AGREEMENT AND PLAN OF REORGANIZATION among
ZAMBA CORPORATION
ZCA CORP.
CAMWORKS, INC.
THE SHAREHOLDERS
appearing on the signature page hereto
and the
SHAREHOLDER REPRESENTATIVE
appearing on the signature page hereto
Dated as of December 28, 1999
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION dated as of December 28, 1999
among Zamba Corporation ("PARENT"), a Delaware corporation, ZCA Corp. ("MERGER
SUB"), a Minnesota corporation and a wholly owned subsidiary of Parent,
Camworks, Inc. ("CAMWORKS"), a Minnesota corporation, the shareholders of
Camworks (the "SHAREHOLDERS") appearing on the signature pages hereto and the
shareholder representative (the "SHAREHOLDER REPRESENTATIVE") appearing on the
signature pages hereto. RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Minnesota Business Corporation Act (the "MBCA"), Parent and
Camworks will enter into a business combination transaction pursuant to which
Camworks will merge with and into Merger Sub.
B. Parent, Camworks, Merger Sub and the Shareholders desire to make
certain representations and warranties and other agreements in connection with
the Merger.
C. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE").
The parties intend that for accounting purposes the transaction be treated
as a "POOLING OF INTERESTS" under generally accepted accounting principles.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. At the Effective Time and subject to and upon the
terms and conditions of this Agreement and the applicable provisions of the
MBCA, Camworks shall be merged (the "MERGER") with and into Merger Sub, the
separate corporate existence of Camworks shall cease and Merger Sub shall
continue as the surviving corporation (sometimes referred to herein as the
"SURVIVING CORPORATION").
SECTION 1.2 EFFECTIVE TIME; CLOSING. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
articles of merger ("ARTICLES OF MERGER") with the Minnesota Secretary of State
in accordance with the relevant provisions of the MBCA (the time of filing with
the Secretary of State of the State of Minnesota (or such later time as may be
agreed in writing between Parent and Camworks) being the "EFFECTIVE TIME") as
soon as practicable following the Closing Date. Unless the context otherwise
requires, the term "AGREEMENT" as used herein includes this
Agreement and Plan of Reorganization and the Articles of Merger. The closing of
the merger (the "CLOSING") shall take place at the offices of Leonard, Street
and Deinard Professional Association, at a time and date to be specified by
Parent and Camworks (the "CLOSING DATE") which shall be no later than the Drop
Dead Date identified in Section 8.1(b).
SECTION 1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable provisions
of the MBCA. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of Camworks and Merger Sub shall vest in the Surviving Corporation,
and all debts, liabilities and duties of Camworks and Merger Sub shall become
the debts, liabilities and duties of the Surviving Corporation.
SECTION 1.4 CERTIFICATE OF INCORPORATION; BYLAWS. (a) The Articles of
Incorporation of Merger Sub, as in effect immediately prior to the Effective
Time, shall be at the Effective Time, the Articles of Incorporation of the
Surviving Corporation until thereafter amended.
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.
SECTION 1.5 DIRECTORS AND OFFICERS. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, to serve until their respective successors are duly
elected or appointed and qualified. The officers of Merger Sub immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation, to serve until their successors are duly elected or appointed orqualified.
SECTION 1.6 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of Merger Sub, Camworks or the
holders of capital stock of Merger Sub or Camworks, the following actions shall
occur with respect to the capital stock of Camworks and Merger Sub:
(a) CAMWORKS COMMON STOCK. Each share of Camworks Common Stock
issued and outstanding immediately prior to the Effective Time (other than any
Shares to be canceled pursuant to Section 1.6(f) shall be converted into the
right to receive (i) if the Average Parent Stock Price is equal to or above
$6.00 per share, and less than or equal to $16.00 per share, that number of
shares of Parent common stock, par value $.01 per share ("PARENT COMMON STOCK"),
equal to the quotient (rounded to the nearest 1/10,000) determined by dividing
1,000,000 by the number of Fully Diluted Camworks Shares Outstanding, (ii) if
the Average Parent Stock Price is less than $6.00, the number of shares of
Parent Common Stock equal to the quotient (rounded to the nearest 1/10,000)
determined by dividing the Floor Ratio by the number of Fully Diluted Camworks
Shares Outstanding, and (iii) if the Average Parent Stock Price is greater than
$16.00 per share, the number of shares of Parent Common Stock equal to the
quotient (rounded to the nearest 1/10,000) determined by dividing the Ceiling
Ratio by the Number of Fully Diluted Camworks Shares Outstanding (the applicable
number of shares of Parent Common Stock issued per share of Camworks Common
Stock pursuant to clause (i), (ii) or (iii) is referred to as the "COMMON
EXCHANGE RATIO"). Parent shall notify Camworks prior to the opening of trading
on the day prior to the Closing Date, announcing the Common Exchange Ratio as
determined pursuant to this Section 1.6(a).
(b) "AVERAGE PARENT STOCK PRICE" means the average of the closing
price per share (expressed in three decimal places) on the NASDAQ National
Market System ("NASDAQ") of Parent
Common Stock, as reported by Bloomberg Financial Markets, during the 10 trading
day period commencing on (and including) the 12th trading day prior to, and
ending on (and including) the third trading day prior to, the Closing Date.
(c) "CEILING RATIO" means the quotient (rounded to the nearest
1/10,000) determined by dividing $16,000,000 by the Average Parent Stock Price.
(d) "FLOOR RATIO" means the quotient (rounded to the nearest
1/10,000) determined by dividing $6,000,000 by the Average Parent Stock Price.
(e) "FULLY DILUTED CAMWORKS SHARES OUTSTANDING" shall be equal to the
sum of:
(1) the number of shares of Camworks Common Stock outstanding
immediately prior to the Effective Time;
(2) the number of shares of Camworks Common Stock issuable upon the
conversion of any shares of convertible securities outstanding immediately
prior to the Effective Time;
(3) the number of shares of Camworks Common Stock issuable upon the
exercise of outstanding warrants immediately prior to the Effective Time; and
(4) the number of shares of Camworks Common Stock issuable upon the
exercise of any outstanding options of Camworks immediately prior to the
Effective Time.
(f) TREASURY STOCK. Each share of Camworks Common Stock, held in the
treasury of Camworks and each share owned by Parent or any direct or indirect
wholly owned subsidiary of Parent immediately prior to the Effective Time shall
be canceled and extinguished without any conversion thereof and no payment shall
be made with respect thereto.
(g) COMMON STOCK OF MERGER SUB. Each share of common stock of Merger
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.
(h) ADJUSTMENTS TO EXCHANGE RATIO. The Common Exchange Ratio
shall be adjusted appropriately to reflect any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Parent Common Stock or Camworks Common Stock),
reorganization, recapitalization, reclassification or other like change with
respect to capital stock of Parent or Camworks occurring on or after the date
hereof and prior to the Effective Time.
SECTION 1.7 DELIVERY OF PARENT SHARES. Within three business days after
the Effective Time, Parent shall deliver to the Shareholders a certificate
representing the number of shares of Parent Common Stock deliverable to each
Shareholder calculated in accordance with Section 1.6, less the number of shares
of Parent Common Stock to be deposited into escrow pursuant to Section 1.8.
SECTION 1.8 ESCROWED SHARES. Within 14 days of the Closing Date, Parent,
on behalf of the Shareholders, shall deposit into escrow, in accordance with the
terms of the Escrow Agreement (the "Escrow Agreement") in the form attached
hereto as Exhibit A, to be entered into pursuant to Section 7.2(e), 10% of the
shares (the "INDEMNITY ESCROW AMOUNT") of Parent Common Stock to be issued
pursuant to Section 1.6. The Indemnity Escrow Amount shall be deposited on
behalf of the Shareholders
PRO RATA based on the Allocation Ratio, from the shares of Parent Common Stock
to be issued and delivered to each Shareholder as of the Effective Time. The
Shares of Parent Common Stock deposited pursuant to the Escrow Agreement,
together with any other property on deposit with the escrow agent, is referred
to herein as the "ESCROWED PROPERTY". "ALLOCATION RATIO" means (i) the number of
shares of Parent Common Stock to be issued to such Shareholder with respect to
all its shares of Camworks Common Stock divided by (ii) the total number of
shares of Parent Common Stock to be issued as of the Effective Time to all the Shareholders.
SECTION 1.9 NO FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued in exchange for
Camworks Common Stock, and such fractional share interests will not entitle the
owner thereof to vote or to any other rights of a stockholder of Parent. All
shares of Parent Common Stock to be issued pursuant to Section 1.6 shall be
rounded up to the nearest whole share.
SECTION 1.10 EFFECT OF FAILURE TO DELIVER CAMWORKS COMMON STOCK. Until
surrendered in accordance with the provisions of this Section, each certificate
representing Camworks Common Stock held by a Shareholder shall be deemed from
and after the Effective Time, for all corporate purposes, to evidence only
ownership of the number of full shares of Parent Common Stock into which such
shares of Camworks Common Stock shall have been so converted and the right to
receive any dividends or distributions to which the holder is entitled pursuant
to Section 1.11.
SECTION 1.11 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Parent Common Stock with a record date after the
Effective Time will be paid to the holder of any unsurrendered Certificate of
Camworks Common Stock ("CERTIFICATE") with respect to the shares of Parent
Common Stock represented thereby until the holder of record of such Certificate
shall surrender such Certificate. Subject to applicable law, following
surrender of any such Certificate, there shall be paid to the record holder
thereof certificates representing whole shares of Parent Common Stock issued in
exchange therefor, without interest, along with the amount of dividends or other
distributions with a record date after the Effective Time payable with respect
to such whole shares of Parent Common Stock.
SECTION 1.12 TRANSFERS OF OWNERSHIP. If any certificate for shares of
Parent Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that (i) the Certificate so surrendered will
be properly endorsed, accompanied by any documents required to evidence and
effect such transfer and otherwise in proper form for transfer and that the
person requesting such exchange will have paid to Parent or any agent designated
by it any applicable transfer taxes required by reason of the issuance of a
certificate for shares of Parent Common Stock in any name other than that of the
registered holder of the Certificate surrendered, or shall provide evidence that
any applicable transfer taxes have been paid, and (ii) the transferee shall
execute letters substantially similar to those referenced in Section 2.8 during
any period of time when such letters impose restrictions on transfer.
SECTION 1.13 NO FURTHER OWNERSHIP RIGHTS IN CAMWORKS COMMON STOCK. All
shares of Parent Common Stock into which shares of Camworks Common Stock shall
have been so converted and any dividends or distributions to which the holder is
entitled pursuant to Section 1.11 shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Camworks Common Stock,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of shares of Camworks Common Stock that were outstanding
immediately prior to the Effective Time. If after the Effective Time,
certificates for shares of Camworks Common Stock are presented to the
Surviving Corporation for any reason, they shall be canceled and no shares of
Parent Common Stock shall be issued in exchange thereof.
SECTION 1.14 LOST, STOLEN OR DESTROYED CERTIFICATES. Parent shall not be
required to issue any shares of Parent Common Stock for lost, stolen or
destroyed certificates, except with respect to shares of Camworks Common Stock
owned by the Shareholders and disclosed on Schedule A hereto.
SECTION 1.15 TAX CONSEQUENCES. It is intended by the parties hereto that
the Merger shall constitute a reorganization within the meaning of Section 368
of the Code. The parties hereto adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Income Tax Regulations.
SECTION 1.16 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of Camworks and Merger Sub, the officers and directors of
Camworks and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action, so long as such action is consistent with this Agreement.
SECTION 1.17 LEGENDS ON SHARES. (a) All certificates representing shares
of Parent Common Stock issued pursuant to Section 1.6 shall bear the followinglegend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be transferred or
otherwise disposed of unless and until (i) the shares are registered
under such Act or (ii) an opinion of counsel reasonably satisfactory
to the Issuer to the effect that registration under such Act is not required.
(b) Any certificates representing shares of Parent Common Stock that
are subject to a lock-up agreement pursuant to Section 2.9(b) shall bear the
following additional legend:
The shares represented by this certificate are subject to a Lock-Up
Agreement with the Issuer dated December 28, 1999, which expires on
December 31, 2001, and may not be transferred or otherwise disposed of
unless and until the restrictions set forth in such Lock-Up Agreement
have been released in accordance with the terms thereof.
SECTION 1.18 SHAREHOLDER CONTROL AGREEMENT; EMPLOYMENT AGREEMENTS. The
Company and the Shareholders hereby waive all rights under Sections 3 and 4 of
the Third Shareholder Control and Voting Agreement dated January 1, 1998 (the
"SHAREHOLDER CONTROL AND VOTING AGREEMENT") and all prior Shareholder Control
and Voting Agreements with respect to the transactions to be consummated hereby.
The Shareholder Control and Voting Agreement shall be deemed cancelled and
without any further force and effect at the Effective Time. All employment
agreements with Camworks shall be deemed cancelled and superceded by the
employment agreements executed pursuant to Section 7.2(f) hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder, jointly and severally, represents and warrants to
Parent and Merger Sub as of the date hereof and as of the Closing Date, as set
forth below (other than the several representations (the "SEVERAL
REPRESENTATIONS") and warranties set forth in Sections 2.9 through 2.11 below,
which representations and warranties shall be several, and not joint) subject to
the exceptions specifically disclosed in writing in the disclosure schedule
supplied to Parent (the "CAMWORKS DISCLOSURE SCHEDULE") the section references
of which correspond to the Sections and Subsections of this Agreement to which
they relate as follows:
SECTION 2.1 SHARE OWNERSHIP. The Shareholder is the record and beneficial
owner of the number of Shares set forth opposite such Shareholder's name on
Schedule A. The Shareholder does not own any securities issued by, or other
obligations of, Camworks which are not listed on Schedule A.
SECTION 2.2 LEGAL POWER; ORGANIZATION; QUALIFICATION OF SHAREHOLDERS. The
Shareholder is a natural person and is competent and has all requisite power and
authority to execute and deliver this Agreement and to consummate the Merger and
has all requisite power and authority to execute and deliver the documents and
instruments executed in connection therewith (the "ANCILLARY AGREEMENTS") to
which the Shareholder is a party.
SECTION 2.3 BINDING AGREEMENT. This Agreement has been duly executed and
delivered by the Shareholder and, assuming due and valid authorization,
execution and delivery by Parent, Merger Sub and Camworks, where applicable,
this Agreement is and each of the Ancillary Agreements to which the Shareholder
is a party, when executed and delivered by the Shareholder will, constitute a
legal, valid and binding obligation of such Shareholder, enforceable against
such Shareholder in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws of general application affecting enforcement
of creditors' rights generally and (ii) the availability of the remedy of
specific performance or injunctive or other forms of equitable relief may be
subject to equitable defenses and would be subject to the discretion of the
court before which any proceeding therefor may be brought.
SECTION 2.4 NO SHAREHOLDER CONFLICT OR DEFAULT. (a) Neither the execution
and delivery of this Agreement nor any of the Ancillary Agreements to which the
Shareholder is a party nor the consummation by Camworks of, nor the
participation by the Shareholder in, the Merger will result in a violation of,
or a default under, or conflict with, or require any consent, approval or notice
under, any contract, trust, commitment, agreement, obligation, understanding,
arrangement or restriction of any kind to which the Shareholder is a party or by
which the Shareholder is bound or to which shares of Camworks Common Stock owned
by the Shareholder are subject. Participation in the Merger by the Shareholder
of the Merger will not violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to the Shareholder or Camworks Common Stock owned by theShareholder.
(b) No filing by the Shareholder is required under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the "HSR ACT"),
in connection with any of the transactions contemplated by this Agreement.
(c) The Shareholder has the sole and exclusive right to take all
actions with respect to the Camworks Common Stock owned by such Shareholder
(including actions with respect to shareholder approval necessary for the
Merger, execution of the Agreement and the Ancillary Documents and waiver of
dissenter's rights), free from any community property laws, spousal consent,
divorce proceeding, property settlement made or pending in connection with a
divorce, and the like. The
Shareholders expressly agree that the disclosures made in Section 2.4(c) of the
Camworks Disclosure Schedule shall in no way limit or otherwise modify the
Shareholders' representations and warranties under this or any other Subsection
or reduce or restrict the Shareholders' indemnity obligations with respectthereto.
SECTION 2.5 OWNERSHIP AND POSSESSION OF SHARES. The shares of Camworks
Common Stock owned by the Shareholders are now, and at all times during the term
hereof shall be, held by the Shareholders, or by a nominee or custodian for the
sole and exclusive benefit of the Shareholders, free and clear of all Liens
whatsoever, except for any Liens created by this Agreement and Liens arising
under any federal or state securities laws. Each Shareholder represents and
warrants he has lost his certificates representing shares of Camworks Common
Stock, and if not lost, such certificates were never issued. Each Shareholder
represents and warrants a share register has never been prepared, but if a share
register had been prepared, the share register would disclose that the
Shareholders were the record and beneficial owners of all issued and outstanding
shares of Camworks Common Stock.
SECTION 2.6 DISSENTER'S RIGHTS. The Shareholder represents and warrants
that (1) the Shareholder has been advised of the dissenter's rights set forth in
Section 302A.471 and 302A.473 of the MCBA ("DISSENTER'S RIGHTS") and (ii)
further represents that by approving the Merger as required by Section 6.1, such
Shareholder waives any statutory notice under the MBCA of the Dissenter's Rights
and hereby waives the Dissenter's Rights.
SECTION 2.7 [Reserved]
SECTION 2.8 ACCOUNTING MATTERS. (a) Each Shareholder represents and
warrants that the representations contained on Schedule B regarding accounting
for the Merger as a pooling of interests transaction under GAAP are true andcorrect.
(b) Concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Parent's and Merger Sub's willingness to
enter into this Agreement, such Shareholder has delivered a pooling letter
agreement as of the date hereof substantially in the form attached as Exhibit Chereto.
Each Shareholder individually and not severally, makes the following
representations and warranties set forth in Sections 2.9 through 2.11 as of the
date hereof and as of the Closing Date:
SECTION 2.9 INVESTMENT REPRESENTATIONS. The Shareholder has such
knowledge and experience in financial and business matters that such Shareholder
is capable of evaluating the merits and risks of an investment in shares the of
the Parent Common Stock. The Shareholder is acquiring the Parent Common Stock
for the Shareholder's own account for investment and not with a view to, or for
sale in connection with, any distribution thereof, nor with any present
intention of distributing the Parent Common Stock. The Shareholder acknowledges
that the shares of Parent Common Stock are restricted securities that are
unregistered; that the Shareholder must hold such shares indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available; and that the Registration and Rights Agreement
constitutes the only obligation of Parent to register such shares.
SECTION 2.10 RESTRICTIONS ON TRANSFER. (a) The Shareholder will not
sell, transfer, distribute or otherwise dispose of the shares of Parent Common
Stock acquired in connection with the Merger except (i) pursuant to an effective
registration statement under the Securities Act as then in effect
covering the shares and proposed distribution or (ii) upon first furnishing to
Parent an opinion of counsel reasonably satisfactory to it stating that the
proposed disposition is not in violation of the registration requirements of the
Securities Act and such undertakings and agreements with Parent by the proposed
transferee as Parent may reasonably require to ensure compliance with the
Securities Act of 1933, as amended (the "SECURITIES ACT").
(b) Concurrently with the execution and delivery of this Agreement and as
a condition and inducement to Parent's and Merger Sub's willingness to enter
into this Agreement, Mr. Cameron and Mr. Lundberg have delivered a lock-up
agreement as of the date hereof substantially in the form attached as Exhibit B
hereto and such Shareholders agree not to sell, transfer, distribute or
otherwise dispose of the shares of Parent Common Stock acquired in connection
with the Merger except in accordance therewith.
SECTION 2.11 INVESTIGATION. The Shareholder has been furnished with, and
has had an opportunity to read, this Agreement and all materials relating to the
business, finances, operations, and prospects of Parent that have been
reasonably requested by it, including but not limited to the reports filed by
Parent with the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") Each
Shareholder understands that the shares of Parent Common Stock are being or will
be issued for exchange for Camworks Common Stock without any particular offering
or disclosure document, but acknowledges that the Shareholder has been given
ample opportunity to ask questions and request information of and receive
answers from Parent officials concerning the business, finances and operations
of Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CAMWORKS
Camworks represents and warrants to Parent and Merger Sub as of the date
hereof and as of the Closing Date, subject to the exceptions specifically
disclosed in writing in the Camworks Disclosure Schedule, the section references
of which correspond to the Sections and Subsections of this Agreement to which
they relate, as follows:
SECTION 3.1 ORGANIZATION OF CAMWORKS. Camworks is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota, has the requisite corporate power to own, lease and operate its
property and to carry on its business as now being conducted and as proposed by
Camworks to be conducted, and is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified would have a Camworks Material Adverse Effect. Camworks has no
Subsidiaries. Camworks has delivered or made available a true and correct copy
of its Articles of Incorporation and its Bylaws, each as amended to date, to
Parent. The minute books of Camworks made available to Parent are the only
minute books of Camworks, and the minutes contain an accurate record of all
actions taken in all meetings of directors (or committees thereof) and
Shareholders or by written consent. The term "CAMWORKS MATERIAL ADVERSE EFFECT"
means, for purposes of this Agreement, any change, event or effect that is, or
that would reasonably be expected to be, materially adverse to the business,
assets (including intangible assets), financial condition or prospects of
Camworks or the Surviving Corporation. "SUBSIDIARY" means, with respect to any
party, any corporation or other organization, whether incorporated or
unincorporated, of which (i) such party or any other Subsidiary of such party is
a general partner (excluding partnerships, the general partnership interests of
which held by such party or any Subsidiary of such party do not have a majority
of the voting interest in such partnership) or (ii) at least 50% of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similarfunctions
with respect to such corporation or other organization are directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries.
SECTION 3.2 CAMWORKS CAPITAL STRUCTURE. (a) The authorized capital stock
of Camworks consists of 2,500 shares of common stock, with no par value
specified ("CAMWORKS COMMON STOCK"), of which 107.52688 shares are issued and
outstanding as of the date hereof. The outstanding shares of Camworks Common
Stock are held of record and beneficially by the persons and in the amounts set
forth on the Schedule A. All outstanding shares of Camworks Common Stock are
duly authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive or similar rights created by statute, the Articles of
Incorporation or Bylaws of Camworks or any agreement or document to which
Camworks is a party or by which it is bound.
(b) All shares or other ownership interests in Camworks previously
held by Michael E. Cameron have been duly and validly redeemed and Michael E.
Cameron has no further ownership interests in the equity or assets of Camworks
and no amounts are otherwise payable to him by Camworks or as a result of the
transactions contemplated hereby. The Shareholders expressly agree that the
disclosures made under Section 3.2(b) of the Camworks Disclosure Schedule shall
in no way limit or otherwise modify the Shareholders' representations and
warranties under this or any other Subsection or reduce or restrict the
Shareholders' indemnity obligations with respect thereto.
(c) The Shareholder Control Agreement is the only effective agreement
governing the relations of the Shareholders with respect to the capital stock of
Camworks, rights of first refusal, voting and like matters. All prior versions
have been duly and effectively cancelled.
SECTION 3.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except for the
shares described in Section 3.2, there are no equity securities of any class of
Camworks, options, warrants, or any securities exchangeable or convertible into
or exercisable for such equity securities, issued, reserved for issuance or
outstanding, there are no calls, rights (including preemptive rights),
commitments or agreements of any character to which Camworks is a party or by
which it is bound obligating Camworks to issue, deliver or sell, or cause to be
issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause
the repurchase, redemption or acquisition, of any shares of capital stock of
Camworks or obligating Camworks to grant, extend, accelerate the vesting of or
enter into any such option, warrant, equity security, call, right, commitment or
agreement. There are no registration rights and, to the knowledge of Camworks,
there are no voting trusts, proxies or other agreements or understandings, with
respect to any equity security of any class of Camworks.
SECTION 3.4 AUTHORITY. (a) Camworks has all requisite corporate power and
authority to enter into this Agreement and any Ancillary Documents to which
Camworks is a party and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Camworks. This Agreement has been duly executed
and delivered by Camworks and, assuming the due authorization, execution and
delivery by the Shareholders, Parent and Merger Sub, this Agreement constitutes
the valid and binding obligation of Camworks, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general principles of equity.
The execution and delivery of this Agreement by Camworks does not, and the
performance of this Agreement by Camworks will not (i) conflict with or violate
the Articles of Incorporation or Bylaws of Camworks, (ii) subject to compliance
with the requirements set forth in Section 3.4(b) below, conflict with or
violate any law, rule, regulation, order, judgment or decree
(collectively "LAWS") applicable to Camworks or by which any of its properties
is bound, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair the rights of Camworks or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Camworks pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Camworks is a party or by
which Camworks or its properties are bound or affected, except, with respect to
clauses (ii) and (iii), for any such conflicts, violations, defaults or other
occurrences that would not, individually or in the aggregate, have a Camworks
Material Adverse Effect. The Camworks Disclosure Schedule lists all consents,
waivers and approvals under any of Camworks' agreements, contracts, licenses or
leases required to be obtained in connection with the consummation of the
transactions contemplated hereby.
(b) To the knowledge of Camworks, after due inquiry, each consent,
approval, order or authorization of, or registration, declaration or filing with
any court, administrative agency or commission or other governmental or
regulatory body or authority or instrumentality ("GOVERNMENTAL ENTITY") required
by or with respect to Camworks in connection with the execution and delivery of
this Agreement or any Ancillary Documents to which it is a party or the
consummation of the transactions contemplated hereby has been obtained, except
for (i) the filing of the Articles of Merger with the Secretary of State of
Minnesota, (ii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and state
securities laws and the laws of any foreign country, and (iii) such other
consents, authorizations, filings, approvals and registrations that are set
forth on the Camworks Disclosure Schedule.
SECTION 3.5 CAMWORKS FINANCIAL STATEMENTS. (a) Camworks has previously
delivered to Parent the financial statements of Camworks as of and for the 11
month period ended November 30, 1999 (collectively, the "CAMWORKS FINANCIAL
STATEMENTS"), including the balance sheet (the "CAMWORKS BALANCE SHEET") of
Camworks as of November 30, 1999 (the date of such Camworks Balance Sheet being
referred to herein as the "BALANCE SHEET DATE") and the profit and loss
statement or the 11 month period ended November 30, 1999. The Camworks
Financial Statements have been prepared from, and are in accordance with, the
books and records of Camworks and present fairly the financial position and the
results of operations of Camworks as of the dates and for the periods indicated,
in each case in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved except as
otherwise stated therein. Camworks has no liabilities (absolute, accrued,
contingent or otherwise), whether or not of a nature required to be disclosed on
a balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP, that are, individually or in the aggregate,
material to the business, results of operations or financial condition of
Camworks, except liabilities (i) provided for in the Camworks Balance Sheet,
(ii) incurred since the Balance Sheet Date in the ordinary course of business
consistent with past practices or (iii) incurred in connection with the
transactions contemplated hereby.
(b) The books and records and internal controls of Camworks are
auditable and adequate to permit the preparation after the Effective Time of
audited financial statements of Camworks and pro forma information in accordance
with GAAP and the rules and regulations of the SEC, for all periods required to
be presented by the rules and regulations of the SEC, and within the time limits
imposed by the rules and regulations of the SEC.
(c) All accounts receivable and unbilled accounts receivable of
Camworks are collectible within the later of the date that is 60 days past the
Closing Date or 90 days from invoicing thereof.
(d) All accounts payable and accrued liabilities of Camworks were
incurred in the ordinary course of business under standard terms and conditions.
SECTION 3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the Balance Sheet
Date, there has not occurred any Camworks Material Adverse Effect and there has
not been, occurred or arisen any:
(a) amendments or changes to the Articles of Incorporation or Bylaws
of Camworks;
(b) individual capital expenditure or commitment, or series of
related capital expenditure or commitments, by Camworks exceeding $5,000;
(c) destruction of, damage to or loss of any assets material to the
business of Camworks (whether or not covered by insurance);
(d) notification from a material customer of an intent to discontinue
to do business with Camworks;
(e) labor trouble or claim of wrongful discharge (except for such
claims as would not reasonably be expected to result in potential damages
greater than $5,000) or other unlawful labor practice or action;
(f) material change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by Camworks;
(g) material revaluation by Camworks of any of its assets or any
material accounting charges against the earnings of Camworks;
(h) declaration, setting aside or payment of a dividend or other
distribution with respect to the capital stock of Camworks, or any direct or
indirect redemption, purchase or other acquisition by Camworks of any of its
capital stock;
(i) increase in the salary or other compensation payable or to become
payable to any of its (i) officers or directors or (ii) any employee or advisor
receiving, after such increase, annualized compensation in excess of $5,000 per
year, or declaration, payment or commitment or obligation of any kind for the
payment of a bonus or other additional salary or compensation to any such person
or grant or amendment of any stock option or other agreement pertaining to any
such person;
(j) sale, lease, license or other disposition of any material amount
of the assets or properties of Camworks;
(k) amendment or termination of any material contract, agreement or
license to which Camworks is a party or by which it is bound or any contract
listed in Section 3.17 of the Camworks Disclosure Schedule;
(l) loan by Camworks to any person or entity, incurring by Camworks
of any indebtedness for borrowed money guaranteeing by Camworks of any
indebtedness, issuance or sale of any debt securities of Camworks or
guaranteeing of any debt securities of others, except for advances to
employees for travel and business expenses and endorsing of checks payable to
Camworks in the ordinary course of business, consistent with past practices;
(m) waiver or release of any material right or claim of Camworks,
including any write-off or other compromise of any account receivable of
Camworks other than in the ordinary course of business and consistent with pastpractices;
(n) change in pricing or royalties set or charged by Camworks to its
customers or licensees or in pricing or royalties set or charged by persons who
have licensed Camworks Intellectual Property to Camworks other than in the
ordinary course of business and consistent with past practices;
(o) other transaction by Camworks except in the ordinary course of
business as conducted on the Balance Sheet Date and consistent with past
practices; or
(p) payments of bonuses or Christmas bonuses to the employees of
Camworks generally;
(q) amounts outstanding under Camworks' line of credit exceeding
$5,000; or
(r) commitment, understanding or agreement by Camworks or any officer
or employee thereof to do any of the things described in the preceding clauses
(a) through (q) (other than this Agreement).
SECTION 3.7 TAXES. (a) DEFINITION OF TAXES. For the purposes of this
Agreement, "TAX" or, collectively, "TAXES", means any and all federal, state,
local and foreign taxes, assessments and other governmental charges, duties,
impositions and liabilities in the nature of a tax including taxes based upon or
measured by gross receipts, income, profits, sales, use and occupation, and
value added, ad valorem, transfer, franchise, withholding, payroll, recapture,
employment, excise and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts and any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor entity.
(b) TAX RETURNS AND AUDITS.
(i) Camworks has prepared and filed all required federal, state,
local and foreign returns, estimates, information statements and reports
("RETURNS") relating to any and all Taxes concerning or attributable to
Camworks or its operations and such Returns are true and correct in all
material respects and have been completed in all material respects in
accordance with applicable law or, with respect to any Taxes payable, an
adequate reserve has been established on the Camworks Balance Sheet.
(ii) Camworks (A) has paid or accrued all Taxes set forth on its
Returns, and (B) has withheld and paid (or will pay at the time required)
with respect to its employees all federal and state income taxes, FICA,
FUTA and other Taxes required to be withheld.
(iii) Camworks is not delinquent in any material respect in the
payment of any Tax nor is there any material Tax deficiency outstanding,
proposed or assessed against Camworks, nor has Camworks executed any waiver
of any statute of limitations on or extending the period for the assessment
or collection of any Tax which has not expired.
(iv) No audit or other examination of any Return of Camworks is
currently in progress, nor has Camworks been notified of any request for
such an audit or other examination.
(v) Camworks did not have, as of the Balance Sheet Date, any
material liabilities, whether asserted or unasserted, contingent or
otherwise, for unpaid federal, state, local and foreign Taxes that have not
been accrued or reserved against in accordance with GAAP on the Camworks
Balance Sheet, and Camworks has not incurred any such liabilities since
such date except in the ordinary course of business and consistent with
past practices.
(vi) Camworks has made available to Parent copies of all federal and
state income and all state sales and use Returns for all periods since
inception of Camworks.
(vii) There are (and as of immediately following the Effective Date
there will be) no liens, pledges, charges, claims, security interests or
other encumbrances of any sort ("LIENS") of a material nature on the assets
of Camworks relating to or attributable to Taxes, except for Liens for
Taxes not yet due and payable or that are being contested in good faith by
appropriate proceedings. Camworks has not received written or oral notice
of any claim relating or attributable to Taxes that, if adversely
determined, would result in any Lien on the assets of Camworks.
(viii) There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any employee
or former employee of Camworks that, individually or collectively, could
give rise to the payment of any amount that would not be deductible
pursuant to Section 280G of the Code or the limitations in Sections 162 of
the Code.
(ix) Camworks has not filed any consent agreement under Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to
any disposition of a subsection (f) asset (as defined in Section 341(f)(4)
of the Code) owned by Camworks.
(x) Camworks has not agreed to, or is not required to, make any
adjustments under Section 481(c) of the Code by reason of a change in
accounting method or otherwise.
(xi) The Surviving Corporation shall not be required to include in a
taxable period ending after the Effective Time taxable income, profits,
gains or returns (together "income") attributable to income that either
accrued or arose by reference to any events or transactions which occurred
in a prior taxable period but was not recognized in any prior taxable
period whether or not as a result of the installment method of accounting,
the completed contract method of accounting, the long-term contract method
of accounting or comparable provisions of state, local or foreign tax law.
(xii) Camworks has paid all taxes due to any state or foreign
jurisdiction as a result of sales into such jurisdiction.
(xiii) Camworks has made and each Shareholder has consented to a valid
election (which has not been revoked or terminated or otherwise become
ineffective) under Section 1362(a) of the Code to be taxed as an "S
corporation" under Section 1361 through 1379 of the Code. Camworks and
each Shareholder have made and consented to valid elections to be taxed in
a comparable fashion under comparable state, local, provincial or foreign
Tax law for all
applicable jurisdictions. Camworks has not been, nor will it be, subject
to any Federal corporate income taxes imposed under Chapter 1 of the Code
(other than Code Sections 1374 and 1375 (and their predecessor Sections
under the Internal Revenue Code of 1954, as amended)) or any state, local,
provincial or foreign income or franchise Taxes. Camworks has not had any
taxable earnings or profits during a taxable year with respect to which an
election under Section 1362(a) of the Code to be treated as an "S
Corporation" was not in effect.
(xiv) Camworks has not been a member of any affiliated, consolidated,
combined, unitary or aggregate group for the purpose of filing Tax returns
and Camworks has no liability for Taxes of such a Group.
(xv) Camworks does not have any reason to believe that any
conditions exist that could reasonably be expected to prevent the Merger as
qualifying as a "reorganization" under Section 368 of the Code.
SECTION 3.8 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement
(noncompete or otherwise), commitment, judgment, injunction, order or decree to
which Camworks is a party or, to the knowledge of Camworks, otherwise binding
upon Camworks, that has or reasonably could be expected to have the effect of
prohibiting or impairing in a material way any business practice of Camworks,
any acquisition of property (tangible or intangible) by Camworks or the conduct
of business by Camworks. Without limiting the foregoing, Camworks has not
entered into any agreement under which Camworks is restricted from selling,
licensing or otherwise distributing any of its products to any class of
customers, or providing consulting services, in any geographic area, during any
period of time or in any segment of the market, and Camworks has not granted any
exclusive rights with respect to any of its products to any other person.
SECTION 3.9 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES. (a)
Camworks does not own any real property. Section 3.9(a) of the Camworks
Disclosure Schedule lists all real property leases to which Camworks is a party
and each amendment thereto. All such current leases are in full force and
effect, are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event of default
(or event which with notice or lapse of time, or both, would constitute a
default) that would give rise to a claim in an amount greater than $5,000.
(b) Camworks has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in its
business, and such properties and assets, as well as all other properties and
assets of Camworks, whether tangible or intangible, are free and clear of any
Liens, except as reflected in the Camworks Financial Statements or in the
Camworks Disclosure Schedule and except for Liens for taxes not yet due and
payable and such imperfections of title and encumbrances, if any, that are not
material in character, amount or extent, and that do not materially detract from
the value, or materially interfere with the present use, of the property subject
thereto or affected thereby. All personal property of Camworks is in good
working condition, ordinary wear and tear excepted.
SECTION 3.10 INTELLECTUAL PROPERTY. (a) Camworks owns, is licensed or
otherwise possesses legally enforceable rights to use, all patents, trademarks,
domain names, trade names, service marks, copyrights, and any applications
therefor, schematics, technology, know-how, computer software programs or
applications (in both source code and object code form), and tangible or
intangible proprietary information or material that are (i) required or
reasonably necessary for the conduct of business of Camworks as currently
conducted or (ii) under development for such business (collectively,
the "CAMWORKS INTELLECTUAL PROPERTY").
(b) The Camworks Disclosure Schedule sets forth a list of all
federal, state and foreign patents, registered copyrights, registered
trademarks, domain registrations, and any applications therefor included in the
Camworks Intellectual Property, and specifies, where applicable, the
jurisdictions in which each such item of Camworks Intellectual Property has been
issued or registered or in which an application for such issuance or
registration has been filed, including the respective registration or
application numbers and the names of all registered owners. The Camworks
Disclosure Schedule sets forth a list of all material licenses, sublicenses and
other agreements to which Camworks is a party and pursuant to which Camworks or
any other person is authorized to use or license the use of any (i) Camworks
Intellectual Property or trade secret of Camworks and (ii) third party patents,
copyrights, trademarks, and applications for registration thereof, schematics,
technology, know-how, computer software programs or applications (in both source
code and object code form), and tangible or intangible proprietary information
or material that are, are incorporated in, or form a part of any Camworks
Intellectual Property. The execution and delivery of this Agreement by
Camworks, and the consummation of the transactions contemplated hereby, will not
cause Camworks to be in violation or default under any such license, sublicense
or agreement, nor entitle any other party to any such license, sublicense or
agreement to terminate or modify such license, sublicense or agreement. Camworks
is (i) the sole and exclusive owner of, with all right, title and interest in
and to (free and clear of any Liens), the Camworks Intellectual Property, or
(ii) a licensee of the Camworks Intellectual Property under valid and binding
license agreements listed in the Camworks Disclosure Schedule.
(c) No claims with respect to Camworks Intellectual Property have
been asserted in writing or are, to Camworks' knowledge, threatened by any
person (i) to the effect that the manufacture, sale, licensing or use of any of
the products of Camworks infringes on any copyright, patent, trademark, service
mark, trade secret or other proprietary right of any third party, (ii) against
the use by Camworks of any trademarks, service marks, trade names, trade
secrets, copyrights, patents, technology, know-how or computer software programs
and applications used in Camworks' business as currently conducted or under
development for use in such business or (iii) challenging the ownership by
Camworks, or the validity or effectiveness, of any of the Camworks Intellectual
Property. Camworks has not infringed, and the business of Camworks does not
infringe, any copyright, patent, trade secret or other proprietary right of any
third party. To the knowledge of Camworks, there is no material unauthorized
use, infringement or misappropriation of any of Camworks Intellectual Property
by any third party, including any employee or former employee of Camworks. No
Camworks Intellectual Property or product of Camworks is subject to any
outstanding decree, order, judgment or stipulation restricting in any manner the
licensing thereof by Camworks.
(d) Section 3.10(d) of the Camworks Disclosure Schedule lists all
Software (other than Software acquired in the ordinary course of business or
having an acquisition price of less than $1,000) owned, licensed, leased, or
otherwise used by the Camworks, and identifies which Software is owned,
licensed, leased, or otherwise used, as the case may be. Section 3.10(d) of the
Camworks Disclosure Schedule lists all Software sold, licensed, leased or
otherwise distributed by Camworks to any third party, and identifies which
Software is sold, licensed, leased, or otherwise distributed as the case may be.
With respect to the Software set forth in Section 3.10(d) of the Camworks
Disclosure Schedule which Camworks purports to own, such Software was either
developed (1) by employees of the Company within the scope of their employment,
or (2) by independent contractors who have assigned their rights to the Company
pursuant to written agreements. In each agreement pursuant to which Camworks
has licensed its Software to third parties, Camworks has not (1) failed to limit
its liability to the amount of the fees paid pursuant to the agreements or (2)
warranted as to the performance or functionality of the Software other than to
state that the Software would perform in accordance with its documentation
and/or specifications. "SOFTWARE" means any and all (v) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code, (w) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (x) descriptions, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing, (y) the
technology (other than hardware) supporting any Internet site(s) operated by or
on behalf of the Camworks, and (z) all documentation, including user manuals and
training materials, relating to any of the foregoing.
(e) To the knowledge of Camworks, after due inquiry, any Software
that Camworks licenses and maintains pursuant to contracts with third parties
("LICENSED SOFTWARE") processes accurately (including calculating, comparing and
sequencing) in all material respects date data from, into and between the
twentieth and twenty-first centuries, including leap year calculations
("MILLENNIAL DATE DATA"). To the knowledge of Camworks, after due inquiry, all
such Licensed Software processes Millennial Date Data without material errors or
omissions and without materially affecting functionality when used in accordance
with the product documentation provided by the Camworks therefor and provided
that all other software and all hardware and firmware used in combination with
such Licensed Software properly exchanges date data with it. Camworks has not
made any representation or warranty to any third party that varies in any
material respect from the preceding representation.
(f) Camworks has obtained written representations or other
unwritten assurances from each third party that (1) provides or will provide
Millennial Date Data to Camworks, (2) processes or will process Millennial Date
Data for Camworks or (3) otherwise provides or will provide any material product
or service to Camworks that is dependent upon any Software, microcode, chip or
hardware system or component, including any electronic or electronically
controlled system or component (a "SYSTEM") that processes any Millennial Date
Data, stating that all of such Systems that are used for, or on behalf of,
Camworks will process Millennial Date Data without materially affecting the
supply of such product or service to Camworks after December 31, 1999.
(g) Each current and former employee and officer of Camworks has
executed an employment agreement in substantially the form previously provided
to Parent.
SECTION 3.11 COMPLIANCE; PERMITS; RESTRICTIONS. (a) Camworks is not in
conflict with, or in default or violation of, (i) any law, rule, regulation,
order, judgment or decree applicable to Camworks or by which any of its
properties is bound or affected, or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Camworks is a party or by which Camworks or any of its
properties is bound or affected, except for any conflicts, defaults or
violations that, individually or in the aggregate, would not have a Camworks
Material Adverse Effect.
(b) Camworks holds all consents, permits, licenses, variances,
exemptions, orders and approvals from governmental authorities that are material
to the operation of the business of Camworks (collectively, the "CAMWORKS
PERMITS"). Camworks is in compliance with the terms of Camworks Permits, except
where the failure to so comply, individually or in the aggregate, would not have
a Camworks Material Adverse Effect.
SECTION 3.12 LITIGATION. There is no action, suit or proceeding of any
nature pending or, to Camworks' knowledge, threatened against Camworks or any of
its properties, officers or directors, in
their respective capacities as such (i) involving Camworks Intellectual Property
or in which injunctive or other equitable relief or damages in excess of $5,000
are or are reasonably likely to be sought against Camworks or that could
otherwise result in a Camworks Material Adverse Effect or (ii) that in any
manner challenges or seeks to prevent, enjoin, alter or delay any of the
transactions contemplated by this Agreement. To Camworks' knowledge, there is no
investigation pending or threatened against Camworks, its properties or any of
its officers or directors by or before any Governmental Entity that would have a
Camworks Material Adverse Effect. The Camworks Disclosure Schedule sets forth,
with respect to any pending or threatened action, suit, proceeding or
investigation, the forum, the parties thereto, the subject matter thereof and
the amount of damages claimed or other remedy requested. To the knowledge of
Camworks, no Governmental Entity has at any time challenged or questioned in
writing the legal right of Camworks to manufacture, offer or sell any of its
products in the present manner or style thereof.
SECTION 3.13 BROKERS' AND FINDERS' FEES; TRANSACTION EXPENSES. Camworks
has not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby. Section
3.13 of the Camworks Disclosure Schedule sets forth Camworks' best estimate of
legal, accounting and other transaction costs and expenses to be incurred in
connection with the Merger.
SECTION 3.14 EMPLOYEE BENEFITS. (a) The Camworks Disclosure Schedule
contains a complete and accurate list of all Employee Benefit Plans maintained
or contributed to by Camworks, or any ERISA Affiliate. For purposes of this
Agreement, "EMPLOYEE BENEFIT PLAN" means (i) any "employee pension benefit plan"
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), (ii) any "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA), and (iii) any other written or oral plan,
agreement or arrangement involving direct or indirect compensation, including
without limitation insurance coverage, severance benefits, disability benefits,
health benefits, life insurance or death benefits, dependent care benefits,
deferred compensation, bonuses, Camworks paid perks (including use of autos,
auto allowances, memberships, cell phone arrangements, telephone lines or other
arrangements permitting the use of Camworks property or reimbursement of
expenses), stock options, stock purchase, phantom stock, stock appreciation or
other forms of incentive compensation or post-retirement or post-termination
compensation, vacation, and sick pay, or other paid or unpaid time off benefits,
transportation benefits, or fringe benefits in each case relating to any current
or former director, employee or consultant of Camworks. For purposes of this
Agreement, "ERISA AFFILIATE" means any entity which is a member of (i) a
controlled group of corporations (as defined in Section 414(b) of the Code),
(ii) a group of trades or businesses under common control (as defined in Section
414(c) of the Code), or (iii) an affiliated service group (as defined under
Section 414(m) of the Code), any of which includes Camworks. Complete and
accurate copies of all Employee Benefit Plans that have been reduced to writing
(including related and ancillary documents, and copies of the IRS Forms 5500,
5500C or 5500R for the most recent three Plan Years for any Employee Benefit
Plan with respect to which such forms have been filed) have been provided to
Parent, and Camworks has made available to Parent written summaries of any such
plans that have not been reduced to writing.
(b) The Camworks Disclosure Schedule lists each Employee Benefit
Plan pursuant to which (i) any amount in excess of $5,000 may become payable
(whether currently or in the future), any of the benefits of which will be
increased, or the vesting of the benefits under which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement or (ii)
the value of any of the benefits will be calculated on the basis of any of the
transactions contemplated by this Agreement.
(c) All Employee Benefit Plans are in compliance in all material
respects with the currently applicable provisions of the terms of the Plans
(except to the extent of any change in applicable governing law not yet required
to be incorporated into the instruments or documents governing the Plans), ERISA
and the Code and the regulations thereunder.
(d) Each Employee Benefit Plan that is intended to be qualified
unde
