Exhibit 4.1
REGISTRATION AND RIGHTS AGREEMENT
This Registration and Rights Agreement dated as of December 28, 1999 is
between Zamba Corporation ("ZAMBA"), a Delaware corporation, and the undersigned
holders (the "HOLDERS") of shares (the "CAMWORKS SHARES") of capital stock of
Camworks, Inc. ("CAMWORKS"), a Minnesota corporation. This Agreement is made in
connection with the execution of the Agreement and Plan of Reorganization dated
as of December 28, 1999 (the "MERGER AGREEMENT") pursuant to which Camworks is
merging with and into a wholly-owned subsidiary of Zamba and Zamba is issuing
shares of its Common Stock ("ZAMBA COMMON STOCK") to Holders of the outstanding
Camworks Shares. All capitalized terms used but not defined herein shall have
the meanings given to them in the Merger Agreement.
The parties hereto agree as follows:
SECTION 1 - REGISTRATION RIGHTS
1.1 RESALE REGISTRATION. Zamba will use its best efforts, with respect to
the Shares, within 75 days after the Closing Date under the Merger Agreement (so
long as any audited financial statements of Camworks necessary to be included in
such filing are available), to prepare and file a Registration Statement (the
"RESALE REGISTRATION STATEMENT") on Form S-3 (or any similar registration
statement then in effect) under the Securities Act covering the resale by each
Holder of the Holder's shares of Zamba Common Stock received pursuant to the
Merger Agreement in the amounts set forth on Exhibit I hereto (the "Shares"), as
applicable, from time to time in transactions not involving an underwritten
public offering and will use reasonable efforts to cause the Registration
Statement to be declared effective by the Securities and Exchange Commission
(the "COMMISSION") as soon as practicable thereafter and to keep the
Registration Statement covering the Shares continuously effective for the period
ending one year after the Closing Date, but in no event after the date on which
any Holder no longer holds any Shares registered under the Registration
Statement (the "EFFECTIVE PERIOD").
1.2 PIGGY-BACK REGISTRATION. (a) If prior to the time the Resale
Registration statement is filed, and before the end of the Effective Period,
Zamba proposes to file a registration statement under the Securities Act with
respect to an offering by Zamba for its own account or for the account of other
holders of Zamba Common Stock to be offered for cash (other than in connection
with the registration of securities issuable pursuant to an employee stock
option, stock purchase or similar plan or pursuant to a merger, exchange offer
or a transaction of the type specified in Rule 145(a) under the Securities Act),
then Zamba shall in each case give written notice of such proposed filing to the
Holders at least 20 days before the filing date, and such notice shall offer
such Holders the opportunity to register such number of Shares as each such
Holder may request (the "PIGGY-BACK REGISTRATION"). If such offer is accepted
by written notice to Zamba from the Holders of at least 20% of the Shares then
held by the Holders (with a proportional adjustment for any stock split or stock
dividend or other issuance of securities with respect to such Shares) within 15
days of the giving of the written notice provided for in the preceding sentence,
Zamba shall use its best efforts to permit, or (in the case of a proposed
underwritten offering) to cause the managing underwriter or underwriters thereof
to permit, the Holders of Shares requested to be included, in the registration
for such offering to include such Shares in such offering on the same terms and
conditions as the corresponding securities of Zamba included therein; PROVIDED
that (i) if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, Zamba shall determine for
any reason not to proceed with the proposed registration, Zamba may, at its
election, give written notice of such
determination to each Holder of Shares requested to be included in such
registration and thereupon shall be relieved of its obligation to register any
Shares in connection with such registration (but not from its obligation to pay
the Registration Expenses (defined below) in connection therewith) and (ii) if
such registration involves an underwritten offering by Zamba (underwritten, at
least in part, by Persons who are not affiliates or associates of Zamba or any
Holder), all Holders requesting to have Shares included in Zamba's registration
must sell their Shares to such underwriters who shall have been selected by
Zamba on the same terms and conditions as apply to Zamba, with such differences,
including any with respect to indemnification and contribution, as may be
customary or appropriate in combined primary and secondary offerings. If a
proposed registration pursuant to this Section 1.2 involves such an underwritten
public offering, any Holder making a request under this Section 1.2 in
connection with such registration may elect in writing, prior to the effective
date of the registration statement filed in connection with such registration,
to withdraw such request and not to have such securities registered in
connection with such registration. Notwithstanding the foregoing, if the
managing underwriter or underwriters of a proposed underwritten offering advise
Zamba in writing that in their opinion the total amount or kind of securities
that the Holders have requested to be included in such offering would adversely
affect the success of such offering, then the amount of securities to be offered
for the accounts of Holders of Shares and securities to be offered for the
account of other stockholders shall be reduced pro rata to the extent necessary
to reduce the total amount of securities to be included in such offering to the
amount recommended by such managing underwriter or underwriters.
1.3 PROCEDURES. In connection with any Registration Statement (defined
below):
(a) Zamba will promptly (subject to Section 1.4) prepare and file
with the Commission such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the Registration Statement
effective for as long as such registration is required to remain effective
hereunder; will cause the Prospectus (defined below) to be supplemented by any
required Prospectus supplement, and, as so supplemented, to be filed pursuant to
Rule 424 under the Securities Act; and will comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all Shares
covered by such Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders set forth in
the Registration Statement or supplement to the Prospectus.
(b) Zamba will promptly furnish to each Holder such number of copies
of the Prospectus (including each preliminary Prospectus) and any amendments or
supplements thereto as the Holder may reasonably request in order to facilitate
the public sale or other disposition of the Shares being sold by the Holder.
(c) Zamba will, on or prior to the date on which the Registration
Statement is declared effective, use reasonable efforts to register or qualify
the Shares covered by the Registration Statement under such securities or "blue
sky" laws, if any, as may be applicable of such states of the United States as
any Holder reasonably requests; PROVIDED, HOWEVER, that Zamba shall not be
required to qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify or to file any general consent to service
of process.
(d) Zamba will promptly give notice to each Holder (i) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any state securities authority with jurisdiction for amendments
and supplements to the Registration Statement and Prospectus or for additional
information after the Registration Statement has
become effective, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, (iv) of the issuance
by any state securities commission or other regulatory authority with
jurisdiction of any order suspending the qualification or exemption from
qualification of any of the Shares under any applicable state securities or
"blue sky" laws and (v) of the happening of any event which makes any statement
made in the Registration Statement or related Prospectus untrue or which
requires the making of any changes in the Registration Statement or Prospectus
so that they will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As soon as practicable following any of such events, but in any
case not later than the expiration of the period for suspension of disposition
of the Shares under Section 1.4, Zamba will prepare and file with the Commission
and furnish such supplement or amendment to such Prospectus as may be necessary
so that, as thereafter deliverable to the purchasers of the Shares, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statement therein, in light of the
circumstances under which they were made, not misleading.
1.4 SUSPENSION PERIOD. Upon receipt of a notice under clauses (ii)
through (v) of Section 1.3(d), each Holder will forthwith discontinue
disposition of the Shares pursuant to the Registration Statement until the
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 1.3(d) or until the Holder is advised in writing by
Zamba that the use of the Prospectus may be resumed and has received copies of
any additional or supplemental filings which are incorporated by reference in
the Prospectus, and, if so directed by Zamba, the Holder will deliver to Zamba
(at Zamba's expense) all copies, other than permanent file copies then in the
Holder's possession, of the Prospectus covering the Shares current at the time
of receipt of such notice; PROVIDED, HOWEVER, that in no event will the period
of suspension of disposition of the Shares under this Section 1.4 exceed 90
days.
1.5 REGISTRATION EXPENSES. Zamba will bear all expenses incurred in
connection with the registration of the Shares pursuant to this Section 1
("Registration Expenses"), including without limitation all printing, legal and
accounting expenses incurred by Zamba and all registration and filing fees
imposed by the Commission, any state securities commission or the Nasdaq Stock
Market or, if the common stock of Zamba is not then listed on such market, the
principal national securities exchange or national market system on which the
common stock is then traded or quoted. Each Holder will be responsible for any
brokerage commissions and taxes of any kind (including, without limitation,
transfer taxes) with respect to any disposition, sale or transfer of the
Holder's Shares and for any legal, accounting and other expenses incurred by the
Holder.
1.6 INDEMNIFICATION.
(a) INDEMNIFICATION BY ZAMBA. Zamba agrees to indemnify and hold
harmless, to the full extent permitted by law, each Holder, its partners,
officers, directors, trustees, stockholders, employees and agents, and each
person who controls such Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Holders, together with the partners, officers,
directors, trustees, stockholders, employees and agents of such controlling
person (collectively, the "CONTROLLING PERSONS"), from and against all losses,
claims, damages, liabilities and expenses, including without limitation
reasonable legal fees and expenses (collectively, the "DAMAGES"), incurred by
such Holder and any such Controlling Person arising out of or based upon any
untrue or alleged untrue statement of material fact contained in the
Registration Statement (or any amendment thereto), or any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading, or any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (as amended or supplemented if Zamba shall have
furnished any amendments or supplements thereto), or any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
except insofar as such Damages arise out of or are based upon any such untrue
statement or omission based upon information relating to such Holder furnished
in writing to Zamba by such Holder specifically for use therein; PROVIDED,
HOWEVER, that Zamba shall not be liable to any Holder under this Section 1.6(a)
to the extent that any such Damages were caused by the fact that such Holder
sold the Shares to a person as to whom it shall be established that there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus as then amended or supplemented if, and only if (i) Zamba has
previously furnished copies of such amended or supplemented Prospectus to such
Holder and (ii) such Damages were caused by any untrue statement or omission or
alleged untrue statement or omission contained in the Prospectus so delivered
which was corrected in such amended or supplemented Prospectus.
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder agrees, severally
and not jointly, to indemnify and hold harmless Zamba, its directors, officers
and each person, if any, who controls Zamba within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from Zamba to such Holder, but only with reference to
information relating to such Holder furnished in writing to Zamba by such Holder
specifically for use in the Registration Statement (or any amendment thereto) or
any Prospectus (or any amendment or supplement thereto); PROVIDED, HOWEVER, that
such selling Holder shall not be obligated to provide such indemnity to the
extent that such Damages result from the failure of Zamba to promptly amend or
take action to correct or supplement the Registration Statement or Prospectus on
the basis of corrected or supplemental information provided by such Holder to
Zamba expressly for such purpose. In no event shall the liability of any Holder
of the Shares hereunder be greater in amount than the amount of the proceeds
received by such Holder upon the sale of the Shares giving rise to such
indemnification obligation.
(c) PROCEDURE. Each party entitled to indemnification under this
Section 1.6 (the "INDEMNIFIED PARTY") shall give prompt notice of any claim as
to which indemnification may be sought to the party required to provide
indemnification (the "INDEMNIFYING PARTY"), provided that failure to give such
notice shall not relieve the Indemnifying Party of its obligations hereunder
except to the extent of actual prejudice. The Indemnifying Party shall be
entitled to assume the defense of any such claim with counsel reasonably
satisfactory to the Indemnified Party. The Indemnified Party may participate in
such defense at its own expense, provided that the Indemnifying Party will pay
such expense if representation of the Indemnified Party by the counsel retained
by the Indemnifying Party would be inappropriate due to actual or potential
differing interests between the Indemnified Party and any other party
represented by such counsel in such proceeding. No Indemnifying Party shall,
except with the consent of the Indemnified Party, agree to any settlement that
does not include a release of the Indemnified Party from all liability in
respect of such claim, and the Indemnified Party shall not settle such claim
without the prior written consent of the Indemnifying Party.
1.7 RESTRICTIONS ON SALE. In the event of an underwritten public offering
for the account of Zamba, upon the written request of the managing underwriter
or underwriters of such offering, each Holder agrees not to effect any public
sale or distribution of any securities similar to those being registered in such
offering, including without limitation, through sales of the Shares pursuant to
the Registration Statement, during the 21 days prior to, and during the 90-day
period beginning on, the effective date of the Registration Statement relating
to such offering. In the event of the delivery of such
a request, the right of a Holder to sell under the Registration Statement and
the obligations of Zamba to keep the Registration Statement current shall be
suspended for the period specified in the preceding sentence, provided that the
periods during which Zamba is obligated to keep any Registration Statement
effective pursuant to Section 1.1 shall be extended for a period equal to the
length of any such suspension. Zamba hereby confirms that it has no current plan
to engage in an underwritten public offering for its account.
1.8 CERTAIN DEFINITIONS. As used in this Section 1, the following terms
have the following meanings:
(a) "PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act), as
amended or supplemented by any prospectus supplement, and by all other
amendments and supplements to the prospectus, including post-effective
amendments, and in each case including all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.
(b) "REGISTRATION STATEMENT" means any registration statement of
Zamba that covers any of the Shares pursuant to the provisions of this Agreement
and all amendments and supplements to any such registration statement, including
post-effective amendments, in each case including the Prospectus, all exhibits,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
1.9 POOLING OF INTERESTS. Notwithstanding anything else in this
Agreement, in no event shall the Holders be allowed to sell any Shares during
any period of time the Holders has agreed not to sell such Shares to permit
Zumba to account for the Merger as a pooling of interests.
SECTION 2 - OTHER RIGHTS
2.1 NON-VOTING OBSERVER. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be entitled to designate
one nonvoting observer to receive (i) reasonable prior notice of and attend all
meetings of the Board of Directors of Zamba and any of its committees and (ii)
prior notice of any action that the Board of Directors of Zamba or any of its
committees may take by written consent.
2.2 TERMINATION. The rights set forth in this Section shall terminate on
the earliest of (i) the date the Holders do not own 50% of the Zamba Common
Stock issued to them in the Merger, (ii) the date that Zamba Common Stock held
by the Holders does not represent 1% of the outstanding Common Stock of Zamba
and (iii) when ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and at least one other Holder are no longer
employed by Zamba.
SECTION 3 - MISCELLANEOUS
3.1 AMENDMENT AND WAIVER; ENTIRE AGREEMENT. This Agreement may not be
amended, modified or supplemented or any requirement hereunder waived, except in
writing signed by the party to be bound thereby. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof. In particular, the
Holders acknowledge that any registration rights granted to them by Camworks
with respect to Camworks shares are terminated and void and are not applicable
to the shares or other securities received in the Merger.
3.2 NOTICES. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telecopier, registered or certified
mail (return receipt requested), postage prepaid or courier to the parties at
their respective addresses set forth on the signature pages hereof (or at such
other address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been received at the
time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged,
if telecopied; and on the next business day if timely delivered to a courier
guaranteeing overnight delivery.
3.3 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns, heirs and legal representatives of
the parties. This Agreement may not be assigned by any Holder and any attempted
assignment shall be void and of no effect and shall terminate all obligations of
Zamba hereunder with respect to such Holder.
3.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute the same agreement.
3.5 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
3.6 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Minnesota without regard to principles of conflicts of law.
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IN WITNESS WHEREOF, the parties have caused this Registration and Rights
Agreement to be executed as of the date stated above.
ZAMBA CORPORATION
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title President and CEO
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
HOLDERS:
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: As set forth in the Merger Agreement
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address: As set forth in the Merger Agreement
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Address: As set forth in the Merger Agreement
EXHIBIT I
Shareholder No. of Shares
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 558,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 372,000
▇▇▇▇▇ ▇. ▇▇▇▇▇ 70,000
