SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
IMRGLOBAL CORP.
(Name of Issuer)
Common Stock
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(Title of Class of Securities)
45675E 10 8
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(CUSIP Number)
John R. Fallon, Jr., Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
(212) 424-8279
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 12, 1999
------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
<PAGE>
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CUSIP No. 45675E 10 8 SCHEDULE 13D Page 2 of 61
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1 NAME OF REPORTING PERSON
Bridge East Capital, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
98-0204614
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
7 SOLE VOTING POWER
800,000
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 800,000
PERSON
WITH 10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
800,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.07%
14 TYPE OF REPORTING PERSON
PN
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CUSIP No. 45675E 10 8 SCHEDULE 13D Page 3 of 61
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1 NAME OF REPORTING PERSON
BV-IT Global LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
54-1962720
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
1,866,667
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,866,667
PERSON
WITH 10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,866,667
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.84%
14 TYPE OF REPORTING PERSON
OO
<PAGE>
Item 1. Security and Issuer
This initial Schedule 13D relates to the Common Stock, par value $.10 per
share ("IMR Common Stock"), of IMRglobal Corp., a Florida corporation (the
"Issuer"). The address of the principal executive offices of the Issuer is 100
South Missouri Avenue, Clearwater, Florida 33756.
Item 2. Identity and Background
(a), (b) and (c) This Statement on Schedule 13D is being filed jointly on
behalf of (i) Bridge East Capital, L.P., a Cayman Islands limited partnership
("Bridge East"), the principal business and offices of which are located at c/o
W.S. Walker & Co., Caledonian House, Mary Street, Georgetown, Grand Cayman,
Cayman Islands, BWI, and (ii) BV-IT Global LLC ("BV-IT," together with Bridge
East, collectively, the "Reporting Persons"), a Delaware limited liability
company, the principal business and offices of which are located at 8065
Leesburg Pike, Suite 140, Vienna, Virginia 22182. The Reporting Persons are
principally engaged in making and holding investments in domestic and foreign
businesses.
Set forth in Appendix A attached hereto and incorporated herein by
reference are the names, addresses and principal businesses or occupations of
each person required to be disclosed in response to Item 2 and General
Instruction C to Schedule 13D.
(d) During the last five years, the Reporting Persons have not been, and to
the best knowledge of the Reporting Persons none of the persons whose names are
set forth in Appendix A have been, convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) During the last five years, the Reporting Persons have not been, and to
the best knowledge of the Reporting Persons none of the persons whose names are
set forth in Appendix A were, a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) All of the persons listed in Appendix A who are natural persons are
citizens of the United States, except that Kamal Bahamdan is a citizen of Saudi
Arabia.
Item 3. Source and Amount of Funds or Other Consideration
The acquisition of 800,000 shares of IMR Common Stock by Bridge East was
financed with capital contributions from the limited partner of Bridge East.
The acquisition of 1,866,667 shares of IMR Common Stock by BV-IT was
financed with capital contributions from the members of BV-IT.
Page 4
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Item 4. Purpose of Transaction
On November 12, 1999, Bridge East acquired 800,000 shares of IMR Common
Stock from A&S Family Limited Partnership ("A&S") and Satish K. Sanan ("Sanan")
for an aggregate purchase price of Six Million Dollars ($6,000,000), pursuant to
a Stock Purchase Agreement (the "Stock Purchase Agreement"), dated November 12,
1999, among Bridge East Management, LLC, Bridge East, BV-IT, A&S and Sanan, a
copy of which is attached hereto as Exhibit 2 and which is incorporated herein
by reference. The IMR Common Stock was acquired in the ordinary course of Bridge
East's business. The purpose of Bridge East's acquisition is to achieve
investment returns and to this end Bridge East may acquire additional IMR Common
Stock or may dispose of all or a portion of the IMR Common Stock they now hold
or may hereafter purchase. In that connection, Bridge East may from time to time
communicate to the Issuer and others its position regarding the Issuer's
business plans.
On November 12, 1999, BV-IT acquired 1,866,667 shares of IMR Common Stock
from A&S and Sanan for an aggregate purchase price of Fourteen Million Dollars
($14,000,000), pursuant to the Stock Purchase Agreement. The IMR Common Stock
was acquired in the ordinary course of BV-IT's business. The purpose of BV-IT's
acquisition is to achieve investment returns and to this end BV-IT may acquire
additional IMR Common Stock or may dispose of all or a portion of the IMR Common
Stock they now hold or may hereafter purchase. In that connection, BV-IT may
from time to time communicate to the Issuer and others its position regarding
the Issuer's business plans.
Notwithstanding the foregoing, for a period of one hundred eighty (180)
days after November 12, 1999, the Reporting Persons, in the aggregate, may only
sell up to twenty-five per cent (25%) of the total shares of IMR Common Stock
purchased under the Stock Purchase Agreement.
Item 5. Interest in Securities of the Issuer
(a) As of the date hereof, Bridge East beneficially owns 800,000 shares of
IMR Common Stock. This position represents 2.07% of all of the IMR Common Stock
outstanding as of November 5, 1999 as reported in the Issuer's Form 10-Q for the
quarterly period ended September 30, 1999.
As of the date hereof, BV-IT beneficially owns 1,866,667 shares of IMR
Common Stock. This position represents 4.84% of all of the IMR Common Stock
outstanding as of November 5, 1999 as reported in the Issuer's Form 10-Q for the
quarterly period ended September 30, 1999.
Except as disclosed in this Item 5(a), neither Bridge East nor, to the best
of its knowledge, any of the persons listed in Appendix A, beneficially owns any
shares of IMR Common Stock.
Page 5
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Except as disclosed in this Item 5(a), neither BV-IT nor, to the best of
its knowledge, any of the persons listed in Appendix A, beneficially owns any
shares of IMR Common Stock.
(b) The responses of the Reporting Persons to (i) Rows (7) through (10) of
the cover pages of this Schedule 13D and (ii) Item 5(a) hereof are incorporated
herein by reference.
Except as disclosed in this Item 5(b), neither Bridge East nor, to the best
of its knowledge, any of the persons listed in Appendix A, presently has the
power to vote or to direct the vote or to dispose or direct the disposition of
any of the shares of IMR Common Stock which it may be deemed to beneficially
own.
Except as disclosed in this Item 5(b), neither BV-IT nor, to the best of
its knowledge, any of the persons listed in Appendix A, presently has the power
to vote or to direct the vote or to dispose or direct the disposition of any of
the shares of IMR Common Stock which it may be deemed to beneficially own.
(c) No shares of IMR Common Stock have been purchased or otherwise acquired
by Bridge East or, to the best of its knowledge, any of the persons listed in
Appendix A, during the past 60 days, other than as described herein.
No shares of IMR Common Stock have been purchased or otherwise acquired by
BV-IT or, to the best of its knowledge, any of the persons listed in Appendix A,
during the past 60 days, other than as described herein.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer
The Reporting Persons are parties to the Stock Purchase Agreement described
in Item 4 above and to a Registration Rights Agreement among the Reporting
Persons and the Issuer, dated November 12, 1999 (the "Registration Rights
Agreement"). The Stock Purchase Agreement contains the material terms and
conditions relating to the purchase of shares of IMR Common Stock by the
Reporting Persons, including certain representations and warranties and
indemnification provisions. In addition, the Stock Purchase Agreement provides
that, for a period of one hundred eighty (180) days after November 12, 1999, the
Reporting Persons, in the aggregate, may only sell up to twenty-five percent
(25%) of the total shares of IMR Common Stock purchased under the Stock Purchase
Agreement (the "Lock-Up").
Pursuant to the Registration Rights Agreement, a copy of which is attached
hereto as Exhibit 3 and is incorporated herein by reference, the Issuer has
agreed to file a registration statement with respect to the shares acquired by
the Reporting Persons pursuant to the Stock Purchase Agreement.
Page 6
<PAGE>
An agreement between the Reporting Persons with respect to the filing of
this Schedule 13D and any future amendments to the Schedule 13D is attached
hereto as Exhibit 1.
Each Reporting Person has sole voting and dispositive power over the shares
of IMR Common Stock indicated in Rows 7-10 of the cover pages of this Schedule
13D. However, the Reporting Persons coordinated their efforts in negotiating the
terms and conditions of (i) the Stock Purchase Agreement, (ii) the Lock-up; and
(iii) the terms and conditions of the Registration Rights Agreement. In
addition, the managing member of BV-IT indirectly owns a minority equity
interest in the general partner of Bridge East.
As a result of the relationships described in this Item 6, the Reporting
Persons may be deemed to be a "group" within the meaning of Rule 13d-5 under the
Securities and Exchange Act of 1934, as amended, and, in such event, each member
of the group would be deemed to beneficially own all shares of IMR Common Stock
held, in the aggregate, by all group members. Notwithstanding the foregoing,
each Reporting Person disclaims membership in a group and disclaims beneficial
ownership of the shares of IMR Common Stock held by any other person.
Except as disclosed in this Item 6, neither Bridge East nor, to the best of
its knowledge, any of the persons listed in Appendix A, are parties to any
contracts, arrangements, understandings or relationships (legal or otherwise)
with respect to any securities of the Issuer.
Except as disclosed in this Item 6, neither BV-IT nor, to the best of its
knowledge, any of the persons listed in Appendix A, are parties to any
contracts, arrangements, understandings or relationships (legal or otherwise)
with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits
Exhibit 1 Joint Filing Agreement, dated November 19, 1999, by and between Bridge
East Capital, L.P. and BV-IT Global LLC.
Exhibit 2 Stock Purchase Agreement, dated November 12, 1999, by and among A&S
Family Limited Partnership, Satish K. Sanan, Bridge East Capital,
L.P., BV-IT Global LLC and Bridge East Management, LLC.
Exhibit 3 Registration Rights Agreement, dated November 12, 1999, by and among
IMRglobal Corp., Bridge East Capital, L.P., and BV-IT Global LLC.
Page 7
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Dated: November 22, 1999
BRIDGE EAST CAPITAL, L.P.
By: Bridge East Partners LDC
its General Partner
By: /s/ John P. Oswald
Name: John P. Oswald
Title: Director
BV-IT GLOBAL LLC
By: /s/ Alex Vahabzadeh
Name: Alex Vahabzadeh
Title: Managing Member
<PAGE>
Appendix A
The managing member of BV-IT is Alex Vahabzadeh. His business address is
c/o BV Investment Management LLC, 8065 Leesburg Pike, Suite 140, Vienna,
Virginia 22182. His principal occupation is a merchant banker.
The general partner of Bridge East is Bridge East Partners LDC ("Bridge
East LDC"), a Cayman Islands limited duration company. The limited partner of
Bridge East is BEC Holdings Cayman LDC ("BEC LDC"), a Cayman Islands limited
duration company. Bridge East LDC and BEC LDC are principally engaged in making
and holding investments in domestic and foreign businesses. Their principal
businesses and offices are located at c/o W.S. Walker & Co., Caledonian House,
Mary Street, Georgetown, Grand Cayman, Cayman Islands, BWI.
The following table sets forth information concerning the directors and
officers of Bridge East LDC:
Name Principal Occupation Business Address
Bassam Aburdene - Merchant Banker 49 Mount Street
Director London, England
President
John P. Oswald - Merchant Banker c/o Bridge East Management, LLC
Director 575 Fifth Avenue
Secretary New York, New York 10017
Alex Vahabzadeh - Merchant Banker c/o BV Investment Management LLC
Director 8065 Leesburg Pike, Suite 140
Vienna, Virginia 22182
Kamal Bahamdan - Merchant Banker c/o BV Capital LLC
Director 306 Dartmouth Street
Boston, Massachusetts 02116
The following table sets forth information concerning the directors and
officers of BEC LDC:
Name Principal Occupation Business Address
Bassam Aburdene - Merchant Banker 49 Mount Street
Director London, England
President
John P. Oswald - Merchant Banker c/o Bridge East Management, LLC
Director 575 Fifth Avenue
Secretary New York, New York 10017
<PAGE>
Alex Vahabzadeh - Merchant Banker c/o BV Investment Management LLC
Director 8065 Leesburg Pike, Suite 140
Vienna, Virginia 22182
Kamal Bahamdan - Merchant Banker c/o BV Capital LLC
Director 306 Dartmouth Street
Boston, Massachusetts 02116
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
This will confirm the agreement by and between the undersigned that the
Schedule 13D filed on or about this date with respect to the beneficial
ownership of the undersigned of shares of Common Stock of IMRglobal Corp., a
Florida corporation, is being filed on behalf of each of the parties named
below.
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.
DATE: November 19, 1999
BRIDGE EAST CAPITAL, L.P.
By: Bridge East Partners LDC
its General Partner
By: /s/ John P. Oswald
Name: John P. Oswald
Title: Director
BV-IT GLOBAL LLC
By: /s/ Alex Vahabzadeh
Name: Alex Vahabzadeh
Title: Managing Member
<PAGE>
EXHIBIT 2
STOCK PURCHASE AGREEMENT
AMONG
A & S FAMILY LIMITED PARTNERSHIP,
SATISH K. SANAN,
THE ENTITIES LISTED ON
ATTACHED EXHIBIT A
AND
BRIDGE EAST MANAGEMENT, LLC
DATED AS OF NOVEMBER 12, 1999
<PAGE>
STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
1. PURCHASE, SALE AND TERMS OF SHARES........................................1
1.01. Shares.............................................................1
1.02. Purchase Price and Closing.........................................1
1.03. Use of Proceeds....................................................1
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER..............................2
2.01. Organization, Standing and Power...................................2
2.02. Authority; Enforceability; No Conflict.............................2
2.03. Stock Ownership....................................................3
2.04. Litigation.........................................................3
2.05. Disclosure.........................................................3
2.06. Securities Act of 1933.............................................3
2.07. Governmental Approvals.............................................4
2.08. United States Real Property Holding Corporation....................4
2.09. Commission Filings.................................................4
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..........................4
3.01. Organization and Standing..........................................4
3.02. Authority; Enforceability; No Conflict.............................4
3.03. Acquisition for Investment.........................................5
3.04. Financing..........................................................5
4. CONDITIONS TO THE PURCHASERS' OBLIGATIONS FOR CLOSING.....................6
4.01. Representations and Warranties.....................................6
4.02. Consents, Licenses, Approvals, etc.................................6
4.03. No Proceedings or Litigation.......................................6
4.04. Legal Opinions.....................................................6
4.05. Consummation of the Bank Financing and the Blood Stock Divestiture;
Certified Documents................................................6
4.06. Fees, Expenses and Taxes...........................................6
4.07. Intentionally Deleted..............................................6
4.08. Compliance with this Agreement.....................................6
4.09. Proceedings Satisfactory...........................................6
4.10. Intentionally Deleted..............................................7
4.11. No Adverse Change..................................................7
4.12. Registration Rights Agreement......................................7
4.13. Guaranties.........................................................7
5. SUBSEQUENT SALES OF THE SHARES............................................7
i
<PAGE>
6. COVENANTS OF THE SELLER AND THE PURCHASERS................................8
(a) Registration Rights Agreement.............................8
(b) Sole Negotiations.........................................8
(c) Intentionally Deleted.....................................8
(d) Restriction on Re-Sale of Shares after the Closing Date...8
7. DEFINITIONS AND ACCOUNTING TERMS..........................................8
7.01. Certain Defined Terms..............................................8
7.02. Accounting Terms..................................................11
8. INDEMNIFICATION..........................................................11
8.01. General Indemnity.................................................11
8.02. Indemnification Procedure.........................................12
9. MISCELLANEOUS............................................................13
9.01. No Waiver; Cumulative Remedies....................................13
9.02. Amendments, Waivers and Consents..................................13
9.03. Addresses for Notices.............................................13
9.04. Fees, Expenses and Taxes..........................................14
9.05. Binding Effect; Assignment........................................15
9.06. Survival..........................................................15
9.07. Prior Agreements..................................................15
9.08. Severability......................................................15
9.09. Confidentiality...................................................15
9.10. Governing Law; Jurisdiction.......................................16
9.11. Headings..........................................................16
9.12. Counterparts......................................................16
9.13. Further Assurances................................................16
9.14. Waiver............................................................16
9.15. Specific Enforcement..............................................16
EXHIBITS
Exhibit A - Purchasers
Exhibit B - Satish K. Sanan Guaranty
Exhibit C - Anne Sanan Guaranty
Exhibit D - Registration Rights Agreement
ii
<PAGE>
SCHEDULES
Schedule 1.01 - Shares of all Purchasers
Schedule 2.02 - Conflicts
Schedule 2.03(a) - Stock Ownership Matters
Schedule 2.04 - Litigation
Schedule 2.07 - Governmental Approvals
Schedule 2.09 - Commission Filings
iii
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), is made and entered into
as of November 12, 1999, among A & S Family Limited Partnership, a Nevada
limited partnership, with principal offices at 101 Convention Center Drive,
Suite 850, Las Vegas, Nevada 89109 ("A&S), Satish K. Sanan, whose address is c/o
IMRglobal Corp., 100 South Missouri Avenue, Clearwater, Florida 33756 (together
with A&S, collectively, the "Seller"), each of the entities listed on attached
Exhibit A (each, a "Purchaser" and, collectively, the "Purchasers") and Bridge
East Management, LLC, a Delaware limited liability company, with principal
offices at 575 Fifth Avenue, New York, New York 10017 ("BEM").
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which hereby is acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. PURCHASE, SALE AND TERMS OF SHARES
1.01. Shares. The Seller has agreed to sell Two Million Six Hundred
Sixty-Six Thousand Six Hundred Sixty-Seven (2,666,667) shares (the "Shares") of
Common Stock, par value $.10 per share (the "Common Stock") of IMRglobal Corp.
(the "Company"), at a purchase price of $7.50 per share to the Purchasers in the
respective numbers and amounts as set forth on Schedule 1.01 hereto.
1.02. Purchase Price and Closing. The Seller agrees to sell to the
Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, indemnities, terms and conditions of
this Agreement, the Purchasers, severally but not jointly, agree to purchase the
Shares set forth opposite their respective names on Schedule 1.01 hereto. The
total purchase price for the Shares being acquired by the Purchasers is
$20,000,000 (the "Purchase Price"). The closing of the purchase and sale of the
Shares to be acquired by the Purchasers from the Seller under this Agreement
(the "Closing") shall take place at the offices of LeBoeuf, Lamb, Greene &
MacRae, L.L.P., 125 West 55th Street, New York, New York 10019 at 10:00 a.m. on
November 12, 1999, or at such later time and date as the Purchasers and the
Seller may agree (the "Closing Date"). At the Closing, the Seller will deliver
to the Purchasers stock certificates representing the number of Shares set forth
opposite their respective names on Schedule 1.01 hereto, which certificates will
be duly endorsed to the Purchasers or accompanied by duly executed stock powers,
together with an irrevocable letter of instructions to the Company's Transfer
Agent sufficient to enable the Transfer Agent to issue certificates for the
Shares in each Purchaser's name (or its nominee). The Purchasers will transfer
funds to the account or accounts of the Seller by wire transfer, representing
the Purchase Price, reduced by the amounts set forth in Section 9.04 herein.
1.03. Use of Proceeds. After payment of the fees and expenses described in
Section 9.04 herein, the Seller covenants to use the net cash proceeds from the
sale of the Shares to repay a portion of the Seller's outstanding obligations to
NationsBank, N.A. and/or the Company.
<PAGE>
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER
Each Seller, severally, but not jointly, hereby represent and warrant to
each of the Purchasers and BEM as follows:
2.01. Organization, Standing and Power. A&S is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Nevada. Each Seller has all requisite power and authority to own, lease and
operate its properties and assets and to conduct its business as now being
conducted and is duly qualified to do business in good standing in those foreign
jurisdictions in which such qualification is required.
2.02. Authority; Enforceability; No Conflict. Each Seller has all requisite
partnership or individual power and authority, as the case may be, to enter into
this Agreement and any other documents and instruments required to be delivered
to which it is or it will become a party, to issue and sell the Shares and to
carry out its obligations under this Agreement and under any other documents and
instruments required to be delivered to which it is or it will become a party.
The execution, delivery and performance of this Agreement and any other
documents and instruments contemplated hereby to be executed and delivered by
each Seller and the sale of the Shares by each Seller are within the legal and
partnership power and authority of each Seller and have been duly and validly
authorized by all requisite partnership proceedings on the part of each Seller.
This Agreement and each of the other documents and instruments required to be
delivered, when executed and delivered by each Seller, is a valid and binding
obligation of each Seller, enforceable against each Seller in accordance with
its terms, except that (a) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium, rehabilitation, liquidation,
conservatorship, receivership or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. Except as set forth on Schedule 2.02 hereto,
the execution, delivery and performance of this Agreement and all of the
documents and instruments contemplated hereby to be executed and delivered by
each Seller and the sale of the Shares does not, and the consummation by each
Seller of the transactions contemplated hereby and thereby will not result in or
constitute (i) a default, breach or violation of or under the Certificate of
Limited Partnership or the Partnership Agreement, (ii) a default, breach or
violation of or under any mortgage, deed of trust, indenture, note, bond,
license, lease agreement or other instrument or obligation to which each Seller
is a party or by which any of its respective properties or assets are bound,
(iii) a violation of any statute, rule, regulation, order, judgment or decree of
any court, public body or authority by which each Seller or any of its
respective properties or assets are bound, (iv) an event which (with notice or
lapse of time or both) would permit any Person to terminate, accelerate the
performance required by, or accelerate the maturity of any indebtedness or
obligation of each Seller under any agreement or commitment to which each Seller
is a party or by which each Seller is bound or by which any of its properties or
assets are bound, (v) the creation or imposition of any lien, charge or
encumbrance on any property of each Seller under any agreement or commitment to
which each Seller is a party or by which each Seller is bound or by which any of
its respective properties or assets are bound, or (vi) an event which would
require any consent under any agreement to which each Seller is a party or by
which each
2
<PAGE>
Seller is bound or by which any of its respective properties or assets are
bound, which consent has not otherwise been obtained and delivered to the
Purchasers.
2.03. Stock Ownership.
(a) Except as set forth on Schedule 2.03(a) hereto, each Seller
represents and warrants that (i) each Seller is the sole record and beneficial
owner of the Shares, and (ii) each Seller owns all of the Shares free and clear
of any mortgages, pledges, charges, liens, security interests or other
encumbrances (other than restrictions on transfer imposed by applicable federal
and state securities laws).
(b) There are no existing options, warrants, calls, commitments or
other rights of any character (including conversion or preemptive rights)
relating to the acquisition of any of the Shares. All of the Shares are duly and
validly authorized and issued, fully paid and non-assessable. Upon completion of
the transactions at the Closing, the Purchasers shall receive valid title to all
of the Shares, free and clear of all mortgages, pledges, charges, liens,
security interests or other encumbrances.
(c) Neither Seller is a party to (or has otherwise terminated) any
voting trust, proxy, or other agreement or understanding with respect to the
voting of any capital stock of the Shares.
2.04. Litigation. Except as set forth on Schedule 2.04 hereto, there is no
litigation, arbitration proceeding, citation, action, suit, claim, investigation
or proceeding of any kind pending or, to the knowledge of each Seller,
threatened, against or involving each Seller, the Company, any Subsidiary or any
of their respective properties or assets or which questions the validity of this
Agreement, the sale of the Shares or any action taken or to be taken pursuant
hereto or thereto. The matters described in Schedule 2.04 hereto, if adversely
determined, would not have a Material Adverse Effect on the business or
financial condition of each Seller, the Company or any Subsidiary or on any
material portion of the assets of each Seller, the Company or any Subsidiary and
would not preclude each Seller from performing its obligations under this
Agreement or the Company from performing its obligations under the Registration
Rights Agreement. There are no outstanding orders, judgments, injunctions,
awards or decrees of any court, arbitrator or governmental or regulatory body
against each Seller, the Company or any Subsidiary.
2.05. Disclosure. Neither this Agreement nor the Schedules hereto nor any
other document, agreement, certificate or instrument furnished to the Purchasers
by or on behalf of each Seller or the Company in connection with the
transactions contemplated by this Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading. Each Seller has
disclosed, or caused the Company to disclose, to the Purchasers all facts,
documents, agreements, certificates or instruments that are material to the
condition, assets, liabilities, businesses, operations and prospects of each
Seller, the Company or any Subsidiary and, with respect to the Company, which
would be required to be disclosed by the Company on a Form 10-K Annual Report
under the Exchange Act.
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2.06. Securities Act of 1933. Each Seller has complied and will comply with
all applicable federal and state securities laws in connection with the offer
and sale of the Shares hereunder. Neither each Seller nor anyone acting on their
behalf has or will sell, offer to sell or solicit offers to buy the Shares or
similar securities to, or solicit offers with respect thereto from, or enter
into any preliminary conversations or negotiations relating thereto with, any
Person, so as to bring the sale of the Shares under the registration provisions
of the Securities Act and applicable state securities laws.
2.07. Governmental Approvals. Except as set forth on Schedule 2.07 hereto
and except for the filing of any notice prior or subsequent to the Closing that
may be required on behalf of each Seller under applicable state and/or federal
securities laws (which, if required, shall be filed on a timely basis), no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution and delivery by each Seller of this
Agreement, for the offer, sale, execution or delivery of the Shares, or for the
performance by each Seller of its obligations under this Agreement to which it
is a party.
2.08. United States Real Property Holding Corporation. Neither Seller is or
has ever been a "United States Real Property Holding Corporation" as defined in
Section 897(c)(2) of the Code and Section 1.897-2(b) of the Regulations
promulgated by the Internal Revenue Service.
2.09. Commission Filings. Copies of all documents (including exhibits
thereto) filed by the Company with the Commission pursuant to the Exchange Act
since December 31, 1998 (the "Commission Filings") have been delivered to the
Purchasers. Except as set forth on Schedule 2.09 hereto, the Commission Filings,
all of which were filed on a timely basis, (a) were prepared, in all material
respects, in accordance with the requirements of the Exchange Act and the rules
and regulations thereunder, (b) did not at the time they were filed contain any
untrue statement of material fact, and (c) did not at the time they were filed
omit to state a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading. Each of the
audited financial statements and unaudited interim financial statements
(including any related notes or schedules) included in the Commission Filings
was prepared in accordance with generally accepted accounting principles applied
on a consistent basis, except as may be indicated therein or in the notes or
schedules thereto (any such schedules being prepared in accordance with
Regulation S-X), and fairly present in all material respects the financial
position of the Company as at the dates thereof and the results of its
operations and cash flows for the periods then ended, subject, in the case of
the unaudited interim financial statements, to normal year-end audit adjustments
and the absence of complete notes.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers and BEM, severally, but not jointly, hereby
represent and warrant to the Seller as follows:
3.01. Organization and Standing. Each of the Purchasers is a corporation,
limited liability company or limited partnership, as the case may be, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. BEM is a limited liability
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company duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization.
3.02. Authority; Enforceability; No Conflict. Each of the Purchasers and
BEM has all requisite corporate, limited liability or partnership power and
authority to enter into this Agreement and any other documents and instruments
required to be delivered to which they are or will become a party and to carry
out their obligations under this Agreement and under any other documents and
instruments required to be delivered to which they are or will become a party.
The execution, delivery and performance of this Agreement and any other
documents and instruments contemplated hereby to be executed and delivered by
each of the Purchasers and BEM are within the legal and corporate, limited
liability or partnership power and authority of such Purchaser and BEM and have
been duly and validly authorized by all requisite corporate, limited liability
or partnership proceedings on the part of such Purchaser and BEM. This Agreement
and any other documents and instruments required to be delivered, when executed
and delivered by each of the Purchasers and BEM, are the valid and binding
obligations of such Purchaser and BEM, enforceable against such Purchaser and
BEM in accordance with its terms, except that (a) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium, rehabilitation,
liquidation, conservatorship, receivership or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. The execution, delivery and performance
of this Agreement and all of the documents and instruments contemplated hereby
to be executed and delivered by each of the Purchasers and BEM do not, and
consummation by such Purchaser and BEM of the transactions contemplated hereby
and thereby will not result in or constitute (i) a default, breach or violation
of or under their Organizational Documents, (ii) a default, breach or violation
of or under any mortgage, deed of trust, indenture, note, bond, license, lease
agreement or other instrument or obligation to which such Purchaser or BEM is a
party or by which any of their properties or assets are bound, or (iii) a
violation of any statute, rule, regulation, order, judgment or decree of any
court, public body or authority, by which such Purchaser or BEM or any of its
properties or assets are bound.
3.03. Acquisition for Investment. Each of the Purchasers is an "accredited
investor", as defined in Regulation D under the Securities Act, and each is
acquiring the Shares solely for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof,
and each has no present intention or plan to effect any distribution of the
Shares. Each of the Purchasers acknowledges that each is able to bear the
financial risks associated with an investment in the Shares and that it has been
given full access to such records of the Seller and the Company and to the
officers of the Company as it has deemed necessary and appropriate to conducting
its due diligence investigation.
3.04. Financing. Each of the Purchasers has sufficient funds and will have
sufficient funds at all times through the Closing Date to consummate the
transactions contemplated hereby. None of the Purchasers will be rendered
insolvent by reason of their investment in the Shares nor will any of the
Purchasers be left with unreasonably small capital for purposes of operating
their businesses.
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4. CONDITIONS TO THE PURCHASERS' OBLIGATIONS FOR CLOSING
The obligations of the Purchasers to purchase and pay for the Shares to be
purchased by them at the Closing are subject to the following conditions, unless
specifically waived in writing by the Purchasers:
4.01. Representations and Warranties. Each of the representations and
warranties set forth in Section 2 herein shall be true, accurate and correct at
the Closing Date with the same effect as though made at and as of such time.
4.02. Consents, Licenses, Approvals, etc. The Purchasers shall have
received certified true copies of all consents, licenses, waivers and approvals
required or advisable in connection with the execution, delivery, performance,
validity and enforceability of this Agreement, and such consents, licenses,
waivers and approvals shall be in full force and effect and be reasonably
satisfactory in form and substance to the Purchasers.
4.03. No Proceedings or Litigation. No litigation, arbitration proceeding,
citation, action, suit, claim, investigation or proceeding of any kind before
any court, arbitrator or any governmental authority shall have been commenced
and no investigation by any governmental authority shall have been threatened
against (a) the Seller or any of its respective properties or assets or (b) the
Seller or the Company seeking to restrain, prevent or change the transactions
contemplated by this Agreement or seeking damages in connection with such
transactions.
4.04. Legal Opinions. The Purchasers and BEM shall have received a legal
opinion from Forlizzo & Neal, P.A., as counsel to the Seller, dated the Closing
Date, in a form reasonably acceptable to the Purchasers.
4.05. Consummation of the Bank Financing and the Blood Stock Divestiture;
Certified Documents. A&S shall have consummated the Bank Financing and the Blood
Stock Divestiture. The Purchasers shall have received certified complete and
correct copies of the Bank Loan Documents (including all schedules, exhibits,
annexes, waivers and amendments thereto), the terms and conditions of which to
be reasonably acceptable to the Purchasers. The Purchasers shall have also
received a certificate from the Chief Financial Officer of Padua Stables
describing in reasonable detail the completion of the Blood Stock Divestiture.
4.06. Fees, Expenses and Taxes. All fees, expenses and taxes required to be
paid by the Seller pursuant to Section 9.04 herein shall have been paid in full.
4.07. Intentionally Deleted.
4.08. Compliance with this Agreement. The Seller shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Seller at or prior to the Closing.
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4.09. Proceedings Satisfactory. All proceedings taken in connection with
the sale of the Shares and all documents and papers relating thereto shall be
satisfactory in form and substance to each of the Purchasers. Each of the
Purchasers shall have received copies of such documents and papers as the
Purchasers may reasonably request in connection with this Agreement.
4.10. Intentionally Deleted.
4.11. No Adverse Change. Except as disclosed in the Seller's financial
statements and the Company's Commission Filings or in the other documents
delivered pursuant to this Agreement, since December 31, 1998, no change or
changes shall have occurred with respect to the assets, liabilities, business,
operations, income, prospects or condition, financial or otherwise, of the
Seller, the Company and the Subsidiaries which any of the Purchasers may
reasonably believe has had or could reasonably be expected to have a Material
Adverse Effect.
4.12. Registration Rights Agreement. The Company and the Purchasers shall
have executed and delivered the Registration Rights Agreement, in the form
attached hereto as Exhibit D.
4.13. Guaranties. The Purchasers shall have received Guaranties from each
of Satish K. Sanan and Anne Sanan, in the forms attached hereto as Exhibit B and
Exhibit C.
The obligations of the Seller to sell the Shares to the Purchasers at the
Closing are subject to the conditions that (a) each of the representations and
warranties set forth in Section 3 herein shall be true, accurate and correct at
the Closing Date with the same effect as though made at and as of such time and
(b) the total number of Shares described in Section 1.01 will be acquired by the
Purchasers.
5. SUBSEQUENT SALES OF THE SHARES
In the event the Purchasers hold all or any portion of the Shares on the
first anniversary of the Closing Date and the Purchasers sell all or any portion
of such Shares during the five (5) month period immediately following such date
for a price less than Ten Dollars ($10) (as adjusted for any stock splits, stock
dividends, etc.) per Share, the Seller shall be obligated to pay the Purchasers
the difference between the actual sales price for such Shares sold during the
five (5) month period and Ten Dollars ($10) per Share. The Purchasers shall
provide the Seller with copies of broker confirmation slips relating to any such
Shares which shall specify the sales price and the number of Shares sold. The
Seller shall have up to thirty (30) days from the date of the Purchasers' sale
of such Shares in which to make such payment to the Purchasers by transfer of
funds to the accounts of the Purchasers. The rights of the Purchasers under this
Section 5 shall only apply to the Shares acquired by the Purchasers pursuant to
this Agreement (as adjusted for any stock splits, stock dividends, etc.) and
shall not apply to any shares of Common Stock of the Company otherwise acquired
by the Purchasers. The Seller shall have no obligation with respect to Shares
sold prior to or following such five (5) month period.
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6. COVENANTS OF THE SELLER AND THE PURCHASERS
(a) Registration Rights Agreement. The Seller shall request that the
Company execute and deliver to the Purchasers the Registration Rights Agreement,
which agreement shall be acceptable to the Purchasers in their sole discretion.
The Registration Rights Agreement attached hereto as Exhibit D is acceptable to
the Purchasers.
(b) Sole Negotiations. The Seller agrees that, from and after the
date hereof until the later of November 13, 1999 or such later date as is agreed
to by the Seller and the Purchasers, the Seller shall not (and shall cause its
advisers, officers, partners, directors, agents and affiliates not to), directly
or indirectly, initiate contact with, solicit or encourage inquiries or
proposals by, or participate in any discussions or negotiations with, or
disclose any information concerning the sale of the Shares or any other
financings or transactions similar to the ones contemplated herein.
(c) Intentionally Deleted.
(d) Restriction on Re-Sale of Shares after the Closing Date.
Notwithstanding Registration of the Shares as provided in Section 6.01 herein
and pursuant to the Registration Rights Agreement, for a period of one hundred
eighty (180) days after the Closing Date (the "Lock-Up Period"), the Purchasers,
in the aggregate, may only sell up to twenty-five percent (25%) of the total
Shares purchased under this Agreement. After the Lock-Up Period terminates and
assuming the Registration Statement filed by the Company pursuant to the
Registration Rights Agreement has been declared Effective, the Purchasers shall
be permitted to sell the remainder of the Shares with no further restrictions
other than any applicable restrictions under federal or state securities laws.
7. DEFINITIONS AND ACCOUNTING TERMS
7.01. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Agreement" shall mean this Stock Purchase Agreement, including the
schedules attached hereto and all amendments, modifications or supplements
thereto.
"A&S" shall mean A&S Family Limited Partnership, a Nevada limited
partnership, with principal offices at 101 Convention Center Drive, Suite 850,
Las Vegas, Nevada 89109.
"Bank Financing" shall mean the financing obtained by A&S in an amount no
less than $20,000,000 extended by First Union or another financial institution,
to be received on or before the Closing Date, the proceeds of which shall be
used to repay Seller's obligations to NationsBank, N.A. and/or the Company.
"Bank Loan Documents" shall mean the loan agreement and the other
agreements and instruments evidencing the Bank Financing, the terms and
conditions of which to be reasonably acceptable to the Purchasers.
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"BEM" shall mean Bridge East Management, LLC, a Delaware limited liability
company, with principal offices at 575 Fifth Avenue, New York, New York 10017.
"Blood Stock Divestiture" shall mean the sale of A&S's "Blood Stock" on or
before the Closing Date, in an amount necessary to achieve proceeds of at least
$20,000,000, which proceeds shall be used to repay Seller's obligations to
NationsBank, N.A. and/or the Company.
"Certificate of Limited Partnership" shall mean the Certificate of Limited
Partnership of A&S, including all amendments, modifications or supplements
thereto.
"Closing" shall have the meaning assigned to such term in Section 1.02
herein.
"Closing Date" shall have the meaning assigned to such term in Section 1.02
herein.
"Closing Fee" shall have the meaning assigned to such term in Section 9.04
herein.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or any other
federal agency then administering the Securities Act or the Exchange Act.
"Commission Filings" shall have the meaning assigned to such term in
Section 2.09 herein.
"Common Stock" shall mean the Company's Common Stock, par value $.10 per
share, as authorized on the date of this Agreement.
"Company" shall mean IMRglobal Corp., a Florida corporation, with principal
offices at 100 South Missouri Avenue, Clearwater, Florida 33756-5763.
"Deposit" shall have the meaning assigned to such term in Section 9.04
herein.
"Effective" shall mean that all requirements under the Securities Act with
respect to a Registration Statement have been satisfied and that the Commission
has officially approved the public distribution or circulation of the
Registration Statement in connection with a public offering of the Shares.
"Effective Date" shall mean the date on which a Registration Statement is
declared to be Effective with respect to the Shares.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated pursuant thereto.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements contained in the
Commission Filings (except for changes concurred in by the independent public
accountants to the Company).
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"Guaranties" shall mean, collectively, (a) the Guaranty, dated the Closing
Date, from Satish K. Sanan for the benefit of the Purchasers and (b) the
Guaranty, dated the Closing Date, from Anne Sanan for benefit of the Purchasers,
the forms of which are attached hereto as Exhibit B and Exhibit C.
"Indemnified Party" shall have the meaning given such term in Section 8.02
herein.
"Lock-Up Period" shall have the meaning given such term in Section 6.05
herein.
"Material Adverse Effect" shall mean any material adverse effect on (a) the
business, profits, properties, condition or prospects of the Company and the
Subsidiaries, taken as a whole, (b) the ability of the Seller to perform its
obligations under this Agreement, (c) the ability of the Company to perform its
obligations under the Registration Rights Agreement and (d) the binding nature,
validity or enforceability of this Agreement, which, in each case, arises from,
or reasonably could be expected to arise from, any action or omission of action
on the part of the Seller, the Company or any Subsidiary or the occurrence of
any event or the existence of any fact or condition in respect of the Seller,
the Company or any Subsidiary or any of their respective properties.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Offered Shares" shall have the meaning assigned to such term in Section
5.01 herein.
"Organizational Documents" shall mean an entity's certificate or articles
of incorporation, certificate defining the rights and preferences of securities,
articles of organization, general or limited partnership agreement, certificate
of limited partnership, joint venture agreement or similar document governing
the entity.
"Partnership Agreement" shall mean the Limited Partnership Agreement of
A&S, dated effective December 19, 1996, among A&S, SKS Inc. and the Limited
Partners described therein.
"Person" shall mean an individual, corporation, partnership, joint venture,
trust, university, or unincorporated organization, or a government or any agency
or political subdivision thereof.
"Purchase Price" shall have the meaning assigned to such term in Section
1.02 herein.
"Purchasers" shall mean, collectively, the entities described on attached
Exhibit A .
"Registration" shall mean the satisfaction by the Company of all applicable
requirements under the Securities Act as evidenced by the official approval of
the Commission in connection with Registration Statement filed by the Company in
connection with the Registration Rights Agreement.
"Registration Expenses" shall mean all expenses incident to the Company's
performance of or compliance with the obligations under Section 4 herein and the
terms and conditions of the Registration Rights Agreement, including, without
limitation, all Commission and stock exchange or NASD fees and expenses, fees
and expenses of compliance with applicable state securities or "blue sky" laws,
printing expenses, messenger and delivery expenses, fees and disbursements of
counsel for
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the Company and the Company's certified public accountants, transfer taxes, fees
of transfer agents and registrars, the fees and expenses of other persons
retained by the Company and the reasonable fees and expenses of counsel for the
Purchasers as the holders of the Shares.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated the Closing Date, among the Company and each of the Purchasers,
the form of which is attached hereto as Exhibit D.
"Registration Statement" shall mean any disclosure document that the
Company is required to file under the Securities Act in connection with a public
offering of the Shares.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time or any other federal act, rule or regulation requiring Registration
with any federal agency in connection with a public offering of the Shares.
"Seller" shall mean, collectively, A&S and Satish K. Sanan.
"Shares" shall have the meaning assigned to such term in Section 1.01
herein.
"SKS" means SKS Management, Inc., a Nevada corporation, and General Partner
of A&S.
"Subsidiary" shall mean any corporation or other entity of which at least a
majority of the securities or other ownership interest having ordinary voting
power (absolutely or contingently) for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries.
7.02. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP, consistently applied, and all
financial data submitted pursuant to this Agreement, unless otherwise specified,
shall be prepared in accordance with GAAP.
8. INDEMNIFICATION
8.01. General Indemnity. Each Seller, severally, but not jointly, agrees to
indemnify and save harmless each of the Purchasers and BEM and their directors,
officers, affiliates, partners, members, shareholders, employees, agents,
successors and assigns from and against any and all losses, liabilities,
deficiencies, costs, penalties, sanctions, damages, obligations, demands,
judgments, actions, suits, causes of action, claims, proceedings,
investigations, citations, and expenses (including, without limitation,
reasonable attorneys' and consultants' fees, charges and disbursements), whether
or not subject to litigation, incurred by any of the Purchasers and BEM as a
result of, imposed upon, arising out of, in connection with, or in any way
attributed or relating to any inaccuracy in, breach or failure of any
representation, warranty or covenant made by the Seller in this Agreement or in
any other document or instrument delivered by the Seller in connection with the
matters addressed in this Agreement; provided, however, that BEM shall be
entitled to indemnification relating only to the Seller's obligations to BEM
arising under Section 9.04 herein. Each of the Purchasers and BEM, severally,
but not jointly, agrees to indemnify and save harmless each Seller and their
directors, officers, affiliates, partners, members, shareholders, employees,
agents, successors and assigns from
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and against any and all losses, liabilities, deficiencies, costs, penalties,
sanctions, damages, obligations, demands, judgments, actions, suits, causes of
action, claims, proceedings, investigations, citations, and expenses (including,
without limitation, reasonable attorneys' and consultants' fees, charges and
disbursements), whether or not subject to litigation, incurred by each Seller as
a result of, imposed upon, arising out of, in connection with, or in any way
attributed or relating to any inaccuracy in, breach or failure of any
representation, warranty or covenant attributable to such Purchaser or BEM in
this Agreement.
8.02. Indemnification Procedure. Any party entitled to indemnification
under this Section 8 (an "Indemnified party") will give written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
promptly after the discovery by such party of any matters giving rise to a claim
for indemnification; provided, however, that the failure of any party entitled
to indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Section 8 except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the Indemnified Party a conflict of interest between it
and the indemnifying party may exist in respect of such action, proceeding or
claim, to assume the defense thereof, with counsel reasonably satisfactory to
the Indemnified Party. In the event that the indemnifying party advises an
Indemnified Party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
Indemnified Party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the Indemnified Party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The Indemnified Party
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party which relates to such action or claim. The indemnifying
party shall keep the Indemnified Party fully apprized at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
Indemnified Party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its written consent; provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. Anything in this Section
8 to the contrary notwithstanding, the indemnifying party shall not, without the
Indemnified Party's prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the Indemnified Party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
Indemnified Party, a release from all liability in respect of such claim. The
indemnification required by this Section 8 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred. The
indemnity obligations contained in this Agreement shall be in addition to (a)
any cause of action or similar right of the Indemnified
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Party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.
9. MISCELLANEOUS
9.01. No Waiver; Cumulative Remedies. No failure or delay on the part of
any party to this Agreement in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
9.02. Amendments, Waivers and Consents. Any provision in this Agreement to
the contrary notwithstanding, and except as hereinafter provided, changes in,
termination or amendments of or additions to this Agreement may be made, and
compliance with any covenant or provision set forth herein may be omitted or
waived, by mutual written agreement of all parties. Any waiver or consent may be
given subject to satisfaction of conditions stated therein and any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
9.03. Addresses for Notices. Any notice, demand, request, waiver or other
communication under this Agreement shall be in writing and shall be deemed to
have been duly given on (a) the date of service if personally served, (b) the
date received by overnight courier service with signed receipt, (c) the third
day after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered, return receipt requested, postage prepaid or (d) the
date received by facsimile transmission with confirmation of receipt, and
addressed as follows:
To each Seller: Satish K. Sanan
c/o IMRglobal Corp.
100 South Missouri Avenue
Clearwater, Florida 33756-5763
Fax No.: 727-467-8111
A&S Family Limited Partnership
P.O. Box 50401
Henderson, Nevada 89016
Fax No.: 702-598-3651
Attention: Monte L. Miller
With a copy to: Forlizzo & Neal, P.A.
13577 Feather Sound Drive, Suite 300
Clearwater, Florida 33762
Attention: Alton R. Neal, Esq.
Fax No.: 727-572-9454
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With a copy to: Brett Hendee, P.A.
100 South Ashley Drive
Tampa, Florida 33602
Fax No.: 813-222-0227
To the Purchasers: Bridge East Capital, L.P.
c/o W.S. Walker & Co.
Caledonian House
Mary Street, P.O. Box 2656
Georgetown, Grand Cayman
Cayman Islands, BWI
Fax No.: 345-949-7886
BV-IT Global LLC
8065 Leesburg Pike - Suite 140
Vienna, Virginia 22182
Attention: Alex Vahabzadeh
Fax No.: 703-748-7401
With a copy to: Bridge East Management, LLC
575 Fifth Avenue, 22nd Floor
New York, New York 10017
Attention: John P. Oswald
Fax No.: 212-277-1001
With a copy to: LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: John R. Fallon, Jr., Esq.
Fax No.: 212-424-8500
To BEM: Bridge East Management, LLC
575 Fifth Avenue, 22nd Floor
New York, New York 10017
Attention: John P. Oswald
Fax No.: 212-277-1001
With a copy to: LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: John R. Fallon, Jr., Esq.
Fax No.: 212-424-8500
14
<PAGE>
9.04. Fees, Expenses and Taxes.
(a) At the Closing, the Seller shall pay to BEM, a closing fee in an
amount equal to five percent (5%) of the Purchase Price of the Shares (the
"Closing Fee"). The deposit in the amount of $100,000 (the "Deposit") which was
paid to BEM upon the execution of the letter of intent, dated October 20, 1999,
shall be credited to the Closing Fee.
(b) The Seller agrees, whether or not the transactions hereby
contemplated shall be consummated, to pay, and save each of the Purchasers
harmless against, any liability for the payment of all reasonable fees and
expenses arising in connection with the due diligence review of the Seller and
the Company and the preparation of all agreements and documents in connection
with the transactions contemplated by this Agreement, including, but not limited
to, the reasonable fees and expenses of LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
counsel to the Seller and counsel to the Company. In addition, the Seller shall
pay the reasonable fees and expenses of other necessary legal counsel,
independent public accountants, consultants and other outside experts retained
by the Purchasers in connection with the transactions contemplated by this
Agreement and in connection with any amendment or waiver to this Agreement or
the successful enforcement of this Agreement by any of the Purchasers or BEM. In
addition, the Seller shall pay the Registration Expenses and any and all stamp
or other similar taxes payable or determined to be payable in connection with
the execution and delivery of this Agreement, the transfer of the Shares and the
other instruments and documents to be delivered hereunder or thereunder, and
agrees to save each of the Purchasers harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes.
9.05. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of each Seller, each of the Purchasers and BEM and its and
their respective heirs, legal representatives, successors and assigns, except
that the Seller shall not have the right to delegate its obligations hereunder
or to assign its rights hereunder or any interest herein without the prior
written consent of each of the Purchasers and BEM. The Purchasers may not assign
their rights under Section 5 herein without the prior written consent of the
Seller.
9.06. Survival. All covenants and agreements to be performed and all
representations, warranties and indemnities made or set forth in this Agreement,
the Shares, or any other instrument or document delivered in connection herewith
or therewith, shall survive the execution and delivery hereof or thereof and the
Closing Date.
9.07. Prior Agreements. This Agreement and the other instruments or
documents executed and delivered herewith constitute the entire agreement
between the parties and supersede any prior understandings or agreements
concerning the subject matter hereof.
9.08. Severability. The provisions of this Agreement are severable and, in
the event that any court of competent jurisdiction shall determine that any one
or more of the provisions or part of a provision contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement; but this Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of a provision, had never
15
<PAGE>
been contained herein, and such provisions or part reformed so that it would be
valid, legal and enforceable to the maximum extent possible.
9.09. Confidentiality. Each of the Purchasers agree that they will keep
confidential and will not disclose or divulge any confidential, proprietary or
secret information which any of the Purchasers may obtain from the Seller or the
Company pursuant to financial statements, reports and other materials submitted
by the Seller or the Company to any of the Purchasers pursuant to this
Agreement, or pursuant to visitation or inspection rights granted hereunder,
unless such information is known, or until such information becomes known, to
the public; provided, however, that each of the Purchasers may disclose such
information (a) on a confidential basis to their attorneys, accountants,
consultants and other professionals to the extent necessary to obtain their
services in connection with the transaction, (b) to any prospective purchaser of
any Shares from any of the Purchasers as long as such prospective purchaser
agrees in writing to be bound by the provisions of this Section 9.09, (c) to any
entity controlling, controlled by or under common control with any of the
Purchasers, or to any partner or stockholder of any of the Purchasers which is a
partnership or corporation, or (d) as required by applicable law.
9.10. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS. EACH SELLER HEREBY CONSENTS
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF
NEW YORK, AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS
AGREEMENT MAY BE LITIGATED IN SUCH COURTS, AND EACH SELLER WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY PROCEEDING IN ANY SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL,
MESSENGER OR OVERNIGHT COURIER SERVICE DIRECTED TO IT AT THE ADDRESS SET FORTH
IN SECTION 9.03 HEREIN.
9.11. Headings. Article, section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
9.12. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
9.13. Further Assurances. From and after the date of this Agreement, upon
the request of any of the Purchasers or any Seller, each Seller and each of the
Purchasers shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement and the
Shares.
9.14. Waiver. At any time prior to the Closing Date, the parties hereto may
(a) extend the time for the performance of any of the obligations or other acts
of any other party hereto, (b) waive
16
<PAGE>
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto, and (c) waive compliance with any of the
covenants, agreements or conditions contained herein. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party granting such waiver but
such waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or future failure; provided, however, that any
extension or waiver that effects any Purchaser shall be valid only if such
written instrument is signed by all of the Purchasers.
9.15. Specific Enforcement. Each of the Purchasers, each Seller and BEM
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that each of
the parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they may be entitled at law or equity.
9.16. Allocating the Purchase Price. Each Seller and each of the Purchasers
agree to allocate the values to the Shares as described on Schedule 1.01 hereto.
Each Seller and each of the Purchasers agree to use the valuations for all
federal, state and local income tax purposes.
SIGNATURE PAGES FOLLOW
17
<PAGE>
IN WITNESS WHEREOF, each undersigned Seller, each of the Purchasers and BEM
have executed this Stock Purchase Agreement as of the date first above written.
SELLER:
A & S FAMILY LIMITED PARTNERSHIP
By: SKS Management, Inc.
its General Partner
By: /s/ Satish K. Sanan
-----------------------------
Name: Satish K. Sanan
Title: President
/s/ Satish K. Sanan
-----------------------------------------
Satish K. Sanan
PURCHASERS:
BRIDGE EAST CAPITAL, L.P.
By: Bridge East Partners LDC
its General Partner
By: Capital Trust S.A.
its General Partner
By: /s/ John P. Oswald
-----------------------------
Name: John P. Oswald
Title: Director
BV-IT GLOBAL LLC
By: /s/ Alex Vahabzadeh
----------------------------------
Name: Alex Vahabzadeh
Title: Managing Member
<PAGE>
BEM:
BRIDGE EAST MANAGEMENT, LLC
By: /s/ John P. Oswald
----------------------------------
Name: John P. Oswald
Title: President
<PAGE>
EXHIBIT A
PURCHASERS
1. Bridge East Capital, L.P.
c/o W.S. Walker & Co.
Caledonian House
Mary Street
Georgetown, Grand Cayman
Cayman Islands, BWI
2. BV-IT Global LLC
8065 Leesburg Pike - Suite 140
Vienna, Virginia 22182
Ex. A-1
<PAGE>
SCHEDULE 1.01
SHARES OF ALL PURCHASERS
Shares to be Acquired by the Purchasers:
1. Bridge East Capital, L.P.
Shares: 800,000
Total Purchase Price: $6,000,000
2. BV-IT Global LLC
Shares: 1,866,667
Total Purchase Price: $14,000,000
Shares to be Sold by Each Seller:
1. A&S Family Limited Partnership
Shares: 2,532,667
Total Purchase Price: $18,995,000
2. Satish K. Sanan
Shares: 134,000
Total Purchase Price: $1,005,000
Sch. 1.01-1
<PAGE>
SCHEDULE 2.02
CONFLICTS
All of the Shares owned by A&S are currently pledged by A&S to NationsBank,
N.A. and sale of the Shares by A&S to the Purchasers is subject to complete
re-payment of the loan from NationsBank, N.A., the termination of any Pledge
Agreement for the benefit of NationsBank, N.A. and the filing of UCC-3
Termination Statements, if applicable, in respect of the Shares owned by A&S.
Sch. 2.02-1
<PAGE>
SCHEDULE 2.03(a)
STOCK OWNERSHIP MATTERS
SEE SCHEDULE 2.02
Sch. 2.03(a)-1
<PAGE>
SCHEDULE 2.04
LITIGATION
NONE
Sch. 2.04-1
<PAGE>
SCHEDULE 2.07
GOVERNMENTAL APPROVALS
NONE
Sch. 2.07-1
<PAGE>
SCHEDULE 2.09
COMMISSION FILINGS
The acquisition of Fusions Systems Japan Co., Ltd., reported on the
Company's Form 8-K filed April 8, 1999 and Orion Consulting, Inc., reported on
the Company's Form 8-K filed June 29, 1999, were reported for accounting
purposes as purchases. The Seller has advised the Purchasers that it is aware
that the Company intends to amend the referenced 8-K forms and the Company's
Form 10-Q as filed for the first and second quarters of fiscal 1999 to restate
the Company's financial statements and the Management's Discussion and Analysis
section of such forms to report such acquisitions using the pooling method of
accounting.
Sch. 2.09-1
<PAGE>
EXHIBIT 3
REGISTRATION RIGHTS AGREEMENT
AMONG
IMRGLOBAL CORP.
AND
THE ENTITIES LISTED ON
ATTACHED EXHIBIT A
DATED AS OF NOVEMBER 12, 1999
<PAGE>
TABLE OF CONTENTS
ARTICLE I. EFFECTIVENESS; DEFINITIONS; REPRESENTATIONS.......................1
1.1. Definitions..........................................................1
1.2. Representations and Warranties of the Holders........................1
1.3. Representations and Warranties of the Company........................3
ARTICLE II. REGISTRATION RIGHTS...............................................3
2.1. Required Registration................................................4
2.1.2. Subsequent Availability of Form S-3.........................4
2.1.3. Payment of Expenses.........................................4
2.2. Piggyback Registration Rights........................................4
2.2.1. Piggyback Registration......................................4
2.2.2. Payment of Expenses.........................................5
2.3. Registration Procedures.....................................5
2.4. Obligations of the Holders...........................................6
2.5. Suspension...........................................................6
2.6. Indemnification and Contribution.....................................7
2.6.1. Indemnities of the Company..................................7
2.6.2. Indemnities to the Company..................................8
2.6.3. Indemnification Procedures..................................8
2.6.4. Contribution................................................9
2.6.5. Limitation on Liability of Holder of Registrable
Securities.................................................10
2.7. Information by Holder...............................................10
2.8. Availability of Information.........................................10
ARTICLE III. REMEDIES.........................................................10
ARTICLE IV. AMENDMENT, TERMINATION, ETC......................................11
4.1. Oral Modifications..................................................11
4.2. Written Modifications...............................................11
4.3. Termination.........................................................11
4.4. Transfer of Registration Rights.....................................11
ARTICLE V. DEFINITIONS......................................................11
5.1. Certain Matters of Construction.....................................11
5.2. Definitions.........................................................12
ARTICLE V. MISCELLANEOUS....................................................13
6.1. Authority; Effect...................................................13
6.2. Notices.............................................................13
6.3. Binding Effect, etc.................................................14
6.4. Descriptive Headings................................................14
6.5. Counterparts........................................................15
6.6. Severability........................................................15
6.7. Governing Law.......................................................15
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
November 12, 1999, among IMRGLOBAL CORP., a Florida corporation, with principal
offices at 100 South Missouri Avenue, Clearwater, Florida 33756 (the "Company")
and each of the entities listed on attached Exhibit A (together with their
respective authorized successors and assigns, each, a "Holder" and,
collectively, the "Holders").
WHEREAS, pursuant to a Stock Purchase Agreement (the "Purchase Agreement"),
dated as of November 12, 1999, among A&S Family Limited Partnership, a Nevada
limited partnership ("A&S"), Satish K. Sanan (together with A&S, collectively,
the "Seller"), the Holders and Bridge East Management, LLC, the Seller agreed to
sell, and the Holders agreed to purchase, Two Million Six Hundred Sixty-Six
Thousand Six Hundred Sixty-Seven (2,666,667) shares (the "Shares") of Common
Stock, par value $.10 per share (the "Common Stock") of the Company at a
purchase price of $7.50 per share; provided, however, that the Company use its
best efforts to effect registration under the Securities Act (as such term is
hereinafter defined) of the Shares pursuant to the terms of this Agreement; and
WHEREAS, a portion of the proceeds received by the Seller under the
Purchase Agreement shall be used to repay a loan by the Company to the Seller,
and as such, the consummation of the transactions contemplated under the
Purchase Agreement is in the best interests of the Company;
WHEREAS, in order to induce the Holders to consummate the transactions
contemplated under the Purchase Agreement, the Company is entering into this
Agreement to define the rights that exist among the Holders on the one hand, and
the Company on the other, with respect to the registration under the Securities
Act of all of the Shares;
NOW, THEREFORE, in consideration of the mutual premises, agreements and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I.
EFFECTIVENESS; DEFINITIONS; REPRESENTATIONS
1.1 Definitions. Certain terms are used in this Agreement as specifically
defined herein. These definitions are set forth or referred to in Article 5
hereof. Capitalized terms used and not defined in this Agreement shall have the
meanings provided in the Purchase Agreement.
1.2 Representations and Warranties of the Holders. The Holders, severally,
but not jointly, represent and warrant to the Company that, as of the date
hereof:
1.2.1. This Agreement has been duly and validly executed and delivered
by such Holder and constitutes a legal and binding obligation of such
Holder, enforceable against such Holder in accordance with its terms.
<PAGE>
1.2.2. The execution, delivery and performance by each Holder of this
Agreement and the consummation by such Holder of the transactions
contemplated hereby will not, with or without the giving of notice or lapse
of time, or both (a) violate any provision of law, statute, rule or
regulation to which such Holder is subject, (b) violate any order, judgment
or decree applicable to such Holder, or (c) conflict with, or result in a
breach of default under, any term or condition of any agreement or other
instrument to which such Holder is a party or by which such Holder is bound
where any such violation, conflict or breach would materially impair such
Holder's ability to perform its obligations under this Agreement.
1.2.3. (a) Each Holder acknowledges and agrees that the Registrable
Securities have not been registered under the Securities Act or under the
securities laws of any state, in reliance upon certain exemptive provisions
of such statutes. Each Holder recognizes and acknowledges that such claims
of exemption are based, in part, upon each Holder's representations
contained in this Agreement. Each Holder further recognizes and
acknowledges that, because the Registrable Securities are unregistered
under federal and state laws, they are not presently eligible for public
resale, and may only be resold in the future pursuant to an effective
registration statement under the Securities Act and any applicable state
securities laws, or pursuant to a valid exemption from such registration
requirements. Each Holder recognizes and acknowledges that Rule 144 or any
other exemption promulgated under the Securities Act (which facilitates
routine sales of securities in accordance with the terms and conditions of
that Rule, including a holding period requirement) is not now available for
resale of the Registrable Securities, and each Holder recognizes and
acknowledges that, in the absence of the availability of Rule 144 or any
other exemption under the Securities Act, a sale pursuant to a claim of
exemption from registration under the Securities Act would require
compliance with some other exemption under the Securities Act, none of
which may be available for resale of the Registrable Securities. Each
Holder recognizes and acknowledges that the Company's obligation to
register the Registrable Securities either pursuant to the Securities Act
or the securities laws of any state is subject to the terms and conditions
of this Agreement.
(b) Each certificate representing Registrable Securities shall, except
as otherwise provided in this Section 1.2.3, be stamped or otherwise
imprinted with a legend substantially in the following form:
"The Securities represented hereby have not been registered under the
Securities Act of 1933, as amended, and may not be sold, transferred
or otherwise disposed of except in accordance with the terms thereof
and unless registered with the Securities and Exchange Commission of
the United States and the securities regulatory authorities of certain
states or unless an exemption from such registration is available."
Such certificates shall not bear such legend if (i) in the opinion of
counsel satisfactory to the Company the securities being sold thereby may
be publicly sold without registration under the Securities Act or (ii) if
such securities have been sold pursuant to Rule 144, any other exemption
under the Securities Act or an effective registration statement.
2
<PAGE>
(c) Prior to the second anniversary of the Closing Date (as that term
is defined in the Purchase Agreement), each Holder shall give written
notice to the Company of intention to effect any proposed transfer of any
Registrable Securities other than Registrable Securities transferred
pursuant to an effective Registration Statement. Prior to the Form S-3 or
the Form S-1 becoming effective, each such notice shall describe the manner
of the proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel satisfactory to the company to the
effect that the proposed transfer may be effected without registration
under the Securities Act (except that no opinion will be required if the
sale is pursuant to Rule 144), whereupon the Holder shall be entitled to
transfer such security in accordance with the terms of his or her notice.
Each certificate for Registrable Securities transferred as above provided
shall bear the legend set forth in this Section 1.2.3, except that such
certificate shall not bear such legend if (i) such transfer is in
accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the
opinion of counsel referred to above is to the further effect that, as of
the date of such opinion, the transferee and any subsequent transferee
(other than an affiliate of the Company) would be entitled to transfer such
securities in a public sale without registration under the Securities Act
(except that no opinion will be required if the sale is pursuant to Rule
144). Upon the effectiveness of the Form S-3 or the Form S-1 and a sale in
accordance with such registration statement, the Company shall cause the
legend described in this Section 1.2.3 to be removed from such Holder's
certificates evidencing the Registrable Securities included in such
registration statement.
1.3. Representations and Warranties of the Company. The Company represents
and warrants to the Holders that, as of the date hereof:
1.3.1 This Agreement has been duly and validly executed and delivered
by the Company and constitutes a legal and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
1.3.2. The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated hereby will not, with or without the giving of notice or lapse
of time, or both (a) violate any provision of law, statute, rule or
regulation to which the Company is subject, (b) violate any order, judgment
or decree applicable to the Company, or (c) conflict with, or result in a
breach of default under, any term or condition of any agreement or other
instrument to which the Company is party or by which the Company is bound
where any such violation, conflict or breach would have a material adverse
effect on the financial condition or results of operation of the Company.
ARTICLE II.
REGISTRATION RIGHTS
The Company will perform and comply with such of the following provisions
as are applicable to the Company. The Holders will perform and comply with such
of the following provisions as are applicable to the Holders.
3
<PAGE>
2.1. Required Registration.
2.1.1. The Company shall, as soon as reasonably practicable, but in no
event later than sixty (60) days after the Closing Date, prepare and file
with the Commission a registration statement on Form S-3 with respect to
the Registrable Securities and use its best efforts to cause such
registration statement to become effective (subject to review by the
Commission) within one hundred eighty (180) days after the Closing Date;
provided that, if the Company is not eligible to use Form S-3 (or any
similar form promulgated by the Commission), then the Company shall use its
best efforts to effect the registration under the Securities Act of all of
the Registrable Securities on Form S-1 as soon as practicable and shall use
its best efforts to cause such registration statement to become effective
(subject to review by the Commission) not later than one hundred eighty
(180) days after the Closing Date and to remain continuously effective for
the period specified in Section 2.3.1.
2.1.2. Subsequent Availability of Form S-3. If at any time, or from
time to time, the Company regains eligibility to effect registration of the
Registrable Securities on a Form S-3, then the Company shall promptly
notify the Holders and use its best efforts to effect the registration
under the Securities Act of all of the Registrable Securities on a Form S-3
as soon as reasonably practicable.
2.1.3. Payment of Expenses. The Company shall pay all Registration
Expenses incurred in connection with the registration of the Registrable
Securities, other than Selling Expenses, if any, provided that,
notwithstanding the foregoing, the Holders shall pay reasonable fees and
expenses of counsel to the Company associated with maintaining any
registration statement on a Form S-1 effective beyond March 26, 2000 solely
at the request of the Holders during any period that a Form S-3 filing is
not available to the Company, but only to the extent that such expenses are
greater than those expenses which would be incurred in maintaining a Form
S-3 registration effective and not including the costs and expenses
incurred during such a period associated with preparing and filing
quarterly or annual financial statements for the Company; and provided
further, that the expenses to be paid by the Holders shall be limited to a
maximum aggregate amount of $150,000. Any expenses payable by the Holders
pursuant to this Section 2.1.3 shall be borne by the Holders of the
Registrable Securities included in such registration pro rata based on the
number of shares so registered.
2.2. Piggyback Registration Rights.
2.2.1. Piggyback Registration. Unless the Registrable Securities are
otherwise subject to an effective registration statement, then each time
the Company proposes to register any Registrable Securities of Common Stock
under the Securities Act for sale in a Public Offering, other than (a) a
registration relating solely to employee benefit plans, (b) a registration
relating solely to a Commission Rule 145 transaction, or (c) a registration
effected pursuant to Section 2.1.1 or Section 2.1.2, the Company will
promptly give notice to the Holders of its intention to do so. The Holders
may, by written response delivered to the Company within fifteen (15) days
after the receipt of the Company's notice, request that all or a specified
part of the Registrable Securities be included in such registration. The
Company thereupon will use its best efforts to cause to be included in such
registration under
4
<PAGE>
the Securities Act all Registrable Securities which the Company has been so
requested to register, to the extent required to permit the disposition (in
accordance with the methods to be used by the Company or other holders
selling Registrable Securities in such Public Offering) of the Registrable
Securities to be so registered.
2.2.2. Payment of Expenses. The Company shall pay all Registration
Expenses incurred in connection with each registration of the Registrable
Securities requested pursuant to this Section 2.2, other than Selling
Expenses, if any. Any expenses payable by the Holders pursuant to this
Section 2.2.2 shall be borne by the Holders of the Registrable Securities
included in such registration pro rata based on the number of shares so
registered.
2.3. Registration Procedures. In the case of each registration effected by
the Company pursuant to this Agreement, the Company will keep each Holder
advised in writing as to the initiation of such registration and as to the
completion thereof and will:
2.3.1. Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain continuously effective (subject
to Section 2.5) until the earliest to occur of (a) the distribution by the
Holders described in such registration statement is completed; (b) the date
all of the Registrable Securities held by the Holders could be sold under
Rule 144 (or similar or successor rule) during any three (3) month period;
and (c) the date all Holders whose securities are included in such
registration shall have requested such registration statement to be
withdrawn.
2.3.2. Prepare and file with the Commission amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement, and use its best efforts to cause each such
amendment to become effective, as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement.
2.3.3. Furnish to the Holders such reasonable number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the registration of the
Registrable Securities owned by them.
2.3.4. Use its best efforts to register or qualify the securities
covered by such registration statement under such securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Holders
provided that the Company shall not be required to register in any
jurisdictions which require it, in connection therewith or as a condition
thereto, to qualify to do business or to file a general consent to service
of process or to subject itself to taxation in any such states or
jurisdiction.
2.3.5. Notify the Holders covered by such registration statement, at
any time when a prospectus relating thereto covered by such registration
statement is required to be delivered under the Securities Act, of the
happening of any event as a result of which the
5
<PAGE>
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and promptly file such amendments and supplements which may be
required pursuant to Section 2.3.2 on account of such event and use its
best efforts to cause each such amendment and supplement to become
effective; provided, however, that the Holders shall refrain from selling
during the period commencing with the giving of such notice and terminating
upon the effectiveness of such amendment or supplement (or at such earlier
time as the Holders are advised that the misleading aspect of the
registration statement has been otherwise cured); and provided further,
that this Section shall not relieve the Company of any of its obligations
under Sections 2.1.1 and 2.3.1.
2.3.6. Furnish, at the request of the Holders, on the date that the
registration statement with respect to the Registrable Securities becomes
effective, (a) an opinion or opinions (which may be relied upon by the
Holders), dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily
given by such counsel, addressed to the Holders, and (b) a comfort letter
dated such date, from the independent certified public accountant of the
Company, in form and substance as is customarily given by independent
certified public accountants, addressed to the Holders.
2.3.7. In the event of any underwritten Public Offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
2.3.8. Promptly notify the Holders of any change at any time in the
status of the Company's eligibility to file with the Commission a
registration statement on Form S-3 (or any similar form promulgated by the
Commission) or its ability to continue maintaining the effectiveness of
such a Form S-3 filing.
2.3.9. The Company represents that it is under a contractual
commitment to file a Registration Statement for certain shareholders
(unrelated to this Agreement) as soon as reasonably possible, and to keep
such Registration Statement effective until March 26, 2000.
2.4. Obligations of the Holders. Notwithstanding registration of the
Registrable Securities in connection with any registration statement filed
pursuant to this Agreement, for a period of one hundred eighty (180) days after
the Closing Date (the "Lock-Up Period"), the Holders, in the aggregate, may only
sell up to twenty-five percent (25%) of the Registrable Securities purchased
under the Purchase Agreement. After the Lock-Up Period terminates and assuming
any registration statement filed by the Company pursuant to this Agreement has
been declared effective, the Holders shall be permitted to sell the remainder of
the Registrable Securities with no further restrictions other than any
applicable restrictions under federal or state securities laws.
2.5. Suspension. The Company may suspend the effectiveness of a
registration statement, in the event that, and for a period not to exceed sixty
(60) days in any calendar year (a "Blackout Period") if, (a) an event occurs and
is continuing as a result of which the registration statement would,
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in the Company's good faith judgment, contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading and (b)(i) if the Company determines in good faith that
the disclosure of such event at such time would have a material adverse effect
on the business, operations or prospects of the Company or (ii) the disclosure
otherwise relates to a pending material business transaction which has not yet
been publicly disclosed.
2.6. Indemnification and Contribution.
2.6.1. Indemnities of the Company.
(a) In connection with any registration statement or any other
disclosure document produced by or on behalf of the Company or any of
its affiliates, including, without limitation, reports required and
other documents filed under the Exchange Act, and other documents
pursuant to which any debt or equity securities of the Company or any
of its affiliates are sold (whether or not for the account of the
Company or its affiliates), the Company will, and hereby does, and
will cause its affiliates, jointly and severally to, indemnify and
hold harmless each Holder, their respective direct and indirect
directors, officers, partners, members, affiliates, shareholders,
employees, agents, successors and assigns advisory board members, and
each other Person, if any, who controls any such Holder or Person
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (each such person being referred to herein as a
"Covered Person"), against any losses, claims, damages or liabilities,
joint or several, to which such Covered Person may be or become
subject under the Securities Act, the Exchange Act, any other
securities or other law of any jurisdiction, the common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any
material fact contained or incorporated by reference in any
registration statement under the Securities Act, any preliminary
prospectus or final prospectus included therein, or any related
summary prospectus, or any amendment or supplement thereto, or any
other such disclosure document (including without limitation reports
and other documents filed under the Exchange Act and any documents,
incorporated by reference therein), (ii) any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(iii) any violation or alleged violation by the Company or any of its
affiliates of any federal, state, foreign or common law rule or
regulation applicable to the Company or any of its affiliates and
relating to action or inaction in connection with any such
registration statement, disclosure document or other document or
report, and will reimburse such Covered Person for any out-of-pocket
reasonable legal or any other expenses incurred by it in connection
with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that neither the
Company nor any of its affiliates shall be liable to any Covered
Person in any such case to the extent that any such loss, claim,
damage, liability, action or proceeding arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus,
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amendment or supplement, incorporated document or other such
disclosure document or other document or report, in reliance upon and
in conformity with written information furnished by such Covered
Person to the Company or to any of its affiliates solely for use in
preparation of such registration statement, disclosure document or
other document or report. The indemnities of the Company and of its
affiliates contained in this Section 2.6.1 shall remain in full force
and effect regardless of any investigation made by or on behalf of
such Covered Person and shall survive any transfer of securities.
(b) The Company will, and hereby does, and will cause its
affiliates, jointly and severally to, indemnify and hold harmless each
of the Holders and their directors, officers, partners, members,
affiliates, shareholders, employees, agents, successors and assigns
from and against any and all losses, liabilities, deficiencies, costs,
penalties, sanctions, damages, obligations, demands, judgments,
actions, suits, causes of action, claims, proceedings, investigations,
citations, and expenses (including, without limitation, reasonable
attorneys' and consultants' fees, charges and disbursements), whether
or not subject to litigation, incurred by any of the Holders as a
result of, imposed upon, arising out of, in connection with, or in any
way attributed or relating to any inaccuracy in, breach or failure of
any representation, warranty or covenant made by the Company in this
Agreement, including the failure of the Company to use its best
efforts to cause the registration of the Registrable Securities to be
effective (subject to review by the Commission) within one hundred
eighty (180) days after the Closing, or in any other document or
instrument delivered by the Company in connection with the matters
addressed in this Agreement.
2.6.2 Indemnities to the Company. To the extent permitted by law, each
Holder will, if Registrable Securities held by such Holder are included in
the securities as to which any registration is being effected pursuant to
this Agreement, indemnify and hold harmless the Company, each director of
the Company, each officer of the Company who shall sign such registration
statement and each other Person (other than such Holder), if any, who
controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act with respect to any statement in or
omission from such registration statement, any preliminary prospectus or
final prospectus included therein, or any amendment or supplement thereto,
or any other disclosure document (including, without limitation, reports
and other documents filed under the Exchange Act or any document
incorporated therein) or other document or report, in each case to the
extent, but only to the extent that such statement or omission was made in
reliance upon and in conformity with written information furnished by such
Holder to the Company specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, incorporated
document or other document or report. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
the Company, or any such director, officer or controlling Person and shall
survive any transfer of securities.
2.6.3. Indemnification Procedures. Promptly after receipt by a Person
entitled to indemnification pursuant to the foregoing provisions of this
Section 2.6 (an "Indemnitee") of
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notice of the commencement of any action or proceeding involving a claim of
the type referred to in the foregoing provisions of this Section 2.6, such
Indemnitee will, if a claim in respect thereof is to be made by such
Indemnitee against any indemnifying party, give written notice to each such
indemnifying party of the commencement of such action; provided, however,
that the failure of any Indemnitee to give notice to such indemnifying
party as provided herein shall not relieve any indemnifying party of its
obligations under the foregoing provisions of this Section 2.6, except and
solely to the extent that such indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against an
Indemnitee, each indemnifying party will be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such Indemnitee, and after notice from an indemnifying
party to such Indemnitee of its election so to assume the defense thereof,
such indemnifying party will not be liable to such Indemnitee for any legal
or other expenses subsequently incurred by such Indemnitee in connection
with the defense thereof; provided, however, that (a) if the Indemnitee
reasonably determines that there may be a conflict between the positions of
such indemnifying party and the Indemnitee in conducting the defense of
such action or if the Indemnitee, based on advice of its counsel,
reasonably concludes that representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them, then counsel for the Indemnitee shall conduct the
defense to the extent reasonably determined by such counsel to be necessary
to protect the interests of the Indemnitee and such indemnifying party
shall employ separate counsel for its own defense, (b) in any event, the
Indemnitee shall be entitled to have counsel chosen by such Indemnitee
participate in, but not conduct, the defense and (c) the indemnifying party
shall bear the legal expenses incurred in connection with the conduct of,
and the participation in, the defense as referred to in clause (a) above.
If, within a reasonable time after receipt of the notice, such indemnifying
party shall not have elected to assume the defense of the action, such
indemnifying party shall be responsible for any legal or other expenses
incurred by such Indemnitee in connection with the defense of the action,
suit, investigation, inquiry or proceeding. No indemnifying party will
consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee of a release from all liabilities in respect
of such claim or litigation. No indemnifying party will be responsible for
any settlement made without its consent, such consent not to be
unreasonably withheld.
2.6.4. Contribution. If the indemnification provided for in Sections
2.6.1 or 2.6.2 hereof is unavailable to a party that would have been an
Indemnitee under any such Section in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each party that would have been an indemnifying party
thereunder shall, in lieu of indemnifying such Indemnitee, contribute to
the amount paid or payable by such Indemnitee as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative fault
of such indemnifying party on the one hand and such Indemnitee on the other
in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates
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to information supplied by such indemnifying party or such Indemnitee and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties
agree that it would not be just or equitable if contribution pursuant to
this Section 2.6.4 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in the preceding sentence. The amount paid or
payable by a contributing party as a result of the losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
above in this Section 2.6.4 shall include any reasonable legal or other
expenses reasonably incurred by such Indemnitee in connection with
investigating or defending any such action or claim. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
2.6.5. Limitation on Liability of Holder of Registrable Securities.
The liability of each Holder in respect of any indemnification contribution
obligation of such Holder arising under this Section 2.6 shall not in any
event exceed an amount equal to the net proceeds to such Holder from the
disposition of Registrable Securities disposed of by such Holder pursuant
to such registration.
2.7. Information by Holder. The Holders of Registrable Securities included
in any registration shall furnish to the Company such information regarding such
Holders, the Registrable Securities held by them and the distribution proposed
by such Holders as the Company may request in writing and as shall be required
in connection with any registration under this Agreement.
2.8. Availability of Information. With a view to making available the
benefit of certain rules and regulations of the Commission which may at any time
permit the sale of Registrable Securities to the public without registration,
the Company shall comply with the reporting requirements of Sections 13 and
15(d) of the Exchange Act and shall comply with all other public information
reporting requirements of the Commission (including Rule 144 promulgated by the
Commission under the Securities Act) from time to time in effect and relating to
the availability of an exemption from the Securities Act for the sale of any
Registrable Securities. The Company shall also cooperate with each Holder in
supplying such information as may be necessary for such Holder to complete and
file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of an exemption from the
Securities Act for the sale of any Registrable Securities.
ARTICLE III.
REMEDIES
The Company and the Holders shall have all remedies available at law, in
equity or otherwise in the event of any breach or violation of this Agreement or
any default hereunder by the Company or the Holders. The parties acknowledge and
agree that in the event of any breach of this Agreement, in addition to any
other remedies which may be available, each of the parties hereto shall be
entitled to specific performance of the obligations of the other parties hereto
and, in addition to such other equitable remedies (including, without
limitation, preliminary or temporary relief) as may be appropriate in the
circumstances.
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ARTICLE IV.
AMENDMENT, TERMINATION, ETC.
4.1. Oral Modifications. This Agreement may not be orally amended,
modified, extended or terminated, nor shall any oral waiver of any of its terms
be effective.
4.2. Written Modifications. This Agreement may be amended, modified,
extended or terminated, and the provisions hereof may be waived, only by an
agreement in writing signed by the Company and the Holders. Each such amendment,
modification, extension, termination and waiver shall be binding upon each party
hereto. In addition, each party hereto may waive any right hereunder by
instrument in writing signed by such party.
4.3. Termination. No termination under this Agreement shall relieve any
Person of liability for breach prior to termination.
4.4. Transfer of Registration Rights. Subject to compliance with the
transfer provisions of Section 1.2.3, the rights to cause the Company to
register the shares granted to the Holders under this Agreement and the other
rights set forth herein may be assigned to a transferee or assignee in
connection with any Transfer of the Shares by the Holders provided that the
transferor provides the Company with written notice of the proposed Transfer,
the transferee agrees in writing to be bound by the provisions of this Agreement
and: (a) the transferee either acquires all of the transferor's Shares not sold
to the public or the transferee acquires more than one hundred thousand
(100,000) Shares (adjusted for stock splits) not sold to the public or (b) the
transferee is a partner, shareholder, affiliated entity or related fund of any
Holder.
ARTICLE V.
DEFINITIONS
For purposes of this Agreement:
5.1. Certain Matters of Construction. In addition to the definitions
referred to or set forth below in this Section 5:
5.1.1 The words "hereof", "herein", "hereunder" and words of similar
import shall refer to this Agreement as a whole and not to any particular
Section or provision of this Agreement, and reference to a particular
Section of this Agreement shall include all subsections thereof.
5.1.2. Definitions shall be equally applicable to both the singular
and plural forms of the terms defined.
5.1.3. The masculine, feminine and neuter genders shall each include
the other.
5.1.4. Definitions shall have the correlative meaning whether used in
noun or verb form.
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5.2. Definitions. The following terms shall have the following meanings:
"Agreement" shall have the meaning set forth in the Preamble.
"Blackout Period" shall have the meaning set forth in Section 2.5.
"Closing Date" shall mean the date of this Agreement.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall have the meaning set forth in the Recitals.
"Company" shall have the meaning set forth in the Preamble.
"Covered Person" shall have the meaning set forth in Section 2.6.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in effect
from time to time.
"Holders" or "Holder" shall have the meaning set forth in the Preamble.
"Indemnitee" shall have the meaning set forth in Section 2.6.3.
"Lock-Up Period" shall have the meaning set forth in Section 2.4.
"Person" shall mean any individual, partnership, corporation, company,
association, trust, joint venture, unincorporated organization, entity or
division, or any government, governmental department or agency or political
subdivision thereof.
"Public Offering" shall mean a public offering and sale of interests in the
Company for cash pursuant to an effective registration statement under the
Securities Act.
"Purchase Agreement" shall have the meaning set forth in the Recitals.
"Registration Expenses" shall mean all expenses, except as included in
Selling Expenses or as otherwise stated below, incurred by the Company in
complying with its registration obligations under this Agreement, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company, blue
sky fees and expenses, the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company) and the reasonable
fees and disbursements of one special counsel for all Holders in the event of
each registration provided for in this Agreement.
"Registrable Securities" shall mean (a) the Shares and/or (b) stock issued
in respect of the Shares as a result of a stock split, stock dividend,
recapitalization or the like, and which has not been sold to the public or
pursuant to Rule 144 promulgated under the Securities Act.
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"Securities Act" shall mean the Securities Act of 1933, as in effect from
time to time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders pursuant to this Agreement.
"Shares" shall have the meaning set forth in the Recitals.
"Transfer" shall mean any sale, pledge, assignment, encumbrance or other
transfer or disposition of any Registrable Securities to any other Person,
whether directly, indirectly, voluntarily, involuntarily, by operation of law,
pursuant to judicial process or otherwise.
ARTICLE VI.
MISCELLANEOUS
6.1. Authority; Effect. Each party hereto represents and warrants to and
agrees with each other party that the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized on behalf of such party and do not violate any agreement or other
instrument applicable to such party or by which its assets are bound. This
Agreement does not, and shall not be construed to, give rise to the creation of
a partnership among any of the parties hereto, or to constitute any of such
parties members of joint venture or other association.
6.2. Notices. Any notices and other communications required or permitted in
this Agreement shall be effective if in writing and (a) delivered personally or
(b) sent (i) by a nationally recognized overnight courier or (ii) by registered
or certified mail, postage prepaid in each case, addressed as follows:
If to the Company, to it at:
IMRglobal Corp.
100 South Missouri Avenue
Clearwater, Florida 33756
Attention: Dilip Patel, Esq.
Fax No.: 727-467-9688
With a copy to:
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
Attention: Thomas J. Egan, Jr., Esq.
Fax No.: 202-452-7073
If to the Holders, to them at:
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Bridge East Capital, L.P.
c/o W.S. Walker & Co.
Caledonian House
Mary Street, P.O. Box 2656
Georgetown, Grand Cayman
Cayman Islands, BWI
Fax No.: 345-949-7886
BV-IT Global LLC
8065 Leesburg Pike - Suite 140
Vienna, Virginia 22181
Attention: Alex Vahabzadeh
Fax No.: 703-748-7401
With a copy to:
Bridge East Management, LLC
575 Fifth Avenue, 22nd Floor
New York, New York 10017
Attention: John P. Oswald
Fax No.: 212-277-1001
With a copy to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: John R. Fallon, Jr., Esq.
Fax No.: 212-424-8500
Unless otherwise specified herein, such notices or other communications shall be
deemed effective (a) on the date delivered, if personally delivered or sent by a
nationally recognized overnight courier and (b) three business days after sent,
if sent by registered or certified mail. Each of the parties hereto shall be
entitled to specify a different address by giving notice as aforesaid to each of
the other parties hereto.
6.3. Binding Effect, etc. This Agreement constitutes the entire agreement
of the parties with respect to its subject matter, supersedes all prior or
contemporaneous oral or written agreements or discussions with respect to such
subject matter, and shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, representatives successors and
permitted assigns.
6.4. Descriptive Headings. The descriptive headings of this Agreement are
for convenience of reference only, are not to be considered a part hereof and
shall not be construed to define or limit any of the terms or provisions hereof.
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6.5. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one instrument.
6.6. Severability. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
be construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with, and possible under, applicable law. The
provisions hereof are severable, and in the event any provision hereof should be
held invalid or unenforceable in any respect, it shall not invalidate, render
unenforceable or otherwise affect any other provision hereof.
6.7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISION OR RULE THAT WOULD
CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER
JURISDICTION. THE COMPANY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK, AND IRREVOCABLY AGREES THAT
ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT MAY BE LITIGATED IN SUCH
COURTS, AND THE COMPANY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT
AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL, MESSENGER OR OVERNIGHT COURIER
SERVICE DIRECTED TO IT AT THE ADDRESS SET FORTH IN SECTION 6.2 HEREIN.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, each of the undersigned has duly executed this
Registration Rights Agreement (or caused this Registration Rights Agreement to
be executed on its behalf by its officer or representative thereunto duly
authorized) under seal as of the date first above written.
COMPANY:
IMRGLOBAL CORP.
By: /s/ Dilip Patel
Name: Dilip Patel
Title: Vice President & Co-General Counsel
HOLDERS:
BRIDGE EAST CAPITAL, L.P.
By: Bridge East Partners LDC
its General Partner
By: Capital Trust S.A.
its General Partner
By: /s/ John P. Oswald
Name: John P. Oswald
Title: Director
BV-IT GLOBAL LLC
By: /s/ Alex Vahabzadeh
Name: Alex Vahabzadeh
Title: Managing Member
<PAGE>
EXHIBIT A
HOLDERS
1. Bridge East Capital, L.P.
c/o W.S. Walker & Co.
Caledonian House
Mary Street
Georgetown, Grand Cayman
Cayman Islands, BWI
2. BV-IT Global LLC
8065 Leesburg Pike - Suite 140
Vienna, Virginia 22182
