the Loans made pursuant to this Agreement.
Lender may pay someone else to help collect the Loans and to enforce this
Agreement, and Borrower will pay that amount. This includes, subject to any
limits under applicable law, Lender's reasonable attorneys' fees and Lender's
legal expenses, whether or not there is a lawsuit, including reasonable
attorneys' fees for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated post-
judgment collection services. Borrower also will pay any court costs, in
addition to all other sums provided by law.
Notices. All notices required to be given under this Agreement shall be given
in writing and shall be effective when actually delivered or when deposited
with a nationally recognized overnight courier or deposited in the United
States registered or certified mail, first class, postage prepaid, return
receipt requested, addressed to the party to whom the notice is to be given at
the address shown above; notification by facsimile is specifically not
allowed. Any party may change its address for notices under this Agreement by
giving formal written notice to the other parties, specifically that the
purpose of the notice is to change the party's address. To the extent
permitted by applicable law, if there is more than one Borrower, notice to any
Borrower will constitute notice to all Borrowers. For notice purposes,
Borrower agrees to keep Lender informed at all times of Borrower's current
address(es).
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in
all other respects shall remain valid and enforceable.
Successors and Assigns. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
Survival. All warranties, representations, and covenants made by Borrower in
this Agreement or in any certificate or other instrument delivered by Borrower
to Lender under this Agreement shall be considered to have been relied upon by
Lender and will survive the making of the Loan delivery to Lender of the
Related Documents, regardless of any investigation made by Lender or on
Lender's behalf.
Time. Time is of the essence in the performance of this Agreement.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate
as a waiver of such right or any other right. A waiver by Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Grantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting
of such consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required, and in all
cases such consent may be granted or withheld in the sole discretion of
Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF JUNE
5, 1996.
BORROWER:
Information Management Resources, Inc.
By: /s/ Satish K. Sanan
-------------------------------------------------------
Satish K. Sanan, President
LENDER:
BARNETT BANK OF PINELLAS COUNTY
By: /s/
-------------------------------------------------------
Authorized Officer
<PAGE>
PROMISSORY NOTE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$900,000.00 06-05-96 02600080333 A100 36 408
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: Information Management Resources, Inc. Lender: BARNETT BANK OF
26750 U.S. Highway 19 N, Suite 500 PINELLAS COUNTY
Clearwater, FL 34621 P.O. Box 12288
ST. PETERSBURG, FL 3733-1288
=======================================================================================================
Principal Amount: $900,000.00 Date of Note: June 5, 1996
</TABLE>
PROMISE TO PAY. Information Management Resources, Inc., jointly and severally
if more than one ("Borrower"), promises to pay to BARNETT BANK OF PINELLAS
COUNTY ("Lender"), or order, in lawfully obtained money of the United States of
America, the principle amount of Nine Hundred Thousand & 00/100 Dollars
($900,000.00) together with interest on the unpaid principal balance from
date(s) of disbursement, until paid in full as set forth herein.
PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in 59 principal payments of $15,000.00 each and one
final principal and interest payment of $15,095.33. Borrower's first principal
payment is due July 5, 1996, and all subsequent principal payments are due on
the same day of each month after that. In addition, Borrower will pay regular
monthly payments of all accrued unpaid interest due as of each payment date.
Borrower's first interest payment is due July 5, 1996, and subsequent interest
payments are due on the same day of each month after that. Borrower's final
payment due June 5, 2001, will be for all principal and accrued interest not yet
paid. Interest on this Note is computed on a 365/360 simple interest basis;
that is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at Lender's address shown above or at such other place Lender may designate in
writing. Payments shall be allocated between principal, interest, costs, fees,
if any, in the discretion of Lender. Any payment to be debited from Borrower's
designated account will be debited on the scheduled due date; however, if the
scheduled due date is on a weekend of holiday, the payment will be debited on
the next non-weekend/holiday day.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the Libor
Rate (as defined herein) ("the Index"). The index is not necessarily the lowest
rate charged by Lender on its loans. If the Index becomes unavailable during
the term of this loan, Lender may designate a substitute index after notice to
Borrower. Borrower understands that Lender may make loans based on other rates
as well. The interest rate change will not occur more often than each 1 month
period. The interest rate shall change on the first Business Banking Day of
each Interest Period. For purposes hereof, the following terms shall have the
following meanings: (a) "Business Banking Day" shall mean each day other than a
Saturday, a Sunday or any holiday on which commercial banks in Jacksonville,
Florida are closed for business; (b) "Interest Period" shall mean (i) initially,
the period commencing the Date of Note and ending the day immediately preceding
the first Interest Rate Change Date or (ii) subsequently, the period commencing
any Interest Rate Change Date and ending on the day immediately preceding the
next subsequent Interest Rate Change Date; (c) "Interest Rate Change Date" shall
mean the first Business Banking Day of each 1 month period; (d) "Libor Rate"
shall mean the offered rate for deposits in United States in the London
Interbank market for a 1 month period which appears on the Reuters Screen LIBO
page as of 11:00 a.m. (London time) on the day that is two London Banking Days
preceding the first Business Banking Day of each Interest Period. If at least
two such rates appear on the Reuters Screen LIBO page, the rate will be the
arithmetic mean of such offered rates; (e) "London Banking Day" shall mean each
day other than a Saturday, a Sunday or any holiday on which commercial banks in
London, England are closed for business. The interest rate to be applied to the
unpaid balance of this Note will be at per annum rate o f1.800 percentage points
over the Index. Lender will tell Borrower the current Index rate upon
Borrower's request. NOTICE: Under no circumstances will the effective rate of
interest on this Note be more than the maximum rate allowed by applicable law.
Upon demand for payment of this Note, the interest rate on this Note to be
applied to the unpaid balance of principal, unpaid accrued interest costs an
fees, to be applicable until paid in full, will be the highest interest rate
permitted by applicable law.
PREPAYMENT. Borrower may pay all or a portion of the amount owed earlier than
it is due. Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower's obligation to continue to make payments under the
payment schedule. Rather, they will reduce the principal balance due and may
result in Borrower making fewer payments.
<PAGE>
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $100.00,
whichever is greater.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due; (b) Borrower breaks any written
promise Borrower has made to lender, or Borrower fails to perform promptly at
the time and strictly in the manner provided in this Note or in any written
agreement related to this Note, or in any other written agreement or loan
Borrower has with Lender, contingent or absolute, due or to become due, now or
hereafter existing; (c) A breach of any term or condition of any security
agreement, pledge agreement, mortgage loan agreement or any other agreement
related to or securing this Note regardless if said document is executed by
borrower, any guarantor or a third-party not liable for this Note, upon which a
cure period, if any, contained in said agreement has expired; (d) suspension,
liquidation, sale or transfer of Borrower's business or assets; (e) Any
representation, warranty, statement or report made or furnished to Lender by
Borrower or on Borrower's behalf is false, or misleading in any material
respect; (f) Borrower becomes insolvent, a receiver is appointed for any part of
Borrower's property, Borrower makes an assignment for the benefit of creditors,
or any proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws; (g) Any creditor tries to take any of Borrower's
property on or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender; (h) Failure of Borrower
to furnish Lender within thirty (30) days after written request by Lender,
current financial statements, including income tax returns, in form satisfactory
to Lender or to permit inspection of any of borrower's books or records; (i) The
issuance of any tax levy or lien against Borrower or Borrower's assets which
forfeiture is a potential penalty; (k) Any of the events described in this
default section occurs with respect to any guarantor of this Note; (l) Lender in
good faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest, costs and fees immediately
due, without notice, and then borrower will pay that amount. Upon default, or
if this Note is not paid at final maturity, Lender, at its option, may add any
unpaid accrued interest, costs and fees to principal and such sum will bear
interest therefrom until paid, at the rate provided in this Note but in no event
at an effective total interest rate on this Note greater than the rate permitted
by applicable law. Lender may hire or pay someone else to help collect his Note
if Borrower does not pay. Borrower also will pay Lender the amount of these
costs and expenses, which includes, subject to any limits under applicable law,
Lender's reasonable attorneys' fees and Lender legal expenses whether or not
there is a lawsuit, including reasonable attorneys' fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys' fees an legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. If not prohibited by applicable law, Borrower also will
pay any court costs, in addition to all other sums provided by law. This Note
shall be governed by and construed in accordance with the laws of the State of
Florida.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge, withdraw or setoff all sums owing on this Note
against any and all the accounts set forth below in the Accounts section without
prior demand or notice to Borrower.
ACCOUNTS. Borrower grants to Lender a contractual possessory security interest
in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
of Borrower's right, title and interest in and to, Borrower's deposits, accounts
(whether checking, savings, or some other account), or securities now or
hereafter in the possession of or on deposit with Lender or with any Barnett
Banks, Inc. affiliate or subsidiary including without limitation all accounts
held jointly with someone else and all accounts Borrower may open in the future,
excluding however all IRA, Keogh, and trust accounts.
GARNISHMENT. Borrower consents to the issuance of a continuing writ of
garnishment or attachment against Borrower's disposable earnings, in accordance
with Section 222.11, Florida Statutes, in order to satisfy, in whole or in part,
any money judgment entered in favor of Lender.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Borrower does not agree or intend to pay, and
Lender does not agree or intend to contract for, charge, collect, take, reserve
or receive (collectively referred to herein as charge or collect"), any amount
in the nature of interest or in the nature of a fee for this loan, which would
in any way or event (including demand, prepayment, or acceleration) cause Lender
to charge or collect more for this loan than the maximum Lender would be
permitted to charge or collect by federal law or the law of the State of Florida
(as applicable). Any such excess interest or unauthorized fee shall instead of
anything stated to the contrary, be applied first to reduce the principal
balance of this loan, and when the principal has been paid in full, be refunded
to Borrower. Lender may delay or forgo enforcing any of its rights or remedies
under this Note without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor and all other
demands and notices in
-2-
<PAGE>
connection with the delivery, acceptance performance, default or enforcement of
this Note. Upon any change in the terms of this Note, and unless otherwise
expressly state in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All rights, powers, privileges and immunities herein granted to Lender shall
extend to its successors and assigns and any other legal holder of this Note.
All rights, powers, privileges and immunities of Borrower hereunder may not in
any way be assigned, transferred or sold. Lender at any time is authorized to
correct patent errors herein. All such parties agree that Lender may renew,
modify, substitute, consolidate or extend (repeatedly and for any length of
time) this loan, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender's security interest in the collateral;
and take any other action deemed necessary by Lender without the consent of or
notice to, acknowledgment or agreement by anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to anyone
other than the party with whom the modification is made. This Note constitutes
the entire understanding and agreement of the parties as to the matter set forth
in this Note and supersedes all prior understandings and correspondence, oral or
written, with respect to the subject matter hereof. No alteration of or
amendment to this Note shall be effective unless given in writing and signed by
Lender. Borrower acknowledges that this Note evidences a loan made primarily for
business, commercial or agricultural purposes and not primarily for personal,
family or household purposes. When this Note becomes due, by default, demand or
maturity, Lender may, at its option, demand, sue for, collect, or make any
compromise or settlement it deems desirable with reference to any collateral
pledged or granted for this Note. Lender shall not be bound to take any steps
necessary to preserve any rights in any such collateral against prior parties.
Lender shall have no duty with respect to collection or protection of any such
collateral or of any income of any such on the collateral as to the preservation
of any rights pertaining to such collateral beyond safe custody. Borrower
authorizes Lender to exchange Lender's deposit, credit and borrowing information
about Borrower with third parties. Borrower agrees to indemnify and hold Lender
harmless against liability for the payment for documentary stamp and intangible
taxes (including interest and penalties) (if applicable), which may be
determined to be payable with respect to this transaction. If this Note is
renewed, modified, extended, substituted or consolidated, although Lender is
under no duty to do so, Lender may, without Borrower's or any guarantor's
consent: (a) advance the maximum amount of principal then available the day
prior to said occurrence, (b) deposit said amount in Borrower's account with
Lender the day prior to said occurrence, (c) withdraw said amount from
Borrower's account with Lender the day after said occurrence, and (d) apply said
amount to the principal amount then outstanding. Said procedures are intended to
minimize Borrower's documentary stamp tax and/or intangible tax liabilities (if
applicable) although Borrower will be fully responsible for accrued interest on
the amount of principal advanced for said procedure. If this Note represents a
renewal modification, extension, substitution or consolidation of a Note owed to
Lender, then Borrower acknowledges and agrees that there are no claims, setoffs,
avoidances, counterclaims or defenses or rights to claims, setoffs, avoidances,
counterclaims or defenses to enforcement of this Note.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
Information Management Resources, Inc.
By: \s\ Satish K. Sanan
------------------------------------------
Satish K. Sanan, President
================================================================================
THIS INSTRUMENT WAS MADE, EXECUTED, AND DELIVERED OUTSIDE THE STATE OF FLORIDA,
AND NO FLORIDA DOCUMENTARY STAMP TAX IS DUE HEREON, IN ACCORDANCE WITH F.A.C.
12B-4.0053(35).
-3-
<PAGE>
STATE OF GEORGIA
COUNTY OF FULTON
The foregoing instrument has been acknowledged before me on this 5th day of
June, 1996 by Satish K. Sanan, as President of INFORMATION MANAGEMENT RESOURCES,
INC., a Florida corporation on behalf of the corporation (____) who is
personally known to me or ( X ) who has provided driver's license as
----- ----------------
identification.
My Commission Expires:
(seal) \s\ Sharon L. Thode
---------------------------------
Notary Public, Fulton County, Georgia Notary Public: Sharon L. Thode
My Commission Expires April 16, 2002
-4-
<PAGE>
CONTINUING UNLIMITED COMMERCIAL GUARANTY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A100 36 408
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: Information Management Resources, Inc. Lender: Barnett Bank of Pinellas County
26750 U.S. Highway 19 N., #500 P.O. Box 1288
Clearwater, FL 34621 St. Petersburg, FL 33733-2288
Guarantor: Satish K. Sanan
163 Woodcreek Drive N.
Safety Harbor, FL 34695
====================================================================================================================================
</TABLE>
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, and for the
purpose(s) of inducing BARNETT BANK OF PINELLAS COUNTY ("Lender") to extend,
make, renew, modify and/or continue to extend, make, renew or modify the
Indebtedness (as that term is defined below), Satish K. Sanan ("Guarantor")
absolutely and unconditionally guarantees and promises to pay to Lender or its
order, on demand, in lawfully obtained legal tender of the United States of
America, the Indebtedness of Information Management Resources, Inc. ("Borrower")
to Lender on the terms and conditions set forth in this Guaranty. Under this
Guaranty, the liability of Guarantor is unlimited and the obligations of
Guarantor are continuing.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word "Borrower" means Information Management Resources, Inc.
- --------
Guarantor. The word "Guarantor" means Satish K. Sanan.
- ---------
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the
- --------
benefit of Lender dated June 5, 1996.
Indebtedness. The word "Indebtedness" means and includes any and all of
- ------------
Borrower's liabilities, obligations debts, and Indebtedness to Lender, as well
now existing, or hereinafter incurred or created and any renewals,
modifications, extensions, substitutions or consolidations thereof, including,
without limitation, all loans, advances, interest, costs, documentary stamp
and/or intangible taxes, debts, overdraft Indebtedness, letters of credit,
credit card Indebtedness, lease obligations, business services, other
obligations and liabilities of Borrower, secured or unsecured absolute or
contingent, liquidated or unliquidated, determined or undetermined; whether
Borrower may be liable individually or jointly with others, or primarily or
secondarily, or as guarantor or, surely; whether direct or indirect; whether
guaranteed or secured; whether recovery on the Indebtedness may be or may become
barred and unenforceable against Borrower for any reason whatsoever; and whether
the Indebtedness arises from transactions which may be voidable on account of
infancy insanity, ultra vires, or otherwise.
Lender. The word "Lender means BARNETT BANK OF PINELLAS COUNTY, its successors
- ------
and assigns.
Related Documents. The words "Related Documents" mean and include without
- -----------------
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages deed of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.
1
<PAGE>
NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all Indebtedness.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any written notice of revocation shall
have been fully and finally paid and satisfied and all other obligations of
Guarantor under this Guaranty shall have been performed in full. If Guarantor
elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's
written notice of revocation must be delivered to Lender at the address of
Lender listed above or such other place as Lender may designate in writing. This
Guaranty may be revoked only with respect to Indebtedness incurred or contracted
by Borrower, or acquired by Lender thirty (30) days or more after the date on
which written notice of revocation is actually received by Lender. No notice of
revocation hereof shall be effective as to any Indebtedness: (a) existing at the
date of receipt of such notice; (b) incurred or contracted by Borrower, or
acquired by Lender, within thirty (30) days after receipt of such notice; (c)
now existing or hereafter created pursuant to or evidenced by a loan agreement
or commitment under which Borrower is or may become obligated to Lender; or (d)
renewals, extensions, consolidations, substitutions, and refinancings of the
foregoing. Any revocation of this Guaranty by less than all guarantors of the
Indebtedness shall not affect the liability hereunder of the remaining
guarantors as to any present or future transactions or Indebtedness. The death
of any guarantor of the Indebtedness shall not operate as a revocation of
liability hereunder of the estate of any such guarantor as to transactions
entered into or Indebtedness created subsequent to such death until actual
receipt by Lender of written notice of the death of such guarantor. Guarantor
waives notice of revocation given by any other guarantor of the Indebtedness.
Any payment by Guarantor with respect to the Indebtedness guaranteed shall not
reduce the maximum obligation hereunder, unless written notice to that effect be
actually received by Lender at or prior to the time of such payment. This
Guaranty shall bind the estate of Guarantor as to Indebtedness created both
before and after the death or incapacity of Guarantor, regardless of Lender's
actual notice of Guarantor's death. Subject to the foregoing, Guarantor's
executor or administrator or other legal representative may terminate this
Guaranty in the same manner in which Guarantor might have terminated it and with
the same effect. Release of any other guarantor or termination of any other
guaranty of the Indebtedness shall not affect the liability of Guarantor under
this Guaranty. A revocation received by lender from any one or more Guarantors
shall not affect the liability of any remaining Guarantors under this Guaranty.
It is anticipated that fluctuations may occur in the aggregate amount of
Indebtedness covered by this Guaranty, and it is specifically acknowledged and
agreed by Guarantor that reductions in the amount of Indebtedness, even to zero
dollars ($0.00), prior to written revocation of this Guaranty by Guarantor shall
not constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long as any of the
guaranteed Indebtedness remains unpaid and even though the Indebtedness
guaranteed may from time to time be zero dollars ($0.00). This Guaranty and
Guarantor's obligations hereunder remains fully enforceable irrespective of any
claim, defense or counterclaim which Borrower may assert on the Indebtedness,
including but not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction, and
usury, same [SOME ?] of which Guarantor hereby waives along with any standing by
Guarantor to assert any said claim, defense or counterclaim. In the event that
any bankruptcy, insolvency, receivership, or similar proceeding is instituted by
or against Guarantor in the event that Guarantor becomes insolvent, makes an
assignment for the benefit of creditors, or attempts to effect a composition
with creditors, or in the event of the death of Guarantor, then, at Lender's
election, without notice or demand, the obligations of Guarantor created
hereunder shall become due, payable, and enforceable against Guarantor, whether
or not any Indebtedness is then due and payable.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, without notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (a) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, supplement,
compromise, modify, renew, extend, terminate, accelerate, waive or otherwise
change one or more times the time for payment or other terms, conditions or
provisions of the Indebtedness or any part of the Indebtedness, including
increases or decreases of the rate of interest on the Indebtedness; extensions
and modifications may be repeated and may be for longer than the original term;
(c) to take and hold security for the payment of this Guaranty or the
Indebtedness, and release, surrender, deal with, abstain from taking, take,
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<PAGE>
substitute, exchange, enforce, waive, fail or decide not to perfect, and release
any such security, with or without the substitution of new collateral and
without application of any security proceeds to the Indebtedness; (d) to
release, substitute, add, agree not to sue, or deal with any one or more of
Borrower's sureties, endorsers, or other guarantors on any terms or in any
manner Lender may chose; (e) to determine how, when and what application of
payments and credits shall be made on the Indebtedness; (f) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(g) to sell, transfer, assign, or grant participations in all or any part of the
Indebtedness; (h) to assign or transfer this Guaranty in whole or in part; (i)
to not resort to, enforce or exhaust any of Lender's remedies against Borrower
or any other party who may be liable for payment of the Indebtedness or not
resort to, marshall, enforce, finalize, or exhaust, in part or in whole, any of
its remedies against any collateral given or held as security for this Guaranty
or the Indebtedness; or (j) to accept partial payments of account of the
Indebtedness.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants
to Lender that: (a) no representations or agreements of any kind have been made
to Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has not and will not, without the prior written consent of
Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise
dispose of all or substantially all of Guarantor's assets, or any interest
therein; (d) Guarantor has, to its own satisfaction, independently investigated
(and relies exclusively on): (i) Borrower's credit history; (ii) Borrower's
payment history with Lender, if any; (iii) Borrower's past, current and
projected financial condition; and (iv) the sufficiency of collateral, if any,
supporting Borrower's Indebtedness; (e) upon Lender's request, Guarantor will
provide to Lender financial and credit information in form acceptable to Lender,
and all such financial information provided to Lender is true and correct in all
material respects and fairly presents the financial condition of Guarantor as of
the dates thereof, and no material adverse change has occurred in the financial
condition of guarantor since the date of the financial statements; and (f)
Guarantor has established adequate means of obtaining from Borrower on a
continuing basis information regarding Borrower's financial condition. Guarantor
agrees to keep adequately informed from such means of any facts, events, or
circumstances which might in any way affect Guarantor's risks under this
Guaranty, and Guarantor further agrees that, absent a request for information,
Lender shall have no obligation to disclose to Guarantor any information or
documents acquired by lender in the course of its relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment, enforce or exhaust
any remedy or to proceed directly or at once against any person, including
Borrower or any other guarantor; (d) to proceed directly against, enforce or
exhaust any collateral held by Lender from Borrower, any other guarantor, or any
other person; (e) to pursue any other remedy within Lender's power; (f) to
commit any act or omission of any kind, or at any time, with respect to any
matter whatsoever; or to proceed directly against, enforce or exhaust any
remedies against Borrower, any other guarantor, or any other person.
Additionally, Guarantor hereby waives any right to assert against Lender any
defense (legal or equitable), setoff, counterclaim, and/or claim of any kind or
value (a) that Guarantor may now or have against Borrower in any way or manner
or (b) arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity, and/or enforceability of Lender's lien on any
collateral or security for the Indebtedness or any guaranty or agreement of any
other guarantor.
Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election of remedies by lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
Indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal
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<PAGE>
tender, of the Indebtedness; (d) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of any collateral for the
Indebtedness; (e) any statute of limitations, if at any time any action or suit
brought by Lender against Guarantor is commenced there is outstanding
Indebtedness of Borrower to Lender which is not barred by any applicable statute
of limitations; or (f) any defenses given to guarantors at law or in equity
other than actual payment and performance of the Indebtedness. If payment is
made by Borrower, whether voluntarily or otherwise, or by any third party, on
the Indebtedness and thereafter Lender is forced to remit the amount of that
payment to Borrower's trustee in bankruptcy or to any similar person under any
federal or state bankruptcy law or law for the relief of debtors, the
Indebtedness shall be considered unpaid for the purpose of enforcement of this
Guaranty. This provisions shall survive termination of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.
RIGHT OF SETOFF. Guarantor authorizes Lender, to the extent permitted by
applicable law, to charge, withdraw or setoff all sums owning on the
Indebtedness against any and all the accounts set forth below in the Accounts
section without prior demand or notice to Guarantor.
ACCOUNTS. Guarantor grants to Lender a contractual possessory security interest
in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
of Guarantor's right, title and interest in and to, Guarantor's deposits,
accounts (whether checking, savings, or some other account), or securities now
or hereafter in the possession of or on deposit with Lender or with any Barnett
Banks, Inc. affiliate or subsidiary including without limitation all accounts
held jointly with someone else and all accounts Guarantor may open in the
future, excluding however all IRA, Keogh, and trust accounts.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
FINANCIAL INFORMATION. If Guarantor is an individual, Guarantor shall provide
to Lender annually, signed and dated personal financial statements on Lender's
forms and, immediately after filing, Guarantor's personal income tax return
filed for the past calendar year. If Guarantor is a non-individual,
notwithstanding anything else contained in any document executed in conjunction
with the Indebtedness, at a minimum Guarantor shall provide to Lender annually,
or more often if requested by Lender, Guarantor's balance sheet and income
statement, statement of cash flow and notes to statements certified as correct
to the best knowledge and belief by Guarantor's chief financial officer or other
officer or person acceptable to Lender.
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<PAGE>
GARNISHMENT. Guarantor consents to the issuance of a continuing writ of
garnishment or attachment against Guarantor's disposable earnings, in accordance
with Section 222.11, Florida Statutes, in order to satisfy, in whole or in part,
any money judgment entered in favor of Lender.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
----------
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Guaranty and supersedes all prior understandings
and correspondence, oral or written, with respect to the subject matter
hereof. No alteration of or amendment to this Guaranty shall be effective
unless given in writing and signed by the party or parties sought to be
charged or bound by the alteration or amendment.
Applicable Law. This Guaranty shall be governed by and construed in
--------------
accordance with the laws of the State of Florida.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of
-------------------------
Lender's costs and expenses, including reasonable attorneys' fees and
Lender's legal expenses, incurred in connection with the Indebtedness, this
Guaranty, or the enforcement of this Guaranty. Lender may pay someone else
to help enforce this Guaranty, and Guarantor shall pay the costs and
expenses of such enforcement. Costs and expenses include Lender's
reasonable attorneys' fees and legal expenses whether or not there is a
lawsuit, including reasonable attorneys' fees and legal expenses for
bankruptcy proceedings (and including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Guarantor also shall pay all court costs and such
additional fees as may be directed by the court.
Notices. All notices required to be given by either party to the other
-------
under this Guaranty shall be in writing, notification by telefacsimile is
specifically not allowed, and, except for revocation notices by Guarantor,
shall be effective when actually delivered or when deposited with a
nationally recognized overnight courier, or when deposited in the United
States mail, first class postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above or to such other
addresses as either party may designate to the other in writing. All
revocation notices by Guarantor shall be in writing and shall be effective
only upon delivery to Lender as provided above in the section titled
"DURATION OF GUARANTY." If there is more than one Guarantor, notice to any
Guarantor will constitute notice to all Guarantors. For notice purposes,
Guarantor agrees to keep Lender informed at all times of Guarantor's
current address.
Interpretation. In all cases where there is more than one Borrower or
--------------
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and only one
or more of them. The words "Guarantor," "Borrower," and "Lender" include
the heirs, successors, assigns, and transferees of each of them. Caption
headings in this Guaranty are for convenience purposes only and are not to
be used to interpret or define the provisions of this Guaranty. If a court
of competent jurisdiction finds any provision of this Guaranty to be
invalid or unenforceable as to any person or circumstance, such finding
shall not render that provision invalid or unenforceable as to any other
persons or circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. If any one or more of Borrower
or Guarantor are corporations or partnerships, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the
officers, directors, partners, or agents acting or purporting to act on
their behalf, and any Indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.
Time. Time is of the essence of all requirements of Guarantor herein.
----
Waiver. Lender shall not be deemed to have waived any rights under this
------
Guaranty unless such waiver is given in writing and signed by lender. No
delay or omission on the part of Lender in exercising any right
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<PAGE>
shall operate as a waiver of such right or any other right. A waiver by
lender of a provision of this Guaranty shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty. No prior waiver by
lender, nor any course of dealing between Lender and Guarantor, shall
constitute a waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Guaranty, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS
GUARANTY IS DATED JUNE 5, 1996.
GUARANTOR:
X \s\ Satish K. Sanan
------------------------------
Satish K. Sanan
================================================================================
THIS INSTRUMENT WAS MADE, EXECUTED, AND DELIVERED OUTSIDE THE STATE OF FLORIDA,
AND NO FLORIDA DOCUMENTARY STAMP TAX IS DUE HEREON IN ACCORDANCE WITH F.A.C.
12B-4.053(35).
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<PAGE>
STATE OF GEORGIA )
COUNTY OF FULTON )
The foregoing instrument has been acknowledged before me on this 5th day of
June, 1996 by Satish K. Sanan (__), who is personally known to me or (X) has
provided driver's licnese as identification.
My Commission Expires: \s\ Sharon L. Thode
----------------------------------------
Notary Public Sharon L. Thode
---------------
(seal)
Notary Public, Fulton County, Georgia
My Commission Expires April 16, 2000
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<PAGE>
EXHIBIT 10.16
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT made in Clearwater, Florida, on the ____ day of
________________, 19__, between Information Management Resources, Inc., a
corporation duly created and organized and existing under and by virtue of the
laws of the State of Florida and having its principal office at 26750 U.S.
Highway 19 North, Suite 500, Clearwater, Florida 34621 ("IMR"), and
____________________________________________________, residing at
_____________________________________________, ("Employee"):
WITNESSETH:
WHEREAS, IMR is engaged in the business of providing computing services to
customers in the United States and has invested substantially in the development
of computer techniques, programs, services, systems and other confidential
property, information and trade secrets, and inventions, discoveries,
improvements or developments (herein called "inventions"); and
WHEREAS, IMR enters into contracts with its customers and must ensure that
customer programs, data, and information remain confidential; and
WHEREAS, IMR desires to protect and preserve its trade secrets and confidential
business information; and
WHEREAS, Employee acknowledges that it is essential to the conduct of IMR's
business and to the protection of the investment of its shareholders that such
trade secrets and confidential business information be protected; and
WHEREAS, IMR desires to protect the substantial investment that it has made and
will make in training and locating Employee; and
WHEREAS, Employee desires to enter the employment of, or to maintain his
employment with, IMR.
NOW, THEREFORE, in consideration of the mutual promises set forth herein, IMR
and Employee hereby agree:
1. EMPLOYMENT:
----------
IMR hereby employs Employee, and Employee hereby accepts employment, upon
the terms and conditions set forth in this Employment Agreement.
2. TERM:
----
Subject to the provisions for termination as hereinafter provided, the
term of this Employment Agreement shall begin on the date hereof and
continue until terminated by either party per Paragraph 7.
3. COMPENSATION:
------------
During the term of this Employment Agreement, IMR shall compensate
Employee as specified in the Letter of Employment accompanying this
Agreement for any and all services of every nature rendered and to be
rendered by Employee in connection with this employment. The stated
salary may be increased from time to time in the sole discretion of IMR
without amendment to this Agreement.
4. DUTIES:
------
Employee shall have such duties as are specified in the Letter of
Employment and such other duties as may from time to time be assigned by
the management of IMR.
:1:
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYMENT AGREEMENT
--------------------
5. EXTENT OF SERVICE:
-----------------
Employee shall devote his or her entire working time, energy, and
attention exclusively to his or her duties in connection with IMR.
6. DEATH DURING EMPLOYMENT:
-----------------------
If Employee dies during the term of his or her employment, IMR shall pay
to the estate of Employee the unpaid prorated portion of his or her
monthly salary for the period prior to death and IMR shall have no
further financial obligations to Employee or to Employee's estate.
7. TERMINATION OF EMPLOYMENT:
-------------------------
(i) IMR may, without cause, terminate Employee's employment under this
Employment Agreement upon written notice to Employee, such notice
to be effective fifteen (15) days after receipt by Employee;
(ii) IMR may, for Cause, terminate Employee's employment under this
Employment Agreement upon written notice to Employee, such notice
to be effective upon receipt by Employee. "Cause" includes, but is
not limited to, theft or misappropriation of customer assets or
information, poor or inadequate work performance by Employee,
excessive tardiness by Employee, disclosure of IMR salary
information to any person other than an authorized IMR manager,
unauthorized discussion of performance related issues with a
customer of IMR, or similar detrimental conduct;
(iii) Employee may, with or without cause, terminate his or her
employment under this Agreement upon written notice to IMR, such
notice to be effective thirty (30) days after receipt by IMR, or
upon successful completion of the current assignment or project,
whichever is later. In no event will this notice period exceed
sixty (60) days. IMR may, in its sole discretion, accept
Employee's notice with immediate effect or with effect from less
than thirty (30) days after receipt;
(iv) Within ten (10) days after the termination of this Employment
Agreement by either IMR or Employee for any reason, Employee
shall, at IMR's option and sole expense, (a) return to IMR's
offices in Clearwater, Florida, (b) participate in an exit
interview, and (c) execute a Certificate of Conclusion of
Employment, in substantially the same form attached as Exhibit A
to this Agreement, certifying that Employee has complied with his
or her obligations and acknowledging Employee's continuing
obligations under Paragraphs 8 and 10 of this Agreement; and
(v) If Employee voluntarily terminates his or her employment in with
IMR within one year from the commencement date of employment with
IMR, Employee will reimburse IMR for any expenses incurred by IMR
in relocating Employee.
8. RESTRICTIVE COVENANTS
---------------------
During his or her employment with IMR and for a period of one (1) year
immediately following termination of such employment, whether by
termination of this Employment Agreement by IMR or for any other reason
whatsoever, Employee shall not, directly or indirectly, either as an
individual on his or her own account or as a partner, joint venturer,
employee, agent, salesman, contractor, officer, director, or stockholder
or otherwise:
(i) Enter into, engage in, or accept contract or employment from any
business offering software services and in direct competition with
the business of IMR, as such business now exists or as it may
exist at the time of termination, anywhere in the United States.
This restrictive covenant specifically includes as prohibited
businesses, but it is not limited to, (a) furnishing computer
programming services, (b)
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<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYMENT AGREEMENT
--------------------
developing computer programs, processes, or techniques, and (c)
offering off-shore software development services from India;
(ii) Solicit employment of or advise any employee of IMR or of any
subsidiary of IMR to terminate his or her contract or relationship
with IMR or to accept any contract (directly or indirectly) or
other arrangement for providing services to any other person or
organization;
(iii) Solicit employment or accept contract from any IMR "Customer" that
has entered into a contract with IMR for Employee's services
within one (1) year preceding Employee's termination. For this
purpose, the term "Customer" includes all affiliated and
subsidiary companies, successors and assigns of the corporation or
organization which contracted with IMR for Employee's services; or
(iv) Solicit, enter into, engage in, or accept contract or business
from any IMR customer or other organization (including IMR
prospects) to which IMR has submitted an oral or written proposal
(known to Employee), within one (1) year prior to Employee's
termination, for computing and other technical services provided
by IMR.
9. RESTRICTIVE COVENANTS - REMEDIES:
--------------------------------
Employee agrees that, in the event of a breach by Employee of any of the
Restrictive Covenants set forth in Paragraph 8 above, such a breach would
irreparably injure IMR and would leave IMR with no adequate remedy at
law. Employee further agrees that, if legal proceedings should have to be
brought by IMR against Employee to enforce such Restrictive Covenants,
IMR shall be entitled to all available civil remedies, including without
limitation:
(i) Preliminary and permanent injunctive relief restraining Employee
from violating, directly or indirectly, either as an individual on
his or her own account or as a partner, joint venturer, employee,
agent, salesman, contractor, officer, director or stockholder or
otherwise, the restrictions of Paragraph 8, above;
(ii) Attorneys' fees in the trial and appellate courts and in all
arbitration proceedings; and
(iii) Costs and expenses of investigation, litigation, and arbitration,
including expert witness fees, deposition costs (appearance fees
and transcript charges), injunction bond premiums, travel and
lodging expenses, arbitration fees and charges, and all other
reasonable costs and expenses.
Nothing in this Agreement shall be construed as prohibiting IMR from
pursuing any other legal or equitable remedies available to it for breach
or threatened breach of the Restrictive Covenants. Employee agrees that
damages resulting from a breach of the Restrictive Covenants by Employee
are not readily ascertainable as of the date of this Agreement. Employee
agrees that, if IMR is granted preliminary injunctive relief under this
Agreement, an injunction bond of no more than $5,000 shall be sufficient
to indemnify Employee for any costs or damages that he or she might incur
if the Court ultimately determines that Employee was wrongfully enjoined.
If Employee violates any of the Restrictive Covenants defined in
Paragraph 8 above, directly or indirectly, either as an individual on his
or her own account or as a partner, joint venturer, employee, agent,
salesman, contractor, officer, director, or stockholder or otherwise, any
and all sales or services by the Employee (or the partnership, joint
venture, corporation, or other entity with which he or she is associated)
in competition with
:3:
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYMENT AGREEMENT
--------------------
the services of IMR shall be conclusively presumed to have been made by
IMR but for the violation of the Restrictive Covenants.
Should legal proceedings have to be brought by IMR against Employee to
enforce the Restrictive Covenants, the period of restriction shall be
deemed to begin running on the date of entry of an order granting IMR
preliminary injunctive relief and shall continue uninterrupted for the
next succeeding one (1) year. Employee acknowledges that the purposes of
the Restrictive Covenants would be frustrated by measuring the period of
restriction from the date of termination of employment where Employee
failed to honor the Restrictive Covenants until directed to do so by
court order.
10. TRADE SECRETS AND CONFIDENTIAL BUSINESS INFORMATION:
---------------------------------------------------
Employee shall not, whether while employed by IMR or otherwise, disclose
or use for the benefit of himself or herself or any other person,
partnership, firm, corporation, association, or other legal entity, any
of the trade secrets or confidential business information of IMR. For the
purpose of this Agreement, "trade secrets" of IMR shall include, but
shall not be limited to, any and all proprietary and technical
information of IMR in the nature of computer techniques, programs,
services, systems, inventions, and the like employed by IMR in the
development of its computer services.
For the purpose of this Agreement, "confidential business information" of
IMR shall include any information that is (i) of any value or
significance to IMR and (ii) not generally known to competitors of IMR
nor intended by IMR for general dissemination, including but not limited
to, lists of IMR's current or potential customers, prospective leads or
target accounts, the identity of various suppliers of products or
services, pricing schedules, computer programming needs of its customers,
information as to the profitability of specific accounts, and information
about IMR itself and its executives, officers, directors and employees.
11. TRADE SECRETS AND CONFIDENTIAL BUSINESS INFORMATION - REMEDIES:
--------------------------------------------------------------
If legal proceedings should have to be brought by IMR against Employee to
enforce the confidentiality provisions of Paragraph 10 of this Agreement,
Employee recognizes, acknowledges, and agrees that IMR shall be entitled
to all of the civil remedies provided by Sections 688.01 et seq. and
------
812.035, Florida Statutes, including without limitation:
(i) Preliminary and permanent injunctive relief restraining Employee
from any unauthorized disclosure or use of any trade secrets or
confidential business information, in whole or in part, and from
rendering any service to any person, partnership, firm,
corporation, association, or other legal entity to whom or to
which such trade secrets or confidential business information, in
whole or in part, has been disclosed or is threatened to be
disclosed;
(ii) Attorneys' fees in the trial and appellate courts and in all
arbitration proceedings; and
(iii) Costs and expenses of investigation, litigation, and arbitration,
including expert witness fees, deposition costs (appearance fees
and transcript charges), injunction bond premiums, travel and
lodging expenses, arbitration fees and charges, and all other
reasonable costs and expenses.
Nothing in this Agreement shall be construed as prohibiting IMR from
pursuing any other legal or equitable remedies available to it for breach
or threatened breach of the provisions of Paragraph 10 of this Agreement,
and the existence of any claim or cause of action of the Employee against
IMR, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by IMR of any of the provisions
of this Agreement. IMR and the Employee agree that damages resulting from
a breach of the prohibitions of
:4:
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYMENT AGREEMENT
--------------------
Paragraph 10 by the Employee are not readily ascertainable as of the date
of this Agreement. IMR has fully performed all obligations entitling it
to these prohibitions of Paragraph 10 of this Agreement, and those
prohibitions therefore are not executory or otherwise subject to
rejection under the Bankruptcy Code. IMR and Employee agree that, if IMR
is awarded temporary injunctive relief under this Paragraph, an
injunction bond of no more than $5,000 shall be sufficient to indemnify
the Employee for any costs or damages that he or she might incur if the
Court ultimately determines that the Employee was wrongfully enjoined.
12. IMR PROPERTY; EMPLOYEE DUTY TO RETURN:
-------------------------------------
IMR products, customer correspondence, internal memoranda, photocopies of
products and designs, sales brochures, price lists, customer lists, any
customer information, sales literature, notebooks, computer training
materials, textbooks, and all other like information or products,
including all copies, duplications, replications, and derivatives of such
information or products, now in the possession of Employee or acquired by
Employee after signing this Agreement and while in the employ of IMR,
shall be the exclusive property of IMR and shall be returned to IMR no
later than the final date of his or her employment with IMR.
13. INVENTIONS, IDEAS, PROCESSES, AND DESIGNS:
-----------------------------------------
All inventions, ideas, processes, programs, software, and designs
(including all improvements) (i) conceived (whether or not actually
conceived during regular business hours) or made by Employee during the
course of his or her employment with IMR, and (ii) related to the
business of IMR, shall be disclosed in writing promptly to IMR and shall
be the sole and exclusive property of IMR. Employee shall cooperate with
IMR and its attorneys in the preparation of patent and copyright
applications for such developments and shall promptly assign all such
inventions, ideas, processes, and designs to IMR. The decision to file
for patent or copyright protection or to maintain such development as a
trade secret shall be in the sole discretion of IMR, and Employee shall
be bound by such decision.
14. NOTICES:
-------
Any and all notices required or permitted to be given pursuant to this
Employment Agreement shall be in writing, shall be either actually
delivered or sent by United States mail, return receipt requested, and
shall be addressed to the signatories at the addresses shown on the
signature page of this Agreement or at any subsequent address provided in
conformity with Paragraph 14 of this Agreement.
15. ARBITRATION:
-----------
All controversies, claims, disputes, and matters in question arising out
of, or related to, this Employment Agreement or any breach of this
Agreement, or the relations between the signatories to this Agreement,
shall be decided by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The
signatories agree that the arbitration shall take place exclusively in
Clearwater, Florida, and shall be governed by the law of the State of
Florida. Any award rendered by the arbitrator shall be final, and
judgment may be entered upon it in accordance with applicable law in any
court having jurisdiction thereof, including a federal district court,
pursuant to the Federal Arbitration Act. The arbitrator may grant IMR
injunctive relief, including mandatory injunctive relief, to protect the
rights of IMR, but shall not be limited to such relief. This arbitration
provision shall not preclude IMR from seeking temporary or preliminary
injunctive relief in a court of law to protect its rights, nor shall the
filing of such an action constitute any waiver by IMR of its right to
arbitrate. In connection with the arbitration of any dispute between the
signatories to this Agreement, each signatory may utilize all methods of
discovery authorized by the Federal and Florida Rules of Civil Procedure.
:5:
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYMENT AGREEMENT
--------------------
16. WAIVER:
------
The waiver by IMR of a breach or threatened breach of this Employment
Agreement by Employee shall not be construed as a waiver of any
subsequent breach by Employee. The refusal or failure of IMR to enforce
the provisions of Paragraph 8 or of Paragraph 10 of this Agreement (or
any similar agreement) against any other employee, agent, or independent
contractor, for any reason, shall not constitute a defense to the
enforcement by IMR against Employee of the provisions of Paragraph 8 or
of Paragraph 10.
17. RULES OF CONSTRUCTION:
---------------------
(i) ENTIRE AGREEMENT. This Employment Agreement constitutes the
----------------
entire agreement between its signatories pertaining to the subject
matters of the Agreement, and it supersedes all negotiations,
preliminary agreements, and all prior and contemporaneous
discussions and understandings of the signatories in connection
with the subject matters of the Agreement. Except as otherwise
herein provided, no covenants, representation, or condition not
expressed in this Agreement, or in an amendment made and executed
in accordance with the provisions of sub-paragraph (ii) of this
paragraph, shall be binding upon the signatories or shall affect
or be effective to interpret, change, or restrict the provisions
of this Agreement.
(ii) AMENDMENTS. No change, modification, or termination of any of the
----------
terms, provisions, or conditions of this Employment Agreement
shall be effective unless made in writing and signed or initialed
by all signatories to this Agreement.
(iii) GOVERNING LAW. This Employment Agreement shall be governed and
-------------
construed in accordance with the statutory and decisional law of
the State of Florida governing contracts to be performed in their
entirety in Florida.
(iv) SEVERABILITY. If any paragraph, subparagraph, or provision of
------------
this Employment Agreement, or the application of such paragraph,
subparagraph, or provision, is held invalid by a court of
competent jurisdiction, the remainder of the Agreement, and the
application of such paragraph, subparagraph, or provision to
persons or circumstances other than those with respect to which it
is held invalid, shall not be affected.
:6:
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYMENT AGREEMENT
--------------------
IN WITNESS WHEREOF, the signatories have executed this Agreement the day and
year first above written.
Information Management Resources, Inc.
By:_______________________________________
Satish K. Sanan
President & CEO
__________________________________________
Employee's Name
__________________________________________
Employee's Signature
Address:__________________________________
__________________________________________
:7:
<PAGE>
Exhibit 10.17
S THE PRINCIPAL
A FINANCIAL GROUP
V PROTOTYPE FOR
I SAVINGS PLANS
N
G
S THIS PLAN IS A 401(K) PROFIT SHARING PLAN
P ---------------------------------------------------
L ---------------------------------------------------
A
N
ADOPTION AGREEMENT- PLUS
IRS SERIAL NO.: D347609B
ADOPTION AGREEMENT PLAN NO.: 001
TO BE USED WITH BASIC PLAN NO.: 03
APPROVED: OCTOBER 26, 1992
<PAGE>
AMENDMENT TO
INFORMATION MANAGEMENT RESOURCES, INC. SAVINGS PLAN
401 (k) Profit Sharing Plan
BY THIS AGREEMENT, entered into this 15th day of December, 1994, Information
Management Resources, Inc. Savings Plan (a 401(k) Profit Sharing Plan) is hereby
amended as follows, effective as of January l, 1994:
1. Section Z(l)(b)(i) is deleted in its entirety.
2. Section Z(2) is deleted in its entirety.
Plan Sponsor
INFORMATION MANAGEMENT RESOURCES, INC.
Witness:
/s/ ____________________ By: /s/ Satish K. Sanan
Satish K. Sanan, President
Witnesses: Trustees:
/s/ ____________________ /s/ Satish K. Sanan
Satish K. Sanan
/s/ ____________________ /s/ Jeffery S. Slowgrove
Jeffery S. Slowgrove
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
A. ADOPTION AGREEMENT.................................................. 1
B. EMPLOYER............................................................ 1
C. PLAN NAME........................................................... 1
D. EFFECTIVE DATE...................................................... 1
E. YEARLY DATE......................................................... 2
F. FISCAL YEAR......................................................... 2
G. NAMED FIDUCIARY..................................................... 2
H. PLAN ADMINISTRATOR.................................................. 2
I. PREDECESSOR......................................................... 3
J. ELIGIBLE EMPLOYEE................................................... 4
K. ENTRY REQUIREMENTS.................................................. 5
L. ENTRY DATE.......................................................... 7
M. PAY................................................................. 7
N. ELECTIVE DEFERRAL CONTRIBUTIONS..................................... 9
O. MATCHING CONTRIBUTIONS.............................................. 10
P. OTHER EMPLOYER CONTRIBUTIONS AND FORFEITURES........................ 12
Q. NET PROFITS AND CONTRIBUTION REQUIREMENTS........................... 15
R. CONTRIBUTION MODIFICATIONS.......................................... 17
S. VOLUNTARY CONTRIBUTIONS............................................. 18
T. INVESTMENT.......................................................... 18
U. VESTING PERCENTAGE.................................................. 21
V. VESTING SERVICE..................................................... 22
W. WITHDRAWAL BENEFITS................................................. 24
X. RETIREMENT AND THE START OF BENEFITS................................ 25
Y. FORMS OF DISTRIBUTION............................................... 27
Z. ADOPTING EMPLOYERS.................................................. 31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Internal Revenue Service Department of the Treasury
<S> <C>
Plan Description: Prototype Non-standardized Profit
Sharing Plan with CODA
FFN: 50307440003-001 Case: 9200863 EIN: 42-0127290
BPD: 03 Plan: 001 Letter Serial No: D347609b Washington, DC 20224
Person to Contact: Ms. Wiggins
PRINCIPAL MUTUAL LIFE INSURANCE CO
Telephone Number: (202) 622-8380
711 HIGH STREET
Refer Reply to: E:EP:Q:8
DES MOINES, IA 50309
Date: 10/26/92
</TABLE>
Dear Applicant:
In our opinion, the amendment to the form of the plan identified above does not
in and of itself adversely affect the plan's acceptability under section 401 of
the Internal Revenue Code. This opinion relates only to the amendment to the
form of the plan. It is not an opinion as to the acceptability of any other
amendment or of the form of the plan as a whole, or as to the effect of other
Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
An employer who adopts the amended form of the plan after the date of the
amendment should apply for a determination letter by filing an application with
the Key District Director of Internal Revenue on Form 5307, Short Form
Application for Determination for Employee Benefit Plan.
This letter with respect to the amendment to the form of the plan does not
affect the applicability to the plan of the continued, interim and extended
reliance provisions of sections 13 and 17.03 of Rev. Proc. 89-9, 1989-1 C.B.
780. The applicability of such provisions may be determined by reference to the
initial opinion letter issued with respect to the plan.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as permanent record. Please notify us if you modify
or discontinue sponsorship of this plan.
Sincerely yours,
/s/
-----------------------
Chief, Employee Plans Qualifications Branch
THE PRINCIPAL FINANCIAL GROUP PROTOTYPE FOR SAVINGS PLANS
<PAGE>
ADOPTION AGREEMENT - PLUS
Use black ink to complete the Adoption Agreement.
-----
A. Select (1 ) or (2). A. This ADOPTION AGREEMENT is
1) If selected, check 1) [_] the Employer's first adoption of The
(a) or (b). If this Principal Financial Group Prototype for
Plan is a restate- Savings Plans. Together with THE
ment, check (b). PRINCIPAL FINANCIAL GROUP PROTOTYPE BASIC
SAVINGS PLAN, it constitutes
a) [_] a new plan.
b) If selected, fill in b) [_] a restatement of an existing plan
the restatement date. (and trust). That plan was qualifi-
able under 401(a) of the Internal
Revenue Code. The provisions of this
restatement are effective on _______,
19____. This is the RESTATEMENT DATE.
2) If selected, fill in 2) [X] Amendment No. 1 to the Plan. It
the amendment number replaces all prior amendments to the Plan
and date. and the first Adoption Agreement. The
provisions of this amendment are effective
on January 1, 1994.
B. Fill in exact, legal B. The terms we, us and our, as they are used
name. in this Plan, refer to the EMPLOYER.
We, INFORMATION MANAGEMENT RESOURCES, INC. are
the Employer.
C. For example: ABC, C. The PLAN'S NAME is INFORMATION MANAGEMENT
Inc. Savings Plan. RESOURCES, INC. SAVINGS PLAN
D. Fill in the date your D. Our retirement plan became effective on
Prior Plan started January 1, 1992. This is the EFFECTIVE
if this Plan is a DATE.
restatement. If this
Plan is new, use the
first day of the first
Plan Year.
<PAGE>
E. Fill in Effective Date E. The YEARLY DATE is the first day of each
and check (1), (2) or Plan Year. The Yearly Date is January 1,
(3). 1992 and
1) [X] the same day of each following year.
2) The first Plan Year is 2) [_] each following ____________ (month and
short. day).
3) A later Plan Year is 3) [_] (a) each following __________ (month
short. and day) through (b) _____________ 19___
(b) First day of short and (c) each following __________ (month
year (use same month and day).
and day as in (a)).
(c) First day of new Plan If the first date in Item E is after the
Year. Effective Date, Yearly Dates, before the
first date in Item E above, shall be
determined under the provisions of the Prior
Plan (Plan) before that date.
F. The FISCAL YEAR is our taxable year and ends
on December 31 (month and day).
G. We are the NAMED FIDUCIARY, unless otherwise
specified in (1) below.
1) Principal Mutual Life 1) [_]
Insurance Company may -------------------------------------
not be named. is the Named Fiduciary.
H. We are the PLAN ADMINISTRATOR, unless
otherwise specified in (1) below.
1) Principal Mutual Life 1) [_]
Insurance Company may --------------------------------------
not be named. is the Plan Administrator. The address, phon
number and tax filing number of the Plan
Administrator are the same as the Employer's
unless otherwise specified below.
Address:
--------------------------------------------
Phone No.:
--------------------------------------------
Tax Filing No.:
--------------------------------------------
<PAGE>
Select any items below I. A PREDECESSOR employer is a firm of which we
which apply. were once a part or a firm absorbed by us
because of a change of name, merger,
acquisition or a change of corporate status.
1) If this Plan is a
continuation of a plan 1) [_] A Predecessor is deemed to be the
of a Predecessor Employer for purposes of determining:
employer, service with
that Predecessor must a) [_] Entry Service.
be treated as service
with you. b) [_] Vesting Service.
c) [_] Hours of Service required to be
eligible for an Employer Contribution.
d) [_] Pay.
2) [_] Service with or pay from a Predecessor
shall be counted only if service continued
with us without interruption. This item
shall not apply if this Plan is a continu-
ation of a plan of that Predecessor.
3) [_] Service with or pay from a Predecessor
shall include service or pay while a
proprietor or partner. (If this item is
not checked, such service or pay shall not
be counted.)
4) [_] Service with or pay from a Predecessor
shall be counted only as to a Predecessor
which
a) [_] maintained a qualified pension or
profit sharing plan (or)
b) Exact, legal name(s). b) [_] is named below:
<PAGE>
J. Select (1) or (2). J. An ELIGIBLE EMPLOYEE is
Use Item Z to identify
the Controlled Group 1) [X] an Employee of ours or of an Adopting
and Affiliated Service Employer listed in Item Z
Group members whose
Employees may
participate in the
Plan.
2) If selected, check the 2) [_] an Employee of ours or of an Adopting
requirements in (a), (c), Employer listed in Item Z provided the
(d) and (e) below which Employee meets the requirement(s) selected
apply. below.
a) Select any employment a) [_] Employed in the following employ-
classifications below ment classification:
which apply.
i) [_] Paid on a salaried basis.
ii) [_] Paid on a commission basis.
iii) [_] Paid on an hourly rate basis.
iv) [_] Represented for collective
bargaining purposes by
A. [_] any bargaining unit.
B. Bargaining unit's name. B. [_]
----------------------------
v) [_] Not represented for collective
bargaining purposes by
A. [_] any bargaining unit for
which retirement benefits have
been the subject of good faith
bargaining between Employee
representatives and us.
B. Bargaining unit's name. B. [_]
----------------------------
b) If more than one b) If more than one employment classi-
employment classi- fication is Employee must meet
fication is selected
in (a), check (i) or i) [_] each one of the employment
(ii). classifications selected above.
ii) [_] any one of the employment
classifications selected above.
<PAGE>
c) If selected, check c) [_] Not covered under any other
(i), (ii) or both. qualified
i) [_] profit sharing plan (or)
ii) [_] pension plan
to which we contribute.
d) [_] Employed at the following location
or divisions or in the following
positions:
-----------------------------------------
e) [_] Not employed at the following
location or divisions or in the
following positions:
-----------------------------------------
K. ENTRY REQUIREMENTS
1) Select (a) or (b). 1) SERVICE REQUIRED to become an Active
Member:
a) [_] Service is not required.
b) If selected, check (i) b) [X] The minimum Entry Service required
or (ii). Up to 1 year is
may be used (6 months
if Entry Date is i) [X] 1 (one) whole year.
Yearly Date).
ii) If selected, fill in ii) [_] ____/12 of a year.
numerator of fraction
(e.g. 6/12 for half a Note: If a fractional part of a year is
year). required, the Hours Method may not be
used to determine Entry Service.
2) Select (a) or (b). 2) ENTRY SERVICE, subject to the provisions
(Use only if service is of Plan Section 1.02, shall be
required for entry.) determined as follows:
a) [_] ELAPSED TIME METHOD. Entry Service
is the total of an Employee's countable
Periods of Service without regard to
Hours of Service.
<PAGE>
h) Only available if b) [X] HOURS METHOD. A year of Entry
one year is used in Service is an Entry Service Period
K(1) above. which has ended and in which an
Employee has 1,000 Hours of Service,
unless a lesser number is specified
in (i) below.
i) Optional reduced i) [_]___________ Hours of Service.
Hours of Service
requirement.
ii) Optional crediting of ii) [_] A year of Entry Service
Entry Service before shall be credited before the
Entry Service Period end of the Entry Service
ends. Period if the Employee has the
number of Hours of Service
specified above.
iii) An ENTRY SERVICE PERIOD is the
12-consecutive month period
beginning on an Employee's Hire
Date and each following 12-
consecutive month period ending
on the last day of the Plan
Year, including the 12-
consecutive month period ending
on the last day of the first
Plan Year after his Hire Date,
unless otherwise specified in
A. below. (See Plan Section
1.02 for the crediting of Entry
Service during the first two
periods.)
A. Optional Entry Service A. [_] An Entry Service Period
Period, continues on is the 12-consecutive month
employment period beginning on an
anniversaries. Employee's Hire Date and
each following 12-
consecutive month period
beginning on an anniversary
of that Hire Date.
iv) An ENTRY BREAK in service, when
the Hours Method is used, is an
Entry Service Period in which
an Employee is credited with
not more than one-half of the
Hours of Service required for a
year of Entry Service, unless
otherwise specified in A.
below.
A. Optional Hours of A. [_] _________ or fewer Hours
Service requirement. of Service.
Fill in up to 500
hours but less than
hours required for year
of Entry Service.
3) Select (a) or (b). 3) AGE REQUIRED to become an Active Member:
a) [X] A minimum age is not required.
b) Not over age 21 (201/2 b) [_] The Employee must be ____ or
if Entry Date is older.
Yearly Date).
4) This waiver applies 4) [_] The requirement(s) for entry
only on the date you checked below shall be waived on
fill in. _____________, 19____. This date
shall be an Entry Date if the Eligible
Employee has met all the other entry
requirements.
a) [_] Service requirement.
b) [_] Age requirement.
<PAGE>
Select one of the L. ENTRY DATE. An Eligible Employee may enter
following dates the Plan as an Active Member on the earliest
1) [X] Monthly Date,
2) [_] Semi-yearly Date,
3) [_] Quarterly Date,
4) If selected, age and 4) [_] Yearly Date,
service required in
Item K can't be over 5) [_] date,
age 201/2 or more than
6 months, respectively. on or after the date this Plan became
effective, on which he meets all the entry
requirements. This date is his ENTRY DATE.
M. PAY
1) COMPENSATION for purposes of Plan Section
3.06 is as defined therein, under
Information required to be reported under
Code Sections 6041 and 6051 (Wages, Tips
and Other Compensation Box on Form W-2),
which is actually paid or made available
by us for the Limitation Year, unless
otherwise specified in (a) or (b) below.
Optional 415 (c)(3) a) [_] 415 safe-harbor compensation as
definition of Pay. defined in Plan Section 3.06.
b) Optional W-2 b) [_] Code Section 3401 (a) wages (wages
definition of Pay. for purposes of income tax withholding)
as defined in Plan Section 3.06.
2) Optional provision 2) [_] The definition of Compensation above
to continue old shall apply on and after the 1994
definition until 1994 Limitation Year. The definition of
Limitation Year. Compensation on any date before the 1994
Limitation Year shall be determined in
accordance with the provisions of the
Prior Plan.
3) PAY for purposes of Plan Section 1.02 is
the same as compensation for purposes of
Plan Section 3.06 as specified in (1)
above.
4) Optional provision 4) [_] The definition of Pay in this Item M
to continue old shall apply on and after the first Yearly
definition until 1994 Date in 1994. The definition of Pay on any
Plan Year. date before the first Yearly Date in 1994
shall be determined in accordance with the
provisions of the Prior Plan.
<PAGE>
Pay shall include elective contributions.
Elective contributions are amounts excludable
from the gross income of the Employee under Code
Sections 125, 402(a)(8), 402(h) or 403(b), and
contributed by us, at the Employee's election, to
a Code Section 401(k) arrangement, a simplified
employee pension, cafeteria plan or tax-sheltered
annuity. Elective contributions also include Pay
deferred under a Code Section 457 plan maintained
by us and Employee contributions "picked up" by a
governmental entity and, pursuant to Code Section
414(h)(2), treated as our contributions.
5) Safe harbor fringe 5) For purposes of Elective Deferral
benefit exclusion. Contributions only Pay shall not include
reimbursements or other expense allowances,
fringe benefits (cash or non-cash), moving
expenses, deferred compensation, and welfare
benefits, unless otherwise specified in (a)
below.
a) Optional provision a) [_] Pay for all purposes under the Plan
to exclude fringe shall not include reimbursements or other
benefits for all expense allowances, fringe benefits (cash
purposes. or non-cash), moving expenses, deferred
compensation, and welfare benefits.
6) ANNUAL PAY is, on any given date, an
Employee's Pay for the latest Pay Year ending
on or before that date.
7) The PAY YEAR is the one-year period ending on
the last day of each Plan Year, unless a
different Pay Year is specified in (a) below.
a) Optional Pay Year. a) [_] The one-year period ending on each
_____________ (month and day).
Select any modifications Pay is modified as follows:
below which apply.
8) [X] An Employee's Annual Pay over $15,000
shall be excluded.
9) [_] If a Member's Entry Date occurs after
____________, 19__, Pay before such Entry Date
shall be excluded.
<PAGE>
Item (10) shall apply to the Pay used for
purposes of determining the allocation or amount
of specified Contributions. Item (10) shall not
apply to the Pay used for purposes of determining
the allocation of Contributions if an Integration
Level is used to determine the allocation of
Contributions.
10) Optional exclusions. 10) [_] Pay for purposes of determining the
allocation or amount of
a) [_] All Employer Contributions
b) [_] Elective Deferral Contributions
c) [_] Additional Contributions
d) [_] Discretionary Contributions
excludes
--------
e) [_] bonuses
f) [_] commissions
g) [_] overtime pay
h) Specify type of h) [_] other special pay
special pay excluded
Item (11) shall only apply to the Pay used for
----
purposes of determining excess amounts under Plan
Section 3.07.
11) [_] Pay shall include only amounts received
while an Active Member of the Plan for the
period described in Plan Section 3.07.
N. ELECTIVE DEFERRAL CONTRIBUTIONS for a Member
are equal to a portion of Pay as specified in
the written elective deferral agreement. An
Employee who is eligible to participate in
the Plan may file an elective deferral
agreement with us. The elective deferral
agreement to start Elective Deferral
Contributions may be effective on a Member's
Entry Date (Reentry Date, if applicable) or
any following Semi-yearly Date, unless
otherwise specified in (1) below.
1) Optional effective 1) [X] Following a Member's Entry Date
dates for elective (Reentry Date, if applicable), a Member's
deferral agreements. elective deferral agreement may become
If selected, check effective on any
(a), b), (c) or (d).
a) [_] Monthly Date.
b) [X] Quarterly Date.
c) [_] Yearly Date.
d) [_] date.
<PAGE>
The Member shall make any change or terminate
the elective deferral agreement by filing a
new elective deferral agreement. A Member's
elective deferral agreement making a change
may be effective on any date an elective
deferral agreement to start Elective Deferral
Contributions could be effective. A Member's
elective deferral agreement to stop Elective
Deferral Contributions may be effective on any
date. The elective deferral agreement must be
in writing and effective before the beginning
of the pay period in which Elective Deferral
Contributions are to start, change or stop. A
Member may not defer more than 20% of Pay for
the Plan Year. Elective Deferral Contributions
shall be limited as needed to meet
nondiscrimination tests.
2) Optional minimum. 2) [_] % of Pay is the minimum Elective
Deferral Contribution.
3) [_] Elective Deferral Contributions must be
a whole percentage of Pay.
4) Optional maximum. 4) [X] 15% of Pay is the maximum Elective
(Consider using 20% Deferral Contribution.
reduced by the amount
of other Contributions
made for the Member.)
O. [X] We shall make MATCHING CONTRIBUTIONS.
If Item O is selected, 1) The percentage of Elective Deferral
check (a) or (b). Contributions matched is
a) Not more than 100%. a) [X] 50 %.
b) [_] determined by us, but won't be more
than 100%.
i) Optional minimum i) [_] ________% is the minimum
percentage. percentage.
ii) Optional maximum ii) [_] ________% is the maximum
percentage. Less percentage.
than 100%.
2) Optional limit on 2) [X] Elective Deferral Contributions which
Elective Deferral are over the percentage of Pay below won't
Contributions matched. be matched.
If selected, check (a)
or (b). Limit can help a) [X] 4%.
meet nondiscrimination
tests. b) [_] A percentage determined by us.
i) Optional minimum i) [_] ___% is the minimum percentage.
percentage.
ii) Optional maximum ii) [_] ___% is the maximum percentage.
percentage.
<PAGE>
If Item O is selected, 3) Matching Contributions are made
check (a) or (b).
a) [X] as Elective Deferral Contributions
are made.
b) [_] at the end of the Plan Year for
Members meeting the requirements in
Item Q.
4) If (3)(a) is selected, 4) [_] At the end of the Plan Year we may
this option may be used make more Matching Contributions for
to adjust the Matching Members who made Elective Deferral
Contributions at the Contributions. Our total Matching
end of the Plan Year. Contributions for the Plan Year shall be
made as specified below.
a) Optional. Match at a) [_] The Matching Contributions made at
end of year only for the end of the Plan Year shall only be
those meeting made for those meeting the requirements
requirements in Item Q. in Item Q.
b) If (4) is selected, b) The percentage of Elective Deferral
check (i) or (ii). Contributions matched is
i) Not more than 100%. i) [_] ________%
ii) [_] determined by us, but won't be
more than 100%.
A. Optional minimum A. [_] ________% is the minimum
percentage. percentage.
B. Optional maximum B. [_] ________% is the maximum
percentage. Less than percentage.
100%.
c) Optional limit on c) [_] Elective Deferral Contributions
Elective Deferral which are over the percentage by Pay
Contributions matched below won't be matched.
if (4) is selected. If
selected, check (i) or i) [_] ________%
(ii). Limit will help
meet nondiscrimination ii) [_] A percentage determined by us.
tests.
A. Optional minimum A. [_] ________% is the minimum
percentage. percentage.
B. Optional maximum B. [_] ________% is the maximum
percentage. percentage.
<PAGE>
5) If selected, Matching 5) [_] Matching Contributions are Qualified
Contributions may be Matching Contributions. Qualified Matching
tested for nondiscrimin- Contributions are 100% vested and subject
ation with the Elective to the withdrawal restrictions of Code
Deferral Contributions. Section 401 (k).
a) Optional if (5) is a) [_] Qualified Matching Contributions
selected. Nonhighly shall be made only for Nonhighly
Compensated Employees Compensated Employees.
only.
6) Optional maximum on 6) [X] Our Matching Contributions for a
Matching Contributions. Member during any Plan Year shall not be
more than $1,000
7) Forfeitures of Matching Contributions which
relate to excess amounts as provided in
Plan Section 3.07 shall be used to offset
our first Contribution after the Forfeiture
occurs, unless otherwise specified in (a)
below.
a) Optional treatment a) [_] Forfeitures of Matching Contri-
of forfeitures which butions which relate to excess amounts
relate to excess as provided in Plan Section 3.07 shall
amounts. be allocated to those meeting the
requirements in Item Q who do not have
an excess amount using the allocation
formula in P(3)(a) and shall be deemed
to be Matching Contributions.
P. OTHER EMPLOYER CONTRIBUTIONS AND FORFEITURES
1) These contributions 1) [_] QUALIFIED NONELECTIVE CONTRIBUTIONS.
are used in the Qualified Nonelective Contributions are
nondiscrimination 100% vested and subject to the withdrawal
tests. If selected, restrictions of Code Section 401(k).
check (a) or (b)
a) Qualified Nonelective a) [_] We shall make Qualified Non-
Contributions are a set elective Contributions equal to the
amount. If selected, following:
check the contribution
formula, (i) or (ii).
i) If selected, check i) [_] PAY FORMULA. An amount equal to
A or B.
A. [_] _______% of Pay for the pay
period for each Member who is an
Active Member on the last day of
that period .
B. [_] _______% of Annual Pay at the
end of the Plan Year for Members
who meet the requirements in
Item Q.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ii) If selected, check ii) [_]SERVICE FORMULA. An amount equal to
A. or B.
A. [_]$__________ for the pay period for each
Member who is an Active Member on the last day
of that period.
B. [ ]$__________ at the end of the Plan Year
for Members who meet the requirements in
Item Q.
b) Qualified b) [_]Qualified Nonelective Contributions may be
Nonelective made for each Plan Year in an amount determined
Contributions are by us. Our Qualified Nonelective Contributions
determined by you each shall be allocated to those meeting the
year. requirements in Item Q using the allocation
formula in P(3)(a).
c) Optional. Nonhighly c) [_]Qualified Nonelective Contributions shall
Compensated Employees be made only for or allocated only to Nonhighly
only. Compensated Employees.
2) These contributions 2) [_]We shall make ADDITIONAL CONTRIBUTIONS
are a set amount. If equal to the following:
selected, check the
contribution formula,
(a) or (b).
a) If selected, check a) [_]PAY FORMULA. An amount equal to
(i) or (ii).
i) [_]_________% of Pay for the pay period for
each Member who is an Active Member on the
last day of that period.
ii) [_]_________% of Annual Pay at the end of
the Plan Year for Members who meet the
requirements in Item Q.
b) If selected, check b) [_]SERVICE FORMULA. An amount equal to
(i), (ii), (iii) or
(iv). i) [_]$________ for the pay period for each
Member who is an Active Member on the last
day of that period.
ii) [_]$________ at the end of the Plan Year for
Members who meet the requirements in Item Q.
iii) No contribution iii) [_]$________ for each Hour of Service he
for paid nonworking has performed during the pay period for each
hours such as vacation. Member who is an Active Member during the pay
period.
iv) Contibution is made for iv) [_]$_________for each Hour of Service
paid nonworking hours credited during the pay period for each
such as vacation. Member who is an Active Member during the pay
period.
</TABLE>
<PAGE>
3) These contributions 3) [X]DISCRETIONARY CONTRIBUTIONS may be made
are determined by you for each Plan Year in an amount determined by
each year. If selected, us. The amount of our Discretionary
check the allocation Contributions and Forfeitures, if applicable,
formula, (a) or (b). allocated to a person meeting the require-
ments in Item Q shall be equal to the
following:
a) [X]PAY FORMULA. An amount equal to our
Discretionary Contributions and
Forfeitures, if applicable, multiplied by
the ratio of such person's Annual Pay to
the total Annual Pay of all such persons.
b) [_]INTEGRATED FORMULA. An amount equal to
a percentage of the person's Annual Pay up
to the Integration Level plus a percentage
(equal to 2 times the first percentage) of
his Annual Pay over the Integration Level.
The first percentage shall be the Maximum
Integration Rate, unless otherwise
specified in (i) below.
i) Optional percentage. i) [_] _______% (If this percentage exceeds
If selected, fill in a the Maximum Integration Rate, the Maximum
percentage up to the Integration Rate shall apply.)
Maximum Integration
Rate. If our Discretionary Contributions and
Forfeitures, if applicable, are great enough
to provide this allocation, the percentage
above shall be proportionally reduced.
If our Discretionary Contributions and
Forfeitures, if applicable, are more than
enough to provide the allocation above, any
amount remaining shall be allocated in the
same manner as provided in the Pay Formula,
Item P(3)(a).
ii) The MAXIMUM INTEGRATION RATE shall be
determined according to the following
schedule:
<TABLE>
<CAPTION>
INTEGRATION
INTEGRATION LEVEL RATE
<S> <C>
100% of TWB 5.7%
Less than 100%, but more than
80% of TWB 5.4%
More than the greater of $10,000
or 20% of TWB, but not more than
80% of TWB 4.3%
Not more than the greater of
$10,000 or 20% of TWB 5.7%
</TABLE>
<PAGE>
"TWB" means the taxable wage base
as in effect on the latest Yearly
Date. "Taxable wage base" means
the maximum amount of earnings
which may be considered for wages
for a year under Code Section 3121
(a)(1).
On any date the portion of the
rate of tax under Code Section
3111 (a) (in effect on the latest
Yearly Date) which is attributable
to old age insurance exceeds 5.7%,
such rate shall be substituted for
5.7% and 5.4% and 4.3% shall be
increased proportionately.
iii) The INTEGRATION LEVEL is the
taxable wage base (as defined in
(ii) above) as in effect on the
latest Yearly Date, unless
otherwise specified in A. or B.
below.
A. Optional dollar amount. A. [_] $___________.
Must be less than such
taxable wage base.
B. Optional percentage of B. [_] ____________% of such
such taxable wage base. taxable wage base.
Must be less than 100%.
4) Not applicable if 4) If P(3) is selected, FORFEITURES shall be
Vesting Percentage is reallocated to remaining Members and if
100%. P(3) is not selected, Forfeitures shall be
used to offset our first Contribution made
after the Forfeiture is determined, unless
otherwise specified in (a) or (b) below.
If P(3) is selected, Forfeitures shall be
allocated with our Discretionary
Contributions and deemed to be
Discretionary Contributions. (See Plan
Section 3.05.)
a) Optional treatment a) [_] Forfeitures shall not be allocated
of Forfeitures if P(3) with our Discretionary Contributions,
is selected. but shall be used to offset our first
Contribution made after the Forfeiture
is determined.
b) Optional treatment b) [_] Forfeitures shall not be used to
of Forfeitures if P(3) offset our first Contribution, but
is not selected, but shall be allocated to those meeting
P(2) is selected. the requirements in Item Q using the
allocation formula in P(3)(a) and shall
be deemed to be Additional
Contributions.
Q. NET PROFITS AND CONTRIBUTION REQUIREMENTS
1) Our Contributions shall be made out of our
current or accumulated NET PROFITS unless
otherwise specified below.
a) [X] Our Contributions may be made
without regard to our current or act
emulated Net Profits.
<PAGE>
2) If annual contributions 2) REQUIREMENTS FOR CONTRIBUTIONS. The
are subject to these allocation of our Contributions is
requirements or if subject to the provisions of Article III
Forfeitures are and Article X of the Plan. Our Contri-
reallocated (see Items butions which are subject to the
O(7) and P(4)), select requirements of this Item Q and
(a), (b), (c) or (d) Forfeitures shall be allocated as of the
below. If advanced last day of the Plan Year to each
funding is used, (a)
must be checked. a) [X] person who was an Active Member
at any time during the Plan Year.
b) [_] Active Member on that date.
c) [_] person who was an Active Member
time during the Plan Year and who has
at least 1,000 Hours of Service
during the latest Accrual Service
Period ending on or before that date,
unless a lesser number is specified
in (i) below.
i) Optional reduced i) [_] __________ Hours of Service.
Hours of Service
requirement.
d) [_] Active Member on that date who has
at least 1,000 Hours of Service during
the latest Accrual Service Period
ending on or before that date, unless
a lesser number is specified in (i)
below.
i) Optional reduced Hours i) [_] __________ Hours of Service.
of Service requirement.
The allocation requirements in (b), (c)
or (d) are modified as follows:
e) Optional allocation e) [_] Our Contributions shall also be
requirement. Do not use allocated to each person who was an
with (a) above. Active Member at any time during the
Plan Year and who has retired, become
Totally Disabled, or died.
3) The ACCRUAL SERVICE PERIOD is the 12-
consecutive month period ending on the
last day of each Plan Year, unless a
different period is specified in (a)
below.
a) Optional Accrual a) [_] The 12-consecutive month period
Service Period if you ending on each (month and day).
use hours in (2) above.
<PAGE>
R. CONTRIBUTION MODIFICATIONS
Contribution Limitations: The Annual
Additions for a Member during a Limitation
Year shall not be more than the Maximum
Permissible Amount. (See Plan Sections 3.06
and 10.05.)
1) For Limitations Years beginning after
December 31, 1991, for purposes of
applying the limitations of Plan Section
3.06, Compensation for a Limitation Year
is the Compensation actually paid or made
available during such Limitation Year.
2) Fill in last day of 2) The LIMITATION YEAR is the 12-consecutive
the Limitation Year. month period ending on each December 31
Normally, the last day (month and day).
of the Plan Year is
used. You must match 3) If the Member is covered under another
the Limitation Years of qualified defined contribution plan main-
all your other plans. tained by the Employer, as defined in
If you or an Employer, Plan Section 3.06, other than a Master or
as defined in Plan Prototype Plan:
Section 3.06, maintain
or ever maintained a) [_] The provisions of (f) through (k)
another qualified plan of Plan Section 3.06 will apply as if
in which any Member in the other plan were a Master or Proto-
this Plan is (or was) a type Plan.
member or could become
a member, you must b) [_] The method described on the
complete (3) and (4) of attached page shall be used to limit
this Item R. total Annual Additions to the Maximum
Permissible Amount, and will properly
reduce the Excess Amounts, in a manner
which precludes Employer discretion.
4) If the Member is or has ever been a member
in a defined benefit plan maintained by
the Employer, as defined in Plan Section
3.06, the method described on the attached
page shall be used to satisfy the 1.0
limitation of Code Section 415, in a
manner which precludes Employer
discretion.
5) Optional maximum 5) [_] The amount of our Contributions for
allocation. any
a) [_] Plan Year
b) [_] Limitation Year
allocated to a person meeting the
requirements in Item Q shall not be more
than (the lesser of)
c) [_] $___________ (or)
d) Less than 25%. d) [_] __________% of his Annual Pay
(Compensation for the Limitation Year
if (b) above is selected).
<PAGE>
In Years when this Plan Top-heavy Plan Requirements: The amount and
is a Top-heavy Plan, special allocation of Contributions shall be subject
minimum and maximum to the provisions of Article X of the Plan
Contribution provisions in Years when this is a Top-heavy Plan.
apply. Use Items (6) through
(9), as needed, to meet the 6) [_] Key Employees who are Employees on
requirements for your plans the last day of the Year shall also
which are top-heavy or to receive the minimum allocation required
extend the minimums to in Years when this is a Top-heavy Plan.
other employees or Years.
The items you select here 7) [_] A __________% (not less than 3%)
override any provisions minimum allocation shall apply in Years
of Article X to the when this is a Top-heavy Plan.
contrary.
8) [_] The minimum allocation in (6) and (7)
above and in Article X shall apply in all
Years without regard to whether or not
this is a Top-heavy Plan or to the
requirements in Item Q.
9) [_] The method described on the attached
page shall be used to meet the minimum
allocation and benefit requirements in
Years when this is a Top-heavy Plan, in a
manner which precludes Employer
discretion.
Present Value: For purposes of establishing
Present Value to compute the Top-heavy Ratio,
any benefit shall be discounted only for 7
1/2% interest and mortality according to the
1971 Group Annuity Table (Male) without the
7% margin but with projection by Scale E from
1971 to the later of (a) 1974, or (b) the
year determined by adding the age to 1920,
and wherein for females the male age six
years younger is used, unless otherwise
specified in (10) and (11) below:
10) [_] Interest rate _________%.
11) [_] Mortality table:
S. VOLUNTARY CONTRIBUTIONS are not permitted,
unless otherwise specified in (1) below.
1) Select if Voluntary 1) [_] Voluntary Contributions are
Contributions are permitted.
permitted.
T. Select (1 ) or (2) T. INVESTMENT
and complete (3).
1) If selected, fill in 1) [X] The Plan is trusteed. Plan assets
the names of all may be invested in an Annuity Contract
trustees. (Consider and other funding vehicle(s).
naming two or more.)
Complete (a) and (b). We have named the following person(s) to act
as TRUSTEE under the Trust:
SATISH SANAN
JEFFERY S. SLOWGROVE
<PAGE>
a) If the Plan is trusteed, a) LIFE INSURANCE
select (i) or (ii).
i) [X] With the Trustee's consent and
subject to the limits and
provisions of Article IV of the
Plan, an Active Member may elect
to have his Account applied to
purchase life insurance coverage
on his life.
ii) [_] Life insurance coverage is not
provided under this Plan.
b) If the Plan is trusteed, b) LOANS
select (i) or (ii).
i) [_] The Trustee shall not make a
loan to a Member.
ii) [X] The Trustee may make a loan to
a Member from the Trust Fund,
subject to the provisions of Plan
Section 5.06.
iii) Fill in the person or iii) JEFFERY S. SLOWGROVE is the Loan
position authorized Administrator.
to administer the
Member loan program.
Principal Mutual Life
Insurance Company may
not be used.
iv) Optional minimum loan iv) [X] The minimum amount of any
amount. Fill in up to loan is $1,000.
$1,000. If none is
selected, there is no
minimum.
v) Optional maximum loan v) [_] The maximum amount of any loan
amount. Fill in up to is the lesser of 50% of the
$49,999. If none is Member's Vested Account or $_____,
selected, the maximum reduced by any outstanding loan
is the lesser of 50% of balance.
Vested Account or
$50,000, reduced by any
loan balance.
vi) Optional number of vi) The number of outstanding loans
outstanding loans. shall be limited to one, unless
otherwise specified in A. or B.
below.
A. [_] The number shall be
limited to _______________.
B. [_] The number shall not be
limited.
<PAGE>
vii) Optional number of vii) The number of loans approved in
loans approved in any a 12-month period shall be
12-month period. limited to one, unless otherwise
specified in A. or B. below.
A. [_] The number shall be
limited to ________________
B. [_] The number shall not be
limited.
2) [_] The Plan is not trusteed. Plan assets
shall be invested only in an Annuity
Contract.
3) Subject to the provisions of Articles IV
and VIIIA of the Plan and the Annuity
Contract, the investment of that part of
a Member's Account resulting from
a) Select (i), (ii) or (iii). a) our Contributions other than Elective
Deferral Contributions shall be
directed by
i) [_] the Member with the Trustee's
consent (our consent, if not
trusteed).
ii) [X] the Member.
iii) [_] the Trustee (us, if not
trusteed).
Select (i), (ii) or (iii). b) Elective Deferral Contributions shall
be directed by
i) [_] the Member with the Trustee's
consent (our consent, if not
trusteed).
ii) [X] the Member.
iii) [_] the Trustee (us, if not
trusteed).
c) Select (i), (ii) or (iii). c) Member Contributions and Rollover
Contributions shall be directed by
i) [_] the Member with the Trustee's
consent (our consent, if not
trusteed).
ii) [X] the Member.
iii) [_] the Trustee (us, if not
trusteed).
<PAGE>
U. VESTING PERCENTAGE is used to determine the
nonforfeitable percentage of a Member's Account
resulting from our Contributions.
The Vesting Percentage for a Member who is an
Employee on the date he reaches Normal
Retirement Age, meets the requirement(s) for
Early Retirement Date, becomes Totally Disabled
or dies, whichever occurs first, shall be 100%
on such date.
1) Check any other Employer 1) Fully Vested Contributions. Elective
Contributions which are Deferral Contributions are 100% vested.
also 100% vested. Qualified Matching Contributions and
Qualified Nonelective Contributions are
100% vested. The following Employer
Contributions are also 100% vested at all
times.
a) [_] All other Employer Contributions.
b) [_] Additional Contributions.
c) [_] Matching Contributions.
d) [_] Discretionary Contributions.
2) Select one of the 2) A Member's Account resulting from our
schedules below if some Contributions which are not 100% vested
Employer Contributions is subject to the Vesting Percentage
aren't 100% vested when determined below.
made.
Vesting
Service Vesting Percentage
e) If selected, fill in (a) (b) (c) (d) (e)
the percentages. The [_] [_] [X] [_] [_]
schedule must provide
full (100%) vesting Less
after 5 years of than 1 0 0 0 0 _________
Vesting Service or must 1 0 0 0 0 _________
at all times be as 2 0 20 0 0 _________
great as the Vesting 3 100 40 0 20 _________
Percentage which the 4 60 0 40 _________
schedule in (d) would 5 80 100 60 _________
provide. 6 100 80 _________
7 100 _________
A Member's Vesting Percentage determined above
shall never be reduced in later years. If this
Plan is or ever has been a Top-heavy Plan, the
minimum vesting provisions of Article X shall
apply.
<PAGE>
Select (1) or (2). V. VESTING SERVICE, subject to the provision of
(Don't use this item Plan Section 1.02, shall be determined as
if all Employer follows:
Contributions are
fully vested and 1) [X] ELAPSED TIME METHOD. Vesting Service
Early Retirement Date if the total of an Employees countable
is not based on Periods of Service without regard to
Vesting Service.) Hours of Service.
Use (a), (b) or both a) [_] The Elapsed Time Method is used
only if the method of to determine service on and after
crediting service has ___________________, 19___
changed. The Plan must
use either the Elapsed b) [_] The Elapsed Time Method is used
Time Method or the to determine service before _______
Hours Method after the ________________, 19___.
date the Plan became
subject to ERISA. 2) [_] HOURS METHOD. A year of Vesting
Service is a Vesting Service Period in
which an Employee has 1,000 Hours of
Service, unless a lesser number is
specified in (a) below.
a) Optional reduced a) [_] ___________ Hours of Service.
Hours of Service.
b) A VESTING SERVICE PERIOD is the 12-
consecutive month period ending on
the last day of each Plan Year,
unless otherwise specified in (i) or
(ii) below.
Optional Vesting
Service Period. i) [_] The 12-consecutive month
period ending on each ___________
____________(month and day).
ii) Optional Vesting ii) [_] The 12-consecutive month
Service Period which period ending on
changes. A. each ____________ (month and
day) through
B. Month and day used B. _____________ 19 ________ and
in A. and last year
this period is used.
C. Month and day on C. each following ______________
which new period ends. (month and day)
<PAGE>
c) A VESTING BREAK in service, when the
Hours Method is used, is a Vesting
Service Period in which an Employee
is credited with not more than one-
half of the Hours of Service required
for a year of Vesting Service, unless
otherwise specified in (i) below.
i) Optional Hours of i) [_]_________of fewer Hours of
Service requirement. Service.
Fill in up to 500
hours, but less than
hours required for year
of Vesting Service.
d) and e). See comment d) [_] The Hours Method is used
for V(1)(a) and (b). to determine service on and after ___
_____________________, 19____.
e) [_] The Hours Method is used to
determine service before ____________
____________, 19____.
Select any modification Vesting Service is modified as follows:
below which apply. If
the Hours Method is
used, any date you use
should be the first day
of a service period. 3) [_] Service before __________, 19____.
a) Not available for a) [_] is the total of an Employee's
service after the date countable service with us, express in
the Plan became subject whole years and fractional parts of a
to ERISA. year (counting a partial month as a
complete month).
b) [_] shall be determined under the
provisions of the Plan in effect on
the date before that date.
4) If selected, fill in 4) [_] Service before __________, 19____
a date on or before the shall not be counted.
---
Effective Date.
5) Not over age 18. 5) [_] Service before an Employee attains
age shall not be counted. (If the Hours
Method is used, service during the
Vesting Service Period in which he
attains this age shall not be excluded
because of this item.)
<PAGE>
W. WITHDRAWAL BENEFITS
1) A Member may withdraw, in a single sum,
any part of his Vested Account resulting
from Voluntary Contributions. A Member
may make only two such withdrawals in any
twelve-month period, unless otherwise
specified in (a) below.
a) Optional frequency
for withdrawal of a) [_] A Member may make
Voluntary Contributions.
If selected, check (i) i) [_] such a withdrawal at any time.
or (ii).
-- ii) [_] only _____ such withdrawal(s)
in any twelve-month period.
2) Optional 401(k) 2) [X] Unless otherwise specified in (a)
hardship withdrawal. below, a Member may withdraw any part of
his Vested Account which does not result
from Voluntary Contributions, Qualified
Matching Contributions or Qualified
Nonelective Contributions in the event of
undue financial hardship. Withdrawals
from the Member's Account resulting from
Elective Deferral Contributions shall be
limited to the amount of the Member's
Elective Deferral Contributions (and
earning thereon accrued as of December
31, 1988). The withdrawal is subject to
the provisions of Plan Section 5.05.
a) Optional restriction a) [_] Such withdrawal shall be limited
on hardship withdrawal. to the amount of the Member's
Elective Deferral Contributions (and
earnings thereon accrued as of
December 31, 1988).
3) Optional withdrawal 3) [X] A Member may withdraw any part of his
after age 59 1/2. Vested Account which does not result from
Voluntary Contributions at any time after
he attains age 59 1/2. A Member may make
only two such withdrawals in any twelve-
month period, unless otherwise specified
in (a) below.
a) Optional frequency a) [_] A member may make
for withdrawal after
age 59 1/2. If i) [_] such withdrawal at any time.
selected, check (i) or
-- ii) [_] only ______ such withdrawal(s)
(ii). in any twelve-month period.
4) Optional withdrawal 4) [_] A percentage of a Member's vested
after 5 years as an Account which does not result from
Active Member. Must Voluntary Contributions, Elective
have Matching Deferral Contributions, Qualified
Contributions that are Matching Contributions or Qualified
not qualified, Nonelective Contributions may be
Additional withdrawn after he has been an Active
Contributions or Member for at least five (5) years.
Discretionary
Contributions. If The percentage which may be withdrawn is
selected, check (a),
(b), (c) or (d). a) [_] 25%.
--
b) [_] 25% or 50%, as he requests.
<PAGE>
c) [_] 25%, 50% or 75%, as he requests.
d) [_] any percentage up to ____%, as he
requests.
A Member shall not make another
withdrawal under this item until he has
been an Active Member for at least five
(5) years since his last withdrawal.
Note: Withdrawals are subject to the
----
qualified election procedures of Article VI.
X. RETIREMENT AND THE START OF BENEFITS
1) Normal Retirement 1) NORMAL RETIREMENT AGE is the age at which
Age may not exceed any the Member's Account shall become
mandatory retirement nonforfeitable if he is an Employee. A
age imposed by you on Member's Normal Retirement Age is age 65,
your Employees. Must unless otherwise specified in (a) or (b)
use (a) or (b) if below.
mandatory age is
younger than 65.
a) Optional Normal a) [_] Age _________.
Retirement Age. Fill
in age younger than 65.
b) Optional Normal b) [_] The order of age _________ on the
Retirement Age. Select
(i) or (ii) and fill in
--
up to age 65.
i) Fill in up to 5 i) [_] date ________ after the first
years. day of the Plan Year in which his
Entry Date occurred.
ii) Fill in up to 5 ii) [_] earlier of the date ________
years. years after his Hire Date or the
date 5 years after the first day
of the Plan Year in which his
Entry Date occurred.
iii) Optional maximum iii) [_] A Member's Normal Retirement
Normal Retirement Age Age shall not be older than
if (b) is selected. age ________.
Fill in up to age 70.
c) [_] A Member's Normal Retirement Age
shall not be older than normal
---
retirement age under the Plan on the
day before any change in the Normal
Retirement Age provisions, if he was
a Member on such date.
<PAGE>
2) Select (a) or (b). 2) EARLY RETIREMENT DATE
a) If selected, check a) [X] Early Retirement Date is the
and complete any first day of the month before a
requirements below Member's Normal Retirement Date which
which apply. An he selects for the start of
Employee's Account is retirement benefits. This day shall
100% vested when the be on or after the date the Member
requirements are met. ceases to be an Employee and the date
the following requirement(s) are met.
i) [X] He is age 55.
ii) [X] He has 5 years of Vesting
Service.
iii) [_] He is within ______ years of
Normal Retirement Date.
iv) [_] He has been an Active Member
________ years.
b) [_] Early retirement is not
---
permitted.
3) Optional 3) Section 5.03 permits an Employee to
modification of the elect to start benefits after he ceases
start of benefits. to be an Employee. The start of benefits
Check (a) or (b). is modified as follows:
--
a) [_] Benefit payments for the part of
a Member's Vested Account resulting
from our Contributions shall not
begin before the Member retires,
becomes Totally Disables or dies. A
small Vested Account may be paid
earlier in a single sum. (See Plan
Section 9.10.)
i) Optional. Restriction i) [_] Such restriction shall not
does not apply to apply to that part of a Member's
Elective Deferral Vested Account resulting from
Contributions. Elective Deferral Contributions.
b) If selected, check b) [_] The Member may elect to receive
(i) or (ii). his Member Contributions in a single
-- sum. Any other benefit payment under
Plan Section 5.03 shall not begin
before the Member has ceased to be an
Employee for a period of time.
Payment of a small Vested Account
will also be delayed. (See Plan
Section 9.10.) The period of time is
i) [_] _________ month(s)
ii) [_] _________ year(s)
<PAGE>
By executing this Adoption Agreement, we, the Employer adopt "The Principal
Financial Group Prototype for Savings Plans" for the exclusive benefit of our
employees. Our selections and specifications contained in this Adoption
Agreement and the terms, provisions and conditions provided in The Principal
Financial Group Prototype Basic Savings Plan constitute our PLAN. No other
basic plan may be used with this Adoption Agreement.
It is understood that Principal Mutual Life Insurance Company is not a party to
our Plan and shall not be responsible for any tax or legal aspects of our Plan.
We assume responsibility for these matters. We acknowledge that we have
counseled, to the extent necessary, with selected legal and tax advisors. The
obligations of Principal Mutual Life Insurance Company shall be governed solely
by provisions of its contracts and policies. Principal Mutual Life Insurance
Company shall not be required to look into any action taken by the Plan
Administrator, Name Fiduciary, Trustee or us and shall be fully protected in
taking, permitting or omitting any action on the basis of our actions.
Principal Mutual Life Insurance Company shall incur no liability or
responsibility for carrying out actions as directed by the Plan Administrator,
Named Fiduciary, Trustee or us.
- --------------------------------------------------------------------------------
This Plan is an important legal document. It may not fit your situation.
You will want to consult with your lawyer on whether it does or not and on
its tax and legal implications, for which neither Principal Mutual Life
Insurance Company nor its agents can assume responsibility.
Failure to properly fill out this Adoption Agreement may result in
disqualification of this Plan. Principal Mutual Life Insurance Company will
inform you of any amendment made to the Plan or of the abandonment of the
Plan. The address of Principal Mutual Life Insurance Company is 711 High
Street, Des Moines, Iowa 50392-0001. When you first adopt the prototype,
Principal Mutual will assign a contact person and give you a toll-free
number. If you have not been assigned a contact person, call 1-800-543-
4015, Extension 75397, for assistance.
The opinion letter issued by the National Office of the Internal Revenue
Service applies to the prototype form. You may not rely on its as evidence
that your Plan is qualified under Code Section 401. In order to obtain
reliance with respect to the qualification of your plan, you must apply to
you Key District Office for a determination letter.
- --------------------------------------------------------------------------------
(Complete in black ink.)
-----
This Adoption Agreement is executed _____________________, 19________.
(month and day)
FOR THE EMPLOYER
By: /s/ Jeffery Slowgrove
(signature)
Treasurer [handwritten]
(title)
[_] By my signature above, I hereby execute this
Adoption Agreement on behalf of each Adopting
Employer identified in Item Z.
ACKNOWLEDGMENT BY THE NAME FIDUCIARY (IF OTHER
THAN THE EMPLOYER OR TRUSTEE).
By:
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(signature)
<PAGE>
Z. ADOPTING EMPLOYERS
There are no Adopting Employers under this Plan.
<PAGE>
FOR THE TRUSTEES(S)
By:
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(signature)
Title:
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Address: INFORMATION MANAGEMENT RESOURCES, INC.
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SUITE 500
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26750 US HIGHWAY 19 NORTH
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CLEARWATER FL 34621-3442
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By: /s/ Jeffery Slowgrove Trustee [handwritten]
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(signature)
Title:
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Address: INFORMATION MANAGEMENT RESOURCES, INC.
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SUITE 500
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26750 US HIGHWAY 19 NORTH
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CLEARWATER FL 34621-3442
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By:
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By:
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By:
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<PAGE>
Item R(3)(b) The method used to limit Annual Additions to the Maximum
Permissible Amount:
Item R(4) The method used to satisfy the 1.0 limitation of Code Section 415:
Item R(9) The method used to meet the minimum contribution and allocation
requirements in Years when this is a Top-heavy Plan:
<PAGE>
EXHIBIT 10.18
INFORMATION MANAGEMENT RESOURCES, INC.
STOCK INCENTIVE PLAN
SECTION 1.
PURPOSE
The purpose of this Plan is to promote the interests of the Company by
providing the opportunity to purchase Shares or to receive compensation which is
based upon appreciation in the value of Shares to Employees and Key Persons in
order to attract and retain Employees and Key Persons by providing an incentive
to work to increase the value of Shares and a stake in the future of the Company
which corresponds to the stake of each of the Company's shareholders. The Plan
provides for the grant of Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock Awards and Stock Appreciation Rights to aid the Company in
obtaining these goals.
SECTION 2.
DEFINITIONS
Each term set forth in this Section shall have the meaning set forth
opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall include
the singular, and reference to one gender shall include the other gender.
2.1 BOARD means the Board of Directors of the Company.
2.2 CODE means the Internal Revenue Code of 1986, as amended.
2.3 COMMITTEE means the Compensation Committee of the Board.
2.4 COMMON STOCK means the voting and non-voting common stock of the
Company, $0.10 par value per share, as defined in the Company's Articles of
Incorporation, as the same may be amended from time to time, and shall also mean
any other stock or securities (including any other share or securities of an
entity other than the Company) for or into which the outstanding shares of such
stock are hereinafter exchanged or changed.
2.5 COMPANY means Information Management Resources, Inc., a Florida
corporation, and any successor to such organization.
2.6 EMPLOYEE means an employee of the Company, a Subsidiary or a Parent.
2.7 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.8 EXERCISE PRICE means the price which shall be paid to purchase one
(1) Share upon the exercise of an Option granted under this Plan.
2.9 FAIR MARKET VALUE of each Share on any date means the price
determined below on the last business day immediately preceding the date of
valuation:
<PAGE>
(a) The closing sales price per Share, regular way, or in the
absence thereof the mean of the last reported bid and asked quotations, on such
date on the exchange having the greatest volume of trading in the Shares during
the thirty-day period preceding such date (or if such exchange was not open for
trading on such date, the next preceding date on which it was open); or
(b) If there is no price as specified in (a), the final reported
sales price per Share, or if not reported, the mean of the closing high bid and
low asked prices in the over-the-counter market for the Shares as reported by
the National Association of Securities Dealers Automatic Quotation System, or if
not so reported, then as reported by the National Quotation Bureau Incorporated,
or if such organization is not in existence, by an organization providing
similar services, on such date (or if such date is not a date for which such
system or organization generally provides reports, then on the next preceding
date for which it does so); or
(c) If there also is no price as specified in (b), the price per
Share determined by the Board by reference to bid-and-asked quotations for the
Shares provided by members of an association of brokers and dealers registered
pursuant to Subsection 15(b) of the Exchange Act, which members make a market in
the Shares, for such recent dates as the Board shall determine to be appropriate
for fairly determining current market value; or
(d) If there also is no price as specified in (c), an amount per
Share determined in good faith by the Board based on such relevant facts, which
may include opinions of independent experts, as may be available to the Board.
2.10 ISO means an option granted under this Plan to purchase Shares which
is intended by the Company to satisfy the requirements of Code Section 422 as an
incentive stock option.
2.11 KEY PERSON means (i) a member of the Board who is not an Employee,
(ii) a consultant, distributor or other person who has rendered valuable
services to the Company, a Subsidiary or a Parent, (iii) a person who has
incurred, or is willing to incur, financial risk in the form of guaranteeing or
acting as co-obligor with respect to debts or other obligations of the Company,
or (iv) a person who has extended credit to the Company. Key Persons are not
limited to individuals and, subject to the preceding definition, may include
corporations, partnerships, associations and other entities.
2.12 NON-ISO means an option granted under this Plan to purchase Shares
which is not intended by the Company to satisfy the requirements of Code Section
422.
2.13 OPTION means an ISO or a Non-ISO.
2.14 PARENT means any corporation which is a parent of the Company (within
the meaning of Code Section 424(e)).
2.15 PARTICIPANT means an individual who receives a Stock Incentive
hereunder.
2.16 PLAN means the Information Management Resources, Inc. Stock Incentive
Plan, as amended from time to time.
2.17 RESTRICTED STOCK AWARD means the grant of Shares by the Company to
Participants referenced in Section 7.4.
2.18 SHARE means a share of the non-voting Common Stock of the Company
unless and to the extent that the Stock Incentive Agreement for a participant
provides that the share(s) subject thereto shall be the voting Common Stock of
the Company.
-2-
<PAGE>
2.19 STOCK APPRECIATION RIGHT means the grant of certain rights from the
Company to a Participant as described in Section 7.3.
2.20 STOCK INCENTIVE means an ISO, a Non-ISO, a Restricted Stock Award or
a Stock Appreciation Right.
2.21 STOCK INCENTIVE AGREEMENT means an agreement between the Company and
a Participant evidencing an award of a Stock Incentive.
2.22 SUBSIDIARY means any corporation which is a subsidiary of the Company
(within the meaning of Code Section 424(f)).
2.23 SURRENDERED SHARES means the Shares described in Section 8.2 which
(in lieu of being purchased) are surrendered for cash or Shares, or for a
combination of cash and Shares, in accordance with Section 8.
2.24 TEN PERCENT SHAREHOLDER means a person who owns (after taking into
account the attribution rules of Code Section 424(d)) more than ten percent
(10%) of the total combined voting power of all classes of shares of either the
Company, a Subsidiary or a Parent.
SECTION 3.
SHARES SUBJECT TO STOCK INCENTIVES
The total number of Shares that may be issued pursuant to Stock Incentives
under this Plan shall not exceed Five Hundred Forty Four Thousand Five Hundred
Ninety Eight (544,598), as adjusted pursuant to Section 11. Of this amount, Two
Hundred Eighty Thousand Two Hundred Sixty Four (280,264) shall be shares without
votoing rights and Two Hundred Sixty Four Thousand Three Hundred Thirty Four
(264,334) shall be shares with voting rights. Such Shares shall be reserved, to
the extent that the Company deems appropriate, from authorized but unissued
Shares, and from Shares which have been reacquired by the Company. Furthermore,
any Shares subject to a Stock Incentive which remain after the cancellation,
expiration or exchange of such Stock Incentive thereafter shall again become
available for use under this Plan, but any Surrendered Shares which remain after
the surrender of an ISO or a Non-ISO under Section 8 shall not again become
available for use under this Plan.
SECTION 4.
EFFECTIVE DATE
The effective date of this Plan shall be the date it is adopted by the
Board, provided the shareholders of the Company approve this Plan within twelve
(12) months after such effective date. If such effective date comes before such
shareholder approval, any Stock Incentives granted under this Plan before the
date of such approval automatically shall be granted subject to such approval.
SECTION 5.
ADMINISTRATION
This Plan shall be administered by the Board. The Board, acting in its
absolute discretion, shall exercise such powers and take such action as
expressly called for under this Plan. The Board shall have the power to
interpret this Plan and, subject to Section 13 to take such other action in the
administration and operation of the Plan as it deems equitable under the
circumstances. The Board's actions shall be binding on the Company, on each
affected Employee or Key Person, and on each other person directly or indirectly
affected by such actions.
-3-
<PAGE>
The Board may delegate its authority under the Plan, in whole or in part,
to a Committee appointed by the Board consisting of not less than two (2)
directors, each of whom does not while a member of the Committee, or has not
during the one (1) year prior to serving as a member of the Committee, received
equity securities of the Company, Parent or Subsidiary, pursuant to this Plan or
any other plan of the Company, Parent or Subsidiary, except as may be permitted
under Section 16(b)(3) of the Exchange Act. The Committee (if appointed) shall
act according to the policies and procedures set forth in the Plan and to those
policies and procedures established by the Board, and the Committee shall have
such powers and responsibilities as are set forth by the Board. Reference to the
Board in this Plan shall specifically include reference to the Committee where
the Board has delegated it authority to the Committee, and any action by the
Committee pursuant to a delegation of authority by the Board shall be deemed an
action by the Board under the Plan. Notwithstanding the above, the Board may
assume the powers and responsibilities granted to the Committee at any time, in
whole or in part.
SECTION 6.
ELIGIBILITY
Except as provided below, only Employees shall be eligible for the grant of
Stock Incentives under this Plan, but no Employee shall have the right to be
granted a Stock Incentive under this Plan merely as a result of his or her
status as an Employee. Key Persons may be eligible, subject to written approval
by the Board, for the grant of Stock Incentives under this Plan, but only if the
Key Person has provided valuable services to the Company, a Subsidiary or a
Parent, and only if the Stock Incentive is not an ISO.
SECTION 7
TERMS OF STOCK INCENTIVES
7.1 TERMS AND CONDITIONS OF ALL STOCK INCENTIVES.
(a) The Committee, in its absolute discretion, shall grant Stock
Incentives under this Plan from time to time and shall have the right to grant
new Stock Incentives in exchange for outstanding Stock Incentives. Stock
Incentives shall be granted to Employees or Key Persons selected by the
Committee, and the Committee shall be under no obligation whatsoever to grant
Stock Incentives to all Employees or Key Persons, or to grant all Stock
Incentives subject to the same terms and conditions. Each grant of a Stock
Incentive shall be evidenced by a Stock Incentive Agreement.
(b) The number of Shares as to which a Stock Incentive shall be
granted, and whether and to what extent such Shares shall possess voting rights,
shall be determined by the Committee in its sole discretion, subject to the
provisions of Section 3 as to the total number of shares available for grants
under the Plan.
(c) Each Stock Incentive shall be evidenced by a Stock Incentive
Agreement executed by the Company and the Participant, which shall be in such
form and contain such terms and conditions as the Committee in its discretion
may, subject to the provisions of the Plan, from time to time determine.
(d) The date a Stock Incentive is granted shall be the date on which
the Committee has approved the terms and conditions of the Stock Incentive
Agreement and has determined the recipient of the Stock Incentive and the number
of Shares covered by the Stock Incentive and has taken all such other action
necessary to complete the grant of the Stock Incentive.
-4-
<PAGE>
7.2 TERMS AND CONDITIONS OF OPTIONS. Each grant of an Option shall be
evidenced by a Stock Incentive Agreement which shall:
(I) specify whether the Option is an ISO or Non-ISO; and
(II) incorporate such other terms and conditions as the Committee,
acting in its absolute discretion, deems consistent with the terms of this Plan,
including (without limitation) a restriction on the number of Shares subject to
the Option which first become exercisable or subject to surrender during any
calendar year.
In determining Employee(s) or Key Person(s) to whom an Option shall
be granted and the number of Shares to be covered by such Option, the Committee
may take into account the recommendations of the President of the Company and
its other officers, the duties of the Employee or Key Person, the present and
potential contributions of the Employee or Key Person to the success of the
Company, the anticipated number of years of service remaining before the
attainment by the Employee of retirement age, and other factors deemed relevant
by the Committee, in its sole discretion, in connection with accomplishing the
purpose of this Plan. An Employee or Key Person who has been granted an Option
to purchase Shares, whether under this Plan or otherwise, may be granted one or
more additional Options.
If the Committee grants an ISO and a Non-ISO to an Employee on the
same date, the right of the Employee to exercise or surrender one such Option
shall not be conditioned on his or her failure to exercise or surrender the
other such Option.
(a) Exercise Price. Subject to adjustment in accordance with
--------------
Section 11 and the other provisions of this Section, the Exercise Price shall be
as set forth in the applicable Stock Incentive Agreement. With respect to each
grant of an ISO to a Participant who is not a Ten Percent Shareholder, the
Exercise Price shall not be less than the Fair Market Value on the date the ISO
is granted. With respect to each grant of an ISO to a Participant who is a Ten
Percent Shareholder, the Exercise Price shall not be less than one hundred ten
percent (110%) of the Fair Market Value on the date the ISO is granted. If a
Stock Incentive is a Non-ISO, the Exercise Price for each Share shall be no less
than the minimum price required by applicable state law, or by the Company's
governing instrument, or $0.01, whichever price is greater.
(b) Option Term. Each Option granted under this Plan shall be
-----------
exercisable in whole or in part at such time or times as set forth in the
related Stock Incentive Agreement, but no Stock Incentive Agreement shall:
(i) make an Option exercisable before the date such Option is
granted; or
(ii) make an Option exercisable after the earlier of the:
(A) the date such Option is exercised in full, or
(B) the date which is the tenth (10th) anniversary of the
date such Option is granted, if such Option is a Non-ISO or an ISO granted to a
non-Ten Percent Shareholder, or the date which is the fifth (5th) anniversary of
the date such Option is granted, if such Option is an ISO granted to a Ten
Percent Shareholder.
A Stock Incentive Agreement may provide for the exercise of an Option
after the employment of an Employee has terminated for any reason whatsoever,
including death or disability.
-5-
<PAGE>
(c) Payment. Payment for all shares of Stock purchased pursuant to
-------
exercise of an Option shall be made in cash or, if the Stock Incentive Agreement
provides, by delivery to the Company of a number of Shares which have been owned
by the holder for at least six (6) months prior to the date of exercise having
an aggregate Fair Market Value of not less than the product of the Exercise
Price multiplied by the number of Shares the Participant intends to purchase
upon exercise of the Option on the date of delivery. In addition, the Stock
Incentive Agreement may provide for cashless exercise through a brokerage
transaction following registration of the Company's equity securities under
Section 12 of the Securities Exchange Act of 1934. Except as provided in
subparagraph (f) below, payment shall be made at the time that the Option or any
part thereof is exercised, and no Shares shall be issued or delivered upon
exercise of an Option until full payment has been made by the Participant. The
holder of an Option, as such, shall have none of the rights of a stockholder.
Notwithstanding the above, and in the sole discretion of the
Committee, an Option may be exercised as to a portion or all (as determined by
the Committee) of the number of Shares specified in the Stock Incentive
Agreement by delivery to the Company of a promissory note, such promissory note
to be executed by the Participant and which shall include, with such other terms
and conditions as the Committee shall determine, provisions in a form approved
by the Committee under which: (i) the balance of the aggregate purchase price
shall be payable in equal installments over such period and shall bear interest
at such rate (which shall not be less than the prime bank loan rate as
determined by the Committee) as the Committee shall approve, and (ii) the
Participant shall be personally liable for payment of the unpaid principal
balance and all accrued but unpaid interest.
(d) Conditions to Exercise of an Option. Each Option granted under
-----------------------------------
the Plan shall be exercisable at such time or times, or upon the occurrence of
such event or events, and in such amounts, as the Committee shall specify in the
Stock Incentive Agreement; provided, however, that subsequent to the grant of an
Option, the Committee, at any time before complete termination of such Option,
may accelerate the time or times at which such Option may be exercised in whole
or in part.
(e) Nontransferability of Options. Except as provided in
-----------------------------
subparagraph (f) below, an Option shall not be transferable or assignable except
by will or by the laws of descent and distribution and shall be exercisable,
during the Participant's lifetime, only by the Participant, or in the event of
the disability of the Participant, by the legal representative of the
Participant.
(f) Special Provisions for Certain Substitute Options.
-------------------------------------------------
Notwithstanding anything to the contrary in this Section, any Option in
substitution for a stock option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such other
terms and conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including
the applicable vesting and termination provisions) as those contained in the
previously issued stock option being replaced thereby.
7.3 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. A Stock
Appreciation Right may be granted in connection with all or any portion of a
previously or contemporaneously granted Option or not in connection with an
Option. A Stock Appreciation Right shall entitle the Participant to receive upon
exercise or payment the excess of: (I) the Fair Market Value of a specified
number of Shares at the time of exercise, over (II) a specified price which
shall be not less than the Exercise Price for that number of Shares in the case
of a Stock Appreciation Right granted in connection with a previously or
contemporaneously granted Option, or in the case of any other Stock Appreciation
Right not less than one hundred percent (100%) of the Fair Market Value of that
number of Shares at the time the Stock Appreciation Right was granted. A Stock
Appreciation Right granted in connection with an Option may only be exercised to
the extent that the related Option has not
-6-
<PAGE>
been exercised. The exercise of a Stock Appreciation Right shall result in a pro
rata surrender of the related Option to the extent the Stock Appreciation Right
has been exercised.
(a) Payment. Upon exercise or payment of a Stock Appreciation
-------
Right, the Company shall pay to the Participant the appreciation in cash or
Shares (at the aggregate Fair Market Value on the date of payment or exercise)
as provided in the Stock Incentive Agreement or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Exercise. Each Stock Appreciation Right granted
----------------------
under the Plan shall be exercisable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of a Stock Appreciation Right, the Committee, at any time before
complete termination of such Stock Appreciation Right, may accelerate the time
or times at which such Stock Appreciation Right may be exercised in whole or in
part.
(c) Nontransferability of Stock Appreciation Right. A Stock
----------------------------------------------
Appreciation Right shall not be transferable or assignable except by will or by
the laws of descent and distribution and shall be exercisable, during the
Participant's lifetime, only by the Participant, or in the event of the
disability of the Participant, by the legal representative of the Participant.
7.4 TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. Shares awarded
pursuant to Restricted Stock Awards shall be subject to restrictions for periods
determined by the Committee. The Committee shall have the power to permit, in
its discretion, an acceleration of the expiration of the applicable restriction
period with respect to any part or all of the Shares awarded to a Participant.
The Committee may require a cash payment from the Participant in an amount no
greater than the aggregate Fair Market Value of the Shares awarded determined at
the date of grant in exchange for the grant of a Restricted Stock Award or may
grant a Restricted Stock Award without the requirement of a cash payment.
SECTION 8.
SURRENDER OF OPTIONS
8.1 GENERAL RULE. The Committee, acting in its absolute discretion, may
incorporate a provision in a Stock Incentive Agreement to allow an Employee or
Key Person to surrender his or Option in whole or in part in lieu of the
exercise in whole or in part of that Option on any date that:
(a) the Fair Market Value of the Shares subject to such Option
exceeds Exercise Price for such Shares, and
(b) the Option to purchase such Shares is otherwise exercisable.
8.2 PROCEDURE. The surrender of an Option in whole or in part shall be
effected by the delivery of the Stock Incentive Agreement to the Committee,
together with a statement signed by the Participant which specifies the number
of Shares ("Surrendered Shares") as to which the Participant surrenders his or
her Option and how he or she desires payment be made for such Surrendered
Shares.
8.3 PAYMENT. A Participant in exchange for his or her Surrendered Shares
shall receive a payment in cash or in Shares, or in a combination of cash and
Shares, equal in amount on the date such surrender is effected to the excess of
the Fair Market Value of the Surrendered Shares on such date over the Exercise
Price for the Surrendered Shares. The Committee, acting in its absolute
discretion, can approve or disapprove a Participant's request for payment in
whole or in part in cash and can make that payment in cash or in such
-7-
<PAGE>
combination of cash and Shares as the Committee deems appropriate. A request for
payment only in Shares shall be approved and made in Shares to the extent
payment can be made in whole shares of Shares and (at the Committee's
discretion) in cash in lieu of any fractional Shares.
8.4 RESTRICTIONS. Any Stock Incentive Agreement which incorporates a
provision to allow a Participant to surrender his or her Option in whole or in
part also shall incorporate such additional restrictions on the exercise or
surrender of such Option as the Committee deems necessary to satisfy the
conditions to the exemption under Rule 16b-3 (or any successor exemption) to
Section 16(b) of the Exchange Act.
SECTION 9.
SECURITIES REGULATION
Each Stock Incentive Agreement may provide that, upon the receipt of Shares
as a result of the surrender or exercise of a Stock Incentive, the Participant
shall, if so requested by the Company, hold such Shares for investment and not
with a view of resale or distribution to the public and, if so requested by the
Company, shall deliver to the Company a written statement satisfactory to the
Company to that effect. Each Stock Incentive Agreement may also provide that, if
so requested by the Company, the Participant shall make a written representation
to the Company that he or she will not sell or offer to sell any of such Shares
unless a registration statement shall be in effect with respect to such Shares
under the Securities Act of 1933, as amended ("1933 Act"), and any applicable
state securities law or, unless he or she shall have furnished to the Company an
opinion, in form and substance satisfactory to the Company, of legal counsel
acceptable to the Company, that such registration is not required. Certificates
representing the Shares transferred upon the exercise or surrender of a Stock
Incentive granted under this Plan may at the discretion of the Company bear a
legend to the effect that such Shares have not been registered under the 1933
Act or any applicable state securities law and that such Shares may not be sold
or offered for sale in the absence of an effective registration statement as to
such Shares under the 1933 Act and any applicable state securities law or an
opinion, in form and substance satisfactory to the Company, of legal counsel
acceptable to the Company, that such registration is not required.
SECTION 10.
LIFE OF PLAN
No Stock Incentive shall be granted under this Plan on or after the earlier
of:
(a) the tenth (10th) anniversary of the effective date of this Plan (as
determined under Section 4 of this Plan), in which event this Plan otherwise
thereafter shall continue in effect until all outstanding Stock Incentives have
been surrendered or exercised in full or no longer are exercisable, or
(b) the date on which all of the Shares reserved under Section 3 of this
Plan have (as a result of the surrender or exercise of Stock Incentives granted
under this Plan) been issued or no longer are available for use under this Plan,
in which event this Plan also shall terminate on such date.
SECTION 11.
ADJUSTMENT
The number of Shares reserved under Section 3 of this Plan, and the number
of Shares subject to Stock Incentives granted under this Plan, and the Exercise
Price of any Options, shall be adjusted by the Committee in an equitable manner
to reflect any change in the capitalization of the Company, including, but not
limited to, such changes as stock dividends or stock splits. Furthermore, the
Committee shall have the right to adjust (in a manner which satisfies the
requirements of Code Section 424(a)) the number of Shares reserved under Section
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3, and the number of Shares subject to Stock Incentives granted under this Plan,
and the Exercise Price of any Options in the event of any corporate transaction
described in Code Section 424(a) which provides for the substitution or
assumption of such Stock Incentives. If any adjustment under this Section
creates a fractional Share or a right to acquire a fractional Share, such
fractional Share shall be disregarded, and the number of Shares reserved under
this Plan and the number subject to any Stock Incentives granted under this Plan
shall be the next lower number of Shares, rounding all fractions downward. An
adjustment made under this Section by the Committee shall be conclusive and
binding on all affected persons and, further, shall not constitute an increase
in the number of Shares reserved under Section 3.
SECTION 12.
SALE OR MERGER OF THE COMPANY
If the Company agrees to sell substantially all of its assets for cash or
property, or for a combination of cash and property, or agrees to any merger,
consolidation, reorganization, division or other transaction in which Shares are
converted into another security or into the right to receive securities or
property and such agreement does not provide for the assumption or substitution
of the Stock Incentives granted under this Plan, each Stock Incentive at the
direction and discretion of the Committee, or as is otherwise provided in the
Stock Incentive Agreements, may be canceled unilaterally by the Company in
exchange for the whole Shares (or, subject to satisfying the conditions to the
exemption under Rule 16b-3 or any successor exemption to Section 16(b) of the
Exchange Act, for the whole Shares and the cash in lieu of a fractional Share)
which each Participant otherwise would receive if he or she had the right to
surrender or exercise his or her outstanding Stock Incentive in full and he or
she exercised that right exclusively for Shares on a date fixed by the Committee
which comes before such sale or other corporate transaction.
SECTION 13.
AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the extent that
the Board deems necessary or appropriate; provided, however, no such amendment
shall be made absent the approval of the shareholders of the Company: (a) to
increase the number of Shares reserved under Section 3, except as set forth in
Section 11, (b) to extend the maximum life of the Plan under Section 10 or the
maximum exercise period under Section 7, (c) to decrease the minimum Exercise
Price under Section 7, or (d) to change the designation of Employees or Key
Persons eligible for Stock Incentives under Section 6. The Board also may
suspend the granting of Stock Incentives under this Plan at any time and may
terminate this Plan at any time; provided, however, the Company shall not have
the right to modify, amend or cancel any Stock Incentive granted before such
suspension or termination unless: (I) the Participant consents in writing to
such modification, amendment or cancellation, or (II) there is a dissolution or
liquidation of the Company or a transaction described in Section 11 or Section
12.
SECTION 14.
MISCELLANEOUS
14.1 SHAREHOLDER RIGHTS. No Participant shall have any rights as a
shareholder of the Company as a result of the grant of a Stock Incentive to him
or to her under this Plan or his or her exercise or surrender of such Stock
Incentive pending the actual delivery of Shares subject to such Stock Incentive
to such Participant.
14.2 NO GUARANTEE OF CONTINUED RELATIONSHIP. The grant of a Stock
Incentive to a Participant under this Plan shall not constitute a contract of
employment and shall not confer on a Participant any rights upon his or her
termination of employment or relationship with the Company in addition to those
rights, if any, expressly set forth in the Stock Incentive Agreement which
evidences his or her Stock Incentive.
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14.3 WITHHOLDING. The exercise or surrender of any Stock Incentive
granted under this Plan shall constitute a Participant's full and complete
consent to whatever action the Committee directs to satisfy the federal and
state tax withholding requirements, if any, which the Committee in its
discretion deems applicable to such exercise or surrender.
14.4 TRANSFER. The transfer of an Employee batween or among the Company,
a Subsidiary or a Parent shall not be treated as a termination of his or her
employment under this Plan.
14.5 CONSTRUCTION. This Plan shall be construed under the laws of the
State of Florida.
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EXHIBIT 10.19
INFORMATION MANAGEMENT RESOURCES, INC.
DIRECTORS STOCK OPTION PLAN
SECTION 1.
PURPOSE
The purpose of this Plan is to promote the interests of the Company and its
stockholders by strengthening the Company's ability to attract and retain the
services of experienced and knowledgeable nonemployee directors and by
encouraging such directors to acquire an increased proprietary interest in the
Company.
SECTION 2.
DEFINITIONS
Each term set forth in this Section shall have the meaning set forth
opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall include
the singular.
2.1 ANNUAL MEETING DATE means, with respect to each fiscal year, the date
within such fiscal year on which the annual meeting of the shareholders of the
Company is held. If in any fiscal year the Company shall not hold an annual
meeting of shareholders, the Annual Meeting Date shall be deemed to occur on the
120th day of the fiscal year in which no such annual meeting of shareholders is
held.
2.2 BOARD means the Board of Directors of the Company.
2.3 CODE means the Internal Revenue Code of 1986, as amended.
2.4 COMMITTEE means the committee appointed by the Board pursuant to
Section 5.
2.5 COMMON STOCK means the common stock of the Company, $1.00 par value
per share, as defined in the Company's Articles of Incorporation, as the same
may be amended from time to time, and shall also mean any other stock or
securities (including any other share or securities of an entity other than the
Company) for or into which the outstanding shares of such stock are hereinafter
exchanged or changed.
2.6 COMPANY means Information Management Resources, Inc., a Florida
corporation, and any successor to such organization.
2.7 ELIGIBLE DIRECTOR means a director of the Company who is not an
employee of the Company or a Parent or Subsidiary.
2.8 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.9 EXERCISE PRICE means the price which shall be paid to purchase one
Share upon the exercise of an Option granted under this Plan.
2.10 FAIR MARKET VALUE of each Share of Common Stock on any date shall
mean the price determined below on the last business day immediately preceding
the date of valuation:
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(a) The closing sales price per Share, regular way, or in the
absence thereof the mean of the last reported bid and asked quotations, on such
date on the exchange having the greatest volume of trading in the Shares during
the thirty-day period preceding such date (or if such exchange was not open for
trading on such date, the next preceding date on which it was open); or
(b) If there is no price as specified in (a), the final reported
sales price per Share, or if not reported, the mean of the closing high bid and
low asked prices in the over-the-counter market for the Shares as reported by
the National Association of Securities Dealers Automatic Quotation System, or if
not so reported, then as reported by the National Quotation Bureau Incorporated,
or if such organization is not in existence, by an organization providing
similar services, on such date (or if such date is not a date for which such
system or organization generally provides reports, then on the next preceding
date for which it does so); or
(c) If there also is no price as specified in (b), the price per
Share determined by the Committee by reference to bid-and-asked quotations for
the Shares provided by members of an association of brokers and dealers
registered pursuant to Subsection 15(b) of the Exchange Act, which members make
a market in the Shares, for such recent dates as the Committee shall determine
to be appropriate for fairly determining current market value; or
(d) If there also is no price as specified in (c), an amount per
Share determined in good faith by the Committee based on such relevant facts,
which may include opinions of independent experts, as may be available to the
Committee.
2.11. INTERIM GRANT DATE means the date on which an Eligible Director is
first appointed or elected to the Board, if such Eligible Director is so
appointed or elected on a date other an Annual Meeting Date.
2.12 OPTION means an option granted under this Plan to purchase Shares;
all Options granted under this Plan are intended by the Company to be
nonqualified options which are not entitled to special tax treatment under, and
do not satisfy the requirements of, Code Section 422.
2.13 OPTIONEE means grantee of an Option.
2.14 PARENT means any corporation which is a parent of the Company within
the meaning of Section 424(e) of the Code.
2.15 PLAN means the Information Management Resources, Inc. Directors Stock
Option Plan, as amended from time to time.
2.16 SHARE means a share of the Common Stock of the Company.
2.17 STOCK OPTION GRANT CERTIFICATE means the written agreement or
instrument which sets forth the terms of an Option granted to an Eligible
Director under this Plan.
2.18 SUBSIDIARY means any corporation which is a subsidiary (within the
meaning of Section 424(f) of the Code) of the Company.
2.19 SURRENDERED SHARES means the Shares described in Section 9 which (in
lieu of being purchased) are surrendered for cash or Shares, or for a
combination of cash and Shares, in accordance with Section 9.
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SECTION 3.
SHARES SUBJECT TO OPTIONS
[____________] ([_________]) Shares of Common Stock shall be reserved for
issue under this Plan. Such Shares shall be reserved to the extent that the
Company deems appropriate from authorized but unissued Shares and from Shares
which have been reacquired by the Company. Furthermore, any Shares subject to an
Option which remain after the cancellation, expiration or exchange of such
Option thereafter shall again become available for use under this Plan, but any
Surrendered Shares which remain after the surrender of an Option under Section 9
shall not again become available for use under this Plan.
SECTION 4.
EFFECTIVE DATE
The effective date of this Plan shall be the date it is adopted by the
Board, provided the shareholders of the Company approve this Plan within twelve
(12) months after such effective date. If such effective date comes before such
shareholder approval, any Options granted under this Plan before the date of
such approval automatically shall be granted subject to such approval. The Plan
shall continue in effect until it is terminated by action of the Board or the
Company's stockholders, but such termination shall not affect the terms of any
Options then outstanding.
SECTION 5.
ADMINISTRATION
The Plan shall be administered by the Committee, which shall consist of two
(2) or more directors appointed by the Board. The Committee, acting in its
absolute discretion, shall exercise such powers and take such action as
expressly called for under this Plan. The Committee shall have the power to
interpret this Plan and, subject to Section 14, to take such other action in the
administration and operation of the Plan as it deems equitable under the
circumstances. The Committee's actions shall be binding on the Company, on each
affected Eligible Director, and on each other person directly or indirectly
affected by such action.
SECTION 6.
ELIGIBILITY
Each Eligible Director shall be entitled to participate in the Plan and
shall be eligible to receive those grants of Options which shall be applicable
to such Eligible Director pursuant to the terms and conditions of Section 7.
SECTION 7.
GRANT OF OPTIONS
7.1 REGULAR GRANTS. An Option to purchase Five Thousand (5,000) Shares
(as adjusted, pursuant to Section 12) shall automatically be granted to each
Eligible Director on the Annual Meeting Date for the Company's 1997 fiscal year.
Subsequent Options to purchase Five Thousand (5,000) Shares shall automatically
be granted every other Annual Meeting Date thereafter, so that Options shall be
granted hereunder every two (2) years. Options shall continue to be granted
hereunder so long as this Plan continues in effect, or until the Shares
available for grant shall no longer be sufficient to grant each Eligible
Director an Option for the number of Shares determined according to this
Subsection 7.1, at which time Options shall be granted to each director to
acquire a number of shares determined by allocating all Shares remaining
available for grant hereunder among the Eligible Directors then entitled to a
grant hereunder. Eligible
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Directors shall not be entitled to any payment of cash hereunder in lieu of
receiving Options. Each grant of an Option shall be evidenced by a Stock Option
Grant Certificate, and each Stock Option Grant Certificate shall incorporate
such other terms and conditions as the Committee, acting in its absolute
discretion, deems consistent with the terms of this Plan, including (without
limitation) a restriction on the number of Shares subject to the Option which
first become exercisable or subject to surrender during any calendar year. Any
Option granted to an Eligible Director shall, at his request, be issued to, in
the name and for the benefit of the entity through which such Eligible Director
has invested in the Company.
7.2 INTERIM GRANTS. Each Eligible Director who is first appointed or
elected to the Board on an Interim Grant Date shall be granted an Option on such
Interim Grant Date to purchase a number of Shares of Common Stock equal to the
product (rounded to the nearest One Hundred (100) Shares) of Five Thousand
(5,000) multiplied by a fraction, the numerator of which is the number of days
during the period beginning on such Interim Grant Date and ending on the next
following Annual Meeting Date on which Options shall be granted pursuant to
Section 7.1, and the denominator of which is Seven Hundred Thirty (730).
7.3 INITIAL GRANTS. Upon the effective date of this Plan, an Option to
purchase Five Thousand (5,000) Shares (as adjusted, pursuant to Section 12)
shall automatically be granted to each Eligible Director (an "Initial Grant").
An Optionee shall be entitled to acquire fifty percent (50%) of the Shares
subject to an Initial Grant on the Annual Meeting Date for the Company's 1997
fiscal year. An Optionee shall be entitled to acquire one hunderd percent (100%)
of the Shares subject to an Initial Grant on the Annual Meeting Date for the
Company's 1999 fiscal year.
SECTION 8.
TERMS AND CONDITIONS OF OPTIONS
8.1 EXERCISE PRICE. The Exercise Price for each Option granted shall be
the Fair Market Value of the Common Stock on the last business day preceding the
date that the Option is automatically granted.
8.2 VESTING OF OPTIONS. Each Option granted under the Plan shall vest as
provided below unless otherwise specified in the Plan or the Stock Option Grant
Certificate. For purposes of the Plan, that portion of an Option which is vested
may be exercised by the Optionee according to the terms and conditions of the
Plan.
(a) An Optionee shall be entitled to acquire fifty percent (50%) of
the Shares subject to an Option on the date on which the Optionee completes
twelve (12) months of continuous service on the Board following the date of
grant of such Option;
(b) An Optionee shall be entitled to acquire one hundred percent
(100%) of the Shares subject to an Option on the date on which the Optionee
completes twenty-four (24) months of continuous service on the Board following
the date of grant of such Option.
8.3 TERM OF OPTION. Each Option granted under the Plan shall include an
expiration date, which shall be set forth in the Stock Option Grant Certificate.
Unless otherwise provided in the Stock Option Grant Certificate, the termination
of service of an Optionee as a member of the Board by death or otherwise shall
not accelerate or otherwise affect the number of Shares with respect to which an
Option may be exercised, and such Option may only be exercised with respect to
that number of Shares which could have been purchased under the Option had the
Option been exercised by the Optionee on the date that such Optionee ceased to
be a member of the Board by reason of such Optionee's death or for any other
reason.
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Each Option granted under this Plan shall be exercisable in whole or
in part at such time or times as set forth in the related Stock Option Grant
Certificate, but no Stock Option Grant Certificate shall:
(a) make an Option exercisable before the date such Option is
granted; or
(b) make an Option exercisable after the earlier of the first to
occur of the following (at which time such option shall be deemed to have
terminated):
(i) immediately at the time and on the date such Option is
exercised in full;
(ii) at 5:00 p.m., EST, on the date which is the tenth (10th)
anniversary of the date such Option is granted;
(iii) at 5:00 p.m., EST on the thirtieth (30) day following the
date an Optionee ceases to be a member of the Board of Directors for any reason
other than his death or disability; or
(iv) at 5:00 p.m., EST on the ninetieth (90) day following the
date that an Optionee ceases to be a member of the Board of Directors by reason
of his death or disability.
8.4 TIME AND MANNER OF OPTION EXERCISE. Any vested and exercisable
Option is exercisable in whole or in part at any time or from time to time prior
to the expiration of an Option by giving written notice, signed by the person
exercising the Option, to the Company stating the number of Shares with respect
to which the Option is being exercised, accompanied by payment in full of the
Exercise Price for the number of Shares to be purchased. The date and time upon
which the Company's Secretary or Treasurer shall have received both such notice
and payment shall be the date and time of exercise of the Option as to the
number of Shares described by the Optionee. No Option may be exercised at any
time with respect to a fractional share. Any Option of a deceased Optionee may
be exercised, to the extent vested at the time of such Optionee's death, by the
estate of such Optionee or by a person or persons whom the Optionee has
designated in writing filed with the Company, or, if no such designation has
been made, by the person or persons to whom the Optionee's rights have passed by
will or the laws of descent and distribution.
8.5 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price may be in
cash, by cashier's check, by personal check, or by promissory note of the
Optionee. The Committee may also provide in an exercise agreement upon exercise
of an Option that, in lieu of cash, all or any portion of the Exercise Price may
be paid by tendering to the Company Shares of Common Stock duly endorsed for
transfer and owned by the Optionee, to be credited against the Option price at
the Fair Market Value of such Shares on the date of exercise. A promissory note
tendered in payment of the Exercise Price shall be in a form designated by the
Committee, shall be signed by the Optionee (which signature shall be notarized
or guaranteed) and shall include substantially the following terms: interest on
the principal amount of the note shall accrue at a per annum rate equal to the
prime rate as announced from time to time by the principal bank of the Company,
or if the Company has no principal bank, that rate announced by the Wall Street
Journal as the prevailing "prime rate" of interest per annum; equal payments of
principal and interest shall be payable in installments for a period determined
by the Committee following exercise, and upon the expiration of such period the
entire unpaid principal amount, together with accrued by unpaid interest, shall
be due and payable; and the Optionee executing the note shall be personally
liable for timely payment of the unpaid principal balance and all accrued by
unpaid interest.
8.6 TRANSFERABILITY. The right of any Optionee to exercise an Option
granted under the Plan shall, during the lifetime of such Optionee, be
exercisable only by such Optionee or by a person who obtained such Option
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
and the rules thereunder (a
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"QDRO"), and shall not be assignable or transferable by such Optionee other than
by will or by the laws of descent and distribution or by a QDRO.
8.7 LIMITATION OF RIGHTS.
(a) LIMITATION AS TO SHARES. Neither the recipient of an Option
under the Plan nor an Optionee's successor or successors in interest shall have
any rights as a stockholder of the Company with respect to any Shares subject to
an Option granted to such person until the date of issuance of a stock
certificate for such Shares.
(b) LIMITATION AS TO DIRECTORSHIP. Neither the Plan, nor the
granting of an Option, nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or implied,
that an Eligible Director has a right to continue as a member of the Board for
any period of time or at any particular rate of compensation.
(c) REGULATORY APPROVAL AND COMPLIANCE. The Company shall not be
required to issue any certificate or certificates for Shares upon the exercise
of an Option granted under the Plan or to record as a holder of record of Shares
the name of the individual exercising an Option under the Plan, without
obtaining to the complete satisfaction of the Board the approval of all
regulatory bodies deemed necessary by the Board and without complying, to the
Board's complete satisfaction, with all rules and regulations under federal,
state, or local law deemed applicable by the Board. In addition, with respect to
persons subject to Section 16 of the Exchange Act, transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of the Plan or
action by the Board or the Committee fail to comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Board.
SECTION 9.
SURRENDER OF OPTIONS
9.1 GENERAL RULE. The Committee, in its absolute discretion may
incorporate a provision in a Stock Option Grant Certificate to allow an Optionee
to surrender his or her Option in whole or in part in lieu of the exercise in
whole or in part of that Option on any date that
(a) the Fair Market Value of the Shares subject to such Option
exceeds the Exercise Price for such Shares, and
(b) the Option to purchase such Shares is otherwise exercisable.
9.2 PROCEDURE. The surrender of an Option in whole or in part shall be
effected by the delivery of the Stock Option Grant Certificate to the Committee
(or to its delegate) together with a statement signed by the Optionee which
specifies the number of Shares ("Surrendered Shares") as to which the Optionee
surrenders his or her Option and how he or she desires payment be made for such
Surrendered Shares.
9.3 PAYMENT. An Optionee in exchange for his or her Surrendered Shares
shall receive a payment in cash or in Shares, or in a combination of cash and
Shares, equal in amount on the date such surrender is effected to the excess of
the Fair Market Value of the Surrendered Shares on such date over the Exercise
Price for the Surrendered Shares. The Committee acting in its absolute
discretion can approve or disapprove an Optionee's request for payment in whole
or in part in cash and can make that payment in cash or in such combination of
cash and Shares as the Committee deems appropriate. A request for payment only
in Shares shall be approved and made in Shares to the extent payment can be made
in whole shares of Shares and (at the Committee's discretion) in cash in lieu of
any fractional Shares.
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9.4 RESTRICTIONS. Any Stock Option Grant Certificate which incorporates
a provision to allow an Optionee to surrender his or her Option in whole or in
part also shall incorporate such additional restrictions on the exercise or
surrender of such Option as the Committee deems necessary to satisfy the
conditions to the exemption under Rule 16b-3 (or any successor exemption) to
Section 16(b) of the Exchange Act.
SECTION 10.
SECURITIES REGISTRATION
Each Stock Option Grant Certificate may provide that, upon the receipt of
Shares as a result of the surrender or exercise of an Option, the Optionee
shall, if so requested by the Company, hold such Shares for investment and not
with a view of resale or distribution to the public and, if so requested by the
Company, shall deliver to the Company a written statement satisfactory to the
Company to that effect. Each Stock Option Grant Certificate also may provide
that, if so requested by the Company, the Optionee shall make a written
representation to the Company that he or she will not sell or offer to sell any
of such Shares unless a registration statement shall be in effect with respect
to such Shares under the Securities Act of 1933, as amended ("1933 Act") and any
applicable state securities law or unless he or she shall have furnished to the
Company an opinion, in form and substance satisfactory to the Company, or legal
counsel acceptable to the Company, that such registration is not required.
Certificates representing the Shares transferred upon the exercise or surrender
of an Option granted under this Plan may at the discretion of the Company bear a
legend to the effect that such Shares have not been registered under the 1933
Act or any applicable state securities law and that such Shares may not be sold
or offered for sale in the absence of an effective registration statement as to
such Shares under the 1933 Act and any applicable state securities law or an
opinion, in form and substance satisfactory to the Company, of legal counsel
acceptable to the Company, that such registration is not required.
SECTION 11.
LIFE OF PLAN
No Option shall be granted under this Plan on or after the earlier of:
(a) The tenth (10th) anniversary of the effective date of this Plan
(as determined under Section 4 of this Plan), in which event this Plan otherwise
thereafter shall continue in effect until all outstanding Options have been
surrendered or exercised in full or no longer are exercisable; or
(b) The date on which all of the Shares reserved under Section 3 of
this Plan have (as a result of the surrender or exercise of Options granted
under this Plan) been issued or no longer are available for use under this Plan,
in which event this Plan also shall terminate on such date.
SECTION 12.
ADJUSTMENT
The number of Shares reserved under Section 3 of this Plan, the number of
Shares subject to Options granted under this Plan and the Exercise Price of such
Options shall be adjusted by the Board in an equitable manner to reflect any
change in the capitalization of the Company, including, but not limited to, such
changes as stock dividends or stock splits. Furthermore, the Board shall have
the right to adjust (in a manner which satisfies the requirements of Code
Section 424(a)) the number of Shares reserved under Section 3 of this Plan and
the number of Shares subject to Options granted under this Plan and the Exercise
Price of such Options in the event of any corporate transaction described in
Code Section 424(a) which provides for the substitution or assumption of such
Options. If any adjustment under this Section creates a fractional Share or a
right to acquire a fractional Share, such fractional Share shall be disregarded
and the number of Shares
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reserved under this Plan and the number subject to any Options granted under
this Plan shall be the next lower number of Shares, rounding all fractions
downward. An adjustment made under this Section by the Board shall be conclusive
and binding on all affected persons and, further, shall not constitute an
increase in the number of Shares reserved under Section 3 of this Plan.
SECTION 13.
SALE OR MERGER OF THE COMPANY
If the Company: (i) agrees to sell substantially all of its assets for
cash or property or for a combination of cash and property, (ii) agrees to any
merger, consolidation, reorganization, division or other transaction in which
Shares are converted into another security or into the right to receive
securities or property and such agreement does not provide for the assumption or
substitution of the Options granted under this Plan, or (iii) agrees to dissolve
the Company or liquidate its assets, then immediately following such time that
the Company manifests its agreement in writing to do any of the foregoing, at
the direction and discretion of the Board, or as is otherwise provided in the
Stock Option Grant Certificates, either (a) each Option shall be exercisable for
a period of thirty (30) days following delivery of written notice to each holder
of an Option (after which such Option shall expire), or (b) each Option may be
canceled unilaterally by the Company in exchange for the whole Shares (or,
subject to satisfying the conditions to the exemption under Rule 16b-3 or any
successor exemption to Section 16(b) of the Exchange Act, for the whole Shares
and the cash in lieu of a fractional Share) which each Optionee otherwise would
receive if he or she had the right to surrender his or her outstanding Option in
full under Section 9 of this Plan and he or she exercised that right exclusively
for Shares on a date fixed by the Board which comes before such sale or other
corporate transaction.
SECTION 14.
AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the extent that
the Board deems necessary or appropriate; provided, however, no such amendment
shall be made absent the approval of the shareholders of the Company: (i) to
increase the number of Shares reserved under Section 3, except as set forth in
Section 12, (ii) to extend the maximum life of the Plan under Section 11 or the
maximum exercise period under Section 8, (iii) to decrease the minimum Exercise
Price under Section 7, or (iv) to change the designation of Optionees eligible
for Options under Section 6. The Board also may suspend the granting of Options
under this Plan at any time and may terminate this Plan at any time; provided,
however, the Company shall not have the right to modify, amend or cancel any
Option granted before such suspension or termination unless: (a) the Optionee
consents in writing to such modification, amendment or cancellation, or (b)
there is a dissolution or liquidation of the Company or a transaction described
in Section 12 or Section 13 of this Plan.
SECTION 15.
MISCELLANEOUS
15.1 WITHHOLDING. The exercise or surrender of any Option granted under
this Plan shall constitute an Optionee's full and complete consent to whatever
action the Committee directs to satisfy the federal and state tax withholding
requirements, if any, which the Committee in its discretion deems applicable to
such exercise or surrender. In addition to and at the time of payment of the
Exercise Price, the Optionee shall pay to the Company in cash the full amount of
any federal, state and local income, employment or other taxes required to be
withheld from the income of such Optionee as a result of such exercise;
provided, however, that in the discretion of the Committee any Stock Option
Grant Certificate may provide that all or any portion of such tax obligations,
together with additional taxes not exceeding the actual
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<PAGE>
additional taxes be owed by the Optionee as a result of such exercise, may, upon
the irrevocable election of the Optionee, be paid by tendering to the Company
whole Shares of Common Stock duly endorsed for transfer and owned by the
Optionee, or by authorizing the Company to withhold Shares of Common Stock
otherwise issuable upon exercise of the Option, in either case in that number of
Shares having a Fair Market Value on the date of exercise equal to the amount of
such taxes thereby being paid, in all cases subject to such restrictions as the
Committee may from time to time determine, including any such restrictions as
may be necessary or appropriate to satisfy the conditions of the exemption set
forth in Rule 16b-3 under the Exchange Act.
15.2 CONSTRUCTION. This Plan shall be construed under the laws of the
State of Florida.
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<PAGE>
EXHIBIT 10.20
INFORMATION MANAGEMENT RESOURCES, INC.
EMPLOYEE STOCK PURCHASE PLAN
SECTION 1.
PURPOSE
The purpose of the Information Management Resources, Inc. Employee Stock
Purchase Plan (the "Plan") is to promote the interests of the Company by
providing the opportunity to purchase Shares to Employees in order to attract
and retain Employees by providing an incentive to work to increase the value of
Shares and a stake in the future of the Company which corresponds to the stake
of each of the Company's shareholders. The Plan is intended to be an "employee
stock purchase plan" as defined in Section 423 of the Internal Revenue Code of
1986, as amended ("Code"). The provisions of the Plan shall, accordingly, be
construed so as to comply with the requirements of Section 423 of the Code
whenever possible.
SECTION 2.
DEFINITIONS
2.1 "BASE PAY" means regular straight-time and overtime earnings
received from the Company, excluding payments for incentive compensation,
bonuses and other special payments.
2.2 "BOARD" means the Board of Directors of Information Management
Resources, Inc.
2.3 "COMMITTEE" means the Compensation Committee of the Board.
2.4 "COMPANY" means Information Management Resources, Inc., a Florida
corporation, and any successor to such organization.
2.5 "CUSTODIAN" means ________________________, whose address is
_____________________, or such other person as the Committee shall designate
from time to time.
2.6 "EFFECTIVE DATE" means the date set by the Board for the Plan to
become effective, which date shall be October 1, 1996. The Effective Date shall
be subject to the terms of Section 7(e) and to shareholder approval pursuant to
Section 17.
2.7 "EXERCISE DATE" means the last day of a Purchase Period (as such
term is defined in Section 4(b) hereof), on which date all Participants'
outstanding Purchase Rights will automatically be exercised.
2.8 "FAIR MARKET VALUE" of each Share on any date means the price
determined below on the last business day immediately preceding the date of
valuation:
(a) The closing sales price per Share, regular way, or in the
absence thereof the mean of the last reported bid and asked quotations, on such
date on the exchange having the greatest volume of trading in the Shares during
the thirty-day period preceding such date (or if such exchange was not open for
trading on such date, the next preceding date on which it was open); or
(b) If there is no price as specified in (a), the final reported
sales price per Share, or if not reported, the mean of the closing high bid and
low asked prices in the over-the-counter market for the Shares as reported by
the National Quotation Bureau Incorporated, or if such organization is not in
existence, by an
<PAGE>
organization providing similar services, on such date (or if such date is not a
date for which such system or organization generally provides reports, then on
the next preceding date for which it does so); or
(c) If there also is no price as specified in (b), the price per
Share determined by the Board by reference to bid-and-asked quotations for the
Shares provided by members of an association of brokers and dealers registered
pursuant to Subsection 15(b) of the Exchange Act, which members make a market in
the Shares, for such recent dates as the Board shall determine to be appropriate
for fairly determining current market value; or
(d) If there also is no price as specified in (c), an amount per
Share determined in good faith by the Board based on such relevant facts, which
may include opinions of independent experts, as may be available to the Board.
2.9 "PARTICIPANT" means an employee of the Company or of a parent or
subsidiary of the Company who has enrolled in the Plan by completing a
Participation Form (as such term is defined in Section 5 hereof) with the Plan
Administrator. The terms parent and subsidiary have the meanings set forth in
Code Sections 424(e) and (f), respectively.
2.10 "PLAN ADMINISTRATOR" means the ________________ of the Company, or
any such other person so designated by the Board.
2.11 "PURCHASE PERIOD" means a calendar quarter period as defined in
Section 4(b) hereof.
2.12 "PURCHASE RIGHT" means a Participant's option to purchase shares of
Common Stock that is deemed to be granted to a Participant during a Purchase
Period pursuant to Section 7.
2.13 "SECTION 16(b) INSIDER" means those persons subject to the
requirements of Section 16(b) of the Securities Exchange Act of 1934, as
amended.
2.14 "SHARES" means the common stock, par value $.10 per share, of
Information Management Resources, Inc., and any other stock or securities
(including any other share or securities of an entity other than Information
Management Resources, Inc.) for or into which the outstanding shares of such
common stock are hereinafter exchanged or changed.
2.15 "TRADING DAY" refers to a day during which the Nasdaq National
Market is available for trading the Shares.
SECTION 3.
ELIGIBILITY
(a) Participation in the Plan is voluntary. All full-time employees of
the Company, including officers and directors who are full-time employees but
who are not members of the Committee, who have completed at least six (6) months
of continuous service with the Company are eligible to participate in the Plan.
The employee's entry date in the Plan shall be the first day of the Purchase
Period immediately following the date the employee has satisfied the eligibility
provisions. Full-time employees mean those employees who work at least twenty
(20) hours per week and for more than five (5) months in any calendar year.
(b) Notwithstanding any provision of the Plan to the contrary, no
employee may participate in the Plan if prior to the grant of Purchase Rights or
if following a grant of Purchase Rights under the Plan, the employee would own,
directly or by attribution, stock, Purchase Rights or other stock options to
purchase stock representing five percent (5%) or more of the total combined
voting power or value of all classes of the Company's stock as defined in Code
Section 423(b)(3).
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SECTION 4.
SECURITIES SUBJECT TO THE PLAN AND PURCHASE PERIODS
(a) The maximum number of Shares which may be granted and purchased
under the Plan may not exceed ______________________________ (________) Shares
(subject to adjustment as provided in Section 15), which may be authorized but
unissued shares, re-acquired shares or shares bought on the open market. If any
Purchase Right granted shall expire or terminate for any reason without been
exercised in full, the unpurchased Shares shall again become available for
purposes of the Plan, unless the Plan has been terminated.
(b) Purchase Period means each three month calendar quarter period,
beginning on January 1, April 1, July 1, and October 1, with the first such
Purchase Period (the "Initial Purchase Period") beginning concurrently with the
Effective Date of the Plan.
SECTION 5.
PARTICIPATION
Eligible employees become Participants in the Plan by authorizing payroll
deductions for the purpose through a "Participation Form" filed with the Plan
Administrator no later than fifteen (15) days prior to the start date of a
Purchase Period.
SECTION 6.
PAYROLL DEDUCTIONS/CONTRIBUTIONS
(a) In order to purchase Shares each Participant must elect and indicate
on the Participation Form the amount he/she wishes to authorize the Company to
deduct at regular payroll intervals during the Purchase Period, expressed either
as (1) an integral percentage amount of such Participant's Base Pay for the
applicable payroll period, with a minimum deduction of $10.00 per payday and a
maximum percentage to be set by the Committee, or (2) a dollar amount to be
deducted pro rata at regular payroll intervals during the Purchase Period, with
a minimum deduction of $10.00 per payday and a maximum dollar amount per payday
to be set by the Committee. The Committee shall determine from time to time
whether method (1) or (2), or both, shall be utilized. The Participation Form
will include authorization for the Company to make payroll deductions from the
Participant's Base Pay. In addition to the foregoing, with respect to the
Initial Purchase Period, each Participant may indicate on the Participation Form
an amount he/she wishes to contribute to his/her account for the exercise of
his/her Purchase Rights with respect to such Initial Purchase Period, subject to
the limitation of Section 6(b). The Participant shall forward with the
Participation Form a cash payment equal to such amount.
(b) Purchase Rights granted to a Participant under the Plan for any
calendar year may not represent Shares with a value in excess of Twenty Five
Thousand Dollars ($25,000.00). The Twenty Five Thousand Dollar ($25,000.00)
limit is determined based upon the Fair Market Value of the Shares subject to a
Purchase Right as of the first day (the grant date) of the Purchase Period
during which such Purchase Rights are granted. Participants will be notified if
this limitation becomes applicable to them.
(c) The amounts deducted from the Participant's Base Pay or otherwise
contributed by the Participant shall be credited to a bookkeeping account
established in the Participant's name under the Plan, but no actual separate
account will be established by the Company to hold such amounts. There shall be
no interest paid on the balance credited to a Participant's account. Amounts
deducted from the Participant's Base Pay or otherwise contributed may be
commingled with the general assets of the Company and may be used for its
general corporate purposes prior to the purchase of Shares during a Purchase
Period.
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<PAGE>
(d) Payroll deductions shall begin on the first payday of each Purchase
Period, and shall end on the last payday of each Purchase Period. Eligible
employees may participate in the Plan and, except with respect to the Initial
Purchase Period, may purchase Shares only through payroll deductions.
Notwithstanding the above, a Participant on an approved leave of absence may
continue participating in the Plan by making cash payments to the Company within
a normal pay period equal to the amount of the normal payroll deduction had the
leave of absence not occurred. The right of a Participant on an approved leave
of absence to continue participating in the Plan shall terminate upon the
expiration of twelve (12) weeks of leave, unless the Participant's right to re-
employment by the Company after a longer leave is guaranteed by statute or
contract, in which case termination of the right to participate will occur upon
the expiration of such extended period.
(e) So long as a Participant remains an employee of the Company, payroll
deductions will continue in effect from Purchase Period to Purchase Period,
unless at least fifteen (15) calendar days prior to the first day of the next
succeeding Purchase Period the Participant:
(i) elects a different rate by filing a new Participation Form
with the Plan Administrator; or
(ii) withdraws from the Plan in accordance with Section 9 hereof.
SECTION 7.
GRANT OF PURCHASE RIGHT
(a) Subject to Section 7(d) and Section 7(e) hereof, and the effective
date provisions of Section 17, at 5:01 p.m. Eastern Standard Time, on the last
day of each Purchase Period (the Exercise Date), each Participant who has not
withdrawn from the Plan pursuant to Section 9 shall be deemed to have been
granted a Purchase Right as of the first day of the Purchase Period to purchase
as many full and fractional Shares as can be purchased with the balance credited
to such Participant's account as of the Exercise Date.
(b) The price at which each Purchase Right to purchase Shares shall be
exercised is the lower of:
(i) 85% of the Fair Market Value of the Shares on the first day
of a Purchase Period; provided, however, that if during any Purchase Period a
registration statement is declared effective by the Securities and Exchange
Commission with respect to an initial public offering of the Shares, the price
shall be 85% of the price to the public in such offering; or
(ii) 85% of the Fair Market Value of the Shares on the last
Trading Day of such Purchase Period.
(c) The Committee has the power, exercisable at any time prior to the
start of a Purchase Period, to set a maximum dollar value Purchase Right for
that Purchase Period, subject to the limitations in Section 6(b). The maximum
dollar value will continue in effect from Purchase Period to Purchase Period
until the Committee once again exercises its power to adjust the limitation.
(d) Notwithstanding anything to the contrary contained herein, each
Participant who has not withdrawn from the Plan pursuant to Section 9 during the
Initial Purchase Period, shall be deemed to have been granted a Purchase Right
with respect to the Initial Purchase Period as of the first day of the trading
of the Shares on the Nasdaq National Market.
(e) Notwithstanding anything to the contrary contained herein, no
Participant shall be entitled to exercise any Purchase Right unless and until a
registration statement has been filed and declared effective by the Securities
and Exchange Commission with respect to an initial public offering of the Shares
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<PAGE>
SECTION 8.
EXERCISE OF PURCHASE RIGHT
(a) Subject to Section 7(e) and the effective date provisions of Section
17, each outstanding Purchase Right shall be deemed automatically exercised as
of 5:01 p.m. of the Exercise Date (the last day of the Purchase Period). The
exercise of the Purchase Right is accomplished by applying the balance credited
to each Participant's account as of the Exercise Date to the purchase on the
Exercise Date of whole and fractional Shares at the purchase price in effect for
the Purchase Period.
(b) If a Participant purchases the maximum share amount determined in
accordance with the terms of Section 7(c), any amount not applied to the
purchase of Shares for that Purchase Period will be held for the purchase of
Shares in the next Purchase Period.
(c) If the number of Shares for which Purchase Rights are exercised
exceeds the number of Shares available in any Purchase Period under the Plan,
the Shares available for exercise will be allocated by the Plan Administrator
pro rata among the Participants in such Purchase Period in proportion to the
relative amounts credited to their accounts. Any amounts not thereby applied to
the purchase of Shares under the Plan will be refunded to the Participants after
the end of the Purchase Period.
SECTION 9.
WITHDRAWAL AND TERMINATION OF PURCHASE RIGHTS
(a) A Participant may withdraw from the Plan during a Purchase Period by
providing written notice to the Plan Administrator on or before 5:00 p.m. of the
last business day of such Purchase Period. Such withdrawal will become effective
upon receipt by the Plan Administrator of such notice, payroll deductions will
cease as soon as is administratively feasible from the date of such notice, and
no additional payroll deductions will be made on behalf of such Participant
during the Purchase Period. Such notice shall be on a form (the "Withdrawal
Form") provided by the Plan Administrator for that purpose. The Withdrawal Form
will permit a Participant to elect to receive all accumulated payroll deductions
and any other contributions made by the Participant as a refund without penalty
or to exercise such Participant's outstanding Purchase Rights to purchase Shares
on the following Exercise Date in the amount of all payroll deductions withheld
during the Purchase Period or other contributions made to the Participant's
account prior to the Participant's withdrawal.
(b) Any Participant who withdraws from the Plan pursuant to Section 9(a)
will not be eligible to rejoin the Plan until the second (2nd) Purchase Period
following the Purchase Period of withdrawal. A Participant wishing to resume
participation may re-enroll in the Plan by completing and filing a new
Participation Form for a subsequent Purchase Period by following the applicable
enrollment procedures.
(c) If a Participant ceases to be an employee of the Company or a parent
or subsidiary of the Company for any reason during a Purchase Period, his or her
outstanding Purchase Right will immediately terminate, and all sums previously
collected from such Participant during such Purchase Period under the terminated
Purchase Right will be refunded to the Participant.
SECTION 10.
RIGHTS AS SHAREHOLDER
(a) A Participant is not a shareholder with respect to Shares to be
purchased during a Purchase Period until the Purchase Right is exercised on the
Exercise Date. Thus, a Participant will not have a right to any dividend or
distribution made prior to the Exercise Date on Shares purchased during the
Purchase Period.
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<PAGE>
(b) Upon a written request made to the Custodian, the Participant will
be entitled to receive, as soon as practicable after the Exercise Date, a stock
certificate for the number of purchased Shares. The Custodian may impose upon,
or pass through to, the Participant a reasonable fee for the transfer of Shares
in the form of stock certificates from the Custodian to the Participant. It is
the responsibility of each Participant to keep his or her address current with
the Company through the Plan Administrator and with the Custodian.
SECTION 11.
SALE OF SHARES ACQUIRED UNDER THE PLAN
(a) Participants may sell the Shares they acquire under the Plan only in
compliance with the restrictions set forth below.
(i) Section 16(b) Insiders may be subject to certain
restrictions in connection with their transactions under the Plan and with
respect to the sale of Shares obtained under the Plan, including, but not
limited to, the Company's Insider Trading Policy, as the same may exist from
time to time.
(ii) Shares obtained under the Plan by a Participant must comply
with the Company's Insider Trading Policy, as the same may exist from time to
time.
(iii) No Participant purchasing Shares under the Plan shall be
entitled to sell such Shares until the latest to occur of (A) the date which is
one hundred eighty (180) days after the Effective Date; or (B) the first day of
the second (2nd) Purchase Period immediately following the Purchase Period in
which the Shares were obtained. For purposes of this restriction, the Company
may, at its option, include the following legend on any certificates
representing the Shares so purchased:
"The shares represented by this Certificate are subject to certain
restrictions on sale and disposition contained in the Information
Management Resources, Inc. Employee Stock Purchase Plan, a copy of which
is on file with the Corporation."
(b) In order to insure compliance with the restrictions and requirements
herein, the Company may issue appropriate "stop transfer" instructions to its
transfer agent, if any, and, if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records. By executing
the Participation Form, each Participant acknowledges and agrees to the
Company's rights described in this Section 11(b).
(c) A Participant shall immediately inform the Plan Administrator in
writing if the Participant transfers any Shares purchased through the Plan
within two (2) years from the date of grant of the related Purchase Right. Such
transfer shall include disposition by sale, gift or other manner. The
Participant may be requested to disclose the manner of the transfer, the date of
the transfer, the number of Shares involved and the transfer price. By executing
the Participation Form, each Participant obligates himself or herself to provide
such information to the Plan Administrator.
(d) The Company is authorized to withhold from any payment to be made to
a Participant, including any payroll and other payments not related to the
Plan, amounts of withholding and other taxes due in connection with any
transaction under the Plan, and a Participant's enrollment in the Plan will be
deemed to constitute his or her consent to such withholding.
SECTION 12.
PLAN ADMINISTRATION
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<PAGE>
(a) The Plan shall be administered by the Committee. No member of the
Board will be eligible to participate in the Plan during his or her period of
Committee service.
(b) The Committee shall have the plenary power, subject to and within
the limited of the express provisions of the Plan:
(i) to determine the commencement and termination date of the
offering of Shares under the Plan; and
(ii) to interpret the terms of the Plan, establish and revoke
rules for the administration of the Plan and correct or reconcile any defect or
inconsistency in the Plan.
(c) The Committee may delegate all or part of its authority to
administer the Plan to the Plan Administrator, who may in turn delegate the day-
to-day operations of the Plan to the Custodian. The Custodian will establish and
maintain, as agent for the Participants, accounts for the purpose of holding the
Shares and/or cash contributions as may be necessary or desirable for the
administration of the Plan.
(d) The Board may waive or modify any requirement that a notice or
election be made or filed under the Plan a specified period in advance in an
individual case or by adoption of a rule or regulation under the Plan, without
the necessity of an amendment to the Plan.
SECTION 13.
TRANSFERABILITY
(a) Any account maintained by the Custodian for the benefit of a
Participant with respect to shares acquired pursuant to the Plan may only be in
the name of the Participant; provided, however, that the Participant may elect
to maintain such account with right of joint ownership with such Participant's
spouse. Such election may only be made on a form (the "Joint Account Form")
provided by the Company.
(b) Neither payroll deductions or other contributions credited to a
Participant's account nor any Purchase Rights or other rights to acquire Shares
under the Plan may be assigned, transferred, pledged or otherwise disposed of by
Participants other than by will or the laws of descent and distribution and,
during the lifetime of a Participant, Purchase Rights may be exercised only by
the Participant.
SECTION 14.
MERGER OR LIQUIDATION OF THE COMPANY
In the event the Company merges with another corporation and the Company is
not the surviving entity, or in the event all or substantially all of the stock
or assets of the Company is acquired by another company, or in the event of
certain other similar transactions, the Committee may, in its sole discretion
and in connection with such transaction, cancel each outstanding Purchase Right
and refund all sums previously collected from Participants under the canceled
outstanding Purchase Rights, or, in its discretion, cause each Participant with
outstanding Purchase Rights to have his or her outstanding Purchase Right
exercised immediately prior to such transaction and thereby have the balance of
his or her account applied to the purchase of whole and fractional Shares
(subject to the maximum dollar limitation, if any, of Section 7(c)) at the
purchase price in effect for the Purchase Period, which would be treated as
ending with the effective date of such transaction. The balance of the account
not so applied will be refunded to the Participant. In the event of a merger in
which the Company is the surviving entity, each Participant is entitled to
receive, for each Share as to which such Participant's outstanding Purchase
Rights are exercised, as nearly as reasonably may be
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<PAGE>
determined by the Committee, in its sole discretion, the securities or property
that a holder of one Share was entitled to receive upon the merger.
SECTION 15.
ADJUSTMENT FOR CHANGES IN CAPITALIZATION
To prevent dilution or enlargement of the rights of Participants under the
Plan, appropriate adjustments may be made in the event any change is made to the
Company's outstanding common stock by reason of any stock dividend, stock split,
combination of shares, exchange of shares or other change in the Shares effected
without the Company's receipt of consideration. Adjustments may be made to the
maximum number and class of securities issuable under the Plan, the maximum
number and class of securities purchasable per outstanding Purchase Right and
the number and class of securities and price per share in effect under each
outstanding Purchase Right. Any such adjustments may be made retroactively
effective to the beginning of the Purchase Period in which the change in
capitalization occurs, and any such adjustment will be made by the Committee in
its sole discretion.
SECTION 16.
AMENDMENT AND TERMINATION
The Committee may terminate or amend the Plan at any time, subject to the
following restrictions. First, the provisions of Sections 4, 5, 6, 7 and 8 which
govern the formula for the automatic grant of Purchase Rights under the Plan may
not be amended more than once in any six (6) month period. Second, any
termination or amendment made to the Plan may not affect or change Purchase
Rights previously granted under the Plan without the consent of the affected
Participant, and any amendment that materially increases the benefits or number
of Shares under the Plan (except for certain allowable adjustments in the event
of changes to the Company's capital structure or for changes authorized by the
Plan to be made by the Committee or the Plan Administrator) or materially
modifies the eligibility requirements of the Plan shall be subject to
shareholder approval. If not sooner terminated by the Committee, the Plan shall
terminate at the time Purchase Rights have been exercised with respect to all
Shares reserved for grant under the Plan.
SECTION 17.
SHAREHOLDER APPROVAL AND EFFECTIVE DATE
The Plan is subject to the approval of shareholders of the Company holding
a majority of the shares of the Common Stock.
The Plan shall be deemed to have been adopted as of the Effective Date upon
the date of its approval by the shareholders of the Company. Until the Plan is
approved by the shareholders, no Purchase Rights shall be deemed granted or
exercised under Sections 7 and 8. Upon approval of the Plan by the Company's
shareholders, Purchase Rights shall be deemed granted and exercised as of the
appropriate dates in the Plan as of the Effective Date, and Shares purchased
shall be deemed purchased as of the applicable Exercise Date. In the event the
Plan is not approved by the shareholders on or before _______________, the Plan
shall be deemed not to have been adopted, and all payroll deduction amounts
withheld on behalf of Participants pursuant to Section 6 shall be refunded to
such Participants.
SECTION 18.
NO EMPLOYMENT RIGHTS
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Participation in the Plan will not impose any obligations upon the Company
to continue the employment of the Participant for any specific period and will
not affect the right of the Company to terminate such person's employment at any
time, with or without cause.
SECTION 19.
COSTS
Except as set forth in Section 10(b), costs and expenses incurred in the
administration of the Plan and the maintenance of accounts with the Custodian
may be shared by the Participant and the Company, to the extent provided in this
Section 19. Any brokerage fees and commissions for the purchase of Shares under
the Plan (including Shares purchased upon reinvestment of dividends and
distributions) will be shared equally by the Participant and the Company, but
any brokerage fees and commissions for the sale of Shares under the Plan by a
Participant will be borne by such Participant.
SECTION 20.
REPORTS
After the close of each Purchase Period, each Participant in the Plan will
receive a report from the Custodian indicating the amount of the Participant's
contributions to the Plan during the Purchase Period, the amount of the
contributions applied to the purchase of Shares for the Purchase Period, the
purchase price per share in effect for the Purchase Period and the amount of the
contributions (if any) carried over to the next Purchase Period.
SECTION 21.
GOVERNING LAW
The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan will be determined in accordance with laws of
the State of Florida, without giving effect to principles of conflicts of laws,
and applicable Federal law.
SECTION 22.
COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS
The Plan, the granting and exercising of Purchase Rights hereunder, and the
other obligations of the Company, the Plan Administrator and the Custodian under
the Plan will be subject to all applicable federal and state laws, rules, and
regulations, and to such approvals by any regulatory or governmental agency as
may be required. The Company may, in its discretion, postpone the issuance or
delivery of Shares upon exercise of Purchase Rights until completion of such
registration or qualification of such Shares or other required action under any
federal or state law, rule, or regulation, listing or other require action with
respect to any automated quotation system or stock exchange upon which the
Shares or other Company securities are designated or listed, or compliance with
any other contractual obligation of the Company, as the Company may consider
appropriate, and may require any Participant to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of Shares in compliance with applicable laws, rules, and
regulations, designation or listing requirements, or other contractual
obligations.
SECTION 23.
EFFECT OF PLAN
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The provisions of the Plan shall, in accordance with its terms, be binding
upon and inure to the benefit of, all successors of each employee participating
in the Plan, including, without limitation, such employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such employee.
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EXHIBIT 10.21
LEASE AGREEMENT
THIS LEASE, made this 22 day March, 1993, between ABR PLYMOUTH PLAZA, LTD,
--
as "Lessor", and INFORMATION MANAGEMENT RESOURCES, INC. as "Lessee".
WITNESSETH
1. Premises. Lessor does hereby lease to Lessee and Lessee hereby hires from
Lessor those certain premises consisting of 22,578 square feet of rentable space
(the "Office Premises") on the 2nd and 5th floors (see Exhibits A-1 & A-2) of an
of rice building (the "Office Building"), at 26750 U.S. Highway 19 North,
Clearwater, Florida 34621, together with the right to use in common with all
other lessee of the Office Building the common areas (as defined below). The
Office Premises are leased exclusively to Lessee together with an allocation of
the buildings common corridors, public toilets and storage areas. The total
square feet of 22,578 leased by Lessee shall be referred to hereinafter as
"Leased Square Feet." All dimensions shall be measured from the exterior of a
wall except for common interior walls which shall be measured from the center
line.
Said letting and hiring the upon and subject to the terms, covenants and
conditions herein set forth and the Lessee and the Lessor each covenant as a
material part of the consideration for this Lease to keep and perform each and
all of said terms, covenants and conditions by it to be kept and performed and
that this Lease is made upon the condition of such performance.
2. Use. It is understood and agreed between the parties hereto and Lessee
covenants that the Office Premises during continuance of this Lease shall be
used only for Software Development and Consulting Services activities, and for
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no other purpose or purposes, without the written consent of the Lessor, which
consent shall not be unreasonably withheld. Lessee affirmatively covenants to
operate the Office Premises for such purposes during the entire term of this
Lease and to operate its business pursuant to the highest reasonable standards
of its business category. Lessee will conduct such business in a lawful manner
and in good faith. It is expressly understood that Lessee shall not have the
exclusive right in the Office Building to conduct the uses set forth in this
Section 2. It is also agreed that Lessee will operate the Office Premises solely
under the name of Information Management Resources, Inc. unless Lessor approves
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a change of name, which approval will not be unreasonably withheld. Lessee
represents that the proposed use is permitted by all applicable zoning laws. In
the event of a zoning violation by Lessee, Lessor shall have the right to
terminate the Lease by notice in writing and Lessee shall hold Lessor harmless
and reimburse Lessor for any expenses, liability or fine resulting from any use
which violates such zoning laws. Lessor agrees to provide lighting, heating and
air conditioning as appropriate during the following hours: Monday through
Friday 7:00 AM to 9:00 PM and from 8:00 AM to 6:00 PM Saturdays. Additional
hours usage may he obtained by Lessee for a charge of $6.00 per hour.
3. Term. Except as otherwise expressly stated in this Lease, the term of this
Lease shall begin as of the date of this lease and end on the last day of the
5th Lease Year (as hereinafter defined). For the purposes of this Lease, the
first "Lease Year" shall be deemed to begin on the Rent Commencement Date (as
hereinafter defined) and to end twelve (12) months thereafter,
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provided, if said twelve (12) month period does not end on the last day of a
calendar month, the first Lease Year shall be extended to the end of said month,
and each succeeding twelve (12) month period thereafter shall he deemed a Lease
Year.
The "Rent Commencement Date" shall he the earlier of (i) 7 days after the
work to be performed by Lessor in the Office Premises in accordance with
Lessee's Interior Completion Plans (as hereinafter defined) shall have been
substantially completed, or (ii) when Lessee opens the Office Premises to the
public for business. It is expressly understood that Lessee shall be deemed to
take the Office Premises "AS IS" upon the delivery of the Office Premises by
Lessor subject only to (i) items specified on punch list provided by Lessee at
such time, and (ii) any latent defects of which Lessee could not reasonably
observe at the time of such delivery. Notwithstanding the foregoing, Lessee
shall have access upon prior written notice to Lessor, at any time prior to the
Rent Commencement Date for installation of telephone equipment and/or
facilities, provided that such installation does not unreasonably interfere with
the work of the Lessor's contractor.
4. Rent. Lessee covenants that it will, without deduction, demand or set off,
pay to Lessor for the use of the Office Premises rental as follows: An annual
minimum rental during the first Lease Year, (the "Base Rent") of $347,701.20.
The Base Rental shall be paid in equal monthly installment of $28,975.10,
together with appropriate sales tax (subject to Paragraph 20) in advance,
commencing on or before the Rent Commencement Date and a like sum on or before
the first day of each and every successive calendar month thereafter during the
term hereof. In the event the term of this Lease commences on a day other than
the first day of a calendar month, then upon Rent Commencement Date, Lessee
shall pay to Lessor as rental for the period from such date to the first day of
the next succeeding calendar month an amount equal to the monthly installment of
Base Rent multiplied by the ratio of the number of such days to thirty (30).
Effective on January 1, 1994 and each year thereafter, said dates being
hereinafter referred to as the "Adjustment Date", the Base Rent as last
described shall be adjusted for the increase in the cost of living for the
preceding twelve (12) month period as reflected by the Consumer Price Index
published by the United States Department of Labor, Bureau of Labor Statistics,
for the United States (December 1967-Base 100). For purpose of determining if
an adjustment is necessary, the index last published one year prior to the
Adjustment Date shall serve as the "Base Index." The increased Base Rent
hereunder shall be determined by multiplying the preceding year's Base Rent by
that ratio obtained by dividing the Base Index into the index published
immediately prior to the Adjustment Date.
In the event the above referenced index ceases publication, the Base Rent
adjustment shall be determined by using the successor index or, in the event of
no successor index, an index which is most comparable to the "all items"
classification of the aforesaid index. In the event of any delay in
establishing the adjustment, the Lessee shall continue to pay the Base Rent as
established until the new adjustment is determined. In such event the
adjustment shall be retroactive to the appropriate date of adjustment.
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Notwithstanding anything to the contrary herein, the annual Base Rent shall
never be increased by less than 5% per year or by more than 10% per year.
5. Late Payment Charge. In addition to Lessor's remedies under the terms of
this Lease, upon Lessee's failure to pay the Base Rent or to make any other
payments required to be made by Lessee hereunder within five (5) days after the
due date, Lessor reserves the right to charge a late payment charge for handling
of Twenty-Five Dollars ($25.00) plus one and one-half percent (1-1/2%) of the
outstanding balance due for each month or portion thereof. In no event shall the
amount of such interest and late charge be in excess of usury laws.
6. Construction Schedule. Not applicable.
7. Interior Completion. It is contemplated that Lessor shall complete the
interior of the Office Premises in accordance with Interior Completion Plans as
set forth in Exhibits B-l, B-2 and B-3 exclusive of any furniture, files and/or
business equipment. Interior buildout shall be completed on or before 80 days
from the full execution of lease and Lessee's signoff of a floor plan to be
built out, unless events beyond Lessor's control prevents the completion of the
build out within said period. It is agreed Lessor shall be responsible for the
interior completion, including architectural and engineering fees up to
$148,000; any additional cost shall be the Lessee's responsibility. [Deleted:
Lessor and Lessee agree that $15,000 of the $140,000 will be allocated solely
for improvements to be made to the fifth floor. Said $15,000 can be used for no
other purpose other than improvements made to the fifth floor.]
Lessor reserves the right to require third party ownership and financing of
Lessees improvements on the basis of a financing lease agreement executed by
Lessor and acknowledged by Lessee; base rent therefore shall be reduced by the
payment scheduled in such agreement. Said reduction in payment shall be paid
directly to the third party.
Any installation in excess of the standards set forth above shall be done
at the expense of the Lessee. Lessee shall pay fifty percent (50%) of the
estimated cost of said installation in excess of these standards upon fifteen
(15) days notice that Lessor is ready to commence the interior completion of the
Office Premises, and the balance of said costs shall be paid upon occupancy,
unless arrangements are agreed to by the parties. In no event shall Lessor he
required to proceed with the Interior Completion of the Office Premises until
said fifty percent (50%) payment has been received and in the event said payment
has not been received within said fifteen (15) day period. Lessor may treat
this failure as a default under the terms of this Lease.
8. Security Deposit. The Lessee, upon executing this Lease, shall deposit
with the Lessor the sum equal to $57,950.20. The sum equal to $57,950.20 shall
be retained by the Lessor as security deposit for the payment by the Lessee of
the rent herein agreed to he paid and for the faithful performance of the
covenants of this Lease. If at any time Lessee shall be in default of any
provisions of this Lease, the Lessor shall have the right to use said deposit,
or so much thereof as may he necessary in payment of any rent in default by said
Lessee, and/or in payment of any damages incurred by the Lessor by reason of
such default of the Lessee, or at the Lessor's option, the same may be retained
by the Lessor in liquidation of part of the damages suffered by the Lessor by
reason of default of the Lessee. Should Lessor utilize any portion of the
security
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deposit for a purpose permitted hereby, then the portion of said deposit so used
shall be reimbursed by Lessee upon demand. In the event that said deposit shall
not be utilized for any such purpose, then such deposit shall be returned to
Lessee at the expiration of this Lease provided the Office Premises are
surrendered in good condition, ordinary wear and tear excepted. Said deposit
shall not bear interest.
In the event of a sale of the Office Building, Lessor shall deliver the
deposit to the Purchaser and thereupon shall be discharged from any further
liability with respect to the deposit and the Purchaser shall be liable as
Lessor under this section.
9. Maintenance and Repairs. By entry hereunder Lessee accepts the Office
Premises as being in good sanitary, orderly condition and repair, except or a
punch list of minor items remaining to be furnished by Lessor and any latent
defects that the Lessee could not determine at the time of such delivery. Lessor
agrees, at Lessor's expense, to maintain and repair the public portions, both
interior and exterior, of the Office Building in which the Office Premises are
located. Lessor shall also be responsible for maintaining and repairing the
structural portions of the Office Building including foundation, exterior and
demising walls and roof. Lessor shall not be required to commence any such
repair until notice shall be received from Lessee specifying the nature of the
needed repair. Lessor shall not be required to malice any such repairs where
same are caused by any act or omission of Lessee, and sub-tenant, or
concessionaire of Lessee, or any of their respective officers, employees,
agents, customers, invitees or contractors
Lessee agrees, at Lessee's expense, to maintain and repair all non-
structural portions of the interior of the Office Premises in good condition
damage from fire or other casualty excepted, including but not limited to the
exterior and interior portions of all doors, door hardware and operators,
windows, plate glass, all plumbing and sewage facilities within the Office
Premises, fixtures, electrical equipment, interior walls, floors, ceilings and
all interior building appliances and similar equipment. Lessee shall, upon the
expiration or any earlier termination of the term hereof, surrender the Office
Premises to Lessor in the same condition as when received, ordinary wear and
tear expected.
It is specifically understood and agreed that Lessor has no obligation and
has made no promises to alter, remodel, improve, repair, decorate or paint the
Office Premises or any part thereof and that no representations respecting the
condition of the Office Premises or the Office Building of which the Office
Premises are a part have been made by Lessor to Lessee except as specifically
herein set forth. During the term of the Lease, Lessee shall, at Lessee's cost
make any change or alterations in the Office Premises that may be necessary to
cause said Office Premises to conform to all governmental and insurance
underwriters requirements adopted after Lease date. Lessor agrees to inspect
the condition of the floor covering (carpet) and walls within premises for 2 1/2
years. Lessor agrees to clean the floor covering and paint the walls where
necessary every 2 1/2 years throughout the term of the lease.
Notwithstanding anything to the contrary contained in this lease agreement,
the Lessee shall notify Lessor by phone or facsimile to be followed up in
writing of any necessary material or operational repairs necessary for the
normal operation of the premises. Upon notification,
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Lessor will respond to Lessee by phone or facsimile to he followed up in
writing, as to the nature of repairs needed and a course of action to effectuate
said repairs. Said notification to lease shall occur within one day (24 hours)
after Lessor has been notified of any necessary materials or operational repairs
necessary for the normal operation of the premises.
In the event that Lessor fails to commence repairs within five (5) days
after receipt of notification, Lessee may retain such panics necessary to
effectuate said repairs at Lessor's cost. Failure of Lessor to pay said repair
hill within thirty (30) days thereafter, shall entitle Lessee to pay said bill
and setoff the amount of said bill from the next rental payment due to Lessor.
Furthermore, Lessor agrees that in the event there is a complete and total
break down of the HVAC system and/or electrical system within the premises,
Lessee has the right to either notify the Lessor as stated in this lease or
directly notify the contractor responsible for the systems as specified by the
Lessor, and secure the immediate, reasonable repair of the system or systems at
Lessor's expense. Upon securing the appropriate contractor, Lessee shall be
obligated to notify the Lessor immediately of the problems and that the
contractor had already been secured by the Lessee. The option to notify the
contractor directly does not apply to any other operation within the facility
and applies to HVAC system and electrical system only in the event of total
discontinuance of service. Lessor shall maintain an emergency response
agreement with an HVAC contractor similar to that described in the attached
Exhibit E-l and will respond to computer generated problems to the HVAC and
electrical systems in the manner set forth in the attached Exhibit E-2.
10. Hold Over. If, with Lessor's written consent, Lessee holds possession of
the Office Premises after the term of this lease, Lessee shall become a tenant
from month to month upon the terms herein specified but at a monthly rent
equivalent to the then prevailing rent paid by lessee at expiration of the term
of this Lease pursuant to all of the provisions of this Lease, payable in
advance on or upon the first day of each month. Said monthly rent shall increase
at the rate of one percent (1%) per month. Lessee shall continue in possession
until such tenancy shall be terminated by Lessor, or until Lessee shall have
given to Lessor a written notice at least one month prior to the date of
termination of such monthly tenancy of this intention to terminate such tenancy.
11. Assignment and Subletting. Without the written consent of Lessor first
obtained in each case, Lessee shall not assign, transfer, mortgage, pledge, or
otherwise encumber or dispose of this Lease or underlet the leased Premises or
any part thereof or permit the Leased Premises to be occupied by other persons.
In the case of a subletting, Lessor's consent may be predicated, among other
things, upon Lessor becoming entitled to collect and retain all rentals payable
under the sublease. If this Lease be assigned, or if the Leased Premises or any
part thereof be underlet or occupied by anybody other than Lessee, the Lessor
may, after default by the Lessee, collect or accept rent from the assignee,
undertenant, or occupant and apply the net amount collected or accepted to the
rent herein reserved, but no such collection or acceptance shall be deemed a
waiver of this covenant or the acceptance of the assignee, undertenant, or
occupancy as Lessee, nor shall it be construed as or implied to he a release of
the Lessee from the further observance
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and performance by the Lessee of the terms, provisions, covenants and conditions
herein contained.
In lieu of consenting or not consenting, Lessor may, at its option, (i) in
the case of the proposed assignment or subletting of Lessee's entire leasehold
interest, terminate this Lease in its entirety, or (ii) in the case of the
proposed assignment or subletting of a portion of the Premises, terminate this
Lease as to that portion of the Premises which Lessee has proposed to assign or
sublet. In the event Lessor elects to terminate this lease pursuant to clause
(ii) of this paragraph, Lessee's obligations as to Base Rental and Additional
Rent shall be reduced in the same proportion that the Net Rentable Area of the
portion of the Premises taken by the proposed assignee or subtenant bears to the
total Net Rentable Area of the Premises.
12. Control of Common Areas by Lessor. All areas of improvements provided by
Lessor for the general use, in common, of Lessee's of the Office Building, their
officers, agents, employees and customers shall be referred to herein as Common
Areas including without limitation, parking areas, pedestrian walk-ways,
elevators, public stairs and equipment rooms, driveways, entrances and exits
thereto, access roads, sidewalks, landscaped areas, plazas, fire corridors,
meeting areas and public rest rooms. Lessor shall operate the Common Areas in
such manner as Lessor shall from time to time determine. All Common Areas shall
at all times be subject to the exclusive control and management of the Lessor.
Lessee hereby expressly grants Lessor easement for ingress and egress over,
under and through the Office Premises for the purpose of making repairs and for
exercising any rights or obligations of Lessor under this Lease. Lessor shall
have the right to construct, maintain and operate lighting facilities on all
said areas and improvements; to police same; from time to time to change the
area, level, location and arrangements of parking areas and other facilities
hereinabove referred to; to restrict parking by Lessee's, their officers, agents
and employees to employee parking areas; to close all or any portion of said
areas or facilities to such extent as may, in the option of the Lessor's
counsel, be legally sufficient to present a dedication thereof or the accrual of
any rights to any person or the public therein; to close temporarily all or any
portion of the parking areas or facilities; to discourage non-customer parking;
and to do and perform such other acts in and, to said areas and improvements as
Lessor shall determine in its sole discretion. All Common areas and facilities
not within the Office Building which Lessee may be permitted to use and occupy
are to be used and occupied under a revocable license, and if the amount of such
areas be diminished, Lessor shall not be subject to any liability, nor shall
Lessee be entitled to any compensation or diminution or abatement of rent, nor
shall such diminution of such areas be deemed constructive or actual eviction.
13. Uses Prohibited: Rules and Regulations. After initial occupancy Lessee
shall not do or permit anything to be done in or about the Office Premises nor
bring or keep anything therein which will in any way increase the existing rate
of or affect any fire or other insurance upon the building or any of its
contents, or cause a cancellation of any insurance policy covering said building
or any part thereof or any of its contents. In the event the specific use of the
Office Premises shall change and such change shall result in an increase in said
insurance policies, Lessor may elect to collect the increased cost of insurance
from Lessee as additional rent rather than treat this as a default under the
terms of this Lease. Lessee shall not do or permit anything
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to be done in or about the Office Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the building or
injure or annoy them or use or allow the Office Premises to be used for any
improper, immoral, unlawful or objectionable purposes nor shall Lessee cause,
maintain or permit any nuisance in, or about the Office Premises. Lessee shall
not commit or suffer to be committed any waster in or upon the Office Premises
or the Office Building.
14. Compliance with law. Lessee shall not use the Office Premises or the
Office Building to permit anything to be done in or about the same which will in
any way conflict with any law, statute, ordinance or governmental rule or
regulation now in force which may hereafter be enacted or promulgated. Lessee
shall as its sole cost and expense promptly with all laws, statutes, ordinances
and governmental rules, regulations or requirements of any board of fire
underwriters or other similar body now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Office Premises, excluding
structural changes not related to or affected by Lessee's improvements or acts.
15. Leasehold Improvements. Lessee shall not make any changes or alterations
in or to the Office Premises without the written consent of the Lessor, which
consent shall not be unreasonably withheld. All alterations, additions,
improvements, including without limitation floor and wall coverings, lighting,
heating, ventilating and air conditioning equipment and fixtures (collectively
referred to herein as "Leasehold Improvements"), which may be made or installed
by either of the parties hereto upon the Office Premises and which in any manner
are attached to the floors, walls or ceilings, shall become the property of the
Lessor upon installation (unless Lessor shall elect otherwise, which election
shall be made by Lessor by giving notice thereof not less than ten (10) days
prior to the expiration or other termination of Lease). All Leasehold
Improvements shall, at the termination of this Lease, remain upon and be
surrendered with the Office Premises as part thereof and shall be unencumbered
by liens, security interest or otherwise. Lessee may remove all its personal
property not attached to the Office Premises and removable without injury to or
defacement of the Office Premises provided all rents are paid in full and Lessee
is not otherwise in default under this Lease and further provided that any
damage to the Office Premises or the Office Building resulting from such removal
shall be simultaneously repaired at Lessee's expense. Lessee agrees that all
Lessee's personal property in the Office Premises shall be at the Lessee's sole
wish and/or those claiming under the Lessee. Lessor shall not be responsible to
Lessee for any loss that may be occasioned by the acts or omissions of persons
occupying any space adjacent to or adjoining Lessee's Office Premises or for any
loss resulting in Lessee or any of Lessee's property caused in any manner
whatsoever. Except as otherwise expressively directed by Lessor in writing,
Lessee agrees to remove all signs and personal insignia at the termination of
the Lease, and to repair any damages caused to the Office Premises or Office
Building by reason of such removal.
All Leasehold Improvements and trade fixtures installed in the Office
Premises by Lessee shall consist of new or completely reconditioned material
installed in a workmanlike manner and in compliance with all applicable laws and
regulations and shall be performed only by contractors or subcontractors who
have complied with the lessee insurance standards specified in Section 19. Any
contractor or person selected by Lessee to make such improvements must first
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be approved of in writing by the Lessor. Said work shall be at Lessee's sole
risk and expense and Lessee shall promptly pay all laborers, contracts and
materialmen performing such work and furnishing material therefor for Lessee.
Lessee agrees to indemnify and save harmless Lessor for all expenses, liens,
claims or damages to either persons or property including, without limitation,
the Office Premises, stemming in any manner from such work. If any lien be filed
by virtue of Lessee's work, Lessee shall cause the same to be discharged of
record within ten (10) days after recording thereof. Lessor may, at Lessor's
option, cause such discharge and Lessee shall reimburse lessor all its costs and
expenses expended thereof upon billing for same.
16. Abandonment. Lessee shall not desert or abandon the Office Premises at any
time during the term, and if Lessee shall abandon, desert or surrender said
Office Premises, or be dispossessed by process of law, or otherwise, any
personal property belonging to Lessee and left on the Office Premises or the
building in which the Office Premises is located shall be deemed to be abandoned
at the option of the Lessor.
17. Liens. Lessee shall keep the Office Premises and the property in which the
Office Premises are situated free from any liens rising out of any work
performed, material furnished or obligations incurred by Lessee. Lessee
covenants to hold Lessor or any successor in interest harmless from any such
liens. In the event Lessee desires to contest any such lien, Lessee shall
immediately notify Lessor of such lien and shall, at the option of Lessor,
transfer said lien to the security of a bond posted or obtained by Lessee.
18. Indemnification of Lessor. Lessee agrees to indemnify and save Lessor
harmless from and defend Lessor against any and all claims or liability for any
injury or damage to any person or property whatsoever (1) occurring, on or about
the office Premises or any part thereof and not caused by or contributed to be
Lessor, its agents, servants, employees, or invitees; or (2) occurring in, or
about any facilities including, without prejudice to the generality of the term
Facilities, elevators, stairways, passageways, hallways and parking areas, the
use of which Lessee may have in conjunction with other Lessee's of the building,
when such injury or damage is caused in part on in whole by the act, neglect,
fault of or omission of any duty with respect to the same by Lessor, its agents,
servants, employees or invitees and which is not caused or contributed to or by
the Lessee, its agents, servants, employees, or invitees.
Lessor shall not be liable for any damage or injury by water which may be
sustained by Lessee or any other person or for any other damage or injury
resulting from the carelessness, negligence, or improper conduct on the part of
any other Lessee's, their agents, employees or invitees, or by reason of the
breakage, leakage, or obstruction of the water, sewer or soil pipes roof leaks,
flooding or other leakage, or obstruction of the water, sewer or soil pipes,
roof leans, flooding or other leakage in or about the Office Premises or the
building in which the Office Premise is located.
19. Insurance. Lessee shall take out and keep in force on or before the date
of delivery of the Office Premises, at Lessee's expense, a comprehensive public
liability policy of insurance insuring Lessee and naming Lessor as additional
insured, insuring against any liability whatsoever occasioned by the accident on
or about the Office Premises. Such policy is to be
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written by an insurance company with a Best rating of A-XV, in the amount of
Five Hundred Thousand Dollars ($500,000.00) for any one occurrence with respect
to any bodily, property or personal injury, which shall also include fire legal
liability coverage in the amount of One Hundred Thousand Dollars ($100,000.00).
Lessee shall also maintain a policy of insurance covering the replacement
value of the stock in trade, furniture, fixtures and equipment located in the
Office Premises. Said policy shall include perils of fire, theft, extended
coverage, vandalism or malicious mischief, water damage, and collapse, or a
policy affording all risk coverage. In addition, Lessee shall carry plate glass
insurance in an amount sufficient to cover Lessee's obligation to repair and
replace all plate glass in the Office Premises.
Lessor hereby releases Lessee and Lessee hereby releases Lessor and each of
them releases the respective officers, agents and employees of the other from
any and all claims and demands for loss, damages, expense or injury to the
Office Premises which is caused by or results from perils, events or happenings
which are the subject of insurance carried by the respective parties in force at
the time of any such loss to the extent of insurance proceeds actually received;
provided, however, that such shall pay any additional premium required of its
own insurer for waiver of subrogation rights under this Section.
Lessee shall have the right to provide such insurance coverage pursuant to
blanket policies which expressly afford coverage to the Office Premises and to
Lessor and Lessee. Lessee shall obtain a written obligation on the part of any
such insurance company to notify Lessor in writing of any delinquency in premium
payments and at least thirty (30) days prior thereto of any cancellation or
amendment to such policy. Lessee agrees if Lessee does not take our such
insurance or keep the same in force and effect, Lessor may take out the
necessary insurance and pay the premium therefor, and Lessee shall repay to
Lessor the amount so paid promptly after the demand together with interest
thereon at the rate of eighteen (18%) percent per annum until paid.
The original policies or a certificate thereof, together with the evidence
of payment therefor, shall be delivered to Lessor. Lessee shall renew said
politics not less than thirty (30) days prior to the expiration date thereof
from time to time, and furnish said renewals and evidence of payment to Lessor.
20. Sales or Other Taxes; Taxes on Leasehold. Lessee shall pay the tax(es) due
by reason of rent or other consideration being paid under this Lease Agreement
or for any other reason, whether such tax(es) is entitled a "sales tax",
"service tax", "gross receipts tax", "use tax", "rental tax", otherwise ("the
tax"). Lessee's duty to promptly pay the tax is operative whether the tax is
payable under any tax or other law(s) now in effect or which may be adopted by a
governmental authority subsequent to the date of the execution hereof. Payment
of the tax shall he made to Lessor by lessee for remittance by Lessor to the
appropriate governmental authority, unless the law provides otherwise. Also,
Lessee shall pay all municipal, county, state and federal taxes assessed during
the term of this Lease against or relative to the leasehold interest created
hereunder or personal property of any kind owned by or placed in, upon or about
the Office
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Premises by Lessee. Lessee shall pay for all license fees, occupational taxes
and other governmental charges assess by reason of Lessee's use or occupancy and
any other taxes arising out of the operation of Lessee's business or occupancy
of the Office Premises.
21. Entry by Lessor. Lessor, upon prior written notice to Lessee, except in
the event of an emergency, reserves and shall at any and all reasonable times
have the right to enter the Office Premises to inspect the same, to supply
janitorial and plant service and any other service to be provided by Lessor to
Lessee hereunder, to submit the Office Premises during business hours or other
reasonable times to prospective tenants, (but only during the last 180 days of
the term with respect to prospective tenants of the Office Premises), and to
alter, improve or repair the Office Premises and any repairs to any portion of
the building of which the Office Premises are a part and which Lessor in good
faith determines are necessary without abatement of rent, and may for that
purpose erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed, always providing that an
entrance to the Office Premises shall not be blocked thereby, and further
providing that the business of Lessee shall not be interfered with unreasonably.
Lessee hereby waives any claim for damages for any injury or inconvenience to or
interference with Lessee's business, any loss of occupant or quiet enjoyment of
the Office Premises, and any other occasioned hereby. For each of the aforesaid
purposes, Lessor shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Office Premises, excluding Lessee's
vaults and safes, and areas of storage of Lessee's confidential correspondence.
Lessor shall have the right to use any and all means which Lessor may deem
proper to open said doors in an emergency in order to obtain entry to the Office
Premises, and any entry to the Office Premises obtained by Lessor by any of said
means, or otherwise, shall not under any circumstances be construed or deemed to
be a forcible or unlawful entry into, or a detainer of, the Office Premises or
an eviction of Lessee from the Office Premises or any portion thereof
22. Default. Upon the happening of any one or more of the following events
("Events of Default"):
Sections b, and d below, shall apply to both Lessor and Lessee.
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a) Lessee's default in the payment of any rental or other sums due
for a period of five (5) days after the due date;
b) Lessee's or Lessor's continued default with respect to any other
covenant of this Lease for a period of ten (10) days after delivery of written
notice of such default to Lessee by Lessor or to Lessor by Lessee, provided that
such default reasonably requires more than ten (10) days to cure, there shall be
no Event of Default, if Lessee or Lessor has commenced correcting the action
within the ten (10) days period and is diligently prosecuting such action;
c) There shall be filed by or against Lessee in any court pursuant to
any statute either of the United States or of any state, a petition in
bankruptcy or insolvency or for reorganization or arrangement, or for the
appointment of a receiver or trustee of all or a portion of Lessee's property,
or if Lessee makes an assignment for the benefit of creditors or if there is an
assignment by operation of law, or if Lessee makes application to Lessee's
creditors to settle
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or compound or extend the time for payment of Lessee obligations, or if any
execution, seizure or attachment shall be levied upon any of the Lessee's
property or the Office Premises are taken or occupied or attempted to be taken
or occupied by someone other than Lessee;
d) Lessee's or Lessor's abandoning the Office Premises;
Lessor, at its option, may exercise any one or more of the following
remedies which shall be cumulative:
Lessee, at its option, may exercise paragraphs 2 & 5 of the following
remedies which shall be cumulative:
1) Re-enter and take possession of the Office Premises and remove
Lessee and its effect, by fore if necessary and, without obligation to do so,
relet or attempt to relet the Office Premises on behalf of Lessee, at such rent
and under such terms and conditions as Lessor may deem best under the
circumstances for the purpose of reducing Lessee's liability, and Lessor shall
not be responsible to Lessee for any damages in connection thereof, nor shall
Lessor be deemed to have thereby accepted a surrender of the Office Premises,
and Lessee shall remain liable for all rents and additional rents due under this
Lease and for all damages suffered by Lessor because of Lessee's breach of any
of the covenants of this Lease. Said damages shall include, but not limited to,
charges for removal and storage of Lessee's property, remodeling and repairs,
leasing, commissions and legal fees. At any time during repossession and
reletting pursuant to this subsection, Lessor may, by delivering written notice
to Lessee, elect to exercise its option under the following sub-section to
accept a surrender of the Office Premises, terminate and cancel this Lease, and
retake possession and occupancy of the Office Premises on behalf of Lessor.
2) Declare this Lease to be terminated, whereupon the term hereby
granted and all right, title and interest of the parties in the Office Premises
shall end. Lessor may re-enter upon and take possession of the Office Premises.
Such termination shall be without prejudice to Lessor's right to collect from
Lessee any rental or additional rental which has accrued prior to such
termination.
3) Accelerate all rentals due and to become due during the remainder
of the term of this Lease, in which event all such rentals shall become
immediately due and payable, provided that payment thereof shall not constitute
a penalty or liquidated damages but shall merely constitute payment of advance
rent. The acceptance of any such payment by Lessor shall not constitute a
waiver of any claim for damages as described above.
4) As agent of Lessee, Lessor may do whatever Lessee is obligated to
do under this Lease, and may enter the Office Premises for such purpose, without
being liable for damages, therefore, and Lessee agrees to reimburse Lessor
immediately on demand for any expenses which Lessor may incur in thus enforcing
compliance with this Lease, and the amount thereof shall bear interest at the
highest contract rate permitted by Florida law until paid.
5) Exercise any and all other rights and privileges that
Lessor/Lessee may have under the laws of the State of Florida and/or the United
States of America.
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6) In the event Lease is terminated by Lessee, Lessor may re-enter
upon and take possession of the office premises. Such termination shall be
without prejudice to Lessors right to collect from Lessees any rental or
additional rental which has accrued prior to such termination together with all
damages, including, but not limited to, the damages specified in this section
22.
23. Casualty. If the Office Building on the site on which the Office Premises
are located is substantially damaged by fire or any other cause, Lessor shall,
within 30 days after occurrence of such damage, notify Lessee of Lessor's
election to repair or rebuild the damaged building at Lessor's expense or to
terminate this and all other Leases whether or not the Office Premises are
directly affected by said damage. For the purpose of this Lease "substantially
damaged" shall mean damaged to such an extent that the good faith estimated cost
to repair or rebuild the damage exceeds one-quarter of the then estimated cost
of replacing all buildings on said site. If such building is not substantially
damaged as herein defined, it shall be the duty of the Lessor to use his best
efforts to complete such repairs or rebuild within 180 days following the
expiration of the period reserved for the Lessor to make such election.
Should Lessor fail to complete said repairing or rebuilding within said 180
day period, Lessee s sole remedy shall be the option to terminate this Lease and
all further liability under its provisions provided that Lessee's notice of
election to terminate is given within 30 days following the expiration of said
180 day period and further provided that Lessee totally vacates the Office
Premises on or before the expiration in the said 30 day period. All obligations
of Lessee under this Lease shall accrue through the date of such vacation.
In the event Lessor is required to repair or rebuild under this Section,
Lessor shall have unlimited access to the Office Premises and all common areas
in the Office Building for such time, at such time, as may be reasonably
required to efficiently and expeditiously complete any such required, or non-
required, repairs or rebuilding.
In no event shall this Paragraph obligate the Lessor to incur in effecting
any such required repair or rebuilding a cost greater than the original cost of
the building, including Lessor's cost in completing all suites for lease within
the building, or the amount of such insurance coverage as may be provided with
respect to the damage, whichever is greater. Should Lessor's limitation as
provided herein be exceeded, Lessor shall have the right to either redesign the
building within the confines of such limitations or terminate this or any other
Lease within the building.
It is further agreed with respect to this Section that Lessor shall carry,
at the expense of and for the benefit of the tenants of the building, rental
interruption insurance and the proceeds of such insurance received by lessor
shall be credited on a pro rata basis against the rental obligations of Lessee
during the period that such insurance is payable. There shall be no other
reduction or abatement of rent in favor of Lessee.
Notwithstanding the forgoing, in the event the holder of the first mortgage
encumbering the building shall elect to use the insurance proceeds payable as
the result of a loss as set forth herein to reduce the outstanding principal
balance of said mortgage, despite Lessor's best efforts to persuade the first
mortgage holder to the contrary, then at Lessor's election, Lessor may
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choose not to rebuild. In such event Lessee may terminate this Lease and this
shall be at its sole remedy hereunder.
24. Eminent Domain. If all or any part of the property in which the Office
Premises are located shall be taken or appropriated by any public quasi-public
authority under the poser of eminent domain, subject to the additional
provisions of this Section, wither party hereto shall have the right at its
option, to terminate this Lease. In such event, Lessor shall be entitled to any
and all income, rent, award, or any interest therein whatsoever which may be
paid or made in connection with such public or quasi-public use or purpose, and
Lessee shall have no claim against Lessor for the value of any unexpired term of
this Lease. If a part of the Office Premises shall be so taken or appropriated
and neither party shall elect to terminate this Lease, the rental thereafter to
be paid shall be equitably reduced. Before Lessee may terminate this Lease by
reason of taking of appropriation as above provided, such talking or
appropriation shall be such an extent and nature as to substantially handicap,
impede or impair Lessee's use of the Office Building, such determination to be
so taken or appropriated, Lessor shall have the right, at its option, to
terminate this Lease and shall be entitled to the entire award, as above
provided.
This Section shall not prohibit Lessee from making its own claim in the
condemnation proceedings for reimbursement or compensation from the condemnor
for moving expenses or other costs for leasehold improvements owned by the
Lessee and the installation thereof incurred by it due to said condemnation or
personal property owned by Lessee and taken by reason of said condemnation.
25. Sale by Lessor. In the event of a sale or conveyance by Lessor of the
Building containing the Office Premises, the same shall operate to release
Lessor from any further liability upon any of the covenants or conditions,
expressed or implied, herein contained in favor of Lessee, and in such event
Lessee agrees to look solely to the responsibility of the successor in interest
of Lessor in and to this Lease. This Lease shall not be affected by any such
sale, and Lessee agrees to attorn to the purchase or grantee unless such sale
occurs prior to occupancy by Lessee in which case Lessor shall remain liable to
Lessee for the performance of the Lessor's grantee until occupancy by the
Lessee.
Notwithstanding anything to the contrary contained herein, no sales, or
conveyance by Lessor as aforesaid shall release Lessor from any future liability
to Lessee hereunder unless and until this Lease is assigned to and assumed by
such grantee.
26. Attorney's Fees. The prevailing party in any litigation shall be entitled
to be reimbursed by the other party for attorney's fees and court costs,
including the costs of appeal.
27. Governing Law. This Lease shall be contained and enforced according to the
laws of the State of Florida.
28. Waiver. The waiver by the Lessor or the Lessee of any term, covenant or
condition herein contained shall not he deemed to he a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Lessor shall not be deemed to be a waiver of any
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preceding breach by Lessee of any term, covenant or condition of this Lease,
other than the failure of Lessee to pay the particular rental so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
29. Demand. All notices and demands which may or are required to be given by
either party to the other hereunder shall be in writing and sent certified or
registered mail or delivered by hand.
All such notices or demands by the Lessor to the Lessee shall be addressed
to or delivered to the Leased Premises with a true copy thereof forwarded by
certified or registered mail to:
Information Management Resources, Inc.
Suite 500
26750 U.S. Highway l9 North
Clearwater, Florida 34621
All notices, demands and sums due by the Lessee to the Lessor shall be sent
to the Lessor al 1150 Cleveland Street, Suite 420, Clearwater, Florida 34615, or
to such other person or place as the Lessor from time to time designates in a
notice to the Lessee.
30. Subordination and Mortgage Provisions. In the event any proceedings are
brought for the foreclosure of, or in the event of exercise of the power of sale
under any mortgage made by Lessor covering the Office Building, Lessee, at the
sole option of the purchaser upon any such foreclosure or sale shall attorn and
recognize such purchase as the Lessor under this Lease, and upon the purchase's
written notice of its election of attornment, such attornment shall be automatic
and self-executing,. Without limiting the generality of the foregoing, Lessee
within ten (10) days after request by the successor in title to the Office
Building shall execute an instrument in form and content acceptable to such
successor evidencing such attornment. This Lease shall be and hereby is subject
and subordinate to the lien of any mortgage and to all renewals, modification,
considerations and replacements thereof, and to all liens resulting from any
other method of financing or refinancing, now of hereafter in force against the
land and/or building of which the Office Premises are a part, or against any
building hereafter to be made upon the security thereof. Upon request of Lessor,
Lessee will within ten (10) days after such request, evidence its subordination
pursuant to an instrument acceptable in form and content to the Lessor.
If the holder of any mortgage encumbering the Office Building shall give
notice to Lessee that it is the holder of said mortgage and such notice includes
the address to which notices to such mortgage are to be sent, Lessee agrees to
give to the said holder of such mortgage notice simultaneously with any notice
given to Lessor to correct any default of Lessor and agrees that the said holder
of such mortgage shall have the right, within sixty (60) days after receipt of
said notice, to commence correction of such default and diligently prosecute
completion thereof before Lessee may take any action under this Lease by reason
of such default.
31. Security Interest. To secure Lessee's obligation under this Lease,
including but not limited to, the payment of rent and other charges, the Lessee
hereby grants unto the Lessor a
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security interest in its equipment, accounts, supplies and inventory whether now
owned or hereafter acquired, together with the proceeds thereof, the rights of
the Lessor being determined in accordance with the Florida Uniform Commercial
Code. This document shall be deemed a "Security Agreement" as provided in said
Florida Uniform Commercial Code and Lessee agrees to execute a financing
statement for recording in the appropriate Public Records perfecting the
security interest granted hereby and further agrees to execute renewal financing
statements as law requires. The security interest granted by virtue of this
Paragraph shall be deemed in addition to, and not in lieu of, any other right or
remedy available to Lessor including, but not limited to, statutory liens
available to the Lessor.
32. Real Estate Agent. Each of the parties represents and warrants that no
real estate agent or broker, other than Lee Arnold & Associates, Inc., (Agent of
Lessor who will he paid by Lessor) brought about this Lease and agrees to
indemnify each other on demand against all claims made by any other brokers and
agent, other than specifically referred to herein, for commissions with respect
to this Lease, arising from the acts of the indemnifying party.
33. Amendment of Site Plan; No Representations; and Relocation of Lessee.
Lessor reserves the right at any time, in its sole discretion and without the
approval of or prior notice to Lessee, to amend without limitation the Site
Plan. Such amendment rights include the right, at Lessor's sole discretion and
without the approval of prior notice to Lessee, to add or change building
perimeters, driveways, change the number and location of parking spaces; and to
make any other changes or additions it desires in and about the Office Building
including Common Areas (as hereinafter defined), provided only that reasonable
access to the Office Building is provided and maintained. Lessor makes no
representation as to the identity or location of other Lessee's in the Office
Building and said Lessee's may be charged from time to time. Lessor makes no
representations as to the Site Plan for the Office Building and Lessee
acknowledges that no such representations have been made.
34. Defined Terms and Marginal Headings. The words "Lessor" and "Lessee" as
used herein shall include the plural as well as the singular. Words used in the
masculine gender include the feminine and neuter. If there be more than one
Lessee, the obligations hereunder imposed upon Lessee shall be joint and
several. The marginal headings and titles to the paragraphs of this Lease are
not a part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.
35. Plats and Riders. Clauses, plats, and riders, if any, signed and
initialled by Lessor and Lessee and endorsed on or affixed to this Lease are a
part hereof.
36. Time. Time is of the essence of this Lease and each and all of its
provisions.
37. Successors and Assigns. The covenants and conditions herein contained shall,
subject to the provisions as to assignments, apply to and bind the heirs,
successors, executors, administrators and assigns of the parties hereto.
38. Right to Cure Defaults. If Lessee, after reasonable notice, shall fail to
make repairs, maintain public liability insurance, comply with all laws and
ordinances, and regulations, pay all
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bills for utilities, or perform any other obligation in accordance with this
Lease, Lessor shall have the right to perform such work; including the right to
enter on the Office Premises, or make such payments on behalf of Lessee, and
Lessee agrees to reimburse Lessor promptly upon demand, together with interest
at the rate of 1-1/2 % per month.
39. Recording. This Lease may not be recorded without the prior written consent
of the Lessor, which may be evidenced solely be a separate executed consent to
recording. Upon request of Lessor, Lessee shall enter into a "short-form," or
memorandum of this Lease. Said documents shall be in recordable form and shall
describe the parties, Office Premises and term of this Lease and shall
incorporate this Lease be reference.
40. Definition Or Lessor, No Personal Liability. The term "Lessor" as used in
this Lease, means only the owner for the time being of land and buildings
comprising the office Building so that, in the event of a sale of the Office
Building, the Lessor shall be and is hereby entirely relieved of all covenants
and obligations of the Lessor hereunder. Lessor shall have the right without the
requirement of prior consent to sell or otherwise convey all or a portion of the
Office Building and assign this Lease to such grantee.
41. Lessee Statement; Financials. Within ten (10) days after request therefor by
Lessor, Lessee agrees to deliver in recordable form a certificate to any
proposed mortgagee or purchaser, or to Lessor, certifying (if such be the case)
that this Lease is in full force and effect as (or if there have been
modifications, that this Lease is in full force and effect as modified and
starting the modification) and that there are no defenses or offsets thereto (or
starting those claimed by Lessee), the dates to which all rents hereunder have
been paid in advance, if any, the amounts of security deposits, if any, and
containing such other matters as may reasonably be requested by Lessor, it being
intended that any such statement as delivered by be relied upon by any
prospective purchaser or mortgagee of all or part of the Office Building. If
Lessee does not, within ten (10) days of Lessor's request as aforesaid, execute
and deliver such instruments or the instruments required in Section 30, or under
this paragraph, then Lessee hereby irrevocably appoints Lessor as attorney-in-
fact for Lessee with full power and authority to execute and deliver the same in
the name of the Lessee. Should the prospective mortgagee or purchaser request a
copy of the Lessee's current financial statement, Lessee agrees to furnish a
certified copy of same to such party within fifteen (15) days of such request.
42.Miscellaneous. Lessor does not, in any way or for any purpose, become a
partner of Lessee in conduct of its business, or otherwise, or joint venturer or
a member of a joint enterprise with Lessee. If any term, covenant or condition
of this Lease shall, to any extent, be held invalid, unenforceable or
inapplicable to particular persons, the remainder of this Lease, or the
application of any term, covenant or condition shall not be affected thereby. If
either party shall be delayed or prevented from the performance of any act
required by this Lease by reason of strikes, utility failures, restrictive laws,
riot, acts of God or other similar reasons not the fault of the non-performing
party, then the performance time for such act shall be extended for a period
equivalent to the period of such delay. The provisions of the Section shall not
operate to excuse Lessee from prompt payment of rent. This Lease sets forth all
covenants, promises, agreements, conditions, and representations, either oral or
written, between then other than are herein set
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forth. Except as herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Lease shall be binding upon Lessor or Lessee unless
reduced to writing and signed by them.
Notwithstanding anything to the contrary continued in this lease agreement,
it is Lessor's intent to complete the decorating of the first floor lobby within
20 days after the full execution of lease.
Lessor has constructed a smoking area outside of the building. Lessor will
notify tenants in writing of the smoking area and require that all tenants use
smoking area or some other area away from the building.
Lessor will use best efforts to secure the building and parking garage.
Lessor agrees to change the phone security at the rear entrance of the facility
and match the card system that was installed at the front door.
43. Janitorial Service. Lessor agrees to provide janitorial service for the
interior leased space at no additional charge to Lessee. Such service to be
provided 5 days per week and includes vacuuming, emptying trash and light
dusting. Also included with janitorial services will be mopping and waxing of
floors a minimum of once a month. Lessor agrees to have the exterior windows
washed a minimum of semi-annual. Lessee has the right to consult with Lessor to
include window washing on a more regular basis if the parties agree.
Additional janitorial service (including but not limited to carpet
shampooing, interior window washing and wood polishing) shall be at Lessee's
expense.
44. Special Provisions.
A. As an incentive to lease, Lessee shall receive a rent credit of
$6,000.00 per month (deferred rent.) for the one (1) month period immediately
subsequent to the Rent Commencement Date (as defined in Paragraph 3) and
$4,500.00 per month for the fifteen (15) months immediately thereafter so long
as the Lessee fully complies with all terms and conditions of the Lease. If the
Lessee shall be in default, the deferred rent shall be immediately due and
payable as rent. All other terms and conditions of this Lease Agreement shall
be in full force and effect during the entire Term of the Lease as defined
herein.
B. Lessor to provide turnkey buildout of the space plan labelled
Exhibit B and attached hereto.
C. Lessor shall reserve 40 spaces in the parking garage area
highlighted on Exhibit D for Lessee's exclusive use at no cost to Lessee. Said
parking spaces shall be agreed upon by Lessor and Lessee at the same time
architectural design is agreed to.
D. Lessor shall allow Lessee to use on a non-reserved and temporary
basis without charges, 24 additional parking spaces until such time as they are
required to meet the needs of the Lessor in Lessor's sole opinion.
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45. Right or First Refusal. As long as this Lease is in full force and effect
and Lessee: (i) is occupying and doing business from the premises at the time
the election is exercised; (ii) is not in default under the Lease at the time of
the election; and (iii) has maintained a history of payments within the
applicable grace period, if any, provided under the Lease; Lessee shall have the
right of first refusal to lease any additional space on the third (3rd) floor.
Lessor further agrees that prior to renting any additional space on the third
(3rd) floor as more fully identified on Exhibit A-3 attached hereto and
incorporated herein, Lessor will submit to Lessee a copy of the lease proposal
which Lessor is willing to accept from the third party (the "Offered Lease"). On
or before the third business day after the date of such submission, Lessee will
have the right (the "First Refusal Right") to send Lessor a notice stating that
Lessee elects to rent the First Refusal Space upon the identical terms and
conditions set forth in the Offered Lease (the "Offered Lease Terms"). To be
timely, such notice must he postmarked within the three day period.
If Lessor timely exercises the Right of First Refusal, Lessor and Lessee
will promptly enter into a Lease for the Right of first Refusal Space (the "New
Lease") on the Offered Lease Terms. If for any reason Lessee fails to timely
exercise the Right of First refusal, or if Lessee properly exercises it but
thereafter for any reason (except for delays caused by Lessor) does not enter
into the New Lease within three business days after its submission, Lessor will
be free to rent the Right of First Refusal Space to another lessee and the Right
of First Refusal will be null and void and without further force and effect
throughout the remainder of the term of this Lease and any extensions thereof.
Additionally, if Lessee exercises the Right of First Refusal, but then does not
sign the Offered Lease, then Lessee shall be liable for an amount equal to what
Lessor would have received for the first six months of the term under the
Offered Lease. Notwithstanding any contrary provision hereof: (a) the New Lease
must (I) be guaranteed by the guarantor(s) of this Lease, if any, upon a
guaranty form which is identical to the guaranty form applicable to this Lease,
and (ii) stipulate that any default by Lessee thereunder will be deemed to
constitute a like default under this Lease; and (b) Lessee agrees that any
default by it under this Lease will be deemed to constitute a like default under
the New Lease.
46. Guaranty. The undersigned, Satish Sanan, the "Guarantor" below, in his
individual capacity only, for valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, and as an inducement to Lessor to enter
into this Lease Agreement embodied herein with Lessee, hereby irrevocably agrees
as follows: (a) This Guaranty runs irrevocably to Lessor, its successors and
assigns for the full term of the Lease and any extensions thereof; (b) The
Guarantor acknowledges that he executes this Guaranty Agreement in his personal
capacity and not in his capacity as a corporate officer or as agent of Lessee;
(c) Guarantor unconditionally guarantees to Lessor the prompt performance and
payment when due of Lessee's obligations to Lessor relative to the Agreement
embodied herein; (d) This Guaranty Agreement is binding upon the undersigned,
his heirs, personal representatives, successor and assigns; and (e) this
Guaranty is for an amount not to exceed $175,000.
Guarantor hereby expressly agrees that validity of this Guaranty and the
obligations of the Guarantor hereunder shall in no way be terminated, affected,
diminished, or impaired by reason of: (a) the assertion that Lessor has failed
to assert against Lessee any of the rights or remedies reserved to Lessor; or
(b) the assertion that Lessor has granted Lessee relief from any of
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Lessee's obligations under the lease; or (c) the release or discharge of Lessee
in any creditors' proceeding, receivership, bankruptcy or other proceedings.
This Guaranty shall be a continuing guaranty and the liability of the Guarantor
shall in no way be affected, modified or diminished by reason of any assignment,
amendment, renewal, supplement, modification or extension of the Lease or by
reason of any modification or waiver of or change in any of the terms,
covenants, conditions or provisions of the Lease, or by reason of any extension
of time that may be granted by Lessor to Lessee. If more than one Guarantor
signs below, each Guarantor shall be jointly and severally liable under this
Guaranty. The failure of one Guarantor to sign below shall not relieve the
signing Guarantors.
47. This lease agreement, attachments and addendum supersede any other lease
agreement and/or Addenda Information Management Resources, Inc. has with office
building (26750 U.S. Highway 19 North, Clearwater, Florida 34621) and/or Lessor.
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DATE: MARCH 20, 1993
PROJECT: INFORMATION MANAGEMENT RESOURCES @ PLYMOUTH PLAZA
SUBJECT: BUILDOUT ITEMS TO BE PERFORMED DURING CONSTRUCTION.
SECOND FLOOR
1. Provide all electrical requirements for I.M.R.
2. Provide separate HVAC system for second floor computer room
and fifth floor phone room. (an additional $3,000.00 is
provided for this scope of work)
3. Provide stained mahogany millwork, 8' high doors and cabinetwork to
match fifth floor offices.
4. Provide shelving in library.
5. Provide a complete built-in audio visual center on north wall of video
conference room.
6. Provide folding acoustical wall between conference rooms.
7. Provide 40 linear feet of built-in lateral files.
8. Provide 16 linear feet of countertop for laser printers.
9. Provide shelving in storage room.
10. Provide complete kitchen facility including counter, sink,
refrigerator, microwave, etc. [Handwritten: "Includes
Dishwasher"]
11. Security System of 2nd Floor [Handwritten]
12. Uninterrupted Power Supply (UPS) [Handwritten]
FIFTH FLOOR
1. Existing supply room to have new shelving added.
2. Existing phone room to have new wall added.
3 Touch up various areas with paint to match existing.
4. Repair existing carps in various areas.
5. Convert existing library to an office. [Deleted]
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6 Existing computer room to have now shelving added. This room shall have
proper hardware installed to be lockable.
7. Security System on 5th Floor [Handwritten]
8. Uninterrupted Power Supply (UPS) [Handwritten]
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EXHIBIT "C"
RULES AND REGULATIONS
---------------------
1. The sidewalks, walks, plaza entries, corridors, concourses, ramps,
staircases escalators and elevators shall not be obstructed or used for any
purpose other than ingress and egress to and from the Premises. No bicycle or
motorcycle shall be brought into the Building or kept on the Premises without
the consent of Landlord.
2. No freight, furniture or bulky matter of any description will be
received into the Building or carried into the elevators except in such a
manner, during such hours and using such elevators and passageways as may be
approved by Landlord, and then only having been scheduled in advance. Any hand
trucks, carryalls or similar appliances used for the delivery or receipt of
merchandise or equipment shall be equipped with rubber tires, side guards and
such other safeguards as Landlord shall require.
3. Landlord shall have the right to prescribe the weight, position and
manner of installation of safes and/or other heavy equipment which shall, if
considered necessary by Landlord, be installed in a manner which shall insure
satisfactory weight distribution. All damage done to the Building by reason of
a safe or any other article of Tenant's office equipment being on the Premises
shall be repaired at the expense of Tenant. The time and manner of moving safes
and/or other heavy equipment shall be subject to prior approval by Landlord.
4. Only persons authorized by Landlord will be permitted to furnish ice,
drinking water, towels, barbering, shoe shining, floor polishing and other
similar services to Tenant, and only at hours and under regulations fixed by
Landlord. Tenant shall use no other method of heating or cooling than that
supplied by Landlord.
5. Tenant, or the employees, agents, servants, visitors or licensees of
Tenant shall not at any time, place, leave or discard any rubbish, paper,
articles or objects of any kind whatsoever outside the doors of the Premises or
in the corridors or passageways of the Building. No animals or birds shall be
brought or kept in or about the Building.
6. Landlord shall have the right to prohibit any advertising by Tenant
which, in Landlord's opinion, tends to impair the reputation of the Building or
its desirability for offices, and upon written notice from Landlord, Tenant will
refrain from or discontinue such advertising.
7. Tenant shall not place, cause or allow to be placed any sign or
lettering whatsoever, at, in, about or upon the Premises, except in and at such
places as may be designated by Landlord and consented to by Landlord in writing.
All lettering and graphics on corridor doors shall conform to the standard
prescribed by Landlord. No trademark shall be displayed in any event.
8. Canvassing, soliciting or peddling in the Building is prohibited and
Tenant shall cooperate to prevent same.
-22-
<PAGE>
9. Landlord shall have the right to exclude any person from the Building
other than during customary business hours, and any person in the Building will
be subject to identification by the employees and agents of Landlord. All
persons in or entering the Building shall be required to comply with the
security policies of the Building. Landlord will provide all security services
for the building, provided that if Tenant desires any additional security
service for the Premises, Tenant shall have the right (with the advance written
consent of Landlord) to obtain such additional service at Tenant's sole cost and
expense.
10. Only workmen employed, designated or approved by Landlord may be
employed for repairs, installations, alterations, painting, material moving and
other similar work that may be done on the Premises.
11. Tenant shall not do any cooking or conduct any restaurant,
luncheonette or cafeteria for the sale or service of food or beverages to its
employees or to others, or permit the delivery of any food or beverage to the
Premises, except by such persons delivering the same as shall be approved by
Landlord and only under regulations fixed by Landlord. Tenant may, however,
operate a coffee bar by and for its employees.
12. Tenant shall not bring or permit to be brought or kept in or on the
Premises any inflammable, combustible, corrosive, caustic, poisonous or
explosive fluid, material, chemical or substance, or cause or permit any odors
to permiate in or emanate from the Premises.
13. Tenant shall not mark, paint, drill into, or in any way deface any
part of the Building or the Premises. No boring, cutting or stringing of wires
shall be permitted, except with the prior written consent of Landlord, as
Landlord may direct. Tenant shall not install any resilient tile or similar
floor covering in the Premises except with the prior approval of Landlord.
14. No additional locks or bolts of any kind shall be placed on any door
in the Building or the Premises and no lock on any door therein shall be changed
or altered in any respect. Landlord shall furnish two keys for each lock on
doors in the Premises and shall, on Tenant's request and at Tenant's expense,
provide additional duplicate keys. All keys shall be returned to Landlord upon
the termination of this Lease. Landlord may at all times keep a pass key to the
Premises. All entrance doors to the Premises shall be left closed at all times,
and left locked when the Premises are not in use.
15. Tenant shall give immediate notice to Landlord in case of accidents in
the Premises, in the Building or Parking Garage, or of defects therein or in any
fixtures or equipment, or of any known emergency in the Building or Parking
Garage.
16. Tenant shall not use the Premises or permit the Premises to be used
for photographic, multilith or multigraph reproductions except in connection
with its own business and then only with Landlord's prior permission.
17. Tenant shall not use or permit any portion of the Premises to be used
as an office for a public stenographer or typist, offset printing, the sale of
liquor or tobacco, a barber or manicure shop, an employment bureau, a labor
union office, a doctor's or dentist's office, a
-23-
<PAGE>
dance or music studio, any type of school or for any use other than those
specifically granted in this Lease.
18. Tenant shall not advertise for laborers giving the Premises as an
address, nor pay such laborers at a location in the Premises.
19. The requirements of Tenant will be attended to only upon application
at the offices of the Building. Employees of Landlord shall not perform any
work or do anything outside of their regular duties, unless under special
instructions from the office of Landlord.
20. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Business machines and mechanical equipment belonging
to Tenant which cause noise, vibration or any other nuisance that may be
transmitted to the structure or other portions of the Building, shall be placed
and maintained by Tenant, at Tenant's expense, in settings of cork, rubber or
spring type vibration eliminators sufficient to eliminate noise or vibration.
21. No draperies, shutters or other covering may be installed by Tenant
between the building standard window covering and the exterior windows or walls.
Installation and use of lighting which is visible from the exterior of the
Building, except for Building Standard lights, are subject to the prior written
approval of Landlord.
22. Tenant shall not place, install or operate within the Premises or any
other part of the Building any engine, stove or machinery, or conduct mechanical
operations therein, without the written consent of Landlord.
23. No portion of the Premises or any other part of the Building shall at
any time be used or occupied as sleeping or lodging quarters.
PARKING REGULATIONS
-------------------
1. Tenant's employees will not park in "Reserved for Visitor Parking"
spaces located on any portion of premises. Should Tenant or its employees
violate this provision, they shall pay to Landlord the sum of $5.00 per day (or
portion thereof) per car. There will be no parking in any area of the premises
other than those areas clearly marked and defined for parking.
2. Parking for authorized employees will be on the basis of first-come-
first-served.
3. Parkers will be expected to park their cars in an orderly manner within
the marked spaced provided.
4. It is recommended that cars be left in a "brakes on, doors locked"
condition at all times.
5. No car will be allowed to park in any driveway area or in any manner
which will interfere with the normal flow of traffic.
-24-
<PAGE>
6. Cars parked illegally will be towed at the car owner's expense and
liability.
7. Tenant agrees that all its employees have been fully informed as to the
content of all regulations and assumes responsibility for their adherence to
them.
Acknowledgment that Tenant has read and will comply with the above stated
"Rules and Regulations."
Tenant
Date:
-25-
<PAGE>
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease effective as
of the date first above written, each representing to the other that they have
full authority to execute same in the capacity indicated.
Dated: 3/23/93
------------------
In the presence of:
WITNESS: LESSOR:
ABR Plymouth Plaza LTD.
/s/ By: /s/
- -------------------------------- -----------------------------
/s/ Its: General Partner
- -------------------------------- -----------------------------
LESSEE:
Information Management Resources, Inc.
/s/ By: /s/ Satish Sanan
- -------------------------------- ------------------------------
/s/ Its: President
- -------------------------------- ------------------------------
GUARANTOR:
Satish Sanan
/s/ By: /s/ Satish Sanan
- -------------------------------- Personally
/s/
- --------------------------------
<PAGE>
EXHIBIT "A-1"
[SCHEMATIC DRAWING OF FLOOR PLAN OF PLYMOUTH PLAZA APPEARS ABOVE CAPTION
"INFORMATION MANAGEMENT RESOURCES 11,289 RSF."]
-27-
<PAGE>
EXHIBIT "A-2"
[SCHEMATIC DRAWING OF FLOOR PLAN OF PLYMOUTH PLAZA APPEARS ABOVE CAPTION
"INFORMATION MANAGEMENT RESOURCES 11,289 RSF."]
-28-
<PAGE>
EXHIBIT "A-3"
[SCHEMATIC DRAWING OF FLOOR PLAN OF PLYMOUTH PLAZA SHOWING SUITE 310 WITH 1,503
RSF, AND SHOWING SUITE 301 WITH 2,822 RSF.]
-29-
<PAGE>
EXHIBIT "B-1"
[SCHEMATIC DRAWING OF FLOOR PLAN OF SECOND FLOOR INDICATING INFORMATION
MANAGEMENT RESOURCES' SPACE THEREIN.]
-30-
<PAGE>
EXHIBIT "B-2"
[SCHEMATIC DRAWING OF FLOOR PLAN OF FIFTH FLOOR INDICATING INFORMATION
MANAGEMENT RESOURCES' SPACE THEREIN.]
-31-
<PAGE>
EXHIBIT "D"
[PROPERTY SKETCH ILLUSTRATING THE OFFICE BUILDING, PARKING GARAGE, ADJACENT
ROADS AND THE PROPERTY LINES.]
-32-
<PAGE>
FIRST AMENDMENT TO LEASE AGREEMENT
----------------------------------
THIS FIRST AMENDMENT TO LEASE AGREEMENT is made and entered into effective
as of (but not necessarily on) the 18th day of October, 1995, between ABR
---
Plymouth Plaza, LTD ("Landlord"), and Information Management Resources, Inc.,
- -------------------------------- ---------------------------------------
("Tenant"), with reference to the following:
- ----------
(a) Landlord and Tenant have previously entered into a certain Lease
Agreement, dated as of March 2, 1993 (collectively, the "Lease"), under the
-------------
terms of which Tenant leased from Landlord certain Premises (deemed in the
Lease) of an office building (the "Office Building") at 26750 U.S. Highway 19
North, Clearwater, Florida 34621.
(b) By means of this instrument, Landlord and Tenant will amend the
Lease, as hereinafter set forth.
NOW, THEREFORE, in consideration of the execution of this instrument by
both parties, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
covenant and agree as follows:
1. As used in this instrument, the following terms shall have the
meaning indicated for each term:
(a) "Temporary Space" shall mean the portion of suite 300 located on
the third floor of the Building (defined in the Lease) which is shown on the
floor plan attached hereto as exhibit "A" and make a part hereof. The Temporary
Space is stipulated to contain 500 square feet of Rentable Area (defined in the
---------------
Lease).
(b) "Temporary Space Base Rent" shall mean $400.00 per month.
-----------------
2. "Temporary Space Commencement Date" shall be October 11, 1995.
Effective as of the Temporary Space Commencement Date, Landlord leases to Tenant
and Tenant leases from Landlord the Temporary Space, subject to the terms of the
Lease, as amended by this instrument.
3. Effective as of the Temporary Space Commencement Date, the Tenant
shall pay to Landlord the Temporary Space Base Rent in addition to sales tax and
all other Rent due and payable under the terms of the Lease. Temporary Space
Base Rent shall be due and payable with the Base rent under the Lease.
4. The Temporary Space is hereby added to and made a part of the
Premises (defined in the lease) subject to the terms of this instrument.
5. Notwithstanding any language in the Lease or this instrument
seemingly to the contrary:
<PAGE>
(a) Tenant's lease of the Temporary Space shall constitute a month-to-
month lease, and either party shall have the right to terminate such leasing of
the Temporary Space on thirty (30) days' written notice to the other party.
-----------------
(b) Landlord does not have any obligation to make improvements or
additions to the Temporary Space, and Tenant shall not make any alterations,
improvements or additions to the Temporary Space. Tenant accepts the Temporary
Space in its "AS IS" condition and state of repair.
(c) Notwithstanding paragraph 2 of the Lease, the Temporary Space
-----------
shall be used for furniture/file storage purposes only, and such files shall be
limited to the amount which may be adequately supported by the structure of the
building in the area of the Temporary Space.
6. As amended by this instrument, all of the covenants, agreements,
terms, provisions, and conditions of the Lease continue in full force and effect
and apply to both the temporary space and the original Premises covered by the
Lease. The Tenant ratifies all terms and conditions of the Lease as amended by
this instrument.
7. This instrument shall be binding upon and shall inure to the benefit
of' Landlord and Tenant and their respective, permitted successors and assigns.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
to Lease Agreement in multiple original counterparts effective as of the date
set forth above
"Landlord" REED DEVELOPMENT COMPANY AS
MANAGER FOR ABR PLYMOUTH
WITNESSES PLAZA, LTD.
/s/ By: /s/ Robert M. Reed II
- ---------------------- ---------------------------
Robert M. Reed II, Owner
- ----------------------
"Tenant" INFORMATION MANAGEMENT
RESOURCES, INC.
WITNESSES
By: /s/ Satish Sanan
- ---------------------- ---------------------------
Satish Sanan, President
- ----------------------
-2-
<PAGE>
[One-page diagram of floor plan showing suites 300, 304 and the addition to 301]
-3-
<PAGE>
SECOND AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT is make and entered into effective
as of (but not necessarily on) the 11th day of December, 1995, between ABR
---
Plymouth Plaza, LTD ("Landlord"), and Information Management Resources, Inc.,
- -------------------------------- ---------------------------------------
("Tenant"), with reference to the following:
- ----------
(a) Landlord and Tenant have previously entered into a certain Lease
Agreement, dated as of March 22, 1993 (collectively, the "Lease"), as First
--------------
Amended October 18, 1995, under the terms of which Tenant leased from Landlord
certain Premises (defined in the Lease) of an office building (the "Office
Building") at 26750 U.S. Highway 19 North, Clearwater, Florida 34621.
(b) By means of this instrument, Landlord and Tenant will amend the Lease,
as hereinafter set forth.
NOW, THEREFORE, in consideration of the execution of this instrument by
both parties, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
covenant and agree as follows:
1. As used in this instrument, the following terms shall have the meaning
indicated for each term:
(a) "Temporary Space" shall mean the portion of suite 499 located on the
fourth floor of the Building (defined in the Lease) which is shown on the floor
plan attached hereto as exhibit "A" and made a part hereof. The Temporary Space
is stipulated to contain 300 square feet of Rentable Area (defined in the
----------------
Lease).
(b) "Temporary Space Base Rent" shall mean $250.00 per month.
------------------
2. "Temporary Space Commencement Date" shall be December 11, 1995.
Effective as of the Temporary Space Commencement Date, Landlord leases to Tenant
and Tenant leases from Landlord the Temporary Space, subject to the terms of the
Lease, as amended by this instrument.
3. Effective as of the Temporary Space Commencement Date, the Tenant shall
pay to Landlord the Temporary Space Base Rent in addition to sales tax and all
other Rent due and payable under the terms of the Lease. Temporary Space Base
Rent shall be due and payable with the Base rent under the Lease.
4. The Temporary Space is hereby added to and made a part of the Premises
(defined in the Lease) subject to the terms of this instrument.
5. Notwithstanding, any language in the Lease or this instrument seemingly
to the contrary:
<PAGE>
(a) Tenant's lease of the Temporary Space shall constitute a month-to-month
lease, and either party shall hare the right to terminate such leasing of the
Temporary Space on thirty (30) days' written notice to the other party.
----------------
(b) Landlord does not have any obligation to make improvements or additions
to the Temporary Space, and Tenant shall not make any alterations, improvements
or additions to the Temporary Space. Tenant accepts the Temporary Space in its
"AS IS" condition and state of repair.
(c) Notwithstanding paragraph 2 of the Lease, the Temporary Space shall be
-----------
used for furniture/file storage purposes only, and such files shall be limited
to the amount which may be adequately supported by the structure of the building
in the area of the Temporary Space.
6. As of the Commencement Date of this Second Amendment to the Lease, the
First Amendment shall be terminated and no longer effective. Tenant agrees to
vacate First Amendment Temporary Space on the Third Floor on or before December
11, 1995.
7. As amended by this instrument, all of the covenants, agreements, terms,
provisions, and conditions of the Lease continue in full force and effect and
apply to both the temporary space and the original Premises covered by the
Lease. The Tenant ratifies all terms and conditions of the Lease, as amended by
this instrument.
8. This instrument shall be binding upon and shall inure to the benefit of
Landlord and Tenant and their respective, permitted successors and assigns.
IN WITNESS WHEREOF Landlord and Tenant have executed this Second Amendment
to Lease Agreement in multiple original counterparts effective as of the date
set forth above.
"Landlord" REED DEVELOPMENT COMPANY AS MANAGER
FOR ABR PLYMOUTH PLAZA, LTD.
WITNESSES
/s/
- ------------------------- By: /s/ Robert M. Reed
- ------------------------- -------------------------------
Robert M. Reed II, Owner
"Tenant" INFORMATION MANAGEMENT RESOURCES, INC.
WITNESSES By: /s/ Satish Sanan
-------------------------------
- ------------------------- Satish Sanan, President
- -------------------------
2
<PAGE>
[A floor plan with "Exhibit 'A' Suite 499" handwritten on it and Areas
A through I identified]
3
<PAGE>
EXHIBIT 10.22
This Sub-Lease is made as of this 17th day of October, 1995, between Information
Management Resources, Inc. of 26750 U.S. Highway 19N, Suite 500, Clearwater,
Florida 34621 as Lessee, and ABR Information Services, Inc. of 34125 U S.
Highway 19 North, Suite 300, Palm Harbor, Florida 34684 as Sub-Lessee.
1. For valuable consideration, the parties agree to sub-lease the following
described premises:
11,289 rentable square feet of space on the second floor of an office
building located at 26750 U.S. Highway 19 North, Clearwater, Florida 34621 (the
"Demised Premises").
2. This property is currently leased to Lessee under the terms of that certain
Lease Agreement (the "Original Lease Agreement") by and between ABR Plymouth
Plaza Ltd. as Lessor and Lessee, as Lessee dated March 22, 1993.
3. Lessee hereby sub-leases to Sub-Lessee, the Demised Premises in its current
"AS IS" condition except that any and all of Lessee's furniture, equipment and
other personal property will be removed from the Demised Premises by the Lessee
prior to October 15, 1995.
4. Sub-Lessee shall use the Demised Premises for COBRA and/or employee benefit
plan administration, marketing and consulting. Sub-Lessee shall operate the
Demised Premises under the name of ABR Information Services, Inc. and/or Applied
Benefits Research, Inc. and/or CobraServ.
5. Sub-Lessee shall provide Lessee and ABR Plymouth Plaza Ltd. with proof of
insurance coverage meeting the requirements of Paragraph 19 of the Original
Lease Agreement.
6. The Sub-Lease will be for a period commencing on November 1, 1995 and
terminating October 31, 1997 and, except as provided in Paragraph 10 hereof, is
not renewable or subject to extension. Notwithstanding the preceding sentence,
Sub-Lessee may, at its option, also occupy the Demised Premises from the date of
execution by all parties of this Sub-Lease until November 1, 1995.
7. The subrental amount is $270,936 plus all applicable sales tax and is
payable in monthly installments of $11,289 plus applicable sales tax by the Sub-
Lessee to the Lessee on the first day of each and every month beginning on
November 1, 1995, provided that subrent for the first and last full months of
the term of this Sub-Lease, shall be paid together with applicable sales tax by
the Sub-Lessee at the signing of this Sub-Lease Agreement.
8. In addition to any other remedies available to Lessee, upon Sub-Lessee's
failure to pay any subrental amount required to be paid hereunder within five
(5) days after the due date, Lessee reserves the right to charge a late payment
charge of Twenty-Five Dollars ($25.00) plus one and one-half percent (1 1/2%) of
the outstanding balance due for each month or portion thereof. In no event shall
the amount of such late charge be in excess of the maximum amount permitted by
applicable usury laws.
-1-
<PAGE>
SUB-LEASE AGREEMENT
9. The Sub-Lease is subject to the provisions in the Original Lease Agreement
that are referenced in this Sub-Lease. A copy of the Original Lease Agreement is
attached hereto as Exhibit A, and incorporated herein. The only services to
which Sub-Lessee is entitled are those to of which Lessee is entitled under the
Original Lease Agreement. Lessee warrants that the Original Lease Agreement is
in effect, has not been modified, and that the property may be sublet with the
consent of Lessee's landlord. Such consent is attached to this Sub-Lease and is
part of this Sub-Lease. Lessee shall hold Sub-Lessee harmless from any claim
which may result from Lessee's failure to perform any obligation under the
Original Lease Agreement with respect to the Demised Premises prior to the date
of and during this Sub-Lease. Sub-Lessee shall hold Lessee harmless from any
claim which may result from Sub-Lessee's failure to perform any obligation under
the Lease Agreement with respect to the Demised Premises during the term of this
Sub-Lease.
10. Subject to the conditions set forth hereinafter, Sub-Lessee shall have the
option to extend this Sub-lease for a term commencing on November 1, 1997 and
ending on August 31, 1998 (or, if earlier, upon the expiration of the Original
Lease Agreement) at a monthly subrental of $13.00 per square foot. In the event
that Sub-Lessee desires to exercise this option, Sub-Lessee shall give Lessee
written notice (the "Option Notice") of such desire on or before September 1,
1997. Sub-Lessee shall not have the right to exercise this option if Lessee
intends to occupy the Demised Premises itself. Within thirty (30) days of
Lessee's receipt the Option Notice, Lessee shall notify Sub-Lessee in writing
whether the Sub-Lease will be extended or whether Lessee intends in good faith
to occupy the Demised Premises itself, provided however that, in the event that
Sub-Lessee delivers the Option Notice to Lessee before September 1, 1997, Lessee
shall not be required to respond to such Option Notice until September 30, 1997.
11. This Sub-Lease shall be governed by and enforced according to the laws of
the State of Florida.
12. All notices and demands which are required, or which may be given, under
the Sub-Lease by either party to the other shall be in writing and delivered by
hand or sent by certified or registered mail.
All such notices and demands by the Lessee to the Sub-Lessee shall be
addressed or delivered to the Demised Premises.
All such notices and demands by the Sub-Lessee to the Lessee shall be
addressed to or delivered to the Lessee's address stated in the preamble to this
Sub-Lease.
13. Notwithstanding anything to the contrary in this Sub-Lease Agreement or in
the Original Lease Agreement between ABR Plymouth Plaza Ltd. and Information
Management Resources, Inc. dated March 22, 1993, Sub-Lessee's only financial
obligations under this Sub-Lease Agreement are the obligations stated in
Paragraphs 7 through 9 (inclusive) of this Sub-Lease Agreement, provided,
--------
however, that Sub-Lessee shall pay for all after-hours electricity and HVAC for
- -------
the Demised Premises and provided further that Sub-Lessee shall be obligated to
-------- -------
comply with each of the following obligations of Lessee under the terms of the
Original Lease Agreement:
-2-
<PAGE>
SUB-LEASE AGREEMENT
(a) the obligation to maintain the interior of the Demised Premises as set
forth in Paragraph 9 of the Original Lease Agreement;
(b) the restrictions on assignment and subletting set forth in Paragraph
11 of the Original Lease Agreement;
(c) the limitations of use of the Demised Premises, as set forth in
Paragraph 2 of the Original Lease Agreement, provided, however, the
use to be made by the Sub-Lessee of the Demised Premises shall be as
set forth in Paragraph 4 of this Sub-Lease;
(d) the use restrictions set forth in Paragraph 13 of the Original Lease
Agreement;
(e) the obligation to comply with law, as set forth in Paragraph 14 of the
Original Lease Agreement;
(f) those provisions regarding leasehold improvements, as set forth in
Paragraph 15 of the Original Lease Agreement;
(g) those provisions regarding liens set forth at Paragraph 17 of the
Original Lease Agreement;
(h) those provisions as set forth in Paragraph 18 of the Original Lease
Agreement are amended to the extent that the words "indemnify and" are
deleted from the first line with regard to Sub-Lessee. Lessee agrees
to be bound by the terms and provisions of Paragraph 18 of the
Original Lease Agreement without such amendment;
(i) allowing Lessee and ABR Plymouth Plaza Ltd. to enter the Demised
Premises, as set forth in Paragraph 21 of the Original Lease
Agreement;
(j) those provisions regarding default, as set forth in Paragraph 22 of
the Original Lease Agreement;
(k) those provisions regarding eminent domain, as set forth in Paragraph
24 of the Original Lease Agreement; and
(l) those provisions regarding subordination to any existing mortgage or
mortgages hereinafter encumbering the Demised Premises, as set forth
in Paragraph 30 of the Original Lease Agreement.
Sub-Lessee shall have no financial obligation under the terms of the
Original Lease Agreement except as specifically set forth herein.
14. Sub-Lessee shall have no right of first refusal, as set forth in Paragraph
45 of the Original Lease Agreement.
-3-
<PAGE>
SUB-LEASE AGREEMENT
15. ABR Plymouth Plaza Ltd. does hereby agree that, so long as Sub-Lessee
remains current and is not in default under the terms of this Sub-Lease
Agreement, Lessee's default under the terms of the Original Lease Agreement
shall not alone constitute a default hereunder; provided, however, in the event
of Lessee's default under the Original Lease Agreement, Sub-Lessee shall, upon
demand by ABR Plymouth Plaza, Ltd., pay all rental and other monies due hereby
directly to Lessor.
16. This Sub-Lease shall in no way diminish or abrogate any of Lessee's
obligations or Guarantor's obligations under the terms of the Original Lease
Agreement who shall remain fully bound thereby.
17. The undersigned, Satish Sanan, as Guarantor of the Original Lease Agreement
does hereby agree and consent to the foregoing and further agrees that
Guarantor's obligations under the terms of the Original Lease Agreement have not
in any way been modified or diminished as a result of this Sub-Lease Agreement.
LESSEE: SUB-LESSEE:
Information Management Resources, Inc. ABR Information Services, Inc.
By: \s\ Satish K. Sanan By: \s\ Vincent Addonisio
Name: Satish K. Sanan Name: Vincent Addonisio
Its: President & CEO Its: Senior Vice President and
Chief Financial Officer
GUARANTOR
Satish Sanan
\s\ Satish K. Sanan
Personally
Consent of Lessor
- -----------------
ABR Plymouth Plaza Ltd. as Lessor under the above-described Original Lease
Agreement consents to the foregoing Sub-Lease provided however that such consent
shall not act as a release or waiver of any obligation of Information Management
Resources. Inc. or of the Guarantor under the Original Lease Agreement.
ABR Plymouth Plaza Ltd.
By: \s\ Robert M. Reed
Name: Robert M. Reed
Its: General Partner
Attachment(s)
-4-
<PAGE>
EXHIBIT 10.23
STOCKHOLDER'S AGREEMENT
THIS AGREEMENT made and entered as of July 1, 1994 by and between INFORMATION
MANAGEMENT RESOURCES, INC., a Florida corporation ("the Corporation"), and the
individuals listed on the signature page hereto, and any other individual who
acquires stock in the Corporation (such individuals hereinafter individually
referred to as a "Stockholder" or collectively referred to as the
"Stockholders").
W I T N E S S E T H
WHEREAS, the Stockholders desire to promote their mutual interest and the
interest of the Corporation by imposing certain restrictions upon the transfer
of the Corporation's Voting Common Shares and Non-Voting Common Shares, par
value $0.10 per share.
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto
and of the mutual benefits to be gained by the performance thereof, the parties
hereto for themselves, their heirs, personal representatives, administrators,
successors and assigns do hereby agree as follows:
1. Termination of Prior Agreements
The parties hereby terminate and cancel any and all prior stock restriction
or stockholders' agreements and amendments thereto, whether written or oral
2. Termination of Resident Alien Status
(a) In the event that any Stockholder who is not a United States citizen
ceases to be a resident alien, as defined in Internal Revenue Code
Section 7701(b), such Stockholder shall be deemed to have made an
offer to sell his stock in the Corporation, and the Corporation shall
be deemed to have purchased such stock as of the day immediately
preceding the date on which such Stockholder ceases to a be a resident
alien of the United States. In such event, the purchase price and
method of payment shall be in accordance with the terms and conditions
of paragraph (b) below.
(b) The purchase price for the Stockholder's stock under paragraph (a)
above shall be equal to the price per share paid by the Stockholder
for his or her stock in the Corporation multiplied by the number of
shares of stock in the Corporation owned by the Stockholder. The
purchase price shall be paid as follows: (i) twenty-five percent
(25%) of the purchase price shall be paid, in cash or certified check,
to the Stockholder within ninety (90) days of the date he ceases to be
a resident alien; and (ii) the balance shall be evidenced by the
delivery to the Stockholder of the Corporation's promissory note which
shall provide for five (5) annual installments of principal and
interest with interest computed at the Prime Rate. The first payment
shall be made on the anniversary date of the initial downpayment
1
<PAGE>
STOCKHOLDERS' AGREEMENT
dates of such initial downpayment. The Corporation may prepay the
promissory note in whole or in part without premium or penalty. Upon
delivery of the Corporation's promissory note, the Stockholder shall
transfer to the Corporation the stock of such Stockholder. As used
herein, the term "Prime Rate" shall mean the prime rate of interest as
stated in the Wall Street Journal on the date that the Stockholder
ceases to be a resident alien.
3. Restriction Against Sale, Transfer, Encumbrance or Change in Beneficial
Ownership.
(a) Except in compliance with Section 4 of this Agreement, no Stockholder
at any time shall during his or her lifetime voluntarily or
involuntarily gift, sell, transfer, hypothecate or otherwise dispose
of all or any part of his or her stock in the Corporation or any
beneficial interest therein, as such term is defined in Rule 13d-a3,
Securities Exchange Act of 1934 ("Beneficial Interest"), without the
prior written consent of the Corporation or a majority in interest of
the other Stockholders, which may be withheld for any reason in their
sole discretion without liability. If any court of competent
jurisdiction shall order any gift, sale, transfer, pledge,
encumbrance, hypothecation or other disposition of all or any part of
the stock of any Stockholder or any Beneficial Interest therein in
connection with any proceeding, including without limitation
bankruptcy, divorce, disability, competency, or otherwise, any such
involuntary transfer first shall be subject to the right of first
refusal provisions as hereinafter provided.
(b) Notwithstanding the restriction set forth in Section 3(a) hereof, a
Stockholder may at any time without compliance with Section 4 hereof
make a gift of all or part of his or her stock in the Corporation to
one or more Family Donees provided that each such Family Donee must
become a party to this Agreement. As used herein the term "Family
Donee" with respect to a stockholder shall mean any parent, child,
descendant or sibling of the Stockholder, the spouse of any of the
foregoing or the spouse of the Stockholder.
(c) No Stockholder shall have the right to pledge or encumber his or her
stock in the Corporation without the prior written consent of a
majority in interest of the other Stockholders. If any stock becomes
subject to any pledge or seizure for an obligation of a Stockholder,
or any other encumbrance, and the debt evidenced by the encumbrance is
in default, the Corporation and/or the other Stockholders can pay to
the holder of the obligation the amount of the debt, so as to release
the stock from the
2
<PAGE>
STOCKHOLDERS' AGREEMENT
encumbrance. The Corporation and/or the other Stockholders will then
be subrogated to all the legal rights and privileges of the creditor
and can enforce payment in the same manner as the creditor. Further,
no pledgee of said stock may sell the stock otherwise than in
connection with the right of first refusal provisions of this
Agreement, and all loan documents must so reflect.
(d) It is the intention of the parties that no court in any bankruptcy,
divorce, competency or other proceeding shall have the right to
involuntarily force such transfer or encumbrance or any change in
Beneficial Interest without the prior written consent and waiver or
exercise of the right of first refusal of the Corporation and the
other Stockholders. Such consent may be withheld for any reason in
their sole discretion without liability. Unless the affected
Stockholder shall otherwise consent, the court shall look to all
assets of the Stockholder other than the stock of the Corporation
initially to satisfy any obligation.
4. Right of First Refusal
(a) Offer to Purchase
-----------------
(1) If any Stockholder shall receive a Bona Fide Offer, as herein
defined, from a third party (the "Proposed Assignee") to purchase
any of his stock in the Corporation and he is willing to accept
such Bona Fide Offer, such Stockholder (the "Offeror
Stockholder") shall promptly send written notice (the "Notice")
to the Corporation offering to sell his stock to the Corporation
at the same price and upon the same terms and conditions that are
contained in the Bona Fide Offer. The Notice shall contain a
true and complete copy of the Bona Fide Offer, setting forth the
price and all terms and conditions with the name, address and
business or other occupation of the Proposed Assignee.
(2) As used herein, "Bona Fide Offer" shall mean an offer in writing.
signed by the Proposed Assignee (who must be a person or persons
financially capable of carrying out the terms of such Bona Fide
Offer), in a form legally enforceable against such Proposed
Assignee.
(3) Whenever, under this Agreement, a Bona Fide Offer to purchase the
stock has been received, and written notice thereof has been sent
to the Corporation by the Offeror Stockholder, the following
procedure shall be complied with:
3
<PAGE>
STOCKHOLDERS' AGREEMENT
(i) For a period of thirty (30) days from its receipt of the
Notice, the Corporation initially, and for an additional
thirty (30) days the other Stockholders, pro rata initially,
shall have the option to purchase the Stock.
(ii) If the Corporation or other Stockholders shall not elect,
within the prescribed time periods, to purchase the stock
covered by the Bona Fide Over, the Offeror Stockholder shall
have the right to accept the Bona Fide Offer and to sell
such stock, but only in strict accordance with all of the
provisions of the Bona fide Offer.
(b) Price. The purchase price to be paid pursuant to the right of first
-----
refusal hereunder shall be the price set forth in the Bona Fide Offer.
(c) Closing. If the Corporation or the other Stockholders shall elect to
-------
purchase the stock of the Offering Stockholder, the closing of such
purchase shall occur within sixty (60) days of the last day of the
prescribed time periods provided under Section 4(a) hereof.
5. New Stockholders
Upon the acquisition of stock by a new stockholder, a revised
supplemental agreement shall be executed by all stockholders of the
Company which, among other things, shall contain a statement that the
Corporation and all stockholders shall be bound by this Agreement as
revised or amended.
6. Termination
This Agreement shall terminate upon:
(a) Its complete consummation upon the death of all but one of the
Stockholders or the acquisition of all of the outstanding stock
(except for the stock of the remaining Stockholder) by the
Corporation.
(b) The bankruptcy or receivership of the Corporation, which is not
discharged within ninety (90) days, or the dissolution of the
Corporation.
(c) The written agreement of all of the Stockholders and the Corporation
to that effect.
4
<PAGE>
STOCKHOLDER'S AGREEMENT
7. Specific Performance
The parties hereby declare that it is impossible to measure in money the
damages which will accrue to a party hereto or to the legal representative
of a deceased Stockholder by reason of failure to perform any of the
obligations under this Agreement. Therefore, if any party hereto or a legal
representative of a deceased Stockholder shall institute any action or
proceeding to enforce the provisions hereof, the defendant or defendants
against whom such action or proceeding is brought hereby waives the claim
or defense therein that such party or such legal representative has or have
an adequate remedy at law and such person shall not urge in any action or
proceeding the claim or defense that such remedy at law exists.
8. Legend on Stock
Each certificate representing shares of the capital stock of the
Corporation now or hereafter held by the Stockholders shall contain a
legend in substantially the following form:
"The shares represented by this certificate are subject to
restrictions on transfer contained in a Stockholder's Agreement, a
copy of which is on file with the Secretary of the Company".
9. Subchapter S Provisions
(a) Each Stockholder (for and on behalf of himself, his estate, his
representatives or successors and his transferees, direct or indirect)
covenants and agrees not to do any act or fail to do any act, the
commission or omission of which would voluntarily or involuntarily
cause the termination of the election of the Corporation and its
Stockholders under and pursuant to Subchapter S (Sections 1361 through
1379 inclusive) of the Internal Revenue Code.
(b) In the event of the violation of any provision of this Section 9 by
any Stockholder, any Stockholder who authorizes or causes such
violation (whether in his capacity as a stockholder, director,
officer, employee or agent of the Corporation otherwise) shall be
liable to the Corporation and to each other Stockholder for any
damages, liabilities or costs resulting directly or indirectly
therefrom, including, without limitation, any additional Federal
income tax liability of any other Stockholder for any taxable year of
such other Stockholder during which the Corporation's fiscal year ends
and the Corporation could have otherwise had an effective election
under Subchapter S; provided, however, that no Stockholder shall be so
liable if such Stockholder acted in the good faith belief and upon the
advice of tax counsel that termination of said election would not be
caused thereby; and provided, further, that any additional Federal
income tax
5
<PAGE>
STOCKHOLDERS' AGREEMENT
liability of any such other Stockholder resulting directly or
indirectly from a violation of any provision of this Section 9 shall
be computed by the certified public accountant then servicing the
Corporation and shall be conclusive and binding upon all parties
hereto for all purposes and in all respects.
(c) Upon the prior written consent of Stockholders holding at least
seventy-five percent (75%) of the issued and outstanding shares of
stock to terminate the election of the Corporation and its
Stockholders under and pursuant to Subchapter S. the parties hereto
agree to revoke said election or to cause said election to be revoked.
10. Agreement Drafted by Corporation's General Counsel
The parties hereto each acknowledge that the Corporation's General Counsel,
Andrew R. Etkind, prepared this Agreement on behalf of and in the course of
his representation of the Corporation, and that:
(a) Such party has been advised that a conflict may exist between his
interests and those of the Corporation and the remaining Stockholders;
and
(b) Such party has had the opportunity to seek the advice of independent
counsel.
11. Entire Agreement
This Agreement contains the entire understanding between the parties hereto
with respect to the transactions contemplated hereby, and this Agreement
supersedes in all respects all written or oral understandings and
agreements heretofore existing between the parties hereto.
12. Modification
This Agreement may not be modified or amended except by an instrument in
writing duly executed by the parties hereto.
13. Counterparts
This Agreement may be executed in two or more counterparts, and all such
counterparts shall constitute one and the same instrument.
6
<PAGE>
STOCKHOLDER'S AGREEMENT
14. Captions
Captions used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
15. Miscellaneous
(a) Assignability. This Agreement shall not be assignable by any of the
-------------
parties to this Agreement without the prior written consent of all
other parties to this Agreement.
(b) Governing Law; Binding Effect. This Agreement shall be governed by
-----------------------------
and construed under the laws of the State of Florida, and shall inure
to the benefit of and be binding upon the parties hereto, their heirs,
personal representatives, successors and assigns.
(c) Severability of Provisions. The invalidity or unenforceability of any
--------------------------
particular provision hereof shall not affect the remaining provisions
of this Agreement, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
(d) Costs and Attorneys' Fees. If any party hereto shall breach any of
-------------------------
the terms of this Agreement, the non-breaching parties shall be
entitled to recover from the breaching party all reasonable costs and
attorneys' fees incurred by the non-breaching parties in enforcing the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
STOCKHOLDERS:
/s/ Satish K. Sanan
------------------------------------
SATISH K. SANAN
____________________________________
JEFFERY S. SLOWGROVE
____________________________________
DONNA M. KAPINOS
____________________________________
DOROTHEA T. REED
7
<PAGE>
STOCKHOLDER'S AGREEMENT
14. Captions
Captions used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
15. Miscellaneous
(a) Assignability. This Agreement shall not be assignable by any of the
-------------
parties to this Agreement without the prior written consent of all
other parties to this Agreement.
(b) Governing Law; Binding Effect. This Agreement shall be governed by
-----------------------------
and construed under the laws of the State of Florida, and shall inure
to the benefit of and be binding upon the parties hereto, their heirs,
personal representatives, successors and assigns.
(c) Severability of Provisions. The invalidity or unenforceability of any
--------------------------
particular provision hereof shall not affect the remaining provisions
of this Agreement, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
(d) Costs and Attorneys' Fees. If any party hereto shall breach any of
-------------------------
the terms of this Agreement, the non-breaching parties shall be
entitled to recover from the breaching party all reasonable costs and
attorneys' fees incurred by the non-breaching parties in enforcing the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
STOCKHOLDERS:
____________________________________
SATISH K. SANAN
/s/ Jeffery S. Slowgrove
------------------------------------
JEFFERY S. SLOWGROVE
____________________________________
DONNA M. KAPINOS
____________________________________
DOROTHEA T. REED
7
<PAGE>
STOCKHOLDER'S AGREEMENT
14. Captions
Captions used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
15. Miscellaneous
(a) Assignability. This Agreement shall not be assignable by any of the
-------------
parties to this Agreement without the prior written consent of all
other parties to this Agreement.
(b) Governing Law; Binding Effect. This Agreement shall be governed by
-----------------------------
and construed under the laws of the State of Florida, and shall inure
to the benefit of and be binding upon the parties hereto, their heirs,
personal representatives, successors and assigns.
(c) Severability of Provisions. The invalidity or unenforceability of any
--------------------------
particular provision hereof shall not affect the remaining provisions
of this Agreement, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
(d) Costs and Attorneys' Fees. If any party hereto shall breach any of
-------------------------
the terms of this Agreement, the non-breaching parties shall be
entitled to recover from the breaching party all reasonable costs and
attorneys' fees incurred by the non-breaching parties in enforcing the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
STOCKHOLDERS:
SATISH K. SANAN
____________________________________
JEFFERY S. SLOWGROVE
/s/ Donna M. Kapinos
------------------------------------
DONNA M. KAPINOS
____________________________________
DOROTHEA T. REED
7
<PAGE>
STOCKHOLDER'S AGREEMENT
14. Captions
Captions used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
15. Miscellaneous
(a) Assignability. This Agreement shall not be assignable by any of the
-------------
parties to this Agreement without the prior written consent of all
other parties to this Agreement.
(b) Governing Law; Binding Effect. This Agreement shall be governed by
-----------------------------
and construed under the laws of the State of Florida, and shall inure
to the benefit of and be binding upon the parties hereto, their heirs,
personal representatives, successors and assigns.
(c) Severability of Provisions. The invalidity or unenforceability of any
--------------------------
particular provision hereof shall not affect the remaining provisions
of this Agreement, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
(d) Costs and Attorneys' Fees. If any party hereto shall breach any of
-------------------------
the terms of this Agreement, the non-breaching parties shall be
entitled to recover from the breaching party all reasonable costs and
attorneys' fees incurred by the non-breaching parties in enforcing the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
STOCKHOLDERS:
/s/ Satish K. Sanan
------------------------------------
SATISH K. SANAN
____________________________________
JEFFERY S. SLOWGROVE
____________________________________
DONNA M. KAPINOS
/s/ Dorothea T. Reed
------------------------------------
DOROTHEA T. REED
7
<PAGE>
STOCKHOLDERS' AGREEMENT
/s/ Valerie A. Reed
------------------------------------
VALERIE A. REED
/s/ Lisa M. Reed
------------------------------------
LISA M. REED
/s/ Paul F. Reed
------------------------------------
PAUL F. REED
------------------------------------
ANDREW G. PETITE
HEATHER A. PARSONS,
AS CUSTODIAN
FOR NICHOLAS A. PETITE, A MINOR
BY:
---------------------------------
HEATHER A. PARSONS,
AS CUSTODIAN
FOR ALEXANDER P. PETITE, A MINOR
BY:
---------------------------------
/s/ D.P. Raju
------------------------------------
D.P. RAJU
------------------------------------
GOPAL KALLURI
------------------------------------
ARAVAMUDHAN LAKSHMANAN
------------------------------------
RAJAN PANDHARE
8
<PAGE>
STOCKHOLDERS' AGREEMENT
------------------------------------
VALERIE A. REED
------------------------------------
LISA M. REED
------------------------------------
PAUL F. REED
/s/ Andrew G. Petite
------------------------------------
ANDREW G. PETITE
HEATHER A. PARSONS,
AS CUSTODIAN
FOR NICHOLAS A. PETITE, A MINOR
BY: /s/ Heather A. Parsons
---------------------------------
HEATHER A. PARSONS,
AS CUSTODIAN
FOR ALEXANDER P. PETITE, A MINOR
BY: /s/ Heather A. Parsons
---------------------------------
/s/ D.P. Raju
------------------------------------
D.P. RAJU
------------------------------------
GOPAL KALLURI
------------------------------------
ARAVAMUDHAN LAKSHMANAN
------------------------------------
RAJAN PANDHARE
8
<PAGE>
STOCKHOLDER'S AGREEMENT
------------------------------------
VALERIE A. REED
------------------------------------
LISA M. REED
------------------------------------
PAUL F. REED
------------------------------------
ANDREW G. PETITE
HEATHER A. PARSONS,
AS CUSTODIAN
FOR NICHOLAS A. PETITE, A MINOR
BY:
---------------------------------
HEATHER A. PARSONS,
AS CUSTODIAN
FOR ALEXANDER P. PETITE, A MINOR
BY:
---------------------------------
/s/ D.P. Raju
------------------------------------
D.P. RAJU
------------------------------------
GOPAL KALLURI
------------------------------------
ARAVAMUDHAN LAKSHMANAN
------------------------------------
RAJAN PANDHARE
8
<PAGE>
STOCKHOLDER'S AGREEMENT
------------------------------------
VALERIE A. REED
------------------------------------
LISA M. REED
------------------------------------
PAUL F. REED
------------------------------------
ANDREW G. PETITE
HEATHER A. PARSONS,
AS CUSTODIAN
FOR NICHOLAS A. PETITE, A MINOR
BY:
---------------------------------
HEATHER A. PARSONS,
AS CUSTODIAN
FOR ALEXANDER P. PETITE, A MINOR
BY:
---------------------------------
------------------------------------
D.P. RAJU
/s/ Gopal Kalluri
------------------------------------
GOPAL KALLURI
------------------------------------
ARAVAMUDHAN LAKSHMANAN
------------------------------------
RAJAN PANDHARE
8
<PAGE>
STOCKHOLDERS' AGREEMENT
------------------------------------
VALERIE A. REED
------------------------------------
LISA M. REED
------------------------------------
PAUL F. REED
------------------------------------
ANDREW G. PETITE
HEATHER A. PARSONS,
AS CUSTODIAN
FOR NICHOLAS A. PETITE, A MINOR
BY:
---------------------------------
HEATHER A. PARSONS,
AS CUSTODIAN
FOR ALEXANDER P. PETITE, A MINOR
BY:
---------------------------------
------------------------------------
D.P. RAJU
------------------------------------
GOPAL KALLURI
/s/ Aravamudhan Lakshmanan 08/16/94
------------------------------------
ARAVAMUDHAN LAKSHMANAN
------------------------------------
RAJAN PANDHARE
8
<PAGE>
STOCKHOLDERS' AGREEMENT
------------------------------------
VALERIE A. REED
------------------------------------
LISA M. REED
------------------------------------
PAUL F. REED
------------------------------------
ANDREW G. PETITE
HEATHER A. PARSONS,
AS CUSTODIAN
FOR NICHOLAS A. PETITE, A MINOR
BY:
---------------------------------
HEATHER A. PARSONS,
AS CUSTODIAN
FOR ALEXANDER P. PETITE, A MINOR
BY:
---------------------------------
------------------------------------
D.P. RAJU
------------------------------------
GOPAL KALLURI
------------------------------------
ARAVAMUDHAN LAKSHMANAN
/s/ Rajan Pandhare
------------------------------------
RAJAN PANDHARE
8
<PAGE>
STOCKHOLDERS' AGREEMENT
/s/ Anandbir Singh
------------------------------------
ANANDBIR SINGH
------------------------------------
DILIP C. KULKARNI
------------------------------------
KENNETH D. SLOWGROVE
CORPORATION:
INFORMATION MANAGMENT
RESOURCES, INC., a Florida corporation
BY:
---------------------------------
NAME: Satish K. Sanan
-------------------------------
TITLE: President
------------------------------
9
<PAGE>
STOCKHOLDERS' AGREEMENT
------------------------------------
ANANDBIR SINGH
/s/ Dilip C. Kulkarni
------------------------------------
DILIP C. KULKARNI
------------------------------------
KENNETH D. SLOWGROVE
CORPORATION:
INFORMATION MANAGMENT
RESOURCES, INC., a Florida corporation
BY:
---------------------------------
NAME: Satish K. Sanan
-------------------------------
TITLE: President
------------------------------
9
<PAGE>
STOCKHOLDER'S AGREEMENT
------------------------------------
ANANDBIR SINGH
------------------------------------
DILIP C. KULKARNI
/s/ Kenneth D. Slowgrove
------------------------------------
KENNETH D. SLOWGROVE
CORPORATION:
INFORMATION MANAGMENT
RESOURCES, INC., a Florida corporation
BY:
---------------------------------
NAME: Satish K. Sanan
-------------------------------
TITLE: President
------------------------------
9
<PAGE>
STOCKHOLDER'S AGREEMENT
------------------------------------
ANANDBIR SINGH
------------------------------------
DILIP C. KULKARNI
------------------------------------
KENNETH D. SLOWGROVE
------------------------------------
CORPORATION:
INFORMATION MANAGMENT
RESOURCES, INC., a Florida corporation
BY: /s/ Satish K. Sanan
---------------------------------
NAME: Satish K. Sanan
-------------------------------
TITLE: President
------------------------------
9
<PAGE>
EXHIBIT 10.25
INFORMATION MANAGEMENT RESOURCES, INC.
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made on this ___ day of ______________,
1996, between INFORMATION MANAGEMENT RESOURCES, INC., a Florida corporation (the
"Company"), and __________________________ ("Indemnitee"):
W I T N E S S E T H:
--------------------
WHEREAS, Indemnitee is or has agreed to become an officer and/or director
of the Company and in such capacity performs or will perform a valuable service
for the Company;
WHEREAS, the Company's Bylaws (the "Bylaws") authorize the Company to
indemnify its officers and directors in accordance with the Florida Business
Corporation Act (the "Act");
WHEREAS, Section 607.0850 of the Act provides that the indemnification
provided under the Act is not exclusive of any other rights in respect to
indemnification or otherwise to which those seeking indemnification may be
entitled under the Company's Bylaws, an agreement, a vote of shareholders or
disinterested directors, or otherwise, to the extent the provisions of such
instruments or contract are consistent with the Act;
WHEREAS, the Act thus contemplates that agreements may be entered into
between the Company and the Company's directors and officers with respect to
indemnification of such individuals; and
WHEREAS, in order to encourage Indemnitee to begin or to continue to serve
as an officer or a member of the Board of Directors of the Company, and to
perform other designated services for the Company at its request, the Company
has determined and agreed to enter into this Agreement with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued service as an
officer and/or director of the Company, and the performance of such other
services as requested by the Company, the parties hereby agree as follows:
1. Statutory Indemnity of Indemnitee. Except as expressly set forth herein
----------------------------------
and subject to the provisions of this Agreement, the Company shall defend, hold
harmless and indemnify Indemnitee to the full extent authorized or permitted by
the provisions of the Act, as currently in effect, or by any amendment thereof
or other statutory provision authorizing or permitting such indemnification
adopted after the date hereof that has the effect of broadening (but not
narrowing) the scope of indemnification provided under the Act as it exists as
of the date hereof.
2. General Indemnity. Except as expressly set forth herein and subject to
-----------------
the provisions of this Agreement, in addition to any other indemnification to
which Indemnitee may be entitled pursuant to the Act, the Company's Articles of
Incorporation or Bylaws, or otherwise, the Company shall defend, hold harmless
and indemnify Indemnitee in the event Indemnitee was, is, or is threatened to be
made a named defendant or respondent, in any threatened, pending or completed
dispute, action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal, by reason of the fact that
Indemnitee is or was an officer, director, employee or agent of the Company, or
is or was serving at the request of the Company as an officer, director,
partner, trustee, employee or agent
<PAGE>
of another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against any obligation to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employment benefit plan), expenses (including attorneys' fees),
and amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such dispute, action, suit or proceeding. For purposes of this
Section 2, Indemnitee shall be considered to be serving an employee benefit plan
at the request of the Company if Indemnitee's duties to the Company also impose
duties on, or otherwise involve services by, Indemnitee to the plan or to
participants in or beneficiaries of the plan.
3. Limitations on General Indemnity.
---------------------------------
A. The Company shall not be liable under this Agreement to make any
payment of amounts otherwise subject to indemnification hereunder if and to the
extent Indemnitee has otherwise actually received such payment under directors'
and officers' liability insurance carried by the Company, or pursuant to any
other insurance policy, contract, agreement or otherwise.
B. No indemnity pursuant to Section 2 of this Agreement shall be paid
by the Company to the extent of any liability incurred in a proceeding in which
Indemnitee is adjudged liable to the Company or is subjected to injunctive
relief in favor of the Company:
(1) for any appropriation, in violation of Indemnitee's duties,
of any business opportunities of the Company;
(2) for acts or omissions which involve intentional misconduct
or a knowing violation of law;
(3) for the types of liability set forth in Section 607.0834 of
the Act (relating to unlawful payment of dividends, etc.);
(4) for any transaction from which Indemnitee received any
improper personal benefit;
(5) for any action or inaction by Indemnitee, which action or
inaction is beyond the scope of his duties as an officer, director, or agent of
the Company, or which action or inaction is beyond the scope of his duties,
while serving at the request of the Company, as an officer, director, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan, or other enterprise;
(6) in connection with or as a result of any action, suit or
proceeding brought by the Company or any of its subsidiaries, except a
derivative proceeding commenced by any third party; or
(7) for matters as to which indemnification would be in
contravention of the laws of the State of Florida or of the United States of
America, whether as a matter of policy or pursuant to statutory provision.
4. Notification and Defense of Claim.
----------------------------------
A. Promptly after receipt by Indemnitee of notice of the commencement
of any action, suit or proceeding, Indemnitee will, if a claim in respect
thereto is to be made against the
-2-
<PAGE>
Company under this Agreement, notify the Company of the commencement thereof,
but the failure to so notify the Company will not relieve the Company from any
liability which it may have to Indemnitee otherwise under this Agreement. With
respect to any such action, suit or proceeding as to which Indemnitee so
notifies the Company:
(1) the Company will be entitled to participate therein at its
own expense; and
(2) except as otherwise provided below, to the extent that it may
desire, the Company may assume the defense thereof.
B. After notice from the Company to Indemnitee of the Company's
election to assume the defense thereof, the Company will not be liable to
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. Indemnitee
shall have the right to employ counsel of Indemnitee's choosing in such action,
suit or proceeding but the fees and expenses of such counsel incurred after
notice from the Company of its assumption of the defense thereof shall be at the
expense of Indemnitee unless (i) the employment of counsel by Indemnitee has
been authorized in writing by the Company, (ii) the Company and Indemnitee shall
reasonably conclude that there may be a conflict of interest between the Company
and Indemnitee in the conduct of the defense of such action, or (iii) the
Company shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the reasonable fees and expenses of Indemnitee's
counsel shall be paid by the Company.
C. The Company shall not be liable to Indemnitee under this Agreement
for any amounts paid in settlement of any threatened or pending action, suit or
proceeding without the Company's prior written consent. The Company shall not
settle any such action, suit or proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's prior written consent.
Neither the Company nor Indemnitee will unreasonably withhold consent to any
proposed settlement.
5. Prepayment Of Expenses. Unless Indemnitee otherwise elects, expenses
----------------------
incurred in defending any civil or criminal action, suit or proceeding will be
paid by the Company in advance of the final disposition of such action, suit or
proceeding if: (i) Indemnitee furnishes the Company a written affirmation of
Indemnitee's good faith belief that Indemnitee's conduct does not constitute
behavior of the kind described in subsection B of Section 3 of this Agreement;
and (ii) Indemnitee furnishes the Company a written undertaking to repay any
advances if it is ultimately determined that Indemnitee is not entitled to be
indemnified by the Company under this Agreement.
6. Continuation Of Indemnity. All agreements and obligations of the
--------------------------
Company contained in this Agreement shall continue during the period Indemnitee
is an officer or director of the Company and shall continue thereafter so long
as Indemnitee shall be subject to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
and whether formal or informal, by reason of the fact that Indemnitee was an
officer, employee or agent of the Company, or is or was serving at the request
of the Company as an officer, director, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
-3-
<PAGE>
7. Enforcement.
------------
A. The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve or to continue to serve as a director and/or officer
of the Company and/or a subsidiary or other affiliate of the Company, and
acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve
or to continue to serve in such capacity.
B. In the event Indemnitee is required to bring any action to enforce
Indemnitee's rights or to collect moneys due under this Agreement and is
successful in such action, the Company shall promptly reimburse Indemnitee for
all of Indemnitee's reasonable fees and expenses in bringing and pursuing such
action, including reasonable attorneys' fees, court costs and other related
expenses.
8. Severability; Reformation. Each of the provisions of this Agreement is
--------------------------
a separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable in whole or in
part for any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof. In the event that all
or any portion of this Agreement is ever held void or unenforceable by a court
of competent jurisdiction, then the parties hereto expressly authorize such
court to modify any provision(s) held void or unenforceable to the extent, and
only to the extent, necessary to render it valid and enforceable.
9. Notices. All notices, demands and other communications required or
-------
permitted hereunder ("Notices") shall be in writing and shall be deemed to have
been duly given (i) if delivered personally, upon receipt of delivery; or (ii)
if mailed by certified mail, return receipt requested, with proper postage
prepaid, on the fifth (5th) business day after mailing. All Notices shall be
delivered or addressed as follows:
If to the Company:
Information Management Resources, Inc.
Attn.: Board of Directors, Chairman
26750 U.S. Highway 19 North
Suite 500
Clearwater, Florida 34621
If to the Indemnitee:
-------------------------------
-------------------------------
-------------------------------
Any party may change its address for Notices by giving a Notice hereunder
specifically setting forth such new address. If receipt of any Notice is
refused, such Notice shall be deemed to have been given on the date of such
refusal to accept receipt.
-4-
<PAGE>
10. Governing Law; Assignment; Binding Effect; Amendment; Termination;
------------------------------------------------------------------
Usage.
- -----
A. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida, without giving effect to the principles
of conflicts of law thereof.
B. Neither this Agreement nor any rights or obligations hereunder
shall be assigned or transferred by Indemnitee.
C. This Agreement shall be binding upon Indemnitee and upon the
Company, and their respective successors and assigns, including successors by
merger or consolidation, and shall inure to the benefit of Indemnitee, his or
her heirs and personal representatives, and to the benefit of the Company, its
successors and assigns.
D. No amendment, modification or termination of this Agreement shall
be effective unless in writing signed by both parties hereto.
E. Whenever the masculine, feminine or neuter gender is used in this
Agreement, it shall, where appropriate and the context so requires, include the
other genders as well, and the plural shall include the singular and the
singular the plural where appropriate and the context so requires.
F. This Agreement may be executed in one or more counterparts, each
of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement.
G. The provisions of this Agreement shall cover claims, actions,
suits and proceedings, whether now pending or hereafter commenced, and shall be
retroactive to cover acts or omissions or alleged acts or omissions that
heretofore have taken place.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
INFORMATION MANAGEMENT RESOURCES, INC.
By:
------------------------------------
Satish K. Sanan
President and Chief Executive Officer
INDEMNITEE:
----------------------------------------
Print Name:
----------------------------
-5-
<PAGE>
EXHIBIT 10.27
Registration No. 11-56-755 of 1990
-----------------
Nominal Capital Rs. 200,00,000/.
------------
Filing Fee Rs. 120/-
-----
Form No. 8
created by a company registered in India
Particulars of charges subject to which property has been acquired by company
registered in India
modification of charge
(Pursuant to Section 125/127/135)
Name of the company Information Management Resources (India) Ltd.
---------------------------------------------
Presented by Information Management Resources (India) Ltd.
---------------------------------------------
1. Date and description of the instruments created the charge.
[Handwritten insert: Agreement / Deed of Hypothecation re: machinery
of 12-10-1995]
2. Amount secured by the charge/Amount owing on security of the charge.
[Handwritten insert: Rs. 200.00 lakhs (Rupees two hundred Lakhs only)]
3. Short particulars of the property charged. If the property acquired subject
to charge the date of acquisition of property should be given.
[Handwritten insert: 1) Hypothecation of Export Receivable
2) Hypothecation of all fixed assets belonging to the company with
W.V. of Rs. 702.57 as on 31-3-95.]
4. Gist of the terms and conditions and extent and operation of the charge.
[Handwritten insert: 1) Interest @ 7-57 / 13 / on Bills. Discounted.
2) No Margin.]
5. Name and addresses and description of the persons entitled to the charge.
6. Date and brief description instrument modifying the charge.
7. Particulars of modifications specifying the terms and conditions or the
extent or operation of the charge in which modification is made, and the
details of the modification.
[Stamp w/handwritten information:Registered on
31/10/95 at S. No. 84
signed: /s/ ]
-------------------
AROC/Addl Rec.
Dated the 19th day of October 1995
---- ------- --
FOR INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
Signature /s/ Signature /s/
----------------------- --------------------------------
COMPANY SECRETARY &
DY., GEN. MANAGER FINANCE
Name /s/ K.S. HEADE Name /s/ JANAK C. PANDYA
-------------- -------------------
(IN BLOCK LETTERS) (IN BLOCK LETTERS)
Designation Manager Designation /s/Company Secretary &
----------------------
D.A.M. - Finance
<PAGE>
Registration No. 11-56755 of 1990 THE COMPANIES ACT, 1956
----------------
Nominal Capital Rs. 200.00.000/-
------------
Filing Fee Rs. 20/-
Form No. 13
REGISTER OF CHARGES
(Pursuant to Section 130, 135, 137 & 138)
created by a company registered in India
Particular of Charges(s) -------------------------------------------------------
subject to which property has been acquired by
a company registered in India.
Name of the company M/S Information Management Resources (India) Ltd.
-------------------------------------------------
Presented by M/S Information Management Resources (India) Ltd.
-------------------------------------------------
created
Particulars of charge(s)
--------------------------------------------------------
subject to which property has been acquired.
- --------------------------------------------------------------------------------
A company registered in India
- --------------------------------------------------------------------------------
PARTICULARS OF CHARGE UNDER SECTION 125
1. Date and description of the instruments creating the charge.
[Handwritten information: 12/10-1995.
Deed of Hypothecation re: Machinery]
2. Amount secured by the charge/Amount owning on security of the charge.
[Handwritten information: Rs. 200.00.000/-
(Rupees Two hundred Lakhs)]
3. Short particular of property charged. If the property acquired is/or
subject to charge, date of acquisition of property should be given.
[Handwritten information: 1) Hypothecation of Export Receivable
2) Hypothecation of all the fixed assets belonging to the company
with W.D.V. of Rs. 702.57 lakhs as of 31/3/95]
4. Gist of the terms and conditions and extent and operation of the charge.
[Handwritten information: 1) Interest @ 751./13; on Bills Discounted.
2) No margin]
5. Name and addresses and description of the persons
PARTICULARS REGARDING CREATED OF CHANGE IN CASE OF SERIES OF DEBENTURES UNDER
SECTION 128/129
-2-
<PAGE>
Date Amount Total
6. Date and amount of each series of debentures
7. Date and amount of the present issue of series
8. Dates of resolution authorising the issue of the
series
9. Date of the covering deed (if any) by which the
security is created or defined: or if there is no
such deed, the first execution of any debenture of
the series
10. Names and addresses of the trustees (if any)
for the debenture holders
11. Date of registration of the series
12. Particulars as to the amount or rate percent
of the commission, allowances or discount (if any)
paid,or made either directly or indirectly by the
company to any person in consideration of subscribing
or agreeing to subscribe, whether absolutely or
conditionally or procuring or agreeing to procure
subscription whether absolute or conditional, for
any of the debentures included in this return
PARTICULARS OF MODIFICATION OF CHARGE UNDER SECTION 135
13. Date and brief description instrument modifying
the charge
14. Particulars of modifications already registered/filed
in the office of the Registrar of Companies
15. Particulars of modifications specifying the terms
and conditions or the extent or operation of the charge
in which modification is made, and the details of the
modification.
APPOINTMENT OF RECEIVER UNDER SECTION 137
16. (a) Name, Address and Date of appointment of receiver
(b) Date on which the received ceased to act
MEMORANDUM OF COMPLETE SATISFACTION OF CHARGE UNDER
SECTION 137
17. (a) Date of creation of original and amount secured
(b) Date of registration/date of filing of the
particulars with the Registrar of Companies
(c) Date of filing of the memorandum of satisfaction/date
of entry of satisfaction
-3-
<PAGE>
Dated the 19th day of October 1995
FOR CANARA BANK FOR INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
Signature /s/ Signature /s/
------------------------- -------------------------
COMPANY SECRETARY &
DY. GEN. MANAGER FINANCE
NAME /s/ K.S. HEADE NAME /s/ JANAK C. PANDYA
----------- -------------------
(IN BLOCK LETTERS) (IN BLOCK LETTERS)
Designation Manager Designation /s/
------- ------------------------
Company Secretary &
D.G.M. - Finance
(FOR OFFICE OF REGISTRAR OF COMPANIES ONLY)
18. Date of Registration
19. Serial No. of the document in file
[Stamp: Registered on 31/10-95
--------
at S. No. 85
---
/s/
--------------------------------
AROC/Addl Rec.
SIGNATURE OF REGISTRAR OF COMPANIES
-4-
<PAGE>
[50 Rupees Paper]
[Handwritten Information: Deed of Hypothecation re: Machinery]
[This Agreement made on this 12th day of October One thousand Nine hundred and
Ninety five (12-10-1995) by M/S Information Management Resources (India) Ltd.,
116/SDF IV, \SEEP2 Andheri (East) Bombay - 400 096 hereinafter termed the
borrower]
[signature block - unreadable]
Certified True Copy
For Information Management
Resources (India) Ltd.
/s/ FOR CANARA BANK
- -----------------------
_____________ Secretary /s/
---------------------
Senior Manager
Overseas Branch
M.G. Road, BANGALORE-1
-5-
<PAGE>
Deed of Hypothecation re: Machinery STAMP
This Agreement executed on this 12th day of October One Thousand Nine Hundred
--------------------
and Ninety Five (12-10-1995)
------------------------
By Shri/Smt __________________________________________________________________
son/wife of ___________________________________________________________________
aged __________________ years, residing at_____________________________________
_______________________________________ _________________________ carrying on
business as proprietor/lx in the name and style of
M/s. [Information Management Resources (India) Limited ]
---------------------------------------------------
a partnership firm/s company incorporated under Companies Act, 1956 , having
his/her/its place of business/Registered Office at [Handwritten: 116 SDF IV
----------
SEEP2 Andheri (East) Bombay 400 096 ] hereinafter called the "Borrower"
- -------------------------------------
(which expression shall wherever the context so requires or admits, be deemed
to include his heirs, executors, administrators, successors in title, assigns,
attorneys, partners from time to time survivor/s of them and their successors
in interest, successors and assigns) in favour of CANARA BANK, a body corporate,
constituted under the Bank Companies (Acquisition & Transfer of Undertakings)
Act, 1970, with their Head Office at 112, J.C. Road, Bangalore - 560002, and
having among others, a branch office at Overseas Branch,
----------------
Bangalore hereinafter called the "BANK", (which term wherever the context so
- ---------
requires or admits shall be deemed to include their assigns, attorneys and
successors in title)
WHEREAS the Borrower is engaged in the business of [Handwritten: Software
----------------------
Developments, imports, distribution of software products] and for the said
- ---------------------------------------------------------
purpose applied to the Bank for certain credit facilities and the Bank has
sanctioned the facility by way of Term loan on conditions inter-alia, that the
borrower shall secure repayment of the sums advanced by the Bank including
Interest, Bank charges, costs, commission, etc., by Hypothecation of its
machinery;
ACCORDINGLY THESE PRESENTS WITNESSETH AS FOLLOWS:
In consideration of the Bank sanctioning the Term Loan facility to the Borrower,
the Borrower hereby hypothecates in favour of the Bank, all that plant,
machinery, tools and accessories , already purchased and described in Schedule
"A" hereto as also the machinery, etc. To be purchased hereafter particulars
whereof will be furnished later and hereinafter referred to as 'Hypothecated
Machinery' which are erected/to be erected/kept/to be kept or in transit for
being erected at the premises in the occupation of the Borrower described in the
Schedule 'B' hereto, as security for repayment to the Bank of a sum of
[Handwritten: Rs. 200,00,000/2 (Rupas two ______] together with Interest, Bank
-----------------------------------
charges, costs of recovery, commission, etc., as herein stipulated.
The Borrower hereby covenants with the Bank as follows:
The Borrower shall duly and punctually repay the amount advanced by the Bank of
due dates indicated in Schedule 'C' hereunder, including - Interest,
default/additional rate of Interest wherever applicable and Bank charges,
Commission, etc., and which is hereby secured, as and when the same falls due
for payment and in the event of the Bank calling up the advance and demanding
payment of the entire amounts due to it forthwith, he shall duly comply with
such demand.
2. The Borrower shall pay Interest at [Handwritten: 7.5%/13 ]% per annum and
-----------------------
such interest shall be calculated and charged on the balance in the account and
be debited to the account and to be payable every quarter and if the Interest is
not paid, the same shall become compounded with the principal balance
outstanding in the account on such balance and on such successive balances the
Borrower shall become liable to pay further interest from time to time provided
that the Interest payable by the Borrower shall be subject to the changes in the
Interest rates made by the Reserve Bank of India from time to time and intimated
by the Bank to the Borrower. [Initials handwritten out to the left of the
number "2"].
In the event of Borrower's default in payment of any one instalment or in
regularising or in clearing the account as per terms agreed upon, the Borrower
shall be liable to pay interest at overdue rate of 2% per annum above the rate
of interest charged on the advance from the date of such default till
regularising or clearing the account in full as the case may be.
-6-
<PAGE>
3. The Borrower shall also pay the usual Bank charges, incidentals, commission,
etc., as may be debited to the Borrower's account from time to time in
accordance with the usages and practices of the Bank.
4. The Hypothecated Machinery shall also be a Continuing Security for repayment
of the ultimate balance due to the Bank (including interest, Bank charges, etc.)
even though the amount actually advanced by the Bank may have exceeded the
sanctioned limit or the account may at some point of time be at credit by reason
of the sums deposited by the Borrower or otherwise.
5. The Hypothecated Machinery shall also be the security to the Bank for monies
due to it in this account and/or any other account as if this Hypothecation is
created for repayment of those other monies also.
6. The title to the Hypothecated Machinery vests in the Borrower absolutely
and that the same is good, marketable and free of any encumbrance. He shall
also do all such acts, deeds and things necessary for more perfectly assuring
his title to the Hypothecated Machinery and/or for effectively implementing the
terms of this agreement.
7. That the Borrower will maintain at his cost the Hypothecated Machinery in
good order and condition and serviced timely, replacing worn out parts. The
Borrower will hold the same in trust for the Bank and be answerable to the Bank
accordingly. [Initials handwritten out to the left of the number "7"].
8. That in the course of the use of the Hypothecated Machinery or otherwise,
the Borrower will not do any act or suffer any omission whereby the value of the
Hypothecated Machinery shall suffer or depreciate beyond the normal extent of
wear and tear. The Borrower shall also take out and keep in force all permits
and licenses required to be obtained in law from time to time for running the
Hypothecated Machinery.
____________
. Mention normal rate and not IDBI/NABARD concessional rate.
[Handwritten initials at bottom of page]
-7-
<PAGE>
The Borrower shall adequately insure the Hypothecated Machinery for the full
market value against risk of fire, war, riots, civil commotion, strike,
accident, risk, thefts and also for such other purposes as may be prescribed by
any law for the time being in force and as required by the Bank and keep the
policy always current by duly and punctually paying the premia from time to time
and to assign the benefits in insurance policy thereof to the Bank. The Bank
shall be entitled for all the benefits of all such policies. The Borrower hereby
agrees and undertakes to do everything necessary to transfer and effectively
vest in the Bank the benefits of all such policies. the Borrower further agrees
to indemnify the Bank against loss by reason of damage to or destruction or loss
of the Hypothecated Machinery from any cause whatsoever by reason of claim by
third party in respect of the same.
The Bank is at liberty and is not bound to effect such insurance at the risk,
responsibility and expenses of the Borrower with any Insurance Company only to
the extent of the value of security as estimated by the Bank and that in the
event of insuring the security, the Bank shall not be considered or - deemed to
be responsible or liable for non-admission or rejection of the claim wholly or
in part whether the claim is made by the Bank or by the Borrower. It is
expressly undertaken by the Borrower that he shall himself/of his own accord
take all steps like initiation of filing claims/furnishing necessary information
to the Bank/Insurance Company without being informed of details of loss/damage
for any reason whatsoever. In the event of rejection of claim either wholly or
in part on account of loss/damage to the security, the Borrower shall be liable
to repay to the Bank the entire outstanding liability without requiring the Bank
to proceed in the first instance against the Insurance Company.
In the event of non-settlement of claim, the Bank may at its absolute discretion
take action against Insurance Company without being under any obligation to do
so or require the Borrower himself to take action, in which case the Borrower
shall not be entitled to question the decision of the Bank. If the Bank does
not lodge any claim under the policy within the time limit prescribed under such
policy, the Bank shall not be liable to the Borrower for not filing any claim or
suit for recovery of the insured amount against the Insurance Company or any
other person.
10. That the Borrower will not remove the Hypothecated Machinery from the
premises described in Schedule 'B' or alienate or encumber or otherwise part
with possession of the same without the previous written consent of the Bank.
11. The Borrower shall duly and punctually pay all rents, rates and taxes and
not lay the Hypothecated Machinery open to any attachments, distress by Court,
Tax or other public authority and see that all those claims are duly satisfied
and attachment/distress averted.
12. The Borrower shall permit the Bank, its officers servants and nominees to
inspect the Factory, Office, Books of Accounts, Hypothecated Machinery and its
condition to satisfy themselves that the security is not impaired or diminished
in any manner.
13. The Borrower shall, in the event of the Bank exercising its right of
seizure and sale of the Hypothecated Machinery under these presents, deliver up
all the Hypothecated Machinery to the Bank and co-operate with the Bank in the
matter of such seizure, removal of the Hypothecated Machinery elsewhere and sale
thereof.
14. The Borrower shall furnish to the Bank periodically or as and when required
by it, true statements of account showing the business sales, purchases, etc.,
as also particulars of its machinery, stock-in-trade and satisfy the Bank as to
the correctness thereof.
15. Further in the matter of making payment towards this debt or acknowledging
this debt or any part thereof as and when called upon by the Bank to do so for
the specific purpose of saving limitation, the Borrowers authorise any one or
more of them to act as agent on behalf of any one or more of them for the
purpose of making payment to the loan account and giving acknowledgement of debt
from time to time. Accordingly, the Borrowers declare that the payment or
acknowledgement made or given by any one or more of them shall be binding on all
of them jointly and/or severally and that any payment and/or acknowledgement so
made or given by one or more of them shall save limitation against all of them
jointly and/or severally for the purposes of law of limitation.
-8-
<PAGE>
16. In the event of Bank applying for and availing of refinance from the
Industrial Development Bank of India (IDBI)/NABARD in respect of the above
advance it is further hereby agreed that:
a) The Bank shall be at liberty to furnish to IDBI/NABARD any such
information or report, whether received by the Bank from the Borrower or
otherwise in the Bank's possession.
b) Where the Bank avails refinance from IDBI/NABARD the rate of interest
payable by the Borrower shall be in accordance with the terms of the
scheme of IDBI/NABARD for the time being in force and such concessional
rate shall be applicable only until relative refinance is reimbursed to
IDBI/NABARD. In the event of delay/default in repayment of any
installment by the Borrower to the Bank, Borrower shall be liable to pay
interest and overdue interest as mentioned in para 2 above.
c) The Borrower shall be bound by all such additional terms and conditions
as may be stipulated by IDBI/NABARD including payment of Commitment
charges in respect of the advance granted/agreed to be granted as
aforesaid and the Borrower shall execute all necessary deeds, documents,
etc., for giving effect to the terms and conditions stipulated by
IDBI/NABARD when called upon by the Bank to execute the same provided,
however, it shall not be obligatory on the part of the Bank to obtain any
additional loan document or agreement containing the additional terms and
conditions that may be stipulated by the IDBI/NABARD and the said
additional terms and conditions shall be binding on the Borrower and be
complied by him merely on being communicated to him by the Bank in
writing and the said terms and conditions that may be stipulated by the
IDBI/NABARD shall form part and parcel of this Agreement and shall be
read as if the same had been incorporated herein.
d) During the currency of refinance, IDBI/NABARD may inspect the units,
factory, office and books of account, etc.
17. So long as the account remains in force or uncleared, the Bank shall have
the right to demand all its discretion that this Agreement shall be renewed for
a like amount or for such other amount as the Bank may deem fit; the execution
of any document/s in this connection shall not be deemed to create a new or a
distinct debt but the account shall be deemed to be the same and continuously
one until it is declared closed by the Bank and shall carry with it the benefit
of the security afforded by this agreement as well as every other security
appurtaining thereto or available therefor.
18. The Bank shall be entitled -
a) to demand repayment of the amounts advanced by it and hereby secured
punctually on the due dates of payment or on demand as the case may by:
b) to demand, at its option, repayment of the entire loan amount in a
lumpsum and forthwith in the event of the Borrower committing default to
pay any one instalment or principal or interest on the due dates or
committing any act or suffering any omission by which the security is
impaired or likely to be impaired or in the event of the borrower
committing reach of any of the terms, conditions, covenants hereof or for
any other reason considered by the Bank to be sufficient to call up the
entire advance.
[Handwritten initials at the bottom of this page]
-9-
<PAGE>
And the Borrower shall comply with such demand.
c) the Borrower hereby undertakes that he shall use the amount only for the
purpose for which it is sanctioned and shall not use the amount or any
part thereof for any purpose other than for which it is sanctioned.
Further the Borrower agrees that if the Bank suspects or has reason to
believe that the Borrower has violated or is violating this undertaking,
the Bank may recall the loan amount or any part thereof at once
notwithstanding anything to the contrary contained in this agreement or
any other agreement.
d) in the event of the Borrower failings or neglecting to comply with the
said demand and to pay the amounts due by it to the Bank as aforesaid,
the Bank is at liberty to enter upon the premises in which the
Hypothecated machinery is kept or believed to be kept, seize and take
possession thereof or otherwise cause it to be sold in public auction or
by private treaty for recovery of the amounts due to it. The net sale
proceeds of the Hypothecated machinery after defraying the expenses of
seizure, storage, sale etc., shall be appropriated by the Bank towards
protanto - satisfaction of the debt due to it as per these presents and
any other debt owing by the Borrower to the Bank. The balance if any will
be kept at the credit of the Borrower with the Bank and he shall be at
liberty to draw the same. The account rendered by the Bank of the costs
and expenses of seizure and shall be binding and conclusive upon the
Borrower.
e) to recover the amounts due from the Borrower personally or from any other
security furnished by him or from his surety without having to take
recourse against the Hypothecated Machinery. In case the Bank proceeds
against the Hypothecated machinery and the sale proceeds thereof are
insufficient to satisfy the whole of the amounts due to the bank, the
Bank shall be entitled to recover such balance from the Borrower
personally.
19. It is expressly agreed and declared by the borrower that in the event of
the Borrower making a request to transfer the limits/outstanding liabilities to
any other branch of the Bank for being availed and operated on the ground of
convenience or for any other reason acceptable to the Bank and Bank agrees to
transfer the limits and/or grants further limits as per records and documents
separately to be obtained for such further limits by the concerned branch/es,
the security created and to be created by way of hypothecation, pledge and
equitable mortgage etc., as the case may be in favour of the branch in which the
account/s is/are maintained shall be available to the Branch/es of the Bank to
which such limits stand transferred for the repayment of the amounts now due and
that may be due hereafter by the Borrower or by the Borrower jointly with others
in any other account/s and the documents/records already created shall continue
to be enforceable against the borrower in all respects and for all purposes and
intents the said documents/records shall be taken as if they are executed by the
Borrower in favour of the branch/es to which such limits stand transferred.
-10-
<PAGE>
SCHEDULE "A"
DESCRIPTION OF THE HYPOTHECATED MACHINERY
[Handwritten] All the fixed assets such as land, Building Plant &
Machineries, Computers, Computer Software, Office Equipment, Furniture &
Fixtures, Vehicles having w.d.v. of R. 702.5 _________ as on 31.3.95
belonging to the Company stored/installed at Bangalore and _____
Hypothecation of Export Receivables.
-11-
<PAGE>
SCHEDULE "B"
PLACE OF STORAGE/INSTALLATION OF THE HYPOTHECATED MACHINERY
[Handwritten] No. 38/1, Naganathapiora, Singasandra Post Bangalore - 560 068.
-12-
<PAGE>
SCHEDULE "C"
DUE DATES OF REPAYMENT OF PRINCIPAL:
Original chart in document marked through by hand.
-13-
<PAGE>
[100 Rupees Paper]
[Handwritten] This deed of Power of Attorney executed this 14th day of June,
1996 by M/S Information Management Resources (India) Ltd. No. 38/1,
Naganathapura Village, Singasanbra, P.O. Box 6068 hereinafter called the
Principal which Expression shall unless excluded by or repugnant to this context
includes
For Information Management
Resources (I) Ltd.
/s/
------------------------------
[Authorised Signatories]
his/her legal heirs/successors, executors, administrators and assigns in favour
of Canara Bank, a body corporate constituted under the banking companies
(acquisition and transfer of under takings Act, 1970 and having its Head Office
at No. 112, J.C. Road, Bangalore - 2, and having among other Branch office at
overseas Branch No. 28, M.G. Road, Bangalore - 1 represented by / its attorney
and proper officer at the said Branch hereinafter termed as "Bank" which
expression shall, unless the context otherwise requires includes its successors
and assigns WITNESSETH as follows:
This deed of power of Attorney is executed in favour of the Bank by the
Principal to facilitate the bank:
(a) to sell without any reference to the principal for proper and
adequate consideration any part or whole of the goods exported;
(b) to sell and convert into money any goods
which belongs to the Principal;
(c) and to do all such acts as are necessary and proper to realise the
goods dispatched / exported by the Principal and represented through documents
of title to goods which are lodged with the Bank for negotiation / collection of
the same.
The Principal hereby irrevocably appoints the Bank to be the true and lawful
attorney of the Principal in the name and for and on behalf of the Principal to
do, execute, apply and perform the following acts, deeds and things viz.,
1. To have the right to sell the Principal's goods exported or to be
exported covered under the various Bills of Lading or other document of title to
goods and such documents handed over to the Bank for collection or purchased by
the Bank, and appropriate the same for all the moneys payable by the Principal
as deemed necessary by the Bank.
For Information Management
Resources (I) Ltd.
<PAGE>
/S/
----------------------
[Authorised Signatories]
2. To negotiate on terms for and sell the goods so exported or to be
exported to any purchaser or purchasers at such price with the Bank, in its
absolute discretion thinks proper to agree upon and to enter into any agreement
or agreements for such sale or sales with all such covenants, conditions,
provisions and stipulations, as may, in the absolute discretion of the Bank be
deemed necessary or expedient and/or to cancel and/or to repudiate the same.
3. To receive from the purchaser/purchasers any earnest money and
also the balance or purchase money and to give good, valid receipt and discharge
for the same which will protect the purchaser or purchasers without seeing the
application of the money.
4. To apply for necessary permit/permission with the Exchange Control
authorities or any other Governmental Agencies on behalf of Principal as
required under provisions of law for the time being in force, at the time of
such sale/disposal of the goods.
5. The sale consideration when received from the
Purchaser/purchasers, the Bank can make, execute, sign and deliver any
conveyance or conveyances of the said goods at the expense of the principal in
favour of the said purchaser/purchasers or his/her or their nominee or assignee.
6. To sign and execute all other deeds, instruments and assurances
which the Bank shall consider necessary and/or enter into such covenants as may
be required for fully and effectively conveying the goods as the principal could
do himself, if present.
7. To have a right to rebook / the Principal's goods in the absolute
discretion of the Bank, be deemed necessary / or expedient and/or to cancel
and/or repudiate the same.
For Information Management
Resources (I) Ltd.
/S/
----------------------
[Authorised Signatories]
AND the Principal does hereby declare that all and every receipt, documents,
deeds matters and things which shall by the Bank, be made, executed or done for
the aforesaid purpose, by virtue of these presents shall be good, valid and
effective to all intents and purposes whatsoever as if the same had been made,
executed or done by the Principal in its own name and persons.
AND the principal hereby ratifies and agrees to ratify and confirm all the
whatever other act/acts the Bank shall lawfully do, execute or perform or cause
to be done, executed or performed in connection with the sale/disposal of the
said goods under and by virtue of this deed notwithstanding any express power
in that behalf is hereunder provided.
-2-
<PAGE>
IN WITNESS WHEREOF the said Principal has hereunto signed this Deed on this day
of June 14, 1996.
For Information Management
Resources (I) Ltd.
/S/
----------------------
[Authorised Signatories]
-3-
<PAGE>
From: Information Management Resources (India) Ltd.
No. 38/1 Naganathapura Village
Singasanadra Post
Bangalore 560 068
To: The Chief Manager
Canara Bank
Overseas Branch
No. 28, M.G. Road
Bangalore 560 001
Dear Sirs,
Sub: Counter Indemnity Letter for Negotiation/Purchase/Discount of Bills
At my/our request you have agreed to negotiate/purchase/discount from time to
time clean / documentary demand / usance bills of exchange drawn by me/us on
my/our various customers and expressed either in foreign currencies or Indian
Rupees and whether under firm contracts/letters of credit or otherwise
(hereinafter for brevity sake collectively referred to as "the said bills")
___ in Printed Format
___ 1692 consisting of
2 pages
For Information Management
Resources (I) Ltd.
/S/
----------------------
[Authorised Signatories]
From:
- ------------------
- ------------------
- ------------------
to:
CANARA BANK
- ------------------
- ------------------
Dear Sirs,
-4-
<PAGE>
SUB: COUNTER INDEMNITY LETTER FOR NEGOTIATION/PURCHASE DISCOUNT OF BILLS
-------------------------------------------------------------------
In pursuance of the said agreement and in consideration of the premises I/We
jointly and each severally hereby covenant with the Bank as follows:--
(a) That I/we will at all times hereafter indemnify and keep
indemnified the Bank against all losses, damages, action, costs, charges and
expenses and disbursements (the legal costs being between the Attorney and
client) whatsoever which the Bank may now or hereafter be liable to pay or incur
or sustain as a result of or in consequences of the Bank having at our request
agreed to negotiate/purchase/discount the said bills including any guarantees
and/or indemnities given and to be given/together with interest at a rate to be
determined by you from time to time at your absolute discretion and without any
reference to me/us, any notice thereof is expressly dispensed by me/us, hereby,
with whatever discrepancies whether noticed by you and/or by the Banks who had
established letter of credit under which the documents were forwarded to you for
negotiation/purchase/discount as aforesaid.
(b) AND THAT on default in payment and/or nonacceptance of the bills
by the respective drawees for whatever reason, I/we agree to pay and make good
to the Bank on demand the amounts of such unpaid bills at the T.T. Selling rate
as appropriate to the currency of the said bills applicable on the date of such
repayment by me us together with costs, charges and expenses incurred by the
Bank by reason of non-payment/non-acceptance (of the amount) of the said bills
or breach or non-performance or non-observance of the obligations on the part of
the drawees of the said bills and all amounts due under the guarantees and/or
indemnities and for which purpose. I/We waive all rights to contest the amounts
or nature of claims paid under such guarantees and/or indemnities.
[P.T.O.]
For Information Management
Resources (I) Ltd.
/s/
----------------------
[Authorised Signatories]
(c) AND THAT if the said bills are not paid on their becoming due I/We
agree to pay to overdue interest at the rate as may be stipulated by the
-----
Bank from time to time and from till the date of clearance of such
-----
amounts.
(d) AND THAT I/We will deposit and keep deposited with the Bank on the
demand made by such sums or securities as the bank may from time to time
--
specify for the due fulfilment obligations under this agreement and
-----
security so deposited with the Bank may be the Bank after giving
--- ------
us reasonable notice of sale and the said net sums or the
-5-
<PAGE>
realisation the securities may be appropriated by the Bank in or towards
--------
satisfaction of my/our obligation and liability to the Bank.
(e) AND THAT I/We agree not to hold the Bank responsible or liable
for any loss or damage I/We may suffer as a result of any act of omission
----
or negligence on the part of any correspondents or agents appointed by the
-----
Bank for the purpose of collection of the said otherwise howsoever.
-----
I/We shall not be entitled to require you to wait till disputes, if any, are
decided by either parties contract concluded or by a competent Court or
------
Tribunal and any payments made to be made by any person/s pending such
---
decisions shall always be deemed by me/us to have been rightful
carefully made. -- -----
Place: Bangalore [Handwritten]
Date: 14-06-1996 [Handwritten]
For Information Management
Resources (I) Ltd.
/s/
----------------------
[Authorised Signatories]
LETTER OF RENEWAL
From: To:
[Handwritten]Information Management The Manager/Senior Manager
Resources (India) Ltd. Canara Bank
No. 38/1, Naganathapura Village Overseas Branch
Singasandra P.O. Bangalore 560068 28 M.G. Road
Bangalore 560001
(INDIA)
Dear Sirs,
1. At our request you have granted us from time to time credit
facilities against the securities and on the execution of documents/loan papers
mentioned hereunder:
<TABLE>
<CAPTION>
Nature of Credit Facility Limit Rs. Liability as on Security Loan papers (with dates)
- --------------------------- ---------- --------------- -------- -----------------------
<S> <C> <C> <C> <C>
[Handwritten: FBE 200,000 Lakhs 14-06-96 Hypothecation of Export Counter Indemnity
265,07.202 Receivables 24.3.95
Power of Attorney
24.3.95
Hypothecation
agreement for receivables
6.3.95]
</TABLE>
-6-
<PAGE>
2. At our request you have agreed to continue/continued to make
available/renew the above credit limits and therefore, we hereby declare and
confirm that all the documents/loan papers and securities referred to above
shall remain in force and continue to remain in force and binding on us for all
purposes and intents and further the security in lieu of the documents/loan
papers are intact and shall continue to be available to the Bank at all times
for the repayment of all the amounts due by us to the Bank.
3. At our request you have agree to continue/continued to make
available/renew the above credit facilities with reduced limits as under:
[P.T.O.]
For Information Management
Resources (I) Ltd.
/S/
----------------------
[Authorised Signatories]
And therefore we hereby declare and confirm that all the documents/loan papers
and securities referred to under para 1, above shall remain in force and
continue to remain in force and binding on us for the reduced limit referred to
above for all purposes and intents and further the security in terms of the
documents/loan papers are intact and shall continue to be available to the bank
at all times for the repayment of all the amounts due by us under the reduced
limits referred to in para above to the Bank.
3. At our request you have in addition to continuation/renewal of
above limits agreed to grant/granted following additional limits in enhancement
of the existing limits:
Nature of Additional limit Additional limit Total limits
- ---------------------------- ---------------- -----------------
[Handwritten: FBE Rs. 100.00 Lakhs Rs. 300.00 Lakhs]
4. We shall execute/have executed documents/loan papers separately
pertaining to such enhanced limits and securing the liability arising out of
such enhanced limits.
Date: 14-06-1996 [Handwritten] For Information Management
Place: Bangalore [Handwritten] Resources (I) Ltd.
/S/
----------------------
Authorized Signatory
Signature of the Borrower
-7-
<PAGE>
GUARANTEE COVERING LETTER
-------------------------
From: Satish K. Sanan To: The Manager/Senior Manager
163 Wood Creek Drive Canara Bank
Safety Harbor, Florida 34695 Overseas Branch
U.S.A. Bangalore
Dear Sir:
I/We enclose an agreement of guarantee duly executed by me/us informing you
that I/We shall be responsible upto a limit of Rs. 200.00.000/0 (Rupees Two
Hundred Lakhs Only) for any credit by way of loans, overdraft, discount of bills
or otherwise extended to M/S Information Management Resources (India) Ltd. or
the members of the said firm with or without co-obligation of others or any
other kind of security.
This is in addition to the guarantee already executed by me/us in this
behalf and held by you.
Yours faithfully,
\S\Satish K. Sanan
------------------
Place: Bangalore
Date: 6th March 1995
Encl: Guarantee Agreement
______________________________________________________________________________
Note: Second para of this letter to be struck off under the signature of the
guarantor/s, if it is not an additional guarantee.
<PAGE>
[50 Rupees Paper]
GUARANTEE AGREEMENT
-------------------
THIS AGREEMENT made on this day 6 - 3, 1995, between 1[Handwritten]/M/S
----
Information Management Resources (India) Ltd., No. 116, SDF IV, SEEPZ Andhere
- -----------------------------------------------------------------------------
(East) Bombay - 400 096.
- ------------------------
2/hereinafter termed the Borrower 2 [Handwritten] Mr. Satish K. Sanan aged
------------------------
48 years residing at 163 Wood Creek Drive, Safety Harbor, Florida 34695, U.S.A.
- -------------------------------------------------------------------------------
3/herinafter termed the "Guarantor" and CANARA BANK, a body corporate
constituted under the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970, Head Office at Jayachamarajendra Road, Bangalore and
among others an office at [Handwritten] Overseas Branch, Bangalore and
--------------------------
represented by their Manager and duly constituted Attorney. 3 [Handwritten] R.Y
---
Kamath
- ------
hereinafter termed the "Bank" which expression shall be deemed to include
their assigns successors and attorneys witnesseth.
Whereas the Guarantor has requested the Bank to grant financial assistance
to the Borrower by way of facilities, including guarantees subject to the
specific condition that the Guarantor shall unconditionally guarantee the
repayment of all amounts advanced and all liabilities guaranteed by the Bank as
also all amounts which may be advanced and all guarantees which may be issued by
the Bank from this day till the expiry of a period of six months of the actual
service on the Bank of a specific notice of revocation in writing.
1. Here enter name, parentage, age, profession and residence of Borrower.
2. Here enter name, parentage, age, profession and residence of Guarantor.
3. Here enter name of the authorised officer.
And whereas in consideration of the Bank's agreeing to do so and in
consideration of the Bank's agreeing at the request of the Guarantor not to
require immediate payment of any amount now due from the Borrower to the Bank
and in consideration of any sums which may hereafter be advanced by the Bank to
the Borrower, and in consideration also of the Bank's hereafter granting
financial accommodation to the Borrower by way of renewal of facilities from
time to time at the discretion of the Bank without previous intimation to the
Guarantor or such renewal the guarantor has agreed to guarantee payments of all
amounts due by the Borrower to the Bank subject to the terms and conditions
hereinafter setforth, and whereas the Bank has agreed thereto.
THIS AGREEMENT WITNESSETH that in consideration of the premises the
Guarantor both hereby agree to indemnity the Bank against all loss and to pay
and satisfy to the Bank on
-2-
<PAGE>
demand the "General Balance" due from the Borrower and the expression "General
Balance" shall be deemed to include all and every sum and sums of money, and the
amount of interest at such rates as charged from time to time and claimed by the
Bank, which are now or shall at any time to owing to the Bank in any of its
offices on any account whatsoever whether from "Borrower" solely or from the
Borrower jointly with any other or others in partnership or otherwise whether as
principal or surety or otherwise and whether such liabilities have matured or
not and whether they are absolute or contingent including all liabilities in
respect of advances, guarantees, letter of credit, cheques, hundies, bills,
notes, drafts, and their negotiable instruments, drawn, accepted, endorsed or
guaranteed by the Borrower and in respect of interest at the rate agreed upon
with quarterly rates, commissions and banking charges and in respect of all
costs, charges, and expenses which the Bank may incur in paying any rent, rate,
taxes, duties, calls, installments, legal and other professional charges or
other outgoings whether for the insurances, repair, maintenance, management,
realisation or otherwise in respect of any property, movable or immovable or any
chattles actionable claims or scrip securities or title deeds pledged, mortgaged
or assigned to or deposited with the Bank as security for the due payment and
discharge of Borrower's liability to the Bank.
PROVIDED always that the total liability ultimately enforceable against the
guarantor under this agreement shall not exceed the sum of Rs. 200,00.000
(Rupees & Two hundred Lakhs only) and interest thereon at 9.25% p.a. above
Reserve Bank of India rate with a minimum of 21.25% p.a. from the date of demand
by the Bank upon the guarantor for payment and expenses, charges, etc., as
debited in the account from time to time or at such other rate/s as may be
specified by the Bank writing.
NOTWITHSTANDING the Borrower's account or accounts with the Bank may be
brought to credit or the credit given to the Borrower fully exhausted or
exceeded howsoever the said financial accommodation be varied or changed or
renewed from time to time notwithstanding any payments from time to time or any
settlement of Accounts or payments in settlement of the balance that may be due
from time to time, this guarantee shall to the extent aforesaid, be a continuing
guarantee for payment of the ultimate balance to become due to the Bank by the
Borrower, until the expiry of six months after a notice in writing of the
revocation of the guarantee as hereinafter provided is received by the Bank.
NOTWITHSTANDING the discontinuance of this Guarantee as to one or more of
the Guarantors by revocation in writing as hereinafter provided or otherwise the
guarantee is to remain a continuing guarantee as to the other or others.
The liabilities of the Guarantors under these presents shall be construed
as joint and several. This guarantee shall be continuing guarantee
notwithstanding the death of any one or more of the Guarantors and shall be
binding on the representatives and the estates of the deceased Guarantors until
the expiry of six months after a notice in writing of revocation of the
guarantee as hereinafter provided is received by the Bank.
In case of discontinuance of the Guarantee as to one or more of the
guarantors as aforesaid, the Bank shall be at liberty to open a fresh account or
accounts with Borrower, and to
-3-
<PAGE>
appropriate thereto all payments subsequently made to the bank by him or others
on his behalf and to allow such amounts to be subsequently drawn out by the
Borrower, without prejudice to the liability of the guarantors under this
guarantee unless the person paying in such amounts shall at the time direct the
Bank in writing specially to appropriate the same to the old account.
The Guarantor hereby consents to the Bank's making any variance that the
Bank may think fit in the terms of the Bank's contract with the Borrower, to the
Bank's determining, enlarging or varying any credit to the Borrower to the
Bank's making any composition with the Borrower or promising to give the
Borrower time or not to sue him and to the Bank's parting with any security the
Bank may hold for the guaranteed debt. The guarantor also agrees that the
Guarantor shall not be discharged from this liability by the Bank's releasing
the Borrower or by any act or omission of the Bank legal consequence of which
may be to discharge Borrower or by any act of the Bank which would, but for this
present provision, be inconsistent with the Guarantor's rights as surety or by
the Bank's omission to do any act which, but for this present provision, the
Bank's duty to the Guarantor would have required the Bank to do. Though as
between the Borrower and the Guarantor, the Guarantor is surety only, the
guarantor agrees that as between the Bank and the Guarantor, the Guarantor is
the principal debtor, jointly with the Borrower and accordingly the Guarantor
shall not be entitled to any of the rights conferred as surety by Section 133,
134, 135, 139 and 141 or any other relevant provision of the Contract Act.
If the borrower shall become insolvent or enter into any arrangement, or
make any composition with his creditors the Bank may (notwithstanding payment to
the Bank by the Guarantor or any other person of the whole or any part of the
amount hereby guaranteed) to rank as creditor and prove against his estate for
the full amounts of the Bank's claim, or agree to and accept any composition in
respect of the same, and the Bank may and shall receive and retain the whole of
the dividends composition or other payments thereon to the exclusion of all the
rights of the Guarantor in computation with the Bank, until the Bank's claim is
fully satisfied; and Guarantor shall not by paying off the sum guaranteed or any
part thereof or upon any other ground, prove or claim to prove or respect of the
sum guaranteed or any part thereof until the whole of the Bank's claim against
the Borrower has been satisfied.
Any account settled or stated by or between the Bank and the Borrower or
admitted by him or on his behalf may be adduced by the Bank and shall in that
case be accepted by the Guarantors and each of them and their respective
representatives as conclusive evidence that the balance or amount thereby
appearing is due fro the Borrower to the Bank.
A certificate in writing under the hand of the Manager, Accountant or the
Officer of the Bank stating the amount at any particular time due and payable to
it under the guarantee shall be conclusive evidence as against the Guarantor,
his representatives and estate.
The guarantee shall be in addition to and shall not in any way be
prejudiced or affected by any collateral or other security or guarantee now or
hereafter to be held by the Bank.
Any notice may be served on the Guarantor personally or by sending the same
in a prepaid cover to the address registered with the Bank and when no such
address is registered, to the last known place of address of the person to be
served and a notice so sent shall be deemed to
-4-
<PAGE>
be served on the third day following that on which it is posted. Any notice
revoking this guarantee by the Guarantor or his representatives in interest
shall be in writing and shall come into operation only at the expiry of a period
of six months after service of notice on the Bank. Since the advances are being
made by the Bank on the basis of the representation made by the Guarantor that
advances made within the notice period of six months shall also be covered by
this guarantee , the Guarantor specifically contracts that he shall be liable
for all advances which the Bank may make and other demands which the Bank may
enter into with the Borrower during the notice period of six months provided
herein.
In these presents the singular number shall be deemed to include the
plural. Whenever the Borrower/Guarantor is an individual it shall be deemed to
include his heirs, administrators and assigns. Whenever the Borrower/Guarantor
is a firm, limited company or other Corporation, Committee, association or
unincorporated body the several expressions shall be deemed to include the
members of the firm, limited company or other corporation or of any committee or
association or unincorporated body ad the case may be, the expression 'Firm'
shall be further deemed to include the members hereof whether the same be
registered or not and the constitution thereof in whatsoever manner varied by
death, insolvency, retirement or admission of members or otherwise such firm to
include also all joint Hindu families carrying on business. This guarantee
shall not be affected by any change in the constitution of the Bank, its
successors or assigns, or by its absorption of or by its amalgamation with any
other Bank or Banks.
The guarantor hereby authorises the borrower herein to act as his agent to
give acknowledgement of liability in respect of the "General Balance" due under
this agreement from time to time. The Guarantor hereby declares that he is all
times bound by such acknowledgements of liability given by their Borrower from
time to time.
IN WITNESS whereof the Borrower, the Guarantor and the Bank have hereunto
affixed their hands the day and year above written at Bangalore.
Borrower
For Information Management
Resources (I) Ltd.
/s/ Satish Sanan /s/ Satish Sanan
-------------------------- ----------------
Director Guarantor/s
Bank:
For Canara Bank
/s/
--------------------------
-5-
<PAGE>
-6-
<PAGE>
Overseas Branch
28, M.G. Road
Bangalore 560 001
India
OBB 147 CR 0308 95 MIS
1st March, 1995
M/s. Information Management Resources (India) Ltd.,
116-SDF,
SEEPZ,
Andheri - Bombay.
- ----------------
Dear Sirs,
SUB: Your proposal for sanctioning of limits
REF: Our letter OBB:CR:NEW:227:BAK dated 22.2.95.
Further to our above letter we are glad to convey the detailed sanction in
respect of the limits sought by you.
The following limits have been sanctioned by our General Manager.
FBE: Rs.200,00,000/= (Rupees Two Hundred Lakhs Only)
Margin: NIL
Rate of Interest: 15% for NTP + USANCE 6.5% for PSCFC
Usance Period: Not to exceed 90 days
Purpose: For discounting bills drawn on IMRS-USA
Bank guarantee: Rs.30,00,000/= (Rupees Thirty Lakhs only)
Margin: 25%
Period: Not to exceed two years excluding claim period.
Purpose: For issue of Bank guarantee favouring Central
Excise/Customs in lieu of Duty Payments,
Financial Guarantees in favour of Govt./Semi-
Govt. Department/Bodies.
Kindly comply with the following:
1. Company should undertake not to avail any further facilities from SBI.
2. Personal guarantee of Chairman, Mr. Satish K. Sanan should be made
available for the above limits.
3. Please furnish the particulars of the guarantor in the enclosed
format.
4. Please furnish an undertaking to the effect that the total post-
shipment liability will not exceed Rs.200.00 lakhs at any time including
liability with SBI.
<PAGE>
5. The securities for the limits are
i. Hypothecation of receivables,
ii. IInd charge of the fixed assets financed by ICICI.
iii. Personal guarantee of the Chairman of the Company Mr.
Satish K. Sanan.
6. Please send us a copy of Project Report submitted by ICICI.
7. Please inform us the exports made during the year 1993-94 and during
this year till 28.2.95.
Apart from the above, all other terms and conditions usually applicable to
this kind of advance shall be complied with.
This sanction is also subject to the following conditions:
i. The Bank may revoke in part or in full or withdraw/stop financial
assistance at any stage without any notice or giving any reason or any purpose
whatsoever.
ii. This sanction does not vest in any one rights to claim any damages
against the Bank for any reasons whatsoever.
Rate of interest is subject to upward revision from time to time.
Please acknowledge.
Yours faithfully,
/s/ M.L.S. Iyengar
M.L.S. IYENGAR
Chief Manager
-2-
<PAGE>
[Ten Rupees Stamp Paper]
AGREEMENT TO HYPOTHECATION OF BOOK DEBTS
----------------------------------------
The Canara Bank a body corporate constituted under the Banking Companies
(Acquisition and Transfer of Undertakings) Act 1970 having is Head Office at
112, J.C. Road, Bangalore 560 002 and among other places having a branch office
at Evenseas Bijanih Bangalore represented by K S [sic] hereinafter called "The
--------------------------- ---------
Bank" (which expression shall includes its successors and assigns), having at
the request of Information Management Resources (I) Limited, a Company within
the meaning of the Companies Act, 1956 (1 of 1956) and having its Registered
Office at Unit No: 116, SDF IV, Seepz, Andhen (East), Bombay: 400 096
hereinafter calls the "Borrower" (which expression shall include its successors
and assigns) agreed to grant accommodation to the Borrower by way of EDBFBE
under a drawing limit of RS 200,00,000/- in the security of [sic] provided the
Book debts of the Borrower are also hypothecated to the Bank as security for the
FDB/FBE account and also the other accounts mentioned below; it is agreed as
follows:
1. The Borrower both hereby hypothecate and charge to the Bank by way of
first charge all the book debts, outstandings, moneys receivable, claims and
bills which are now due and owing or which may at any time hereafter during
continuance of its security become due and owing to the borrower in the course
of its business by any person, firm, company or by the Government or any local
public body or authority (all of which are hereinafter, collectively referred to
as the "said debts") as security for the repayment to the Bank at any time on
demand of:
a. All moneys which now are, or which at any time or times hereafter
may become due and owing from the Borrower to the Bank either in the said Cash
Credit Account of the Borrower with the Bank with the limit of Rs. 200,00,000/-
------------
which may be renewed from time to time or in any other amount and whether alone
in partnership with any person, firm or company including moneys owing upon any
cheques, promissory notes, or bill of exchange drawn, accepted or endorsed or
discounted or purchased or paid at the request or on behalf or for credit of the
Borrower either solely or jointly with another or others;
b. All costs (between Attorney and Client), charges and expenses,
which the Bank is entitled to recover under these persents or by law;
c. An for the payment and discharge of all the Borrower's present and
future indebtedness and liabilities to the Bank of any kind in any manner
whether solely or jointly primary or collateral accrued or accruing with all
relative interest, cost (between Attorney and client) charges and expenses.
1A. The Borrower has furnished to the Bank, a list with particulars
of the Bank debts, outstanding moneys receivable, claims and bills which are now
due and owing. The Borrower also agrees to file similar particulars with the
Bank, at such intervals as may be required by the Bank.
2. That on any default of the Borrower in payment or demand of any money
hereby secured or the performance of any obligation to the Bank under this or
any other security or the occurrence of any circumstances in the opinion of the
Bank prejudicing or endangering this or any other security the Bank shall be
entitled at the Borrower's risk and expenses as Attorney for and in the name of
the Borrower or otherwise (the Borrower hereby irrevocably appointing the Bank
to be its Attorney) to take possession and/or appoint receivers of the said
debts under this security give notices and demands to Borrowers and third
parties liable thereof and to demand, sue for recover, receive and give receipts
and discharges for the same and sell or realise by Public auction or private
contract or otherwise dispose of all or any part of the said debts and enforce,
compromise, submit to arbitration or deal in any manner with any of the said
debts or claims under this security without being bound to exercise any of these
powers or liable for any loss in the exercise thereof the borrower undertaking
to transfer and deliver to the Bank all relative documents and papers and
agreeing to accept the Bank's accounts or recept from realisation this security
and to pay any shortfall or deficiency hereby shown.
<PAGE>
3. This security is to continue, notwithstanding the existence of a
credit balance on said accounts at any time or any partial payments or any
fluctuations of accounts.
4. That nothing herein shall prejudice the Bank's right or remedies in
respect of any present or future security, guarantees, obligation or decree for
any indebtedness or liability of the Borrower to the Bank.
5. All accounts rendered to the Borrower by the Bank shall be conclusive
evidence both in and out of Court of all matters herein stated.
6. The borrower agrees to execute on demand by the Bank such further
documents as may be required by the Bank to vest the said debts or any of them
in the Bank to render the same readily relisable or transferable by the Bank at
the time.
7. The Borrower also agrees that notwithstanding anything herein before
contained the Bank shall not be bound to allow or to continue their Cash Credit
Account or any other Account whether overdraft or current or loan or to grant
the Borrower any financial or other facilities or accommodation to any extent or
any time further than the Bank shall in its absolute discretion see fit to do.
8. The Borrower hereby declares that the said debts shall always be their
absolute property at their sole disposal and free from any prior charges or
encumbrance and declares that nothing herein shall operate to prejudice the
Bank's rights or remedies in respect of any present or further security,
guarantee, obligation or decree for any indebtedness liability of the Borrower
to the Bank.
9. The security hereby constituted is to operate as a continuing security
for all sums due or owing to the Bank at any time and in the event of the
Borrower's current account loan or cash credit or any other account with the
Bank running to a credit balance at any time the Bank's security hereunder shall
still continue and the Borrower shall be liable for all sums due or
continentally due on any account whatsoever.
10. That the Borrower will not receive compound or release any of the said
debts nor do anything whereby the recovery of the same may be impeded, delayed
or prevented without the consent of the Bank and will keep proper books of
account of its business and will at any time when required produce such books
for the inspection of the bank and its officers and agents and allow it or them
access thereto and to make copies of or extracts from the same.
11. Any notice by way of request demand or otherwise hereunder may be
given by the Bank to the Borrower or any of the individuals constituting the
Borrower personally or may be left at the then or last known place of business
or residence in the Indian Union of Borrower or any of such individuals or may
be sent by post to the Borrower or any such individuals or may be send by post
to the Borrower or any such individuals addressed as aforesaid and if sent by
post it shall be deemed to have been given at the time when it would be
delivered in due course of post and in proving such notice when given by post it
shall be sufficient to prove that the envelope containing the notice was posted
and a certificate signed by the Bank's Local Manager that the envelope was so
posted shall be conclusive.
12. It is expressly agreed and declared by the Borrower that in the event
of the Borrower making a request to transfer the limits/outstanding liabilities
to any other branch of the Bank for being availed and operated on the ground of
convenience or for any other reason acceptable to the Bank and the Bank agrees
to transfer the limits and/or grants further limits as per records and documents
separately to be obtained for such further limits by the concerned branch/ex,
the security created and to be created by way of hypothecation, pledge and
equitable mortgage, etc., as the case may be in favour of the branch in which
the account/s is/are maintained shall be available to the branch/es of the Bank
to which such limits stand transferred for the repayment of the amounts now due
and that may be due hereafter by the Borrower or by the Borrower jointly with
others in any other account/s and the documents/records already created shall
continue to be enforceable against the Borrower in all respects and for all
purposes and intents the said documents records shall be taken as if they are
executed by the Borrower in favour of the branch/es as to which limits stand
transferred.
-2-
<PAGE>
13. The Borrower hereby declares and agrees that the finances provided
from time to time in terms of this agreement shall be applied by the Borrower
only for purposes as mentioned herein above and on part of it shall be applied
by him/it for any other purpose or any other activity of the Borrower.
14. The Borrower further declares and agrees that he/it shall not be
entitled to dispose of all or any of its assets, rights or interest which result
in the transfer of ownership or will have the effect of ultimately transferring
its ownership to any other or others without the written consent of the Bank.
15. The Borrower hereby further declares and agrees that he/it shall be
deemed to have committed breach of this agreement among other conditions if the
Borrower takes any steps on account of which diversion of funds at any time
provided by the Bank is made by the Borrower and decision of the Bank in the
matter whether there as been or is diversion of funds as stated herein is made
or not shall be binding on the Borrower. "Further the borrower agrees that if
the Bank suspect or has reason to believe that the borrower has violated or is
violating this undertaking, the Bank may recall the loan amount or any part
thereof at once notwithstanding anything to the contrary contained in this
agreement or any other agreement."
IN WITNESS WHEREOF the Company has caused its common seal to be affixed
hereto on the day, month and year first above written
<TABLE>
<S> <C>
The common seal of Information For Information Management Resources (I) Ltd.
Resources (I) Ltd. has been
hereunto affixed pursuant to /s/ K.V. Sridharan
the resolution passed by its Director
Board of Directors at their
meeting held on the 6th day of
March, 1995 in the presence of
Shri K.V. Sridharan, Director For Information Management Resources (I) Ltd.
of the company, who has signed
these presents and subscribed /s/ Janek C. Pandya
their signature hereto in token Company Secretary and
thereof and Shri. Janak C. Sr. Manager Finance
Pandya, Company Secretary and
Sr. Manager - Finance, who has
countersigned the same in token
thereof.
</TABLE>
-3-
<PAGE>
EXHIBIT 10.28
EXPORT-IMPORT BANK OF INDIA
OIF:EOU:D-210:275 27th August 1996
Information Management Resources (India) Limited
No. 38/1, Nagananthapura
Singasandra Post
Bangalore 560 068
- -----------------
Kind Attn: Mr. Ashutosh Gupta, President..
---------
Dear Sirs
Programme for Computer Software Exports: Term Loan of USD 1.3 million (approx.
equivalent to Rs. 4.55 crores) to Information Management Resources (India)
Limited [IMR] for part financing expansion project for Software development by
creating infrastructure and sourcing hardware and software at Bangalore.
1. Please refer to your application for a Term Loan of USD 1.3 million
under Exim Bank's Lending Programme for Computer Software Exports for
part financing the captioned project.
2. On the basis of your application, supplemented by information
furnished by IMR from time to time and discussions held with your
representatives, we advise that Exim Bank is agreeable to provide a
Term Loan of USD 1.3 million towards part-financing the said project.
Terms and conditions of the sanction are outlined in Annexure I.
----------
Approved cost of project and means of finance are given at Annexure
--------
II. Documents specified by Reserve Bank of India as outlined at
--
Annexure III may be forwarded by you along with your acceptance of
------------
sanction, if not already done. Documents required to be furnished
while seeking disbursement against imported machinery are listed at
Annexure IV.
-----------
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
-------------------
AUTHORISED SIGNATORY
3. Please note that this sanction is valid for:
15 days from the date of this letter i.e. up to 11th September 1996,
-------------------
for conveying acceptance of the terms and conditions of sanction of
finance by returning the duplicate copy of this letter duly signed by
an authorised signatory of the company.
-8-
<PAGE>
15 days from the date of this letter i.e. up to 11th September 1996,
-------------------
for paying service fee @ 1% flat of the sanctioned loan amount.
90 days from the date of this letter i.e. up to 26th November, for
-------------
completion of documentation.
Processing Fee of Rs. 7,5000.00 may also be paid immediately, if not
already done.
The above amounts should be paid by an instrument payable in Mumbai.
-------------------------------
4. We are enclosing Checklist of legal formalities to be complied with by
yourselves. Please immediately forward to our office Items 1-5 of the
checklist together with the Documentation Fees of Rs. 15,000/- in
------------------
order to enable us to prepare draft documentation for the loan. For
completion of mortgage formalities, please furnish us with the papers
listed under item 14 of the check-list.
5. Should you have any difficulty in completing the documentation, you
may please contact our Bangalore Representative office for guidance.
Yours faithfully,
/S/Rajshekhar Singh
- -------------------
Rajshekhar Singh
Manager
cc: Legal Desk, Exim Bank, Head Office
Exim Bank, Bangalore Representative Office, Bangalore
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
-----------------
AUTHORISED SIGNATORY
ANNEXURE I
Annexure I forming part of Sanction letter No. OIF:EOU:D-210-275 dated 27th
August 1996, issued by Export Import Bank of India, in favour of Information
Management Resources (India) Limited (IMR), Bangalore
-9-
<PAGE>
Terms and Conditions of the Sanctioned term loan
------------------------------------------------
1. Amount of the loan : Foreign Currency Loan (FCL) of USD 1.3
million (United States Dollars One Million
Thirty Thousand only).
2.. Currency of Loan : United States Dollars
3. Purpose of Loan : To part finance expansion project for
software development by creating
infrastructure and sourcing
hardware and software and Bangalore.
4. Rate of Interest : LIBOR plus 3.00% p.a.
5. Service Fee : 1% flat on the sanctioned loan amount of
USD 1.3 million, payable (in Rupees at the
exchange rate prevailing on date of
payment), within 15 days from the date of
this letter i.e. by 10th September 1996.
6. Documentation Fee : Rs. 15,000.00 payable upfront before
documentation.
7. Repayment Schedule : To be repaid in 8 approximately equal
semiannual instalments, commencing from
September 20, 1997 or such nearby date to
be matched with Exim Bank's source of funds
and to be advised at the time of first
disbursement.
8. Availability Period : 12 months from the date of sanction i.e.
till 26th August 1997.
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/s/
-----------------
AUTHORISED SIGNATORY
9. Security for the loan : i) First charge by way of hypothecation
of all the movable fixed assets of IMR.
-10-
<PAGE>
ii) Unconditional and irrevocable Personal
Guarantee from Mr. Satish K. Sannan.
iii) Undertaking to create mortgage in
favor of Exim in respect of immovable
property, if any, acquired during the
currency of the Exim Bank loan.
10. Liquidated Damages : Liquidated Damages in case of default in
payment of principal, interest, service fee
or any other monies on respective due dates
will be payable at 2% (or such other rate as
may be specified) over and above the
applicable rate.
11. Expenses : All out of pocket expenses including but not
restricted to legal fees, travel expenses,
documentation expenses, incurred with
reference to project appraisal, monitoring,
supervision will be borne by the company.
12. Other terms and Conditions:
a. Prior to first disbursement, the company shall:
Create security as stipulated.
Tie up entire equity financing and balance debt financing from Banks'
Financial Institutions as per the approved Means of Finance (Annexure
II).
Submit evidence to the effect that adequate working capital facilities
have been arranged and ensure that any shortfall in working capital or
margin thereof will be brought in by the promoters.
Submit documentary evidence in respect of import or machinery or any
other expenditure for which Exim finance is being availed by way of
authenticated copies of contracts, proforma invoices, Letters of
Credit. For imports of second hand machinery (where applicable) the
company shall obtain relevant Chartered Engineer's Certificate as to,
inter alia, valuation and residual life of the machinery to the
satisfaction of Exim Bank.
Agree to banking arrangements for disbursement of loan funds as may be
acceptable to Exim Bank.
Bring in its own contribution on a pro-rata basis.
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
-----------------
AUTHORISED SIGNATORY
-11-
<PAGE>
b. Any variations in the approved project cost / Means of Finance (Annexure
II) will require the prior written approval of Exim Bank. Any increase
in Project Cost / shortfall in Means of Finance will be met by the
promoters from their own resources or they shall raise necessary funds
on terms acceptable to Exim Bank.
c. The minimum FACR to be maintained by the company throughout the currency
of the Exim Bank loan is 1.25.
d. The Company will furnish to Exim Bank quarterly and annual progress
reports in such form and manner as may be prescribed by Exim Bank, and
also periodically furnish its audited annual financial statements within
90 days of financial year end.
e. The company will obtain all necessary approvals from Government of India
(GOI), Reserve Bank of India (RBI) and all other relevant statutory /
regulatory bodies that may be required for effective implementation of
the project, including but not restricted to approval from State
Pollution Control Board in respect of effluent treatment and disposal
arrangements, sanction of power for the project from the State
Electricity Board, sanction of water and other requirements from the
relevant statutory / regulatory authorities. Copies of all such
approvals will be furnished to Exim Bank as and when obtained.
f. The company will obtain any undertaking from IMR-US and Mr. Satish K.
Sannan that they will not dispose off the shares in Information
Management Resources (India) Ltd. during the currency of the Exim Bank
loan without prior consent. Original share certificates shall be
produced to Exim Bank, as and when so required by Exim Bank.
g. Assets financed under Exim Bank loan and all other assets of the company
shall be insured against "all risks". A certified copy of the policy
duly noting Exim Bank as the lender (Bank Clause and Reinstatement Value
Clause) shall be furnished to Exim Bank. The company shall keep the
policy valid during the tenor of the loan.
h. The company will procure suitable performance guarantee on plant and
machinery acquired for the project including suitable retention money or
guarantee in lieu thereof. Any loss incurred by the company on account
of non-availability of performance guarantee will be made good by the
promoters from their own resources.
i. The company shall untertake adequate safeguards to ensure proper
installation of machines and their satisfactory maintenace and
performance.
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
----------------
AUTHORISED SIGNATORY
-12-
<PAGE>
j. The company shall satisfy Exim Bank about the physical progress of the
project as well as ensure that expenditure incurred on the project is as
per the original schedule. To this end, the company shall furnish such
information and data as may be required by Exim Bank.
k. The company shall not declare dividend for any year except out of
profits relating to that year after making all due and necessary
provisions and provided further that no default had occurred in any
repayment obligation to Exim Bank. Any deviation shall require prior
written approval of Exim Bank.
l. Any change in the composition of the Board of Directors, management
structure, or equity pattern of the company shall require the prior
written approval of Exim Bank.
m. The company shall install relevant systems taking cognisance of
pollutants generated from the manufacturing process and for preservation
of environmental balance.
n. The company shall not incur expenditure in excess of the amounts
indicated under different heads in the final project cost estimate
without the prior written approval of Exim Bank.
o. During the currency of the loan and so long as any amounts remain
outstanding thereunder, the company shall not undertake any new project
or expansion or any other form of capital investment or obtain equipment
on lease, other than that undertaking in the normal course of business,
without the prior written approval of Exim Bank.
p. The company shall not resort to double financing either in foreign
currency or in Indian Rupees for funding the project activities covered
by the Exim term loan.
q. The company shall appoint technical, financial and executive personnel
of proper qualification and experience for the key positions and ensure
that its organisational set up is adequate for the smooth implementation
and operations of the project, to the satisfaction of Exim Bank.
r. The company shall furnish financial and operational data on specified
formats duly signed by an authorised signatory on a quarterly basis
during the project implementation and thereafter during the currency of
the loan and so long as any amounts remain outstanding thereunder.
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
-----------------
AUTHORISED SIGNATORY
-13-
<PAGE>
s. As per the Reserve Bank of India's General Permission to Exim Bank for
extending foreign currency loans to sub-borrowers in India, information
as specified in Annexure III should be furnished immediately by the
company, if not already furnished.
t. Prepayment of loan may be considered at the discretion of Exim Bank and
upon such terms and conditions as it may specify in this regard,
including payment of such premium as may be specified. Permission for
prepayment will need to be obtained by the company from regulatory
authorities to the extent applicable.
u. The company shall effect all remittances related to the Exim loan
through its banks (Authorised Dealer) only.
v. The loan shall also be subject to such other terms and conditions as may
be stipulated by Exim Bank.
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
-----------------
AUTHORISED SIGNATORY
ANNEXURE II
Annexure II forming part of Sanction letter No. OIF:EOU:D-210:275 dated 27th
August 1996, issued by Export-Import Bank of India, in favour of Information
Management Resources (India) Limited, (IMR) Bangalore.
Cost of Project Sub-items Amount (Rs. Lacs)
Infrastructure 166.82
Architect Fees 7.00
Computer Hardware 179.30
Imported 174.30
Indigenous 5.00
Computer Software 277.34
Imported 253.75
Indigenous 23.59
Miscellaneous Assets 13.56
Total 644.02
Means of Finance Sub-items Amount (Rs. Lacs)
Internal Accruals 189.02
-14-
<PAGE>
Exim Bank FC Term Loan 455.00
Total 644.02
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
----------------
AUTHORISED SIGNATORY
ANNEXURE III
Annexure III forming part of Sanction Letter No. OIF:EOU:D-210:275 dated
27th August 1996, issued by Export-Import Bank of India, in favour of
Information Management Resources (India) Limited, (IMR), Bangalore.
List of Documents / Information to be furnished to Exim Bank for availing
Foreign Currency Loan under the Reserve Bank of India's General Permission to
Exim Bank, for extending foreign currency loans to sub-borrowers in India (if
not applicable, please explain why):
A certified copy of letter from the concerned Ministry of Government of
India approving the industrial project in connection with which the sub-
loan is taken or a certified copy of the industrial licence.
Exchange control copy of import license in original or photocopy issued for
import of capital goods wherever applicable and full details of OGL, if the
import is covered under OGL.
MRTP clearance, if applicable.
Where foreign currency sub-loan is required for a new industrial unit or
for expansion / diversification of existing unit, details regarding the
total cost and the manner in which it will be financed. Rupee loans, if
any, obtained from banks / financial institutions in India for financing
part cost of the project, should be supported with details of such
financing together with letters from banks / institutions indicating that
they have agreed to finance the project and the terms and conditions
thereof.
A certified copy of the agreement / contract with the overseas supplier(s)
giving CIF cost of goods to be imported in India and the terms of payment
to the suppliers.
If the sub-loan has been applied for payment of technical know-how fees,
copy of the Government / RBI letter approving payment out of foreign
currency loan.
If the applicant firm / company is having non-resident interest in its
equity capital, a copy of Government / RBI approval under FERA 1973.
-15-
<PAGE>
Quarterly statements in triplicate, certified by Authorised Dealer,
regarding utilisation of the Foreign Currency Loan duly supported by
Supplier's invoice, copy of Bill of Entry, etc.
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/s/
----------------
AUTHORISED SIGNATORY
ANNEXURE IV
Annexure IV forming part of Sanction letter No. OIF:EOU:D-210:275 dated
27th Agusut 1996, issued by Export-Import Bank of India, in favour of
Information Management Resources (India) Limited, (IMR), Bangalore.
Procedure for seeking disbursements against imported machinery.
--------------------------------------------------------------
a. While seeking disbursements under the loan, IMR is required to forward
us the following through our Bangalore Representative Office:
i. Disbursement claim signed by an Authorised Signatory of the company.
ii. Letter from company's bankers stating exact amount of the
disbursement, the corresponding due date and details of the overseas
bank account number etc. to which disbursement is to be made. In case
the amount to be paid for retirement of the import bill is in a
currency different from the currency of denomination of the Exim loan,
the company may arrange for cross exchange deal to be done and the
resultant amount in the currency of denomination of the Exim loan may
be advised to us with a copy of the cross exchange contract.
iii. Copy of applicable Import Contract and Letter of Credit if not already
furnished.
iv. Copies of (non-negotiable) all related shipping documents as specified
in the import contract and L/C i.e. commercial invoice, bill of
lading, certificate of origin, etc.
v. Copy of insurance policy (if not already furnished) taken by company
evidencing that the company's assets have been insured against all
risks. The policy should have endorsements by way of agreed bank
clause listing the various financing institutions.
vi. A certificate from a Chartered Accountant (prefererably the statutory
auditors of the company) certifying amounts expended (as of the
Certificate date) for the project under various heads of account, e.g.
land and building, imported
-16-
<PAGE>
machinery, misc. assets, etc. The certificate should also state the
sources from which the above expenditure has been financed e.g.,
equity, unsecured loans, loans from other institutions, etc.
b. Subsequent to the disbursement being effected, a copy of Bill of Entry duly
certified by the company's bankers should be forwarded to us for our records.
For INFORMATION MANAGEMENT
RESOURCES (INDIA) LTD.
/S/
----------------
AUTHORISED SIGNATORY
-17-
<PAGE>
EXHIBIT 21.1
INFORMATION MANAGEMENT RESOURCES, INC.
LIST OF SUBSIDIARIES
--------------------
The subsidiaries of the Registrant are as follows:
Information Management Resources (India) Limited Organized in India
Information Management Resources (U.K.) Limited* Organized in the United
Kingdom
Each company does business in the name listed above.
______________________
* Joint Venture
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in this registration statement on this Form
S-1 of our report dated September 6, 1996, except as to certain information in
Note 20, for which the date is September 12, 1996, on our audits of the
consolidated financial statements of Information Management Resources, Inc. and
subsidiary. We also consent to the reference to our Firm under the caption
"Experts."
Coopers & Lybrand L.L.P.
Tampa, Florida
September 13, 1996
<PAGE>
Exhibit 23.2
Consent Of Independent Public Accountants
We hereby consent, as independent public accountants, to the use of our
report of September 6, 1996, on the financial statements of Information
Management Resources (India) Limited (and to all references to our Firm)
included in or made a part of this United States Securities and Exchange
Commission Form S-1 Registration Statement under the Securities Act of 1933
File No. ___________ (in connection with the offering of 4,025,000 shares
of common stock) of Information Management Resources, Inc.
ARTHUR ANDERSEN & ASSOCIATES
Bombay, India
September 12, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-START> JAN-01-1995 JAN-01-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<CASH> 1,620,968 1,012,897
<SECURITIES> 0 0
<RECEIVABLES> 3,614,014 1,975,953
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 5,694,977 3,405,948
<PP&E> 2,938,417 3,429,017
<DEPRECIATION> (1,239,333) (958,622)
<TOTAL-ASSETS> 8,657,504 7,099,296
<CURRENT-LIABILITIES> 3,349,235 3,745,603
<BONDS> 0 0
0 0
0 0
<COMMON> 905,600 905,600
<OTHER-SE> (641,304) 1,802,512
<TOTAL-LIABILITY-AND-EQUITY> 8,657,504 7,099,296
<SALES> 22,700,170 14,101,653
<TOTAL-REVENUES> 22,700,170 14,101,653
<CGS> 13,708,782 8,662,244
<TOTAL-COSTS> 13,708,782 8,662,244
<OTHER-EXPENSES> 5,782,982 4,610,481
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 348,652 472,606
<INCOME-PRETAX> 3,522,325 1,327,495
<INCOME-TAX> 292,747 450,504
<INCOME-CONTINUING> 2,517,585 814,404
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,517,585 814,404
<EPS-PRIMARY> 0.12 .03
<EPS-DILUTED> 0 0
</TABLE>
