3,500,000 Shares
INFORMATION MANAGEMENT RESOURCES, INC.
Common Stock
UNDERWRITING AGREEMENT
__________, 1996
XXXXXXXXXX SECURITIES
ALEX. XXXXX & SONS, INC.
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SECTION 1. Introduction. Information Management Resources,
------------
Inc., a Florida corporation (the "Company), proposes to issue and sell 2,950,000
shares of its authorized but unissued Common Stock, $.10 par value per share
(the "Common Stock"), and certain shareholders of the Company named in Schedule
B annexed hereto (the "Selling Shareholders") propose to sell an aggregate of
550,000 shares of the Company's issued and outstanding Common Stock to the
several underwriters named in Schedule A annexed hereto (the "Underwriters"),
for whom you are acting as Representatives. Said aggregate of 3,500,000 shares
are herein called the "Firm Common Shares." In addition, the Company and Xxxxxx
X. Xxxxx (the "Principal Shareholder") propose to grant to the Underwriters an
option to purchase up to 525,000 additional shares of Common Stock (the
"Optional Common Shares"), as provided in Section 5 hereof. The Firm Common
Shares and, to the extent such option is exercised, the Optional Common Shares
are hereinafter collectively referred to as the "Common Shares."
You have advised the Company and the Selling Shareholders that
the Underwriters propose to make a public offering of their respective portions
of the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and each of the Selling Shareholders hereby
confirm their respective agreements with respect to the purchase of the Common
Shares by the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company and
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the Principal Shareholder. The Company and the Principal Shareholder represent
-------------------------
and warrant to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-12037)
with respect to the Common Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The
Company has prepared and has filed or proposes to file prior to the
effective date of such registration statement an amendment or
amendments to such registration statement, which amendment or
amendments have been or will be similarly prepared. There have been
delivered to you two signed copies of such registration statement and
amendments, together with two copies of each exhibit filed therewith.
Conformed copies of such registration statement and amendments (but
without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested
for each of the Underwriters. The Company will next file with the
Commission one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form
of final prospectus or (ii) a final prospectus in accordance with Rules
430A and 424(b) of the Rules and Regulation. As filed, the final
prospectus shall include all Rule 430A Information and, except to the
extent that you shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the date
and time that this Agreement was executed and delivered by the parties
hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus) as the
Company shall have previously advised you in writing would be included
or made therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement
becomes effective and, in the event any post-effective amendment
thereto becomes effective prior to the First Closing Date (as
hereinafter defined), shall also mean such registration statement as so
amended; provided, however, that such term shall also include (i) all
Rule 430A Information deemed to be included in such registration
statement at the time such registration statement becomes effective as
provided by Rule 430A of the Rules and Regulations and (ii) any
registration statement filed pursuant to 462(b) of the Rules and
Regulations relating to the Common Shares. The term "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in the
preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall
mean (i) the prospectus relating to the Common Shares in the form in
which it is first filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations or (ii) if no filing pursuant to Rule 424(b)
of the Rules and Regulations is required, shall mean the form of final
prospectus included in the Registration Statement at the time such
registration statement becomes effective together with the Preliminary
Prospectus included in the Registration Statement at the time it
becomes effective. The term "Rule 430A Information" means information
with respect to the Common Shares and the offering thereof permitted to
be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements
of the Act and the Rules and Regulations and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and at
the time the Registration Statement becomes effective, and at all times
subsequent thereto up to and including each Closing Date hereinafter
mentioned, the Registration
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Statement and the Prospectus, and any amendments or supplements
thereto, will contain all material statements and information required
to be included therein by the Act and the Rules and Regulations and
will in all material respects conform to the requirements of the Act
and the Rules and Regulations, and neither the Registration Statement
nor the Prospectus, nor any amendment or supplement thereto, will
include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, no representation
or warranty contained in this subsection 2(b) shall be applicable to
information contained in or omitted from any Preliminary Prospectus,
the Registration Statement, the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter, directly
or through the Representatives, specifically for use in the preparation
thereof.
(c) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
Information Management Resources (India) Limited, a limited company
organized under the laws of India ("IMR-India"), and Information
Management Resources (U.K.) Limited, a company organized under the laws
of the United Kingdom ("IMR- UK" and, together with IMR-India, the "IMR
Affiliates"). The Company and each of the IMR Affiliates have been duly
incorporated and are validly existing under the laws of their
respective jurisdictions of incorporation, with full power and
authority (corporate and other) to own and lease their properties and
conduct their respective businesses as described in the Prospectus. As
of the date hereof, the Company beneficially owns ________ shares of
[name of capital stock] (representing approximately 42.9% of the
outstanding equity of IMR-India), and the Principal Shareholder
beneficially owns ________ shares of [name of capital stock]
(representing approximately 18.4% of the outstanding equity of
IMR-India). After giving effect to the IMR- India Purchase (as defined
below), the Company will beneficially own ________ shares of [name of
capital stock] (representing approximately _____% of the outstanding
equity of IMR-India), and the Principal Shareholder will beneficially
own no shares of [name of capital stock]. The Company beneficially owns
________ shares of [name of capital stock] (representing approximately
39.5% of the outstanding equity of IMR-UK). All equity shares of
IMR-India or IMR-UK beneficially owned by the Company or the Principal
Shareholder are owned free and clear of all claims, liens, charges and
encumbrances, equities, claims, security interests, voting trusts,
restrictions or other defects of title.
(d) The condition (financial or otherwise), business,
properties, operations, assets, liabilities, results of operations,
prospects, business strategy and growth strategy of IMR-UK, either
individually or in the aggregate, are not material to the condition
(financial or otherwise), business, properties, operations, assets,
liabilities, results of operations, prospects, business strategy or
growth strategy of the Company. The Registration Statement and the
Prospectus contain all statements required to be stated therein
regarding IMR-UK, and neither the Registration Statement nor the
Prospectus includes any untrue statement of a material fact or omits to
state any material fact regarding IMR-UK that is required to be stated
therein or necessary to make the statements therein regarding the
Company and/or IMR-UK not misleading.
(e) The Company and IMR-India are in possession of and
operating in compliance with all authorizations, licenses, permits,
consents, certificates and orders material to the conduct of their
respective businesses, all of which are valid and in full force and
effect. The Company and IMR-India are duly qualified to do business and
in good standing as foreign corporations in each jurisdiction in which
the ownership or leasing of properties or the conduct of their
respective
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businesses requires such qualification, except for jurisdictions in
which the failure to so qualify would not have a material adverse
effect upon the Company or IMR-India. No proceeding has been instituted
in any such jurisdiction, revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or qualification.
(f) The Company has an authorized and outstanding capital
stock as set forth under the heading "Capitalization" in the
Prospectus. The issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable,
have been issued in compliance with all federal and state securities
laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and
conform to the description thereof contained in the Prospectus. All
issued and outstanding shares of capital stock of IMR-India and all
issued and outstanding shares of capital stock of IMR-UK beneficially
owned by the Company have been duly authorized and validly issued and
are fully paid and nonassessable. Except as disclosed in or
contemplated by the Prospectus and the financial statements of the
Company, and the related notes thereto, included in the Prospectus,
neither the Company nor IMR-India has outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or
to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock
or any such options, rights, convertible securities or obligations. The
description of the stock option, stock bonus and other stock plans or
arrangements maintained by the Company and IMR-India, and of the
options or other rights granted and exercised thereunder, set forth in
the Prospectus accurately and fairly presents the information required
to be shown in respect of, such plans, arrangements, options and
rights.
(g) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable, and will conform to the description thereof
contained in the Prospectus. No preemptive rights or other rights to
subscribe for or purchase exist with respect to the issuance and sale
of the Common Shares by the Company pursuant to this Agreement. No
shareholder of the Company has any right which has not been waived to
require the Company to register the sale of any shares owned by such
shareholder under the Act in the public offering contemplated by this
Agreement. No further approval or authority of the shareholders or the
Board of Directors of the Company will be required for the transfer and
sale of the Common Shares to be sold by the Selling Shareholders or the
issuance and sale of the Common Shares to be sold by the Company as
contemplated herein.
(h) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated
hereby. Each of this Agreement, the S Corporation Termination, Tax
Allocation and Indemnification Agreement, dated as of
_________________, 1996 (the "Tax Agreement"), and the respective
agreements between the Company and the Principal Shareholder and
between the Company and India Magnum Fund N.V. ("India Magnum") whereby
the Company has agreed to purchase (the "IMR-India Purchase") the
entire equity interests of the Principal Shareholder and India Magnum
in IMR-India (collectively, the "IMR-India Purchase Agreements" and,
together with the Tax Agreement, the "Ancillary Agreements") have been
duly authorized, executed and delivered by the Company and constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with the terms of such agreements, except as
enforceability may be limited by general principles of equity,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights. The execution and performance of this
Agreement and each of the Ancillary Agreements
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by the Company and the consummation of the transactions contemplated
herein and therein (i) will not violate any provisions of the articles
of incorporation or bylaws, or other organizational documents, of the
Company or IMR-India, and will not conflict with, result in the breach
or violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under any material agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument to which the Company or IMR-India is a party or by
which the Company or IMR-India or any of its respective properties may
be bound or affected, any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other United States or foreign governmental
body applicable to the Company or IMR-India or any of its respective
properties. No consent, approval, authorization or other order of any
United States or foreign court, regulatory body, administrative agency
or other governmental body is required for the execution and delivery
of this Agreement or any of the Ancillary Agreements or the
consummation of the transactions herein or therein contemplated, except
for compliance with the Act, the blue sky laws applicable to the public
offering of the Common Shares by the several Underwriters, the
clearance of such offering with the National Association of Securities
Dealers, Inc. (the "NASD") and, with respect to the IMR-India Purchase
Agreements, the approval of the Reserve Bank of India [(for which
application has been made)].
(i) Coopers & Xxxxxxx L.L.P. and Xxxxxx Xxxxxxxx & Associates,
each of whom has expressed its opinion with respect to the financial
statements and schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus and in the
Registration Statement, are independent accountants as required by the
Act and the Rules and Regulations.
(j) The consolidated financial statements and schedules of the
Company and IMR- India, and the related notes thereto, included in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and IMR-India as of the
respective dates of such financial statements and schedules, and the
results of operations and changes in financial position of the Company
and IMR-India for the respective periods covered thereby. Such
statements, schedules and related notes have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis as certified by the independent accountants named in
subsection 2(g). No other financial statements or schedules are
required to be included in the Registration Statement. The selected
financial data set forth in the Prospectus under the captions
"Capitalization" and "Selected Consolidated Financial Data" fairly
present the information set forth therein on the basis stated in the
Registration Statement.
(k) Except as to defaults which individually or in the
aggregate would not be material to the Company, neither the Company nor
IMR-India is in violation or default of any provision of its articles
of incorporation or bylaws, or other organizational documents, or is in
breach of or default with respect to any provision of any material
agreement, judgment, decree, order, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which it
is a party or by which it or any of its properties are bound. There
does not exist any state of facts which constitutes an event of default
on the part of the Company or IMR-India as defined in such documents or
which, with notice or lapse of time or both, would constitute such an
event of default.
(l) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by
5
the Rules and Regulations which have not been described or filed as
required. The descriptions of contracts so described in the Prospectus
are accurate and complete. All such contracts are in full force and
effect on the date hereof. Neither the Company nor IMR-India, nor, to
the best of the Company's knowledge, any other party is in breach of or
default under any of such contracts.
(m) There are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge,
threatened to which the Company or IMR-India is or may be a party or of
which property owned or leased by the Company or IMR-India is or may be
the subject, or related to environmental, intellectual property or
discrimination matters, which actions, suits or proceedings might,
individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement and the Ancillary
Agreements or result in a material adverse change in the condition
(financial or otherwise), properties, business, results of operations
or prospects of the Company and IMR-India. No labor disturbance by the
employees of the Company or IMR-India exists or is imminent which might
be expected to affect adversely such condition, properties, business,
results of operations or prospects. Neither the Company nor IMR-India
is a party or subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body, administrative
agency or other United States or foreign governmental body.
(n) The Company or IMR-India, as the case may be, has good and
marketable title to all the properties and assets reflected as owned in
the consolidated financial statements hereinabove described (or
elsewhere in the Prospectus), subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except (i) those, if any, reflected
in such financial statements (or elsewhere in the Prospectus), or (ii)
those which are not material in amount and do not adversely affect the
use made and proposed to be made of such property by the Company and
IMR-India. The Company and IMR-India hold their respective leased
properties under valid and binding leases, with such exceptions as are
not materially significant in relation to the business of the Company.
Except as disclosed in the Prospectus, the Company owns or leases all
such properties as are necessary to its operations as now conducted or
as proposed to be conducted.
(o) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
described in or specifically contemplated by the Prospectus: (i)
neither the Company nor IMR-India has incurred any material liabilities
or obligations, indirect, direct or contingent, or entered into any
material verbal or written agreement or other transaction which is not
in the ordinary course of business or which could result in a material
reduction in the future earnings of the Company and IMR-India; (ii)
neither the Company nor IMR-India has sustained any material loss or
interference with their respective businesses or properties from fire,
flood, windstorm, accident or other calamity, whether or not covered by
insurance; (iii) the Company has not paid or declared any dividends or
other distributions with respect to its capital stock and the Company
and IMR-India are not in default in the payment of principal or
interest on any outstanding debt obligations; (iv) there has not been
any change in the capital stock (other than upon the reclassification
of the Common Stock described in the Registration Statement, upon the
sale of the Common Shares hereunder and upon the exercise of options
described in the Registration Statement) or indebtedness material to
the Company and the IMR-India (other than in the ordinary course of
business); and (v) there has not been any material adverse change in
the condition (financial or otherwise), business, properties, results
of operations or prospects of the Company and IMR-India.
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(p) Except as disclosed in or specifically contemplated by the
Prospectus, (i) the Company and IMR-India have sufficient intellectual
property rights (including, without limitation, trademarks, trade
names, copyrights and licenses), approvals and governmental
authorizations to conduct their businesses as now conducted; (ii) the
expiration of any intellectual property rights (including, without
limitation, trademarks, trade names, copyrights and licenses),
approvals or governmental authorizations would not have a material
adverse effect on the condition (financial or otherwise), business,
results of operations or prospects of the Company or IMR-India; and the
Company has no knowledge of any infringement by it or IMR-India of
intellectual property rights (including, without limitation,
trademarks, trade name rights, patent rights, mask works, copyrights or
licenses), trade secret or other similar rights of others, and there is
no claim being made against the Company or IMR-India regarding
trademark, trade name, patent, mask work, copyright, license, trade
secret or other infringement of intellectual property rights which
could have a material adverse effect on the condition (financial or
otherwise), business, results of operations or prospects of the Company
and IMR-India. Neither the Company nor IMR-India holds, owns or
licenses any patent rights or mask works.
(q) The Company has not been advised, and has no reason to
believe, that either it or IMR-India is not conducting their respective
businesses in compliance with all applicable laws, rules and
regulations of the jurisdictions in which either of them is conducting
business, including, without limitation, all applicable local, state,
(United States and foreign) and federal and foreign environmental,
intellectual property and anti-discrimination laws and regulations;
except where failure to be so in compliance would not materially
adversely affect the condition (financial or otherwise), business,
results of operations or prospects of the Company and IMR- India.
(r) The Company and IMR-India have filed all necessary
federal, state, local and foreign income and franchise tax returns and
have paid all taxes shown as due thereon. The Company has no knowledge
of any tax deficiency which has been or might be asserted or threatened
against the Company or IMR-India which could materially and adversely
affect the business, operations or properties of the Company and
IMR-India.
(s) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(t) The Company has not distributed and will not distribute
prior to the First Closing Date any offering material in connection
with the offering and sale of the Common Shares other than the
Preliminary Prospectus, the Prospectus, the Registration Statement and
the other materials permitted by the Act.
(u) Each of the Company and IMR-India maintains insurance of
the types and in the amounts generally deemed adequate for its
business, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and IMR-India against
theft, damage, destruction, acts of vandalism and all other risks
customarily insured against by other comparable companies, all of which
insurance is in full force and effect.
(v) The Company has filed a registration statement (the "1934
Act Registration Statement") pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to register the
Common Stock, which such 1934 Act Registration Statement has been
declared effective by the Commission. The Company has filed an
application form
7
quotation of the Common Shares on the Nasdaq National Market and has
received notification that the listing has been approved, subject only
to formal notice of issuance.
(w) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(x) To the best of the Company's and the Principal
Shareholder's knowledge after due inquiry, neither the Company nor
IMR-India has at any time during the last five years (i) made any
unlawful contribution to any candidate for United States or foreign
office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any United States or foreign
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or
permitted by the laws of the United States and any other applicable
jurisdiction.
(y) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected
to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Common Shares.
SECTION 3. Representations, Warranties and Covenants of the Selling
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Shareholders.
------------
(a) Each of the Selling Shareholders severally, and not
jointly, represents and warrants to, and agrees with, the several
Underwriters that:
(i) Such Selling Shareholder has, and on the First
Closing Date and the Second Closing Date hereinafter mentioned
will have, good and marketable title to the Common Shares
proposed to be sold by such Selling Shareholder hereunder on
such Closing Date and full right, power and authority to enter
into this Agreement and to sell, assign, transfer and deliver
such Common Shares hereunder, free and clear of all liens,
encumbrances, equities, security interests, voting trusts,
restrictions and other adverse claims whatsoever. Upon
delivery of and payment for such Common Shares hereunder, the
Underwriters will acquire good and marketable title thereto,
free and clear of all liens, encumbrances, equities, claims,
restrictions, security interests, voting trusts, restrictions
or other defects of title whatsoever.
(ii) Such Selling Shareholder has executed and
delivered a Power of Attorney and caused to be executed and
delivered on his behalf a Custody Agreement (hereinafter
collectively referred to as the "Shareholders Agreement") and
in connection herewith such Selling Shareholder further
represents, warrants and agrees that such Selling Shareholder
has deposited in custody, under the Shareholders Agreement,
with the agent named therein (the "Agent") as custodian,
certificates in negotiable form for the Common Shares to be
sold hereunder by such Selling Shareholder, for the purpose of
further delivery pursuant to this Agreement. Such Selling
Shareholder agrees that the Common Shares to be sold by such
Selling Shareholder on deposit with the Agent are subject to
the interests of the Company and the Underwriters, that the
arrangements made for such custody are to that extent
irrevocable, and that the obligations of such Selling
Shareholder hereunder shall not be terminated, except as
provided in this Agreement or in the Shareholders Agreement,
by any act of such Selling Shareholder, by operation of law,
8
by the death or incapacity of such Selling Shareholder or by
the occurrence of any other event. If the Selling Shareholder
should die or become incapacitated, or if any other event
should occur, before the delivery of the Common Shares
hereunder, the documents evidencing Common Shares then on
deposit with the Agent shall be delivered by the Agent in
accordance with the terms and conditions of this Agreement as
if such death, incapacity or other event had not occurred,
regardless of whether or not the Agent shall have received
notice thereof. This Agreement and the Shareholders Agreement
have been duly executed and delivered by or on behalf of such
Selling Shareholder and the form of such Shareholders
Agreement has been delivered to you.
(iii) The performance of this Agreement, the
Shareholders Agreement and the Ancillary Agreements to which
such Selling Shareholder is a party and the consummation of
the transactions contemplated herein and therein will not
result in a breach or violation by such Selling Shareholder of
any of the terms or provisions of, or constitute a default by
such Selling Shareholder under, any indenture, mortgage, deed
of trust, trust (constructive or other), loan agreement,
lease, franchise, license or other agreement or instrument to
which such Selling Shareholder is a party or by which such
Selling Shareholder or any of its properties is bound, any
statute, or any judgment, decree, order, rule or regulation of
any court or governmental agency or body applicable to such
Selling Shareholder or any of its properties.
(iv) Such Selling Shareholder has not taken and will
not take, directly or indirectly, any action designed to or
which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or
resale of the Common Shares.
(v) Each Preliminary Prospectus and the Prospectus,
insofar as it has related to such Selling Shareholder has
conformed in all material respects to the requirements of the
Act and the Rules and Regulations and has not included any
untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were
made. Neither the Registration Statement nor the Prospectus,
nor any amendment or supplement thereto, as it relates to such
Selling Shareholder, will include any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading.
(vi) Such Selling Shareholder is not aware that any
of the representations or warranties set forth in Section 2
above is untrue or inaccurate in any material respect.
(b) Each of the Selling Shareholders agrees with the Company
and the Underwriters not to offer to, directly or indirectly, sell,
sell or contract to sell or otherwise dispose of any shares of Common
Stock or securities convertible into or exchangeable for any shares of
Common Stock, for a period of 180 days after the first date that any of
the Common Shares are released by you for sale to the public, without
the prior written consent of Xxxxxxxxxx Securities, which consent may
be withheld at the sole discretion of Xxxxxxxxxx Securities.
SECTION 4. Representations and Warranties of the Underwriters. The
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Representatives, on behalf of the several Underwriters, represent and warrant to
the Company and to the Selling Shareholders that the information set forth (i)
on the cover page of the Prospectus with respect to price, underwriting
9
discounts and commissions and terms of offering, (ii) with respect to
stabilization and overallotment set forth on the inside cover page of the
Prospectus, and (iii) under "Underwriting" in the Prospectus was furnished to
the Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and the Prospectus and is correct in
all material respects. The Representatives represent and warrant that they have
been authorized by each of the other Underwriters as the Representatives to
enter into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 5. Purchase, Sale and Delivery of Common Shares. On the basis
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of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, (i) the Company agrees to issue
and sell to the Underwriters 2,950,000 of the Firm Common Shares, and (ii) the
Selling Shareholders agree, severally and not jointly, to sell to the
Underwriters in the respective amounts set forth in Schedule B hereto, an
aggregate of 550,000 of the Firm Common Shares. The Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Shareholders, respectively, the number of Firm Common Shares described below.
The purchase price per share to be paid by the several Underwriters to the
Company and to the Selling Shareholders, respectively, shall be $___ per share.
The obligation of each Underwriter to the Company shall be to purchase from the
Company that number of full shares which (as nearly as practicable, as
determined by you) bears to 2,950,000 the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares. The obligation of each
Underwriter to the Selling Shareholders shall be to purchase from the Selling
Shareholders that number of full shares which (as nearly as practicable, as
determined by you) bears to 550,000 the same proportion as the number of shares
set forth opposite the name of such Underwriter in Schedule A hereto bears to
the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of Xxxxxxxxxx
Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other
place as may be agreed upon by the Company and the Representatives) at such time
and date, not later than the third (or, if the Firm Common Shares are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act after 4:30 P.M. Washington
D.C. time, the fourth) full business day following the first date that any of
the Common Shares are released by you for sale to the public, as you shall
designate by at least 24 hours prior notice to the Company (or at such other
time and date, not later than one week after such third or fourth full business
day, as the case may be, as may be agreed upon by the Company and the
Representatives) (the "First Closing Date"); provided, however, that if the
Prospectus is at any time prior to the First Closing Date recirculated to the
public, the First Closing Date shall occur upon the later of the third or
fourth, as the case may be, full business day following the first date that any
of the Common Shares are released by you for sale to the public or the date that
is 48 hours after the date that the Prospectus has been so recirculated.
10
Delivery of certificates for the Firm Common Shares shall be made by or on
behalf of the Company and the Selling Shareholders to you, for the respective
accounts of the Underwriters with respect to the Firm Common Shares to be sold
by the Company and by the Selling Shareholders against payment by you, for the
accounts of the several Underwriters, of the purchase price therefor by wire
transfer of immediately available funds to an account designated by the Company
and to an account designated by the Agent (each such wire transfer shall be in
proportion to the number of Firm Common Shares to be sold by the Company and the
Selling Shareholders, respectively). The certificate for the Firm Common Shares
shall be registered in such names and denominations as you shall have requested
at least two full business days prior to the First Closing Date, and shall be
made available for checking and packaging on the business day preceding the
First Closing Date at a location in New York, New York, as may be designated by
you. Time share be of the essence, and delivery at the time and place specified
in this Agreement is a further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company and the Principal Shareholder hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
525,000 Optional Common Shares at the purchase price per share to be paid for
the Firm Common Shares, for use solely in covering any over-allotments made by
you for the account of the Underwriters in the sale and distribution of the Firm
Common Shares. If the Underwriters exercise such option, the Company and the
Principal Shareholder agree to sell to the Underwriters an aggregate of 525,00
Optional Common Shares in the respective amounts set forth in Schedule B
attached hereto. If the option granted hereby is exercised in part, the
respective number of Optional Common Shares to be sold by the Company and the
Principal Shareholder shall be determined on a pro rata basis in the same
proportion as (x) the number of Optional Common Shares that the Company or the
Principal Shareholder would have sold had the option been exercised in whole
bears to (y) the total number of Optional Common Shares that would have been
sold had the option been exercised in whole, with such adjustments made by you
as are necessary to avoid fractional shares. The option granted hereunder may be
exercised at any time (but not more than once) within 30 days after the first
date that any of the Common Shares are released by you for sale to the public,
upon notice by you to the Company and the Principal Shareholder setting forth
the aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, the names and denominations in which the certificates for
such shares are to be registered and the time and place at which such
certificates will be delivered. Such time of delivery (which may not be earlier
than the First Closing Date), being herein referred to as the "Second Closing
Date," shall be determined by you, but if at any time other than the First
Closing Date shall not be earlier than three nor later than five full business
days after delivery of such notice of exercise. The number of Optional Common
Shares to be purchased by each Underwriter shall be determined by multiplying
the number of Optional Common Shares to be sold by the Company and the Principal
Shareholder pursuant to such notice of exercise by a fraction, the numerator of
which is the number of Firm Common Shares to be purchased by such Underwriter as
set forth opposite its name in Schedule A and the denominator of which is the
total number of Firm Common Shares (subject to such adjustments to eliminate any
fractional share purchases as you in your discretion may make). Certificates for
the Optional Common Shares will be made available for checking and packaging on
the business day preceding the Second Closing Date at a location in New York,
New York, as may be designated by you. The manner of payment for and delivery of
the Optional Common Shares shall be the same as for the Firm Common Shares
purchased from the Company and the Selling Shareholders as specified in the two
preceding paragraphs. At any time before lapse of the option, you may cancel
such option by giving written notice of such cancellation to the Company and the
Principal Shareholder. If the option is cancelled or expires unexercised in
whole or in part, the Company will as soon as practicable deregister under the
Act the number of Option Shares as to which the option has not been exercised.
You have advised the Company and the Selling Shareholders that each Underwriter
has authorized you to accept delivery of its Common Shares, to make payment and
to receipt therefor. You, individually and not as the Representatives of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by you by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
11
Subject to the terms and conditions hereof, the Underwriters propose to make a
public offering of their respective portions of the Common Shares as soon after
the effective date of the Registration Statement as in the judgment of the
Representatives is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the final Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and agrees
------------------------
that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the
parties hereto, to become effective. If the Registration Statement has
become or becomes effective pursuant to Rule 430A of the Rules and
Regulations, or the filing of the Prospectus is otherwise required
under Rule 424(b) of the Rules and Regulations, the Company will file
the Prospectus, properly completed, pursuant to the applicable
paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such
timely filing. The Company will promptly advise you in writing (i) of
the receipt of any written or oral comments of the Commission or its
staff, (ii) of any written or oral request of the Commission or its
staff for amendment of or supplement to the Registration Statement
(either before or after it becomes effective), any Preliminary
Prospectus or the Prospectus or for additional information, (iii) when
the Registration Statement shall have become effective, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose. If the Commission shall enter any
such stop order at any time, the Company will use its best efforts to
obtain the lifting of such order as soon as practicable. The Company
will not file any amendment or supplement to the Registration Statement
(either before or after it becomes effective), any Preliminary
Prospectus or the Prospectus of which you have not been furnished with
a copy a reasonable time prior to such filing or to which you
reasonably object or which is not in compliance with the Act and the
Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which in your judgment may be
necessary or advisable to enable the several Underwriters to continue
the distribution of the Common Shares and will use its best efforts to
cause the same to become effective as promptly as possible. The Company
will fully and completely comply with the provisions of Rule 430A of
the Rules and Regulations with respect to information omitted from the
Registration Statement in reliance upon such Rule.
(c) Within the time during which a prospectus relating to the
Common Shares is, in the opinion of counsel for the Underwriters or
counsel for the Company, required under the Act to be delivered in
connection with sales by an Underwriter or dealer, the Company will
comply with all requirements imposed upon it by the Act and by the
Rules and Regulations, as from time to time are in force, so far as
necessary to permit the continuance of sales of or dealings in the
Common Stock as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of which
the Prospectus, including any amendments or supplements, would include
an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances then existing, not misleading, or if during such period
it is necessary at any time to amend the Registration Statement,
including any amendments or supplements, to comply with the Act or the
Rules and Regulations, the Company will promptly notify you thereof and
will promptly prepare and file with the Commission, at its own expense,
an amendment or supplement to the Registration
12
Statement which will correct such statement or omission or an amendment
or supplement which will effect such compliance and will use its best
efforts to cause the same to become effective as soon as possible; and,
in case any Underwriter is required to deliver a prospectus after such
nine-month period, the Company upon request, but at the expense of such
Underwriter, will promptly prepare such amendment or amendments to the
Registration Statement and such Prospectus or Prospectuses as may be
necessary to permit compliance with the requirements of Section
10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45 days after
the end of the first quarter ending after one year following the
"effective date of the Registration Statement" (as defined in Rule
158(c) of the Rules and Regulations), the Company will make generally
available to its security holders an earnings statement (which need not
be audited) covering a period of 12 consecutive months beginning after
the effective date of the Registration Statement which will satisfy the
provisions of the last paragraph of Section 11(a) of the Act.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the nine-month period referred to
in Section 10(a)(3) of the Act, will furnish to you and the Selling
Shareholders or mail to your order copies of the Registration
Statement, the Prospectus, the Preliminary Prospectus and all
amendments and supplements to any such documents in each case as soon
as available and in such quantities as you and the Selling Shareholders
may request, for the purposes contemplated by the Act.
(f) The Company shall cooperate with you and your counsel in
order to qualify or register the Common Shares for sale under (or
obtain exemptions from the application of) the blue sky laws of such
United States and Canadian jurisdictions as you designate, will comply
with such laws and will continue such qualifications, registrations and
exemptions in effect so long as reasonably required for the
distribution of the Common Shares. The Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise you promptly of the suspension of
the qualification or registration of (or any such exemption relating
to) the Common Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and
in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company, with your
cooperation, will use its best efforts to obtain the withdrawal
thereof.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request of the
Representatives, to each of the other Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the consolidated balance sheet of the
Company as of the close of such fiscal year and consolidated statements
of income, shareholders' equity and cash flows for the year then ended
and the opinion thereon of the Company's independent public
accountants; (ii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and
(iii) as soon as available, copies of any report or communication of
the Company mailed generally to holders of its Common Stock.
13
(h) During the period of 180 days after the first date that
any of the Common Shares are released by you for sale to the public,
without the prior written consent of Xxxxxxxxxx Securities (which
consent may be withheld at the sole discretion of the Xxxxxxxxxx
Securities), the Company will not other than pursuant to the exercise
of outstanding stock options or the grant or the issuance of options or
shares pursuant to stock option plans (which vest or become exercisable
after the expiration of such 180-day period) disclosed in the
Prospectus, issue, offer, sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities or any other
securities convertible into or exchangeable with its Common Stock or
other equity security.
(i) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or
register its Common Stock for sale in non-issuer transactions under (or
obtain exemptions from the application of) the blue sky laws of the
State of California (and thereby permit market making transactions and
secondary trading in the Company's Common Stock in California), will
comply with such blue sky laws and will continue such qualifications,
registrations and exemptions in effect for a period of five years after
the date hereof.
(k) The Company will use its best efforts to cause the Common
Stock to be admitted for quotation on the Nasdaq National Market.
You, on behalf of the Underwriters, may, in your sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.
SECTION 7. Payment of Expenses. Whether or not the transactions
-------------------
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company and, unless otherwise paid by the Company, the Selling
Shareholders agree to pay in such proportions as they may agree upon among
themselves all costs, fees and expenses incurred in connection with the
performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel and the Company's independent accountants, (v) all costs
and expenses incurred in connection with the preparation, printing, filing,
shipping and distribution of the Registration Statement, each Preliminary
Prospectus and the Prospectus (including all exhibits and financial statements)
and all amendments and supplements provided for herein, this Agreement, the
Agreement Among Underwriters, the Selected Dealers Agreement, the Underwriters'
Questionnaire, the Underwriters' Power of Attorney and the blue sky memorandum,
(vi) all filing fees, attorneys' fees and expenses incurred by the Company or
the preliminary and final Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Common Shares for offer and sale under the United States
and foreign blue sky laws designated by your pursuant to Section 6(f), (vii) the
filing fee of the NASD and the related fees and expenses of counsel to the
Underwriters in connection with the NASD's review of the Underwriting
arrangements contemplated hereby, and (viii) all other fees, costs and expenses
referred to in Item 13 of the
14
Registration Statement. The Underwriters may deem the Company to be the primary
obligor with respect to all costs, fees and expenses to be paid by the Company
and by the Selling Shareholders. Except as provided in this Section 7, Section 9
and Section 11 hereof, the Underwriters shall pay all of their own expenses,
including the fees and disbursements of their counsel (excluding those relating
to qualification, registration or exemption under the blue sky laws, the blue
sky memorandum and the NASD's review of underwriting arrangements referred to
above). This Section 7 shall not affect any agreements relating to the payment
of expenses between the Company and the Selling Shareholders.
The Company will pay (directly or by reimbursement) all fees and expenses
incident to the performance of their obligations under this Agreement which are
not otherwise specifically provided for herein, including but not limited to (i)
any fees and expenses of counsel for such Selling Shareholders; (ii) any fees
and expenses of the Agent; and (iii) all expenses and taxes incident to the sale
and delivery of the Common Shares to be sold by such Selling Shareholders to the
Underwriters hereunder.
SECTION 8. Conditions of the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the several Underwriters to purchase and pay for the Firm Common
Shares on the First Closing Date and the Optional Common Shares on the Second
Closing Date, if any, shall be subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Shareholders herein
set forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company
officers and the Selling Shareholders made pursuant to the provisions hereof, to
the performance by the Company and the Selling Shareholders of their respective
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 P.M., (or, in the case of a registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations relating to
the Common Shares, not later than 10 P.M.), Washington, D.C. Time, on
the date of this Agreement, or at such later time as shall have been
consented to by you; if the filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b) of the Rules and
Regulations, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules and
Regulations; and prior to such Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
and no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company, the Selling
Shareholders or you, shall be contemplated by the Commission, and any
request of the Commission for inclusion of additional information in
the Registration Statement, or otherwise, shall have been complied with
to your satisfaction.
(b) You shall be satisfied that since the respective dates as
of which information is given in the Registration Statement and
Prospectus, (i) there shall not have been any change in the capital
stock of the Company or IMR-India (other than pursuant to the exercise
of outstanding options disclosed in the Prospectus or the issuance of
options or shares pursuant to stock option plans (which vest or become
exercisable after the expiration of the 180-day "lock-up" period
described in Section 6(h))) or any material change in the indebtedness
(other than in the ordinary course of business) of the Company or
IMR-India, (ii) except as set forth or contemplated by the Registration
Statement or the Prospectus, no material verbal or written agreement or
other transaction shall have been entered into by the Company or
IMR-India, which is not in the ordinary course of business or which
could result in a material reduction in the future earnings of the
Company and IMR-India, (iii) no loss or damage (whether or not insured)
to the property of the Company or IMR-India shall have been sustained
which materially and adversely affects the condition (financial or
otherwise), business, results of operations or prospects of the Company
15
and IMR-India, (iv) no legal or governmental action, suit or proceeding
affecting the Company or IMR-India which is material to the Company and
IMR-India or which affects or may affect the transactions contemplated
by this Agreement shall have been instituted or threatened, and (v)
there shall not have been any material change in the condition
(financial or otherwise), business, management, results of operations
or prospects of the Company and IMR-India which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the
public offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you, as Representatives
of the Underwriters, on each Closing Date, in form and substance
satisfactory to you, except as otherwise expressly provided below:
(i) An opinion of Xxxxxx, Xxxxxxx & Xxxxxx L.L.P.,
counsel for the Company and the Selling Shareholders,
addressed to the Underwriters and dated the First Closing
Date, or the Second Closing Date, as the case may be, in the
form of Schedule C hereto, to the effect that:
(1) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Florida, is
duly qualified to do business as a foreign
corporation and is in good standing in all other
jurisdictions where the ownership or leasing of
properties or the conduct of its business requires
such qualification, except for jurisdictions in which
the failure to so qualify would not have a material
adverse effect on the Company, and has full corporate
power and authority to own its properties and conduct
its business as described in the Registration
Statement;
(2) The authorized, issued and outstanding
capital stock of the Company is as set forth under
the caption "Capitalization" in the Prospectus; all
necessary and proper corporate proceedings have been
taken in order to authorize validly such authorized
Common Stock; all outstanding shares of Common Stock
(including the Firm Common Shares and any Optional
Common Shares) have been duly and validly issued, are
fully paid and nonassessable, have been issued in
compliance with federal and state securities laws,
were not issued in violation of or subject to any
preemptive rights or, to the best of such counsel's
knowledge, other rights to subscribe for or purchase
any securities and conform to the description thereof
contained in the Prospectus; without limiting the
foregoing, there are no preemptive or other rights to
subscribe for or purchase any of the Common Shares to
be sold by the Company hereunder;
(3) The Company beneficially owns ________
shares of [name of capital stock] (representing
approximately 42.9% of the outstanding equity of
IMR-India), and the Principal Shareholder
beneficially owns ________ shares of [name of capital
stock] (representing approximately 18.4% of the
outstanding equity of IMR-India); the Company
beneficially owns ________ shares of [name of capital
stock] (representing approximately 39.5% of the
outstanding equity of IMR-UK); all such equity shares
of IMR-India and IMR-UK are owned free and clear of
all liens, encumbrances, equities, claims, security
interests, voting trusts, restrictions or other
defects of title whatsoever;
16
(4) The certificates evidencing the Common
Shares to be delivered hereunder are in due and
proper form under Florida law, and when duly
countersigned by the Company's transfer agent and
registrar and delivered to you or upon your order
against payment of the agreed consideration therefor
in accordance with the provisions of this Agreement,
the Common Shares represented thereby will be duly
authorized and validly issued, fully paid and
nonassessable and will conform in all material
respects to the description thereof contained in the
Prospectus;
(5) Except as disclosed in or specifically
contemplated by the Prospectus, to the best of such
counsel's knowledge, there are no outstanding
options, warrants or other rights calling for the
issuance of, and no commitments, plans or
arrangements to issue, any shares of capital stock of
the Company or any security convertible into or
exchangeable for capital stock of the Company;
(6) The Registration Statement has become
effective under the Act, and, to the best of such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or
preventing the use of the Prospectus has been issued
and no proceedings for that purpose have been
instituted or are pending or contemplated by the
Commission; any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the
Rules and Regulations has been made in the manner and
within the time period required by such Rule 424(b);
(7) The 1934 Act Registration Statement has
become effective under the Exchange Act.
(8) The Registration Statement as of its
effective date, the Prospectus and each amendment or
supplement thereto at the time it became effective
(except for the consolidated financial statements,
schedules, pro forma and other financial and
statistical data included therein and in the exhibits
to the Registration Statement as to which such
counsel need express no opinion) comply as to form in
all material respects with the requirements of the
Act and the Rules and Regulations;
(9) To the best of such counsel's knowledge,
there are no franchises, leases, contracts,
agreements or documents of a character required to be
disclosed in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration
Statement which are not disclosed or filed, as
required;
(10) To the best of such counsel's
knowledge, there are no legal or governmental
actions, suits or proceedings pending or threatened
against the Company or IMR-India which are required
to be described in the Prospectus which are not
described as required;
(11) The statements set forth in the
Prospectus under the headings "Risk
Factors--Immigration Issues; --Benefits to Principal
Selling Shareholder; --Control by Principal
Shareholder; --Intellectual Property Rights;
--Certain Anti-Takeover Provisions; --Shares Eligible
for Future Sale," "Prior S
17
Corporation Status and Distributions," "Management's
Discussion and Analysis of Financial Condition and
Results of Operations--Overview; --Affiliate
Relationships; --Income Tax Matters; --Net Charge
Resulting from S Corporation Termination; --Liquidity
and Capital Resources," "Business--Intellectual
Property; --Human Resources; --Legal Proceedings;
--Facilities," "Management," "Principal and Selling
Shareholders," "Certain Transactions," "Description
of Capital Stock," "Shares Eligible for Future Sale,"
and "Underwriting", and Items 14 and 15 of the
Registration Statement, insofar as such statements
constitute a summary of the terms of legal matters,
documents, agreements or other instruments or
governmental, regulatory or other legal proceedings,
are fair and accurate in all material respects;
(12) The Company has full right, power and
authority to enter into this Agreement and each of
the Ancillary Agreements and to sell and deliver the
Common Shares to be sold by it to the several
Underwriters; each of this Agreement and the
Ancillary Agreements has been duly and validly
authorized by all necessary corporate action by the
Company, has been duly and validly executed and
delivered by and on behalf of the Company, and is a
valid and binding agreement of the Company
enforceable in accordance with its terms, except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and except as to those provisions of this
Agreement relating to indemnity or contribution for
liabilities arising under the Act, as to which no
opinion need be expressed; and no approval,
authorization, order, consent, registration, filing,
qualification, license or permit of or with any
court, regulatory, administrative or other
governmental body is required for the execution and
delivery of this Agreement and the Ancillary
Agreements by the Company or the consummation of the
transactions contemplated herein or therein, except
such as have been obtained and are in full force and
effect under the Act and such as may be required
under applicable blue sky laws in connection with the
purchase and distribution of the Common Shares by the
Underwriters, and the clearance of such offering with
the NASD;
(13) The execution and performance of this
Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated herein
and therein will not conflict with, result in the
breach of, or constitute, either by itself or upon
notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other
instrument known to such counsel to which the Company
or IMR-India is a party or by which the Company or
IMR-India may be bound or affected which is material
to the Company or violate any of the provisions of
the articles of incorporation or bylaws, or other
organizational documents, of the Company or, so far
as is known to such counsel, violate any statute,
judgment, decree, order, rule or regulation of any
court or governmental body having jurisdiction over
the Company or any of its property;
(14) The Company is not in violation or
default of any provision of its articles of
incorporation or bylaws, or other organizational
documents, or to the best of such counsel's
knowledge, in breach of or default with respect to
any
18
provision of any agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other
instrument known to such counsel to which the Company
is a party or by which it or any of its properties
may be bound or affected and which is material to the
Company, except where such default would not
materially adversely affect the Company; and, to the
best of such counsel's knowledge, the Company is in
compliance with all laws, rules, regulations,
judgments, decrees, orders and statutes of any court
or jurisdiction to which they are subject, except
where noncompliance would not materially adversely
affect the Company;
(15) To the best of such counsel's
knowledge, no holders of securities of the Company
have rights to the registration of shares of Common
Stock or other securities, because of the filing of
the Registration Statement by the Company or the
offering contemplated hereby, except for rights fully
satisfied or effectively waived;
(16) To the best of such counsel's
knowledge, this Agreement, the Ancillary Agreements
and the Shareholders Agreement have been duly
authorized, executed and delivered by or on behalf of
each of the Selling Shareholders party thereto; the
Agent has been duly and validly authorized to act as
the custodian of the Common Shares to be sold by each
such Selling Shareholder; and the performance of this
Agreement and the Shareholders Agreement and the
consummation of the transactions herein contemplated
by the Selling Shareholders will not result in a
breach of, or constitute a default under, any
indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease,
franchise, license or other agreement or instrument
known to such counsel to which any of the Selling
Shareholders is a party or by which any of the
Selling Shareholders or any of their properties may
be bound, or violate any statute, judgment, decree,
order, rule or regulation known to such counsel of
any court or governmental body having jurisdiction
over any of the Selling Shareholders or any of their
properties; and, to the best of such counsel's
knowledge, no approval, authorization, order or
consent of any court, regulatory body, administrative
agency or other governmental body is required for the
execution and delivery of this Agreement, the
Ancillary Agreements or the Shareholders Agreement or
the consummation by the Selling Shareholders party
thereto of the transactions contemplated by this
Agreement, except such as have been obtained and are
in full force and effect under the Act and such as
may be required under the rules of the NASD and
applicable blue sky laws;
(17) To the best of such counsel's
knowledge, the Selling Shareholders have full right,
power and authority to enter into this Agreement and
the Shareholders Agreement and to sell, transfer and
deliver the Common Shares to be sold on such Closing
Date by such Selling Shareholders hereunder and good
and marketable title to such Common Shares so sold,
free and clear of all liens, encumbrances, equities,
claims, security interests, voting trusts,
restrictions or other defects of title whatsoever,
has been transferred to the Underwriters (whom
counsel may assume to be bona fide purchasers) who
have purchased such Common Shares hereunder; and
19
(18) To the best of such counsel's
knowledge, this Agreement, the Ancillary Agreements
and the Shareholders Agreement are valid and binding
agreements of each of the Selling Shareholders in
accordance with their respective terms, except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and except with respect to those provisions
of this Agreement relating to indemnities or
contributions for liabilities under the Act, as to
which no opinion need be expressed.
(19) Except for the payment of Florida
___________________, no transfer taxes are required
to be paid in connection with the sale and delivery
of the Common Shares to the Underwriters hereunder.
In rendering such opinion, such counsel may rely as to matters of local
law, on opinions of local counsel, and as to matters of fact, on
certificates of the Selling Shareholders and of officers of the Company
and of governmental officials, in which case their opinion is to state
that they are so doing and that the Underwriters are justified in
relying on such opinions or certificates and copies of said opinions or
certificates are to be attached to the opinion. Such counsel shall also
include a statement to the effect that although such counsel has not
independently verified the accuracy or completeness of the information
in the Registration Statement and Prospectus, they have participated in
conferences with representatives of the Company and its counsel and
independent accountants, at which the contents of the Registration
Statement and Prospectus were discussed at length, nothing has come to
such counsel's attention that would lead such counsel to believe that
either at the effective date of the Registration Statement or at the
applicable Closing Date the Registration Statement or the Prospectus,
or any such amendment or supplement, contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading
(excluding consolidated financial statements, schedules, pro forma and
other financial and statistical data and exhibits contained therein).
(ii) An opinion of Xxxxxxx Xxxxx, counsel for
IMR-India, addressed to the Underwriters and dated the First
Closing Date, or the Second Closing Date, as the case may be,
in the form of Schedule D hereto, to the effect that:
(1) IMR-India has been duly organized and is
validly existing as a limited company in good
standing under the laws of India;
(2) IMR-India has ________ [shares] of [type
of] stock authorized, ________ of which are issued
and outstanding; all necessary and proper corporate
proceedings have been taken in order to authorize
validly such authorized stock; all outstanding shares
of [type of] stock have been duly and validly issued,
are fully paid and nonassessable, have been issued in
compliance with Indian law, were not issued in
violation of or subject to any preemptive rights or
other rights to subscribe for or purchase any
securities;
(3) As of the date of this Agreement, the
Company beneficially owns _______ shares of [name of
capital stock] (representing approximately 42.9% of
the outstanding equity of IMR-India), free and clear
of all liens, encumbrances,
20
equities, claims, security interests, voting trusts,
restrictions or other defects of title whatsoever;
(4) Each of IMR-India and India Magnum has
full right, power and authority to enter into the
Ancillary Agreements to which it is a party; each
Ancillary Agreement has been duly and validly
authorized by all necessary corporate action by
IMR-India and India Magnum, as the case may be, has
been duly and validly executed and delivered by and
on behalf of the IMR-India and India Magnum, as the
case may be, and is a valid and binding agreement of
IMR-India and India Magnum, as the case may be,
enforceable in accordance with its terms; the
execution, delivery and performance of each of the
Ancillary Agreements and the consummation of the
transactions contemplated thereby will not result in
a breach of, or constitute a default under, any
indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease,
franchise, license or other agreement or instrument
known to such counsel to which IMR- India or India
Magnum is a party or by which any of its properties
may be bound, or violate any statute, judgment,
decree, order, rule or regulation known to such
counsel of any court or governmental body having
jurisdiction over IMR- India or India Magnum or any
of its properties; and, to the best of such counsel's
knowledge, no approval, authorization, order or
consent of any court, regulatory body, administrative
agency or other governmental body is required for the
execution and delivery of the Ancillary Agreements to
which it is a party, except for the approval of the
Reserve Bank of India [(application of which has
made)][(which has been obtained)];
(5) IMR-India has such approvals,
authorizations, orders, consents, qualifications,
licenses and permits as are necessary to own, lease
and operate its respective properties and to conduct
its businesses; IMR-India has fulfilled and performed
all of its material obligations with respect to such
approvals, authorizations, orders, consents,
qualifications, licenses and permits and no event has
occurred which allows, or after notice or lapse of
time would allow, for revocation or termination
thereof or results, or would result, in any other
material impairment of the rights of the holder of
any such approval, authorization, order, consent,
qualification, license or permit.
(6) The statements set forth in the
Prospectus under the headings "Risk
Factors--Dependence on India Offshore Software
Development Center; --Intellectual Property Rights,"
"Management's Discussion and Analysis of Financial
Condition and Results of Operations--Affiliate
Relationships; --Income Tax Matters; --Liquidity and
Capital Resources," "Business--Human Resources;
--Intellectual Property Rights,"
"Management--Employee Benefit Plans--IMR- India
Benefit Plans," "Certain Transactions--IMR-India
Transactions," insofar as such statements constitute
a summary of the terms of legal matters, documents,
agreements or other instruments or governmental,
regulatory or other legal proceedings, are fair and
accurate in all material respects.
In rendering such opinion, such counsel may rely as to matters of fact,
on certificates of the officers of the Company and of governmental
officials, in which case their opinion is to state that
21
they are so doing and that the Underwriters are justified in relying on
such opinions or certificates and copies of said opinions or
certificates are to be attached to the opinion.
(iii) An opinion of ____________________, counsel for
the Company, addressed to the Underwriters and dated the First
Closing Date, or the Second Closing Date, as the case may be,
in the form of Schedule E hereto, to the effect that:
(1) IMR-UK has been duly organized and is
validly existing as a [__________] in good standing
under the laws of the United Kingdom.
(iv) Such opinion or opinions of Xxxxxx & Xxxxxxx,
counsel for the Underwriters, dated the First Closing Date or
the Second Closing Date, as the case may be, with respect to
such legal matters relating to this Agreement, the
Registration Statement and the Prospectus and other related
matters as you may reasonably require, and the Company and the
Selling Shareholders shall have furnished to such counsel such
documents and shall have exhibited to them such papers and
records as they may reasonably request for the purpose of
enabling them to pass upon such matters. In connection with
such opinions, such counsel may rely on representations or
certificates of officers of the Company and governmental
officials.
(v) A certificate of the Company executed by the
chief executive officer and the chief financial or accounting
officer of the Company, dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that,
to the best of such officers' knowledge:
(1) The representations and warranties of
the Company set forth in Section 2 of this Agreement
are true and correct as of the date of this Agreement
and as of the First Closing Date or the Second
Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all
the conditions on its part to be performed or
satisfied on or prior to such Closing Date;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the
Registration Statement or any amendment thereto; no
stop order suspending the effectiveness of the
Registration Statement has been issued; and to the
best of the knowledge of the respective signers, no
proceedings for that purpose have been instituted or
are pending or contemplated under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration
Statement and the Prospectus; in his opinion and to
the best of his knowledge, the Registration Statement
and the Prospectus and any amendments or supplements
thereto contain all statements required to be stated
therein regarding the Company and the IMR-Affiliates;
and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or
omits to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading;
22
(4) Since the initial date on which the
Registration Statement was filed, no agreement,
written or oral, transaction or event has occurred
which should have been set forth in an amendment to
the Registration Statement or in a supplement to or
amendment of any prospectus which has not been
disclosed in such a supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus, and except as disclosed in or
contemplated by the Prospectus, there has not been
any material adverse change or a development
involving a material adverse change in the condition
(financial or otherwise), business, properties,
results of operations, management or prospects of the
Company and IMR-India; and no legal or governmental
action, suit or proceeding is pending or threatened
against the Company or IMR-India which is material to
the Company and IMR-India whether or not arising from
transactions in the ordinary course of business, or
which may adversely affect the transactions
contemplated by this Agreement; since such dates and
except as so disclosed, neither the Company nor
IMR-India has entered into any verbal or written
agreement or other transaction which is not in the
ordinary course of business or which could result in
a material reduction in the future earnings of the
Company or incurred any material liability or
obligation, direct, contingent or indirect, made any
change in its capital stock, made any material change
in its short-term debt or funded debt or repurchased
or otherwise acquired any of the Company's capital
stock; and the Company has not declared or paid any
dividend, or made any other distribution, upon its
outstanding capital stock payable to shareholders of
record on a date prior to the First Closing Date or
Second Closing Date; and
(6) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus and except as disclosed in or
contemplated by the Prospectus, the Company and
IMR-India have not sustained a material loss or
damage by strike, fire, flood, windstorm, accident or
other calamity (whether or not insured).
(vi) On the First Closing Date or the Second Closing
Date, as the case may be, a certificate, dated such Closing
Date and addressed to you, signed by or on behalf of each of
the Selling Shareholders to the effect that the
representations and warranties of such Selling Shareholder in
this Agreement are true and correct, as if made at and as of
the First Closing Date or the Second Closing Date, as the case
may be, and such Selling Shareholder has complied with all the
agreements and satisfied all the conditions on his part to be
performed or satisfied prior to the First Closing Date or the
Second Closing Date, as the case may be.
(vii) On the date before this Agreement is executed
and also on the First Closing Date and the Second Closing Date
a letter addressed to you, as Representatives of the
Underwriters, from each of Coopers & Xxxxxxx L.L.P. and Xxxxxx
Xxxxxxxx & Associates, the first one to be dated the day
before the date of this Agreement, the second one to be dated
the First Closing Date and the third one (in the event of a
Second Closing) to be dated the Second Closing Date, in form
and substance satisfactory to you.
23
(viii) The Ancillary Agreements shall have been
executed by all parties thereto and shall be effective.
(ix) Pursuant to the IMR-India Purchase, the Company
shall have purchased all of the Principal Shareholder's equity
interest in IMR-India. The only remaining closing condition to
the Company's purchase of all of India Magnum's equity
interest in IMR-India shall be the approval of the Reserve
Bank of India (application of which has been made); and
neither the Company nor India Magnum shall have any right to
terminate, discharge or prevent the consummation of the
IMR-India Purchase.
(x) On or before the First Closing Date, letters from
each of the Selling Shareholders, each holder of one percent
or more of the Company's Common Stock and each director and
officer of the Company, in form and substance satisfactory to
you, confirming that for a period of 180 days after the first
date that any of the Common Shares are released by you for
sale to the public, such person will not directly or
indirectly sell or offer to sell or otherwise dispose of any
shares of Common Stock (or any right to acquire such shares,
including options, warrants or any other securities
convertible into or exchangeable for Common Stock), without
the prior written consent of Xxxxxxxxxx Securities, which
consent may be withheld at the sole discretion of Xxxxxxxxxx
Securities.
All such opinions, certificates, letters and documents shall be in compliance
with the provisions hereof only if they are satisfactory to you and to Xxxxxx &
Xxxxxxx, counsel for the Underwriters. The Company shall furnish you with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as you request. Any certificate signed by any officer of the Company
and delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the Underwriters as
to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification by you as Representatives, to the
Company and the Selling Shareholders without liability on the part of any
Underwriter, the Company or the Selling Shareholders, except for the expenses to
be paid or reimbursed by the Company and by the Selling Shareholders pursuant to
Sections 7 and 9 hereof and except to the extent provided in Section 11 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses. Notwithstanding any
---------------------------------------
other provisions hereof, if this Agreement shall be terminated by you pursuant
to Section 8, or if the sale to the Underwriters of the Common Shares at the
First Closing is not consummated because of any refusal, inability or failure on
the part of the Company or the Selling Shareholders to perform any agreement
herein or to comply with any provision hereof, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses that
shall have been reasonably incurred by you and them in connection with the
proposed purchase and the sale of the Common Shares, including but not limited
to fees and disbursements of counsel, printing expenses, travel expenses,
postage, telegraph charges and telephone charges relating to the offering
contemplated by the Prospectus. Any such termination shall be without liability
of any party to any other party except that the provisions of this Section 9,
Section 7 and Section 11 shall at all times be effective and shall apply.
SECTION 10. Effectiveness of Registration Statement. You, the Company
---------------------------------------
and the Selling Shareholders will use your, its and their respective best
efforts to cause the Registration Statement to
24
become effective, to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 11. Indemnification.
---------------
(a) The Company and the Principal Shareholder,
jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Underwriter or
such controlling person may become subject, under the Act, the Exchange
Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company and
the Principal Shareholder), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to
be stated therein or necessary to make the statements in any of them
not misleading (in the case of a Preliminary Prospectus or the
Prospectus, in light of the circumstances in which they are made), or
arise out of or are based in whole or in part on any inaccuracy in the
representations and warranties of the Company or the Selling
Shareholders contained herein or any failure of the Company or the
Selling Shareholders to perform their respective obligations hereunder
or under law; and will reimburse each Underwriter and each such
controlling person for any legal and other expenses as such expenses
are reasonably incurred by such Underwriter or such controlling person
in connection with investigating, defending, settling (only with the
indemnifying party's written approval, as provided above), compromising
or paying any such loss, claim, damage, liability, expense or action;
provided, however, that neither the Company nor the Principal
Shareholder will be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto (i)
in reliance upon and in conformity with the information furnished to
the Company pursuant to Section 4 hereof or (ii) with respect to the
Underwriter from whom the person asserting the loss, claim, damage or
liability purchased securities, made in any Preliminary Prospectus if a
copy of the Prospectus (as amended or supplemented, if the Company
shall have furnished the Underwriters with such amendments or
supplements thereto on a timely basis) was not delivered by or on
behalf of any of the Underwriters seeking indemnification, at or prior
to the written confirmation of the sale of the Common Shares, and if
the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability; and
provided further that, under this Agreement, the liability of the
Principal Shareholder shall not exceed the sum of the aggregate gross
proceeds received by the Company and by the Principal Shareholder upon
the sale of the Common Shares by the Company and the Principal
Shareholder, respectively, to the Underwriters. The Company and the
Principal Shareholder may agree, as among themselves and without
limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be
responsible. Notwithstanding the foregoing provisions of this Section
11(a), the Underwriters shall not be entitled to indemnity or
contribution from the Principal Selling Stockholder except, until and
to the extent that, either: (x) at the time indemnity is sought from
the Principal Shareholder, the Company is subject to proceedings
pending under Title 11 of the United States Code, or (y) after
providing written demand to the Company for indemnity or
25
reimbursement with respect to such losses, claims, damages or
liabilities pursuant to this Section 11, the Company fails to provide
such indemnification or reimbursement or has provided such
indemnification or reimbursement in an amount less than the total
indemnity or reimbursement sought.
In addition to their other obligations under this Section 11(a), the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, or any inaccuracy
in the representations and warranties of the Company or the Selling Shareholders
herein or failure to perform its obligations hereunder, all as described in this
Section 11(a), it will reimburse in the manner set forth above each Underwriter
on a quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
or the Principal Shareholder's obligation to reimburse each Underwriter for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by Bank of America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement, shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Company or the Principal Shareholder may otherwise have.
(b) Each Underwriter will severally indemnify and
hold harmless the Company, each of its directors, each of its officers
who signed the Registration Statement, the Selling Shareholders and
each person, if any, who controls the Company or any Selling
Shareholder within the meaning of the Act, against any losses, claims,
damages, liabilities or expenses to which the Company, or any such
director, officer, Selling Shareholder or controlling person may become
subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, (i) in reliance upon and in conformity with the
information furnished to the Company by the Underwriters pursuant to
Section 4 hereof or (ii) with respect to the Underwriter from whom the
person asserting the loss, claim, damage or liability purchased
securities, made in any Preliminary Prospectus if a copy of the
Prospectus (as amended or supplemented, if the Company shall have
furnished the Underwriters with such amendments or supplements thereto
on a timely basis) was not delivered by or on behalf of any of the
Underwriters to the person asserting the claim or action, if required
by law to have been so delivered by the Underwriter seeking
indemnification, at or prior to the written confirmation of the sale of
the Common Shares and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such
26
loss, claim, damage or liability; and will reimburse the Company, or
any such director, officer, Selling Shareholder or controlling person
for any legal and other expense reasonably incurred by the Company, or
any such director, officer, Selling Shareholder or controlling person
in connection with investigating, defending, settling (only with the
indemnifying party's written approval, as provided above), compromising
or paying any such loss, claim, damage, liability, expense or action.
In addition to its other obligations under this Section 11(b), each
Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 11(b)
which relates to information furnished to the Company by the
Underwriters pursuant to Section 4 hereof, it will reimburse the
Company (and, to the extent applicable, each officer, director,
controlling person or Selling Shareholder) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, controlling person or Selling
Shareholder) for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment
is so held to have been improper, the Company (and, to the extent
applicable, each officer, director, controlling person or Selling
Shareholder) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate.
Any such interim reimbursement payments which are not made to the
Company within 30 days of a request for reimbursement, shall bear
interest at the Prime Rate from the date of such request. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section or to the extent it
is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all
other indemnifying parties similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be
legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the
provison
27
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by the Representatives in the case of
paragraph (a) and approved by the indemnified parties in the case of
paragraph (b), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 11 is
required by its terms but is for any reason held to be unavailable to
or otherwise insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of any losses, claims, damages,
liabilities or expenses referred to herein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company,
the Selling Shareholders and the Underwriters from the offering of the
Common Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, the Selling
Shareholders and the Underwriters in connection with the statements or
omissions or inaccuracies in the representations and warranties herein
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
respective relative benefits received by the Company, the Selling
Shareholders and the Underwriters shall be deemed to be in the same
proportion, (x) in the case of the Company and the Selling Shareholders
(other than the Principal Shareholder), as the total price paid to the
Company and to the Selling Shareholders (other than the Principal
Shareholder), respectively, for the Common Shares sold by them to the
Underwriters (net of underwriting commissions but before deducting
expenses) bears to the total price to the public set forth on the cover
page of the Prospectus, (y) in the case of the Principal Shareholder,
as the total price paid to the Company and to the Principal Shareholder
for the Common Shares sold by them to the Underwriters (net of
underwriting commissions but before deducting expenses) bears to the
total price to the public set forth on the cover page of the
Prospectus, and (z) in the case of the Underwriters as the underwriting
commissions received by them bears to the total price to the public set
forth on the cover page of the Prospectus. The relative fault of the
Company, the Selling Shareholders and the Underwriters shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged
inaccurate representation and/or warranty relates to information
supplied by the Company, the Selling Shareholders or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in subparagraph (c) of
this Section 11, any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in subparagraph (c) of
this Section 11 with respect to notice of commencement of any action
shall apply if a claim for contribution is to be made under this
subparagraph (d); provided, however, that no additional notice shall be
required with respect to any action for which notice has been given
under subparagraph (c) for purposes of indemnification. The Company,
the Selling Shareholders and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 11 were
determined solely by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or
28
by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 11, no
Underwriter shall be required to contribute any amount in excess of the
amount of the total underwriting commissions received by such
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. The Principal Shareholder shall not be
required to contribute any amount in excess of the aggregate gross
proceeds received by the Company and the Principal Shareholder upon the
sale of the Common Shares to the Underwriters. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 11 are several in
proportion to their respective underwriting commitments and not joint.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in
Sections 11(a) and 11(b) hereof, including the amounts of any requested
reimbursement payments and the method of determining such amounts,
shall be settled by arbitration conducted under the provisions of the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the
NASD. Any such arbitration must be commenced by service of a written
demand for arbitration or written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Such an arbitration would be
limited to the operation of the interim reimbursement provisions
contained in Sections 11(a) and 11(b) hereof and would not resolve the
ultimate propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of such Sections 11(a) and
11(b) hereof.
SECTION 12. Default of Underwriters. It shall be a condition
-----------------------
to this Agreement and the obligation of the Company and the Selling Shareholders
to sell and deliver the Common Shares hereunder, and of each Underwriter to
purchase the Common Shares in the manner as described herein, that, except as
hereinafter in this paragraph provided, each of the Underwriters shall purchase
and pay for all the Common Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Common Shares hereunder on either the First or Second
Closing Date and the aggregate number of Common Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase on such Closing Date
does not exceed 10% of the total number of Common Shares which the Underwriters
are obligated to purchase on such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Common Shares which such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of Common Shares with respect
to which such default occurs is more than the above percentage and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Common Shares by other persons are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Shareholders, except
for the expenses to be paid by the Company and the Selling Shareholders pursuant
to Section 7 hereof and except to the extent provided in Section 11 hereof.
In the event that Common Shares to which a default relates are to be purchased
by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days in
29
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangements, may be effected. As used
in this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 13. Effective Date. This Agreement shall become effective
--------------
immediately as to Sections 7, 9, 11, 14 and 16 and, as to all other provisions,
(i) if at the time of execution of this Agreement the Registration Statement has
not become effective, at 2:00 P.M., California time, on the first full business
day following the effectiveness of the Registration Statement, or (ii) if at the
time of execution of this Agreement the Registration Statement has been declared
effective, at 2:00 P.M., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the Company
or by release of any of the Common Shares for sale to the public. For the
purposes of this Section 13, the Common Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
SECTION 14. Termination. Without limiting the right to terminate this
-----------
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to you and the Selling Shareholders or by you by notice to the Company
and the Selling Shareholders at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company or
the Selling Shareholders to any Underwriter (except for the expenses to
be paid or reimbursed by the Company and the Selling Shareholders
pursuant to Sections 7 and 9 hereof and except to the extent provided
in Section 11 hereof) or of any Underwriter to the Company or the
Selling Shareholders (except to the extent provided in Section 11
hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum
or maximum prices shall have been generally established on the New York
Stock Exchange or on the American Stock Exchange or in the over the
counter market by the NASD, or trading in securities generally shall
have been suspended on either such Exchange or in the over the counter
market by the NASD, or a general banking moratorium shall have been
established by federal, New York or California authorities, (ii) if an
outbreak of major hostilities or other national or international
calamity or any substantial change in political, financial or economic
conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Representatives, to
affect adversely the marketability of the Common Shares, (iii) if any
adverse event shall have occurred or shall exist which makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement or Prospectus or which is not
reflected in the Registration Statement or Prospectus but should be
reflected therein in order to make the statements or information
contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened, or
there shall have been any development or prospective development
involving particularly the business or properties or securities of the
Company or IMR-India or the
30
transactions contemplated by this Agreement, which in any case, in the
reasonable judgment of the Representatives, may materially and
adversely affect the Company's business or earnings and makes it
impracticable or inadvisable to offer or sell the Common Shares. Any
termination pursuant to this subsection (b) shall without liability on
the part of any Underwriter to the Company or the Selling Shareholders
or on the part of the Company or the Selling Shareholders to any
Underwriter (except for expenses to be paid or reimbursed by the
Company and the Selling Shareholders pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof.
SECTION 15. Failure of the Selling Shareholders to Sell and Deliver. If
-------------------------------------------------------
one or more of the Selling Shareholders shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Shareholders at the First Closing Date under the terms of this Agreement and if
the Company is unable to arrange for an equal number of shares to be sold by
another Selling Shareholder, then the Underwriters may at their option, by
written notice from you to the Company and the Selling Shareholders, either (i)
terminate this Agreement without any liability on the part of any Underwriter
or, except as provided in Sections 7, 9 and 11 hereof, the Company or the
Selling Shareholders, or (ii) purchase the shares which the Company and other
Selling Shareholders have agreed to sell and deliver in accordance with the
terms hereof. In the event of a failure by one or more of the Selling
Shareholders to sell and deliver as referred to in this Section, either you or
the Company shall have the right to postpone the Closing Date for a period not
exceeding seven business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected.
SECTION 16. Representations and Indemnities to Survive Delivery. The
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Shareholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Shareholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 17. Notices. All communications hereunder shall be in writing
-------
and, if sent to the Representatives shall be mailed, delivered or telegraphed
and confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: __________, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
__________________________; and if sent to the Company or the Selling
Shareholders shall be mailed, delivered or telegraphed and confirmed to the
Company at Information Management Resources, Inc., 00000 X.X. Xxxxxxx 00 Xxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, with a copy to
Xxxxxx, Xxxxxxx & Xxxxxx L.L.P., 1600 Atlanta Financial Center, 0000 Xxxxxxxxx
Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Xxx X. Xxxxxx III. The Company,
the Selling Shareholders or you may change the address for receipt of
communications hereunder by giving notice to the others.
SECTION 18. Successors. This Agreement will inure to the benefit of and
----------
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 12 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 11, and in each case their
respective successors, personal representatives and assigns, and no other person
will have any right or obligation hereunder. No such assignment shall relieve
any party of its obligations hereunder. The term "successors" shall not include
any purchaser of the Common Shares as such from any of the Underwriters merely
by reason of such purchase.
31
SECTION 19. Representation of Underwriters. You will act as
------------------------------
Representatives for the several Underwriters in connection with all dealings
hereunder, and any action under or in respect of this Agreement taken by you
jointly or by Xxxxxxxxxx Securities, as Representatives, will be binding upon
all the Underwriters.
SECTION 20. Partial Unenforceability. The invalidity or
------------------------
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 21. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of California.
SECTION 22. General. This Agreement constitutes the entire agreement of
-------
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the singular
and the plural include one another. The section headings in this Agreement are
for the convenience of the parties only and will not affect the construction or
interpretation of this Agreement. This Agreement may be amended or modified, and
the observance of any term of this Agreement may be waived, only by a writing
signed by the Company, the Selling Shareholders and you.
Any person executing and delivering this Agreement as Attorney-in-fact for the
Selling Shareholders represents by so doing that he has been duly appointed as
Attorney-in-fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-fact to take such
action. Any action taken under this Agreement by any of the Attorneys-in-fact
will be binding on all the Selling Shareholders.
* * * *
32
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed copies hereof, whereupon it will
become a binding agreement among the Company, the Selling Shareholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
Information Management Resources, Inc.
By:__________________________
Xxxxxx X. Xxxxx
President and
Chief Executive Officer
Selling Shareholders
By:__________________________
(Attorney-in-fact)
By:__________________________
(Attorney-in-fact)
The foregoing Underwriting Agreement is hereby confirmed and accepted by us in
San Francisco, California as of the date first above written.
XXXXXXXXXX SECURITIES
ALEX. XXXXX & SONS, INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A
By: XXXXXXXXXX SECURITIES
By:______________________________
Partner
33
SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
Xxxxxxxxxx Securities ...............
Alex. Xxxxx & Sons, Inc..............
TOTAL .....................
34
SCHEDULE B
Name of Selling Shareholder Number of Firm Number of Optional
Common Shares to Common Shares to
be Sold by Selling be sold by
Selling Shareholders Selling Shareholders
TOTAL ..........
35
SCHEDULE C
Form of Opinion of
Xxxxxx, Xxxxxxx & Xxxxxx L.L.P.
U.S. Counsel to the Company
[To be attached prior to
execution of this Agreement]
36
SCHEDULE D
Form of Opinion of
Xxxxxxx Xxxxx
India Counsel to the Company
[To be attached prior to
execution of this Agreement]
37
SCHEDULE E
Form of Opinion of
---------------------------
U.K. Counsel to the Company
[To be attached prior to
execution of this Agreement]
38
