SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported:) May 15, 1998
Commission File Number 0-28840
Information Management Resources, Inc.
(Exact Name of Registrant as Specified in its Charter)
Florida 59-2911475
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
26750 U.S. Highway 19 North
Suite 500
Clearwater, Florida 33761
(Address of Principal Executive Offices and Zip Code)
(813)797-7080
(Registrant's Telephone Number, Including Area Code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
------------------------------------
Pursuant to an Agreement signed May 15, 1998, the Company
agreed to acquire 100% of the outstanding shares of Lyon
Consultants, S.A. ("Lyon"), a privately held software
engineering company headquartered in Paris, France from its
five owners, Jean Rene Lyon, Pierre Barberis, Marie-Amelie
Barberis, Romain Barberis and Didier Lamour (collectively
referred to as "Sellers"). Lyon specializes in rapid software
application development, utilizing reusable business and
technical software objects, and information technology
consulting. Lyon currently provides these services to large
European and American companies, with a strong emphasis on the
insurance, banking, utility and manufacturing industries. For
the year ended December 31, 1997, Lyon was profitable with
revenue of approximately $13,700,000. Lyon's assets consist
primarily of cash, marketable securities and accounts
receivable.
The purchase price of Lyon consists of $16.0 million in cash
and 499,353 unregistered shares of IMR's common stock with a
value of $12.3 million on the date of the transaction.
Additional payments, not to exceed $3.0 million and 32,503
unregistered shares of IMR's common stock, will be payable to
the Sellers if certain financial targets are achieved in 1998.
The purchase price was determined through negotiations between
the Company and the Sellers. Cash was paid out of the
Company's working capital. A more detailed description of the
transaction is contained in the Agreement filed as Exhibit 2.1
and hereby incorporated by reference.
The Lyon acquisition will be accounted for as a purchase
pursuant to APB No. 16, "Business Combinations" and resulting
goodwill will be amortized over a 10 year period. A portion of
the acquisition price will be expensed in the quarter ending
June 30, 1998 as acquired in-process research and development
in accordance with Financial Accounting Standard (FAS) No. 2.
Management is in the process of determining the amount of
acquired in-process research and development.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Financial Statements of Lyon Consultants, S.A.
Financial statements for Lyon Consultants, S.A. prepared
in accordance with Regulation S-X and required to be
filed pursuant to this section are not available at this
time. Such financial statements will be filed by
Information Management Resources, Inc. as soon as
practicable by an amended Current Report on Form 8-K
which will be filed within 60 days after May 30, 1998.
(b) Pro Forma Financial Information
The pro forma financial statements of Information
Management Resources, Inc. required to be filed pursuant
to this section are not available at this time. Such pro
forma financial information will be filed by Information
Management Resources, Inc. as soon as practicable by an
amended Current Report on Form 8-K which will be filed
within 60 days after May 30, 1998.
2
<PAGE>
(c) Exhibits:
--------
Number Description
------ -----------
2.1 Share Purchase Agreement - Acquisition of
Lyon Consultants, S.A. dated May 15, 1998
for the acquisition of "Lyons" between
Information Management Resources, Inc.
(Buyer) and Jean Rene Lyon, Pierre
Barberis, Marie-Amelie Barberis, Romain
Barberis and Didier Lamour (Sellers).
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INFORMATION MANAGEMENT RESOURCES, INC.
Date May 28, 1998
/s/ Satish K. Sanan
-----------------------------
Chief Executive Officer
Date May 28, 1998
/s/ Robert M. Molsick
-----------------------------
Chief Financial Officer
4
- ----------------------------------------------------------------------------
SHARE PURCHASE AGREEMENT
BY AND BETWEEN
INFORMATION MANAGEMENT RESOURCES, INC.
AND
Mr. Jean Rene LYON
Mr. Pierre BARBERIS
Miss. Marie-Amelie BARBERIS
Mr. Romain BARBERIS
Mr. Didier LAMOUR
Dated as of May 15, 1998
- ---------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I. THE TRANSACTION 5
1.1. Sale and Purchase of the Sale Shares 5
1.2. Purchase price 5
1.3. Payment of the Purchase Price 5
1.4. Closing 7
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE SELLERS 8
2.1. Good and Valid Title of the Sale Shares 8
2.2. Organization of the Company and the Subsidiary; Valid and Binding Agreement 8
2.3. Absence of Restrictions and Conflicts 9
2.4. Capitalization of the Company and the Subsidiary 9
2.5. Equity Interest of the Company 10
2.6. Financial Statements 10
2.7. Absence of Undisclosed Liabilities 11
2.8. Absence of Material Adverse Change 11
2.9. Compliance with Laws; Licenses 11
2.10 Tax Matters 11
2.11. Title to Real and Personal Properties; Liens and Encumbrances 12
2.12. Contracts 13
2.13 Employee Benefits Plans 15
2.14. Labor Controversies 17
2.15. Legal Proceedings 17
2.16. Intellectual Property 17
2.17. Insurance 20
2.18. Transactions with Affiliates 20
2.19. Customers 20
2.20. Brokers, Finders and Investment Bankers 21
2.21. Banking Relationships 21
2.22. Payments 21
2.23. Disclosure 21
2.24. Government Grants 21
ARTICLE III. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNIFICATION 23
3.1. Indemnification 23
<PAGE>
3.2. Tax indemnity 23
3.3. Term of Indemnification Obligations 24
3.4. Defense of Third Parties Claims 24
3.5. Time for Payment 25
3.6. Limitations on Indemnity 26
3.7 Dispute Indemnification 27
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASE 27
4.1. Good and Valid Title of the Considerations Shares 27
4.2. Organization of Purchaser; Valid and Binding Agreement 27
4.3. Securities Filing 27
4.4. Financial Statements 27
4.5. Absence of Restrictions and Conflicts 28
4.6. Purchase Stock Option Plan 28
4.7. Absence of Material Adverse Change or Other Events 28
ARTICLE V. SPECIFIC UNDERTAKING 29
ARTICLE VI. RESTRICTIVE COVENANTS 31
6.1. Non-Competition 31
6.2. Non-Sollicitation of Customers 31
ARTICLE VII. MISCELLANEOUS PROVISIONS 32
7.1. Governing Law 32
7.2. Headings 32
7.3 Notices 32
7.4. Counterparts 33
7.5. Entire Agreement 33
7.6. Amendments 33
7.7. Parties in Interest; Assignment 33
7.8. Severability; Enforcement 33
7.9. Arbitration 34
7.10. Waiver 34
7.11. Costs 34
ARTICLE VIII. DEFINITIONS 35
</TABLE>
<PAGE>
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement is made and entered into on this 15 day of May ,
1998 by and between the undersigned :
- - INFORMATION MANAGEMENT RESOURCES, Inc., a corporation incorporated under the
laws of the State of Florida, United States of America, with its registered
office at 26750 US Highway 19 North, Suite 500, Clearwater Florida 33761,
United States of America
represented by Mr. John Hindman, Chief Operating Officer, duly authorized for
the purpose of this Agreement,
hereinafter referred to as "Purchaser"
on the one hand,
and
- - Mr. Pierre BARBERIS, born on May 29, 1942 domiciliated at 82, rue Charles
Laffitte, 92200 Neuilly sur Seine, and
- - Miss Marie-Amelie BARBERIS, born on October 18, 1971, domiciliated at 7, Villa
Emile Bergerat, 92200 Neuilly sur Seine, and
- - Mr. Romain, Paul BARBERIS, born on November 13, 1968, domiciliated at 14,
Garcia Villa, San Lorenzo Village, Makati, Metro Manilla, Phillipines,
acting jointly and severally,
hereinafter collectively referred to as the "BARBERIS Group",
on the second hand,
and
- - Mr. Jean Rene LYON, born on October 3, 1947, domiciliated at 4 rue de
Montmorency 75003 Paris,
- - Mr. Didier LAMOUR, born on May 6, 1957, domiciliated at 220 bis rue du Bois
des Chartres, 91220 Bretigny sur Orge,
each of Jean-Rene LYON, Didier LAMOUR, and the BARBERIS Group is hereinafter
individually referred to as a "Seller" and, collectively as "Sellers",
on the third hand.
Sellers and Purchaser being hereinafter collectively referred to as the
"Parties" or, individually, as a "Party".
<PAGE>
WITNESSETH :
WHEREAS, Sellers wish to assign and transfer to the Purchaser and Purchaser
wishes to acquire directly from Sellers all of the equity interest held by each
Seller in LYON CONSULTANTS SA, a French company registered with the Registry of
Commerce and Companies of Paris under number B 384 684 254 and whose registered
office is at 20 avenue de l'Opera, 75001 Paris, France ("the Company"), and
indirectly in LYON CONSULTANTS Ltd.UK, an English company registered with the
Register of Companies House under number 3304857 and whose registered office is
45 Berkeley Street, Mayfair, London W1A 1EB (the "Subsidiary") which is 100%
owned by the Company.
WHEREAS, of the date of this Agreement, Sellers own in the aggregate 100 % of
the Shares of the Company.
NOW, THEREFORE, the Parties have agreed as follows :
ARTICLE I
---------
The Transaction
---------------
1.1. Sale and Purchase of the Sale Shares
------------------------------------
Each Seller hereby agrees to transfer on the Closing Date (as defined in Article
1.4) to Purchaser or to any legal entity that Purchaser may designate all of the
shares held by such Seller in the Company, which shares held by Sellers
represent, in the aggregate, 100 % of the issued and outstanding shares of the
Company, together with all rights then or thereafter attaching hereto, (the
"Sale Shares"). The Sale Shares shall be transferred to Purchaser, in accordance
with the foregoing sentence, together with the rights to dividends in respect of
the Company's fiscal year ended on December 31, 1997.
1.2. Purchase Price
--------------
The price payable by Purchaser to Sellers for the whole of the Sale Shares based
among other things on the Financial Statements, shall be composed of a cash
payment of USD 16,000,000, in accordance with Article 1.3.1, the delivery to
Sellers of 499.343 IMR Shares in accordance with Article 1.3.3, ("the Purchase
Price"), plus the Incentive for additional payment described in Article 1.3.4.
1.3. Payment of the Purchase Price
-----------------------------
The Purchase Price shall be paid as follows:
1.3.1 Cash Payment. Sixteen million dollars (USD 16,000,000) to be paid
in cash at the Closing by a bank transfer on Paribas Bank account n(degree) 182
910 R.
1.3.2 Purchaser shall be deemed to have satisfied its obligation under
Article 1.3.1 above at the time the above bank account is credited with the
foregoing amount of USD 16,000,000 .
<PAGE>
1.3.3 Delivery of IMR Shares. By delivery of irrevocable notification to
the transfer agent evidencing the issue of 499,443 shares of IMR in favor of
Sellers with effect as of the Closing Date, ("Consideration Shares") of the
common stock of Purchaser (the "IMR Shares").
As used herein, the "Anniversary Value" is defined as the arithmetic average of
the trading stock exchange value in dollars per share of IMR Shares as reported
on the NASDAQ National Market for each of the seven (7) trading days immediately
prior to the date on which such payment is due. Purchaser and Sellers hereby
expressly agree, that, in the event that the Anniversary Value shall be less
than USD 27,24, Purchaser shall pay to Sellers a cash amount intended to
guarantee the value of the 499,443 Consideration Shares, equal to the number of
Consideration Shares multiplied by the dollar amount by which the Anniversary
Value is less than USD 27,24.
1.3.4 Incentive for Additional Payments. Subject to the following
----- -----------------------------------------------------------
terms and conditions, Purchaser hereby agrees that the Purchase
---------------------------------------------------------------
Price shall be increased as follows :
-------------------------------------
(a) Provided that the consolidated gross operating income of the
Company and the Subsidiary before interest, tax and distribution
of profits to employees for the fiscal year ending on December 31,
1998 equals at least 20 % of the consolidated revenues of the
Company and the Subsidiary for the same period :
(i) the Incentive shall be equal to USD 1,000,000 if the consolidated
revenues of the Company and the Subsidiary for the fiscal year
ending on December 31, 1998, is comprised between USD 18,000,000
and USD 19,000,000; and
(ii) the Incentive shall equal to USD 2,000,000 if the consolidated
revenues of the Company and the Subsidiary for the fiscal year
ending on December 31, 1998, is comprised between USD 19,000,001
and 20,000,000 ; and
(iii) the Incentive shall equal to USD 3,000,000 if the consolidated
revenues of the Company and the Subsidiary for the fiscal year
ending on December 31, 1998, is USD 20,000,001 or more.
(b) For purposes of calculating the Incentive that shall be payable by
Purchaser if any :
(i) the figures indicated in paragraph (a) above shall be converted
into French Francs based on the exchange rate of USD 1.00 = FF
6.00.
(ii) the consolidated revenues of the Company and the Subsidiary for
the fiscal year ending on December 31, 1998 shall be calculated on
the basis of its annual accounts as certified by the Company's
statutory auditor with respect to the fiscal year 1998, in
accordance with US GAAP.
<PAGE>
(iii) As used herein, "consolidated revenues" shall mean the earnings
appearing in the annual accounts of the Company with respect to
the fiscal year ending on December 31, 1998 resulting from
operations in France and in the UK. Purchaser and Sellers hereby
agree, that in the event that Sellers shall disagree with the
amount of Consolidated revenues for the fiscal year 1998 as
resulting from the annual accounts of the Company certified by its
statutory auditors, Sellers shall have the right within thirty
(30) days following such certification, to appoint at its own
expense an accounting firm of its choice which shall render a
report to the parties with respect to such consolidated revenues.
In the event that, within thirty (30) days following the delivery
of its report by the accounting firm chosen by Sellers, such
accounting firm and the Company's statutory auditors shall have
failed to reach agreement on the amount of consolidated revenues
for the fiscal year 1998, either Party may refer the matter to
arbitration in accordance with Article 7.9.
(c) Purchaser shall pay the Incentive for adiditional due to Sellers
within 30 days of the annual meeting closing the accounts of the
fiscal year of 1998 by banker's draft drawn on the Paris Branch of
a major bank.
(d) Provided that the consolidated gross operating income of the
Company and the Subsidiary before interest, tax and distribution
of profits to employees for the fiscal year ending on December 31,
1998 equals at least 19 % of the consolidated revenues of the
Company and the Subsidiary for the same period and that the
consolidated revenues of the Company and the Subsidiary for the
fiscal year ending on December 31, 1998, calculated as provided
above, shall be USD 15,840,000, or more, Purchaser shall issue in
favor of Sellers 32,000 additional shares of the Common Stock of
Purchaser.
1.3.5 Final Purchase Price
--------------------
The Final Purchase Price shall be equal to the sum of both the Purchase Price
plus the Incentive for additional payment if any.
1.4. Closing
-------
Closing with respect to the transactions contemplated by this Agreement has
taken place on May 15, 1998 at the offices of Coopers & Lybrand CLC Juridique et
Fiscal, 32 rue Guersant, 75017 Paris (hereinafter called the "Closing" or the
"Closing Date", as the case may be). At the Closing:
(a) Sellers have delivered to Purchaser the board of directors'
minutes authorizing the transfer of shares to Purchaser and
approving Purchaser as new shareholder, transfer orders (ordres
de mouvement) effecting the transfer to Purchaser of all rights,
title and interest in and to the Sale Shares;
(b) Sellers have delivered to Purchaser such other documents and
instruments, and taken such other actions, as reasonably required
to effect the transactions contemplated herein including, without
limitation, the provision of certificates evidencing the
registration of the Company on the books of the Subsidiary as the
owner of the Subsidiary shares the up-dated transfer register and
minutes of the shareholders and board of directors' meetings
registers of the Company and the Subsidiary;
<PAGE>
(c) Purchaser has effected the payment of the cash portion of USD
16,000,000 and has irrevocably instructed the stock transfer
agent to deliver certificates evidencing the issue of
Consideration Shares in accordance with Articles 1.3.1 and 1.3.3,
respectively;
(d) Messrs. Jean-Rene Lyon and Didier Lamour have entered with
Purchaser into the employment agreements set forth in Annex 1.
ARTICLE II
----------
Representations and warranties of Sellers
-----------------------------------------
Each Seller, individually for himself only (the "Representing Seller"), hereby
makes and gives to Purchaser the representations and warranties set forth in
this Article II. Such representations and warranties are true as of the Closing
Date subject to the qualifications and exceptions set forth herein and in the
Disclosure Letter set forth in Annex 2 (the "Disclosure Letter").
2.1. Good and Valid Title of the Sale Shares
---------------------------------------
The Representing Seller owns his respective Sale Shares, free and clear of any
Encumbrance and, upon the sale of such Sale Shares in accordance with Article I,
Purchaser will acquire good and valid title, free and clear of any Encumbrance
to the Sale Shares of the Representing Seller.
2.2. Organization of the Company and the Subsidiary; Valid and Binding
-----------------------------------------------------------------
Agreement
---------
(a) The Company is a corporation duly incorporated and registered, validly
existing and in good standing under the laws of France.
(b) The Subsidiary is a company duly incorporated and registered, validly
existing and in good standing under the laws of England.
(c) This Agreement has been duly executed and delivered by each Seller and
constitutes the legal, valid and binding agreement of each
Representing Seller, enforceable against him in accordance with its
terms, subject to applicable bankruptcy, insolvency and other similar
laws of general application in France (and in England for the
Subsidiary) now or hereafter affecting the enforceability of
creditors' rights generally.
2.3. Absence of Restrictions and Conflicts
-------------------------------------
The execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated by this Agreement and the
fulfillment of and compliance with the terms and conditions of this
Agreement do not and will not, with the passing of time or the giving of
notice or both, violate or conflict with, constitute a breach of or
default under, result in the loss of any material benefit under, or
permit the acceleration of any obligation under :
<PAGE>
(a) any term or provision of the Articles of Incorporation or other
governing documents of the Company or the Subsidiary,
(b) any Material Contract (as defined in Article 2.12.1),
(c) any judgment, decree or order of any court or Governmental Authority
(as hereinafter defined) to which the Representing Seller, the Company or
the Subsidiary is a party or by which the Representing Seller, the
Company or the Subsidiary or any of their respective properties is bound,
or
(d) any statute, law, regulation or rule applicable to the Representing
Seller, the Company or the Subsidiary,
except where such breach, default, loss or benefit or acceleration of an
obligation would not have in the case of subsections (b) through (d) above, a
Material Adverse Effect.
No consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Authority with respect to the Company or the
Subsidiary is required in connection with the execution, delivery or performance
of this Agreement by the Representing Seller the failure to obtain which would
have a Material Adverse Effect.
As used herein, the term "Governmental Authority" shall mean any and all
national or local French (and with respect to Subsidiary, English) governmental
institutions, public authorities and governmental bodies and entities of any
nature whatsoever exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature, and any subdivisions or instrumentals thereof, including,
but not limited to, departments, boards, bureaus, commissions, agencies, courts
or other tribunals, administrations and panels, and any divisions or
instrumentality's thereof, whether permanent or ad hoc.
2.4. Capitalization of the Company and the Subsidiary
------------------------------------------------
(a) The authorized capital stock of the Company consists of 16,900
shares of common stock (-"actions ordinaires"-) having a par value
of FRF 250 each, all of which are issued and fully paid-up and at
the Closing Date, there were no other shares of share capital of
the Company authorized.
(b) The Company owns all of the shares of the Subsidiary.
(c) The authorized capital stock of the Subsidiary consists of
100,000 shares of common stock, having a par value of GBP 1,00
each, of which 5,000 are issued and fully paid-up and at the
Closing Date, there were no other shares of share capital of
Subsidiary authorized.
(d) There are no outstanding options, warrants or other rights of any
kind to acquire any additional shares of capital stock of the
Company and/or the Subsidiary or securities convertible into or
exchangeable for, or which otherwise confer on the holder thereof
any right to acquire, any such additional shares, nor is the
Company and/or the Subsidiary committed to issue any such option,
warrant, right or security.
<PAGE>
(e) There are no agreements or understandings with respect to the
voting of the capital stock of the Company or of the Subsidiary.
(f) There exists no obligation to pay any distributions (whether
current or in respect of arrearage) with respect to the shares of
common stock of the Company or of the Subsidiary.
2.5. Equity Interest of the Company
------------------------------
With the exception of the shares held by the Company in the Subsidiary, neither
the Company nor the Subsidiary owns, directly or indirectly, any capital stock
or other equity securities of any or have any direct or indirect equity or
ownership interest, including interest in partnership and joint ventures, in any
business other than the businesses which the Company and the Subsidiary are
conducting as of the date of this Agreement.
2.6. Financial Statements
--------------------
The Representing Seller has delivered to Purchaser true and complete copies of :
(a) the Company's and the Subsidiary's respective balance sheets with
respect to the fiscal year ended on December 31, 1997, the
related audited statement of income of the Company and the
Subsidiary as of and for the period then ended, and
(b) the report of the Company's statutory auditors describing the
methods used in the preparation of the foregoing accounts.
The foregoing accounts and the report described in paragraph
(b) above are set forth in Annex 3 to this Agreement.
The Purchaser, as part of an information memorandum, was
provided with unaudited Financial Statements prepared in
accordance with US GAAP (hereinafter the " Financial
Statements").Purchaser relied on them on determining the
Purchase Price.
The Financial Statements present fairly and accurately, in all
material respects, the financial position of the Company and the
Subsidiary as of and for the periods ended referred to therein.
2.7. Absence of Undisclosed Liabilities
----------------------------------
The Company and/or its Subsidiary has no liabilities other than those disclosed
in the Company Financial Statements or in this Agreement and the Disclosure
Letter including, inter alia, off balance sheet commitments.
2.8. Absence of Material Adverse Change
----------------------------------
Since January 1, 1998, except as permitted, required, or specifically
contemplated by this Agreement, (a) the business of the Company, and the
Subsidiary has been conducted in the ordinary course consistent with past
practice, (b) there has not been any Materially Adverse Change in the financial
condition, results of operations, operations or business of the Company and/or
the Subsidiary, including, but not limited to, any material damage, claim,
destruction or other loss (whether or not covered by insurance) and (c) the
Company and/or the Subsidiary has not disposed of any of its capital assets, or
made or committed to make any capital expenditure, other than as stated in the
Disclosure Letter and
(a) The Company and or the Subsidiary has not paid any dividend and
(b) The Company and or the Subsidiary has not created incurred or
assumed any indebtedness (other than trade indebtedness) or any
off balance sheet liabilities
Since January 1, 1998, both the Company and the Subsidiary have duly calculated,
deducted, withheld, paid and accounted for all tax payable by it on or before
the Closing Date.
2.9. Compliance with Laws; Licenses
------------------------------
(a) The Company and/or the Subsidiary is not and has not been within
the past three (3) years in violation of any law, regulation,
licensing requirement or orders applicable to it or to its
business which would have a Material Adverse Effect.
(b) The Company and/or the Subsidiary, as the case may be, have all
licenses, permits, or approvals that are material to or necessary
for the conduct of their respective business. Each such permit is
in full force and effect and no violation has been recorded in
respect of any such permit.
2.10. Tax Matters
-----------
(a) Both the Company and the Subsidiary have within the requisite
time limits duly prepared, made, all material returns, given all
material notices or filed all material forms, and supplied all
other material information required to be supplied to any
competent fiscal authority and all such information requested
when given or supplied (applying the tax rules at the time of
such returns, notices, forms and information were made, given
filed or supplied) was accurate in all material respects and made
on a proper basis.
(b) Both the Company and the Subsidiary have duly calculated,
deducted, withheld, paid and accounted for all tax due to have
been deducted, withheld, paid or accounted for by it on or before
December 31, 1997, and has accounted for all tax for which it may
after the Closing Date become liable in respect of any profits,
gains, income (whether actual or deemed) made or received, or in
respect of any distribution or transaction entered into, as of
December 31, 1997.
(c) Neither the Company nor the Subsidiary has (in respect of any of
its assets) made a claim or election under the provisions of any
tax legislation for any special treatment (of the value thereof)
for tax purposes and neither the Company nor the
<PAGE>
Subsidiary has not been party or a member of a group of companies which
has undertaken any reorganization or reduction of share capital or
share exchange or any scheme or transfer of assets which might have
that effect;
(d) Neither the Company nor the Subsidiary has ever been, a member of
a tax group and neither is under any liability to taxation,
contingent or otherwise, in respect of any company which at the
same time has been a member of the same tax group as the Company
for taxation purposes.
(e) Both the Company and its Subsidiary have only ever been resident
for tax purposes in its country of incorporation.
(f) Neither the Company nor the Subsidiary has received as at the
date hereof any request for information from any tax authorities,
nor it is engaged in or is subject to or has been advised of any
proposed or actual investigation, adjustment, litigation,
prosecution, or other claims or actions for tax matters, nor is
the Representing Seller aware that any such investigation,
adjustment, litigation, prosecution, or other claims or actions
is pending or threatened against the Company and/or the
Subsidiary, or in respect of which the Company and/or the
Subsidiary is could be liable to indemnify or compensate any
third party in respect of tax matters.
(g) With the exception of the URSSAF inquiry disclosed in the
Disclosure Letter, neither the Company nor the Subsidiary has
incurred any tax inspection during the last (4) years.
(h) Transfer taxes payable in connection with Purchaser's acquisition
of the Sale Shares hereunder shall be borne be the Purchaser.
2.11. Title to Real and Personal Properties; Liens and Encumbrances
-------------------------------------------------------------
(a) The Company and/or the Subsidiary have good and marketable
title, free of any Encumbrance to, or a valid leasehold interest
in, all of their respective assets and real and personal
properties (tangible, intangible, and mixed) reflected in the
Financial Statements and all other properties and assets owned
or utilized by the Company and /or the Subsidiary which are
material to the conduct of the business of the Company and the
Subsidiary.
(b) The Disclosure Letter sets forth a true and complete list of all
leases and agreements of Company or Subsidiary granting
possession of or rights to real property and for personal
property with a value in the case of personal property of at
least FF 100.000 (the "Scheduled Leases"). All such Scheduled
Leases are in full force and effect and constitute the legal,
valid, binding and enforceable obligations of the Company or the
Subsidiary, as applicable, and are legal, valid, binding and
enforceable in accordance with their respective terms with
respect to each other party thereto, in each case to the extent
material to the business and operations of
<PAGE>
the Company and the Subsidiary taken as a whole and subject in
each case to applicable bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors' rights generally.
Except as would not have a Material Adverse Effect, the Company
and the Subsidiary have physical possession of all equipment and
other assets which are covered by Scheduled Leases.
Except as would not have a Material Adverse Effect, there are no
existing defaults by the Company or the Subsidiary with respect
to such Scheduled Leases of any of the other parties thereto (or
events or conditions which, with notice or lapse of time, or
both, would constitute a default).
2.12. Contracts
2.12.1 Material Contracts
The Disclosure Letter contains a list correct in all material respects
of the following (the " Material Contracts"):
(a) all bonds, debentures, notes, mortgages, indentures or guarantees
securing indebtedness in excess of FF 100.000 individually to which
the Company or the Subsidiary is a party or by which any of their
properties or assets (real, personal or mixed, tangible or
intangible) are bound;
(b) all outstanding loans and credit commitments under which the
Company or the Subsidiary incurs indebtedness or is the recipient
of subsidies or similar amounts in excess of FF 100.000
individually;
(c) all contracts or agreements not otherwise disclosed in the
Disclosure Letter which limit or restrict in a substantial manner
(i) Company or the Subsidiary or any of the Sellers, from engaging
in any business in any jurisdiction or (ii) others from competing
with the Company or the Subsidiary in any jurisdiction, except for
employment contracts between the Company or the Subsidiary and a
current or former employee of the Company or the Subsidiary;
(d) all agreements or documentation evidencing currently outstanding
loans or advances in excess of FF 100.000 individually made by the
Company or the Subsidiary to or on behalf of its clients, other
than accounts receivable incurred in the ordinary course of
business, and identification of all bank accounts; and
(e) all other existing contracts and commitments to which the Company
or the Subsidiary is a party or by which their properties or asset
may be bound involving an annual commitment or annual payment by
any party thereto of more than FF 100.000 individually or which by
its terms requires performance thereunder by the Company for more
than one year following the Closing Date.
True and complete copies of all Material Contracts, including all
amendments thereto, have been made available to Purchaser. The Material
Contracts are valid and enforceable in
<PAGE>
accordance with their respective terms with respect to the Company or the
Subsidiary, as the case may be, and are valid and enforceable in accordance with
their respective terms with respect to any other party thereto, in each case to
the extent material to the business and operations of the Company and the
Subsidiary taken as a whole and subject to applicable bankruptcy, insolvency and
other similar laws affecting the enforceability of creditors' rights generally.
Except for events or occurrences, the consequences of which,
individually or in the aggregate, would not have a Material Adverse Effect,
there is not under any of the Material Contracts any existing breach, default or
event of default by the Company or the Subsidiary or event that with notice or
lapse of time or both would constitute a breach, default or event of default by
the Company or the Subsidiary, and neither the Company nor the Subsidiary has
received notice of, or made a claim with respect to, any breach or default by
any other party thereto. Neither the Company nor the Subsidiary is a party to or
subject to (i) any joint venture contract or arrangement or any other agreement
which involves or can reasonably be expected to involve a sharing of profits,
(ii) any original equipment manufacturer ("OEM"), reseller, distribution or
equivalent agreement, volume purchase agreement, corporate end user license,
sales or service agreement or other agreement or contract pursuant to which the
Company or the Subsidiary has granted or received most favored nation pricing
provisions or exclusive marketing, reproduction, publishing, licensing or
distribution rights related to any product, group of products or territory,
2.12.2 Customer Contracts
Except as set forth in the Disclosure Letter, the execution, and
performance of this Agreement by the Representing Seller, and the consummation
of the transactions contemplated hereby will not, with the passing of time or
the giving of notice or both, violate or constitute a default or give rise to a
termination right under any Customer Contract ("Customer Contract") and under
any contract to which the Company and/or the Subsidiary is a party with any
customer designed in Article 2.19. True and complete copies of all written
Customer Contracts, including all amendments thereto, have been made available
to Purchaser. The Customer Contracts are valid and enforceable in accordance
with their respective terms with respect to the Company or the Subsidiary, as
applicable, and are valid and enforceable in accordance with their respective
terms with respect to any other party thereto, in each case except as would not
have a Material Adverse Effect. There is no existing breach, default or event of
default by the Company or the Subsidiary, or event that solely as a result of
notice or lapse of time or both would constitute a breach, default or event of
default by the Company or the Subsidiary under the Customer Contracts the
consequences of which, individually or in the aggregate, would have a Material
Adverse Effect. Neither the Company nor the Subsidiary has received notice of,
or made a claim with respect to, any breach or default of any Customer Contract
by any other party.
2.12.3 Officers, Directors and Employees
The Disclosure Letter contains a true and complete list of all of the
officers and directors of the Company and the Subsidiary, specifying their
office and annual rate of compensation, and a true and complete list of all of
the employees of the Company and the Subsidiary as of the date hereof with whom
the Company or the Subsidiary, as applicable, has a written employment agreement
or to whom the Company or the Subsidiary, as applicable, has made verbal
commitments involving material terms which are binding on it and that involve
gross annual compensation to such employees individually of at least FF 400.000
(including any
<PAGE>
estimated bonuses payable thereto).
2.13. Employee Benefits Plans
(a) Definition of Benefit Plans. For purposes of this Article 2.13 the
term "Company Benefit Plan" means any plan, program, arrangement, fund, policy,
practice or contract which, through which or under which the Company or the
Subsidiary provides benefits or compensation to or on behalf of employees or
former employees of the Company or the Subsidiary, whether formal or informal,
whether or not written, including but not limited to the following:
(i) Arrangements - any bonus, incentive compensation, stock
option, deferred compensation, commission, severance pay,
golden parachute or other compensation plan ("Specified
Arrangements");
(ii) Employee Benefit Plans - any employee benefit plan,
including, but not limited to, any defined benefit plan,
profit sharing plan, pension plan, savings or thrift plan,
or any plan, fund, program, arrangement or practice
providing for medical (including post-retirement medical),
hospitalization, accident, sickness, disability, or life
insurance benefits ("Employee Benefit Plans"); and
(iii) Other Employee Fringe Benefits - any stock purchase,
vacation, scholarship, sick days, day care, prepaid legal
services, dependent care or other fringe benefits plans,
programs, arrangements, contracts or practices ("Fringe
Benefit Plans").
(b) Identification of Benefits Plans. Except as set forth in the
Disclosure Letter , neither the Company nor the Subsidiary
maintains, nor has either of them at any time established ,
maintained or contributed to, or otherwise participated in any
Company Benefit Plan other than those Company benefit Plans which
are required to be implemented under applicable labor laws and
regulations.
(c) Compliance. Each Company Benefit Plan has been maintained, in all
material respects in accordance with all applicable laws, rules or
regulations . Further, there has been no failure to comply with
applicable laws or other requirements concerning the filing of
reports, documents and notices with any Governmental Authority or
the furnishing of such documents to participants or beneficiaries
that could subject , the Company or the Subsidiary to any material
civil or criminal sanction.
(d) Documentation. The Company has made available to Purchaser a true
and complete copy of all documents, if applicable, with respect to
the Company Benefit Plans identified in the Disclosure Letter as
being in addition to or in lieu of the Company Benefit Plans
provided under applicable laws and regulations.
(e) Legal Actions. Except as would not have a Material Adverse Effect,
there are no actions, audits, suits or claims known which are
pending or threatened against any Company Benefit Plan, except
claims for benefits made in the ordinary course of the operation of
such plans.
(f) Funding. The Company and the Subsidiary have made in all material
respects full and timely payment of all amounts required to be
contributed under the terms of each
<PAGE>
Company Benefit Plan and applicable law or required to be paid as
expenses under such Company Benefit Plan and no excise taxes are
assessable as a result of any non-deductible or other contributions
made or not made to a Company Benefit Plan. The assets of all
Company Benefit Plans which are required under applicable laws to
be held in trust are in fact held in trust, and the assets of each
such Company Benefit Plan equal or exceed the liabilities of each
such plan. The liabilities of the Company and the Subsidiary under
each Company Benefit Plan are in all material respects treated in
the Financial Statements and the records of the Company and the
Subsidiary in accordance with US GAAP and applicable laws and
regulations.
(g) Liabilities. Neither the Company nor the Subsidiary is subject to
any material liability, tax or penalty whatsoever to any person
whomsoever as a result of the Company or the Subsidiary engaging in
a prohibited transaction under applicable law governing a Company
Benefit Plan, and the Representing Seller has no knowledge of any
circumstances which reasonably might result in any material
liability, tax or penalty whatsoever as a result or a breach of
fiduciary duty thereunder.
(h) No Acceleration of Liability Under Benefit Plans. The consummation
of the transactions contemplated hereby will not accelerate or
increase any liability under any Company Benefit Plan because of an
acceleration or increase of any of the rights or benefits to which
employees of the Company or the Subsidiary may be entitled
thereunder.
2.14. Labor Controversies
-------------------
Except as disclosed in the Disclosure Letter, there is no pending or to the
Representing Seller's knowledge threatened unfair labor practice charge,
complaint or other proceeding against the Company and/or the Subsidiary nor is
there any labor strike, slow down, or work stoppage actually in effect, or to
the representing Seller's knowledge threatened against or involving the Company
and/or its Subsidiary.
2.15. Legal Proceedings
-----------------
Except as disclosed in the Disclosure Letter, there is no complaint, lawsuit,
action or proceeding (governmental or otherwise), or governmental or
administrative agency investigation, or labor arbitration, actual, pending or to
the Representing Seller's knowledge threatened, against or involving the Company
and/or the Subsidiary or the right for the Company and/or the Subsidiary to use
or own any of the properties used or owned by it.
2.16. Intellectual Property
---------------------
2.16.1 Patents, Trademarks, Tradenames
The Disclosure Letter sets forth a true and complete list of (a) all trademarks,
trade names (including all national and state registration pertaining thereto)
and copyrights owned by the Company or the Subsidiary (collectively, the
"Proprietary Intellectual Property") and (b) all patents, trademarks, trade
names, copyrights, technology and processes used by the Company or the
Subsidiary in their businesses which are material to their businesses and are
used pursuant to a license or other right granted by a third party
(collectively, the "Licensed Intellectual Property", and the "-Proprietary
Intellectual Property-", together, the "Intellectual Property").
<PAGE>
A true and complete list of all such licenses and agreements with respect to
Licensed Intellectual Property is set forth in the Disclosure Letter. Each of
the national, state and other governmental registrations with any country
pertaining to the Proprietary Intellectual Property except as will not have a
Material Adverse Effect is valid and in full force and effect. The Company or
the Subsidiary, as applicable, owns, or has the right to use pursuant to valid
and effective agreements, all Intellectual Property, and the consummation of the
transactions contemplated hereby will not materially adversely alter or impair
any such rights. No claims are pending against the Company or the Subsidiary,
and there are no factual basis for such a claim, by any person with respect to
the use of any Intellectual Property or challenging or questioning the validity
or effectiveness of any license or agreement relating to the same that would be
likely to result in a Material Adverse Effect; the current use by the Company or
the Subsidiary of the Intellectual Property does not in any material respect
infringe upon the rights of any third party, including but not limited to any
copyright, patent, trade secret, trademark, service mark, trade name, firm name,
logo, trade dress, mask work, moral right, other intellectual property right,
right of privacy or right in personal data of any person. The Disclosure Letter
sets forth a list of all jurisdictions in which the Company or the Subsidiary is
operating under a trade name, and each jurisdiction in which any such trade name
is registered. There are no potentially interfering patent and to the best
knowledge of the Representing Seller patent application of any third party which
could reasonably be expected to interfere with the Company's intellectual
property rights.
2.16.2 Company Computer Software and Hardware
(a) The Disclosure Letter sets forth a true and complete list in all
material respects of: (i) all software and associated documentation
owned by the Company which are material to the business of the
Company, other than custom-developed software developed for and
assigned to a Company customer (the " Proprietary Software"); (ii)
all software (other than the Company Proprietary Software and
"shrink-wrap" software) used in connection with the business of the
Company (the "Licensed Software", the Licensed Software and the
Proprietary Software, together the "Company Software"). The Company
and the Subsidiary are in possession of all technical and
descriptive materials to run the Company Software its, except as
would not have a Material Adverse Effect. The Proprietary Software
consists of: (i) source and object code embodied in magnetic media;
and (ii) all development and procedural tools, documentation, and
manuals necessary to maintain, enhance, develop derivative works,
support and service the Proprietary Software, including licenses to
use compilers, assemblers, libraries and other aids. No party other
than the Company and/or the Subsidiary possesses any current or
contingent rights to any source code for the Proprietary Software.
(b) The Company and the Subsidiary have a valid right, title and
interest in and to all intellectual property rights in the
Proprietary Software, including all copyrights (registered and
unregistered), trade secrets, and proprietary and confidential
information rights therein. The Company has developed the
Proprietary Software entirely through its own efforts for its own
account or has acquired prior to the date hereof valid right, title
and interest in the Proprietary Software and the Proprietary
Software is free and clear of all liens, claims and encumbrances.
The Disclosure Letter lists all parties other than employees of the
Company who have created any portion of, or otherwise have any
rights in or to, the Proprietary Software. The Company has secured
from all parties who have created any portion of, or otherwise have
any rights in or to, the Proprietary Software valid and enforceable
written assignments of any such work or other rights to the Company
and has provided true
<PAGE>
and complete copies of such assignments to Purchaser. The use of
the Licensed Software and the use and distribution of the
Proprietary Software does not breach any terms of any contract
between the Company and any third party. The Company has been
granted under the license agreements relating to the Licensed
Software (the " License Agreements") valid and subsisting license
rights with respect to all software comprising the Licensed
Software and such rights may be exercised in any jurisdiction in
which Company currently conducts its business or could reasonably
be expected to conduct its business in the future. The Company and
the Subsidiary are in compliance with each of the terms and
conditions of each of the License Agreements except to the extent
failure to so comply, individually or in the aggregate, would not
have a Material Adverse Effect. In the case of any commercially
available "shrink-wrap" software programs, the Company and the
Subsidiary have not made and is not using any unauthorized copies
of any such software programs and none of the employees, agents or
representatives of the Company and the subsidiary have made or are
using any such unauthorized copies, except as would not have a
Material Adverse Effect.
(c) The Proprietary Software and the Licensed Software do not infringe
the registered patent, copyright, moral rights or trade secret
rights or any other intellectual property or legal right of any
third party which may exist anywhere in the world.
(d) Neither the Company nor the Subsidiary has granted rights in the
Company Software to any third party except for rights granted to
value added resellers, distributors or customers in the ordinary
course of business pursuant to contracts with customers.
(e) The Company Software and the related computer hardware used by
Company in its operations (the "Company Hardware") are adequate in
all material respects, when taken together with the other assets,
resources and personnel of the Company and the Subsidiary, to run
the business of the Company and the Subsidiary in the same manner
as such business was operated during the year ended December 31,
1997, except as would not result in a Company Material Adverse
Effect. The Seller Disclosure Letter contains a summary description
of any problems experienced by Company in the past twelve months
with respect to the Company Software or Company Hardware and the
provision of services to Company clients which have arisen outside
the ordinary course of business and could result in a Company
Material Adverse Effect.
(f) The Proprietary Software is "Year 2000 Compliant". For the
purposes of this Agreement "Year 2000 Compliant" means:
(i) the functions, calculations, and other computing processes
of the Proprietary Software (collectively, "Processes")
perform in a consistent manner regardless of the date in time
on which the Processes are actually performed and regardless
of the date input to the Proprietary Software, whether before,
on, or after January 1, 2000 and whether or not the dates are
affected by leap years;
(ii) the Proprietary Software accepts, calculates, compares,
sorts, extracts, sequences, and otherwise processes date
inputs and date values, and returns and displays date values,
in a consistent manner regardless of the dates used, whether
<PAGE>
before, on, or after January 1, 2000;
(iii) the Proprietary Software will function without
interruptions caused by the date in time on which the
Processes are actually performed or by the date input to the
Proprietary Software, whether before, on, or after January 1,
2000;
(iv) the Proprietary Software accepts and responds to
two-digit year-date input in a manner that resolves any
ambiguities as to the century in a defined, predetermined, and
appropriate manner; and
(v) the Proprietary Software stores and displays date
information in ways that are unambiguous as to the
determination of the century.
(g) The Disclosure Letter includes a true and complete list and summary
of principal terms concerning support and maintenance agreements
relating to the Company Software, including without limitation the
identity of the parties entitled to receive such service or
maintenance, the term of such agreements and any other provisions
relating to the termination of such agreements.
2.17. Insurance
---------
The Company and/or the Subsidiary have all policies of insurance customarily
held by companies engaged in their respective types of business in France and
England. All such policies are in full force and effect, all premiums due
thereon have been timely and fully paid, and the Company and/or the Subsidiary
have complied in all material respects with the provisions of such policies.
2.18. Transactions with Affiliates.
----------------------------
Except as disclosed in the Disclosure Letter, no officer, director or holder of
5% or more of the outstanding share capital of the Company or the Subsidiary, or
any person or affiliated group with whom any such stockholder, officer or
director has any direct or indirect relation by blood, marriage or adoption, or
any entity in which any such person, owns (other than through a publicly held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is beneficially
owned by all such persons) has any beneficial interest in:
(a) any contract, arrangement or understanding or any related series of
the same involving an aggregate consideration in excess of FF
100.000 with, or relating to, the business or operations of the
Company or the Subsidiary;
(b) any loan, arrangement, understanding, agreement or contract or any
related series of the same for or relating to indebtedness of the
Company or the Subsidiary in excess of FF 100,000 in the aggregate;
or
(c) any property or related group of properties with an aggregate value
of at least FF 100,000 (real, personal or mixed), tangible or
intangible, used or currently intended
<PAGE>
to be used in, the business or operations of the Company or the
Subsidiary.
2.19. Customers.
---------
The Disclosure Letter includes
(a) a list of all customers of the Company and the Subsidiary from whom
payments were received which equaled or exceeded FF 1,000,000 for
the fiscal year ended on December 31, 1997 or from whom payments
are projected to equal or exceed such amount for the current fiscal
year (collectively, the "Significant Customers");
(b) a summary of existing contractual relations with all Significant
Customers; and
(c) a statement of revenues realized from each of the Significant
Customers during the fiscal year 1997.
Except as set forth on the Seller Disclosure Letter, the Representing Seller has
no knowledge that any of the Significant Customers intends to terminate or
otherwise modify adversely its relationship with the Company or the Subsidiary
or to materially decrease its purchases of goods or services from the Company
and the subsidiary . The Company and the subsidiary have maintained its customer
lists and related information on a confidential and proprietary basis and have
not granted to any third party any right to use such customer lists for any
purpose unrelated to the business of the Company or the Subsiadiry.
2.20. Brokers, Finders and Investment Bankers.
---------------------------------------
Except as disclosed in the Disclosure Letter, the Representing Seller, nor the
Company nor the Subsidiary has employed any broker, finder or investment banker
or incurred any liability for any investment banking fees, financial advisory
fees, brokerage fees or finders' fees in connection with the transactions
contemplated hereby.
2.21. Banking Relationships.
---------------------
The Disclosure Letter sets forth a complete and accurate list of all banks,
savings and loan associations or other financial institutions with whom the
Company or the Subsidiary has checking accounts, safe deposit boxes or credit
lines, indicating in each case account numbers, if applicable, and the person or
person authorized to act or sign on behalf of the Company and the Subsidiary in
respect of any of the foregoing.
2.22. Payments.
--------
The Representing Seller has not, directly or indirectly, paid or delivered any
fee, commission or other sum of money or item or property, however
characterized, to any finder, agent, client, customer, supplier, government
official or other party, in the United States of America or any other country,
which is in any manner related to the business, assets or operations of the
Company, which is, illegal under any federal, state or local laws of the United
States of America (including without limitation the U.S. Foreign Corrupt
Practices' Act) or any other country having jurisdiction; nor has the
Representing Seller, participated, directly or indirectly, in any boycotts or
other similar practices affecting any of the Company's or the Subsidiary's
customers.
2.23. Disclosure.
----------
<PAGE>
No representation, warranty or covenant made by the Sellers in this Agreement,
the Seller Disclosure Letter or the Exhibits attached hereto contains an untrue
statement of a fact or omits to state a material fact required to be stated
herein or therein or necessary to make the statements contained herein or
therein not misleading. There is no fact, event or condition that Sellers have
not disclosed in writing to Purchaser which could reasonably be anticipated to
have a Company Material Adverse Effect.
2.24. Government Grants.
-----------------
The Disclosure Letter describes all grants subsidies or financial assistance
applied for or received by the Company or the Subsidiary from any Governmental
Authority or from the European Community which are material to the conduct of
the Company's or the Subsidiary's respective business. Neither the Company nor
the Subsidiary has done or omitted to do any act or thing which could reasonably
be expected to result in all or part of any investment grant, employment subsidy
or other similar payment made or due to be made to it becoming repayable or
being forfeited or withheld in whole or in part.
ARTICLE III
-----------
Survival of Representations and Warranties and Indemnification
--------------------------------------------------------------
3.1. Indemnification
---------------
Each Seller agrees with Purchaser, for a period of three (3) years as from the
Closing Date, to indemnify and hold indemnified the Company, the Subsidiary or
the Purchaser -at the Purchaser's sole option, in accordance with this Article
III, against and in respect of the following (the "Damages") :
(a) any and all judgments, costs, losses, damages, deficiencies,
debts, liabilities or expenses (whether or not arising out of
third party claims) caused by, resulting or arising from or
otherwise relating to the breach of any representation or
warranty of the Representing Seller set forth in this Agreement;
and
(b) any and all actions, suits, proceedings, claims, liabilities,
demands, assessments, judgments, costs and expenses, including
reasonable attorneys' fees in relation to the business of the
Company or the Subsidiary other than resulting from the
misconduct or negligence of the Purchaser.
(c) any reduction in the value of any assets or any increase in any
liabilities of the Company and its Subsidiary as at December 31,
1997, which in the aggregate results in a reduction of the net
asset value.
3.2. Tax indemnity
-------------
3.2.1. In addition and without prejudice to the rights of the Purchaser
under Section 3.1, but subject to the following provisions of this
Clause, the Sellers agree with the Purchaser fully to indemnify and hold
indemnified the Company or the Purchaser - at the Purchaser's
<PAGE>
sole option - on demand by the Purchaser against (and for such purpose
shall pay to the Company, the Subsidiary or the Purchaser an amount
equal to) :
(a) any Tax Liability of the Company and/or its Subsidiary, arising
in respect of or in connection with or in consequence of :
(i) any income, profit or gain actually or deemed or treated for
tax purposes as having been earned, accrued or received on or
before December 31, 1997, but not timing differences; and/or
(ii)any event occurring or entered into or deemed for any tax
purposes to have occurred or to have been entered into on or
before December 31, 1997.
(b) all costs, expenses and other liabilities incurred by the
Purchaser and/or the Company and/or its Subsidiary in connection
with any such Tax Liability as it is mentioned in the above
paragraph.
3.2.2. "Tax Liability" shall include both liabilities of the Company to
make actual payments of tax and also :
(a) the loss, or the setting off against income, profits or gains, of
any Tax Relief which would have been available to the relevant
company, and which has been taken into account in computing (and
so reducing) any provision for tax which appears in the Financial
Statements (or which, but for the presumed availability of such
Tax Relief, would have appeared in the Financial Statements);
(b) the loss of a right to repayment of a Tax Relief which has been
treated as an asset of the Company and/or its Subsidiary in
preparing the Financial Statements or the setting off of any such
Tax Relief against any actual Tax Liability for which the
Purchaser would, but for that setting off, have been able to make
a claim against the Seller under Clause 3.2.1.; and
3.2.3. For the purposes of this Clause 3.2:
(a) in determining the liability of the Sellers account shall be taken
of any Tax Relief which, in either case, arises wholly or mainly
by reason of events occurring after December 31, 1997. Accordingly
where any Tax Liability in respect of which the Seller is liable
under Clause 3.2.1. is, or can be, reduced or prevented from
arising by virtue of any such Tax Relief, the Seller shall
nevertheless be liable in respect of such Tax Liability as if an
actual payment of tax had been made and in any event without
regard to such Tax Relief; and
(b) It has been agreed by the Sellers the limitation on Indemnity is
not applicable under the Tax Indemnity Clause even if it is
provided otherwise in this Agreement.
3.2.4. In the event of a claim made by the Purchaser in application of
Article 3.2.1. above which gives rise to a liability by the Sellers to
make a payment to the Purchaser and/or the Company and/or its Subsidiary,
the due date of making the payment shall be:
(a) in a case which involves an actual payment of tax by the Company
and/or its Subsidiary, fifteen (15) business days after service by
the Purchaser of a written
<PAGE>
demand therefore, in order to avoid incurring a liability to
interest or a charge or penalty in respect of that Tax Liability;
however when the competent tax authorities are satisfied that a
bank guarantee can replace an actual payment of tax until the
first judgment by a court on the pending dispute or litigation,
the Sellers will organize that this guarantee is set-up at his
sole expense.
(b) in other cases, the date upon which the Company has lost the right
to use the relevant Tax Relief as a result of the final settlement
of a tax claim by the tax authorities or as a result of the final
judgment by a court on the pending dispute or litigation.
3.2.5. The Purchaser shall not be entitled to claim any indemnification
under Clause 3.2.1. if and to the extent that sufficient provisions or
reserves for tax are booked in the Financial Statements.
3.2.6. Amounts due by the Sellers shall be subject to interest for late
payment at a rate equivalent to PIBOR 3 months plus two (2) per cent;
interest shall begin to accrue from the date, fifteen (15) days after the
date on which the Seller has been requested to make a payment and shall
be computed until its effective payment date.
3.2.7. All sums payable by the Sellers in respect of the REPRESENTATIONS
AND WARRANTIES or this Clause shall be paid at the Seller sole opinion,
either by cash or by returning a number of Consideration Shares
calculated on the basis of the arithmetic average of the Stock Exchange
Value in dollars per share of IMR Shares as reported on the NASDAQ
National Market for each of the seven (7) trading days immediately prior
to the date on which such payment is due.
3.2.8. Where the Company and/or its Subsidiary are entitled to recover
from some other person any sum with respect to a Tax Liability for
which a claim has been made under Clause 3.2.1. and an actual payment
has been made under Clause 3.2.4. then the Purchaser shall or shall
procure that the Company shall notify the Sellers and upon the Seller
first indemnifying the Purchaser or the Company and/or its Subsidiary
against any costs or expenses that may be incurred thereby, take all
appropriate steps to enforce that recovery. The Purchaser shall
account to the Sellers for any sums so recovered up to an amount paid
by the Seller pursuant to Clause 3.2.4.
3.3 Term of Indemnification Obligations
-----------------------------------
3.3.1 The right for Purchaser to make a claim under this Article III
shall lapse (a) 8 days after the third anniversary of the date of this
Agreement for all claims other than relating to Tax matters ; provided,
however, that the indemnification obligations shall not terminate as to
any claims asserted or notified prior to the end of such period : or (b)
on the date eight (8) days after the expiration of the statutes of
limitations applicable to the relevant Tax following which the Tax
authorities will no more be entitled to make any investigation,
adjustment, litigation, prosecution, or other claims or actions for tax
matters and relating to the period ending on the Closing Date.
3.3.2 If Purchaser becomes aware that it is entitled to make a claim
against Sellers, Purchaser shall give or procure that notice of the claim
(with such details as are available to Purchaser to reasonably identify
the subject matter thereof) is given to Sellers as soon as is reasonably
practicable and in any event within 30 days after Purchaser becomes so
<PAGE>
aware.
3.4. Defense of Third Parties Claims
-------------------------------
(a) If any action, suit, claim, proceeding, demand, assessment or
enforcement action is filed by a third party against Purchaser, the
Company or the Subsidiary which may give rise to a Damage
indemnifiable by Sellers hereunder, Purchaser shall give written
notice thereof to Sellers as soon as practicable (and in any event
within fifteen (15) days after the service of the citation or
summons).
(b) In the event that any Damage results from a demand or claim made by
third party ("Third Party Claims") and the Purchaser intends to
seek indemnity pursuant to this Article 3.4., the Purchaser shall
notify the Sellers forthwith, and, in any event, within fifteen
(15) days of the Purchaser becoming aware of the Third Party Claim.
(c) Regarding Third Party Claims which could give rise to Damage:
(i) The Purchaser shall consult with the Seller with regard to
possible lines of defense and argument, strategy and in general,
all relevant and significant information concerning the claim;
however,
(ii) Only the Purchaser shall have the right to settle, negotiate
or otherwise conclude the matters concerning such demands or claims
and the Damage resulting from such settlement or negotiation shall
be indemnified under the terms of Article 3 where Seller shall have
made a reasonable proposal in light of the legal issue involved,
the interest of the business of the Company and of the Subsidiary
concerned which the Purchaser shall have decided not to follow.
For all litigation relating to Third Party Claims which could give
rise to a Damage, the Purchaser shall have the right to choose and
appoint the lawyer representing the interests of the Company and or
the relevant Subsidiary.
For purposes of the foregoing:
(i) Purchaser shall give and procure that the Company and/or the
Subsidiary shall give Sellers such reasonable cooperation, access,
information and assistance as shall be necessary for Sellers to
evaluate, resist to or otherwise deal with such third party claim;
(ii) Sellers shall keep Purchaser fully informed of all matters
relating to the third party claim, the dispute in connection
therewith or any appeal, negotiations or other proceedings
conducted pursuant to this Article 3.4, and shall provide
Purchaser with copies of all correspondence and other documents
relating thereto. Sellers shall first submit to Purchaser all
communications (whether oral or writing) relating to any
proceedings conducted under this Article 3.4 for prior approval by
Purchaser, which approval shall not be unreasonably withheld or
delayed.
d) The provisions of this clause 3.4 also applies to tax claims.
<PAGE>
3.5. Time for Payment
----------------
Any indemnity payable under this Article III will be paid within fifteen (15)
days of such indemnity becoming payable either by cash or by returning a number
of Consideration Shares calculated on the basis of the arithmetic average of the
Stock Exchange Value in dollars per share of IMR Shares as reported on the
NASDAQ National Market for each of the seven (7) trading days immediately prior
to the date on which such payment is due.
3.6 Limitations on Indemnity
------------------------
3.6.1 The recourse of Purchaser against each Seller with respect to
indemnification obligations under this Agreement shall be
limited in all respects as provided in this Article III.
3.6.2 No claim may be made against any Seller for indemnification,
whether pursuant to this Agreement or otherwise, with respect to
any Damage, unless and until :
(a) such Damage exceeds FF 300.000 ; and
(b) the aggregate of all indemnifiable Damages pursuant to clause
(a) exceeds a threshold of FF 3.000.000 whereupon the respective
responsible Seller shall only be required to pay or be liable
for payment to the Purchaser of such Seller's pro rata share of
such indemnifiable Damages. The aggregate indemnification
obligations of all Sellers to the Purchaser, whether pursuant to
this Agreement or otherwise, shall be limited in any event to an
aggregate ceiling of FF 72.000.000 (the "Ceiling"), and the
indemnification obligation at each Seller to the Purchaser shall
be limited to such Seller's pro rata share of the Ceiling. The
Purchaser shall have no indemnification claim with respect to
any individual Damage, regardless of the amount of such Damage,
where the aggregate of all Damages for which the Purchaser has
received indemnification from the Sellers or any one or more of
them pursuant to this Agreement has reached the Ceiling.
3.6.3 The amount of any indemnity for purposes of calculating the
limits on any Seller's indemnification obligations and for
purposes of any payment to the Purchaser by the respective
Seller under Article III, shall be calculated as an amount net
of :
(a) any reserves or provisions made with respect to the applicable
Damage in the Financial Statements ;
(b) any increase in the assets or decrease in the liabilities as
set forth in the Financial Statements ;
(c) any tax benefit realizable by the Purchaser or any of the
Purchaser's Affiliates by reason of deductibility of such Damage
(determined by multiplying such deductible amount by the
applicable tax rate at the time of the event or omission in
contradiction with the Representations and Warranties made by
the Seller on Closing Date) ; and
<PAGE>
(d) any insurance proceeds or other indemnity, contribution or other
similar payment recoverable by Purchaser or any of its Affiliate
entities from any third party with respect to such Damage.
3.7. Dispute Indemnification
-----------------------
Any dispute between the parties relating to a Damage resulting of
a breach of representation and warranty which cannot be resolved
by them within thirty (30) days after receipt by the Sellers of
the notice of breach of representations and Warranties may be
referred either by the Purchaser or by the Sellers to arbitration
pursuant to Article 7.9. hereunder.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby makes and gives the following representations and warranties to
Sellers :
4.1 Good and Valid Title of the Considerations Shares
-------------------------------------------------
Upon delivery of the Consideration Shares to Sellers at the Closing in
accordance with Article I, each such Seller will acquire good and valid title,
free of any Encumbrance other than the matters referred to in Article V.
4.2 Organization of Purchaser ; Valid and Binding Agreement
-------------------------------------------------------
Purchaser is a corporation duly incorporated and registered, validly existing
and in good standing under the laws of the State of FLORIDA. This Agreement has
been duly executed and delivered by Purchaser and constitutes the legal, valid
and binding agreement of Purchaser, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency and other similar laws
of general application now or hereafter affecting the enforceability of
creditor's rights generally.
4.3 Securities Filing
-----------------
(a) Set forth in Annex 4 are true and complete copies of (i) Purchaser's
annual report on Form (the "10-K") for the year ended on December 31, 1997 as
filed with the U.S. Securities and Exchange Commission (the "SEC"), (ii) all
proxy statements relating to meetings of Purchaser's stockholders held during
the year 1998, and (iii) all other reports, registration statements and
prospectuses filed by Purchaser with the SEC in accordance with applicable U.S.
federal securities laws and regulations since December 31, 1997. As of their
respective dates, such reports, registration statements and prospectuses
complied in all material respects with applicable SEC requirements and did not
contain any untrue statement of a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading.
(b) Purchaser has filed and is current in filing all applicable filings
with any state or local securities divisions.
<PAGE>
4.4 Financial Statements
--------------------
The financial statements contained in the 10-K and in Purchaser's quarterly
report on Form 10-Q for the quarter ended March 31, 1998 have been prepared from
and are in accordance with, the books and records of Purchaser and present
fairly, in all material respects, the financial condition and results of
operations of Purchaser as of and for the periods indicated therein, in each
case in accordance with U.S. GAAP consistently applied during the periods
covered thereby, except to the extent otherwise disclosed in such financial
statements.
4.5 Absence of Restrictions and Conflicts
-------------------------------------
The execution, delivery and performance of this Agreement, the consummation of
the transactions contemplated by this Agreement and the fulfillment of and
compliance with the terms and conditions of this Agreement do not and will not,
with the passing of time or the giving of notice or both, violate or conflict
with, constitute a breach of or default under, result in the loss of any
material benefit under, or permit the acceleration of any obligation under:
(a) any term or provision of the Articles of Incorporation or other
governing documents of Purchaser,
(b) any material contract to which Purchaser is a party or by which it
or its assets are bound,
(c) any judgment, decree or order of any court or governmental
authority (in the United States or elsewhere) to which Purchaser is
a party or by which it or any of its properties is bound, or
(d) any statute, law, regulation or rule applicable to Purchaser.
No consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental authority with respect to Purchaser is required in
connection with the execution or performance of this Agreement by Purchaser, the
failure to obtain which would have a material adverse effect on Purchaser's
ability to enter into this Agreement or to perform its obligations hereunder.
4.6 Purchaser Stock Option Plan
---------------------------
Annex-sets forth a true and correct copy of the Stock Option Plan under which
Messrs. Jean-Rene Lyon and Didier Lamour may be entitled to benefits from and
after the Closing Date. The Stock Option Plan has been duly and validly adopted
by Purchaser and is binding and enforceable against Purchaser in accordance with
its terms.
4.7 Absence of Material Adverse Change or Other Events
--------------------------------------------------
Since the date of the 10-K, (i) the business of Purchaser and its
Affiliates has been conducted in the ordinary course of business
consistent with past practice; and (ii) there has not been and, to
Purchaser's knowledge, there is not expected to be, any materially
adverse change in the financial condition, results of operations,
operations, prospects or business of Purchaser and its Affiliates.
<PAGE>
ARTICLE V
---------
Specific Undertaking
--------------------
5.1 Considering that Purchaser is a Company listed on the NASDAQ National Market
and that part of the Purchase Price shall be paid by issue of IMR Shares in
accordance with Article 1.3.each Seller, individually for himself only, agrees
as follows :
(a) Each Seller recognizes that the Consideration Shares are
"restricted securities" as defined in Rule 144, promulgated under
the U.S. Securities Act of 1933, as amended (the "Securities Act")
and are not being registered under the Securities Act or under the
securities laws of any state, country or other jurisdiction in
reliance upon an exemption from the Securities Act which is
predicated, in part, on the representations and agreements of
Sellers set forth in this Agreement.
(b) Each Seller represents and warrants to Purchaser that such Seller
is an "accredited investor" as that term is defined in Rule 501(a)
of the Securities Act and that the Consideration Shares are being
acquired solely for such Seller's own account for investment and
not with a view to, or for offer or resale in connection with, a
distribution thereof within the meaning of the Securities Act.
Such Seller understands that the effect of this representation and
warranty is that the Consideration Shares must be held
indefinitely unless subsequently registered under the Securities
Act or an exemption from such registration is available at the
time for any proposed sale or other transfer thereof.
(c) Each Seller represents and warrants to Purchaser such Seller is
not acquiring the Consideration Shares for the account or benefit
of: (i) any natural person resident in the United States; (ii) any
partnership or corporation organized or incorporated under the
laws of the United States; (iii) any estate of which any executor
or administrator is a U.S. Person (as defined below); (iv) any
trust of which any trustee is a U.S. Person, (v) any agency or
branch of a foreign entity located in the United States; (vi) any
non-discretionary account or similar account (other than an estate
or trust) held by a "dealer" (as defined in the Securities Act) or
other fiduciary for the benefit or account of a U.S. Person; (vii)
any discretionary account or similar account (other than an estate
or trust) held by a dealer or other professional fiduciary
organized or incorporated or (if an individual) resident in the
U.S.; or (viii) any partnership or corporation organized or
incorporated under the laws of any foreign jurisdiction by a U.S.
Person principally for the purpose of investing in securities not
registered under the Securities Act unless it is organized or
incorporated, and owned, by accredited investors (as defined in
Rule 501 (a) under the Securities Act) who are not natural
persons, estates or trusts (any of (i) through (viii) above are
defined herein as a "U.S. Person"). In addition to the
restrictions on transfer set forth herein, each Seller agrees that
he will not transfer the Consideration Shares into the United
States or to a U.S. Person for a period of one year after the date
hereof (the "Holding Period"), and that such Seller will not
engage in any hedging transactions with respect to the
Consideration Shares during the Holding Period, except, in each
case, in compliance with the Securities Act.
<PAGE>
Each Seller further represents and warrants that the offer to
acquire the Consideration Shares was not made to him in the U.S.,
and at the time the offer was accepted by such Seller, such Seller
was outside the United-States.
(d) Each Seller acknowledges and agrees that , Purchaser is under no
obligation to file a registration statement under the Securities
Act covering the Consideration Shares or to take any other action
to enable such Seller to transfer or otherwise dispose of the
Consideration Shares. Each Seller represents that he consulted
with counsel in regard to the Securities Act and that he is fully
familiar with the circumstances under which he is required to hold
the Consideration Shares and the limitations upon the transfer or
other disposition thereof. Each Seller acknowledges that Purchaser
is relying upon the truth and accuracy of the foregoing
representations and warranties in issuing the Consideration Shares
under the Securities Act. Each Seller agrees to indemnify and hold
Purchaser harmless against all liabilities, costs and expenses,
including reasonable attorneys' fees, incurred by Purchaser as a
result of any sale, transfer or other disposition by such Seller
in violation of the Securities Act. Each Seller acknowledges that
Purchaser will not be obligated to honor or register the transfer
of any Consideration Shares in violation of this Article 5 .
(e) Each Seller agrees that he will not attempt to pledge, transfer,
convey or otherwise dispose of the Consideration Shares prior to
the expiration of the Holding Period. Following the expiration of
such Holding Period, any disposition of the Consideration Shares
shall be made only upon receipt by Purchaser of an opinion of
counsel satisfactory to Purchaser that such disposition complies
with all applicable securities laws and only (i) pursuant to the
registration requirements under the Securities Act, or (ii)
pursuant to an available exemption, from registration under the
Securities Act. Each Seller consents to the placement of legends
on any certificates or documents any of the Consideration Shares
stating that they have not been registered under the Securities
Act or any applicable securities laws of other jurisdictions and
setting forth or referring to such holding Period and offering
restrictions. The legend will also state that the holder of the
Consideration Shares shall not engage in any hedging transactions
related to such shares during the Holding Period, except in
compliance with the Securities Act. Each Seller is aware and
agrees that Purchaser will make a notation in its appropriate
records, and notify its transfer agent, with respect to the
restrictions on the transferability of the Consideration Shares.
The legend imprinted on any Seller's certificates shall be removed
and Purchaser shall issue a new certificate without such legend to
the holder of such securities upon the delivery by any Seller to
Purchaser of an opinion of counsel to such Seller which opinion
shall be satisfactory to Purchaser that such legend is no longer
required under the Securities Act.
ARTICLE VI
----------
Restrictive Covenants
---------------------
6.1 Non-Competition
---------------
(a) For a period of three (3) years following the Closing Date (or, if
this period shall be unenforceable by law, then for such shorter period as shall
be enforceable), either Jean-Rene Lyon nor Didier Lamour will engage, directly
or indirectly, including any active participation and/or any management
position, in any activity with any entity which is competitive with the current
business of the Company or the Subsidiary.
(b) For a period of three (3) years following the Closing Date (or, if
this period shall be unenforceable by law, then for such short a period as shall
be enforceable) Pierre Barberis will not hold any position as an officer in
addition to those which he already holds as of the Closing Date or exercise
control directly or indirectly or make any undue and unfair use of information,
which Pierre Barberis would not have had access to but for his position as
shareholder and director of the Company, in any activity with any entity which
is competitive with the current business of the Company or the Subsidiary.
6.2 Non-Sollicitation of Customers
------------------------------
For a period of three (3) years following the Closing Date (or, if this period
shall be unenforceable by law, then for such shorter period as shall be
enforceable), no Seller will contact with a view toward selling any product
competitive with any product sold or proposed to be sold by the Company or the
Subsidiary as of the date of this Agreement, any person, firm, association or
corporation : (a) to which the Company has sold any product, (b) which such
Seller solicited, contacted or otherwise dealt with on behalf of the Company or
the Subsidiary or which was a customer or prospective customer of the Company or
the Subsidiary during the three (3) years preceding the date of this Agreement.
No Seller shall , directly or indirectly, make any such contact, either for the
benefit of such Seller or for the benefit of any other person, firm, association
or corporation, and such Seller shall not assist any such person, firm,
association or corporation in any manner to make any such contact.
6.3 Non-solicitation of employees and consultants
---------------------------------------------
For a period of three (3) years following the Closing Date (or, if this period
shall be unenforceable by law, then for such shorter period as shall be
enforceable), the Seller shall not, directly or indirectly, solicit any
full-time or part-time employees of the Company or its Subsidiary or the
Purchaser.
<PAGE>
ARTICLE VII
-----------
Miscellaneous Provisions
------------------------
7.1 Governing Law. This Agreement will be governed in all respects, including
as to validity, interpretation, and effect, by the laws of the Republic
of France, without giving effect to the conflict of laws rules thereof.
7.2 Headings. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or
interpretation on any provision of this Agreement.
7.3 Notices. All communications provided for hereunder or desired to be given
hereunder will be in writing and will be deemed to be given upon receipt
of: hand delivery; certified or registered mail, return receipt
requested; or telecopier transmission with confirmation of receipt, as
follows:
(a) if to Sellers, addressed to:
Mr. Jean-Rene Lyon
4 rue de Montmorency
75003 Paris, France
Telecopy :01 42 61 06 78
Mr. Pierre Barberis
82 rue Charles Laffitte
92200 Neuilly-sur-Seine, France
Telecopy : 01 41 05 16 11
Miss. Marie-Amelie Barberis
7, villa Emile Bergerat
92200 Neuilly sur Seine, France
Mr. Romain, Paul Barberis
14, Garcia Villa, San Lorenzo Village,
Makati, Metro Manilla, Phillipines
Mr. Didier Lamour
220 bis du Bois des Chartres
91220 Bretigny-sur-Marne, France
Telecopy : 01 53 45 67 59
<PAGE>
(b) if to Purchaser, addressed to:
INFORMATION MANAGEMENT RESOURCES, INC.
26750 US Highway 19 N, Suite 500
Clearwater, FL 33761
United States of America
Attention: Mr. Dilip Patel, Vice President - General Counsel
Telecopy: 1 813 725 12 57
or at such other place or places or to such other Persons as will be designated
in writing by any party hereto in a notice to the others given in the manner
herein above provided.
7.4 Counterparts.
------------
This Agreement may be executed in two or more counterparts, each of which will
be deemed to be an original. The English language version of this Agreement will
be the definitive version of this Agreement for all purposes.
7.5 Entire Agreement.
----------------
This Agreement embodies the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the Parties relating to such subject matter.
7.6 Amendments.
----------
This Agreement may be amended only by a written instrument executed by the
Parties or their respective authorized successors or assigns.
7.7 Parties in Interest; Assignment.
-------------------------------
This Agreement will inure to the benefit of and be binding upon each Seller,
Purchaser and their respective successors. Nothing in this Agreement, express or
implied, is intended to confer upon any Person not a party to this Agreement any
rights or remedies under or by reason of this Agreement. No Party to this
Agreement may assign or delegate all or any portion of its rights, obligations
or liabilities under this Agreement without the prior written consent of the
other Parties.
7.8 Severability; enforcement.
-------------------------
In the event that any provision of this Agreement will be deemed invalid or
unenforceable by any tribunal or arbitrator with competent jurisdiction over
this Agreement, the remainder of this Agreement will remain in full force and
effect and the affected provision in such jurisdiction will be replaced with a
valid, enforceable provision most closely reflecting the Parties' intent under
this Agreement so that it can be reasonably assumed that the Parties would have
contracted on the basis of such new provision. The provisions of this Agreement
will remain in full force and effect in any other jurisdiction without such
replacement.
7.9 Arbitration.
-----------
<PAGE>
Any dispute, claim or controversy arising out of or relating to this Agreement,
or the interpretation or breach thereof, will be referred to and finally settled
by arbitration under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce, by one or more arbitrators appointed in
accordance with such Rules. Judgement upon the award of the arbitrators may be
entered in any court having jurisdiction thereof or such court may be asked to
judicially confirm the award and order its enforcement, as the case may be. The
request for arbitration will not be made after the date when institution of
legal or equitable proceedings, based on such claim, dispute or other matter in
question, would be barred by the applicable statute of limitations. The place of
arbitration will be in Paris, France. English will be the language of the
arbitration. The arbitral procedure will be governed by French law. The
arbitrators will interpret this Agreement according to its meaning in the
English language.
7.10 Waiver.
------
The failure by any Party to enforce at any time any of the provisions of this
Agreement will in no way be construed to be a waiver of any such provision, nor
in any part thereof or of the right of such Party thereafter to enforce each and
every such provision. No waiver of any breach of or non-compliance with this
Agreement will be held to be a waiver of any other or subsequent breach or
non-compliance.
7.11 Costs.
-----
(a) At the Closing, Purchaser shall pay, upon presentation of
appropriate documentation, the commission of Seller's agent, the
fees and expenses of Seller's legal, financial and accounting
advisers incurred by Sellers and the Company in connection with
the transaction contemplated hereby up to a maximum of one
Million Dollars ($1,000,000). The reimbursement shall at the
option of Purchaser be either in FF or in USD converted into
French Francs based on the exchange rate of USD 1,00 = FF 6,00.
(b) Except as stated in (a) above, whether or not the transaction
contemplated by this Agreement is consummated, each of the
Parties shall bear its own costs arising out of and in connection
with this Agreement, the contract negotiations including the fees
and expenses of any accountants, lawyers, or other advisors
retained by such Party. Each Party shall pay any taxes for which
it may be liable as a result of the transfer of the Sale Shares.
<PAGE>
ARTICLE VIII
------------
Definitions
-----------
The terms defined in this Article VIII, whenever used in this
Agreement will have the respective meanings indicated below for all
purposes of this Agreement.
"Affiliate" means any Person or business which is less 50% or more
owned or controlled directly or indirectly by the Company.
"Anniversary Value" has the meaning set forth in Article 1.3.3.
"Agreement" means this Share Purchase Agreement, including the
Disclosure Letter and any annexes hereto, as the same may be amended
from time to time by a writing executed by all Parties.
"Ceiling" has the meaning set forth in Article 3.6.2.
"Closing" and "Closing Date" have the meaning set forth in Article
1.4.
"Company" has the meaning set forth in the preamble of this
Agreement.
"Considerations Shares" has the meaning set forth in Article 1.3.3.
"Control" (including, with correlative meanings, the terms
"controlled by" and "under common control with") as used with
respect to any Person, means the power to direct the management or
policies of such Person, whether through ownership of voting
securities, by contract or otherwise.
"Damage" has the meaning set forth in Article 3.1 .
"Disclosure Letter" has the meaning set forth in Article II.
"Encumbrance" means any mortgage, pledge, lien, deed of trust,
security interest, encumbrance, claim, charge, or any other
security, or promise of such security.
"FF" or "FRF" or "French Francs" means the lawful currency of the
Republic of France.
"Financial Statements" has the meaning set forth in Article 2.6.
"GBP" or "Sterling Pounds" means the lawful currency of the United
Kingdom.
"Holding Period" has the meaning set forth in Article 5
"Material Adverse Effect" means an impact on the ability of the
Company and/or the Subsidiary to operate in the same manner as prior
to this Agreement.
"Person" means an individual, company, corporation, partnership,
joint venture, trust or unincorporated organization or a
governmental authority.
"Sale Shares" has the meaning set forth in Article 1.1
<PAGE>
"Subsidiary" has the meaning set forth in the first paragraph of
this Agreement.
"Taxes" "tax" or "taxation" shall mean any forms of taxation
(including without limitation, corporate taxes and value added
taxes), duties (including without limitation, stamp duties and
customs duties), levies (including without limitation, withholding
taxes), social security payments of any jurisdiction whenever and
wheresoever charged, imposed or deducted, together with all costs,
charges, interest, penalties, fines and expenses incidental and or
relating or arising in connection with any such taxes, duties,
levies, social security payments, or the negotiation of any
settlement of any dispute as to the liability of any person therefor
or any actual claim in respect thereof.
"Tax Relief" means any relief, allowance or credit in respect of any
tax or any deduction in computing income, profits or gains for the
purposes of any tax, and, where appropriate, any right to repayment
of tax and any related interest and supplements, and any right to
minimize tax, including without limitation, ordinary losses brought
forward ("deficits ordinaires reportables"), evergreen losses
("amortissements reputes differes"), long-term capital losses
brought forward ("moins-values a long terme reportables", carry-back
receivable ("creance de report en arriere des deficits"), research
tax credit ("credit d'impot en faveur de la recherche"), training
tax credit ("credit d'impot formation), VAT credit ("credit de
TVA"), tax credit resulting from the cancellation of the one-month
lag period for VAT recovery ("creance nee de la suppression de la
regle du decalage d'un mois en matiere de TVA"), tax credit attached
from French source dividends ("avoirs fiscaux") and tax credits
attached to foreign source income ("credits d'impots attaches aux
revenus de source etrangere")
"U.S. GAAP" means the United States' generally accepted accounting
principles.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
INFORMATION MANAGEMENT RESOURCES, INC.
/s/ John Hindman
- --------------------------------
Name: John Hindman
Title: Chief Operating Officer
/s/ Jean-Rene LYON
- --------------------------------
Jean-Rene LYON
/s/ Pierre BARBERIS
- --------------------------------
Pierre BARBERIS
/s/ Marie-Amelie BARBERIS
- --------------------------------
Marie-Amelie BARBERIS
/s/ Romain BARBERIS
- --------------------------------
Romain BARBERIS
/s/ Didier LAMOUR
- --------------------------------
Didier LAMOUR
<PAGE>
ANNEXES
ANNEX 1 Employment contracts with Jean Rene Lyon and Didier Lamour
ANNEX 2 Disclosure Letter
ANNEX 3 Financial Statements
ANNEX 4 Securities Filing
