EXHIBIT 2.1
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
IMRGLOBAL CORP.,
IMRGLOBAL OXFORD CORP.,
ORION CONSULTING, INC.,
AND
XXXXXX X. XXXXXXXXX,
INDIVIDUALLY AND AS SHAREHOLDER REPRESENTATIVE
OF
THE SHAREHOLDERS OF ORION CONSULTING, INC.
--------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS.................................... 1
Section 1.1 DEFINITIONS..................................................... 1
ARTICLE II
THE MERGER..................................... 7
Section 2.1 THE MERGER...................................................... 7
Section 2.2 EFFECTIVE TIME OF THE MERGER.................................... 7
Section 2.3 CLOSING......................................................... 7
Section 2.4 EFFECTS OF THE MERGER........................................... 7
Section 2.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION............. 8
Section 2.6 SHAREHOLDER REPRESENTATIVE...................................... 8
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES................... 9
Section 3.1 EFFECT ON CAPITAL STOCK......................................... 9
Section 3.2 EXCHANGE OF CERTIFICATES........................................ 10
Section 3.3 LOST, STOLEN OR DESTROYED CERTIFICATES.......................... 10
Section 3.4 DISSENTING SHARES............................................... 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
ORION SHAREHOLDERS................................ 11
Section 4.1 TITLE TO THE ORION COMMON STOCK................................. 11
Section 4.2 ORGANIZATION.................................................... 12
Section 4.3 CAPITALIZATION.................................................. 12
Section 4.4 AUTHORITY OF THE ORION SHAREHOLDERS ............................ 12
Section 4.5 AUTHORITY OF ORION.............................................. 13
Section 4.6 CONSENTS AND APPROVALS; NO VIOLATIONS........................... 13
Section 4.7 NO UNDISCLOSED LIABILITIES...................................... 14
Section 4.8 EMPLOYEE BENEFIT PLANS.......................................... 14
Section 4.9 OTHER BENEFIT PLANS............................................. 17
Section 4.10 LITIGATION..................................................... 17
Section 4.11 COMPLIANCE WITH APPLICABLE LAW................................. 17
Section 4.12 BOARD ACTION; VOTE REQUIRED.................................... 18
Section 4.13 TAX RETURNS AND AUDITS......................................... 18
Section 4.14 MATERIAL CONTRACTS............................................. 18
Section 4.15 INSURANCE...................................................... 19
Section 4.16 SUBSIDIARIES................................................... 20
1
Section 4.17 REAL PROPERTY.................................................. 20
Section 4.18 ENVIRONMENTAL AND EMPLOYEE SAFETY MATTERS...................... 20
Section 4.19 INTELLECTUAL PROPERTY.......................................... 21
Section 4.20 TANGIBLE PERSONAL PROPERTY..................................... 24
Section 4.21 EMPLOYEES AND INDEPENDENT CONTRACTORS.......................... 24
Section 4.22 FINANCIAL STATEMENTS........................................... 24
Section 4.23 EVENTS SUBSEQUENT TO MARCH 31, 1999............................ 25
Section 4.24 NOTES AND ACCOUNTS RECEIVABLE.................................. 27
Section 4.25 ORDINARY COURSE................................................ 27
Section 4.26 ACCOUNTING MATTERS............................................. 27
Section 4.27 AMBULATORY PAYMENT CLASSIFICATION.............................. 27
Section 4.28 DISCLOSURE..................................................... 28
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF IMRGLOBAL AND THE MERGERSUB........................... 28
Section 5.1 ORGANIZATION.................................................... 28
Section 5.2 AUTHORITY....................................................... 28
Section 5.3 CONSENTS AND APPROVALS; NO VIOLATIONS........................... 29
Section 5.4 ISSUANCE OF IMRGLOBAL COMMON STOCK.............................. 29
Section 5.5 SEC REPORTS AND FINANCIAL STATEMENTS............................ 29
Section 5.6 INSURANCE. Schedule 5.6 sets forth the material insurance
policies maintained by IMRglobal. Except as.......................... 30
ARTICLE VI
COVENANTS...................................... 30
Section 6.1 PRE-CLOSING COVENANTS........................................... 30
Section 6.2 POST-CLOSING COVENANTS.......................................... 32
ARTICLE VII
ADDITIONAL AGREEMENTS.............................. 34
Section 7.1 EXPENSES........................................................ 34
Section 7.2 BROKERS OR FINDERS.............................................. 34
Section 7.3 CONFIDENTIALITY/NON-DISCLOSURE.................................. 35
Section 7.4 POOLING OF INTERESTS............................................ 35
Section 7.5 RESTRICTED SHARES............................................... 35
Section 7.6 REGISTRATION RIGHTS............................................. 36
Section 7.7 CONDITIONS TO REGISTRATION...................................... 36
Section 7.8 REGISTRATION PROCEDURES......................................... 37
Section 7.9 TAX TREATMENT................................................... 39
Section 7.10 NASDAQ LISTING................................................. 39
Section 7.11 CONTINGENT FEES................................................ 39
2
Section 7.12 INSURANCE...................................................... 39
ARTICLE VIII
INDEMNIFICATION; SURVIVAL.............................. 39
Section 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................... 39
Section 8.2 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF IMRGLOBAL......... 39
Section 8.3 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE ORION
SHAREHOLDERS................................................... 40
Section 8.4 MATTERS INVOLVING THIRD PARTIES................................. 40
Section 8.5 DETERMINATION OF ADVERSE CONSEQUENCES........................... 41
Section 8.6 OTHER INDEMNIFICATION PROVISIONS................................ 42
ARTICLE IX
CONDITIONS TO CLOSING............................... 42
Section 9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY......................... 42
Section 9.2 CONDITIONS TO OBLIGATIONS OF IMRGLOBAL AND THE MERGERSUB........ 43
Section 9.3 CONDITIONS TO OBLIGATIONS OF THE ORION SHAREHOLDERS AND ORION... 44
ARTICLE X
TERMINATION AND AMENDMENT.............................. 46
Section 10.1 TERMINATION.................................................... 46
Section 10.2 EFFECTS OF TERMINATION......................................... 46
ARTICLE XI
MISCELLANEOUS................................... 46
Section 11.1 NOTICES........................................................ 46
Section 11.2 INTERPRETATION................................................. 48
Section 11.3 COUNTERPARTS................................................... 48
Section 11.4 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES................. 48
Section 11.5 GOVERNING LAW.................................................. 48
Section 11.6 ASSIGNMENT..................................................... 48
Section 11.7 AMENDMENT...................................................... 48
Section 11.8 EXTENSION; WAIVER.............................................. 48
Section 11.9 MATERIALITY OF REPRESENTATIONS AND WARRANTIES.................. 49
Section 11.10 JURISDICTION.................................................. 49
EXHIBITS
Exhibit 1.1 - List of Orion Shareholders
Exhibit 2.1 - Plan of Merger
Exhibit 2.5 - Officers of the Surviving Corporation
Exhibit 2.6 - Shareholder Representative Agreement
3
Exhibit 3.2 - Irrevocable Authority
Exhibit 4.3 - Shares of Orion Common Stock Outstanding
Exhibit 4.22 - Financial Statements
Exhibit 6.2(d) - Orion Shareholders subject to Non-Competition/
Non-Solicitation
Exhibit 7.2 - Brokers or Finders
Exhibit 7.5 - Shareholder Certificate
Exhibit 9.2(f) - Employment and/or Non-Competition and
Non-Solicitation Agreements
Exhibit 9.2(i) - Xxxxxxxxxx Employment Agreement
SCHEDULES
Schedule 4.6 - Consents, Approvals and Violations
Schedule 4.8 - Employee Benefit Plans
Schedule 4.9 - Other Benefit Plans
Schedule 4.10 - Litigation
Schedule 4.11 - Compliance with Applicable Law
Schedule 4.13 - Tax Returns and Audits
Schedule 4.14 - Material Contracts
Schedule 4.15 - Insurance
Schedule 4.16 - Subsidiaries
Schedule 4.17 - Real Property
Schedule 4.18 - Environmental and Employee Safety Matters
Schedule 4.19 - Intellectual Property
Schedule 4.20 - Tangible Personal Property
Schedule 4.21 - Employees and Independent Contractors
Schedule 4.23 - Events Subsequent to March 31, 1999
Schedule 4.24 - Notes and Accounts Receivable
Schedule 5.6 - Insurance
4
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of June 11,
1999, by and among IMRglobal Corp., formerly Information Management Resources,
Inc., a Florida corporation ("IMRglobal"), IMRglobal Oxford Corp., a Florida
corporation and a wholly-owned subsidiary of IMRglobal (the "MergerSub"), Orion
Consulting, Inc., an Ohio corporation ("Orion"), Xxxxxx X. Xxxxxxxxx,
individually ("Xxxxxxxxx") and as attorney-in-fact (the "Shareholder
Representative") for the shareholders set forth in Exhibit 1.1 to this Agreement
(referred to collectively in this Agreement as the "Orion Shareholders").
IMRglobal, the MergerSub, Orion, and the Orion Shareholders are referred to
collectively in this Agreement as the "Parties."
BACKGROUND
The Board of Directors of IMRglobal, the MergerSub, and Orion, each has
approved the terms and conditions of the business combination transaction
provided for in this Agreement, pursuant to which Orion will merge with and into
the MergerSub and will become a wholly-owned subsidiary of IMRglobal (the
"Merger"). The Orion Shareholders, who beneficially own and hold of record
shares collectively representing at least 98% of the voting stock of Orion, have
approved this Agreement and the transactions contemplated by this Agreement. As
a result of the Merger, each outstanding share of Orion Common Stock (as defined
below) will be converted into the right to receive the consideration provided in
this Agreement. For accounting purposes, it is intended that the Merger shall be
accounted for as a "pooling of interests." Accordingly, in consideration of the
mutual representations, warranties, covenants, and agreements set forth below,
the parties to this Agreement agree as follows:
TERMS
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. When used in this Agreement, the following terms
shall have the meanings specified below, which apply to both the singular and
the plural forms of such terms:
"ADVERSE CONSEQUENCES" means actual assessments, levies, losses, fines,
penalties, obligations, payments, judgments, Liabilities, damages, costs and
expenses, including attorneys', accountants', investigators', and experts' fees
and expenses. Adverse Consequences shall not include any punitive, special or
consequential damages that may be awarded in any lawsuit against a Party to this
Agreement in favor of another Party to this Agreement, but shall include any
punitive, special or consequential damages awarded to any third party.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"AGREEMENT" has the meaning set forth in the preface of this Agreement.
"XXXXXXXXX" has the meaning set forth in the preface of this Agreement.
"ARTICLES OF MERGER" has the meaning set forth in Section 2.2.
"BENEFIT PLANS" has the meaning set forth in Section 4.8(a).
"CERTIFICATES" has the meaning set forth in Section 3.2(a).
"CERTIFICATE OF MERGER" has the meaning set forth in Section 2.2.
"CLOSING" has the meaning set forth in Section 2.2.
"CLOSING DATE" has the meaning set forth in Section 2.3.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement dated
February 18, 1999, between Orion and IMRglobal.
"CONSIDERATION SHARES" has the meaning set forth in Section 3.1(c)
"CONSTITUENT CORPORATIONS" has the meaning set forth in Section 2.4(a).
"COVENANTING SHAREHOLDERS" has the meaning set forth in Section 6.2(d).
"DISSENTING SHARES" has the meaning set forth in Section 3.1(c).
"EFFECTIVE TIME" has the meaning set forth in Section 2.2.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any Person that, together with Orion, may be or
was at any time since May 1, 1994, treated as a single employer under Section
414 of the Code or Section 4001 of ERISA and any general partnership of which
Orion is or has been a general partner.
"ERISA PLANS" has the meaning set forth in Section 4.8(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE RATIO" has the meaning set forth in Section 3.1(c).
"FBCA" means the Florida Business Corporation Act, as amended.
2
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4.22.
"GAAP" means United States generally accepted accounting principles as
defined by the Financial Accounting Standards Board and the SEC in effect from
time to time.
"GOVERNMENTAL ENTITY" has the meaning set forth in Section 4.6.
"HARDWARE" has the meaning set forth in Section 4.19(b)(v).
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"IMRGLOBAL" has the meaning set forth in the preface of this Agreement.
"IMRGLOBAL COMMON STOCK" has the meaning set forth in Section 3.1(c).
"IMRGLOBAL SEC DOCUMENTS" has the meaning set forth in Section 5.5.
"INDEMNIFIED PARTY" has the meaning set forth in Section 8.4(a).
"INDEMNIFYING PARTY" has the meaning set forth in Section 8.4(a).
"INFORMATION" has the meaning set forth in Section 7.3.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 4.19(a).
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means the actual Knowledge of an Orion Shareholder after
reasonable investigation in a manner consistent with the level of responsibility
within Orion of such shareholder.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"LICENSE AGREEMENTS" has the meaning set forth in Section 4.19(b)(ii).
"LICENSED INTELLECTUAL PROPERTY" has the meaning set forth in Section
4.19(a).
"LICENSED SOFTWARE" has the meaning set forth in Section 4.19(b)(i).
3
"MARKET PRICE" means the average of the closing price per share of
IMRglobal Common Stock on Nasdaq on the trading days during the 30 calendar days
ending one business day immediately prior to the date of the Closing, or June
14, 1999 whichever shall first occur.
"MATERIAL ADVERSE EFFECT" means such event, change, or effect is
materially adverse to the consolidated condition (financial or otherwise),
properties, assets (including intangible assets), liabilities (including
contingent liabilities), businesses, or results of operations of such entity
(or, if with respect thereto, of such group of entities taken as a whole).
"MERGER" has the meaning set forth in the Background section of this
Agreement.
"MERGER AGREEMENT" has the meaning set forth in Section 2.1.
"MERGER CONSIDERATION" has the meaning set forth in Section 3.1(c).
"MERGERSUB" has the meaning set forth in the preface to this Agreement.
"MERGERSUB COMMON STOCK" has the meaning set forth in Section 3.1(a).
"NASDAQ" means the Nasdaq Stock Market's National Market.
"NET WORK IN PROGRESS" means net work in progress at March 31, 1999 as
shown on the Financial Statements.
"OGCL" means the Ohio General Corporation Law.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"ORION" has the meaning set forth in the preface to this Agreement.
"ORION COMMON STOCK" has the meaning set forth in Section 3.1(c).
"ORION SHAREHOLDERS" has the meaning set forth in the preface of this
Agreement.
"PARTIES" has the meaning set forth in the preface of this Agreement.
"PERMITS" has the meaning set forth in Section 4.11.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
4
"PROCESSES" has the meaning set forth in Section 4.19(b)(vi).
"PROPRIETARY INTELLECTUAL PROPERTY" has the meaning set forth in
Section 4.19(a).
"PROPRIETARY SOFTWARE" has the meaning set forth in Section 4.19(b)(i).
"REGISTRABLE SHARES" has the meaning set forth in Section 7.6.
"SEC" means the Securities and Exchange Commission.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not incurred
in connection with the borrowing of money.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR MANAGEMENT TEAM" is comprised of Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxxx Plato, Xxxxxxx X. Xxxxxxx, and those persons identified in EXHIBIT
6.2(D).
"SHAREHOLDER CERTIFICATE" has the meaning set forth in Section 7.5.
"SHAREHOLDER REPRESENTATIVE" has the meaning set forth in the preface
above.
"SOFTWARE" has the meaning set forth in Section 4.19(b)(i).
"SUBSIDIARY" means, with respect to any party, any corporation, or
other entity, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such party is a general partner (excluding partnerships
whose general partnership interests held by such party or any Subsidiary of such
party do not have a majority of the voting interest in such partnership) or (ii)
at least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other entity is
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries.
"SURVIVING CORPORATION" has the meaning set forth in Section 2.4(a).
"SURVIVING CORPORATION COMMON STOCK" has the meaning set forth in
Section 3.1(a).
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll,
5
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code /section/ 59A), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"THIRD PARTY CLAIM" has the meaning set forth in Section 8.4(a).
"VOTING DEBT" has the meaning set forth in Section 4.3.
"YEAR 2000 COMPLIANT" has the meaning set forth in Section 4.19(b)(vi).
6
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. Upon the terms and subject to the conditions of
this Agreement and the Plan of Merger in substantially the form attached as
EXHIBIT 2.1 (the "Merger Agreement") and in accordance with the FBCA and the
OGCL, Orion shall be merged with and into the MergerSub. Unless the context
otherwise requires, the term "Agreement" includes the Merger Agreement.
Section 2.2 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, articles of merger (the "Articles of Merger") and a certificate of
merger ("Certificate of Merger") have been duly prepared, executed, and
acknowledged by the MergerSub and Orion, as required, and will be delivered to
the Secretaries of State of Florida and Ohio for filing, in accordance with the
FBCA and OGCL, respectively, as soon as practicable on or after the closing of
the transactions contemplated by this Agreement (the "Closing"). The Merger will
become effective at such time as is provided in the Articles of Merger (the
"Effective Time"), which shall be on or after the time the Certificate of Merger
is filed with the Secretaries of the State of Ohio and Florida.
Section 2.3 CLOSING. The Closing will take place on June 10, 1999 or as
soon as practicable (but no more than three business days) after satisfaction or
waiver of the last to be fulfilled of the conditions set forth in Article IX
that by their terms are not to occur at the Closing or such other date as
IMRglobal and Orion may mutually determine, but in no event later than June 24,
1999 (the "Closing Date"), at a mutually agreed upon place.
Section 2.4 EFFECTS OF THE MERGER. (a) At and after the Effective Time (i)
the separate existence of Orion will cease and Orion shall be merged with and
into the MergerSub (the MergerSub and Orion are sometimes referred to in this
Agreement as the "Constituent Corporations"); (ii) the MergerSub will continue
as the surviving corporation of the Merger under the laws of Florida (the
"Surviving Corporation"); (iii) the Merger will have all of the effects provided
by the Articles of Merger and applicable law; (iv) the articles of incorporation
of the MergerSub in effect immediately before the Effective Time shall be the
articles of incorporation of the Surviving Corporation, with the exception that
the name of the Surviving Corporation shall become IMRglobal - Orion Consulting,
Inc.; and (v) the bylaws of the MergerSub as in effect immediately before the
Effective Time shall be the bylaws of the Surviving Corporation.
(b) At and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, immunities, and franchises, of a public as
well as of a private nature, and be subject to all the restrictions,
disabilities, and duties, of each of the Constituent Corporations; and all the
singular rights, privileges, immunities, and franchises of each of the
Constituent Corporations, and all property, real, personal, and mixed, and all
debts due to either of the Constituent Corporations on whatever account,
including subscriptions to shares and all other choses in action, and
all and every other interest of or belonging to or due to each of the
Constituent Corporations, shall be
7
taken and deemed to be transferred to and vested in the Surviving Corporation,
and all property, rights, privileges, powers, and franchises, and all and every
other interest shall be thereafter as effectually the property of the Surviving
Corporation as they were of the Constituent Corporations, and the title to any
real estate vested by deed or otherwise in either of the Constituent
Corporations shall not revert or be in any way impaired; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired, and all debts, Liabilities, and
duties of the Constituent Corporations shall attach to, and be assumed by, the
Surviving Corporation, and may be enforced against it to the same extent as if
such debts and Liabilities had been incurred by it.
Section 2.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors of the MergerSub at the Effective Time shall, from and after the
Effective Time, be the directors of the Surviving Corporation until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation, or removal in accordance with the Surviving
Corporation's articles of incorporation and bylaws. The officers of the
Surviving Corporation shall be those listed in EXHIBIT 2.5, and such officers
shall, from and after the Effective Time, be the officers of the Surviving
Corporation until their successors shall have been duly appointed and qualified
or until their earlier death, resignation, or removal in accordance with the
Surviving Corporation's articles of incorporation and bylaws.
Section 2.6 SHAREHOLDER REPRESENTATIVE. Each Orion Shareholder shall
execute and deliver a Shareholder Representative Agreement in substantially the
form attached as EXHIBIT 2.6 to this Agreement designating Xxxxxx X. Xxxxxxxxx
as the Shareholder Representative and authorizing and empowering the Shareholder
Representative to act for and on behalf of all Orion Shareholders in all matters
relating to the transactions contemplated by this Agreement, including receipt
on the Orion Shareholders' behalf of all Consideration Shares and other
deliveries by IMRglobal pursuant to the terms of this Agreement and the
resolution of all post-Closing matters and disputes, including but not limited
to indemnification claims pursuant to Article VIII below. IMRglobal and the
MergerSub shall be entitled to deal solely and exclusively with the Shareholder
Representative and to rely upon his authority to act for and on behalf of the
Orion Shareholders in all matters.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of
the Merger and without any further action on the part of the Constituent
Corporations or the holders of any shares of capital stock of the Constituent
Corporations:
(a) CAPITAL STOCK OF THE MERGERSUB. Each issued and outstanding share
of common stock, par value $0.01 per share, of the MergerSub (the "MergerSub
Common Stock"), shall remain outstanding (the "Surviving Corporation Common
Stock"). Each certificate representing
8
shares of the MergerSub Common Stock at the Effective Time shall represent an
equal number of shares of the Surviving Corporation Common Stock.
(b) CANCELLATION OF CERTAIN SHARES OF ORION COMMON STOCK. Each share of
Orion Common Stock that is owned by Orion as treasury stock and each share of
Orion Common Stock, if any, that is owned by IMRglobal, the MergerSub or any
other Subsidiary of IMRglobal or Orion shall be canceled and no capital stock of
IMRglobal, the MergerSub or other consideration shall be delivered in exchange
therefor.
(c) EXCHANGE RATIO FOR ORION COMMON STOCK. Each share of common stock,
no par value, of Orion ("Orion Common Stock") issued and outstanding at the
Effective Time (other than shares canceled pursuant to Section 3.1(b) and
excluding shares owned by holders who have properly exercised their rights of
appraisal within the meaning of Section 1701.85 of the OGCL (the "Dissenting
Shares")), shall be converted into the right to receive such number of shares
(the "Consideration Shares") of common stock, $.10 par value, of IMRglobal
("IMRglobal Common Stock") equal to the quotient determined by dividing U.S.
$60,000,000 by the Market Price (the "Merger Consideration") divided by
5,496,400, the total number of shares of Orion Common Stock outstanding
immediately prior to the Closing (the "Exchange Ratio"), subject to Section 7.1
below; provided, however, that amounts to be paid for the Dissenting Shares, if
any, will be governed by Section 3.4 below.
(d) ADJUSTMENT OF EXCHANGE RATIO. If between the date of this Agreement
and the Effective Time, the outstanding shares of IMRglobal Common Stock or
Orion Common Stock shall have been changed into a different number of shares or
a different class by reason of any reclassification, recapitalization, split-up,
stock dividend, stock combination, exchange of shares, readjustment or
otherwise, then the Exchange Ratio shall be correspondingly adjusted; provided,
however, that any such changes shall be subject to Section 6.1(c) below.
Section 3.2 EXCHANGE OF CERTIFICATES. (a) EXCHANGE PROCEDURES. At the
Closing, the Shareholder Representative shall deliver or cause to be delivered
certificates representing the issued and outstanding shares of Orion Common
Stock (the "Certificates") (except as contemplated by Section 3.1(b) above and
excluding Dissenting Shares), accompanied by stock powers duly signed in blank,
and with all revenue stamps necessary to transfer such shares and the
Certificates affixed and cancelled, and all taxes on such transfer, if any,
fully paid. Subject to Section 3.2, in exchange for the Certificates, IMRglobal
will deliver an irrevocable authority, in the form attached as EXHIBIT 3.2, to
IMRglobal's transfer agent to issue and deliver the Consideration Shares to the
Shareholder Representative. Until surrendered as contemplated by this Section
3.2, each Certificate shall be deemed at all times after the Effective Time to
represent only the right to receive the Merger Consideration specified in
Section 3.1(c).
(b) NO FURTHER OWNERSHIP RIGHTS IN THE ORION COMMON STOCK. The
Consideration Shares issued in exchange for shares of Orion Common Stock in
accordance with the
9
terms of this Agreement shall be deemed to have been issued in full satisfaction
of all rights pertaining to such shares of Orion Common Stock, and there shall
be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Orion Common Stock that were outstanding
immediately prior to the Effective Time.
(c) NO FRACTIONAL SHARES. No certificate or scrip representing
fractional shares of IMRglobal Common Stock shall be issued and no cash will be
paid in lieu of fractional shares. Instead, any fractional amount payable based
on the Exchange Ratio will be rounded up to the next whole share of IMRglobal
Common Stock.
(d) TAXES. All Taxes resulting from or relating to the transactions
contemplated by this Agreement shall be the sole responsibility and obligation
of the Orion Shareholders, to the extent such shareholders are obligated to pay
such Tax. IMRglobal or the Surviving Corporation shall be entitled to deduct and
withhold from the Merger Consideration otherwise payable pursuant to this
Agreement to the Orion Shareholders, such amounts as IMRglobal or the Surviving
Corporation, as the case may be, is required to deduct and withhold with respect
to such payment under the Code or any provision of state, local or foreign Tax
law. Any amounts so withheld shall be treated for all purposes of this Agreement
as having been paid to the Orion Shareholders, in respect of which such
deduction and withholding was made.
Section 3.3 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the holder thereof and, if required by IMRglobal and
the MergerSub, the posting by such holder of a bond in customary amount as
indemnity against any claim that may be made against IMRglobal with respect to
such Certificate, IMRglobal will, in exchange for such lost, stolen or destroyed
Certificate, deliver the Merger Consideration contemplated by this Article III.
Section 3.4 DISSENTING SHARES. The Dissenting Shares shall not be converted
into the right to receive shares of IMRglobal Common Stock; instead, the holders
thereof shall be entitled to payment of the appraised value of such Dissenting
Shares in accordance with the provisions of Section 1701.85 of the OGCL;
provided, however, that (a) if any holder of Dissenting Shares shall
subsequently deliver a written withdrawal of his demand for appraisal of such
shares, or (b) if any holder fails to establish his entitlement to dissenters'
rights as provided in Section 1701.85 of the OGCL, such holder or holders (as
the case may be) shall forfeit the right to appraisal of such shares of Orion
Common Stock and each of such shares shall thereupon be deemed to have been
converted into the right to receive, and to have become exchangeable for, as of
the Effective Time, IMRglobal Common Stock, as provided in Section 3.1(c)
above. Orion will give IMRglobal (i) prompt notice of any written demands for
appraisal, withdrawals of demands for appraisal and any other instruments served
pursuant to Section 1701.85 of the OGCL received by Orion and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under Section 1701.85 of the OGCL. Orion has not voluntarily made
any payment with respect to any demands for appraisal and has not, except with
the prior written consent of IMRglobal, settled or offered to settle any such
10
demands. It is understood and agreed that the obligation to make any payment
under Section 1701.85 of the OGCL shall be a joint obligation of IMRglobal and
the Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
ORION SHAREHOLDERS
Each of Orion and the Orion Shareholders, jointly and severally, represent
and warrant to IMRglobal and the MergerSub as follows:
Section 4.1 TITLE TO THE ORION COMMON STOCK. Each Orion Shareholder
represents and warrants that he or it owns and holds good and valid title to the
shares of Orion Common Stock held by him or it and title to such shares will
pass free and clear of any shareholder agreements, Security Interests,
restrictions, options or encumbrances of any type. Each Orion Shareholder
represents and warrants that he or it has the sole right to transfer such shares
of Orion Common Stock to the MergerSub pursuant to this Agreement, and upon
delivery of such shares of Orion Common Stock pursuant to this Agreement, good
and valid title to such shares, free and clear of any shareholder agreements,
Security Interests, restrictions, options or encumbrances of any type, will be
transferred to the MergerSub.
Section 4.2 ORGANIZATION. Each of Orion and its Subsidiary is a corporation
duly organized, validly existing, and in good standing under the laws of Ohio
and has all requisite power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing,
and in good standing, or to have such power, authority, and governmental
approvals would not have a Material Adverse Effect on Orion and its Subsidiary.
Each of Orion and its Subsidiary is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the property owned,
leased, or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except where the failure to be so
duly qualified or licensed and be in good standing would not have a Material
Adverse Effect on Orion and its Subsidiary. If an Orion Shareholder is a trust,
such Orion Shareholder represents and warrants that it is duly organized and
validly existing under the laws of the jurisdiction governing it, with all
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as now being
conducted.
Section 4.3 CAPITALIZATION. EXHIBIT 4.3 contains a true and correct list
(of record and beneficial) of the outstanding shares of Orion Common Stock
specifying the shares of Orion Common Stock (expressed as a number and in
percentage terms) owned by, and the address of, each such owner. Except as set
forth in EXHIBIT 4.3, as of the date of this Agreement, no shares of Orion
Common Stock or other voting securities of Orion are issued, reserved for
issuance or outstanding. All outstanding shares of Orion Common Stock are duly
authorized, validly issued, fully
11
paid and nonassessable and free of any preemptive rights. As of the date of this
Agreement, no bonds, debentures, notes, or other indebtedness or securities
having the right to vote (or convertible into securities having the right to
vote) ("Voting Debt") of Orion are issued or outstanding. Except as set forth on
Schedule 4.3 there are no outstanding or authorized options, warrants, calls,
subscriptions, or other rights, agreements, or commitments of any character to
which Orion is a party or by which Orion is bound obligating Orion to issue,
transfer, or sell or cause to be issued, transferred, or sold additional shares
of Orion Common Stock or other Voting Debt of Orion, or securities convertible
into or exchangeable for shares of Orion Common Stock or obligating Orion to
grant, extend, or enter into any such option, warrant, call, subscription or
other right, agreement, or commitment. There are no outstanding contractual
obligations of Orion to repurchase, redeem, or otherwise acquire any shares of
Orion Common Stock. As of the effective date of this Agreement, the Orion
Restricted Stock Bonus Plan and the Orion Restricted Stock Grant Plan have been
terminated, and the grantees under such plans have no continuing rights under
such plans.
Section 4.4 AUTHORITY OF THE ORION SHAREHOLDERS . Each Orion Shareholder
represents and warrants that he or it has the right, power, legal capacity and
authority to enter into and perform his or its obligations under this Agreement.
No filing, authorization or approval, governmental or otherwise, is necessary to
enable such Orion Shareholder to enter into, and to perform his or its
obligations under this Agreement, other than notice and filings pursuant to the
HSR Act. At least 98% of the Orion shareholders have approved this Agreement,
the Merger and the other transactions contemplated by this Agreement in
accordance with the requirements of Ohio law and the articles of incorporation
and bylaws of Orion. This Agreement has been duly executed and delivered by at
least 98% of the Orion shareholders and, assuming this Agreement constitutes a
valid and binding obligation of each of IMRglobal and the MergerSub, constitutes
a valid and binding obligation of such Orion shareholders enforceable against
such Orion shareholders in accordance with its terms, subject to the laws of
general application relating to bankruptcy, insolvency, and the relief of
debtors and to the rules of law governing specific performance, injunctive
relief and other equitable remedies.
Section 4.5 AUTHORITY OF ORION. Orion has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution, delivery, and
performance of this Agreement and the consummation of the Merger and of the
other transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action on the part of Orion, and no other corporate
proceedings on the part of Orion is necessary to authorize this Agreement or to
consummate the transactions so contemplated. The Orion Shareholders holding at
least 98% of the shares of Orion Common Stock have approved this Agreement and
the transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by Orion and, assuming this Agreement constitutes a valid
and binding obligation of each of IMRglobal and the MergerSub, constitutes a
valid and binding obligation of Orion, enforceable against it in accordance with
its terms, subject to the laws of general application relating to bankruptcy,
insolvency, and the relief of debtors and to the rules of law governing specific
performance, injunctive relief or other equitable remedies.
12
Section 4.6 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth on
Schedule 4.6, and except for specific provisions set forth in the leases and
other contracts to which Orion is a party as identified on Schedules 4.14 and
4.17, and except for filings, permits, authorizations, consents, and approvals
as may be required under, and other applicable requirements of, the HSR Act, the
OGCL or the FBCA, the laws of other states in which Orion or its Subsidiary is
qualified to do or is doing business, state takeover laws, and foreign laws,
neither the execution, delivery or performance of this Agreement by Orion, nor
the consummation by Orion of the transactions contemplated by this Agreement,
nor compliance by Orion with any of the provisions of this Agreement will: (a)
conflict with or result in any breach of any provision of the articles of
incorporation or bylaws of Orion or its Subsidiary; (b) require any filing with,
or authorization, consent, permit or approval of, any court, arbitral tribunal,
administrative agency or commission, or other governmental or other regulatory
authority or agency (a "Governmental Entity"), except where the failure to
obtain such authorizations, consents, permits, or approvals, or to make such
filings, would not have a Material Adverse Effect on Orion and its Subsidiary,
or the Surviving Corporation; (c) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any right of termination, amendment, cancellation, or acceleration)
under, any of the terms, conditions, or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement, or other instrument or
obligation to which Orion is a party or by which it or any of its properties or
assets may be bound; or (d) violate any order, writ, injunction, decree,
statute, rule, or regulation applicable to Orion or its Subsidiary or any of its
properties or assets, except as they relate to (c) or (d), for violations,
breaches or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect on Orion and its Subsidiary, or the Surviving
Corporation.
Section 4.7 NO UNDISCLOSED LIABILITIES. At March 31, 1999, Orion and its
Subsidiary had no Liabilities that were not reflected on a consolidated balance
sheet of Orion (including the notes to the balance sheet), except for
Liabilities that arise in the Ordinary Course of Business. Since March 31, 1999,
Orion and its Subsidiary have not incurred any Liabilities that would reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on Orion and its Subsidiary; provided, however, that Orion shall accrue bonuses
to certain of its employees. Bonuses reflected on the Financial Statements shall
be paid by the Surviving Corporation or IMRglobal within 120 days of the Closing
Date; provided, however, to the extent that the cash generated in the Ordinary
Course of Business by the Surviving Corporation is not sufficient to pay all of
said bonuses within such 120-day period, the amount of said bonuses shall be
reduced by 4% to reflect the cost of money.
Section 4.8 EMPLOYEE BENEFIT PLANS. (a) Schedule 4.8 contains a complete
and accurate list of each pension, retirement, profit sharing, deferred
compensation, stock option, stock purchase, bonus, medical, welfare, disability,
severance or termination pay, insurance or incentive plan, and each other
employee benefit plan, program, agreement or arrangement, whether funded or
unfunded, sponsored, maintained or contributed to or required to be contributed
to by Orion or any ERISA Affiliate, for the benefit of any employee or
13
terminated employee of Orion or any ERISA Affiliate (the "Benefit Plans").
Schedule 4.8 identifies each Benefit Plan that is an "employee benefit plan,"
within the meaning of Section 3(3) of ERISA (the "ERISA Plans").
(b) Neither Orion nor any ERISA Affiliate participates currently or has
ever participated in, or is required currently or has ever been required to
contribute to or otherwise participate in any "multi-employer plan," as defined
in Sections 3(37)(A) and 4001(a)(3) of ERISA and Section 414(f) of the Code.
Neither Orion nor any ERISA Affiliate participates in or maintains currently or
has ever participated in or maintained, and is not required currently or has
ever been required to contribute to, any plan or program or arrangement subject
to Title IV of ERISA.
(c) Orion has furnished to IMRglobal complete and accurate copies of
each of the Benefit Plans and related trusts, the most recent financial
statement and the most recent actuarial report prepared with respect to any of
such Benefit Plan that is funded, the most recent IRS determination letter, the
most recent summary plan description and the three most recent Form 5500 or Form
5500-C/R annual reports.
(d) With respect to each Benefit Plan intended to be "qualified" within
the meaning of Section 401(a) of the Code, (i) a determination letter from the
IRS has been received to the effect that the Benefit Plan is in form qualified
under Section 401 of the Code and any trust maintained pursuant thereto is
exempt from federal income taxation under Section 501 of the Code, (ii) such
Benefit Plan is in operation qualified within the meaning of Section 401(a) of
the Code and the trust maintained under such Benefit Plan is exempt from
taxation under section 501(a) of the Code, and (iii) nothing has occurred or
will occur through the Effective Time (including without limitation the
transactions contemplated by this Agreement) which would cause the loss of such
qualification or exemption or the imposition of any penalty or Tax Liability.
(e) All contributions required by each Benefit Plan or by law with
respect to all periods through the Effective Time shall have been made by such
date (or provided for by adequate reserves on the Financial Statements) and no
excise or other Taxes have been incurred or are due and owing with respect to
any Benefit Plan because of any failure to comply with the minimum funding
standards of ERISA and the Code.
(f) No "accumulated funding deficiency," as defined in Section 302 of
ERISA, whether or not waived, has been incurred with respect to any Benefit
Plan.
(g) To the best knowledge of each Shareholder, there are no violations
of ERISA or the Code with respect to the filing of applicable reports,
documents, and notices regarding any Benefit Plan with the Secretary of Labor or
the Secretary of the Treasury, or furnishing such documents to participants or
beneficiaries, as the case may be.
(h) To the best knowledge of each Shareholder, no claim (other than any
14
routine claim for benefits), lawsuit, arbitration or other action has been
threatened, asserted or instituted against any Benefit Plan, any trustee or
fiduciaries of any Benefit Plan, Orion, or any of the assets of any trust
maintained under any Benefit Plan.
(i) To the best knowledge of each Shareholder, all amendments required
to bring any Benefit Plan into conformity with any of the applicable provisions
of ERISA and the Code have been duly adopted and filed with the appropriate
agency as required.
(j) To the best knowledge of each Shareholder, any bonding required
with respect to each ERISA Plan in accordance with applicable provisions of
ERISA has been obtained and is in full force and effect.
(k) To the best knowledge of each Shareholder, each Benefit Plan has
been operated and administered in accordance with its terms and the applicable
terms and provisions of ERISA and the Code (including the rules and regulations
under ERISA and the Code) applicable to a Benefit Plan.
(l) To the best knowledge of each Shareholder, all required information
filings for each Benefit Plan have been timely filed.
(m) To the best knowledge of each Shareholder, no "prohibited
transaction," as such term is defined in Section 4975 of the Code and Section
406 of ERISA, has occurred with respect to any Benefit Plan (and the
transactions contemplated by this Agreement will not constitute or directly or
indirectly result in such a "prohibited transaction") which could subject Orion,
or its successors, or any officer, director or employee of any of the foregoing,
or any trustee, administrator or other fiduciary, to a Tax or penalty on
prohibited transactions imposed by either Section 502 of ERISA or Section 4975
of the Code.
(n) No Benefit Plan is under audit by the IRS or the Department of
Labor.
(o) The present value, determined on a termination basis, of all
accrued benefits, vested and unvested, under each Benefit Plan, determined using
the actuarial valuation assumptions and methods (including interest rates)
contained in the most recent actuarial report for such Benefit Plan, does not
exceed the assets of the Benefit Plan allocable to such benefits.
(p) No welfare benefit plan (within the meaning of Section 3(1) of
ERISA) provides for continuing benefits or coverage for any participant or
beneficiary of a participant after such participant's termination of employment,
except as may be required by the Consolidated Omnibus Budget Reconciliation Act
of 1985 or by Sections 601 through 608 of ERISA, or Sections 162 and 4980B of
the Code at the expense of the participant or the beneficiary of the
participant.
(q) Orion does not currently maintain or contribute to any severance
pay
15
plan.
(r) No individual shall accrue or receive any additional benefits,
service, or accelerated rights to payment of benefits under any Benefit Plan as
a result of the actions contemplated by this Agreement;
(s) To the best knowledge of each Shareholder, Orion has complied with
all of the requirements of the Consolidated Omnibus Budget Reconciliation Act of
1985, Sections 601 through 608 of ERISA, and Sections 162 and 4980B of the Code.
Section 4.9 OTHER BENEFIT PLANS. Except as set forth on Schedule 4.9, and
except as provided for in this Agreement, as of the date of this Agreement
neither Orion nor its Subsidiary is a party to any oral or written: (a)
consulting agreement not terminable on 60 days or less notice involving the
payment of more than $25,000 per year; (b) union or collective bargaining
agreement; (c) agreement with any executive officer or other key employee of
Orion or its Subsidiary providing for contingent benefits or the alteration of
terms, based upon the occurrence of a transaction involving Orion of the nature
contemplated by this Agreement; (d) agreement concerning any executive officer
of Orion or its Subsidiary providing any term of employment or compensation
guarantee extending for a period longer than one year and for the payment of in
excess of $25,000 per year; or (e) agreement or plan, including any stock option
plan, stock appreciation right plan, restricted stock plan, or stock purchase
plan, providing for increased benefits or the accelerated vesting of the
benefits by the occurrence of any of the transactions contemplated by this
Agreement, or the calculation of the value of any of the benefits on the basis
of any of the transactions contemplated by this Agreement. To the best Knowledge
of each Orion Shareholder, there is no basis for any Person to assert a claim
against Orion or its Subsidiary or any of the Orion Shareholders based upon: (i)
ownership or rights to ownership of any shares of Orion Common Stock or (ii) any
rights as an Orion securities holder, including without limitation, any option
or other right to acquire any Orion securities, any preemptive rights or any
rights to notice or to vote.
Section 4.10 LITIGATION. Except as set forth on Schedule 4.10, there is no
suit, claim, action, proceeding, or investigation pending or, to the best
Knowledge of each Orion Shareholder, threatened against, Orion or its Subsidiary
before any Governmental Entity. Except as disclosed on Schedule 4.10, neither
Orion nor its Subsidiary is subject to any outstanding order, writ, injunction,
or decree that, insofar as can be reasonably foreseen, individually or in the
aggregate, in the future would have a Material Adverse Effect on Orion and its
Subsidiary, or would prevent Orion from consummating the transactions
contemplated by this Agreement.
Section 4.11 COMPLIANCE WITH APPLICABLE LAW. Each of Orion and its
Subsidiary holds all permits, licenses, variances, exemptions, orders, and
approvals of all Governmental Entities necessary for the lawful conduct of its
business (the "Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders, and approvals that would not, individually or in
the aggregate, have a Material Adverse Effect on Orion and its Subsidiary.
16
Each of Orion and its Subsidiary is in material compliance with the terms of the
Permits. Except as set forth on Schedule 4.11, the respective businesses of
Orion and its Subsidiary are in material compliance with all laws, ordinances,
and regulations of any Governmental Entity, and no investigation or review by
any Governmental Entity with respect to Orion or its Subsidiary is pending or,
to the Knowledge of each Orion Shareholder, threatened, nor has any Governmental
Entity indicated an intention to conduct any investigation or review.
Section 4.12 BOARD ACTION; VOTE REQUIRED. As of the date of this Agreement,
the Board of Directors of Orion has (a) approved this Agreement and the
transactions contemplated by this Agreement and (b) determined that the Merger
and the transactions contemplated by this Agreement are in the best interests of
Orion and the Orion Shareholders. The Orion Shareholders, who beneficially own
and hold of record shares collectively representing at least 98% of the voting
stock of Orion, have approved this Agreement and the transactions contemplated
by this Agreement.
Section 4.13 TAX RETURNS AND AUDITS. Except as set forth on Schedule 4.13,
each of Orion and its Subsidiary has duly filed all Tax Returns required to be
filed by it, has correctly reflected the taxable income required to be shown on
such Tax Returns, and has duly paid or made adequate provision for the payment
of all Taxes, including payroll Taxes, that have been incurred or are due and
payable pursuant to such returns or pursuant to any assessment with respect to
Taxes in such jurisdictions, whether or not in connection with such Tax Returns.
There are no ongoing or to the Knowledge of each Shareholder, threatened Tax
audits relating to the Taxes. There are no circumstances or pending questions
relating to potential Tax Liabilities or claims asserted for Taxes or
assessments of Orion that, if adversely determined, would be reasonably likely
to result in a Tax Liability that would have a Material Adverse Effect on Orion
for any period prior to, including, or beginning after the Closing, or result in
a change in Orion's present practices in computing or reporting Taxes. In the
event of an examination, including audit, of the federal income Tax returns of
Orion encompassing the period prior to the Closing Date, the Shareholder
Representative shall have the right to participate in the examination, including
the audit, at the sole cost of the Orion Shareholders and IMRglobal and the
MergerSub shall cooperate with the Shareholder Representative in the
examination, including the audit. The Shareholder Representative shall have the
right to participate and control (at his expense) the conduct of the
examination, including the audit for any tax year prior to January 1, 1998. In
the event of an examination, including an audit related to a period after
December 31, 1997, IMRglobal shall control the conduct of the investigation but
the Shareholder Representative may participate (at his expense) in the
examination, including the audit.
Section 4.14 MATERIAL CONTRACTS. Schedule 4.14 lists all material
contracts, agreements and other arrangements, written or oral, to which Orion or
its Subsidiary is a party, or by which any of its assets is bound, including,
but not limited to, the following:
(a) any contract, agreement or other agreement concerning a partnership
or joint venture;
17
(b) any contract, agreement or other arrangement concerning
confidentiality or noncompetition;
(c) any contract, agreement or other arrangement between Orion or its
Subsidiary and its officers, directors, employees, or Affiliates;
(d) any contract, agreement or other arrangement under which the
consequences of a default or termination would be reasonably likely to have a
Material Adverse Effect on Orion and its Subsidiary; and
(e) any other contract, agreement or other arrangement (or group of
related contracts, agreements or other arrangements) either involving more than
$25,000 or not entered into in the Ordinary Course of Business.
To the best Knowledge of each Orion Shareholder, except as noted on Schedule
4.14, no party to any contract listed on Schedule 4.14 plans to terminate any
such contract with Orion or its Subsidiary, or the Surviving Corporation. Orion
has delivered to IMRglobal a correct and complete copy of each written contract,
agreement or other arrangement, as amended to date, listed on Schedule 4.14.
With respect to each such written contract, agreement or other arrangement
listed on Schedule 4.14: (i) it is legal, valid, binding, enforceable, and in
full force and effect, assuming the other parties to the arrangement have duly
executed and delivered such arrangement and had the necessary power and
authority to enter into such written arrangement when executed and delivered;
(ii) it will continue to be legal, valid, binding, and enforceable and in full
force and effect on identical terms following the Closing, assuming, if
applicable, that required consents to assignment are obtained; (iii) to the best
Knowledge of each Orion Shareholder, no party is in breach or default, and no
event has occurred that with notice or lapse of time or both would constitute a
breach or default, or permit termination, modification, or acceleration under
such written contract, agreement or other arrangement; and (iv) to the best
Knowledge of each Orion Shareholder, no party has repudiated any provision of
such written contract, agreement or other arrangement.
Section 4.15 INSURANCE. Schedule 4.15 sets forth and briefly describes each
insurance policy (including without limitation liability, property, business
risk, employee health, group life, key man, director/officer liability, and bond
insurance and surety arrangements) currently in effect to which Orion or its
Subsidiary is a party, or pursuant to which it is, a named insured, or otherwise
the beneficiary of coverage. Orion has delivered or made available to IMRglobal
a correct and complete copy of each such insurance policy. With respect to each
insurance policy set forth on Schedule 4.15: (a) the policy is legal, valid,
binding, and enforceable, and in full force and effect, assuming the other
parties to the policy have duly executed and delivered such policy and had the
necessary power and authority to enter into such policy when executed and
delivered; (b) neither Orion or its Subsidiary nor any other party to the policy
is in breach or default (including with respect to the payment of premiums or
the giving of notices), and no event has occurred that, with notice or the lapse
18
of time or both, would constitute such a breach or default or permit
termination, modification, or acceleration under the policy; and (c) to the best
Knowledge of each Orion Shareholder, no party to the policy has repudiated any
provision of the policy. Neither Orion nor its Subsidiary has received any
notification of a reservation of rights from any of its insurers regarding any
open claim.
Section 4.16 SUBSIDIARIES. Orion has a wholly-owned Subsidiary, Dhrystone
Systems Incorporated. Except as set forth on Schedule 4.16, Orion has never had
any other Subsidiaries. All of the issued and outstanding shares of capital
stock of Orion's Subsidiary have been duly authorized and are validly issued,
fully paid, and nonassessable. Orion holds of record and owns beneficially all
of the outstanding shares of its Subsidiary, free and clear of any shareholder
agreements, Security Interests, restrictions, options, or encumbrances of any
type. As of the date of this Agreement, no Voting Debt of Orion's Subsidiary is
issued or outstanding. There are no outstanding or authorized options, warrants,
calls, subscriptions, or other rights, agreements, or commitments of any
character that could require Orion or its Subsidiary to sell, transfer, or
otherwise dispose of any capital stock of its Subsidiary or that could require
Orion's Subsidiary to issue, sell, or otherwise cause to become outstanding any
of its own capital stock or Voting Debt. There are no outstanding contractual
obligations of Orion's Subsidiary to repurchase, redeem, or otherwise acquire
any shares of its capital stock. Neither Orion nor its Subsidiary controls
directly or indirectly or has any direct or indirect equity participation in any
corporation, partnership, trust, or other business entity which is not a
Subsidiary of Orion.
Section 4.17 REAL PROPERTY. Schedule 4.17 lists all parcels of real
property leased by each of Orion and its Subsidiary. Neither Orion nor its
Subsidiary currently owns, or has ever owned, any real property. With respect to
each parcel of leased real property listed on Schedule 4.17, the lease or
sublease is legal, valid, binding, and enforceable, and in full force and
effect. Except as noted on Schedule 4.17, all facilities leased by Orion and its
Subsidiary have received all material approvals of Governmental Entities
(including licenses and permits) required in connection with the occupancy or
operation of the real property.
Section 4.18 ENVIRONMENTAL AND EMPLOYEE SAFETY MATTERS. Except as set forth
on Schedule 4.18, each of Orion and its Subsidiary has complied with all laws
(including rules and regulations thereunder) of all federal, state, local, and
foreign Governmental Entities concerning the environment, public health and
safety, and employee health and safety, and no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, demand, or notice has been filed or
commenced against it alleging any failure to comply with any such law or
regulation. Neither Orion nor its Subsidiary has any Liability, and there is no
basis for such Liability, under any law (or rule or regulation under such law)
of any federal, state, local, or foreign Governmental Entity, concerning release
or threatened release of hazardous substances or pollution or protection of the
environment.
Section 4.19 INTELLECTUAL PROPERTY. (a) Schedule 4.19 sets forth a complete
list of (i) all trademarks, trade names (including all national and state
registrations
19
pertaining to such trademarks and trade names), and copyrights owned by each of
Orion and its Subsidiary (collectively, the "Proprietary Intellectual Property")
and (ii) all patents, trademarks, trade names, copyrights, technology, and
processes used by each of Orion and its Subsidiary in its business which are
material to its business and are used pursuant to a license or other right
granted by a third party (the "Licensed Intellectual Property" and together with
the Proprietary Intellectual Property, the "Intellectual Property"). A complete
list of all such licenses and agreements with respect to the Licensed
Intellectual Property is set forth on Schedule 4.19. Each of the national, state
or other governmental registrations with any governmental agency in any
jurisdiction (whether domestic or foreign) pertaining to the Proprietary
Intellectual Property is valid and in full force and effect, except where the
failure to holder such governmental registration will not have a Material
Adverse Effect on Orion and its Subsidiary. Orion or its Subsidiary own, or have
the right to use pursuant to valid and effective agreements, all Intellectual
Property, and the consummation of the Merger will not adversely alter or impair
any such rights. No claims are pending against Orion or its Subsidiary and there
is no factual basis for such a claim by any person, with respect to the use of
any Intellectual Property or challenging or questioning the validity or
effectiveness of any license or agreement relating to any Intellectual Property
that would have a Material Adverse Effect on Orion and its Subsidiary. The
current use by Orion and its Subsidiary of the Intellectual Property does not in
any material respect infringe upon the rights of any third party, including but
not limited to any copyright, patent, trade secret, trademark, service xxxx,
trade name, firm name, logo, trade dress, mask work, moral right, other
intellectual property right, right of privacy or right in personal data of any
person. Schedule 4.19 sets forth a list of all jurisdictions in which Orion and
its Subsidiary are operating under a trade name, and each jurisdiction in which
any such trade name is registered. There are no potentially interfering patents,
and to the best Knowledge of each Orion Shareholder, any patent application of
any third party, which could reasonably be expected to interfere with the
Intellectual Property rights.
(b) (i) Schedule 4.19 sets forth a complete list of: (A) all software
and associated documentation owned by each of Orion and its Subsidiary which are
material to its business, other than custom-developed software developed for and
assigned to a customer of Orion or its Subsidiary (the "Proprietary Software");
(B) all software (other than Proprietary Software, client's software and
"shrink-wrap" software) used in connection with the respective businesses of
Orion and its Subsidiary (the "Licensed Software" and together with the
Proprietary Software, the "Software"). Orion and its Subsidiary are in
possession of all technical and descriptive materials necessary to operate the
Software, except where the absence of such materials would not have a Material
Adverse Effect on Orion and its Subsidiary. The Proprietary Software consists of
(x) source and object code embodied in magnetic media, and (y) all development
and procedural tools, documentation and manuals necessary to maintain, enhance,
develop derivative works, support and service the Proprietary Software,
including licenses to use compilers, assemblers, libraries and other aids.
Except as noted on Schedule 4.19, no party, other than Orion and its Subsidiary,
possess any current or contingent rights to the Proprietary Software.
(ii) Orion or its Subsidiary has a valid right, title and interest
in all Intellectual Property rights in the Proprietary Software and confidential
information rights in the
20
Proprietary Software. Except as noted on Schedule 4.19, Orion or its Subsidiary
has developed the Proprietary Software entirely through its own efforts and for
its own account or has acquired, prior to the date of this Agreement, valid
right, title and interest in the Proprietary Software, and the Proprietary
Software is free and clear of all claims, Security Interests and encumbrances of
any type. Schedule 4.19 lists all parties other than Orion's or its Subsidiary's
current employees who have created any portion of, or otherwise have any rights
in, the Proprietary Software. Orion or its Subsidiary has secured from all
parties listed on Schedule 4.19 who have created any portion of, or otherwise
have any rights in, the Proprietary Software valid and enforceable written
assignments of any such Proprietary Software or other rights to Orion or its
Subsidiary and has provided copies of such assignments to IMRglobal. The use of
the Licensed Software and the use and distribution of the Proprietary Software
does not breach any terms of any contract between Orion or its Subsidiary and
any third party. Orion or its Subsidiary has been granted under the license
agreements relating to the Licensed Software (the "License Agreements") valid
and subsisting license rights with respect to all software comprising the
Licensed Software and such rights may be exercised in any jurisdiction in which
Orion and its Subsidiary currently conduct their respective businesses or could
reasonably be expected to conduct their respective businesses in the future.
Orion and its Subsidiary are in compliance with each of the terms and conditions
of each of the License Agreements, except to the extent that the failure to so
comply, individually or in the aggregate, would not have a Material Adverse
Effect on Orion and its Subsidiary.
(iii) Neither Orion nor its Subsidiary has interfered with,
infringed upon, misappropriated, or otherwise violated any Intellectual
Property, Proprietary Software, or Licensed Software rights of any third party
and, neither Orion nor its Subsidiary has ever received any charge, complaint,
claim or notice alleging any such interference, infringement, misappropriation,
or violation which could have a Material Adverse Effect on Orion and its
Subsidiary.
(iv) Except as noted on Schedule 4.19, neither Orion nor its
Subsidiary has granted any rights in the Software to any third party except for
rights granted to value added resellers, distributors or customers in the
Ordinary Course of Business pursuant to written agreements with customers.
(v) The Software and the related computer hardware used by each of
Orion and its Subsidiary in the operation of its business (the "Hardware") are
adequate in all material respects, when taken together with the other assets,
resources, and personnel of Orion and its Subsidiary, to conduct the respective
businesses of Orion and its Subsidiary in the same manner as such businesses
were operated during the fiscal year ended December 31, 1998, except as would
not have a Material Adverse Effect on Orion and its Subsidiary. Schedule 4.19
contains a summary description of any problems experienced by Orion and its
Subsidiary in the past 12 months with respect to the Software or the Hardware
and the provision of services to the respective customers of Orion and its
Subsidiary which have arisen outside the Ordinary Course of Business and could
have a Material Adverse Effect on Orion and its Subsidiary.
21
(vi) The Proprietary Software is "Year 2000 Compliant." For the
purposes of this Agreement, "Year 2000 Compliant" means: (A) the functions,
calculations, and other computing processes of the Proprietary Software
(collectively, "Processes") perform in a consistent manner regardless of the
date in time on which the Processes are actually performed and regardless of the
date input to the Proprietary Software, whether before, on, or after January 1,
2000, and whether or not the dates occur during leap years; (B) the Proprietary
Software accepts, calculates, compares, sorts, extracts, sequences, and
otherwise processes date inputs and date values, and returns and displays date
values in a consistent manner regardless of the dates used, whether before, on,
or after January 1, 2000; (C) the Proprietary Software will function without
interruptions caused by the date in time on which the Processes are actually
performed or by the date input to the Proprietary Software, whether such dates
occur before, on, or after January 1, 2000; (D) the Proprietary Software accepts
and responds to two-digit year-date input in a manner that resolves any
ambiguities as to the century in a defined, predetermined and appropriate
manner; (E) the Proprietary Software stores and displays date information in
ways that are unambiguous as to the determination of the century; and (F) the
Proprietary Software will function on September 9, 1999 and will accept and
process data input including the date September 9, 1999.
(vii) Schedule 4.19 includes a complete list and summary of
principal terms concerning support and maintenance agreements relating to the
Software, including without limitation the identity of the parties entitled to
receive such service or maintenance, the term of such agreements and any
provisions relating to the termination of such agreements.
Section 4.20 TANGIBLE PERSONAL PROPERTY. (a) Except as set forth on
Schedule 4.20, each of Orion and its Subsidiary owns, leases or otherwise has
the right to use all tangible personal property (including, without limitation,
furniture, fixtures, equipment, and supplies) necessary for the conduct of its
business as presently conducted and as presently proposed to be conducted.
(b) Except as set forth in the Financial Statements or on Schedule
4.20, each of Orion and its Subsidiary is the sole lawful and beneficial owner
of its owned tangible personal property, free and clear of all liens and
encumbrances, except for (i) liens for current Taxes not yet due or payable,
(ii) liens imposed by law and incurred in the Ordinary Course of Business for
obligations not yet due to carriers, warehousemen, laborers, and materialmen,
and (iii) liens in respect of pledges or deposits under worker's compensation
laws, all of which liens aggregate less than $10,000, and Orion and its
Subsidiary have good and marketable title to all such property.
(c) To the best Knowledge of each Orion Shareholder, the tangible
personal property of each of Orion and its Subsidiary is in good and serviceable
condition, reasonable wear and tear excepted, and the value attributed to it in
the Financial Statements represents an amount not in excess of the purchase
price, less reasonable depreciation, of such property.
22
Section 4.21 EMPLOYEES AND INDEPENDENT CONTRACTORS. Set forth on Schedule
4.21 is a complete list of the names of all persons who perform services for
Orion and its Subsidiary, classified as permanent employees, temporary employees
or independent contractors, and classified according to whether the employee's
services are billable to a third party. All of the employees and independent
contractors listed on Schedule 4.21 are properly and currently licensed, to the
extent that licensure is required, and all of such licenses are in good
standing. To the best Knowledge of each Orion Shareholder, no employee or group
of employees or independent contractors listed on Schedule 4.21 plans to
terminate employment with Orion or its Subsidiary or the Surviving Corporation.
Section 4.22 FINANCIAL STATEMENTS. Attached to this Agreement as EXHIBIT
4.22 are the following financial statements (collectively, the "Financial
Statements"): (a) audited balance sheets and statements of income, changes in
shareholders' equity, and cash flow as of and for the three years ended December
31, 1996, 1997 and 1998 for Orion; and (b) unaudited consolidated balance sheets
and statements of income, changes in shareholders' equity, and cash flow for
Orion through March 31, 1999. The Financial Statements (including the notes
thereto) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby, present fairly in all material
respects the financial condition of Orion as of such dates and the results of
operations of Orion for such periods, are correct and complete, and are
consistent in all material respects with the books and records of Orion (which
books and records are in all material respects correct and complete); provided,
however, that the unaudited Financial Statements are subject to normal year-end
audit adjustments (which will not be material individually or in the aggregate)
and lack footnotes.
Section 4.23 EVENTS SUBSEQUENT TO MARCH 31, 1999. Since March 31, 1999,
there has not been any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of Orion and
its Subsidiary, except that Orion will accrue bonuses to certain of its
employees. Without limiting the generality of the foregoing, since that date:
(a) except as set forth on Schedule 4.23(a) neither Orion nor its
Subsidiary has sold, leased, transferred, or assigned any of its assets,
tangible or intangible, other than for a fair consideration in the Ordinary
Course of Business;
(b) neither Orion nor its Subsidiary has entered into any agreement,
contract, lease, or license (or series of related agreements, contracts, leases,
and licenses) either involving more than $10,000 or outside the Ordinary Course
of Business;
(c) except as set forth on Schedule 4.23(c) no party (including Orion
and its Subsidiary) has accelerated, terminated, modified, or canceled any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) involving more than $10,000 to which Orion or
its Subsidiary is a party or by which either of them is bound;
23
(d) neither Orion nor its Subsidiary has imposed any Security Interest
upon any of its assets, tangible or intangible;
(e) except as set forth on Schedule 4.23(e), neither Orion nor its
Subsidiary has made any capital expenditure (or series of related capital
expenditures) either involving more than $10,000 or outside the Ordinary Course
of Business;
(f) neither Orion nor its Subsidiary has made any capital investment
in, any loan to, or any acquisition of the securities or assets of, any other
Person (or series of related capital investments, loans, and acquisitions)
either involving more than $10,000 or outside the Ordinary Course of Business;
(g) except as set forth on Schedule 4.23(g), neither Orion nor its
Subsidiary has issued any note, bond, or other debt security, or created,
incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than $10,000 singly or
$30,000 in the aggregate;
(h) neither Orion nor its Subsidiary has delayed or postponed the
payment of accounts payable and other Liabilities outside the Ordinary Course of
Business;
(i) neither Orion nor its Subsidiary has canceled, compromised, waived,
or released any right or claim (or series of related rights and claims) either
involving more than $10,000 or outside the Ordinary Course of Business;
(j) neither Orion nor its Subsidiary has granted any license or
sublicense of any rights under or with respect to any Intellectual Property;
(k) there has been no change made or authorized in the articles of
incorporation, bylaws or other constitutive documents of Orion or its
Subsidiary;
(l) neither Orion nor its Subsidiary has issued, sold, or otherwise
disposed of any shares of its capital stock, or granted any options, warrants,
or other rights to purchase or obtain (including upon conversion, exchange, or
exercise) any shares of its capital stock;
(m) except as set forth on Schedule 4.23(m), neither Orion nor its
Subsidiary has declared, set aside, or paid any dividend or made any
distribution with respect to any shares of its capital stock (whether in cash or
in kind) or redeemed, purchased, or otherwise acquired any shares of its capital
stock;
(n) neither Orion nor its Subsidiary has experienced any damage,
destruction, or loss (whether or not covered by insurance) to its property;
24
(o) except as set forth on Schedule 4.23(o), neither Orion nor its
Subsidiary has made any loan to, or entered into any other transaction with, any
of its directors, officers, and employees outside the Ordinary Course of
Business;
(p) neither Orion nor its Subsidiary has entered into any employment
contract or collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
(q) neither Orion nor its Subsidiary has granted any increase in the
base compensation of any of its directors, officers, or employees outside the
Ordinary Course of Business;
(r) neither Orion nor its Subsidiary has adopted, amended, modified, or
terminated any bonus, profit sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, or
employees (or taken any such action with respect to any other Benefit Plan);
(s) neither Orion nor its Subsidiary has made any other change in
employment terms for any of its directors, officers, or employees outside the
Ordinary Course of Business;
(t) neither Orion nor its Subsidiary has made or pledged to make any
charitable or other capital contribution outside the Ordinary Course of
Business;
(u) there has not been any other material occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of Business
involving Orion or its Subsidiary; and
(v) neither Orion nor its Subsidiary has committed to any of the
foregoing.
Section 4.24 NOTES AND ACCOUNTS RECEIVABLE. Except as set forth on Schedule
4.24, all notes and accounts receivable of Orion and its Subsidiary are
reflected properly on Orion's books and records, are valid receivables subject
to no setoffs or counterclaims, are current and collectible, and will be
collected in accordance with their terms at their recorded amounts, subject only
to the reserve for bad debts set forth on the face of Orion's unaudited
consolidated balance sheet as of March 31, 1999 (rather than in any notes
thereto). The amount shown as Net Work In Progress on the Financial Statements
will be collected and received by Orion in cash in the Ordinary Course of
Business.
Section 4.25 ORDINARY COURSE. Each of Orion and its Subsidiary has carried
on its business in the usual, regular, and Ordinary Course of Business since
March 31, 1999, and neither Orion nor its Subsidiary has, without the prior
written consent of
25
IMRglobal: (a) declared any dividends or issued any form of cash to any Orion
Shareholder (other than payment of bonuses to certain employees of Orion); (b)
made any distributions of its assets in any form; (c) awarded any salary
increase or approved any bonus payments, except in the Ordinary Course of
Business; or (d) taken any other action of any kind, which can be reasonably
anticipated to impair or reduce the value of the shares of Orion Common Stock.
Section 4.26 ACCOUNTING MATTERS. Neither Orion or its Subsidiary nor any of
its Affiliates has through the date of this Agreement taken or agreed to take
any action that would prevent IMRglobal from accounting for the business
combination to be effected by the Merger as a "pooling of interests," and, to
the Knowledge of each Orion Shareholder, nothing will prevent the Merger from
qualifying as a "pooling of interests."
Section 4.27 AMBULATORY PAYMENT CLASSIFICATION. Neither Orion nor its
Subsidiary has any Liabilities to customers or any Governmental Entity arising
out of or related to Ambulatory Payment Classifications.
Section 4.28 DISCLOSURE. The representations and warranties of each of
Orion and the Orion Shareholders contained in this Agreement, or in any
certificate or other writing delivered by any of Orion and the Orion
Shareholders pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained herein or therein not misleading, in light
of circumstances in which made, and will remain accurate as of the Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF IMRGLOBAL AND THE MERGERSUB
IMRglobal and the MergerSub, joint and severally, represent and warrant
to each of the Orion Shareholders as follows:
Section 5.1 ORGANIZATION. Each of IMRglobal and the MergerSub is a
corporation duly organized, validly existing, and with active status under the
laws of Florida and has all requisite corporate power and authority and all
necessary governmental approvals to own, lease, and operate its properties and
to carry on its business as now being conducted, except where the failure to be
so organized, existing, and in good standing or to have such power, authority,
and governmental approvals would not have a Material Adverse Effect on IMRglobal
and the MergerSub taken as a whole. Each of IMRglobal and the MergerSub is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased, or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing would not in the aggregate have a Material
26
Adverse Effect on IMRglobal and the MergerSub.
Section 5.2 AUTHORITY. IMRglobal and the MergerSub have the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The execution,
delivery, and performance of this Agreement, and the consummation of the Merger
and the other transactions contemplated by this Agreement, have been duly
authorized by all necessary corporate action on the part of IMRglobal and the
MergerSub and no other corporate proceedings on the part of IMRglobal and the
MergerSub are necessary to authorize the execution and delivery of this
Agreement or to consummate the transactions so contemplated. This Agreement has
been duly executed and delivered by IMRglobal and the MergerSub, as the case may
be, and, assuming this Agreement constitutes a valid and binding obligation of
Orion and each Orion Shareholder, constitutes a valid and binding obligation of
each of IMRglobal and the MergerSub, as the case may be, enforceable against
them in accordance with its terms, subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors and to the rules of
law governing specific performance, injunctive relief, or other equitable
remedies. Approval of the shareholders of IMRglobal is not required for the
consummation of the transactions contemplated by this Agreement.
Section 5.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings,
permits, authorizations, consents, and approvals as may be required under, and
other applicable requirements of, the HSR Act, the OGCL or the FBCA, the laws of
other states in which IMRglobal or the MergerSub is qualified to do or is doing
business, state takeover laws, and foreign laws, neither the execution, delivery
or performance of this Agreement by IMRglobal and the MergerSub, nor the
consummation by IMRglobal and the MergerSub of the transactions contemplated by
this Agreement, nor compliance by IMRglobal and the MergerSub with any of the
provisions of this Agreement will: (a) conflict with or result in any breach of
any provision of the articles of incorporation or bylaws of IMRglobal or the
MergerSub; (b) require any filing with, or authorization, consent, permit or
approval of, any Government Entity, except where the failure to obtain such
authorizations, consents, permits, or approvals, or to make such filings, would
not have a Material Adverse Effect on IMRglobal and the MergerSub; (c) result in
a violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any right of termination, amendment,
cancellation, or acceleration) under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement, or other instrument or obligation to which IMRglobal or the MergerSub
is a party or by which it or any of its properties or assets may be bound; or
(d) violate any order, writ, injunction, decree, statute, rule, or regulation
applicable to IMRglobal or the MergerSub or any of its properties or assets,
except as they relate to (c) or (d), for violations, breaches or defaults that
would not, individually or in the aggregate, have a Material Adverse Effect on
IMRglobal and the MergerSub.
Section 5.4 ISSUANCE OF IMRGLOBAL COMMON STOCK. The shares of IMRglobal
Common Stock to be issued pursuant to the Merger, when issued, will be duly
authorized, validly issued, fully paid, non-assessable and issued in compliance
with
27
applicable federal and state securities laws subject to the truth and
accuracy of the representations made by each Orion Shareholder in the
Shareholder Certificate (as defined below).
Section 5.5 SEC REPORTS AND FINANCIAL STATEMENTS. IMRglobal has filed with
the SEC, and has made available to Orion complete copies of all forms, reports,
schedules, statements, and other documents required to be filed by it since
November 1996, under the Exchange Act or the Securities Act (as such documents
have been amended since the time of their filing, collectively, the "IMRglobal
SEC Documents"). There has been no material change related to IMRglobal since
the most recently filed IMRglobal SEC Document. As of the filing date, none of
IMRglobal's filings with the SEC contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statement made therein, in light of the circumstances under which they were
made, not misleading.
Section 5.6 INSURANCE. Schedule 5.6 sets forth the material insurance
policies maintained by IMRglobal. Except as set forth on Schedule 5.6, there are
no claims pending under any material insurance policy maintained by IMRglobal
covering the operations, employees, officers and directors of IMRglobal or
disputes with underwriters, and all premiums due and payable have been paid.
Except as set forth on Schedule 5.6, there are no pending or threatened
terminations with respect to any such policies, and IMRglobal has not received
notice of breach of any conditions contained therein and such policies are in
full force and effect, assuming the other parties to the policy have duly
executed and delivered such policies and had the necessary power and authority
to enter into such policies when executed and delivered.
ARTICLE VI
COVENANTS
Section 6.1 PRE-CLOSING COVENANTS. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing:
(a) GENERAL. Each of the Parties will use his or its reasonable
commercial efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Section 9 below).
(b) NOTICES AND CONSENTS. Each of the Parties will give any notices to,
make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of Governmental Entities in connection
with the matters referred to in Sections 4.6 and 5.3 above. Without limiting the
generality of the foregoing, each of the Parties will file any (i) Notification
and Report Forms and related material that he or it may be required to file with
the Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the HSR Act, will use its reasonable commercial
efforts to obtain an early termination of the applicable waiting
28
period, and will make any further filings pursuant thereto that may be necessary
proper, or advisable in connection therewith and (ii) any other required state
filings where each of Orion and its Subsidiary conducts, or is registered or
licensed to conduct, business.
(c) OPERATION OF BUSINESS. Neither Orion nor its Subsidiary shall
engage in any practice, take any action, or enter into any transaction outside
the Ordinary Course of Business. Without limiting the generality of the
foregoing, neither Orion nor its Subsidiary shall: (i) declare any dividends or
issue any form of cash to any Orion Shareholder (other than payment of bonuses
to certain employees of Orion); (ii) make any distributions of its assets in any
form; (iii) award any salary increase or approved any bonus payments, except in
the Ordinary Course of Business; (iv) engage in any transaction which may
prohibit the utilization of the "pooling of interests" under the Code with
respect to the transactions contemplated in this Agreement; or (v) take any
other action of any kind, which can be reasonably anticipated to impair or
reduce the value of the shares of Orion Common Stock, including without
limitation engage in any practice, take any action, or enter into any
transaction of the type described in Section 4.23 above.
(d) PRESERVATION OF BUSINESS. Each of Orion and its Subsidiary shall
keep its business and properties substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers and employees.
(e) FULL ACCESS. Each of Orion and its Subsidiary will permit
representatives of IMRglobal to have full access at all reasonable times, and in
a manner so as not to interfere with the normal business operations of Orion and
its Subsidiary to all premises, properties, personnel, books, records (including
Tax records), contracts, and documents of or pertaining to Orion and its
Subsidiary.
(f) BREACH OF REPRESENTATION AND WARRANTIES; NOTICE OF DEVELOPMENTS.
None of the Parties will permit, and will not permit any of its Subsidiaries to,
take any action, the taking of which, or omit to take any action, the omission
of which, would reasonably be expected to cause any of the representations and
warranties in this Agreement, or in any certificate or other writing delivered
pursuant to this Agreement or in connection with this Agreement to be inaccurate
in any material respect at or as of any time prior to the Closing. The Parties
shall notify the other Parties in writing of any development causing a breach of
any of the representations and warranties contained in this Agreement.
(g) EXCLUSIVITY. Neither Orion or its Subsidiary nor the Orion
Shareholders will: (i) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of any capital
stock or other voting securities, or any substantial portion of the assets of,
Orion or its Subsidiary (including any acquisition structured as a merger,
consolidation, or share exchange) or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. None of the Orion Shareholders will
vote their shares of Orion Common Stock in favor of any such acquisition
structured as a merger, consolidation, or share
29
exchange unless, if such Orion Shareholder is a trust, the trustee determines,
upon the advice of legal counsel, that such action violates his fiduciary duty
to the trust. Orion and each of the Orion Shareholders will notify IMRglobal in
writing immediately if any Person makes any proposal, offer, inquiry, or contact
with respect to any of the foregoing.
(h) S CORPORATION STATUS. The Orion Shareholders will not revoke or
cause to be revoked Orion's election to be taxed as an S corporation within the
meaning of Code Sections 1361 and 1362. The Orion Shareholders will not take or
allow any action that would result in the termination of Orion's status as a
validly electing S corporation with the meaning of Code Sections 1361 and 1362.
Section 6.2 POST-CLOSING COVENANTS. The Parties agree as follows with
respect to the period following the Closing:
(a) GENERAL. In case at any time after the Closing any further action
is necessary to carry out the purposes of this Agreement, each of the Parties
will take such further action (including the execution and delivery of such
further instruments and documents) as any other Party reasonably may request,
all at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Article VIII below). Orion
and each of the Orion Shareholders acknowledge and agree that from and after the
Closing IMRglobal will be entitled to possession of all documents, books,
records (including Tax records), agreements, and financial data of any sort
relating to Orion and its Subsidiary; provided, however, that, after the
Closing, IMRglobal shall provide the Shareholder Representative with reasonable
access to and the right to copy such documents, books, records (including Tax
records), agreements, and financial data where the Shareholder Representative
has a legitimate purpose including without limitation in the event of an IRS
audit.
(b) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving Orion or its Subsidiary, each of the other Parties
will cooperate with him or it and his or its counsel in the contest or defense,
make available their personnel, and provide such testimony and access to their
books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Article VIII below).
(c) TRANSITION. None of the Orion Shareholders will take any action
that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of Orion or its
Subsidiary from maintaining the same business relationships with the Surviving
Corporation after the Closing as it maintained with Orion or its Subsidiary
prior to
30
the Closing. Each of the Orion Shareholders will refer all customer inquiries
relating to the businesses of Orion and its Subsidiary to IMRglobal or the
Surviving Corporation from and after the Closing.
(d) NON-COMPETITION/NON-SOLICITATION. Each of the Orion Shareholders
set forth on EXHIBIT 6.2(d) (the "Covenanting Shareholders") agree, in addition
to any other covenants against competition and solicitation in his employment
agreement with the Surviving Corporation or IMRglobal or any of its
Subsidiaries, as follows:
(i) NON-COMPETITION. For a period of five years following the
Closing (or, if this period shall be unenforceable by law, then for such shorter
period as shall be enforceable), none of the Covenanting Shareholders shall
engage, directly or indirectly, including without limitation any active
participation or any management, director, employee, or consulting position, in
any activity with any entity or sole proprietorship which is competitive with
the business of Orion or its Subsidiary, the Surviving Corporation, or IMRglobal
or any of its Subsidiaries, as its business currently exists, anywhere in the
United States, or make any undue and unfair use of information, which any
Covenanting Shareholder would not have had access to but for his position with
Orion or its Subsidiary, in any activity with any entity that is competitive
with the current business of Orion or its Subsidiary, the Surviving Corporation,
or IMRglobal or any of its Subsidiaries; provided, however, that the ownership
of less than 1% of the outstanding stock of any publicly traded corporation
shall be permitted under this Section 6.2(d)(i).
(ii) NON-SOLICITATION OF CUSTOMERS. For a period of five years
following the Closing (or, if this period shall be unenforceable by law, then
for such shorter period as shall be enforceable), none of the Covenanting
Shareholders shall contact or respond to any contact, with a view toward selling
any product or service competitive with any product or service sold or proposed
to be sold by Orion or its Subsidiary, the Surviving Corporation, or IMRglobal
or any of its Subsidiaries as of the Closing, to any Person (i) to which Orion
or its Subsidiary, the Surviving Corporation, or IMRglobal or any of its
Subsidiaries has sold any product, or (ii) which such Covenanting Shareholder
has solicited, contacted, or otherwise dealt with on behalf of Orion or its
Subsidiary, or which was a customer or prospective customer of Orion or its
Subsidiary, the Surviving Corporation, or IMRglobal or any of its Subsidiaries
during the three years preceding the Closing. None of the Covenanting
Shareholders shall directly or indirectly, make any such contact, either for the
benefit of himself or for the benefit of any other Person, and shall not assist
any such Person in any manner to make any such contact.
(iii) NO EMPLOYMENT OR SOLICITATION OF EMPLOYEES. For a period of
five years following the Closing (or, if this period shall be unenforceable by
law, then for such shorter period as shall be enforceable), none of the
Covenanting Shareholders shall directly or indirectly, solicit, hire or engage
(directly or indirectly) any full-time or part-time employee of Orion or its
Subsidiary, the Surviving Corporation, or IMRglobal or any of its Subsidiaries.
(e) EMPLOYEE BENEFIT OBLIGATIONS. IMRglobal agrees to recognize the
31
prior service of employees of Orion for purposes of eligibility and vesting
under IMRglobal's 401(k) plan and vacation policy.
(f) ORION BONUSES TO EMPLOYEES. Orion shall accrue bonuses to certain
of its employees. Bonuses reflected on the Financial Statements shall be paid by
the Surviving Corporation or IMRglobal within 120 days of the Closing Date;
provided, however, to the extent that the cash generated in the Ordinary Course
of Business by the Surviving Corporation is not sufficient to pay all of said
bonuses within such 120-day period, the amount of said bonuses shall be reduced
by 4% to reflect the cost of money.
(g) RECEIPT OF CONSIDERATION. IMRglobal shall undertake and complete
all actions required for the Orion Shareholders to receive the consideration
identified in this Agreement within 15 days after the Closing Date.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 EXPENSES. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the Party incurring such costs
and expenses; provided, however, that if the Merger is consummated, at the
Closing or within 60 days thereafter, IMRglobal, MergerSub, or the Surviving
Corporation will pay up to $1.7 million of such reasonable costs and expenses
incurred by Orion, including 2% of the Merger Consideration plus $50,000 to
Xxxxxxxxx, Xxxxxx & Xxxxxxxx and $250,000 to Xxxxxx, Halton & Xxxxxxxx and other
reasonable costs and expenses, subject to receipt and approval by IMRglobal of
invoices evidencing such costs and expenses (such approval not to be
unreasonably withheld). Any costs or expenses in excess of $1.7 million or
deemed unreasonable by IMRglobal shall be the sole obligation of the Orion
Shareholders.
Section 7.2 BROKERS OR FINDERS. Except as set forth in EXHIBIT 7.2, Orion,
each Orion Shareholder and IMRglobal represent, as to himself or itself, its
Subsidiaries, and his or its Affiliates, that no agent, broker, investment
bankers, financial advisor, or other firm or person is or will be entitled to
any brokers' or finder's fee or any other commission or similar fee in
connection with any of the transactions contemplated by this Agreement and Orion
and the Orion Shareholders jointly and severally on the one hand and IMRglobal
on the other hand, agree to indemnify and hold the other harmless from and
against any and all claims, Liabilities, or obligations with respect to any
other fees, commissions, or expenses asserted by any person on the basis of any
act or statement alleged to have been made by such party or its Affiliate.
Section 7.3 CONFIDENTIALITY/NON-DISCLOSURE. Except for such disclosure to
the Parties' professional advisors as may be necessary or appropriate and such
disclosure as may be required by court order or by any law or regulation to
which a party is subject, or in order to defend litigation, the Parties agree
that they shall use all reasonable efforts to
32
maintain in confidence the existence and terms of this Agreement and shall
refrain from using any "Information" (as defined in the Confidentiality
Agreement), except in connection with this Agreement, and no Party will issue
any press release or public statement concerning this Agreement or any of the
transactions contemplated by this Agreement without the prior written consent of
the other Parties; provided, however, that IMRglobal may make such disclosure as
is required by law. Upon any termination of this Agreement, each of the Parties
shall promptly deliver to the other Parties all tangible embodiments (and all
copies) of the Information of the other Party which are in its possession.
Section 7.4 POOLING OF INTERESTS. The Parties expressly agree that, if any
term or condition of this Agreement or the application of the same to any Person
or circumstances preclude the use of the "pooling of interests" accounting
treatment by IMRglobal in accordance with GAAP in connection with this
Agreement, then, (a) such term will be of no force and effect to the extent
necessary to preserve the "pooling of interests" accounting treatment under this
Agreement; and (b) in the event that any term or condition of this Agreement is
subject to different interpretation under Section 7.4(a): (i) the remainder of
the terms and conditions of this Agreement shall not be affected; and (ii) in
lieu of such term or condition, a new term or condition will be added to this
Agreement in similar terms as may be possible for the exchange of shares
pursuant to this Agreement.
Section 7.5 RESTRICTED SHARES. The Parties to this Agreement acknowledge
and agree that the shares of IMRglobal Common Stock to be issued pursuant to
Article III will not be registered under the Securities Act and therefore shall
constitute "restricted securities" within the meaning of the Securities Act.
Until such time as the Consideration Shares are registered under the Securities
Act or the holder thereof provides IMRglobal with evidence reasonably
satisfactory to IMRglobal that the Consideration Shares may be transferred
without registration or restriction, the certificates representing the
Consideration Shares shall bear appropriate legends to identify the transfer of
such privately placed shares as being restricted under the Securities Act, and
subject to compliance with applicable state securities laws. It is acknowledged
and understood that IMRglobal is relying upon the representations made by each
Orion Shareholder in a Shareholder Certificate in substantially the form
attached as EXHIBIT 7.5 (a "Shareholder Certificate") in connection with the
issuance of IMRglobal Common Stock to such shareholders.
Section 7.6 REGISTRATION RIGHTS. Notwithstanding the provisions of Section
7.5, the Orion Shareholders will be entitled to have IMRglobal effect, at
IMRglobal's sole expense, one registration of up to 20% of the Consideration
Shares (the "Registrable Shares") received by such shareholder in the Merger to
the extent permitted by Section 7.7. IMRglobal will file such registration
statement as soon as commercially reasonable after combined financial statements
for IMRglobal and Orion are publicly available which include at least 30 days of
combined post-Merger operations up to the first anniversary of this Agreement.
Subject to the foregoing, IMRglobal will use its reasonable commercial efforts
to cause the Registrable Shares to be registered as soon as practicable so as to
permit the sale of such shares and IMRglobal will promptly notify the Orion
Shareholders of the effectiveness of the registration. IMRglobal will include in
its
33
registration 20% of the Consideration Shares, unless the Orion Shareholders
request a lesser number of shares. The Orion Shareholders will have their
Registrable Shares registered on a pro rata basis. The Orion Shareholders agree
that, as an alternative to the foregoing, IMRglobal may effectuate the
registration of the Registrable Shares pursuant to a registration that will
involve an underwritten distribution of IMRglobal Common Stock by IMRglobal (but
not in the case of an underwritten distribution of securities other than
IMRglobal Common Stock) so long as such underwritten offering is in an amount of
at least $100,000,000 and at a per share price of at least $30.00 per share, and
subject to the provisions of this Section 7.6 and the following Section 7.7: (i)
IMRglobal shall include in the underwriting all the Registrable Shares that the
Orion Shareholders are entitled to include in the registration, (ii) the Orion
Shareholders shall sell the Registrable Shares through the underwriter or
syndicate of underwriters selected by IMRglobal, (iii) the Orion Shareholders
shall enter into an underwriting agreement with the underwriter or syndicate of
underwriters selected by IMRglobal, which will provide (among other things) for
IMRglobal, the Orion Shareholders, and each underwriter (and each person who
controls each underwriter within the meaning of Section 15 of the Securities
Act) to grant to each other (and to each person who controls each of them within
the meaning of Section 15 of the Securities Act) reciprocal indemnification
against Liabilities under the Securities Act, subject to such limitations as are
appropriate to reflect the parties' respective interests in the underwriting as
well as a "lockup" period not to exceed 180 days.
Section 7.7 CONDITIONS TO REGISTRATION. IMRglobal's obligations under
Section 7.6 to register any Registrable Shares owned by an Orion Shareholder is
subject to the following conditions:
(a) The Orion Shareholder must provide to IMRglobal all information,
and take all action, IMRglobal reasonably requests with reasonable advance
notice, to enable it to comply with any applicable law, rule, regulation or SEC
pronouncement or to prepare the registration statement that will cover the
Registrable Shares that will be included in the registration;
(b) all sales of the Registrable Shares included in the registration
will be made in a manner contemplated by the SEC's General Instructions for use
of the applicable registration statement form;
(c) the Orion Shareholder promptly shall notify IMRglobal in writing
when any of the Registrable Shares included in the registration have been sold.
(d) the Orion Shareholder shall pay all sales commissions and
underwriting discounts relating to the Registrable Shares they sell;
(e) if during the effectiveness of the registration statement for the
registration, IMRglobal notifies the Orion Shareholders of the occurrence of any
intervening event that, in the opinion of IMRglobal's legal counsel, causes the
prospectus included in the registration statement not to comply with the
Securities Act, the Orion Shareholders, promptly after receipt of IMRglobal's
34
notice, shall cease making any offers, sales, or other dispositions of the
Registrable Shares included in the registration until the Orion Shareholders
receive from IMRglobal copies of a new, amended, or supplemented prospectus
complying with the Securities Act (which IMRglobal agrees to provide as promptly
as practicable after delivery of IMRglobal's notice);
(f) The inclusion of the Registrable Shares in the registration must
not violate any provisions of the Securities Act or the Exchange Act, any rules
or regulations promulgated under the Securities Act or the Exchange Act.
(g) The Registrable Shares owned by an Orion Shareholder shall not be
subject to resale pursuant to Rule 144 promulgated under the Securities Act.
(h) Notwithstanding the foregoing, if IMRglobal shall furnish to the
Orion Shareholders a certificate signed by a duly authorized officer of
IMRglobal stating that, in the good faith judgment of the Board of Directors of
IMRglobal, it would be seriously detrimental to IMRglobal for such registration
statement to be filed on or before the date such filing would be required, then
IMRglobal shall be entitled to postpone filing of the registration statement for
a period of time not to exceed 90 days.
Section 7.8 REGISTRATION PROCEDURES. IMRglobal will keep each holder
participating in any registration pursuant to this Agreement advised in writing
as to the initiation of the registration and as to the completion thereof. At
its expense, IMRglobal will:
(a) keep such registration continuously effective for 90 days from the
day the SEC approves the registration, or such longer period as IMRglobal in its
sole discretion deems appropriate;
(b) promptly prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act, and to keep such registration statement effective 90 days from the day the
SEC approves the registration,;
(c) furnish such number of prospectus and other documents incident
thereto as a holder from time to time may reasonably request;
(d) use reasonable commercial efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the lifting
of any suspension of the qualification of any of the Registrable Shares for sale
in any jurisdiction, at the earliest possible moment;
(e) register or qualify such Registrable Shares for offer and sale
under the securities or blue sky laws of such jurisdictions in which IMRglobal
currently is registered to do
35
business, and keep such registration or qualification effective for 90 days from
the day the SEC approves the registration;
(f) cause all Registrable Shares covered by such registration to be
listed on Nasdaq;
(g) enter into such customary agreements (including underwriting
agreements in customary form) in order to expedite or facilitate the disposition
of such Registrable Shares;
(h) notify each holder, at any time a prospectus covered by such
registration statement is required to be delivered under the Securities Act, of
the happening of any event of which it has knowledge as a result of which the
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
(i) in addition to its obligations concerning registration of the
Registrable Shares, IMRglobal agrees that for a period of two years from the
date of this Agreement or until all the Registrable Shares have been sold,
whichever occurs first, IMRglobal shall use its reasonable commercial efforts to
keep current in filing all reports, statements and other materials required to
be filed by IMRglobal with the SEC to permit holders of the Registrable Shares
to sell such securities under Rule 144 promulgated under the Securities Act.
Section 7.9 TAX TREATMENT. The Parties agree to treat the Merger as a Tax
free reorganization pursuant to Section 368(a) of the Code.
Section 7.10 NASDAQ LISTING. IMRglobal will use its reasonable commercial
efforts to cause the Consideration Shares to be approved for listing on Nasdaq,
subject to official notice of issuance, within 15 days after the Closing Date.
Section 7.11 CONTINGENT FEES. The Parties agree that any amounts recovered
or recoverable for work done by Orion or its employees for which payment is
contingent (in all or part) shall be due and payable to the Surviving
Corporation; provided, however, that cash bonuses, cash distributions or accrued
bonuses shall not affect the agreement contained in this Section 7.11.
Section 7.12 INSURANCE. The Surviving Corporation shall maintain in effect
the same or substantially similar insurance coverage as set forth in Schedule
4.15, for a period of not less than one year from the Closing Date.
36
ARTICLE VIII
INDEMNIFICATION; SURVIVAL
Section 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Orion Shareholders, IMRglobal and the
MergerSub contained in Articles IV and V of this Agreement shall survive the
Closing and continue in full force and effect for a period of one year from the
Closing Date. None of the representations and warranties of Orion contained in
Article IV shall survive the Closing.
Section 8.2 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF IMRGLOBAL.
Subject to the limitations set forth in this Article VIII, if any Orion
Shareholder breaches (or in the event any third party alleges facts that, if
true, would mean any Orion Shareholder has breached) any of its representations,
warranties and covenants contained in this Agreement, and IMRglobal makes a
written claim for indemnification against any Orion Shareholder pursuant to the
notice provisions set forth in Section 11.1 below within the applicable survival
period set forth in Section 8.1, then the Orion Shareholders jointly and
severally agree to indemnify IMRglobal up to the Shareholder limitation set
forth below for Adverse Consequences IMRglobal may suffer through and after the
date of the claim for indemnification (including any Adverse Consequences
IMRglobal may suffer after the end of any applicable survival period) resulting
from, arising out of, relating to, in the nature of, or caused by the breach (or
the alleged breach); provided, however, that after the Closing, no Orion
Shareholder shall have any obligation to indemnify IMRglobal from and against
any Adverse Consequences proximately caused by the breach of any representation,
warranty or covenant of the Orion Shareholders contained in Article IV (a) until
IMRglobal has suffered Adverse Consequences by reason of all such breaches (or
alleged breaches) in excess of an aggregate threshold of $200,000 (at which
point IMRglobal shall be entitled to indemnification from the first dollar of
Adverse Consequences) or thereafter (b) to the extent the Adverse Consequences
IMRglobal has suffered by reason of all such breaches exceeds 70% of the Merger
Consideration received by such Orion Shareholder (after which point such Orion
Shareholder shall have no obligation to indemnify IMRglobal from and against
further such Adverse Consequences). The foregoing indemnification obligation
shall be payable in cash and/or shares of IMRglobal Common Stock (valued at the
then current market price) at the sole election of each Orion Shareholder.
Section 8.3 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE ORION
SHAREHOLDERS. Subject to the limitations set forth in this Article VIII, if
IMRglobal or the MergerSub breaches (or in the event any third party alleges
facts that, if true, would mean IMRglobal or the MergerSub had breached) any of
its representations, warranties or covenants contained in this Agreement and an
Orion Shareholder makes a written claim for indemnification against IMRglobal or
the MergerSub pursuant to the notice provisions set forth in Section 11.1 below
within the applicable survival period set forth in Section 8.1, then IMRglobal
agrees to indemnify such Orion Shareholder, from and against any Adverse
37
Consequences such Orion Shareholder may suffer through and after the date of the
claim for indemnification resulting from, arising out of or caused by the breach
(or the alleged breach); provided however, that IMRglobal shall have no
obligation to indemnify such Orion Shareholder from and against any Adverse
Consequences proximately caused by the breach of any representation, warranty or
covenant of IMRglobal or the MergerSub contained in Article V until (a) such
Orion Shareholder has suffered Adverse Consequences by reason of all such
breaches (or alleged breaches) in excess of an aggregate threshold of $200,000
(at which point such Orion Shareholder shall be entitled to indemnification from
the first dollar of Adverse Consequences) or thereafter (b) to the extent the
Adverse Consequences such Orion Shareholder has suffered by reason of all such
breaches exceeds 70% of the Merger Consideration received by such Orion
Shareholder (at which point IMRglobal shall have no obligation to indemnify such
Orion Shareholder from and against further such Adverse Consequences).
Section 8.4 MATTERS INVOLVING THIRD PARTIES. (a) If any third party
notifies either IMRglobal or the Orion Shareholders (the "Indemnified Party")
with respect to any matter (a "Third Party Claim") which may give rise to a
claim for indemnification against the other party (the "Indemnifying Party")
under this Article VIII, then the Indemnifying Party shall promptly (and in any
event within 10 business days after receiving notice of the Third Party Claim)
notify the Indemnifying Party in writing; provided, however, that no delay on
the part of the Indemnified Party in notifying the Indemnifying Party shall
relieve from any obligation under this Agreement unless (and then solely to the
extent) the Indemnifying Party is prejudiced.
(b) The Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (ii) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations under this Agreement, (iii) the
Third Party Claim involves only money damages and does not seek an injunction or
other equitable relief, (iv) settlement of, or an adverse judgment with respect
to, the Third Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice materially adverse
to the continuing business interest of the Indemnified Party (v) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently; and (vi) no conflict of interest develops between the Indemnifying
Party and the Indemnified Party.
(c) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 8.4(b), (i) the Indemnified Party
may retain separate co-counsel at its sole cost and expense and participate in
the defense of the Third Party Claim, and (ii) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
38
respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably);
(d) In the event any of the conditions in Section 8.4(b) fail to be
complied with, however, (i) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim in any manner it reasonably may deem appropriate (and
the Indemnified Party need not consult with, or obtain any consent from, the
Indemnifying Party ), (ii) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the costs of defending against the Third
Party Claim (including reasonable attorneys' fees and expenses), and (iii) the
Indemnifying Party will remain responsible for any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim to the fullest extent provided in
this Article VIII.
Section 8.5 DETERMINATION OF ADVERSE CONSEQUENCES. All claims for
indemnification payments under this Article VIII shall be made in good faith and
although a claim may be made under the Agreement, no payments shall be made for
the benefit of the Indemnified Party until the Indemnified Party has incurred
actual out-of-pocket expenses.
Section 8.6 OTHER INDEMNIFICATION PROVISIONS. Each Orion Shareholder hereby
agrees that he will not make any claim for indemnification against Orion by
reason of the fact that he was a director, officer, employee, or agent of any
such entity or was serving at the request of any such entity as a partner,
trustee, director, officer, employee, or agent of another entity (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw, agreement, or otherwise) with respect to
any action, suit, proceeding, complaint, claim, or demand brought by IMRglobal
or any third party against Orion (whether such action, suit, proceeding,
complaint, claim, or demand is pursuant to this Agreement, applicable law, or
otherwise).
ARTICLE IX
CONDITIONS TO CLOSING
Section 9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligation of each Party to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction prior to the Closing of the
following conditions:
(a) CONSENTS AND APPROVALS. Other than the filing provided for by
Section 2.2 and any filing pursuant to state takeover laws, all authorizations,
consents, orders, or approvals of, or declarations or filings with, or
expirations of waiting periods imposed by, any Governmental Entity (including
the expiration of all applicable waiting periods under the HSR Act), the failure
to obtain which would have a Material Adverse Effect on IMRglobal and its
Subsidiaries, Orion and its Subsidiary, the Orion Shareholders or the Surviving
Corporation, shall have been filed, occurred, or been obtained. IMRglobal shall
have received all state securities or "blue sky" permits and other
39
authorizations necessary to issue IMRglobal Common Stock pursuant to this
Agreement. It is acknowledged that IMRglobal may not close the transactions
contemplated by this Agreement if more than 35 of the Orion Shareholders are not
"accredited investors" for the purposes of the Securities Act.
(b) POOLING OPINION. IMRglobal shall have received a letter from Xxxxxx
Xxxxxxxx LLP, stating that with respect to Orion the Merger will qualify as a
pooling of interests transaction under Opinion 16 of the Accounting Principles
Board.
(c) DISSENTING SHARES. The aggregate number of Dissenting Shares shall
not equal more than 2% of the outstanding shares of Orion Common Stock.
(d) 368(a) REORGANIZATION OPINION. IMRglobal and Orion shall have
received the opinion, based on appropriate representations of Orion and
IMRglobal, of Holland & Knight LLP, to the effect that the Merger will be
treated for federal income Tax purposes as a reorganization within the meaning
of Section 368(a) of the Code, and that IMRglobal, the MergerSub, the Orion
Shareholders and Orion will each be a party to that reorganization within the
meaning of Section 368(b) of the Code and such opinion shall not have been
withdrawn or modified in any material respect.
Section 9.2 CONDITIONS TO OBLIGATIONS OF IMRGLOBAL AND THE MERGERSUB. The
obligations of IMRglobal and the MergerSub to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction prior to the
Closing of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Orion and the Orion Shareholders set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date,
except as otherwise contemplated by this Agreement; provided, however, if any
such representation or warranty is already qualified by materiality, for
purposes of determining whether this condition has been satisfied, such
representation or warranty must be true and correct in all respects.
(b) PERFORMANCE OF OBLIGATIONS OF THE ORION SHAREHOLDERS AND ORION.
Each of the Orion Shareholders and Orion shall have performed in all material
respects all obligations required to be performed by them under this Agreement
at or prior to the Closing.
(c) NO INJUNCTION OR RESTRAINTS. No action, suit, or proceeding shall
be pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (i) prevent consummation of any of the transactions contemplated
by this Agreement, (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (iii) affect adversely the
right of IMRglobal to own shares of
40
Orion Common Stock and to control Orion, or (D) affect adversely the right of
Orion to own its assets and to operate its business (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(d) DELIVERY OF CERTIFICATE. Each of Orion and the Shareholder
Representative shall have delivered to IMRglobal a certificate to the effect
that each of the conditions specified above in Section 9.2(a)-(c) is satisfied
in all respects;
(e) NO AMENDMENTS TO RESOLUTIONS. Neither the Board of Directors of
Orion nor any committee thereof shall have amended, modified, rescinded, or
repealed the resolutions adopted by such Board on June 11, 1999 (accurate and
complete copies of which have been provided to IMRglobal) and shall not have
adopted any other resolutions in connection with this Agreement and the
transactions contemplated by this Agreement inconsistent with such resolutions.
(f) EMPLOYMENT AND/OR NON-COMPETITION AND NON-SOLICITATION AGREEMENTS.
Each of the Covenanting Shareholders and the members of the Senior Management
Team shall have executed and delivered employment and/or non-competition and
non-solicitation agreements in substantially the form set forth in EXHIBIT
9.2(f).
(g) LEGAL OPINION OF XXXXXX, HALTER & XXXXXXXX LLP. IMRglobal shall
have received the legal opinion of Xxxxxx, Halter & Xxxxxxxx LLP, counsel to the
Orion Shareholders and Orion, to the effect that (i) Orion is duly organized and
in good standing under the laws of Ohio and has the corporate power and
authority to execute, deliver, and perform this Agreement, (ii) Orion has the
authorized, issued and outstanding shares of capital stock set forth in EXHIBIT
4.3 to this Agreement, (iii) there are no outstanding warrants, convertible
securities or rights (contractual or otherwise) to acquire any additional shares
of Orion Common Stock, and (iv) this Agreement has been duly authorized,
executed, and delivered by Orion.
(h) XXXXXXXXXX EMPLOYMENT AGREEMENT. Xxxxxxx X. Xxxxxxxxxx shall have
executed and delivered an employment agreement in substantially the form set
forth in Section 9.2(i).
(j) EMPLOYEE MATTERS. There shall have been no material changes in
employment of the persons named on Schedule 4.21.
(k) SHAREHOLDER CERTIFICATES. Each of the Orion Shareholders shall have
delivered a Shareholder Certificate.
IMRglobal may waive any condition specified in this Section 9.2 if it executes a
writing so stating at or prior to the Closing.
Section 9.3 CONDITIONS TO OBLIGATIONS OF THE ORION SHAREHOLDERS AND ORION.
The obligations of
41
the Orion Shareholders and Orion to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction prior to the Closing of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of IMRglobal and the MergerSub set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and (except to
the extent such representations speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement; provided, however, if any such representation or
warranty is already qualified by materiality, for purposes of determining
whether this condition has been satisfied, such representation or warranty must
be true and correct in all respects.
(b) PERFORMANCE OF OBLIGATIONS OF IMRGLOBAL AND THE MERGERSUB.
IMRglobal and the MergerSub shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to
the Closing.
(c) NO INJUNCTIONS OR RESTRAINTS. No action, suit, or proceeding shall
be pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (i) prevent consummation of any of the transactions contemplated
by this Agreement, or (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect).
(d) DELIVERY OF CERTIFICATES. IMRglobal and the MergerSub shall have
delivered to the Shareholders a certificate to the effect that each of the
conditions specified above in Section 9.3(a)-(c) is satisfied in all respects.
(e) EMPLOYMENT AND/OR NON-COMPETITION AND NON-SOLICITATION AGREEMENTS.
IMRglobal shall have executed and delivered employment and/or non-competition
and non-solicitation agreements in substantially the form set forth in EXHIBIT
9.2(f).
(f) LEGAL OPINION OF HOLLAND & KNIGHT LLP. The Shareholder
Representative shall have received the opinion of Holland & Knight LLP, counsel
to IMRglobal to the effect that (i) each of IMRglobal and the MergerSub is duly
incorporated and with active status under the laws of Florida and has the
corporate power and authority to execute, deliver, and perform this Agreement,
and (ii) this Agreement has been duly authorized, executed, and delivered by
each of IMRglobal and the MergerSub.
(g) XXXXXXXXXX EMPLOYMENT AGREEMENT. IMRglobal shall have executed and
delivered an employment agreement in substantially the form set forth in EXHIBIT
9.2(i).
42
Orion and the Shareholder Representative may waive any condition specified in
this Section 9.3 if he or it executes a writing so stating at or prior to the
Closing.
ARTICLE X
TERMINATION AND AMENDMENT
Section 10.1 TERMINATION. This Agreement may be terminated and the Merger
may be abandoned at any time before the Closing as follows:
(a) by the mutual written consent of the board of directors of each of
IMRglobal and Orion at any time before the Closing;
(b) by IMRglobal or Orion if either (i) the Closing shall not have
occurred on or before June 30, 1999 provided, however, the right to terminate
this Agreement under this Section 10.1(b) shall not be available to any Party
whose failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of the Closing to occur on or before such date;
or (ii) there shall be any statute, law, ordinance, rule, or regulation that
makes consummation of the Merger illegal or otherwise prohibited or if any court
of competent jurisdiction or Governmental Entity shall have issued an order,
decree, or ruling or taken any other action restraining, enjoining, or otherwise
prohibiting the Merger and such order, decree, ruling, or other action shall
have become final and nonappealable;
(c) by Orion, upon a breach of any material representation, warranty,
or agreement set forth in this Agreement; or
(d) by IMRglobal, upon a breach of any material representation,
warranty, or agreement set forth in this Agreement.
Section 10.2 EFFECTS OF TERMINATION. In the event of a termination of this
Agreement by either IMRglobal or Orion as provided in Section 10.1, this
Agreement shall become void and there shall be no Liability or obligation on the
part of IMRglobal, the MergerSub, Orion, or their respective officers or
directors, or the Orion Shareholders, except (a) with respect to Section 7.3,
and (b) to the extent that such termination results from the willful breach by a
Party of any of its representations, warranties, covenants, or agreements set
forth in this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1 NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied (if
43
confirmed), or if mailed by registered or certified mail (return receipt
requested) on the third business day after mailing to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to IMRglobal:
IMRglobal Corp.
00000 XX Xxxxxxx 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Senior Vice President
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Xxxxx, Esq.
00000 XX Xxxxxxx 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
and
Holland & Knight LLP
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to the Orion Shareholders:
Xxxxxx X. Xxxxxxxxx
c/o Orion Consulting, Inc.
The Tower at Erieview
0000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Facsimile: (000) 000-0000
44
With a copy to:
Xxxxxx, Halter & Xxxxxxxx LLP
1400 XxXxxxxx Investment Center
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Section 11.2 INTERPRETATION. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."
Section 11.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 11.4 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES . This
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.
Section 11.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without regard to
any applicable conflicts of law.
Section 11.6 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests, or obligations under this Agreement shall be assigned by any of the
parties (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that the MergerSub may assign, in its sole
discretion, any or all of its rights, interests, and obligations under this
Agreement to IMRglobal or to any direct or indirect wholly-owned Subsidiary of
IMRglobal. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by the parties and their
respective successors and assigns.
45
Section 11.7 AMENDMENT. This Agreement may not be amended except by an
instrument signed on behalf of each of the Parties to this Agreement.
Section 11.8 EXTENSION; WAIVER. At any time prior to the Closing, the
Parties to this Agreement may, to the extent legally allowed: (a) extend the
time for the performance of any of the obligations or other acts of the other
parties to this Agreement; (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant to
this Agreement; and (c) waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a Party of
this Agreement to any such extension or waiver shall be valid only if set forth
in a written instrument signed on behalf of such Party.
Section 11.9 MATERIALITY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in Articles IV and V of this Agreement
or a representation or warranty in any other document delivered pursuant to this
Agreement or in connection with the transactions contemplated by this Agreement
are deemed to be material and the party to whom said representations and
warranties are made is entering into this Agreement relying on such
representations and warranties.
Section 11.10 JURISDICTION. The Parties agree that any dispute arising out
of or relating to this Agreement shall be resolved in the appropriate state or
federal court located within the United States Northern District of Ohio or the
United States Middle District of Florida. Each Party to this Agreement hereby
submits to the jurisdiction of such Courts.
46
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first written above.
ORION CONSULTING, INC., an IMRGLOBAL CORP., a Florida
Ohio corporation corporation
By: /s/ XXXXXXX X. XXXXXXXXXX By: /s/ XXXXXXX XXXXXXXXX
----------------------------------- ----------------------------------
Xxxxxxx X. Xxxxxxxxxx, Xxxxxxx Xxxxxxxxx,
Chairman Senior Vice President
/s/ XXXXXX X. XXXXXXXXX IMRGLOBAL OXFORD CORP., a
-------------------------------------- Florida corporation
Xxxxxx X. Xxxxxxxxx, individually and
as attorney-in-fact for the Orion
Shareholders
By: /s/ XXXXXXX XXXXXXXXX
----------------------------------
Xxxxxxx Xxxxxxxxx, President
47
