EXHIBIT 10.32
STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 1, 1994
AMONG
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇
POLUDNEWYCZ (COLLECTIVELY, THE "SELLERS")
AND
THE PURCHASERS LISTED ON SCHEDULE A ATTACHED HERETO
Table of Contents
ARTICLE 1. TRANSFER OF SHARES AND RELATED MATTERS........................ 1
1.1 The Sale........................................................... 1
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1.2 Payment of Purchase Price and Delivery of Shares................... 1
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ARTICLE 2. CLOSING....................................................... 1
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS................. 2
3.1 Ownership of Shares................................................ 2
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3.2 Authorization and Execution........................................ 2
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3.3 Consents and Approvals............................................. 2
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3.4 Governmental Approvals............................................. 2
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3.5 Brokers and Finders................................................ 2
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3.6 Financial Statements............................................... 3
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3.7 Business Generally................................................. 3
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............... 3
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4.1 Investment......................................................... 3
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4.2 Resale............................................................. 4
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4.3 Sophisticated Investor............................................. 4
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4.4 Access to Information.............................................. 4
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ARTICLE 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION, ETC.......................................... 5
5.1 Survival........................................................... 5
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5.2 Sellers' Agreement to Indemnify.................................... 5
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ARTICLE 6. RESTRICTION ON TRANSFERABILITY................................ 5
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6.1 Restriction; Procedure for Transfer................................ 5
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6.2 Notice of Proposed Transfer........................................ 5
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ARTICLE 7. REGISTRATION UNDER SECURITIES ACT, ETC........................ 5
7.1 Incidental Registration............................................ 5
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7.2 Registration Procedures............................................ 7
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7.3 Underwritten Offerings............................................. 11
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7.4 Preparation; Reasonable Investigation.............................. 13
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7.5 Indemnification.................................................... 13
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ARTICLE 8. RULE 144...................................................... 17
ARTICLE 9. DEFINITIONS................................................... 17
ARTICLE 10. MISCELLANEOUS................................................. 19
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10.1 Amendment, Modification and Waiver................................. 19
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10.2 Expenses; Transfer Taxes, Etc...................................... 19
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10.3 Binding Effect; Benefits; Parties in Interest...................... 19
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10.4 Entire Agreement................................................... 19
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10.5 Headings.......................................... 20
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10.6 Notices........................................... 20
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10.7 Counterparts...................................... 21
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10.8 Governing Law..................................... 21
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10.9 Gender............................................ 21
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT dated as of June 1, 1994 by and among the
purchasers listed on Schedule A attached hereto (the "Purchasers") and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ POLUDNEWYCZ
(collectively, the "SELLERS").
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE 1. TRANSFER OF SHARES AND RELATED MATTERS
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1.1 The Sale. Subject to the terms and conditions of this Agreement,
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on the date of the Closing (as hereinafter defined), the Sellers hereby
severally agree to sell, transfer, convey and deliver to the Purchasers, and the
Purchasers hereby agree to purchase from the Sellers, the number of shares set
forth opposite each respective Seller's name on Schedule B attached hereto
(collectively, the "Shares") of the common stock, no par value ("Common Stock"),
of Information Management Associates, Inc. (the "Company") free and clear of all
liens, claims, liabilities, restrictions or other encumbrances at a purchase
price of $9.00 per share (the "Purchase Price").
1.2 Payment of Purchase Price and Delivery of Shares. On the Closing
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Date (as hereinafter defined), the Purchasers shall pay to each of the Sellers
by certified or bank check or wire transfer an amount equal to the Purchase
Price multiplied by the number of shares set forth opposite each such Seller's
name on Schedule B attached hereto and the Sellers will deliver to the
Purchasers, certificates representing the Shares duly endorsed in blank or with
a fully executed stock power attached, all in proper form for transfer with all
transfer taxes, if any, paid by Sellers.
ARTICLE 2. CLOSING
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The closing for the consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of LeBoeuf, Lamb,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, New York, New York, 10:00 a.m. on June 2, 1994 or at such other
time or place as the parties hereto shall mutually agree (the "Closing Date").
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
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Each Seller severally represents and warrants to the Purchasers, as to
himself, as follows:
3.1 Ownership of Shares. The Seller owns of record and beneficially
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the number and type of Shares set forth opposite the Seller's name in Schedule B
hereto. The Seller has good, marketable and valid title to the Shares to be sold
by him hereunder, free and clear of all liens, pledges, encumbrances, claims,
security interests, charges, voting trusts, voting agreements, other agreements,
rights, options, warrants or restrictions of any kind, nature or description
other than pursuant to this Agreement. The delivery to Buyer of such Shares
pursuant to this Agreement will transfer valid title thereto, free and clear of
all pledges, liens, claims, charges, security interests and other encumbrances
of any nature whatsoever. No person or entity has any agreement or option or any
right or privilege (whether preemptive or contractual) capable of becoming an
agreement or option for the purchase of any such Shares from the Seller.
3.2 Authorization and Execution. The Seller has the legal capacity to
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enter into this Agreement and to perform his obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Seller and constitutes the legal, valid and
binding obligation of the Seller, enforceable against him in accordance with its
terms.
3.3 Consents and Approvals. Neither the execution and delivery of this
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Agreement nor the consummation of the transactions contemplated hereby will
violate, result in a breach of any of the terms or provisions of, constitute a
default (or an event which, with the giving of notice or the passage of time or
both, would constitute a default) under, result in the acceleration of any
indebtedness under or performance required by, result in any right of
termination of, increase any amounts payable under, decrease any amounts
receivable under, change any other rights pursuant to, or conflict with, any
material agreement, indenture or other instrument to which the Seller, or the
Company, is a party or by which any of his, or its, properties are bound, or any
judgment, decree, order or award of any court, governmental body or arbitrator
(domestic or foreign) against the Seller, or the Company.
3.4 Governmental Approvals. No approval, authorization, consent or
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order or action of or filing with any court, administrative agency or other
governmental authority is required for the execution and delivery by Seller of
this Agreement or the consummation by him of the transactions contemplated
hereby.
3.5 Brokers and Finders. No broker, agent, finder or consultant or
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other person has been retained by or on behalf of
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Seller or is entitled to be paid based upon any agreements or understandings
made by Seller in connection with the transactions contemplated hereby. Neither
the Purchasers nor the Seller shall have liability for any broker's fee,
finder's fee, consultant's fee or other similar third party remuneration by
reason of any action of Seller arising out of the transactions contemplated
hereby.
3.6 Financial Statements. (a) The Sellers have heretofore delivered or
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made available to the Purchasers the audited balance sheets at December 31,
1993, 1992 and 1991 of the Company and the related statements of income,
stockholders equity and cash flows for the years then ended, including the
related notes and auditors' report thereon (the "Financial Statements"). The
Financial Statements (i) present fairly the financial position of the Company at
the dates thereof and present fairly its results of operations and cash flows
for the years then ended and (ii) have been prepared in conformity with
generally accepted accounting principals ("GAAP") applied consistently with
respect to the immediately preceding fiscal year period except as set forth in
the Notes to the Financial Statements or in the auditor's report thereon.
(b) Sellers have heretofore delivered or made available to the
Purchaser the unaudited balance sheet at February 28, 1994 of the Company (the
"February Balance Sheet") and the related statements of income and cash flow for
the three months then ended (such February Balance Sheet and related statements,
collectively, the "February Financial Statements"), each of which (i) presents
fairly the financial condition of the Company at February 28, 1994 and presents
fairly its results of operations and cash flows for the period then ended and
(ii) has been prepared in conformity with GAAP, applied consistently with the
Financial Statements, subject to normal year-end adjustments.
(c) To the knowledge of the Sellers, there has been no material
adverse change in the business, results of operations, assets or financial
condition of the Company since December 31, 1993.
3.7 Business Generally. The Seller is not aware of the existence of
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any conditions which could be reasonably expected to have a material adverse
effect on the business and operations of the Company, other than general
business and economic conditions generally affecting the industry and markets in
which the Company participates.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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Each Purchaser represents and warrants to the Company and the Sellers,
as to himself, as follows:
4.1 Investment. The Purchaser is acquiring the Shares for investment
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for his own account and not with a view to, or for resale in connection with,
any distribution thereof. The Purchaser
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understands that the Shares have not been registered under the Securities Act of
1933, as amended (the "Act"), by reason of a specific exemption from the
registration provisions of the Act which depends upon, among other things,
accuracy of the Purchaser's representations herein and the bona fide nature of
the Purchaser's investment intent as expressed herein. The investment made
pursuant to this Agreement is in accord with the nature and size of the
Purchaser's present investments and net worth, and each Purchaser is financially
able to bear the economic risk of this investment, including the ability to hold
the Shares for an indefinite period of time or to suffer a complete loss of this
investment.
4.2 Resale. The Purchaser acknowledges that the Shares must be held
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indefinitely unless the Shares are subsequently registered under the Act or an
exemption from such registration is available. Each certificate representing (i)
the Shares, and (ii) any other securities issued in respect of the Shares upon
any stock split, stock dividend, recapitalization, merger, consolidation or
similar event, shall (unless otherwise permitted by law) be stamped or otherwise
imprinted with a legend in the following form (in addition to any legend
required under applicable state securities laws, rules or regulations):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, OR THE CONNECTICUT UNIFORM
SECURITIES ACT. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT EXCEPT PURSUANT TO AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
4.3 Sophisticated Investor. The Purchaser has sufficient knowledge and
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experience in investment matters so as to be capable of evaluating the merits
and risks of purchasing the Shares.
4.4 Access to Information. The Purchaser acknowledges that he has
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received such information and made such investigation and analysis as he deems
appropriate of the business and prospects of the Company and has been afforded
an opportunity to meet with and ask questions of and receive answers from,
management of the Company.
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ARTICLE 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION,
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ETC.
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5.1 Survival. All representations and warranties made herein shall
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survive the execution and delivery of this Agreement and the sale and delivery
of the Shares pursuant hereto for two (2) years from the Closing Date, and all
statements contained in any certificate or other instrument delivered by any
party hereunder shall be deemed to constitute representations and warranties
made by such party. Notwithstanding the foregoing, the representations and
warranties in Section 3.1 shall survive indefinitely and the covenants and
agreements made herein shall survive for so long as the Purchasers own any of
the Shares.
5.2 Sellers' Agreement to Indemnify. Each of the Sellers hereby
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severally agrees to indemnify and save the Purchasers harmless from and against,
for and in respect of, any and all damages, losses, obligations, liabilities,
claims, actions or causes of action, encumbrances, costs, and expenses
(including, without limitation, reasonable attorneys' fees) arising from the
untruth, inaccuracy or breach or nonfulfillment of any representation, warranty,
covenant or agreement of such Seller, contained in or made pursuant to this
Agreement, including any Exhibit or Schedule attached hereto or certificate
delivered hereunder; provided, however, that the maximum liability of each
Seller under this indemnification shall not exceed the aggregate purchase price
paid to each such Seller.
ARTICLE 6. RESTRICTION ON TRANSFERABILITY
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6.1 Restriction; Procedure for Transfer. The Shares shall not be
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transferable except upon the conditions specified in this Article 6, which
conditions are intended to ensure compliance with the Securities Act of 1933, as
amended, and applicable state securities laws.
6.2 Notice of Proposed Transfer. Prior to any proposed transfer of any
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of the Shares (other than a transfer pursuant to registration under the Act),
the holder thereof shall give written notice to the Company of such holder's
intention to effect such transfer at least thirty (30) days prior to the date of
transfer and shall specify the proposed purchase price and the other terms and
conditions relating to such proposed transfer. Each such notice shall describe
the manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied by a written opinion of legal counsel who shall be
reasonably satisfactory to the Company, addressed to the Company, to the effect
that the proposed transfer of the Shares may be effected without registration
under the Act.
ARTICLE 7. REGISTRATION UNDER SECURITIES ACT, ETC.
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7.1 Incidental Registration.
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(a) Right to Include Registrable Securities. If the Company at any
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time proposes to register any of its securities under the Securities Act
(other than by a registration on Form S-4 or S-8, or any successor or
similar forms), whether or not for sale for its own account, it will each
such time give prompt written notice to all holders of Registrable
Securities of its intention to do so and of such holders' rights under this
Section 7.1. Upon the written request of any such holder made within 30
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder and the
intended method of disposition thereof), the Company will use its best
efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register
by the holders thereof, to the extent requisite to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the
Registrable Securities so to be registered, by inclusion of such
Registrable Securities in the registration statement which covers the
securities which the Company proposes to register, provided that if, at any
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time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for
any reason either not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i)
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in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
in connection therewith), and (ii) in the case of a determination to delay
--
registering, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registering such other
securities. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 7.1.
(b) Priority in Incidental Registrations. If (i) a registration
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pursuant to this Section 7.1 involves an underwritten offering of the
securities so being registered, whether or not for sale for the account of
the Company, to be distributed (on a firm commitment basis) by or through
one or more underwriters of recognized standing under underwriting terms
appropriate for such a transaction, (ii) the Registrable Securities so
--
requested to be registered for sale for the account of holders of
Registrable Securities are not also to be included in such underwritten
offering (either because the Company has not been requested so to include
such Registrable Securities pursuant to Section 7.3(b) or, if requested to
do so, is not obligated to do so under Section 7.3(b), and (iii) the
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managing underwriter of such underwritten offering shall
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inform the Company and holders of the Registrable Securities requesting
such registration by letter of its belief that the distribution of all or a
specified number of such Registrable Securities concurrently with the
securities being distributed by such underwriters would interfere with the
successful marketing of the securities (other than such Registrable
Securities and other shares or securities so requested to be included)
being distributed by such underwriters within a price range acceptable to
the holders of securities other than the Registrable Securities covered by
such registration requested to be included in such registration (such
writing to state the basis of such belief and the approximate number of
such Registrable Securities which may be distributed without such effect),
then the Company may, upon written notice to all holders of such
Registrable Securities and the holders of any other shares or securities
which shall have exercised in respect of such offering, registration rights
comparable to the rights granted under this Section 7.1 (which other shares
or securities are not to be included in such underwritten offering), reduce
pro rata (if and to the extent stated by such managing underwriter to be
necessary to eliminate such effect) the number of such Registrable
Securities and shares or other securities so that the resultant aggregate
number of such Registrable Securities and other shares or other securities
so included in such registration shall be equal to the number of shares
stated in such managing underwriter's letter. Notwithstanding the
foregoing, with respect to any registration initiated pursuant to the
exercise of "demand" registration rights by any holder of securities of the
Company, the holders of Registrable Securities shall have no right to
include any Registrable Securities in such registration unless all of the
securities requested to be registered by the holders exercising such
"demand" registration rights have been included in such registration and
have not been subjected to any reduction by underwriters.
7.2 Registration Procedures. If and whenever the Company is required
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to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 7.1 the Company shall, as
expeditiously as possible:
(i) prepare and (within 90 days after the end of the period
within which requests for registration may be given to the Company or
in any event as soon thereafter as possible) file with the Commission
the requisite registration statement to effect such registration
(including such audited financial statements as may be required by the
Securities Act or the rules and regulations promulgated thereunder)
and thereafter use its reasonable best efforts to cause such
registration statement to become and remain effective for the time
period required by this Agreement, provided, that before filing such
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registration statement or any amendments thereto the Company will
furnish to the counsel selected by the holders of Registrable
Securities which are to be
7
included in such registration copies of all such documents proposed to be
filed, which documents will be subject to the review of such counsel;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until the earlier of such time as all of such
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement or the expiration of 90 days after such registration statement
becomes effective, it being understood that following the expiration of the
relevant time period, the Company shall have no further obligation to
maintain the effectiveness of such registration statement;
(iii) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and
any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities
Act, and such other documents, as such seller may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller;
(iv) use its reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as any seller thereof and any underwriter of the securities
being sold by such seller shall reasonably request, to keep such
registrations or qualifications in effect for so long as such registration
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such seller and underwriter to
consummate the disposition in such jurisdictions of the securities owned by
such seller, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this
subdivision (iv) be obligated to be so qualified, or to consent to general
service of process in any such jurisdiction;
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(v) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller (and the underwriters, if any) of
(x) an opinion of counsel for the Company, dated the effective
date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of
the closing under the underwriting agreement), reasonably satisfactory
in form and substance to such seller, and
(y) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing
under the underwriting agreement), signed by the independent public
accountants who have certified the Company's financial statements
included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and, in the case of the
accountants' letter, such other financial matters, and, in the case of the
legal opinion, such other legal matters, as such seller (or the
underwriters, if any) may reasonably request;
(vii) notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating to a
registered offering thereof is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as
a result of which, the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any such
seller promptly prepare
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and furnish to such seller and each underwriter, if any, a reasonable
number of copies of a supplement to or an amendment of such prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an 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 in the
light of the circumstances under which they were made; otherwise use its
best efforts to comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act, and will furnish to each such seller at least
five business days prior to the filing thereof a copy of any amendment or
supplement to such registration statement or prospectus and shall not file
any thereof to which any such seller shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or of the rules or
regulations thereunder;
(viii) enter into such agreements and take such other actions as
sellers of such Registrable Securities holding 51% of the shares so to be
sold shall reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(ix) use its reasonable best efforts to list all Company's equity
securities covered by such registration statement on any securities
exchange on which any of the Company's equity securities are then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in subdivision (vii) of this
Section 7.2, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision
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(vii) of this Section 7.2 and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of
such notice. In the event the Company shall give any such notice, the
periods mentioned in subdivision (ii) of this Section 7.2 shall be extended
by the length of the period from and including the date when each seller of
any Registrable Securities covered by such registration statement shall
have received such notice to the date on which each such seller has
received the copies of the supplemented or amended prospectus contemplated
by subdivision (vii) of this Section 7.2.
If any such registration or comparable statement refers to any holder
of Registrable Securities by name or otherwise as the holder of any
securities of the Company then such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory
to such holder, to the effect that the holding by such holder of such
securities is not to be construed as a recommendation by such holder of the
investment quality of the Company's securities covered thereby and that
such holding does not imply that such holder will assist in meeting any
future financial requirements of the Company, or (ii) in the event that
such reference to such holder by name or otherwise is not required by the
Securities Act or any similar federal statute or the rules and regulations
promulgated thereunder then in force, the deletion of the reference to such
holder.
7.3 Underwritten Offerings.
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(a) Incidental Underwritten Offerings. If the Company at any time
---------------------------------
proposes to register any of its securities under the Securities Act as
contemplated by Section 7.1 and such securities are to be distributed
by or through one or more underwriters, the Company will, if requested
by any holder of Registrable Securities as provided in Section 7.1 and
subject to the provisions of Section 7.1(b), use its best efforts to
arrange for such underwriters to include all the Registrable
Securities to be offered and sold by such holder among the securities
to be distributed by such underwriters, provided that if the managing
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underwriter of such underwritten offering shall inform the holders of
the Registrable Securities requesting such registration and the
holders of any other shares or securities which shall have exercised,
in respect of such underwritten offering, registration rights
comparable to the rights under Section 7.1 by letter of its belief
that inclusion in such underwritten distribution of all or a specified
number of such Registrable Securities or of such other shares or
securities so requested to be included would interfere with the
successful marketing of the securities (other than such Registrable
Securities and other shares or securities so requested to be included)
within a price range acceptable to the Company or in the case of a
secondary
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offering, the holders of securities other than Registrable Securities
requested to be included in such registration by the underwriters (such
writing to state the basis of such belief and approximate number of such
Registrable Securities and shares or other securities so requested to be
included which may be included in such underwritten offering without
such effect), then the Company may, upon written notice to all holders
of such Registrable Securities and of such other shares or securities so
requested to be included, exclude pro rata from such underwritten
offering (if and to the extent stated by such managing underwriter to be
necessary to eliminate such effect) the number of such Registrable
Securities and shares or other securities so requested to be included in
the registration, so that the resultant aggregate number of such
Registrable Securities and of such other shares or securities so
requested to be included which are included in such underwritten
offering shall be equal to the approximate number of shares stated in
such managing underwriter's letter. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to
the underwriting agreement between the Company and such underwriters and
may, at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to
and for the benefit of such underwriters shall also be made to and for
the benefit of such holders of Registrable Securities and that any or
all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the
obligations of such holders of Registrable Securities. Any such holder
of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements
regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation
required by law. Notwithstanding the foregoing, with respect to any
registration initiated pursuant to the exercise of "demand" registration
rights by any holder of securities of the Company, the holders of
Registrable Securities shall have no right to include any Registrable
Securities in such registration unless all of the securities requested
to be registered by the holders exercising such "demand" registration
rights have been included in such registration and have not been
subjected to any reduction by underwriters.
(b) Holdback Agreements.
-------------------
(i) Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities, if so required by the managing
underwriter, not to effect any public sale or distribution of any
equity securities of the Company, during the seven days prior to and
the 90 days after any underwritten registration pursuant to Section
7.1 has become effective, except as part of such
12
underwritten registration, whether or not such holder participates in
such registration.
(ii) The Company agrees (x) if so required by the managing
underwriter not to effect any public sale or distribution of its
equity securities or securities convertible into or exchangeable or
exercisable for any of such securities during the seven days prior to
and the 90 days after any underwritten registration pursuant to
Section 7.1 has become effective, except as part of such underwritten
registration and except pursuant to registrations on Form S-4 and S-
8, or any successor or similar forms thereto, and (y) to cause each
holder of its equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, in each case
purchased from the Company at any time after the date of this
Agreement (other than in a public offering) to agree not to effect
any such public sale or distribution of such securities during such
period.
7.4 Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the holders of
Registrable Securities registered under such registration statement, their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission,
and each amendment thereof or supplement thereto, and will give each of
them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
7.5 Indemnification.
---------------
(a) Indemnification by the Company. In the event of any
------------------------------
registration of any securities of the Company under the Securities Act
pursuant to this Article 7, the Company will indemnify and hold
harmless the holder of any Registrable Securities covered by such
registration statement, its directors, officers, agents, employees,
general partners, limited partners, each other Person who participates
as an underwriter in the offering or sale of such securities and each
other Person, if any, who controls such holder or any such underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such holder or any
such director, officer, agent, employee, general partner, limited
partner or underwriter or controlling person may become subject under
the
13
Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities
were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Company will reimburse such holder, and each such director, officer,
agent, employee, general partner, limited partner, underwriter and
controlling person for any reasonable legal or any other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding;
provided that the Company shall not be liable in any such case to the
--------
extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company through an
instrument duly executed by such holder specifically stating that it
is for use in the preparation thereof and, provided further that the
----------------
Company shall not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or to
any other Person, if any, who controls such underwriter within the
meaning of the Securities Act, in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to
send or give a copy of the final prospectus, as the same may be then
supplemented or amended, within the time required by the Securities
Act to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if
such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such holder or any such
director, officer, agent, employee, general partner, limited partner,
underwriter or controlling person and shall survive the transfer of
such securities by such holder.
(b) Indemnification by the Sellers. In the event of any
------------------------------
registration of Registrable Securities under the Securities Act
pursuant to this Article 7, each seller of Registrable Securities will
(severally and not jointly) indemnify and hold harmless (in the same
manner and to the same extent as set
14
forth in subdivision (a) of this Section 7.5) the Company, each
director of the Company, each officer of the Company and each other
person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in
or omission or alleged omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such
seller specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement. Such indemnity shall
remain in full force and effect, regardless of any investigation made
by or on behalf of the Company or any such director, officer or
controlling person and shall survive the transfer of such securities
by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
----------------------
indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subdivisions
of this Section 7.5, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as
--------
provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 7.5,
except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party shall be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying
party similarly notified, to the extent that the indemnifying party
may wish, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement of any such action which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to
such claim or litigation. No indemnified party shall consent to entry
of any judgment or enter into any settlement of any such action
15
the defense of which has been assumed by an indemnifying party
without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that
---------------------
specified in the preceding subdivisions of this Section 7.5 (with
appropriate modifications) shall be given by the Company and each
seller of Registrable Securities with respect to any required
registration or other qualification of securities under any Federal or
state law or regulation of any governmental authority, other than the
Securities Act.
(e) Indemnification Payments. The indemnification required by
------------------------
this Section 7.5 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred.
(f) Contribution. If for any reason the indemnification provided
------------
for in the preceding paragraphs of this Section 7.5 is unavailable to
an indemnified party or is insufficient to hold it harmless as
contemplated by the preceding clauses (a) and (b), then the
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such, claim, damage, liability or expense in such
proportion as is appropriate to reflect not only the relative benefits
received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and indemnifying party in
connection with the actions which resulted in such loss, claim,
damage, liability or expense, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. 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
any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7.5(f) were determined by pro
rata allocation or by any other method of allocation which does not
take into account the equitable considerations referred to in the
immediately preceding paragraph. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not
16
guilty of such fraudulent misrepresentation. No holder of Registrable
Securities shall be required to contribute in an amount greater than the
dollar amount of proceeds received by such holder with respect to the
sale of such holder's Registrable Securities.
ARTICLE 8. RULE 144
---------- --------
If the Company shall have filed a registration statement pursuant to the
requirements of section 12 of the Exchange Act or a registration statement
pursuant to the requirements of the Securities Act, the Company shall timely
file the reports required to be filed by it under the Securities Act and the
Exchange Act (including but not limited to the reports under sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 adopted by
the Commission under the Securities Act) and the rules and regulations adopted
by the Commission thereunder (or, if the Company is not required to file such
reports, it will, upon the request of any holder of Registrable Securities, make
publicly available other information in order to meet the conditions set forth
in subparagraph (c)(2)of Rule 144 under the Securities Act) and will take such
further actions as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver such holder a written
statement as to whether it has complied with the requirements of this Article 8.
ARTICLE 9. DEFINITIONS
---------- -----------
As used herein, unless the context otherwise requires, the following
terms have the following meanings:
Commission: The Securities and Exchange Commission or any other federal
----------
agency at the time administering the Securities Act.
Common Stock: As defined in Section 1.1 hereof, such term to include
------------
any stock into which such Common Stock shall have been changed or any stock
resulting from any reclassification of such Common Stock, and all other stock of
any class or classes (however designated) of the Company the holders of which
have the right, without limitation as to amount, either to all or to a share of
the balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference.
Company: As defined in the introduction to this Agreement, such term to
-------
include any corporation which shall succeed to or assume the obligations of the
Company hereunder.
17
Control: The possession, directly or indirectly, of the power, whether
-------
or not exercised, to direct or cause the direction of the management or policies
of any Person, whether through the ownership of voting securities, by contract
or otherwise; "Controlled" and "Controlling" shall have meanings correlative to
the foregoing.
Exchange Act: The Securities Exchange Act of 1934, or any similar
------------
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
NASD: The National Association of Securities Dealers, Inc.
----
Person: An individual, a partnership, a joint venture, a corporation,
------
a trust, an unincorporated organization, an association or any other entity or a
government or any department or agency thereof.
Purchasers: As defined in the introduction to this Agreement.
----------
Registrable Securities: (a) The shares of Common Stock purchased
----------------------
pursuant to this Agreement; and (b) any securities issued or issuable with
respect to any securities referred to in the foregoing subdivision by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As
to any particular Registrable Securities, once issued such certificates shall
cease to be Registrable Securities when (a) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (b) they shall have been distributed to the
public pursuant to Rule 144 (or any successor or similar provision) under the
Securities Act, (c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of them immediately
thereafter shall not require registration or qualification of them (other than
by the issuer, an underwriter or an affiliate [as such term is defined in the
Securities Act and the regulations promulgated thereunder] of the issuer) under
the Securities Act or any similar state law then in force, or (d) they shall
have ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's
---------------------
performance of or compliance with Article 7, including, without limitation, all
registration, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, the reasonable
18
fees and disbursements of any counsel and accountants retained by the holder or
holders of more than 51% of the Registrable Securities being registered,
premiums and other costs of policies of insurance (if any) against liabilities
arising out of the public offering of the Registrable Securities being
registered or officers and directors insurance and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any.
Securities Act: The Securities Act of 1933, or any similar federal
--------------
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Transfer: Any sale, assignment, pledge or other disposition of any
--------
security, or of any interest therein, which could constitute a "sale" as that
term is defined in Section 2(3) of the Securities Act.
ARTICLE 10. MISCELLANEOUS
----------- -------------
10.1 Amendment, Modification and Waiver. This Agreement shall not be
----------------------------------
altered or otherwise amended except pursuant to an instrument in writing signed
by the Purchasers and the Sellers, and any obligation owed to a party under this
Agreement may only be waived in a writing signed by such party. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
10.2 Expenses; Transfer Taxes, Etc. Each of the Sellers and the
-----------------------------
Purchasers shall bear their own fees, costs and expenses (including legal fees)
incurred in connection with, relating to or arising out of the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby; provided, that the Sellers shall be severally
obligated to pay all sales, use and excise taxes and all registration, recording
or transfer taxes which may be payable in connection with the transfer of Shares
by such Seller hereunder.
10.3 Binding Effect; Benefits; Parties in Interest. This Agreement shall
---------------------------------------------
be binding upon, inure to the benefit of, and be enforceable by, the respective
successors, assigns, heirs and legal representatives of the parties hereto;
provided, however, that this Agreement shall not be assignable by the Sellers or
-------- -------
the Purchaser without the prior written consent of the other.
10.4 Entire Agreement. This Agreement (including the Schedules
----------------
attached hereto), and the other writings referred to herein or delivered
pursuant hereto contain the entire understanding of the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings
with respect to such subject matter.
19
10.5 Headings. The section and paragraph headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.6 Notices. All notices, claims, certificates, requests, demands and
-------
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand, mailed (by first-class mail, postage
prepaid), transmitted by telex or telecopier or sent by air courier guaranteeing
overnight delivery as follows:
If to the Company or Sellers to:
c/o Information Management Associates, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
CityPlace II
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Purchasers to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Wand Partners Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been given, in the case of personal
delivery, on the date of delivery and in the case of mailing five (5) days after
such mailing.
10.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
20
10.8 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Connecticut.
10.9 Gender. Any reference to the masculine gender shall be deemed to
------
include the feminine and neuter genders unless the context otherwise requires.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.
THE PURCHASERS:
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
THE SELLERS:
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/Andrei Poludnewycz
-----------------------------------
Andrei Poludnewycz
21
THE COMPANY:
INFORMATION MANAGEMENT ASSOCIATES, INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CFO
22
Schedule A
----------
Purchasers
----------
Aggregate
Name, Address and Number of Shares Purchase
Social Security Number of Common Stock Price
---------------------- --------------- --------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 14,167 $127,503
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 14,166 $127,494
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 1,111 $9,999
----- ------
TOTALS 29,444 $264,996
23
Schedule B
----------
List of Sellers
---------------
Aggregate
Number of Shares Purchase
of Common Stock Price
--------------- --------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,556 $ 95,004
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 10,556 $ 95,004
▇▇▇▇ ▇▇▇▇▇▇▇ 3,055 $ 27,495
Andrei Poludnewycz 5,277 $ 47,493
------- ---------
TOTAL 29,444 $264,996
24