AGREEMENT AND PLAN OF REORGANIZATION
dated as of April 24, 1997
by and among
ICCE, Inc.,
Cama of Tampa, Inc.,
Cama Acquisition, Inc.
and
Xxxxxxx X. Xxxxxxxx
TABLE OF CONTENTS
PAGE
I. DEFINITIONS 1
II. THE MERGER 3
2.1 Merger 3
2.2 Effective Time of the Merger 3
2.3 Effect of the Merger 3
2.4 Certain Information With Respect to
the Capital Stock of Cama, Cama
Acquisition, and ICCE 4
III. CONVERSION OF STOCK 4
3.1 Conversion of Outstanding Shares 4
3.2 No Fractional Shares 4
3.3 Treasury Shares 4
3.4 Change in Number of Shares 5
3.5 RIGHTS OF THE SHAREHOLDER 5
IV. CLOSING 5
4.1 The Closing Date 5
4.2 The Closing 5
V. REPRESENTATIONS AND WARRANTIES
OF CAMA AND THE SHAREHOLDER 6
(A) Representations and Warranties of Cama
and the Shareholder. 6
5.1 Due Organization 6
5.2 Authorization 6
5.3 Capital Stock of Cama 7
5.4 Transactions in Capital Stock 7
5.5 Subsidiaries 7
5.6 Predecessor Status, etc. 7
5.7 Spin-off by Cama 7
5.8 Financial Statements 7
5.9 Liabilities and Obligations 8
5.10 Accounts and Notes Receivable 8
5.11 Permits, Intangibles, and Intellectual
Property 8
5.12 Environmental Matters 9
5.13 Personal Property 9
5.14 Significant Customers; Material
Contracts and Commitments 10
5.15 Real Property 10
5.16 Insurance 10
5.17 Compensation; Employment
Agreements; Organized Labor Matters 11
5.18 Employee Plans 11
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5.19 Compliance with ERISA 11
5.20 Conformity with Law, Litigation 13
5.21 Taxes 13
5.22 No Violations 16
5.23 Government Contracts 16
5.24 Absence of Changes 16
5.25 Deposit Accounts, Powers of Attorney 18
5.26 Disclosure 18
5.27 18
(B) Representations and Warranties of
the Shareholder 18
5.28 Authority, Ownership 18
5.29 Preemptive Rights 18
VI. REPRESENTATIONS OF CAMA ACQUISITION
AND ICCE 19
6.1 Due Organization 19
6.2 Authorization 19
6.3 Capital Stock of ICCE
AND CAMA ACQUISITION 19
6.4 Transactions in Capital Stock,
Reorganization Accounting 19
6.5 Subsidiaries 19
6.6 Financial Statements 20
6.7 Liabilities and Obligations 20
6.8 Conformity with Law, Litigation 20
6.9 No Violations 20
6.10 ICCE Stock 20
6.11 No Side Agreements 20
6.12 Business; Real Property, Material
Agreements 21
6.13 Permits and Intangibles 21
6.14 Disclosure 21
VII. COVENANTS PRIOR TO CLOSING 21
7.1 Access and Cooperation; Due Diligence 21
7.2 Conduct of Business Pending Closing 22
7.3 Prohibited Activities 22
7.4 No Shop 23
7.5 Notification of Certain Matters 24
7.6 Further Assurances 24
7.7 Sale of Stock 24
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS
OF CAMA AND THE SHAREHOLDER 24
8.1 Representations and Warranties;
Performance of Obligations 24
8.2 No Litigation 25
8.3 Opinion of Counsel 25
8.4 Consents and Approvals 25
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8.5 Good Standing Certificates 25
8.6 No Material Adverse Change 25
8.7 Secretary's Certificate 25
8.8 Employment Agreements 25
8.9 Registration Rights 26
8.10 Shareholders Agreement 26
8.11 Financing 26
8.12 Agreements 26
IX. CONDITIONS PRECEDENT TO OBLIGATIONS OF ICCE 26
9.1 Representations and Warranties;
Performance of Obligations 26
9.2 No Litigation 26
9.3 Secretary's Certificate 26
9.4 No Material Adverse Effect 27
9.5 Shareholders' Release 27
9.6 Termination of Related Party Agreements 27
9.7 Opinion of Counsel 27
9.8 Consents and Approvals 27
9.9 Good Standing Certificates 27
9.10 Employment Agreements 27
9.11 Registration Rights 27
9.12 Shareholders Agreement 27
9.13 Affiliates Agreements 28
X. COVENANTS OF ICCE AFTER CLOSING 28
10.1 Preservation of Tax and Accounting
Treatment 28
10.2 Preparation and Filing of Tax Returns 28
10.3 Preservation of Employee Benefit Plans 29
XI. INDEMNIFICATION 29
11.1 Survival of Representations and
Warranties 29
11.2 Indemnification by the Shareholder 29
11.3 Indemnification by ICCE 29
11.4 Claims 29
11.5 Exclusive Remedy 30
11.6 Limitations on Indemnification 30
XII. TERMINATION OF AGREEMENT 31
12.1 Termination 31
XIII. GENERAL 31
13.1 Cooperation 31
13.2 Successors and Assigns 31
13.3 Entire Agreement 31
13.4 Counterparts 31
13.5 Brokers and Agents 31
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13.6 Expenses 32
13.7 Notices 32
13.8 Governing Law 32
13.9 Exercise of Rights and Remedies 33
13.10 Time 33
13.11 Reformation and Severability 33
13.12 Captions 33
13.13 Amendments and Waivers 33
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SCHEDULES and EXHIBITS
Schedule 5.1 - Qualifications to do Business; Fundamental Documents
Schedule 5.3 - Exceptions Regarding Capital Stock of Cama
Schedule 5.4 - Transactions in Capital Stock; Options & Warrants to
Acquire Capital Stock
Schedule 5.6 - Names of Predecessor Companies
Schedule 5.7 - Sales or Spin-Offs of Significant Assets
Schedule 5.8 - Initial Financial Statements
Schedule 5.9 - Significant Liabilities and Obligations
Schedule 5.10 - Accounts and Notes Receivable
Schedule 5.11 - Licenses, Franchises, Permits and Other Governmental
Authorizations
Schedule 5.12 - Environmental Matters
Schedule 5.13 - Personal Property
Schedule 5.14 - Significant Customers and Material Contracts
Schedule 5.15 - Real Property
Schedule 5.16 - Insurance Policies and Claims
Schedule 5.17 - Officers, Directors and Key Employees, Employment
Agreements; Compensation
Schedule 5.18 - Employee Benefit Plans
Schedule 5.19 - Violations of ERISA
Schedule 5.20 - Violations of Law, Regulations or Orders
Schedule 5.21 - Tax Returns and Examinations
Schedule 5.21(v) - Federal, State, Local and Foreign Income Tax Returns Filed
Schedule 5.21(xvii)- Aggregate Tax Losses
Schedule 5.22(a) - Violations of Charter and Documents and Material
Defaults
Schedule 5.23 - Governmental Contracts Subject to Price Redetermination or
Renegotiation
Schedule 5.24 - Changes Since Balance Sheet Date
Schedule 5.25 - Deposit Accounts; Powers of Attorney
Schedule 5.29 - Ownership of Cama Stock
Schedule 6.1 - Articles and Bylaws of ICCE
Schedule 6.3 - Ownership of ICCE Stock, etc.
Schedule 6.4 - Transactions in Capital Stock of ICCE
Schedule 6.7 - Liabilities and Obligations of ICCE
Schedule 6.8 - Conformity with Law; Litigation of ICCE
Schedule 6.9 - Violations of Charter Documents and Material Defaults of
ICCE
Schedule 6.12 - Real Property and Material Personal Property and Agreements
of ICCE
Schedule 7.2 - Exceptions to Conducting Business in the Ordinary Course
Between Balance Sheet Date and Consummation Date
Schedule 7.3 - Prohibited Activities
Schedule 8.13 - Financing
v
Schedule 9.6 - Exceptions to Terminations of Related Party Agreements
Exhibit A - Form of Articles of Merger
vi
Exhibit B - Form of Opinion of Nelson, Mullins, Xxxxx & Xxxxxxxxxxx,
LLP
Exhibit C - Form of Employment Agreement
Exhibit D - Form of Registration Rights Agreement
Exhibit E - Form of Shareholders Agreement
Exhibit F - Form of Opinion of Counsel to Cama
Exhibit G - Form of Affiliate Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
April 24, 1997, by and among ICCE, Inc., a Georgia corporation ("ICCE"), Cama
of Tampa, Inc., a Florida corporation ("Cama"), Cama Acquisition, Inc., a
Florida corporation ("Cama Acquisition"), and Xxxxxxx X. Xxxxxxxx (the
"Shareholder"). The Shareholder is the sole shareholder of Cama.
WHEREAS, ICCE is a corporation duly organized and existing under the laws
of the State of Georgia, having been incorporated on March 10, 1997;
WHEREAS, the respective Boards of Directors of ICCE and Cama deem it
advisable and in the best interests of Cama and the Shareholder that Cama,
pursuant to this Agreement and the applicable laws of the state of Florida,
merge with Cama Acquisition, a wholly owned subsidiary of ICCE pursuant to a
reverse triangular merger as more particularly set forth herein;
WHEREAS, the Shareholder will receive shares of ICCE stock pursuant to
such merger;
WHEREAS, the parties intend that the merger qualify as a tax-free
reorganization under Sections 351 and 368(a) of the Internal Revenue Code of
1986;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto agree as follows:
I. DEFINITIONS
Unless the context otherwise requires, capitalized terms used in this
Agreement or in any schedule or exhibit attached hereto and not otherwise
defined herein shall have the following meanings:
"1933 Act" means the Securities Act of 1933, as amended.
"Acquired Party" shall have the meaning set forth in Section 5.21(i).
"Articles of Merger" shall mean the Articles of Merger substantially in
the forms attached hereto as Exhibit A, with such changes as may be required by
Florida laws or agreement among the parties.
"Balance Sheet Date" shall mean December 31, 1996.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"COBRA" shall have the meaning set forth in Section 5.19.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company Financial Statements" shall have the meaning set forth in Section
5.8.
"Cama Stock" shall have the meaning set forth in Section 3.1.
"Conversion Ratios" shall have the meaning set forth in Section 3.1.
"Effective Time of the Merger" shall mean the time as set forth in Section
2.2.
"Environmental Laws" shall have the meaning set forth in Section 5.12.
"ERISA" means Employee Retirement Income Security Act of 1974.
"ICCE Documents" shall have the meaning set forth in Section 6.9.
"ICCE Stock" shall mean the common stock, no par value, of ICCE.
"Indemnification Threshold" shall have the meaning set forth in Section
11.6.
"Indemnified Party" shall have the meaning set forth in Section 11.4.
"Indemnifying Party" shall have the meaning set forth in Section 11.4.
"IRS" shall mean the United States Internal Revenue Service.
"Material Adverse Effect" shall mean a material adverse impact on the
business, operations, affairs, prospects, properties, assets or condition
(financial or otherwise) of the party referred to.
"Material Documents" shall have the meaning set forth in Section 5.22.
"Merger" shall mean the merger of Cama Acquisition with and into Cama as
described in Section 2.1 below and pursuant to this Agreement and the
applicable provisions of the State Laws.
"PBGC" means Pension Benefit Guaranty Corporation.
"Permits" shall have the meaning set forth in Section 5.11(a).
"Plans" shall have the meaning set forth in Section 5.18.
"Qualified Plans" shall have the meaning set forth in Section 5.19(ii).
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"Relevant Group" shall have the meaning set forth in Section 5.21(i).
"Returns" shall have the meaning set forth in Section 5.21.
"Rule" shall have the meaning set forth in Section 5.20.
"SEC" shall mean the United States Securities and Exchange Commission.
"State Laws" shall mean the corporation law of each of Georgia and
Florida.
"Statutory Liens" shall have the meaning set forth at the end of Section
7.3(v).
"Shareholder" shall have the meaning set forth in the first paragraph of
this Agreement.
"Tax" shall have the meaning set forth at the end of Section 5.21.
"Tax Losses" shall have the meaning set forth in Section 5.21(xvi).
"Taxing Authority" shall have the meaning set forth in Section 5.21.
II. THE MERGER
2.1 MERGER. Subject to the terms and conditions hereof and of the
Articles of Merger, Cama Acquisition shall be merged with and into Cama in
accordance with the applicable provisions of the State Laws; Cama shall be the
surviving corporation, shall continue its existence under the name of "Cama of
Tampa, Inc.", and shall succeed to and possess all of the assets, rights,
liabilities and debts of Cama Acquisition;
2.2 EFFECTIVE TIME OF THE MERGER. The Merger shall become effective at
such time as the Articles of Merger (i) have been executed by Cama and Cama
Acquisition in accordance with the applicable provisions of the State Laws,
(ii) have been duly filed with the appropriate authorities in Florida as
required by the State Laws, and (iii) have become effective in accordance with
their terms and the State Laws (the "Effective Time of the Merger").
2.3. EFFECT OF THE MERGER. Upon consummation of the Merger:
(i) the Articles of Incorporation of Cama then in effect shall
remain the Articles of Incorporation of Cama following the Merger;
(ii) the Bylaws of Cama then in effect shall remain the Bylaws of
Cama following the Merger;
(iii) the officers of Cama immediately prior to the Effective
Time of the Merger shall continue as the officers of Cama following the
Merger in the same capacity or capacities;
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(iv) the assets, liabilities, and debts of Cama shall remain the
assets, liabilities, and debts of Cama following the Merger.
2.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF CAMA, CAMA
ACQUISITION, AND ICCE. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of Cama and
of ICCE as of the date of this Agreement are as follows:
(i) the authorized and outstanding capital stock of Cama is:
Authorized Shares Outstanding
of Common Stock Shares
10,000 10,000
(ii) The authorized capital stock of ICCE consists of 45 million
shares of ICCE Stock, of which no shares are issued and outstanding, and 5
million shares of preferred stock, no par value, of which no shares are
issued and outstanding.
(iii) Cama Acquisition has 10,000 authorized shares of no par value
common stock, of which 1,000 shares are outstanding and owned by ICCE.
III. CONVERSION OF STOCK
3.1 CONVERSION OF OUTSTANDING SHARES. At the Effective Time of the
Merger, all of the stock of Cama issued and outstanding immediately prior to
the Effective Time of the Merger (the "Cama Stock") shall be converted into a
total of 131,143 shares of ICCE Stock according to the following conversion
ratio (the "Conversion Ratios"):
(i) Each outstanding share of common stock of Cama shall be
converted into 13.1143 shares of ICCE Stock; and
(ii) Each outstanding share of common stock of Cama Acquisition shall
be converted into one share of Cama common stock.
3.2 NO FRACTIONAL SHARES. No fractional shares shall be issued pursuant
to the Merger. To the extent the Shareholder is entitled to receive a
fractional share of ICCE Stock pursuant to Section 3.1 above, the number of
shares of ICCE Stock that the Shareholder shall be entitled to receive shall be
rounded down to the next lower whole number.
3.3 TREASURY SHARES. All shares of stock that are held by Cama as
treasury stock shall be retired and canceled and no shares of ICCE Stock or
other consideration shall be delivered or paid in exchange therefor.
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3.4 CHANGE IN NUMBER OF SHARES. (a) If, prior to the Closing Date, there
occurs an increase, decrease, or other change in the number of outstanding
shares of any of the Cama Stock as a result of a stock split, stock dividend,
reverse stock split, or other similar event, the Conversion Ratio under which
shares of such Cama Stock may be converted into the right to receive shares of
ICCE Stock pursuant to this Section 3.4 shall be proportionally adjusted so
that the aggregate number of shares of ICCE Stock to be issued in the Merger
and to be received by the Shareholder remains the same as set forth in Section
3.1 above.
(b) If, prior to the Closing Date, there occurs an increase, decrease, or
other change in the number of outstanding shares of ICCE Stock as a result of a
stock split, stock dividend, reverse stock split, or other similar event, the
Conversion Ratio under which shares of Cama Stock may be converted into the
right to receive shares of ICCE Stock shall be proportionally adjusted so that
the ownership interest of the Shareholder in ICCE shall remain the same.
Nothing in the foregoing shall be deemed to prohibit ICCE from taking any and
all such steps as are reasonably necessary to pursue and consummate such other
business reorganizations, mergers, acquisitions or securities distributions as
ICCE's management or its Board of Directors shall deem to be in the best
interests of ICCE and its shareholders.
3.5 RIGHTS OF THE SHAREHOLDER. All ICCE Stock received by the
Shareholder pursuant to this Agreement shall, except for restrictions on resale
or transfer described in any agreement among the parties hereof, have the same
rights as all outstanding shares of ICCE Stock prior to the Merger, including
all voting rights.
IV. CLOSING
4.1 THE CLOSING DATE. The closing of the Merger and the transactions
hereunder (the "Closing") shall occur on the date as determined by the parties,
which shall in any case be on or before May 15, 1997, unless otherwise agreed
in writing by the parties (the "Closing Date").
4.2 THE CLOSING. The Closing shall occur on the Closing Date at such
time and place as agreed upon by the parties. At the Closing the following
shall occur:
(i) The Articles of Merger shall be filed with the appropriate state
authorities, or if already filed shall become effective as provided
therein and the Merger shall thereby be effected;
(ii) The Shareholder shall deliver to ICCE the certificates
representing all of the applicable Cama Stock, duly endorsed in blank by
the Shareholder, or accompanied by blank stock powers, with all necessary
transfer tax and other revenue stamps, acquired at the Shareholder's
expense, affixed and canceled. To the extent any certificate representing
Cama Stock is lost or missing, the applicable Shareholder shall deliver an
affidavit of lost certificate and associated indemnifications in such form
as may be approved by ICCE and its legal counsel. The Shareholder agrees
to take all further actions necessary to cure any deficiencies with
respect to the endorsement of the stock
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certificates or other documents of conveyance with respect to such Cama
Stock or with respect to the stock powers accompanying any Cama Stock;
(ii) ICCE shall deliver to the Shareholder newly issued shares of
ICCE Stock in accordance with Section 3.1 above;
(iv) Cama shall deliver to ICCE newly issued shares of its common
stock in accordance with Section 3.1 above;
(v) The certificates representing outstanding stock in Cama
Acquisition shall be canceled; and
(vi) All other transactions contemplated herein shall be completed,
including the execution and delivery of the certificates pursuant to
Sections 8.1 and 9.1 hereunder, the Shareholders Agreement pursuant to
Sections 8.10 and 9.12, the Affiliate Letter pursuant to Section 9.13, the
Registration Rights Agreement pursuant to Section 8.9 and 9.11, and any
and all other documents required to be delivered hereunder.
V. REPRESENTATIONS AND WARRANTIES OF CAMA AND THE SHAREHOLDER
(A) REPRESENTATIONS AND WARRANTIES OF CAMA AND THE SHAREHOLDER.
Cama and the Shareholder represent and warrant to ICCE that, all of the
representations and warranties in this Article V(A) are true at the date of
this Agreement.
5.1 DUE ORGANIZATION. Cama is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and is duly authorized and qualified to do business under all applicable laws,
regulations, ordinances and orders of public authorities to carry on its
business in the places and in the manner as now conducted except (i) as set
forth on Schedule 5.1 or (ii) where the failure to be so authorized or
qualified would not have a Material Adverse Effect on Cama. Schedule 5.1
contains a list of all jurisdictions in which Cama is authorized or qualified
to do business. A certified copy of the Certificate or Articles of
Incorporation and a true, complete and correct copy of the Bylaws of Cama are
attached hereto as Schedule 5.1. The minute books and stock records of Cama as
provided to ICCE are correct and complete in all material respects.
5.2 AUTHORIZATION. The execution and delivery of this Agreement by Cama
and the completion of the transactions contemplated herein have been duly and
validly authorized by the Board of Directors and the Shareholder, the
representatives of Cama executing this Agreement have the authority to enter
into and bind Cama to the terms of this Agreement, Cama has the full legal
right, power and authority to enter into this Agreement and to effect the
Merger, and this Agreement is a legal, valid and binding obligation of Cama.
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5.3 CAPITAL STOCK OF CAMA. The authorized stock of Cama is as set forth
in Section 2.4(i). All of the issued and outstanding shares of the stock of
Cama are owned by the Shareholder in the amounts set forth on Schedule 5.3 and,
except as set forth on Schedule 5.3, such shares are owned free and clear of
all liens, security interests, pledges, charges, voting trusts, restrictions,
encumbrances and claims of every kind. There are no other shareholders of Cama
except as set forth on Schedule 5.3. All of the issued and outstanding shares
of the stock of Cama have been duly authorized and validly issued, are fully
paid and nonassessable, are owned of record and beneficially by the
Shareholder, and were offered, issued, sold and delivered by Cama in compliance
with all applicable state and Federal securities and other laws. No shares
were issued in violation of the preemptive rights of any past or present
shareholder.
5.4 TRANSACTIONS IN CAPITAL STOCK. Except as set forth on Schedule 5.4,
Cama has not acquired any Cama Stock since January 1, 1992. No option,
warrant, call, conversion right or commitment of any kind exists which
obligates Cama to issue any of its authorized but unissued capital stock. Cama
has no obligation (contingent or otherwise) to purchase, redeem or otherwise
acquire any of its equity securities or any interests therein or to pay any
dividend or make any distribution in respect thereof. Neither the voting stock
structure of Cama nor the relative ownership of shares among any of its
respective shareholders has been altered or changed in contemplation of the
Merger.
5.5 SUBSIDIARIES. Cama does not own, of record or beneficially, any
capital stock or other equity interest in any entity, nor is Cama, directly or
indirectly, a participant in any joint venture, partnership or other non-
corporate entity.
5.6 PREDECESSOR STATUS, ETC. Schedule 5.6 lists the names of all
predecessor companies of Cama, including the names of any entities acquired by
Cama (by stock purchase, merger, or otherwise) or from whom Cama previously
acquired material assets. Except as set forth on Schedule 5.6, Cama has not
been a subsidiary or division of another corporation or a part of an
acquisition which was later rescinded and Cama has never operated under any
trade or fictitious name in any jurisdiction.
5.7 SPIN-OFF BY CAMA. Except as set forth on Schedule 5.7, there has
never been any sale, spin-off, split-off or split-up of material assets of
either Cama or any other person or entity that directly or indirectly controls,
is controlled by, or is under common control with Cama.
5.8 FINANCIAL STATEMENTS. Schedule 5.8 contains copies of the following
financial statements of Cama (the "Company Financial Statements"): Cama's
preliminary and tentative audited Consolidated Balance Sheets as of December
31, 1996 and 1995, and Statements of Income, Cash Flows and Retained Earnings
for each year in the three-year period ended December 31, 1996. Except as set
forth on Schedule 5.8, the Company Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated, and all such Consolidated
Balance Sheets, Statements of Income, Cash Flows and Retained Earnings present
fairly in all material respects the financial position and results of
operations of Cama as of the dates indicated thereon.
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5.9 LIABILITIES AND OBLIGATIONS. Except as set forth on Schedule 5.9 or
reflected on or reserved against in the balance sheet of Cama as of the Balance
Sheet Date, Cama does not have any liabilities or obligations, other than
liabilities incurred in the ordinary course of business in accordance with past
practice which would not have a Material Adverse Effect on Cama. Schedule 5.9
contains the following information with respect to any liabilities for pending
or threatened litigation or other liabilities for which the amount thereof has
not been fixed, accrued or reserved:
(i) a summary description of the liability, including amounts
claimed and any other action or relief sought;
(ii) copies of all relevant documentation relating thereto; and
(iii) in the case of litigation, the name of the claimants and
all other parties to the suit, the name of each court or agency before
which such suit is pending, and the date such suit was filed or
instituted.
5.10 ACCOUNTS AND NOTES RECEIVABLE. Schedule 5.10 contains an accurate
list of each of the accounts and notes receivable of Cama as of a date no later
than 60 days prior to the date of this Agreement, and a list of all receivables
from and advances to employees and the Shareholder separately indicated as
such. All accounts and notes receivable are collectible in the amount shown on
Schedule 5.10, except as reserved against in the balance sheet of Cama or as
set forth on Schedule 5.10.
5.11 PERMITS, INTANGIBLES, AND INTELLECTUAL PROPERTY. (a) Cama holds all
licenses, franchises, permits, registrations, and other governmental
authorizations, licenses, franchises, and certificates, the absence of any of
which could have a Material Adverse Effect on its business (the "Permits").
Schedule 5.11 contains an accurate list and summary description of the Permits.
To the best of Cama's or the Shareholder's knowledge, the Permits are valid and
currently in effect, and Cama has not received any notice that any governmental
authority intends to cancel, terminate, or not renew any Permit. Cama has
conducted and is conducting its business in compliance with the requirements,
standards, criteria and conditions set forth in applicable permits, licenses,
orders, approvals, variances, rules and regulations and is not in violation of
any of the foregoing except where such non-compliance or violation would not
have a Material Adverse Effect on Cama.
(b) Schedule 5.11 contains a list of (i) all trademarks, service marks,
and trade names owned, used, or licensed by Cama or in which Cama otherwise
claims any rights, (ii) all state or federal registrations and applications for
registration of any trademark or service xxxx of Cama, and (iii) all copyright
applications and registrations, patents, and patent applications pertaining to
Cama, its business or affairs. Except as set forth on Schedule 5.11, no such
registration or application has been challenged, opposed, or invalidated, and
there are no known claims or encumbrances against any of them. Schedule 5.11
contains a complete and accurate list of all computer software, programs, and
other proprietary computer or other technology owned, developed, or licensed by
Cama or in which Cama otherwise claims any right, other than retail shrink-wrap
license software. To the best of Cama's or the Shareholder's knowledge,
8
except as set forth on Schedule 5.11, no such computer software, program or
other technology infringes upon any copyright, patent, trade secret, or other
intellectual property right of any third party. Except as set forth on
Schedule 5.11, all such computer programs, and all intellectual property rights
therein including copyrights, developed by or for Cama are owned solely by Cama
and have either been produced by employees of Cama as works for hire under
Federal copyright law or have been assigned to Cama in enforceable technology
transfer agreements. Except as set forth on Schedule 5.11, all such computer
software, programs and other technology (i) function properly and (ii) are
capable of functioning and of recognizing and processing dates after January 1,
2000, to the same extent that they currently function.
(c) Except as specifically provided on Schedule 5.11, the transactions
contemplated by this Agreement will not result in a default under, a breach or
violation of, or have a Material Adverse Effect on the rights and benefits
afforded to Cama by any item listed on Schedule 5.11.
5.12 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.12, to the
best of Cama's or the Shareholder's knowledge, (i) Cama has complied with and
is in compliance with all Federal, state, local and foreign statutes (civil and
criminal), laws, ordinances, regulations, rules, notices, permits, judgments,
orders and decrees applicable to it or any of its respective properties,
assets, operations and businesses relating to environmental protection
(collectively "Environmental Laws") including, without limitation,
Environmental Laws relating to air, water, land and the generation, storage,
use, handling, transportation, treatment or disposal of Hazardous Wastes and
Hazardous Substances (as such terms are defined in any applicable Environmental
Law); (ii) Cama has and is in compliance with all necessary permits and other
approvals necessary to treat, transport, store, dispose of, and otherwise
handle Hazardous Wastes and Hazardous Substances; (iii) there have been no
releases or threats of releases (as defined in Environmental Laws) at, from,
in, or on any property owned or operated by Cama in violation of any
Environmental Law; (iv) Cama knows of no on-site or off-site location to which
Cama has transported or disposed of Hazardous Wastes or Hazardous Substances or
arranged for the transportation of Hazardous Wastes or Hazardous Substances,
which site is the subject of any Federal, state, local or foreign enforcement
action or any other investigation which could lead to any claim against Cama or
ICCE for any clean-up cost, remedial work, damage to natural resources or
personal injury, including, but not limited to, any claim under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended; and (v) Cama has no contingent liability in connection with any
release of any Hazardous Waste or Hazardous Substance into the environment.
5.13 PERSONAL PROPERTY. Schedule 5.13 contains an accurate list of (i)
all personal property reflected on the balance sheet of Cama at the Balance
Sheet Date, (ii) each other item of personal property owned or used by Cama
which has a value in excess of $2,500 as of the Closing Date, and (iii) all
leases and agreements in respect of personal property. Schedule 5.13 contains
(i) true, complete and correct copies of all such leases, (ii) a listing of the
capital costs of all assets subject to capital leases, and (iii) an indication
of which assets are currently owned, or were formerly owned, by the Shareholder
or business or personal affiliates of Cama or the Shareholder. Except as set
forth on Schedule 5.13, (i) all personal property used by Cama in its business
is either owned by Cama or leased by Cama pursuant to a lease included on
Schedule 5.13, (ii) all of the personal property listed on Schedule 5.13 is in
good working order
9
and condition, ordinary wear and tear excepted, and (iii) all leases and
agreements included on Schedule 5.13 are in full force and effect and
constitute valid and binding agreements of the parties (and their successors)
thereto in accordance with their respective terms.
5.14 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS. (a)
Schedule 5.14 contains an accurate list of all customers representing 5% or
more of Cama's annual revenues for the years ended December 31, 1995 and 1996.
Except to the extent set forth on Schedule 5.14, no such customer has canceled
or substantially reduced or, to the best of Cama's or the Shareholder's
knowledge, is currently attempting or threatening to cancel a contract or
substantially reduce utilization of the services provided by Cama.
(b) Cama has listed on Schedule 5.14 all material contracts, commitments
and similar agreements to which Cama is a party or by which it or any of its
properties are bound, including, but not limited to, contracts with significant
customers, joint venture or partnership agreements, contracts with any labor
organizations, strategic alliances, loan agreements, indemnity or guaranty
agreements, bonds, mortgages, options to purchase land, liens, pledges or other
security agreements, and licenses for software or other intellectual property.
Cama has delivered true, complete and correct copies of such agreements to
ICCE. Cama is not in default under any contracts or agreements and no notice
of default under any such contract or agreement has been received which default
would have a Material Adverse Effect on Cama. Schedule 5.14 contains a summary
description of all plans or projects involving the opening of new operations,
expansion of existing operations, the acquisition of any personal property,
business or assets requiring, in any event, the payment of more than $20,000 by
Cama.
5.15 REAL PROPERTY. Schedule 5.15 includes a list of all real property
owned or leased by Cama and all other real property, if any, used by Cama in
the conduct of its business. Cama has good and insurable title to the real
property owned by it subject to no material mortgage, pledge, lien, conditional
sales agreement, encumbrance or charge, except as reflected on Schedule 5.15.
Schedule 5.15 shall, without limitation, contain true, complete and correct
copies of all title reports and title insurance policies for real property
owned by Cama. Schedule 5.15 contains a true, complete, and correct copy of
all leases and agreements in respect of real property leased by Cama, and an
indication as to which such properties, if any, are currently owned, or were
formerly owned, by the Shareholder or business or personal affiliates of Cama
or the Shareholder. Except as set forth on Schedule 5.15, all of such leases
are in full force and effect and constitute valid and binding agreements of the
parties and their successors in accordance with their respective terms.
5.16 INSURANCE. Schedule 5.16 contains (i) an accurate list of all
insurance policies carried by Cama, (ii) an accurate list of all insurance loss
runs or workers compensation claims received since January 1, 1994, and (iii)
true, complete and correct copies of all insurance policies currently in
effect. Such insurance policies are currently in full force and effect and
shall remain in full force and effect through the Closing Date. Except as set
forth on Schedule 5.16, no insurance carried by Cama has ever been canceled by
the insurer and Cama has never been denied coverage.
10
5.17 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS.
Schedule 5.17 contains a list of all officers, directors, key employees and
staff of Cama, all employment agreements with any of them, and a description of
the compensation (and the portions thereof attributable to salary, bonus and
other compensation, respectively) of each such person. Cama has provided to
ICCE true, complete and correct copies of any employment agreements for persons
listed on Schedule 5.17. Except as set forth on Schedule 5.17, since the
Balance Sheet Date, there have been no increases in the compensation payable or
any special bonuses to any officer, director, key employee or other employee,
except salary increases in the ordinary course of business implemented on a
basis consistent with past practices. Cama is not bound by or subject to any
arrangement with any labor union. No employees of Cama are represented by any
labor union or covered by any collective bargaining agreement. No campaign to
establish such representation is in progress. There is no pending or, to the
best of Cama's and the Shareholder's knowledge, threatened labor dispute
involving Cama or any group of its employees, nor has Cama experienced any
labor interruptions over the past three years. Neither Cama nor the
Shareholder has any knowledge of the intent of any employee (or employees) to
leave Cama as a result of the Merger or otherwise whose departure(s) would have
a Material Adverse Effect on Cama.
5.18 EMPLOYEE PLANS. Attached hereto as Schedule 5.18 are complete and
accurate copies, as of the date of this Agreement, of all employee benefit
plans, all employee welfare benefit plans, all employee pension benefit plans,
all multi-employer plans and all multi-employer welfare arrangements (as
defined in Sections 3(3), (1), (2), (37) and (40), respectively, of ERISA,
which are currently maintained and/or sponsored by Cama, or any benefit plans
or arrangements, formal or informal, that are not subject to ERISA, including,
without limitation, employment agreements and any other agreements containing
"golden parachute" provisions and deferred compensation agreements, or to which
Cama currently contributes, or has an obligation to contribute in the future
(including, without limitation, benefit plans or arrangements that are not
subject to ERISA, such as employment agreements and any other agreements
containing "golden parachute" provisions and deferred compensation agreements),
together with copies of any trusts related thereto and a classification of
employees covered thereby (collectively, the "Plans"). Schedule 5.18 sets
forth all of the Plans that have been terminated within the past three years.
5.19 COMPLIANCE WITH ERISA. (a) Except for the Plans, Cama does not
maintain or sponsor, and is not a contributing employer to, a pension, profit-
sharing, deferred compensation, stock option, employee stock purchase or other
employee benefit plan, employee welfare benefit plan, or any other compensation
or benefit arrangement, formal or informal, with any of their respective
employees, whether or not subject to ERISA.
(b) Except as set forth on the Schedule 5.19 to best of Cama's or the
Shareholder's knowledge, (i) all Plans are in substantial compliance with all
applicable provisions of ERISA and the regulations issued thereunder, as well
as with all other applicable laws, and, in all material respects, have been
administered, operated and managed in substantial accordance with the governing
documents; (ii) all Plans that are intended to qualify (the "Qualified Plans")
under Section 401(a) of the Code are so qualified and have been determined by
the IRS to be so qualified, and copies of the current plan determination
letters, most recent actuarial valuation
11
reports, if any, most recent Form 5500, or, as applicable, Form 5500-C/R filed
with respect to each such Qualified Plan or employee welfare benefit plan and
most recent trustee or custodian report, are included as part of Schedule 5.19;
(iii) to the extent that any Qualified Plans have not been amended to comply
with applicable law, the remedial amendment period permitting retroactive
amendment of such Qualified Plans has not expired and will not expire within
120 days after the Closing Date; (iv) all reports and other documents required
to be filed with any governmental agency or distributed to plan participants or
beneficiaries (including, but not limited to, annual reports, summary annual
reports, actuarial reports, PBGC-1 Reports, audits or tax returns) have been
timely filed or distributed, or failure to timely file or deliver will not
result in a Material Adverse Effect to Cama; (v) the Shareholder, any Plan, or
Cama has engaged in any transaction prohibited under the provisions of Section
4975 of the Code or Section 406 of ERISA; (vi) no Plan has incurred an
accumulated funding deficiency, as defined in Section 412(a) of the Code and
Section 302(1) of ERISA; (vii) no circumstances exist pursuant to which Cama
could have any direct or indirect liability whatsoever (including being subject
to any statutory lien to secure payment of any such liability), to the PBGC
under Title IV of ERISA or to the IRS for any excise tax or penalty with
respect to any plan now or hereafter maintained or contributed to by Cama;
(viii) Cama currently has (or at the Closing Date will have) no obligation
whatsoever to contribute to any "multi-employer pension plan" (as defined in
ERISA Section 4001(a)(14)), nor has any withdrawal liability whatsoever
(whether or not yet assessed) arising under, or capable of assertion under,
Title IV of ERISA (including, but not limited to, Sections 4201, 4202, 4203,
4204, or 4205 thereof) been incurred by any Plan; (ix) there have been no
terminations, partial terminations or discontinuance of contributions to any
Qualified Plan without notice to and approval by the IRS; (x) no Plan which is
subject to the provisions of Title IV of ERISA has been terminated; (xi) there
have been no "reportable events" (as that phrase is defined in Section 4043 of
ERISA) with respect to any Plan which were not properly reported; (xii) the
valuation of assets of any Qualified Plan, as of the Closing Date, will exceed
the actuarial present value of all accrued pension benefits under any such
Qualified Plan in accordance with the assumptions contained in the Regulations
of the PBGC governing the funding of terminated defined benefit plans; (xiii)
with respect to Plans which qualify as "group health plans" under Section 4980B
of the and Section 607(l) of ERISA and related regulations (relating to the
benefit continuation rights imposed by "COBRA"), Cama and the Shareholder have
complied (and on the Closing Date will have complied) in all material respects
with all reporting, disclosure, notice, election and other benefit continuation
requirements imposed thereunder as and when applicable to such plans, and Cama
has not incurred (and will not incur) any material direct or indirect liability
and is not (and will not be) subject to any material loss, assessment, excise
tax penalty, loss of Federal income tax deduction or other sanction, arising on
account of or in respect of any direct or indirect failure by Cama or the
Shareholder, at any time prior to the Closing Date, to comply with any such
Federal or state benefit continuation requirement, which is capable of being
assessed or asserted before or after the Closing Date directly or indirectly
against Cama or the Shareholder with respect to such group health plans; (xiv)
Cama is not now, nor has it been within the past five years, a member of a
"controlled group" as defined in ERISA Section 4001(a)(14); (xv) there is no
pending litigation, arbitration, or disputed claim, settlement or adjudication
proceeding, and to the best of Cama's or the Shareholder's knowledge, there is
no threatened litigation, arbitration or disputed claim, settlement or
adjudication proceeding, or any governmental or other proceeding, or
investigation with respect to any Plan, or with respect to any fiduciary,
administrator, or
12
sponsor thereof (in their capacities as such), or any party in interest
thereof; (xvi) Company Financial Statements as of the Balance Sheet Date
reflect the approximate total pension, medical and other benefit expense for
all Plans, and no material funding changes or irregularities are reflected
thereon which would cause such Financial Statements to be not
representative of most prior periods; and (xvii) Cama has not incurred
liability under Section 4062 of ERISA.
(c) Cama has not entered into any contract under which it has assumed any
liability related to any other person's qualified retirement plan. Cama has
not made any representation or warranty to any person that the use of Cama's
temporary employees would not have an adverse impact on such person's qualified
benefit plan.
(d) Cama is not subject to regulation or licensing in any jurisdiction in
which it currently operates, pursuant to any Rule, as an employee leasing
company or professional employer organization. Cama does not engage in
"Employee Leasing." For purposes hereof, "Employee Leasing" shall mean an
arrangement whereby a client of Cama places some or all of its workforce onto
the payroll of Cama in a co-employment relationship in which Cama assumes
responsibility for administration of payroll, benefits, and other human
resources activities for the client. "Employee Leasing" does not include a
temporary help arrangement, whereby an organization hires its own employees and
assigns them to a client to support or supplement the client's workforce in
special work situations such as employee absences, temporary skill shortages,
seasonal workloads, and special assignments and projects.
5.20 CONFORMITY WITH LAW, LITIGATION. Except to the extent set forth on
Schedule 5.20, Cama has conducted its business in accordance with, has not
violated, and is not in violation of any law, rule, statute, ordinance,
regulation, or any order of any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
including but not limited to the rules and regulations of the U.S. Department
of Justice Immigration and Naturalization Services regarding Employment
Eligibility Verification (a "Rule") which would have a Material Adverse Effect
on Cama. Except to the extent set forth on Schedule 5.20, there are no
material claims, actions, suits or proceedings, pending or, to the best of
Cama's or its Shareholder's knowledge, threatened, against or affecting Cama,
at law or in equity, or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
and no notice of any claim, action, suit or proceeding, whether pending or
threatened, has been received. The delivery of this Agreement and performance
hereunder will not cause Cama to violate any Rule.
5.21 TAXES. Except as set forth on Schedule 5.21:
(i) All Returns required to have been filed with any Taxing
Authority by or with respect to Cama or any affiliated, combined,
consolidated, unitary or similar group of which Cama is or was a member (a
"Relevant Group") have been duly filed, and each such Return correctly and
completely reflects the income, franchise or other Tax liability and all
other information required to be reported thereon. All Taxes (whether or
not shown on any Return) owed by Cama, any subsidiary and any member of a
Relevant Group (individually, the "Acquired Party" and collectively, the
"Acquired Parties") have been paid.
13
(ii) The provisions for Taxes due by Cama and any subsidiaries (as
opposed to any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) in Company Financial Statements
are sufficient for all unpaid Taxes.
(iii) No Acquired Party is a party to any agreement extending the
time within which to file any Return. No claim has ever been made by any
Taxing Authority in a jurisdiction in which an Acquired Party does not
file Returns that it is or may be subject to taxation by that
jurisdiction.
(iv) Each Acquired Party has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to
any employee, creditor, independent contractor or other third party.
(v) No Acquired Party expects any Taxing Authority to assess any
additional Taxes against or in respect of it for any past period. There
is no dispute or claim concerning any Tax liability of any Acquired Party
either (i) claimed or raised by any Taxing Authority or (ii) otherwise
known to any Acquired Party. No issues have been raised in any
examination by any Taxing Authority with respect to any Acquired Party
which, by application of similar principles, reasonably could be expected
to result in a proposed deficiency for any other period not so examined.
Schedule 5.21(v) attached hereto lists all Federal, state, local and
foreign income Tax Returns filed by or with respect to any Acquired Party
for all taxable periods ended on or after January 1, 1991, indicates those
Returns, if any, that have been audited, and indicates those Returns that
currently are the subject of audit. Each Acquired Party has delivered to
ICCE complete and correct copies of all federal, state, local and foreign
income Tax Returns filed by, and all Tax examination reports and
statements of deficiencies assessed against or agreed to by, such Acquired
Party since January 1, 1993.
(vi) No Acquired Party has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to any
Tax assessment or deficiency.
(vii) No Acquired Party has made any payments, is obligated to
make any payments, or is a party to any agreement that under certain
circumstances could require it to make any payments, that are not
deductible under Section 280G of the Code.
(viii) No Acquired Party is a party to any Tax allocation or
sharing agreement.
(ix) None of the assets of any Acquired Party constitutes tax-exempt
bond financed property or tax-exempt use property, within the meaning of
Section 168 of the Code. No Acquired Party is a party to any "safe harbor
lease" that is subject to the provisions of Section 168(f)(8) of the Code
as in effect prior to the Tax Reform Act of 1986, or to any "long-term
contract" within the meaning of Section 460 of the Code.
(x) No Acquired Party is a "consenting corporation" within the
meaning of Section 341(f)(1) of the Code, or comparable provisions of any
state statutes, and none
14
of the assets of any Acquired Party is subject to an election under
Section 341(f) of the Code or comparable provisions of any state statutes.
(xi) No Acquired Party is a party to any joint venture, partnership
or other arrangement that is treated as a partnership for Federal income
Tax purposes.
(xii) There are no proposed accounting method changes or, to the
best of Cama's or the Shareholder's knowledge, threatened accounting
method changes, of any Acquired Party that could give rise to an
adjustment under Section 481 of the Code for periods after the Closing
Date.
(xiii) No Acquired Party has received any written ruling of a
Taxing Authority related to Taxes or entered into any written and legally
binding agreement with a Taxing Authority relating to Taxes.
(xiv) Each Acquired Party has disclosed (in accordance with
Section 6662(d)(2)(B)(ii) of the Code) on its Federal income Tax Returns
all positions taken therein that could give rise to a substantial
understatement of Federal income Tax within the meaning of Section 6662(d)
of the Code.
(xv) No Acquired Party has any liability for Taxes of any person
other than such Acquired Party (i) under Section 1.1502-6 of the
regulations promulgated pursuant to the Code (the "Treasury Regulations")
(or any similar provision of state, local or foreign law), (ii) as a
transferee or successor, (iii) by contract, or (iv) otherwise.
(xvi) There currently are no limitations on the utilization of
the net operating losses, built-in losses, capital losses, tax credits or
other similar items of any Acquired Party (collectively, the "Tax Losses")
under (i) Section 382 of the Code, (ii) Section 383 of the Code, (iii)
Section 384 of the Code, (iv) Section 269 of the Code, (v) Section 1.1502-
15 and Section 1.1502-15A of the Treasury Regulations, (vi) Section
1.1502-21 and Section 1.1502-21A of the Treasury Regulations, or (vii)
Sections 1.1502-91 through 1.1502-99 of the Treasury Regulations, in each
case as in effect both prior to and following the Tax Reform Act of 1986.
(xvii) At the Closing Date, Cama will not have outstanding any
warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in Cama which, if
exercised or converted, would affect ICCE's acquisition or retention of
ownership of more than 100% of the total combined voting power of all
classes of Cama Stock and more than 80% of the total number of shares of
each class of Cama non-voting stock.
(xviii) Cama is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
(xix) The fair market value of the assets of Cama exceeds the sum
of its liabilities, plus the amount of liabilities, if any, to which the
assets are subject.
15
(xx) Cama is not under the jurisdiction of a court in a Title II or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
For purposes of this Section 5.21, the following definitions shall apply:
"Returns" means any returns, reports or statements (including any
information returns) required to be filed for purposes of any Tax or with any
Taxing Authority.
"Tax" or "Taxes" means all Federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, sales, use,
property, deed, stamp, alternative or add-on minimum, environmental or other
taxes, assessments, duties, fees, levies or other governmental charges of any
nature whatever, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"Taxing Authority" means any governmental agency, board, bureau, body,
department or authority of any United States Federal, state or local
jurisdiction or any foreign jurisdiction, having or purporting to exercise
jurisdiction with respect to any Tax.
5.22 NO VIOLATIONS. Cama is not in violation of its Articles of
Incorporation or Bylaws. Neither Cama nor, to best of Cama's or the
Shareholder's knowledge, any other party thereto, is in default under any
lease, instrument, agreement, license, or permit set forth on any Schedule
hereto, or any other material agreement to which it is a party or by which its
properties are bound (the "Material Documents"); and, except as set forth on
Schedule 5.22, the execution of this Agreement and the performance of the
obligations hereunder and the consummation of the transactions contemplated
hereby will not result in any violation or breach, or constitute a default
under, any of the terms or provisions of the Material Documents or the
Certificate or Articles of Incorporation or the Bylaws of Cama, which
violation, breach, or default would have a Material Adverse Effect on Cama.
Except as set forth on Schedule 5.22, none of the Material Documents requires
notice to, or the consent or approval of any third party with respect to any of
the transactions contemplated hereby, and consummation of the transactions
contemplated hereby will not give rise to any right to termination,
cancellation, acceleration, or loss of any right or benefit. Except as set
forth on Schedule 5.22, none of the Material Documents prohibits the use or
publication by Cama or ICCE of the name of any other party to such Material
Document, and none of the Material Documents prohibits or restricts Cama from
freely providing services to any other customer, potential customer, Cama, or
ICCE.
5.23 GOVERNMENT CONTRACTS. Except as set forth on Schedule 5.23, Cama is
not now a party to any governmental contracts subject to price redetermination
or renegotiation.
5.24 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set
forth on Schedule 5.24, there has not been:
(i) any change in the financial condition, assets, liabilities
(contingent or otherwise), income or business of Cama which has had a
Material Adverse Effect on Cama;
16
(ii) any damage, destruction or loss (whether or not covered by
insurance) which had or may have a Materially Adverse Effect on Cama;
(iii) any change in the authorized capital of Cama or its
outstanding securities or any change in its ownership interests or any
grant of any options, warrants, calls, conversion rights or commitments
with respect to Cama's securities;
(iv) any declaration or payment of any dividend or distribution in
respect of the capital stock or any direct or indirect redemption,
purchase or other acquisition of any of the capital stock of Cama other
than S corporation dividends consistent with past practice;
(v) any increase in the compensation, bonus, sales commissions or
fee arrangement payable or to become payable by Cama to any of its
officers, directors, shareholders, employees, consultants or agents,
except for ordinary and customary bonuses and salary increases for
employees in accordance with past practice;
(vi) any work interruptions, labor grievances, or claims filed, or
any event or condition of any character which had or may have a Material
Adverse Effect on Cama;
(vii) any sale or transfer, or any agreement to sell or transfer,
any material assets, property or rights of Cama to any person, including,
without limitation, the Shareholder and his affiliates;
(viii) any cancellation, or agreement to cancel, any indebtedness
or other obligation owing to Cama, including, without limitation, any
indebtedness or obligation of the Shareholder or any affiliate thereof;
(ix) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets, property,
or rights of Cama or requiring consent of any party to the transfer and
assignment of any such assets, property or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets outside
of the ordinary course of Cama's business;
(xi) any waiver of any material rights or claims of Cama;
(xii) any breach, amendment, or termination of any material
contract, agreement, license, permit or other right to which Cama is a
party;
(xiii) any transaction by Cama outside the ordinary course of its
business;
(xiv) any cancellation or termination of a material contract with
a customer or client; or
17
(xv) any other distribution of property or assets by Cama.
5.25 DEPOSIT ACCOUNTS, POWERS OF ATTORNEY. Schedule 5.25 sets forth as of
the date of this Agreement:
(i) the name of each financial institution in which Cama has
accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or have
access thereto.
Schedule 5.25 also sets forth the name of each person, corporation, firm
or other entity holding a general or special power of attorney from Cama and a
description of the terms of such power.
5.26 DISCLOSURE. This Agreement, including the schedules hereto, presents
fairly the business and operations of Cama as addressed in the representations
and warranties. Cama's rights under the documents delivered pursuant hereto
would not be materially adversely affected by, and no statement made herein by
Cama or the Shareholder would be rendered untrue by, any other document to
which Cama or the Shareholder is a party, or by which its properties are
subject, or by any other fact or circumstance known to Cama or to the
Shareholder that is not otherwise disclosed herein.
5.27 NOT USED
(B) REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder represents and warrants to ICCE that all of the
representations and warranties in this Article V(B) are true at the date of
this Agreement and shall be true on the Closing Date.
5.28 AUTHORITY, OWNERSHIP. The Shareholder has the full legal right,
power and authority to enter into this Agreement. The Shareholder owns
beneficially and of record all of the shares of the Cama Stock identified on
Schedule 5.3 and, except as set forth on Schedule 5.28, such Cama Stock is
owned free and clear of all liens, encumbrances, and claims of every kind.
5.29 PREEMPTIVE RIGHTS. Except as set forth in the ICCE Shareholders
Agreement, the Shareholder does not have, or hereby permanently waives, any
preemptive or other rights to acquire shares of Cama Stock or ICCE Stock that
the Shareholder has or may have had other than the rights of the Shareholder to
acquire ICCE Stock pursuant to (i) this Agreement or (ii) any option granted by
ICCE.
18
VI. REPRESENTATIONS OF CAMA ACQUISITION AND ICCE
ICCE and Cama Acquisition, as applicable, represent and warrant to Cama
and to the Shareholder that all of the following representations and warranties
in this Article VI are true at the date of this Agreement.
6.1 DUE ORGANIZATION. Each of ICCE and Cama Acquisition is a corporation
duly organized, validly existing and in good standing under the laws of the
state where it was organized, is duly authorized and qualified to do business
under all applicable laws, regulations, ordinances and orders of public
authorities to carry on its business in the places and in the manner as now
conducted except where the failure to be so authorized or qualified would not
have a Material Adverse Effect on Cama. True, complete and correct copies of
the Articles of Incorporation and Bylaws of ICCE are attached hereto as
Schedule 6.1.
6.2 AUTHORIZATION. The execution and delivery of this Agreement by ICCE
and Cama Acquisition and the completion of the transactions contemplated herein
have been duly and validly authorized by the Board of Directors of ICCE and
Cama Acquisition. The representatives of ICCE and Cama Acquisition executing
this Agreement have the authority to enter into and bind their respective
corporations to the terms of this Agreement, ICCE and Cama Acquisition has the
full legal right, power and authority to enter into this Agreement and the
Merger, and this Agreement is a legal, valid and binding obligation of ICCE and
Cama Acquisition.
6.3 CAPITAL STOCK OF ICCE AND CAMA ACQUISITION. The authorized capital
stock of ICCE and of Cama Acquisition is as set forth in Section 2.4(ii) and
(iii). All of the issued and outstanding stock of Cama Acquisition is owned by
ICCE. All of the issued and outstanding shares of the capital stock of Cama
Acquisition and of ICCE have been duly authorized and validly issued, are fully
paid and nonassessable, were offered, issued, sold and delivered by ICCE and
Cama Acquisition in compliance with all applicable state and Federal laws
concerning the issuance of securities, and were not issued in violation of the
preemptive rights of any past or present shareholder.
6.4 TRANSACTIONS IN CAPITAL STOCK, REORGANIZATION ACCOUNTING. Except as
set forth on Schedule 6.4, no option, warrant, call, conversion right or
commitment of any kind exists which obligates ICCE or Cama Acquisition to issue
any of its authorized but unissued capital stock. Neither ICCE nor Cama
Acquisition has any obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests therein or to
pay any dividend or make any distribution in respect thereof. Schedule 6.4
contains a list of all stock option or stock purchase plans for ICCE, including
a list, accurate as of the date of this Agreement hereof, of all outstanding
options, warrants, or other rights to acquire shares of ICCE's stock.
6.5 SUBSIDIARIES. ICCE has no subsidiaries other than Cama Acquisition.
Cama Acquisition has no subsidiaries. Neither ICCE nor Cama Acquisition
presently owns, of record or beneficially, any capital stock or other equity
interest in any entity, nor is ICCE or Cama
19
Acquisition, directly or indirectly, a participant in any joint venture,
partnership, or other non-corporate entity.
6.6 FINANCIAL STATEMENTS. There are no prepared financial statements for
ICCE or Cama Acquisition.
6.7 LIABILITIES AND OBLIGATIONS. Except as set forth on Schedule 6.7,
neither ICCE nor Cama Acquisition has any material liabilities, contingent or
otherwise, except as set forth in or contemplated by this Agreement and except
for fees and expenses incurred in connection with the transactions contemplated
hereby and thereby.
6.8 CONFORMITY WITH LAW, LITIGATION. Except to the extent set forth on
Schedule 6.8, neither ICCE nor Cama Acquisition is in violation of any Rule
which would have a Material Adverse Effect. Except to the extent set forth on
Schedule 6.8, there are no material claims, actions, suits or proceedings,
pending or, to the knowledge of ICCE or Cama Acquisition, threatened, against
or affecting ICCE or Cama Acquisition, at law or in equity, or before or by any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality having jurisdiction over ICCE or any of Cama
Acquisition, and no notice of any claim, action, suit or proceeding, whether
pending or threatened, has been received. The delivery of this Agreement and
performance hereunder will not cause ICCE or Cama Acquisition to violate any
Rule.
6.9 NO VIOLATIONS. Neither ICCE nor Cama Acquisition is (i) in violation
of any of its Articles of Incorporation or Bylaws or (ii) in default under any
lease, instrument, agreement, license, or permit to which it is a party, or by
which any of them is bound (collectively, the "ICCE Documents"). The rights
and benefits of ICCE and Cama Acquisition under the ICCE Documents will not be
adversely affected by the transactions contemplated hereby, and the execution
of this Agreement, the performance of the obligations hereunder, and the
consummation of the transactions contemplated hereby will not result in any
material violation or breach or constitute a default under any of the terms or
provisions of the ICCE Documents or the Articles of Incorporation or the Bylaws
of ICCE or Cama Acquisition. Except as set forth on Schedule 6.9, none of the
ICCE Documents requires notice to, or the consent or approval of, any third
party with respect to any of the transactions contemplated hereby in order to
remain in full force and effect, and consummation of the transactions
contemplated hereby will not give rise to any right to termination,
cancellation, or acceleration or loss of any right or benefit.
6.10 ICCE STOCK. Upon the issuance and delivery of the ICCE Stock to the
Shareholder pursuant to this Agreement, such shares will constitute valid and
legally issued shares of ICCE, fully paid and nonassessable.
6.11 NO SIDE AGREEMENTS. Neither ICCE nor Cama Acquisition have entered
nor will they, prior to the Closing, enter into any agreement with Cama or the
Shareholder other than this Agreement and the agreements appearing as Exhibits
hereto. ICCE and Cama Acquisition have made available to Cama copies of all
agreements entered into between ICCE or Cama Acquisition and Cama or the
Shareholder.
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6.12 BUSINESS; REAL PROPERTY, MATERIAL AGREEMENTS. ICCE was formed on
March 10, 1997, and Cama Acquisition was formed on _________, 1997. Each of
them conducted limited or no operations since that time. ICCE and Cama
Acquisition have not conducted any material business since the date of their
inception, except in connection with this Agreement. Neither ICCE nor Cama
Acquisition owns or has at any time owned any real property or any material
personal property or been a party to any other agreement, except as listed on
Schedule 6.12.
6.13 PERMITS AND INTANGIBLES. ICCE and Cama Acquisition hold all permits
the absence of any of which could have a Material Adverse Effect on their
business. To the knowledge of ICCE and Cama Acquisition, the Permits are
valid, and they have not received any notice that any governmental authority
intends to cancel, terminate or not renew any such Permit. ICCE and Cama
Acquisition have conducted and are conducting their business in compliance with
the requirements, standards, criteria and conditions set forth in applicable
permits, licenses, orders, approvals, variances, rules and regulations and are
not in violation of any of the foregoing except where such non-compliance or
violation would not have a Material Adverse Effect on ICCE or Cama Acquisition.
The transactions contemplated by this Agreement will not result in a default
under or a breach or violation of, or adversely affect the rights and benefits
afforded to, ICCE or Cama Acquisition by any such Permits.
6.14 DISCLOSURE. This Agreement, including the schedules hereto, presents
fairly the business and operations of ICCE and Cama Acquisition. ICCE's and
Cama Acquisition's rights under the documents delivered pursuant hereto would
not be materially adversely affected by, and no statement made herein would be
rendered untrue by, any other document to which ICCE or Cama Acquisition is a
party, or by which their properties are subject, or by any other known fact or
circumstance that is not disclosed pursuant hereto.
VII. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE. (a) Cama agrees to afford the
officers and authorized representatives of ICCE access to all of Cama's sites,
properties, books and records and to furnish ICCE with such additional
financial and operating data and other information as to the business and
properties of Cama as ICCE may from time to time reasonably request. Cama
agrees to cooperate with ICCE and its representatives, auditors and counsel in
the preparation of any documents or other material which may be required in
connection with any documents or materials contemplated by this Agreement.
ICCE, Cama Acquisition, the Shareholder, and Cama agree to treat all
information obtained in connection with the negotiation and performance of this
Agreement, or the due diligence investigations conducted with respect to each
other, as confidential.
(b) ICCE and Cama Acquisition agree to afford the officers and authorized
representatives of Cama access to all of their sites, properties, books and
records and to furnish Cama with such additional financial and operating data
and other information as to the business and properties of ICCE and Cama
Acquisition as Cama may from time to time reasonably request. ICCE and Cama
Acquisition agree to cooperate with Cama and their representatives, auditors
and counsel in the preparation of any documents or other material which may be
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required in connection with any documents or materials contemplated by this
Agreement. Cama will cause all information obtained in connection with the
negotiation and performance of this Agreement to be treated as confidential.
7.2 CONDUCT OF BUSINESS PENDING CLOSING. During the period commencing on
the date of this Agreement and ending with the earlier to occur of the Closing
Date or the termination of this Agreement in accordance with its terms, Cama
agrees that it will, except as set forth on Schedule 7.2:
(i) carry on its respective businesses in substantially the same
manner as it has heretofore and not introduce any material new method of
management, operation or accounting;
(ii) maintain its respective properties and facilities, including
those held under leases, in as good working order and condition as at
present, ordinary wear and tear excepted;
(iii) perform all of its respective obligations under agreements
relating to or affecting its respective assets, properties, or rights;
(iv) keep in full force and effect present insurance policies or
other comparable insurance coverage;
(v) use its best efforts to maintain and preserve its business
organization intact, retain its respective present key employees, and
maintain its respective relationships with suppliers, customers, and
others having business relations with it;
(vi) maintain compliance with all permits, laws, rules and
regulations, consent orders, and all other orders of applicable courts,
regulatory agencies, and similar governmental authorities;
(vii) maintain present debt and lease instruments and not enter
into new or amended debt or lease instruments.; and
(viii) maintain present salaries and commission levels for all
officers, directors, employees and agents.
7.3 PROHIBITED ACTIVITIES. During the period commencing on the date of
this Agreement and ending with the earlier to occur of the Closing Date or the
termination of this Agreement in accordance with its terms, each of Cama, ICCE,
and Cama Acquisition agrees that it will not, except as set forth on Schedule
7.3:
(i) make any change in its Certificate or Articles ofIncorporation
or Bylaws;
(ii) issue any securities, options, warrants, calls, conversion
rights or commitments relating to its securities of any kind;
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(iii) declare or pay any dividend, or make any distribution in
respect of its stock whether now or hereafter outstanding, or purchase,
redeem or otherwise acquire or retire for value any shares of its stock or
declare any dividends or make any distributions (other than S Corporation
distributions), nor pay out any extraordinary bonuses in excess of pro
rata bonuses customarily paid, or fees, or commissions to the Shareholder,
directors, management or other personnel;
(iv) enter into any contract or commitment or incur, or agree to
incur, any liability or make any capital expenditures, except in the
normal course of business consistent with past practice, involving amounts
less than $5,000;
(v) create, assume, or permit to exist any mortgage, pledge, or
other lien or encumbrance upon any assets or properties whether now owned
or hereafter acquired, except (1) with respect to purchase money liens
incurred in connection with the acquisition of equipment with an aggregate
cost not in excess of $10,000 necessary or desirable for the conduct of
the businesses of Cama, (2) liens for taxes either not yet due or being
contested in good faith and by appropriate proceedings (and for which
contested taxes adequate reserves have been established and are being
maintained) or materialmen's, mechanics', workers', repairmen's,
employees', or other like liens arising in the ordinary course of business
(the liens set forth in clause (2) being referred to herein as "Statutory
Liens"), or (3) liens set forth on Schedule 5.15 hereto;
(vi) sell, assign, lease, or otherwise transfer or dispose of any
property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the start-up
of any new business;
(viii) merge or consolidate or agree to merge or consolidate with or
into any other corporation;
(ix) waive any material rights or claims;
(x) commit a material breach of or amend or terminate any material
agreement or Permit;
(xi) enter into any other transaction outside the ordinary course of
its business consistent with past business practice or prohibited
hereunder; or
(xii) change its accounts receivable collection practice or factor
its accounts receivable in any way.
7.4 NO SHOP. Except as required under applicable law, Cama and the
Shareholder agree that they will not, and agree to cause each agent, officer,
director, trustee or any representative of Cama not to, during the period
commencing on the date of this Agreement and
23
ending with the earlier to occur of the Closing Date or the termination of this
Agreement in accordance with its terms, directly or indirectly:
(i) solicit or initiate the submission of proposals or offers from
any person for,
(ii) participate in any discussions pertaining to, or
(iii) furnish any information to any person other than ICCE or
its authorized agents relating to,
any acquisition or purchase of all or a material amount of the assets of,
or any equity interest in, Cama or a merger, consolidation, or business
combination of Cama.
7.5 NOTIFICATION OF CERTAIN MATTERS. ICCE and Cama shall each notify the
other of (i) the occurrence or non-occurrence of any event would be likely to
cause any representation or warranty of such party contained herein to be
untrue or inaccurate in any material respect at or prior to the Closing and
(ii) any material failure of such party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such person
hereunder. The delivery of any notice pursuant to this Section 7.5 shall not
be deemed to (i) modify the representations or warranties hereunder of the
party delivering such notice, which modification may only be made pursuant to
Section 13.13, (ii) modify the conditions set forth in Articles VIII or IX, or
(iii) limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
7.6 FURTHER ASSURANCES. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents or
take such other action as may be reasonably necessary or convenient to carry
out the transactions contemplated hereby.
7.7 SALE OF STOCK. The Shareholder shall not sell any stock in Cama
between the date of this Agreement and the date upon which financial statements
are published which cover at least 30 days of post-Merger operations of ICCE on
a consolidated basis.
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF CAMA AND THE SHAREHOLDER
The obligations of the Shareholder and of Cama are subject to the
satisfaction or waiver on or prior to the Closing Date of all of the following
conditions.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of ICCE and Cama Acquisition contained in
Article VI shall be true and correct in all material respects as of the Closing
Date as though such representations and warranties had been made as of that
time; all of the terms, covenants and conditions of this Agreement to be
complied with and performed by ICCE or Cama Acquisition on or before the
Closing Date shall have been duly complied with and performed in all material
respects, and a
24
certificate to the foregoing effect dated the Closing Date and signed by the
President or the Chief Financial Officer of ICCE shall have been delivered to
the Shareholder.
8.2 NO LITIGATION. Prior to the Closing Date, no action or proceeding
before a court or any other governmental agency or body shall have been
instituted to restrain or prohibit the Merger, and no governmental agency or
body shall have taken any other action or made any request of Cama as a result
of which the management of Cama deems it inadvisable to proceed with the
transactions hereunder.
8.3 OPINION OF COUNSEL. Cama shall have received an opinion from counsel
for ICCE, dated the Closing Date, in substantially the form in Exhibit B.
8.4 CONSENTS AND APPROVALS. All necessary consents of and filings
required to be obtained from or made with the SEC, the NASD, the Federal Trade
Commission, the United States Department of Justice, or any other federal,
state, county, local or other governmental or regulatory, authority (including
any self-regulated authority), commission, board or body, required by any Rule,
or required from any third party under any material contract or otherwise
relating to the consummation of the transactions contemplated herein shall have
been obtained or filed and each such consent or filing shall be in full force
and effect as of the Closing Date and all waiting periods required by any Rule
shall have expired. No such consent shall be conditioned or restricted in a
manner which would have a Material Adverse Effect on Cama or the transactions
contemplated herein.
8.5 GOOD STANDING CERTIFICATES. ICCE and Cama Acquisition shall have
delivered to Cama a certificate or certificates, dated no later than ten days
prior to the Closing Date, duly issued by the appropriate governmental
authority in ICCE's and Cama Acquisition's respective states of incorporation,
showing that ICCE and Cama Acquisition are in good standing and authorized to
do business and that no state franchise and/or income tax returns and taxes for
ICCE and Cama Acquisition, respectively, required to be filed or paid prior to
the Closing have not been filed or paid, as the case may be.
8.6 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to ICCE or Cama Acquisition which would have a Material
Adverse Effect on either of them.
8.7 SECRETARY'S CERTIFICATE. Cama shall have received a certificate or
certificates, dated the Closing Date and signed by the Secretary of ICCE,
certifying the truth and correctness of attached copies of ICCE's and Cama
Acquisition's respective Certificate or Articles of Incorporation (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the boards of directors and, if required, the shareholders, of ICCE approving
ICCE's and Cama Acquisition's entering into this Agreement and the consummation
of the transactions contemplated hereby.
8.8 EMPLOYMENT AGREEMENTS. The Shareholder shall have entered into an
employment agreement with ICCE substantially in the form of Exhibit C hereto.
25
8.9 REGISTRATION RIGHTS. ICCE shall have executed and delivered a
Registration Rights Agreement in substantially the form attached hereto as
Exhibit D.
8.10 SHAREHOLDERS AGREEMENT. ICCE and each of its other shareholder shall
have executed and delivered a First Amendment to the ICCE Shareholders
Agreement adding the Shareholder as a party to the Shareholders Agreement. The
Shareholders Agreement shall be in substantially the form attached hereto as
Exhibit E.
8.11 FINANCING. ICCE shall have secured financing upon such terms and
conditions as are acceptable to Cama and ICCE sufficient to repay the
liabilities set forth on Schedule 8.13, and either (i) each such liability
shall be retired at or prior to the Closing, or (ii) ICCE shall have received a
waiver from each person as required under any instrument governing any such
debt sufficient to allow the consummation of the transactions contemplated
herein.
8.12 AGREEMENTS. The Shareholder and Cama shall have terminated (i) the
shareholders agreements, voting agreements, voting trusts, and (ii) any
existing agreement between Cama and the Shareholder (not including group
medical, pension, profit-sharing or other plan), at or prior to the Closing
Date.
IX. CONDITIONS PRECEDENT TO OBLIGATIONS OF ICCE AND CAMA ACQUISITION
The obligations of ICCE and Cama Acquisition at the Closing are subject to
the satisfaction or waiver on or prior to the Closing Date of all of the
following conditions.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the Shareholder and Cama contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date with the same effect as though such representations and warranties had
been made on and as of such date; all of the terms, covenants and conditions of
this Agreement to be complied with or performed by the Shareholder and Cama on
or before the Closing Date shall have been duly performed or complied with in
all material respects; and Cama and the Shareholder shall have delivered to
ICCE a certificate dated the Closing Date and signed by them to such effect.
9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to
restrain or prohibit the merger of Cama Acquisition with and into Cama.
9.3 SECRETARY'S CERTIFICATE. ICCE shall have received a certificate from
Cama, dated the Closing Date and signed by the secretary of Cama, certifying
the truth and correctness of attached copies of Cama's Articles of
Incorporation (including amendments thereto), Bylaws (including amendments
thereto), and resolutions of its board of directors and the Shareholder
approving Cama's entering into this Agreement and the consummation of the
transactions contemplated hereby.
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9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to Cama which would constitute a Material Adverse Effect.
9.5 SHAREHOLDERS' RELEASE. The Shareholder shall have delivered to ICCE
an instrument dated the Closing Date releasing Cama from any and all claims of
the Shareholder against Cama and ICCE and the obligations of Cama and ICCE to
the Shareholder, except for director and officer indemnification claims as
permitted by the Articles of Incorporation and Bylaws of Cama or applicable
state corporate law, items specifically identified on Schedules 5.10 and 5.11
as being claims of or obligations to the Shareholder, continuing obligations to
the Shareholder relating to their employment by Cama, and obligations arising
under this Agreement or the transactions contemplated hereby.
9.6 TERMINATION OF RELATED PARTY AGREEMENTS. All existing agreements
described in Section 8.12 shall have been canceled effective prior to or as of
the Closing Date as required by Section 8.12.
9.7 OPINION OF COUNSEL. ICCE shall have received an opinion from counsel
to Cama, dated the Closing Date, in substantially the form attached hereto as
Exhibit F.
9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all
consents and approvals of third parties listed on Schedule 5.22 shall have been
obtained; and no action or proceeding shall have been instituted or threatened
to restrain or prohibit the Merger and no governmental agency or body shall
have taken any other action or made any request of ICCE which would have a
Material Adverse Effect on the transactions hereunder.
9.9 GOOD STANDING CERTIFICATES. Cama shall have delivered to ICCE a
certificate, dated as of a date no earlier than ten days prior to the Closing
Date, duly issued by the appropriate governmental authority in Florida and,
unless waived by ICCE, in each state in which Cama is authorized to do
business, showing Cama is in good standing and authorized to do business and
that all state franchise and/or income tax returns and taxes for Cama for all
periods prior to the Closing have been filed and paid.
9.10 EMPLOYMENT AGREEMENTS. The Shareholder shall have executed and
delivered an employment agreement substantially in the form of Exhibit C
hereto.
9.11 REGISTRATION RIGHTS. The Shareholder shall have executed and
delivered a Registration Rights Agreement in substantially the form attached
hereto as Exhibit D.
9.12 SHAREHOLDERS AGREEMENT. The Shareholder shall have executed and
delivered a First Amendment to the ICCE Shareholders Agreement adding the
Shareholder as a party to the Shareholders Agreement. The Shareholders
Agreement shall be in substantially the form attached hereto as Exhibit E.
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9.13 AFFILIATES AGREEMENTS. ICCE shall have received from all persons
whom it reasonably believes to be an "affiliate" of Cama as such term is
defined under Rule 145 of the 1933 Act an Affiliates Agreement substantially in
the form attached hereto as Exhibit G.
X. COVENANTS OF ICCE AFTER CLOSING
10.1 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as contemplated
by this Agreement, after the Closing Date, ICCE shall not and shall not permit
any of its subsidiaries to undertake any act that would jeopardize the tax-free
status of the reorganization, including:
(a) the retirement or reacquisition, directly or indirectly, of all or
part of the ICCE Stock issued in connection with the transactions contemplated
hereby;
(b) the entering into of financial arrangements for the benefit of the
Shareholder; or
(c) the disposition of any material part of the assets of ICCE within the
two years following the Closing Date except in the ordinary course of business
or to eliminate duplicate services or excess capacity.
10.2 PREPARATION AND FILING OF TAX RETURNS. (a) Cama shall, if possible,
file, or cause to be filed, all separate Returns of any Acquired Party for all
taxable periods that end on or before the Closing Date. If Cama is an S
Corporation, the Shareholder shall pay or cause to be paid all Tax liabilities
shown by such Returns to be due.
(b) ICCE shall file or cause to be filed all separate Returns of, or that
include, any Acquired Party for all taxable periods ending after the Closing
Date.
(c) Each party hereto shall, and shall cause its subsidiaries and
affiliates to, provide to each of the other parties hereto such cooperation and
information as any of them reasonably may request in filing any Return, amended
Return, or claim for refund, determining a liability for Taxes or a right to
refund of Taxes, or conducting any audit or other proceeding in respect of
Taxes. Such cooperation and information shall include providing copies of all
relevant portions of relevant Returns, together with relevant accompanying
schedules and relevant work papers, relevant documents relating to rulings or
other determinations by Taxing Authorities, and relevant records concerning the
ownership and Tax basis of property, which such party may possess. Each party
shall make its employees reasonably available on a mutually convenient basis at
its cost to provide explanation of any documents or information so provided.
Subject to the preceding sentence, each party required to file Returns pursuant
to this Agreement shall bear all costs of filing such Returns.
(d) ICCE, Cama and the Shareholder shall comply with the tax reporting
requirements of Section 1.351-3 of the Treasury Regulations and treat the
transaction as a tax-free reorganization under Section 351 and 368(a) of the
Code.
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10.3 PRESERVATION OF EMPLOYEE BENEFIT PLANS. Except as required under any
applicable Rule, following the Closing, ICCE shall not terminate any health
insurance, life insurance, profit sharing or 401(k) plan in effect at Cama
until such time as ICCE is able to replace such plan with a plan that is
applicable to ICCE and all of its then existing subsidiaries. ICCE shall have
no obligation to provide replacement plans that have the same terms and
provisions as the existing plans, except that any new health insurance plan
shall provide for coverage for preexisting conditions.
XI. INDEMNIFICATION
The Shareholder and ICCE each make the following covenants that are
applicable to them, respectively:
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each of the parties contained herein shall survive the Closing
until the earlier of (i) 15 days following the issuance of post-Merger audited
financial statements for ICCE and its subsidiaries on a consolidated basis
which cover at least 30 days of post-Merger operations, and (ii) the one year
anniversary of the Closing Date.
11.2 INDEMNIFICATION BY THE SHAREHOLDER. The Shareholder covenants and
agrees that he will indemnify, defend, protect and hold harmless ICCE at all
times, from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) incurred by ICCE or Cama as a result of or arising from (i) any
breach of the representations and warranties of such Shareholder or Cama set
forth herein, (ii) any breach of any obligation on the part of such Shareholder
or Cama under this Agreement, (iii) any Tax imposed upon or relating to an
Acquired Party for any pre-Closing Date period, or (iv) any Tax to which an
Acquired Party is subject imposed upon or relating to any third party for a
pre-Closing Date period, including, in each case, any such Tax for which an
Acquired Party may be liable under Section 1.1502-6 of the Treasury regulations
(or any similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
11.3 INDEMNIFICATION BY ICCE. ICCE covenants and agrees that it will
indemnify, defend, protect and hold harmless the Shareholder at all times from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses, including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation,
incurred by the Shareholder as a result of or arising from (i) any breach by
ICCE or Cama Acquisition of its representations and warranties set forth
herein, (ii) any material breach of any obligation of ICCE or Cama Acquisition
hereunder, or (iii) any liabilities which the Shareholder may incur due to
ICCE's failure to be responsible for the liabilities and obligations of Cama
(except to the extent that ICCE has claims against the Shareholder by reason of
such liabilities).
11.4 CLAIMS. Each person to be indemnified pursuant to this Section 11
(an "Indemnitee") shall, within five days after the discovery by the Indemnitee
of any matters giving
29
arise to a claim for indemnification pursuant to Section 11.2 or 11.3, give
written notice to the person or persons responsible for indemnifying such
Indemnitee (an "Indemnifying Party") setting forth any claim with respect to
which the Indemnitee seeks indemnification, provided that the failure of any
Indemnitee to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Article XI except to the extent that the
Indemnifying Party is actually prejudiced by such failure to give notice. In
case any such action, proceeding or claim is brought against any Indemnitee,
the Indemnifying Party shall be entitled to participate in and, unless in the
reasonable good faith judgment of the Indemnitee a conflict of interest between
such Indemnitee and the Indemnifying Party may exist in respect of such action,
proceeding or claim, assume the defense thereof, with counsel reasonably
satisfactory to the Indemnitee. After notice from the Indemnifying Party to
the Indemnitee of their election so to assume such defense, the Indemnifying
Party shall not be liable to such Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with such defense other
than reasonable costs of investigation. In any event, unless and until the
Indemnifying Party elects in writing to assume and does so assume the defense
of any such claim, proceeding or action, the Indemnitee's costs and expenses
arising out of the defense, settlement or compromise of any such action, claim
or proceeding shall be considered losses subject to indemnification hereunder.
If the Indemnifying Party elects to defend any such action or claim, then the
Indemnitee shall be entitled to participate in such defense with counsel of
their choice at their sole cost and expense. The Indemnifying Party shall not
be liable for any settlement of any action, claim or proceeding effected
without its written consent, provided, however, that the Indemnifying Party
shall not unreasonably withhold, delay or condition its consent. Anything in
this Section 11.4 to the contrary notwithstanding, the Indemnifying Party shall
not, without the Indemnitee's prior written consent (which consent shall not be
unreasonably withheld), settle or compromise any claim or consent to entry of
any judgment in respect thereof which imposes any future obligation on the
Indemnitee or which does not include, as an unconditional term thereof, the
giving by the claimant or the plaintiff to the Indemnitee, a release from all
liability in respect of such claim.
11.5 EXCLUSIVE REMEDY. The indemnification provided in this Article XI
shall (except as prohibited by ERISA) be the exclusive remedy in any action
seeking damages or any other form of monetary relief brought by any party to
this Agreement against another party, provided that, nothing herein shall be
construed to limit the right of a party, in a proper case, to seek injunctive
relief for a breach of this Agreement.
11.6 LIMITATIONS ON INDEMNIFICATION. ICCE and the other persons
indemnified pursuant to Section 11.2 shall not assert any claim (other than a
claim arising from a third party claim) for indemnification hereunder against
the Shareholder until such time as, and solely to the extent that, the
aggregate of all claims which such persons may have against the Shareholder
shall exceed $50,000 (the "Indemnification Threshold"). Shareholder shall not
assert any claim (other than a claim arising from a third person's claim) for
indemnification hereunder against ICCE until such time as, and solely to the
extent that, the aggregate of all claims which Shareholder may have against
ICCE exceeds $50,000.
Notwithstanding any other term of this Agreement (except the proviso to
this sentence), the Shareholder shall not be liable under this Article XI for
an amount which exceeds the fair market value (at the time when the amount of
liability is determined) of the ICCE stock received
30
by the Shareholder in connection with the Merger, provided that the
Shareholder's indemnification obligations pursuant to Section 11.2(iv) shall
not be so limited.
XII. TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date by the unanimous mutual consent of the boards of directors of
ICCE and Cama. Cama may withdraw from this Agreement after May 15, 1997, if
the Closing has not occurred provided that Cama has paid all expenses incurred
by ICCE in connection herewith, including its share of all professional fees.
XIII. GENERAL
13.1 COOPERATION. Cama, the Shareholder, and ICCE shall deliver or cause
to be delivered to the others on the Closing Date, and at such other times and
places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement.
Cama will cooperate and use its reasonable efforts to have the present
officers, directors and employees of Cama cooperate with ICCE on and after the
Closing Date in furnishing information, evidence, testimony and other
assistance in connection with any tax return filing obligations, actions,
proceedings, arrangements or disputes of any nature with respect to matters
pertaining to all periods prior to the Closing Date.
13.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law) and shall be binding
upon and shall inure to the benefit of the parties hereto, the successors of
ICCE and Cama, and the heirs and legal representatives of the Shareholder.
13.3 ENTIRE AGREEMENT. This Agreement (including the schedules and
exhibits attached hereto) and the documents delivered pursuant hereto
constitute the entire agreement and understanding among the parties hereto and
supersede any prior agreement and understanding relating to the subject matter
of this Agreement, except for paragraphs 4 (relating to confidential
information) and 5 (relating to announcements) of the Memo of Understanding,
which shall remain in effect. This Agreement, upon execution, constitutes a
valid and binding agreement of the parties hereto enforceable in accordance
with its terms and may be modified or amended only by a written instrument
executed by the parties hereto. Any disclosure made on any Schedule delivered
pursuant hereto shall be deemed to have been disclosed for purposes of any
other Schedule required hereby.
13.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
13.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with this transaction and agrees to
indemnify the other parties
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hereto against all loss, cost, damages or expense arising out of claims for
fees or commission of brokers employed or alleged to have been employed by such
indemnifying party.
13.6 EXPENSES. The Shareholder shall pay his or her own personal
professional fees necessary to consummate this transaction, and all sales, use,
transfer, and other similar taxes and fees imposed in connection with the
Merger. The Shareholder shall file all necessary documentation and Returns
with respect to such taxes. Cama shall pay all legal and accounting fees
incurred by such Cama in connection with this transaction.
13.7 NOTICES. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the
same in person to an officer or agent of such party.
(a) If to ICCE, addressed to it at:
ICCE, Inc.
Five Concourse Parkway
Suite 2700
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxx, Xx.
with copies to:
Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P.
First Union Plaza
999 Peachtree Street, N.E.
Suite 1400
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx
(b) If to Cama or the Shareholder, addressed to such party at its address
set forth below; or to such other address or counsel as any party hereto shall
specify pursuant to this Section 13.7 from time to time. Notice shall be
effective upon receipt.
Cama of Tampa, Inc.
Xxx Xxxxxxx Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
13.8 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia.
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13.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or
of any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
13.10 TIME. Time is of the essence with respect to this Agreement.
13.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby unless severing such provision(s) results in this Agreement not
providing reasonable assurance to a party that he or it will receive
substantially all of the benefits he or it bargained for.
13.12 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
13.13 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of ICCE and Cama. Any amendment or waiver effected in
accordance with this Section 13.13 shall be binding upon each of the parties
hereto, and their successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"Cama"
Cama of Tampa, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx, President
[SIGNATURES CONTINUED ON NEXT PAGE]
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"Cama Acquisition"
Cama Acquisition, Inc.
By: /s/ Xxxxxxx Xxxx, Xx.
Xxxxxxx Xxxx, Xx., President
ICCE, Inc.
By: /s/ Xxxxxxx Xxxx, Xx.
Xxxxxxx Xxxx, Xx., President
"Shareholder"
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
SCHEDULE 1
Xxxxxxx X. Xxxxxxxx
Cama of Tampa, Inc.
Xxx Xxxxxxx Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Flordia 33602
Counsel:
