AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is entered
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into as of September 30, 1997, by and among Asymetrix Corporation, a Washington
corporation ("Asymetrix"), Xxxxx Acquisition Corp., a Massachusetts corporation
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and a wholly-owned subsidiary of Asymetrix ("Xxxxx Interactive Sub"), TopShelf
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Acquisition Corp., a Massachusetts corporation and a wholly-owned subsidiary of
Asymetrix ("TopShelf Sub") Acorn Acquisition Corp. ("Acorn Sub"), a
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Massachusetts corporation and a wholly-owned subsidiary of Asymetrix, Xxxxx
Interactive Incorporated, a Massachusetts corporation ("Xxxxx Interactive"),
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TopShelf Multimedia, Inc., a Massachusetts corporation ("TopShelf"), Acorn
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Associates Incorporated, a Massachusetts corporation ("Acorn" and, together with
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TopShelf and Xxxxx Interactive, the "Xxxxx Companies") and Xxxxxx Xxxxx and
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Xxxxx Xxxxx (each of whom is a stockholder of each of the Xxxxx Companies, and
are collectively referred to herein as the "Principals" and each individual
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referred to as a "Principal").
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RECITALS
The parties intend that, subject to the terms and conditions of this
Agreement:
(i) Xxxxx Interactive Sub will merge with and into Xxxxx Interactive
in a reverse triangular merger, with Xxxxx Interactive to be the corporation
surviving the Xxxxx Interactive Merger (as defined below), all pursuant to the
terms and conditions of this Agreement and Articles of Merger in the form of
Exhibit A-1 attached hereto (the "Xxxxx Interactive Articles of Merger") and the
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applicable provisions of the law of the Commonwealth of Massachusetts.
(ii) TopShelf Sub will merge with and into TopShelf in a reverse
triangular merger, with TopShelf to be the corporation surviving the TopShelf
Merger (as defined below), all pursuant to the terms and conditions of this
Agreement and Articles of Merger in the form of Exhibit A-2 attached hereto (the
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"TopShelf Articles of Merger") and the applicable provisions of the laws of the
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Commonwealth of Massachusetts, and
(iii) Acorn Sub will merge with and into Acorn in a reverse triangular
merger, with Acorn to be the corporation surviving the Acorn Merger (as defined
below), all pursuant to the terms and conditions of this Agreement and Articles
of Merger in the form of Exhibit A-3 attached hereto (the "Acorn Articles of
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Merger") and the applicable provisions of the laws of the Commonwealth of
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Massachusetts.
Upon the effectiveness of the Mergers (as defined below), all of the
outstanding capital stock of each of the Xxxxx Companies will be converted into
shares of Asymetrix Series 5 Class B Stock, as provided in this Agreement and
the respective Articles of Merger. Each of the Mergers is intended to be treated
as a tax-free reorganization pursuant to the provisions of Section 368(a)(1)(A)
of the Internal Revenue Code of 1986, as amended (the "Code") by virtue of the
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provisions of Section 368(a)(2)(E) of the Code and will be treated as a
"purchase" for accounting purposes.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms have
the meanings set forth below:
1.1 "Acorn Common Stock" means the Common Stock of Acorn, no par value per
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share.
1.2 "Acorn Merger" means the merger of Acorn Sub with and into Acorn in a
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reverse triangular merger pursuant to this Agreement and the Acorn Articles of
Merger.
1.3 "Asymetrix Merger Stock" means the Series 5 Class B Stock of
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Asymetrix, $0.01 par value per share, having the rights, preferences and
limitations set forth in the Statement of Designation (as defined below), and
any Asymetrix Common Stock into which such Series 5 Class B Stock may be
converted pursuant to the terms in the Statement of Designation.
1.4 "Asymetrix Options" means options exercisable for Asymetrix Common
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Stock to be granted to employees of the Xxxxx Companies as provided in Section
11.3.
1.5 "Articles of Merger" mean collectively the Xxxxx Interactive Articles
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of Merger, the Acorn Articles of Merger and the TopShelf Articles of Merger.
1.6 "Effective Time" means the time and date on which each of the Xxxxx
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Interactive Articles of Merger, the Acorn Articles of Merger and the TopShelf
Articles of Merger, as applicable, has been filed with the Commonwealth of
Massachusetts, and each of the Mergers becomes effective under Massachusetts
law.
1.7 "Former Xxxxx Interactive Stockholders" means any holder of shares of
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Xxxxx Interactive Common Stock that are issued and outstanding immediately prior
to the Effective Time.
1.8 The "Mergers" means each of the Xxxxx Interactive Merger, the
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TopShelf Merger and the Acorn Merger.
1.9 "Merger Subs" means collectively each of Oaks Sub, TopShelf Sub and
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Acorn Sub.
1.10 "Xxxxx Interactive Common Stock" means the Common Stock of Xxxxx
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Interactive, no par value per share.
1.11 "Xxxxx Interactive Merger" means the merger of Xxxxx Interactive
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Sub with and into Xxxxx Interactive in a reverse triangular merger pursuant to
this Agreement and the Xxxxx Interactive Articles of Merger.
1.12 "Stated Value Per Share" means $3.47 per share of Asymetrix Merger
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Stock.
1.13 "Statement of Designation" means the Statement of Designation of
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Rights, Preferences and Limitations of Series 5 Class B Stock in the form
attached hereto as Exhibit 1.13.
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1.14 "TopShelf Common Stock" means the Common Stock of TopShelf, no par
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value per share.
1.15 "TopShelf Merger" means the merger of TopShelf Sub with and into
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TopShelf in a reverse triangular merger pursuant to this Agreement and the
TopShelf Articles of Merger.
Other capitalized terms defined elsewhere in this Agreement and not defined
in this Section 1 have the meanings assigned to such terms in this Agreement.
2. PLAN OF REORGANIZATION
2.1 The Xxxxx Interactive Merger. At the Effective Time, Xxxxx Interactive
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Sub will be merged with and into Xxxxx Interactive pursuant to this Agreement
and the Xxxxx Interactive Articles of Merger and in accordance with applicable
provisions of the laws of the Commonwealth of Massachusetts. Each share of Xxxxx
Interactive Common Stock issued and outstanding immediately prior to the
Effective Time will, by virtue of the Xxxxx Interactive Merger and at the
Effective Time, and without further action on the part of any holder thereof, be
converted into the right to receive such number of shares (the "Xxxxx
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Interactive Applicable Fraction") of Asymetrix Merger Stock as is equal to
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1,210,000 shares divided by the total number of shares of Xxxxx Interactive
Common Stock issued and outstanding immediately prior to the Effective Time.
2.2 The TopShelf Merger. Simultaneously with Xxxxx Interactive Merger,
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Asymetrix shall cause the TopShelf Articles of Merger to be filed with the
Secretary of State of the Commonwealth of Massachusetts. At the Effective Time,
TopShelf Sub will be merged with and into TopShelf pursuant to this Agreement
and the TopShelf Articles of Merger and in accordance with applicable provisions
of the laws of the Commonwealth of Massachusetts. Each share of TopShelf Common
Stock issued and outstanding immediately prior to the Effective Time will, by
virtue of the TopShelf Merger and at the Effective Time, and without further
action on the part of any holder thereof, be converted into the right to receive
such number of shares (the "TopShelf Applicable Fraction") of Asymetrix Merger
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Stock as is equal to 151,250 shares divided by the total number of shares of
TopShelf Common Stock issued and outstanding immediately prior to the Effective
Time.
2.3 The Acorn Merger. Simultaneously with the Xxxxx Interactive Merger and
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the TopShelf Merger, Asymetrix shall cause the Acorn Articles of Merger to be
filed with the Secretary of State of the Commonwealth of Massachusetts. At the
Effective Time, Acorn Sub will be merged with and into Acorn pursuant to this
Agreement and the Acorn Articles of Merger and in accordance with applicable
provisions of the laws of the Commonwealth of Massachusetts. Each share of Acorn
Common Stock issued and outstanding immediately prior to the Effective Time
will, by virtue of the Acorn Merger and at the Effective Time, and without
further action on the part of any holder thereof, be converted into the right to
receive such
number of shares (the "Acorn Applicable Fraction"; the Xxxxx Interactive
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Applicable Fraction, the TopShelf Applicable Fraction and the Acorn Applicable
Fraction are collectively referred to as the "Applicable Fractions") of
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Asymetrix Merger Stock as is equal to 151,250 shares divided by the total number
of shares of Acorn Common Stock issued and outstanding immediately prior to the
Effective Time.
2.4 Adjustments for Capital Changes. If, prior to the Effective Time,
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Asymetrix or any of the Xxxxx Companies recapitalizes through a split-up of its
outstanding shares into a greater number, or a combination of its outstanding
shares into a lesser number, reorganizes, reclassifies or otherwise changes its
outstanding shares into the same or a different number of shares of other
classes (other than through a split-up or combination of shares provided for in
the previous clause), or declares a dividend on its outstanding shares payable
in shares, securities convertible into shares or other property, then the
Applicable Fractions will be adjusted appropriately.
2.5 Fractional Shares. No fractional shares of Asymetrix Merger Stock will
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be issued in connection with any of the Mergers, but in lieu thereof, the
holders of Xxxxx Interactive Common Stock, TopShelf Common Stock or Acorn Common
Stock who would otherwise be entitled to receive a fraction of a share of
Asymetrix Merger Stock will receive from Asymetrix, promptly after the Effective
Time, an amount of cash equal to the Stated Value Per Share, multiplied by the
fraction of a share of Asymetrix Merger Stock to which such holder would
otherwise be entitled. Such cash payment in lieu of fractional share interests
is merely intended to provide a mechanism to avoid fractional shares.
2.6 Options; Other Securities. No shares of Asymetrix Merger Stock (or any
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other securities of Asymetrix) shall be issued or issuable with respect to
options to purchase Xxxxx Interactive Common Stock, TopShelf Common Stock or
Acorn Common Stock or with respect to any other equity securities of the Xxxxx
Companies (including warrants and stock appreciation rights), other than Xxxxx
Interactive Common Stock, TopShelf Common Stock or Acorn Common Stock and all
such options or other equity securities shall be canceled at the Effective Time.
2.7 Effects of the Mergers. At the Effective Time: (a) the separate
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existence of each of the Merger Subs will cease and (i) Xxxxx Interactive Sub
will be merged with and into Xxxxx Interactive, and Xxxxx Interactive will be
the surviving corporation of the Xxxxx Interactive Merger, pursuant to the terms
of the Xxxxx Interactive Articles of Merger; (ii) TopShelf Sub will be merged
with and into TopShelf and TopShelf will be the surviving corporation of the
TopShelf Merger, pursuant to the terms of the TopShelf Articles of Merger, and
(iii) Acorn Sub will be merged with and into Acorn, and Acorn will be the
surviving corporation of the Acorn Merger, pursuant to the terms of the Acorn
Articles of Merger; (b) the Articles of Organization and Bylaws of Xxxxx
Interactive, TopShelf or Acorn will be unchanged and will continue to be the
Articles of Organization and Bylaws of the surviving corporation of the Oaks
Interactive Merger, the TopShelf Merger or the Acorn Merger, as applicable; (c)
each share of capital stock of each Merger Sub outstanding immediately prior to
the Effective Time will continue to be an identical outstanding share of the
respective surviving corporation; (d) the directors and officers
of Xxxxx Interactive Sub, TopShelf Sub or Acorn Sub shall become the directors
and officers of the respective surviving corporation; (e) each share of Xxxxx
Interactive Common Stock, TopShelf Common Stock or Acorn Common Stock
outstanding immediately prior to the Effective Time will be converted into the
right to receive that number of shares of Asymetrix Merger Stock as provided in
Sections 2.1, 2.2 or 2.3, as applicable; (f) the purposes of the surviving
corporation of each of the Mergers shall be as specified in the Articles of
Organization of each of the Xxxxx Companies immediately prior to the Mergers;
(g) the authorized capitalization of the surviving corporation of each of the
Mergers shall be the authorized capital of the applicable Xxxxx Company
immediately prior to the Mergers; and (h) the Mergers will, from and after the
Effective Time, have all of the effects provided by applicable law.
2.8 Further Assurances. Each of the Xxxxx Companies and the Principals
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agree that if, at any time after the Effective Time, Asymetrix considers or is
advised that any further deeds, assignments or assurances are reasonably
necessary or desirable to vest, perfect or confirm in Asymetrix title to any
property or rights of the Xxxxx Companies, Asymetrix and its officers and
directors may execute and deliver all such proper deeds, assignments and
assurances and do all other things necessary or desirable to vest, perfect or
confirm title to such property or rights in Asymetrix and otherwise carry out
the purpose of this Agreement, in the name of the Xxxxx Companies or otherwise.
2.9 Securities Law Compliance. Asymetrix will issue the shares of
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Asymetrix Merger Stock in the Mergers pursuant to the "private placement"
exemption from registration under Section 4(2) of, and Rule 506 of Regulation D
promulgated under, the Securities Act of 1933, as amended (the "Securities
Act"), and the shares received by the Principals and the other Former Xxxxx
Interactive Stockholders in the Mergers will therefore be restricted securities
within the meaning of Rule 144 of the Securities Act, and Articles evidencing
such shares will bear a restrictive legend evidencing that fact. Asymetrix shall
also take any action that is required to be taken under any applicable state
securities or Blue Sky laws in connection with the issuance of Asymetrix Merger
Stock in the Mergers. The Xxxxx Companies and the Principals shall furnish to
Asymetrix all information known to the Xxxxx Companies or the Principals (or
reasonably ascertainable by the Xxxxx Companies or the Principals) concerning
each of the Xxxxx Companies, the Principals and the other Former Xxxxx
Interactive Stockholders, as may be reasonably requested in connection with any
action contemplated by this Section.
2.10 Purchase Accounting. The parties intend that each of the Mergers be
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treated as a purchase for accounting purposes.
2.11 Tax-Free Reorganization. The parties intend to adopt this Agreement as
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a tax-free plan of reorganization and to consummate the Mergers in accordance
with the provisions of Section 368(a)(1)(A) of the Code. The parties believe
that the value of the Asymetrix Merger Stock to be received in each applicable
Merger is equal, in each instance, to the value of the Xxxxx Interactive Common
Stock, TopShelf Common Stock or Acorn Common Stock, as applicable, to be
surrendered in exchange therefor. The Asymetrix Merger Stock issued in the
Mergers will be issued solely in exchange for Xxxxx Interactive Common Stock,
TopShelf Common Stock or Acorn Common Stock, as applicable, and no other
transaction other than the
applicable Merger represents, provides for or is intended to be an adjustment to
the consideration paid for the Xxxxx Interactive Common Stock, TopShelf Common
Stock or Acorn Common Stock, as applicable. No consideration that could
constitute "other property" within the meaning of Section 356 of the Code is
being paid by Asymetrix for the Xxxxx Interactive Common Stock, TopShelf Common
Stock or Acorn Common Stock in the Merger. The parties shall not take a position
on any tax returns inconsistent with this Section 2.11. In addition, Asymetrix
represents now, and as of the Effective Time, that it presently intends to
continue the Xxxxx Companies' historic business or use a significant portion of
the Xxxxx Companies' business assets in a business. At the Effective Time,
officers of each of Asymetrix and each of the Xxxxx Companies shall execute and
deliver officers' Certificates in the forms of Exhibits 2.11A, 2.11B, 2.11C and
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2.11D attached hereto. The provisions and representations contained or referred
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to in this Section 2.11 shall survive until the expiration of the applicable
statute of limitations.
3. REPRESENTATIONS AND WARRANTIES OF THE XXXXX COMPANIES
Each of the Principals and each Xxxxx Company, jointly and severally,
hereby represents and warrants as follows, except as set forth in the Xxxxx
Schedule of Exceptions (in numbered paragraphs that correspond to the Section
numbers below) simultaneously delivered to Asymetrix as Exhibit 3.0 with the
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execution of this Agreement:
3.1 Organization, Good Standing and Qualification. Each Xxxxx Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, has the corporate power and authority to
own, operate and lease its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified as a foreign
corporation in the jurisdictions listed in Schedule 3.1 of the Xxxxx Schedule of
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Exceptions. None of the Xxxxx Companies owns or leases any property outside of
the Commonwealth of Massachusetts and has no employees or offices outside of the
Commonwealth of Massachusetts. None of the Xxxxx Companies has received any
notice from any state in which the Xxxxx Companies are not qualified as a
foreign corporation to the effect that the Xxxxx Companies should be so
qualified.
3.2 Power, Authorization and Validity.
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3.2.1 Each Xxxxx Company has the corporate right, power, legal
capacity and authority to enter into and perform its obligations under this
Agreement and all agreements to which such Xxxxx Company is or will be a party
that are required to be executed at the Closing (defined below) pursuant to this
Agreement (the "Xxxxx Ancillary Agreements"). The execution, delivery and
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performance of this Agreement and the Xxxxx Ancillary Agreements to which the
Xxxxx Companies are a party have been duly and validly approved and authorized
by the Boards of Directors of Xxxxx Interactive, TopShelf and Acorn,
respectively. The Xxxxx Interactive Merger, the TopShelf Merger and the Acorn
Merger have been approved by all of the stockholders of Xxxxx Interactive,
TopShelf and Acorn, respectively.
3.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable the Xxxxx Companies to enter into, and to
perform its obligations under, this Agreement and the Xxxxx Ancillary
Agreements, except for (a) the filing of the Articles of
Merger with the Commonwealth of Massachusetts, and (b) such filings as may be
required to comply with federal and state securities laws.
3.2.3 This Agreement and the Xxxxx Ancillary Agreements are, or
when executed by the Xxxxx Companies, will be, valid and binding obligations of
the Xxxxx Companies, enforceable in accordance with their respective terms,
except as to the effect, if any, of (a) applicable bankruptcy and other similar
laws affecting the rights of creditors generally and (b) rules of law governing
specific performance, injunctive relief and other equitable remedies; provided,
however, that the Articles of Merger will not be effective until the Effective
Time.
3.3 Capitalization. As of the date hereof, the authorized capital stock of
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(i) Xxxxx Interactive consists of 200,000 shares of Xxxxx Interactive Common
Stock, of which 200 shares are issued and outstanding, (ii) TopShelf consists of
200,000 shares of TopShelf Common Stock, of which 200 shares are issued and
outstanding and (iii) Acorn consists of 200,000 shares of Acorn Common Stock, of
which 200 shares are outstanding. All issued and outstanding shares of Xxxxx
Interactive Common Stock, TopShelf Common Stock and Acorn Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable, are not
subject to any right of rescission, and have been offered, issued, sold and
delivered by Xxxxx Interactive, TopShelf or Acorn, as applicable, in compliance
with all registration or qualification requirements (or applicable exemptions
therefrom) of applicable federal and state securities laws. Schedule 3.3 of the
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Xxxxx Schedule of Exceptions sets forth a true, correct and complete list of all
holders of Xxxxx Interactive Common Stock, TopShelf Common Stock and Acorn
Common Stock. There are no options, warrants, stock appreciation rights, calls,
commitments, conversion privileges or preemptive or other rights or agreements
outstanding to purchase or otherwise acquire any of Xxxxx Interactive's,
TopShelf's or Acorn's authorized but unissued capital stock or any securities
convertible into or exchangeable for shares of Xxxxx Interactive, TopShelf or
Acorn capital stock or obligating any Xxxxx Company to grant, extend, or enter
into any such option, warrant, call, commitment, conversion privilege or other
right or agreement, and there is no liability for dividends accrued but unpaid.
There are no voting agreements, rights of first refusal or other restrictions
(other than normal restrictions on transfer under applicable federal and state
securities laws) applicable to any of the Xxxxx Companies' outstanding
securities. No Xxxxx Company is under any obligation to register under the
Securities Act any of its presently outstanding securities or any securities
that may be subsequently issued. All holders of Common Stock of any Xxxxx
Company reside in the Commonwealth of Massachusetts.
3.4 Subsidiaries. No Xxxxx Company presently owns or controls, directly or
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indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity.
3.5 No Violation of Existing Agreements. Neither the execution and
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delivery of this Agreement or any Xxxxx Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach or violation of, or cause an acceleration or amendment of
any obligation under, (a) any provision of the Articles of Organization or
Bylaws of any Xxxxx Company, as currently in effect, (b) any Material Agreement
(as defined in Section 3.11) to
which any Xxxxx Company is a party or by which the Xxxxx Companies or its assets
or properties are bound, or (c) to the knowledge of the Xxxxx Companies, any
federal, state, local or foreign judgment, writ, decree, order, statute, rule or
regulation applicable to the Xxxxx Companies, or their respective assets or
properties, in each case, such that the conflict, termination, breach,
acceleration or amendment would have a material adverse effect on the business,
operations, financial condition or prospects of such Xxxxx Companies (for
purposes of this Section 3, Section 3A and Section 5, a "Material Adverse
----------------
Effect").
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3.6 Litigation. There is no action, proceeding, claim or investigation
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pending against any Xxxxx Company before any federal, state, municipal, foreign
or other court or administrative agency, department, board or instrumentality
that, if concluded adversely to such Xxxxx Company, would have a Material
Adverse Effect, and, to the best of the Xxxxx Companies' knowledge, no such
action, proceeding, claim or investigation has been threatened. There is, to the
best of the Xxxxx Companies' knowledge, no reasonable basis for any stockholder
or former stockholder of any Xxxxx Company, or any other person, firm,
corporation or entity, to assert a claim against any Xxxxx Company, Principal or
Asymetrix based upon: (a) ownership or rights to ownership of any shares of
Xxxxx Interactive Common Stock, TopShelf Common Stock or Acorn Common Stock, (b)
any rights as or to become a holder of securities of any Xxxxx Company,
including any option or preemptive rights or rights to notice or to vote, or (c)
any rights under any agreement among any Xxxxx Company and any of their
respective stockholders or former stockholders or option holders or former
option holders.
3.7 Taxes. For purposes of this Section 3.7, the terms "tax" and "taxes"
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include all federal, state, local and foreign income, gains, franchise, excise,
property, sales, use, employment, license, payroll, occupation, recording,
value-added or transfer taxes, governmental charges, fees, levies or assessments
(whether payable directly or by withholding), and, with respect to such taxes,
any estimated taxes, interest, penalties, additions to tax and interest on any
such penalties and additions to tax.
3.7.1 Each of the Xxxxx Companies has timely filed all federal,
state, local and foreign tax returns or information statements required to be
filed by it, has timely paid all taxes required to be paid by it in respect of
all periods for which returns have been filed, has established an adequate
accrual or reserve for the payment of all taxes payable in respect of the
periods subsequent to the periods covered by the most recent applicable tax
returns, has made all necessary estimated tax payments, and has no material
liability for taxes in excess of the amount so paid or accruals or reserves so
established. Each of the Xxxxx Companies is not delinquent in the payment of
any tax or in the filing of any tax returns, and no deficiencies for any tax
have been threatened, claimed, proposed or assessed against the Xxxxx Companies
or any of its officers, employees or agents. None of the Xxxxx Companies has
received any notification that any material issues have been raised by (or are
currently pending) before the Internal Revenue Service or any other taxing
authority (including but not limited to any sales or use tax authority)
regarding any of the Xxxxx Companies and no tax return of any of the Xxxxx
Companies has ever been audited by the Internal Revenue Service or any state or
local taxing agency or authority. No tax liens have been filed against any
assets of the Xxxxx Companies.
3.7.2 Each of the Xxxxx Companies and/or its stockholders have made
an effective election (acknowledged by the Internal Revenue Service) to be
treated as a subchapter S corporation for each Xxxxx Company's taxable year
beginning January 1, 1995 , January 1, 1996 and January 1, 1997 (which were the
first taxable year as a subchapter S corporation of Xxxxx Interactive, TopShelf
and Acorn, respectively) pursuant to the provisions of the Code, and have not
taken (and, at all times from the date of this Agreement until the earlier of
(i) the Effective Time or (ii) the termination of this Agreement in accordance
with its terms, will not take) any actions inconsistent with the requirements
for subchapter S corporations, and such election has not been rescinded,
revoked, or terminated (and will not be rescinded, revoked, or terminated at any
time prior to the earlier of (i) the Effective Time or (ii) the termination of
this Agreement in accordance with its terms). Each of the stockholders of the
Xxxxx Companies is an individual who is a resident citizen of the United States
of America, and none of the Xxxxx Companies has ever authorized or issued any
stock other than Common Stock. None of the stockholders of the Xxxxx Company
has taken, caused or permitted, nor will, at any time prior to the earlier of
(i) the Effective Time or (ii) the termination of this Agreement in accordance
with its terms, take, cause or permit any action inconsistent with the
requirements for subchapter S corporations. Each Xxxxx Company and/or its
stockholders have validly and timely filed all elections and notices with the
Commonwealth of Massachusetts and with any other taxing authorities of any other
state or jurisdiction having jurisdiction over the Xxxxx Companies for income
tax purposes that are required by the laws of Massachusetts or any such other
jurisdiction to be filed in order to enable each Xxxxx Company to be taxed as a
subchapter S corporation under such tax laws for all tax periods for which such
Xxxxx Company has prepared its tax returns on the basis that it was a subchapter
S corporation within the meaning of the Code. None of the Xxxxx Companies is a
"personal holding company" within the meaning of Section 542 of the Code.
3.7.3 None of the Xxxxx Companies is aware of any pending or
threatened claim or assessment with respect to any deficiencies for any tax in
writing against the Xxxxx Companies by any taxing authority. None of the Xxxxx
Companies has executed any waiver of any statute of limitations relating to
taxes or any extension of the period for the assessment or collection of any tax
(other than extensions which have expired by the Effective Time). None of the
Xxxxx Companies has received any written notification, or is otherwise aware,
that any material issues are currently under audit, examination or review by any
taxing authority regarding the Xxxxx Companies.
3.7.4 There are no material liens, pledges, charges, claims,
security interests or other encumbrances covering the assets of the Xxxxx
Companies and relating or attributable to taxes, other than for taxes not yet
due and payable and others that do not have a Material Adverse Effect.
3.7.5 There is no contract, agreement, plan or arrangement,
including but not limited to the provisions of this Agreement, covering any
current or former employee of the Xxxxx Companies that, individually or
collectively, could give rise to the payment of any amount with respect to which
a deduction would be disallowed under Sections 280G or 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code").
3.7.6 None of the Xxxxx Companies is a party to a tax sharing or
tax allocation agreement, and none of the Xxxxx Companies owes any amount under
any such agreement.
3.7.7 None of the Xxxxx Companies is or has at any time been a
"United States real property holding corporation" within the meaning of Section
897(c) of the Code.
3.7.8 None of the Xxxxx Companies has filed any consent agreement
under Section 341(f) of the Code or has agreed to have Section 341(f)(2) of the
Code apply to any disposition of a "subsection (f) asset" (as defined in Section
341(f)(4) of the Code) owned by any of the Xxxxx Companies.
3.7.9 None of the Xxxxx Companies' assets constitute "tax-exempt
use property" within the meaning of Section 168(h) of the Code.
3.8 Financial Statements. Each of the Xxxxx Companies has delivered to
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Asymetrix as Schedule 3.8 of the Xxxxx Schedule of Exceptions, as appropriate
(a) with respect to Xxxxx Interactive, a balance sheet as of December 31, 1996
(the "Xxxxx Interactive 1996 Balance Sheet") and income statement and statement
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of cash flows for the 12 month period then ended (collectively, the "Xxxxx
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Interactive 1996 Financial Statements"), which have been reviewed by Xxxxx
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Interactive's accounting firm, and with respect to TopShelf, an internally
prepared balance sheet as of December 31, 1996 and income statement for the 12
month period then ended (which, collectively with the Xxxxx Interactive 1996
Financial Statements, are referred to herein as the "1996 Financial
--------------
Statements"), and (b) an internally prepared balance sheet as of June 30, 1997
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(the "June 30 Balance Sheet") and income statement for the six month period then
---------------------
ended (collectively, the "Xxxxx Xxxx Financial Statements") (the 1996 Financial
-------------------------------
Statements and the Xxxxx Xxxx Financial Statements are collectively referred to
herein as the "Xxxxx Financial Statements"). The Xxxxx Financial Statements (a)
--------------------------
are in accordance with the books and records of the respective Xxxxx Companies,
(b) fairly present the financial condition of the Xxxxx Companies at the dates
therein indicated and the results of operations for the periods therein
specified, and (c) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, subject, in the case of the
Xxxxx Xxxx Financial Statements, to normal recurring year-end adjustments and
the absence of any notes thereto. None of the Xxxxx Companies has any debt,
liability or obligation of any nature, whether accrued, absolute, contingent or
otherwise, and whether due or to become due, that is not reflected or reserved
against or disclosed in the Xxxxx Financial Statements, except for those that
may have been incurred after the date of the Xxxxx Financial Statements in the
ordinary course of its business, consistent with past practice and that are not
material in amount either individually or collectively.
3.9 Title to Properties. Each of the Xxxxx Companies has good and
-------------------
marketable title to all of its tangible assets as shown on the June 30 Balance
Sheets, free and clear of all liens, charges, restrictions or encumbrances,
other than for taxes not yet due and payable and others that do not have a
Material Adverse Effect and all leases of real or personal property to which any
Xxxxx Company is a party are fully effective.
3.10 Absence of Certain Changes. Since June 30, 1997, other than actions
--------------------------
required by this Agreement (including, without limitation, the incurrence of
legal and accounting fees and expenses in connection therewith), there has not
been with respect to any Xxxxx Company:
(a) any change in the financial condition, properties, assets,
liabilities, business or operations of any Xxxxx Company which change by itself
or in conjunction with all other such changes, whether or not arising in the
ordinary course of business, has had or, to the knowledge of the Xxxxx Companies
and the Principals, will have a Material Adverse Effect (other than changes
arising from the operation, at a loss, of the business of any of the Xxxxx
Companies in the ordinary course);
(b) any contingent liability incurred by any Xxxxx Company as
guarantor, surety or otherwise with respect to the obligations of others, which
contingent liability is in excess of $10,000 individually or $25,000 in the
aggregate;
(c) any mortgage, encumbrance or lien placed on any of the properties
of any Xxxxx Company, which mortgage, encumbrance or lien is in excess of
$10,000 individually or $25,000 in the aggregate;
(d) any obligation or liability incurred thereby other than
obligations and liabilities incurred in the ordinary course of business, which
obligation or liability is in excess of $10,000 individually or $25,000 in the
aggregate;
(e) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, other than in the
ordinary course, of any of the properties or assets of any Xxxxx Company, which
purchase, sale, other disposition or other arrangement is in excess of $10,000
individually or $25,000 in the aggregate;
(f) any damage, destruction or loss, whether or not covered by
insurance, which has a Material Adverse Effect;
(g) any declaration, setting aside or payment of any dividend on, or
the making of any other distribution in respect of, the capital stock of any
Xxxxx Company, any split, combination or recapitalization of the capital stock
of any Xxxxx Company or any direct or indirect redemption, purchase or other
acquisition of the capital stock of any Xxxxx Company;
(h) any labor dispute or claim of unfair labor practices or, other
than changes in the ordinary course of business, consistent with past practice,
any change in the compensation payable or to become payable to any of the Xxxxx
Companies' officers, employees or agents, any bonus payment or arrangement made
to or with any of such officers, employees or agents or any employee
terminations or resignations;
(i) any declaration or payment of an extraordinary dividend, within
the meaning of Section 1059(c) of the Code;
(j) any payment or discharge of a lien or liability thereof which
lien was not either shown on the June 30 Balance Sheets or incurred in the
ordinary course of business thereafter; or
(k) any material transaction with any of its officers, directors,
employees or stockholders or any entity controlled by any of such individuals.
3.11 Material Agreements, Contracts and Commitments. Except as set
----------------------------------------------
forth on Schedule 3.11 of the Xxxxx Schedule of Exceptions and other than this
-------------
Agreement and the Xxxxx Ancillary Agreements, no Xxxxx Company is on the date
hereof a party or subject to any oral or written contracts, obligations,
commitments, plans, leases, instruments, arrangements or licenses which are
material to the business of any Xxxxx Company (each a "Material Agreement"),
------------------
including, but not limited to any:
(a) Contract, commitment, letter contract or purchase order providing
for payments by or to any Xxxxx Company in an aggregate amount of (1) $50,000 or
more in the ordinary course of business to any one vendor or customer; or (2)
$25,000 or more not in the ordinary course of business to any one vendor or
customer;
(b) License agreement as licensor or licensee (except for standard
non-exclusive hardware and software licenses granted to end-user customers in
the ordinary course of business the current form of which has been provided to
Asymetrix's counsel), but in all events including site licenses for products
with initial year fees in excess of $50,000 and each agreement that provides for
either the delivery of source code to the licensee or escrow of such source code
for the benefit of such licensee and including any Xxxxx IP Rights Agreement (as
defined in Section 3.12);
(c) Consulting, development or similar agreement under which any
Xxxxx Company provides or will provide any advice or services to a customer of
any Xxxxx Company (collectively, the "Current Service Agreements." Consulting
--------------------------
Service Agreements which are memorialized in definitive written form are
referred to herein as "Definitive Agreements");
---------------------
(d) Contract for the current or future sale, provision or
manufacture of products (including computer software), material, supplies or
equipment from any Xxxxx Company or in which any Xxxxx Company has granted or
received manufacturing rights, most favored customer pricing provisions nor
exclusive marketing rights relating to any product or services, group of
products or services or territory (collectively, "Current Sales Agreements,"
------------------------
together with the Current Service Agreements, the "Customer Agreements");
-------------------
(e) Contract providing for the development of software by or for any
Xxxxx Company, or license of software to any Xxxxx Company, which software is
used or incorporated in any products distributed or services provided by any
Xxxxx Company or is contemplated to be used or incorporated in any products to
be distributed or services to be provided by any Xxxxx Company (other than
software generally available to the public at a per copy license fee of less
than $1,000 per copy);
(f) Contract or commitment for the employment of any officer,
employee or consultant of any Xxxxx Company or any other type of contract or
understanding with any officer, employee or consultant of any Xxxxx Company
which is not immediately terminable by such Xxxxx Company without a fixed
obligation on part of the Xxxxx Company in the nature of severance payments;
(g) Agreement for the lease of real or personal property involving
payments by or to any Xxxxx Company in an aggregate amount of $25,000 or more;
(h) Joint venture contract or arrangement or any other agreement that
involves a sharing of profits with other persons;
(i) Written dealer, distributor, sales representative, original
equipment manufacturer, value added remarketer or other agreement for the
ongoing distribution of any products of any Xxxxx Company;
(j) Instrument evidencing or related in any way to indebtedness for
borrowed money by way of direct loan, sale of debt securities, purchase money
obligation, conditional sale, guarantee, or otherwise, except for trade
indebtedness incurred in the ordinary course of business, and except as
disclosed in the Xxxxx Financial Statements;
(k) Contract containing covenants purporting to limit any Xxxxx
Company's freedom to compete in any line of business in any geographic area; or
(l) Stock redemption or purchase agreement yet to be performed.
All Material Agreements other than Current Services Agreements which
are not Definitive Agreements, and to the best of the Xxxxx Companies'
knowledge, all Current Services Agreements which are not Definitive Agreements,
constitute valid and enforceable obligations of the parties thereto (except as
to the effect, if any, of (i) applicable bankruptcy and other similar laws
affecting the rights of creditors generally, (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies, and (iii)
the enforceability of provisions requiring indemnification in connection with
the offering, issuance or sale of securities), and are and will, immediately
after the Effective Time, be in full force and effect. None of the Xxxxx
Companies has received any notice that any Material Agreement is subject to
termination based upon the failure of any Xxxxx Company to be qualified to do
business in a state. None of the Xxxxx Companies is, nor, to the best knowledge
of the Xxxxx Companies, is any other party thereto, in breach or default in any
material respect under the terms of any such Material Agreement. A copy of each
Material Agreement has been delivered or made available to Asymetrix's counsel.
No Xxxxx Company is a party to any contract, agreement or arrangement which has
had, or could reasonably be expected to have, a Material Adverse Effect. None
of the Xxxxx Companies has any material liability for renegotiation of
government contracts or subcontracts, if any.
3.12 Intellectual Property. Each Xxxxx Company owns all right, title or
---------------------
interest in, or has the rights to use, sell or license, all Intellectual
Property Rights (as defined below) necessary or required for the conduct of, or
used in, its business as presently conducted (such Intellectual
Property Rights being hereinafter collectively referred to as the "Xxxxx IP
--------
Rights") and such rights to use, sell or license are reasonably sufficient for
------
the conduct of its business as presently conducted. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not cause the forfeiture or termination or give rise to
a right of forfeiture or termination of any Xxxxx IP Right or materially impair
the right of any Xxxxx Company to use, sell or license any Xxxxx IP Right or
portion thereof. There are no royalties, honoraria, fees or other payments
payable by any Xxxxx Company to any person by reason of the ownership, use,
license, sale or disposition of any Xxxxx IP Rights. Except for matters which
would not have a Material Adverse Effect, neither the manufacture, marketing,
license, sale or intended use of any product currently licensed or sold by any
Xxxxx Company or currently under development by any Xxxxx Company violates any
license or agreement between any Xxxxx Company and any third party or to the
best of each Xxxxx Company's knowledge infringes any Intellectual Property Right
of any other party; and, except for matters which would not have a Material
Adverse Effect, there is no pending or, to the best knowledge of the Xxxxx
Companies, threatened claim or litigation contesting the validity, ownership or
right to use, sell, license or dispose of any Xxxxx IP Right; nor, to the best
knowledge of the Xxxxx Companies without any independent investigation thereof,
is there any basis for any such claim; nor has any Xxxxx Company received any
notice asserting that any Xxxxx IP Right or the proposed use, sale, license or
disposition thereof conflicts or will conflict with the rights of any other
party, nor, to the best knowledge of the Xxxxx Companies, is there any basis for
any such assertion. All past and present officers, employees and consultants of
each Xxxxx Company have executed and delivered to such Xxxxx Company an
agreement regarding the protection of proprietary information and the assignment
to such Xxxxx Company of all Intellectual Property Rights arising from the
services performed for such Xxxxx Company by such persons, copies of the form of
all such agreements have been delivered or made available to Asymetrix, and no
Xxxxx Company is using any Intellectual Property Rights of any past or present
officers, employees or consultants. Schedule 3.12 of the Xxxxx Schedule of
-------------
Exceptions contains a list of all applications, registrations, filings and other
formal actions made or taken pursuant to federal, state and foreign laws by each
Xxxxx Company to perfect or protect its interest in Xxxxx IP Rights, including,
without limitation, all patents, patent applications, copyrights, copyright
registrations, trademarks, trademark applications and service marks and all
Xxxxx IP Rights Agreements (except for object code end-user licenses granted to
end-users in the ordinary course of business that permit use of software
products without a right to modify, distribute or sublicense the same). As used
herein, the term "Intellectual Property Rights" shall mean all intellectual
----------------------------
property rights in any jurisdiction in the world, including, without limitation,
patents, patent applications, patent rights, trademarks, trademark applications,
trade names, service marks, service xxxx applications, copyright, copyright
registrations, licenses, know-how, trade secrets, customer lists, proprietary
processes, formulae and other rights to Software. The term "Software" shall mean
--------
all source and object code, algorithms, architecture, structure, display
screens, layouts, inventions, development tools and all documentation and media
constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records. The term "Xxxxx IP Rights Agreement"
-------------------------
shall mean any instrument or agreement governing any Xxxxx IP Right.
3.13 Compliance with Laws. Each Xxxxx Company has complied, or prior
--------------------
to the Closing Date will have complied, and is or will be at the Closing Date in
full compliance, in all material respects, with all applicable laws, ordinances
and regulations, and rules, and all orders, writs, injunctions, awards,
judgments and decrees, applicable to it or to its assets, properties, and
business (the violation of which would have a Material Adverse Effect),
including, without limitation: (a) all applicable federal and state securities
laws and regulations, (b) all applicable federal, state and local laws,
ordinances and regulations, and all orders, writs, injunctions, awards,
judgments and decrees, pertaining to (i) the sale, licensing, leasing, ownership
or management of such Xxxxx Company's owned, leased or licensed real or personal
property, products and technical data, and (ii) employment and employment
practices, terms and conditions of employment, and wages and hours, (c) the
Export Administration Act and regulations promulgated thereunder and all other
laws, regulations, rules, orders, writs, injunctions, judgments and decrees
applicable to the export or re-export of controlled commodities or technical
data and (d) the Immigration Reform and Control Act; provided, however, that
this Section 3.13 shall not be deemed to apply to any matters within the general
scope of any other representation in this Section 3. Each Xxxxx Company has
received all permits and approvals from, and has made all filings with, third
parties, including government agencies and authorities, that are necessary in
connection with its present business and which, if not received or filed, would
have a Material Adverse Effect. There are no legal or administrative
proceedings or investigations pending or threatened, that, if enacted or
determined adversely to any Xxxxx Company or any Principal, would result in any
Material Adverse Effect.
3.14 Certain Transactions and Agreements. None of the executive officers,
-----------------------------------
directors or affiliates (as that term is defined in Rule 405 under the
Securities Act) of any Xxxxx Company (each, an "Xxxxx Insider") nor any member
-------------
of their immediate families is or has been directly or indirectly interested in
any contract or informal arrangement with any Xxxxx Company within the last
three years, except for compensation as an officer, director or employee of such
Xxxxx Company. None of the Xxxxx Insiders nor any member of their immediate
families has any interest in any property, real or personal, tangible or
intangible, including inventions, patents, copyrights, trademarks or trade names
or trade secrets, used in or pertaining to the business of any Xxxxx Company,
except for the normal rights of a stockholder.
3.15 Employees, ERISA and Other Compliance.
-------------------------------------
3.15.1 No Xxxxx Company has any employment contracts or consulting
agreements currently in effect that are not terminable at will (other than
agreements with the sole purpose of providing for the confidentiality of
proprietary information or assignment of inventions).
3.15.2 No Xxxxx Company (i) has ever been or is now subject to a
union organizing effort, (ii) is subject to any collective bargaining agreement
with respect to any of its employees, (iii) is subject to any other contract,
written or oral, with any trade or labor union, employees' association or
similar organization, or (iv) has any current labor dispute. The Xxxxx
Companies have no knowledge that a material number of employees intend to leave
the employ of any Xxxxx Company.
3.15.3 Schedule 3.15.3 of the Xxxxx Schedule of Exceptions
---------------
identifies each "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), but
-----
excluding workers' compensation, unemployment compensation and other government-
mandated programs currently or previously maintained, contributed to or entered
into by any Xxxxx Company under which any Xxxxx Company or any ERISA Affiliate
(as defined below) thereof has any present or future obligation or liability
(collectively, the "Xxxxx Employee Plans"). For purposes of this Section 3.15.3,
--------------------
"ERISA Affiliate" shall mean any entity which is a member of (A) a "controlled
---------------
group of corporations," as defined in Section 414(b) of the Code, (B) a group of
entities under "common control," as defined in Section 414(c) of the Code, or
(C) an "affiliated service group," as defined in Section 414(m) of the Code, or
treasury regulations promulgated under Section 414(o) of the Code, any of which
includes any Xxxxx Company. Copies of all Xxxxx Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto and summary
plan descriptions thereof (including summary plan descriptions) have been
delivered or made available to Asymetrix or its counsel, together with the three
most recent annual reports (Form 5500, including, if applicable, Schedule B
thereto) prepared in connection with any such Xxxxx Employee Plan. All Xxxxx
Employee Plans which individually or collectively would constitute an "employee
pension benefit plan," as defined in Section 3(2) of ERISA (collectively, the
"Xxxxx Pension Plans"), are identified as such in Schedule 3.15.3 of the Xxxxx
------------------- ---------------
Schedule of Exceptions. As of the date hereof, all contributions due and
previously required to be made on or before the date hereof from Xxxxx with
respect to any of the Xxxxx Employee Plans have been made as required under
ERISA or have been accrued on the Xxxxx Financial Statements. To the knowledge
of the Xxxxx Companies and the Principals, each Xxxxx Employee Plan has been
maintained substantially in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including,
without limitation, ERISA and the Code, which are applicable to such Xxxxx
Employee Plans.
3.15.4 No "prohibited transaction," as defined in Section 406 of
ERISA or Section 4975 of the Code, has occurred with respect to any Xxxxx
Employee Plan which is covered by Title I of ERISA which would result in a
material liability to any Xxxxx Company taken as a whole, excluding transactions
effected pursuant to a statutory or administrative exemption. Nothing done or
omitted to be done and no transaction or holding of any asset under or in
connection with any Xxxxx Employee Plan has made or will make such Xxxxx Company
or any officer or director of any Xxxxx Company subject to any material
liability under Title I of ERISA or liable for any material tax (as defined in
Section 2.7) or penalty pursuant to Sections 4972, 4975, 4976 or 4979 of the
Code or Section 502 of ERISA.
3.15.5 Any Xxxxx Pension Plan which is intended to be qualified
under Section 401(a) of the Code (an "Xxxxx 401(a) Plan") has received a
-----------------
favorable determination from the Internal Revenue Service as to its
qualifications, and the Xxxxx Companies and the Principals are not aware of any
reason why such determination may not be relied upon by such plan. The Xxxxx
Companies and the Principals have delivered or made available to Asymetrix or
its counsel a true, correct and complete copy of the most recent Internal
Revenue Service determination letter with respect to each Xxxxx 401(a) Plan, if
any.
3.15.6 Schedule 3.15.6 of the Xxxxx Schedule of Exceptions lists each
---------------
employment, severance or other similar contract (written or oral), arrangement
or policy and each plan or arrangement providing for insurance coverage
(including any self-insured arrangements), workers' benefits, vacation benefits,
severance benefits, disability benefits, death benefits, hospitalization
benefits, retirement benefits, deferred compensation, profit-sharing, bonuses,
stock options, stock purchase, phantom stock, stock appreciation or other forms
of incentive compensation or post-retirement insurance, compensation or benefits
for employees, consultants or directors, but excluding workers' compensation,
unemployment compensation and other government-mandated programs currently or
previously maintained, which (A) is not an Xxxxx Employee Plan, (B) is entered
into, maintained or contributed to, as the case may be, by an Xxxxx Company and
(C) covers any employee or former employee of any Xxxxx Company. Such
contracts, plans and arrangements as are described in this Section 3.15.6 are
herein referred to collectively as the "Xxxxx Benefit Arrangements." Each Xxxxx
--------------------------
Benefit Arrangement has been maintained in substantial compliance with its terms
and with the requirements prescribed by any and all statutes, orders, rules and
regulations which are applicable to such Xxxxx Benefit Arrangement. The Xxxxx
Companies have delivered or made available to Asymetrix or its counsel a
complete and correct copy or description of each Xxxxx Benefit Arrangement.
3.15.7 The Xxxxx Companies have timely provided to individuals
entitled thereto all required notices and coverage pursuant to Section 4980B of
the Code and the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), with respect to any "qualifying event" (as defined in Section
-----
4980B(f)(3) of the Code) under any Xxxxx Employee Plan occurring prior to and
including the Closing Date, and no material Tax payable on account of Section
4980B of the Code has been incurred with respect to any current or former
employees (or their beneficiaries) of any Xxxxx Company.
3.15.8 No benefit payable or which may become payable by an Xxxxx
Company pursuant to any Xxxxx Employee Plan or any Xxxxx Benefit Arrangement or
as a result of or arising under this Agreement shall constitute an "excess
parachute payment" (as defined in Section 280G(b)(1) of the Code) which is
subject to the imposition of an excise Tax under Section 4999 of the Code or
which would not be deductible by reason of Section 280G of the Code.
3.15.9 [Intentionally Omitted]
3.15.10 To the knowledge of the Xxxxx Companies and the Principals
and except for matters which would not have a Material Adverse Effect, no
employee of any Xxxxx Company is in violation of any term of any employment
contract, patent disclosure agreement, noncompetition agreement, or any other
contract or written agreement, or any restrictive covenant contained in any such
agreement relating to the right of any such employee to be employed thereby, or
to use trade secrets or proprietary information of others, and the employment of
such employees does not subject any Xxxxx Company to any material liability.
3.15.11 A list of all employees, officers and consultants of each
Xxxxx Company and their current compensation, bonus plans, commission plans,
vacation rights and severance
rights is set forth on Schedule 3.15.11 of the Xxxxx Schedule of Exceptions. The
----------------
Xxxxx Companies are currently paying all amounts that are currently required to
be paid to such parties shown in such Schedule.
3.15.12 No Xxxxx Company is a party to any (a) agreement with any
executive officer or other key employee of such Xxxxx Company (i) the benefits
of which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving any Xxxxx Company in the nature of any of
the transactions contemplated by this Agreement and the Articles of Merger, (ii)
providing any term of employment or compensation guarantee, or (iii) providing
severance benefits or other benefits after the termination of employment of such
employee regardless of the reason for such termination of employment, or (b)
agreement or plan, including, without limitation, any stock option plan, stock
appreciation rights plan or stock purchase plan, any of the benefits of which
will be materially increased, or the vesting of benefits of which will be
materially accelerated, by the occurrence of any of the transactions
contemplated by this Agreement and the Articles of Merger or the value of any of
the benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement and the Articles of Merger. No Xxxxx Company is
obligated to make any "excess parachute payment" (as defined in Section
280G(b)(1) of the Code), nor will any excess parachute payment be deemed to have
occurred as a result of or arising out of the Mergers.
3.16 Corporate Documents. The Xxxxx Companies have made available to
-------------------
Asymetrix for examination all documents and information listed in the Xxxxx
Schedule of Exceptions or other exhibits called for by this Agreement or which
have been requested by Asymetrix's counsel, including, without limitation, the
following: (a) copies of the Articles of Organization and Bylaws of each Xxxxx
Company as currently in effect; (b) the Minute Book containing all records of
all proceedings, consents, actions and meetings of the stockholders, the board
of directors and any committees thereof of each Xxxxx Company; (c) the stock
ledger and journal reflecting all stock issuances and transfers of each Xxxxx
Company; (d) all material permits, orders, and consents issued by any regulatory
agency with respect to any Xxxxx Company, or any securities of any Xxxxx
Company, and all applications for such permits, orders, and consents; and (e)
copies or forms of all stock purchase agreements, warrants, option plans, grants
and exercise agreements and, where forms of agreements are provided rather than
copies of the signed documents, a true and complete list showing the names of
the security holder, numbers of shares, exercise or purchase prices, grant
dates, vesting dates, exercise dates, expiration dates and all other relevant
data necessary for Asymetrix to issue the Asymetrix Merger Stock .
3.17 No Brokers. None of the Xxxxx Companies is obligated for the payment
----------
of fees or expenses of any investment banker, broker or finder in connection
with the origin, negotiation or execution of this Agreement or the Xxxxx
Ancillary Agreements or in connection with any transaction contemplated hereby
or thereby. Except as otherwise provided in this Agreement, each Xxxxx Company
will pay only its own expenses, if any, incurred in connection with this
Agreement and the transactions contemplated herein.
3.18 Disclosure. Neither this Agreement, its exhibits and schedules, nor
----------
any of the Certificates or documents to be delivered by any Xxxxx Company or the
Principals to Asymetrix
under this Agreement, taken together, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which such statements were made, not misleading.
3.19 Insurance. Each Xxxxx Company maintains and at all times during the
---------
prior three years has maintained fire and casualty, general liability, business
interruption and product liability insurance which it believes to be reasonably
prudent for similarly sized and similarly situated businesses. A list of all
such insurance is set forth on Schedule 3.19 of the Xxxxx Schedule of
-------------
Exceptions.
3.20 Environmental Matters.
---------------------
3.20.1 During the period that any Xxxxx Company has leased or owned
its properties or owned or operated any facilities, there have been no disposals
or releases of Hazardous Materials (as defined below) by any Xxxxx Company, or
to the Xxxxx Companies' knowledge, by others, on, from or under such properties
or facilities, the liability for which would have a Material Adverse Effect.
The Xxxxx Companies have no knowledge of any presence, generation,
manufacturing, disposals or releases of Hazardous Materials on, from or under
any of such properties or facilities, which may have occurred prior to any Xxxxx
Company having taken possession of any of such properties or facilities, the
liability for which would have a Material Adverse Effect. For the purposes of
this Agreement, the terms "disposal" and "release" shall have the definitions
-------- -------
assigned thereto by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., as amended ("CERCLA"). For
------
the purposes of this Agreement, "Hazardous Materials" shall mean any hazardous
-------------------
or toxic substance, material or waste which is or becomes prior to the Closing
Date regulated under, or defined as a "hazardous substance," "pollutant,"
"contaminant," "toxic chemical," "hazardous material," "toxic substance" or
"hazardous chemical" under (i) CERCLA; (ii) the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. (S) 1801 et seq.; (iii) the Toxic Substance Control
Act, 15 U.S.C. (S) 2601 et seq.; (iv) the Occupational Safety and Health Act of
1970, 29 U.S.C. (S) 651 et seq.; (v) any applicable federal, state or local
statute or ordinance that has a scope or purpose similar to those identified
above; or (vi) regulations promulgated under any of the laws or statutes
identified above.
3.20.2 None of the properties or facilities of any of the Xxxxx
Companies is in material violation of any federal, state or local law,
ordinance, regulation or order relating to industrial hygiene or to the
environmental conditions on, under or about such properties or facilities,
including, but not limited to, soil and ground water condition. During the time
that each of the Xxxxx Companies has owned or leased its properties and
facilities, none of the Xxxxx Companies nor, to the Xxxxx Companies' knowledge,
any third party, has used, generated, manufactured or stored on, under or about
such properties or facilities or transported to or from such properties or
facilities any Hazardous Materials except in substantial accordance with
applicable environmental laws.
3.20.3 During the time that each of the Xxxxx Companies has owned or
leased its respective properties and facilities, there has been no litigation
brought or, to the knowledge of
the Xxxxx Companies, threatened against any Xxxxx Company by, or any settlement
reached by any Xxxxx Company with, any party or parties alleging the presence,
disposal, release or threatened release of any Hazardous Materials on, from or
under any of such properties or facilities.
3.21 Books and Records. The books, records and accounts of the Xxxxx
-----------------
Companies (a) are in all material respects true, complete and correct, (b) have
been maintained in accordance with good business practices on a basis consistent
with prior years, (c) are stated in reasonable detail and accurately and fairly
reflect the material transactions and dispositions of the assets of each of the
Xxxxx Companies, and (d) accurately and fairly reflect the basis for the Xxxxx
Financial Statements, except as would not have a material adverse effect on the
business, operations, financial condition or prospects of all of the Xxxxx
Companies in the aggregate, and subject to normal recurring year end adjustments
and, in the case of financial statements, the absence of any notes thereto.
3.22 Prior Customer Agreements. Each of the Xxxxx Companies has previously
-------------------------
provided to Asymetrix a copy of (i) all consulting, development or similar
agreement under which any Xxxxx Company has provided any advice or services to a
customer of any Xxxxx Company and (which agreements are not Current Service
Agreements), and (ii) all contracts for the sale, provision or manufacture of
products (including computer software), material, supplies or equipment (which
agreements are not Current Sales Agreements). Such agreements described in this
Section 3.22 are collectively referred to herein as "Prior Agreements."
----------------
3A. REPRESENTATIONS AND WARRANTIES OF THE PRINCIPALS
In addition to the provisions of Section 3 hereof, each of the Principals
and, jointly and severally, hereby represents and warrants as follows, except as
set forth in the Xxxxx Schedule of Exceptions:
3A.1 Power, Authorization and Validity.
---------------------------------
3A.1.1 Each Principal has the right, power, legal capacity and
authority to enter into and perform his obligations under this Agreement and all
Xxxxx Ancillary Agreements to which such Principal is or will be a party.
3A.1.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable the Principals to enter into, and to perform
his obligations under, this Agreement and the Xxxxx Ancillary Agreements, except
for (a) the filing of the Articles of Merger with the Commonwealth of
Massachusetts, if any, and (b) such filings as may be required to comply with
federal and state securities laws.
3A.1.3 This Agreement and the Xxxxx Ancillary Agreements are, or
when executed by the Principals, as applicable, will be, valid and binding
obligations of Principals, enforceable in accordance with their respective
terms, except as to the effect, if any, of (a) applicable bankruptcy and other
similar laws affecting the rights of creditors generally and (b)
rules of law governing specific performance, injunctive relief and other
equitable remedies; provided, however, that the Articles of Merger will not be
effective until the Effective Time.
3A.2 No Violation of Existing Agreements. Neither the execution and
-----------------------------------
delivery of this Agreement or any Xxxxx Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach or violation of, or cause an acceleration or amendment of
any obligation under, (a) any Material Agreement to which any Xxxxx Company is a
party or by which the Xxxxx Companies or the Principals or his or its assets or
properties are bound, or (b) to the knowledge of the Principals, any federal,
state, local or foreign judgment, writ, decree, order, statute, rule or
regulation applicable to the Principals, or their assets or properties, in each
case, such that the conflict, termination, breach, acceleration or amendment
would have a Material Adverse Effect.
3A.3 Litigation. There is no action, proceeding, claim or investigation
----------
pending against any Principal before any federal, state, municipal, foreign or
other court or administrative agency, department, board or instrumentality that,
if concluded adversely to Principal, would have a Material Adverse Effect, and,
to the best of the Principals' knowledge, no such action, proceeding, claim or
investigation has been threatened. There is, to the best of Principals'
knowledge, no reasonable basis for any stockholder or former stockholder of any
Xxxxx Company, or any other person, firm, corporation or entity, to assert a
claim against any Xxxxx Company, Principal or Asymetrix based upon: (a)
ownership or rights to ownership of any shares of Xxxxx Interactive Common
Stock, TopShelf Common Stock or Acorn Common Stock, (b) any rights as or to
become a holder of securities of any Xxxxx Company, including any option or
preemptive rights or rights to notice or to vote, or (c) any rights under any
agreement among any Xxxxx Company and any of their respective stockholders or
former stockholders or option holders or former option holders.
3A.4 None of the Principals is aware of any pending or threatened claim or
assessment with respect to any deficiencies for any tax in writing against the
Xxxxx Companies by any taxing authority. None of the Principals has executed any
waiver of any statute of limitations relating to taxes or any extension of the
period for the assessment or collection of any tax (other than extensions which
have expired by the Effective Time). None of the Principals has received any
written notification, or is otherwise aware, that any material issues are
currently under audit, examination or review by any taxing authority regarding
the Xxxxx Companies.
3A.5 Title to Properties. To the knowledge of each of the Principals, no
-------------------
Xxxxx Company is in violation of any zoning, building, safety or environmental
ordinance, regulation or requirement or other law or regulation applicable to
the operation of owned or leased properties (the violation of which would have a
Material Adverse Effect), or has received any notice of such violation with
which it has not complied or had waived.
3A.6 Material Agreements, Contracts and Commitments. Except as set forth on
----------------------------------------------
Schedule 3.11 of the Xxxxx Schedule of Exceptions and other than this Agreement
-------------
and the Xxxxx
Ancillary Agreements, no Principal is on the date hereof a party or subject to
Material Agreement.
All Material Agreements other than Current Services Agreements which
are not Definitive Agreements, and to the best of the Xxxxx Companies'
knowledge, all Current Services Agreements which are not Definitive Agreements,
constitute valid and enforceable obligations of the parties thereto (except as
to the effect, if any, of (i) applicable bankruptcy and other similar laws
affecting the rights of creditors generally, (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies, and (iii)
the enforceability of provisions requiring indemnification in connection with
the offering, issuance or sale of securities), and are and will, immediately
after the Effective Time, be in full force and effect. None of Principals is,
nor, to the best knowledge of the Principals, is any other party thereto, in
breach or default in any material respect under the terms of any such Material
Agreement. No Principal is a party to any contract, agreement or arrangement
which has had, or could reasonably be expected to have, a Material Adverse
Effect.
3A.7 Intellectual Property. Except for matters which would not have a
---------------------
Material Adverse Effect, neither the manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by any Xxxxx Company or
currently under development by any Xxxxx Company to the best of each Principal's
knowledge, infringes any Intellectual Property Right of any third party. Except
for matters which would not have a Material Adverse Effect, there is no pending
or, to the best knowledge of the Principals, threatened claim or litigation
contesting the validity, ownership or right to use, sell, license or dispose of
any Xxxxx IP Right; nor, To the best knowledge of the Principals without any
independent investigation thereof, is there any basis for any such claim; no
Principal has received any notice asserting that any Xxxxx IP Right or the
proposed use, sale, license or disposition thereof conflicts or will conflict
with the rights of any other party, nor, to the best knowledge of the
Principals, is there any basis for any such assertion.
3A.8 Compliance with Laws. There are no legal or administrative
--------------------
proceedings or investigations pending or threatened, that, if enacted or
determined adversely to any Xxxxx Company or any Principal, would result in any
Material Adverse Effect.
3A.9 Employees, ERISA and Other Compliance.
-------------------------------------
3A.9.1 The Principals have no knowledge that a material number of
employees intend to leave the employ of any Xxxxx Company.
3A.9.2 To the knowledge of the Principals, each Xxxxx Employee
Plan has been maintained substantially in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including, without limitation, ERISA and the Code, which are applicable to such
Xxxxx Employee Plans.
3A.10 No Brokers. None of the Principals is obligated for the payment of
----------
fees or expenses of any investment banker, broker or finder in connection with
the origin, negotiation or execution of this Agreement or the Xxxxx Ancillary
Agreements or in connection with any transaction contemplated hereby or thereby.
Except as otherwise provided in this Agreement,
each Principal will pay only its own expenses, if any, incurred in connection
with this Agreement and the transactions contemplated herein.
3A.11 Environmental Matters.
---------------------
3A.11.1 During the period that any Xxxxx Company has leased or owned
its properties or owned or operated any facilities, there have been no disposals
or releases of Hazardous Materials (as defined below) by any Xxxxx Company, or
to Principals' knowledge, by others, on, from or under such properties or
facilities, the liability for which would have a Material Adverse Effect. The
Principals have no knowledge of any presence, generation, manufacturing,
disposals or releases of Hazardous Materials on, from or under any of such
properties or facilities, which may have occurred prior to any Xxxxx Company
having taken possession of any of such properties or facilities, the liability
for which would have a Material Adverse Effect.
3A.11.2 During the time that each of the Xxxxx Companies has owned
or leased its properties and facilities, none of the Xxxxx Companies nor, to the
Principals' knowledge, any third party, has used, generated, manufactured or
stored on, under or about such properties or facilities or transported to or
from such properties or facilities any Hazardous Materials except in substantial
accordance with applicable environmental laws.
3A.11.3 During the time that each of the Xxxxx Companies has owned
or leased its respective properties and facilities, there has been no litigation
brought or, to the knowledge of the Principals, threatened against any Xxxxx
Company by, or any settlement reached by any Xxxxx Company with, any party or
parties alleging the presence, disposal, release or threatened release of any
Hazardous Materials on, from or under any of such properties or facilities.
3A.12 Certain Dispositions After Effective Time. None of the Principals has
-----------------------------------------
any present plan or intention, or any binding commitment, to dispose, after the
Effective Time, of an amount of Asymetrix Merger Stock that would cause the
Principals, in the aggregate, to have disposed of such stock in an amount equal
in value to 50% or more of the value of each of the Xxxxx Interactive Common
Stock, TopShelf Common Stock and Acorn Common Stock outstanding immediately
prior to the Effective Time.
4. REPRESENTATIONS AND WARRANTIES OF ASYMETRIX AND MERGER SUBS
Asymetrix and each Merger Sub hereby jointly and severally represent and
warrant as follows, except as set forth on the Asymetrix Schedule of Exceptions
(in numbered paragraphs that correspond to the Section numbers below)
simultaneously delivered to the Xxxxx Companies and the Principals as Exhibit
-------
4.0 with the execution of this Agreement:
---
4.1 Organization, Good Standing and Qualification. Asymetrix is a
---------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Washington and has the corporate power and authority to own,
operate and lease its properties and to carry on its business as now conducted
and as proposed to be conducted. Each Merger Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the corporate power and authority to own,
operate and lease its properties and carry on its business as now conducted and
as proposed to be conducted. Each Merger Sub was formed in September 1997 and
has conducted no business or operations prior to the date hereof. Asymetrix is
qualified to do business as a foreign corporation in each jurisdiction where
failure to be so qualified could reasonably be expected to have a material
adverse effect on the business, operations, financial condition or prospects of
Asymetrix and its subsidiaries taken as a whole (for purposes of this Section 4
and 6, a "Material Adverse Effect").
-----------------------
4.2 Power, Authorization and Validity.
---------------------------------
4.2.1 Each of Asymetrix and each Merger Sub has the corporate right,
power, legal capacity and authority to enter into and perform its respective
obligations under this Agreement, and all agreements to which Asymetrix and
Merger Subs are or will be a party that are required to be executed pursuant to
this Agreement (the "Asymetrix Ancillary Agreements"). The execution, delivery
------------------------------
and performance of this Agreement and the Asymetrix Ancillary Agreements have
been duly and validly approved and authorized by all necessary corporate action
on the part of each of Asymetrix and each Merger Sub.
4.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable each of Asymetrix and each Merger Sub to enter
into, and to perform its respective obligations under, this Agreement and the
Asymetrix Ancillary Agreements, except for (a) the filing of the Articles of
Merger with the Commonwealth of Massachusetts , and the filing of appropriate
documents with the relevant authorities of other states in which Asymetrix is
qualified to do business, if any, and (b) such filings as may be required to
comply with federal and state securities laws.
4.2.3 This Agreement and the Asymetrix Ancillary Agreements are, or
when executed by Asymetrix and Merger Subs will be, valid and binding
obligations of Asymetrix and each Merger Sub enforceable in accordance with
their respective terms, except as to the effect, if any, of (a) applicable
bankruptcy and other similar laws affecting the rights of creditors generally,
(b) rules of law governing specific performance, injunctive relief and other
equitable remedies, and (c) the enforceability of provisions requiring
indemnification in connection with the offering, issuance or sale of securities;
provided, however, that none of the Articles of Merger will be effective until
the Effective Time.
4.3 Capitalization. The capitalization of Asymetrix and Merger Subs
--------------
consist of the following:
4.3.1 Asymetrix Capital Stock. A total of 5,000,000 authorized
-----------------------
shares of Class B Stock, $0.01 par value per share (the "Class B Stock"), of
-------------
which 50,000 shares are designated as Series 1 Class B Stock (the "Series 1
--------
Stock"), and of which 37,500 shares are outstanding, and 388,395 are designated
-----
as Series A Preferred Stock (the "Series A Stock"), all of which are
--------------
outstanding, 388,395 are designated as Series B Preferred Stock (the "Series B
--------
Stock"), all of which are outstanding (310,560 shares of which are subject to a
-----
pledge securing a note from the investors in such stock), and 2,500,000 are
designated as Series 4 Class B Stock (the "Series 4
--------
Stock") of which 2,383,894 shares are outstanding. A total of 40,000,000
-----
authorized shares of Asymetrix Common Stock, of which 8,078,172 shares are
outstanding. A total of 1,512,500 shares of Asymetrix Series 5 Class B Stock
will be authorized prior to the Effective Time, of which no shares will be
outstanding. The rights, preferences and privileges of the Class B Stock,
including the Series 1 Stock, the Series A Stock, the Series B Stock, the Series
4 Stock, the Asymetrix Common Stock and the Class B Stock, are as stated in
Asymetrix's Articles of Incorporation, as amended, and as provided by law. All
issued and outstanding shares of Asymetrix capital stock have been duly
authorized and validly issued, are fully paid and nonassessable, and have been
offered, issued, sold and delivered by Asymetrix in compliance with all
registration or qualification requirements (or applicable exemptions therefrom)
of applicable federal and state securities laws.
4.3.2 Asymetrix Options, Warrants, Reserved Shares. Except for: (i)
--------------------------------------------
conversion privileges of the Series A Stock, the Series B Stock, the Series 1
Stock and the Series 4 Stock, (ii) options to purchase 4,283,008 shares of
Asymetrix Common Stock (outstanding as of September 29, 1997) and a like number
shares of Asymetrix Common Stock reserved for issuance upon the exercise
thereof, (iii) 1,135,210 additional shares of Asymetrix Common Stock (as of
September 29, 1997) reserved for future issuance under the Asymetrix's 1995
Combined Incentive and Nonqualified Stock Option Plan (the "Asymetrix Option
----------------
Plan"), (iv) an option to purchase 19,431 shares of Series 4 Stock, and (v) the
----
proposed issuance of up to 50,000 shares of Series 1 Stock (of which shares,
37,500 are validly issued, outstanding, fully paid and nonassessable) to certain
of Asymetrix's vendors, there are not outstanding any options, warrants, calls,
commitments, rights (including conversion or preemptive rights) or agreements
for the purchase or acquisition from Asymetrix of any shares of its capital
stock or any securities convertible into or ultimately exchangeable or
exercisable for any shares of Asymetrix's capital stock or obligating Asymetrix
to grant, extend, or enter into any such option, warrant, call, commitment,
conversion privilege or other right or agreement, and there is no liability for
dividends accrued but unpaid. Apart from the exceptions noted in this Section
4.3.2, and except for (i) rights of first refusal and rights of repurchase held
by Asymetrix to repurchase shares of Asymetrix Common Stock issued under Stock
Issuance and Restriction Agreements relating to the issuance of 8,100 shares of
Common Stock and to 37,500 shares of Series 1 Stock (the "Stock Issuance and
------------------
Restriction Agreements"), (ii) rights of first refusal and repurchase rights
----------------------
held by Asymetrix to purchase shares of its capital stock issued under the
Asymetrix Option Plan, (iii) the rights granted in that certain Amended and
Restated Investor's Rights Agreement dated as of December 20, 1996 by and among
Asymetrix, SOFTVEN No. 2 Investment Enterprise Partnership and Multimedia Asia
Pacific Pty Ltd (the "Investor's Rights Agreement") and (iv) a Voting Agreement
---------------------------
and Registration Rights Agreement dated as of September 11, 1997 entered into in
connection with the acquisition of Aimtech, there are no voting agreements,
rights of first refusal or other restrictions (other than normal restrictions on
transfer under applicable federal and state securities laws) or registration
rights applicable to any of Asymetrix's outstanding securities.
4.3.3 Merger Subs. A total of one authorized share of Common Stock,
-----------
$0.01 par value per share for each of Xxxxx Interactive Sub, TopShelf Sub and
Acorn Sub, each of which is validly issued, outstanding, fully paid and
nonassessable. There are not outstanding any
options, warrants, rights (including conversion of preemptive rights) or
agreements for the purchase or acquisition from any Merger Sub of any shares of
its capital stock or any securities convertible into or ultimately exchangeable
or exercisable for any shares of any Merger Sub's capital stock.
4.4 Subsidiaries. Asymetrix does not presently own or control, directly
------------
or indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity, other than Aimtech Corporation, a
Delaware corporation, SuperCede, Inc. and Merger Subs. Each Merger Sub does not
presently own or control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, association, or other entity.
4.5 No Violation of Existing Agreements. Neither the execution and
-----------------------------------
delivery of this Agreement or any Asymetrix Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach, impairment or violation of, or cause an acceleration or
amendment of any obligation under, (a) any provision of the Articles of
Incorporation or Organization or Bylaws of Asymetrix and each Merger Sub, as
currently in effect, (b) in any material respect, any material instrument or
contract to which Asymetrix and each Merger Sub is a party or by which any of
their assets or properties are bound, or (c) any federal, state, local or
foreign judgment, writ, decree, order, statute, rule or regulation applicable to
Asymetrix and each Merger Sub or their assets or properties, in each case, such
that the conflict, termination, breach, acceleration or amendment would have a
Material Adverse Effect.
4.6 Litigation. There is no action, proceeding, claim or investigation
----------
pending against Asymetrix before any federal, state, municipal, foreign or other
court or administrative agency, department, board or instrumentality that, if
concluded adversely to Asymetrix, would have a Material Adverse Effect, and, to
the best of Asymetrix's knowledge, no such action, proceeding, claim or
investigation has been threatened. There is, to the best of Asymetrix's
knowledge, no reasonable basis for any shareholder or former shareholder of
Asymetrix, or any other person, firm, corporation or entity, to assert a claim
against Asymetrix based upon: (a) ownership or rights to ownership of any shares
of Asymetrix capital stock, (b) any rights as or to become a holder of
securities of Asymetrix, including any option or preemptive rights or rights to
notice or to vote, or (c) share any rights under any agreement among Asymetrix
and any of its shareholders or former shareholders or option holders or former
option holders.
4.7 Taxes. Asymetrix has timely filed all tax returns and reports
-----
required by law, other than where a failure to file a return did not or would
not have a Material Adverse Effect, and has never been audited by any state or
federal taxing authority. All tax returns and reports of Asymetrix are true and
correct in all material respects. Asymetrix has paid all taxes and other
assessments due, except those, if any, currently being contested by it in good
faith (for which it has established a proper reserve). Asymetrix is not aware
of any pending or threatened claim or assessment with respect to any
deficiencies for any tax in writing against Asymetrix by any taxing authority.
Asymetrix has not executed any waiver of any statute of limitations relating to
taxes or any extension of the period for the assessment or collection of any tax
(other than extensions which have expired by the Effective Time). Asymetrix has
not received any written
notification, and is not otherwise aware, that any material issues are currently
under audit, examination or review by any taxing authority regarding Asymetrix.
There are no material liens, pledges, charges, claims, security interests or
other encumbrances covering the assets of Asymetrix and relating or attributable
to taxes, other than for taxes not yet due and payable and others that do no
have a Material Adverse Effect. Asymetrix is not a party to a tax sharing or tax
allocation agreement, and Asymetrix does not owe any amount under any such
agreement.
4.8 Financial Statements. Asymetrix has delivered to the Xxxxx Companies
--------------------
and the Principals as Schedule 4.8 of the Asymetrix Schedule of Exceptions
------------
Asymetrix's (a) audited balance sheet as of December 31, 1996 (the "Asymetrix
---------
1996 Balance Sheet") and income statement and statement of cash flows for the 12
------------------
month period then ended (collectively, the "Asymetrix 1996 Financial
------------------------
Statements"), and (b) balance sheet as of June 30, 1997 (the "Asymetrix June 30
---------- -----------------
Balance Sheet") and income statement and statement of cash flows for the six
-------------
month period then ended (collectively, the "Asymetrix June Financial
------------------------
Statements") (the Asymetrix 1996 Financial Statements and Asymetrix June
----------
Financial Statements are collectively referred to herein as the "Asymetrix
---------
Financial Statements"). The Asymetrix Financial Statements (a) are in
--------------------
accordance with the books and records of Asymetrix, (b) fairly present the
financial condition of Asymetrix at the dates therein indicated and the results
of operations for the periods therein specified, and (c) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis, subject, in the case of the Asymetrix June Financial Statements, to
normal recurring year-end adjustments and the absence of any notes thereto.
Asymetrix has no debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, that is not
reflected or reserved against or disclosed in the Asymetrix Financial
Statements, except for those that may have been incurred after the date of the
Asymetrix Financial Statements in the ordinary course of its business,
consistent with past practice and that are not material in amount either
individually or collectively.
4.9 Title to Properties.
-------------------
4.9.1 Asymetrix has good and marketable title to all of its tangible
assets as shown on the Asymetrix June 30 Balance Sheet, free and clear of all
liens, charges, restrictions or encumbrances, other than for taxes not yet due
and payable and others that do not have a Material Adverse Effect. With respect
to the property and assets it leases, Asymetrix is in material compliance with
such leases.
4.9.2 Each Merger Sub has been newly formed for the sole and express
purpose of participating in the Mergers and has at no time engaged in any
activities or owned any assets except as necessary for such purpose.
4.10 Absence of Certain Changes. Since the June 30, 1997, other than
--------------------------
actions required by this Agreement (including, without limitation, the
incurrence of legal and accounting fees and expenses in connection therewith),
there has not been with respect to Asymetrix and each Merger Sub.
(a) any change in its financial condition, properties, assets,
liabilities, business or operations from that reflected in the Asymetrix
Financial Statements, other than those that do not have a Material Adverse
Effect;
(b) any contingent liability incurred by it as guarantor, surety or
otherwise with respect to the obligations of others, which contingent liability
is in excess of $50,000 individually or in excess of $100,000 in the aggregate;
(c) any mortgage, encumbrance or lien placed on any of its properties,
which mortgage, encumbrance or lien is in excess of $100,000 individually or in
excess of $250,000 in the aggregate;
(d) any obligation or liability incurred by it other than obligations
and liabilities incurred in the ordinary course of business, which obligation or
liability is in excess of $100,000 individually or in excess of $250,000 in the
aggregate;
(e) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of its
properties or assets, which purchase, sale, other disposition or other
arrangement is in excess of $100,000 individually or $250,000 in the aggregate;
(f) any damage, destruction or loss, whether or not covered by
insurance, which has a Material Adverse Effect;
(g) any declaration, setting aside or payment of any dividend on, or
the making of any distribution in respect of, its capital stock, or any split,
combination or recapitalization of its capital stock or any direct or indirect
redemption, purchase or other acquisition of its capital stock, including,
without limitation, any extraordinary dividend within the meaning of Section
1059(c) of the Code;
(h) any labor dispute or claim of unfair labor practices;
(i) any payment or discharge of a lien or liability thereof which lien
was not either shown on the Asymetrix June 30 Balance Sheet or incurred in the
ordinary course of business thereafter; or
(j) entered into any material transactions with any of its officers,
directors, employees or stockholders or any entity controlled by any of such
individuals.
4.11 Material Agreements, Contracts and Commitments. All oral or written
----------------------------------------------
contracts, obligations, commitments, plans, leases, instruments, arrangements or
licenses which are material to the business of Asymetrix and its subsidiaries
taken as a whole (for purposes of this Section 4.11, a "Material Agreement")
------------------
constitute valid and enforceable obligations of the parties thereto (except as
to the effect, if any, of (i) applicable bankruptcy and other similar laws
affecting the rights of creditors generally, (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies, and (iii)
the enforceability of provisions requiring
indemnification in connection with the offering, issuance or sale of
securities); and are in full force and effect. Asymetrix is not, nor, to the
best knowledge of Asymetrix, is any other party thereto, in breach or default in
any material respect under the terms of any such Material Agreement. A copy of
each Material Agreement has been delivered or made available to counsel for the
Xxxxx Companies and the Principals. Asymetrix is not a party to any contract or
arrangement which, in the absence of a breach by the other party or parties
thereto, has had or could reasonably be expected to have a Material Adverse
Effect. Asymetrix does not have any material liability for renegotiation of
government contracts or subcontracts, if any.
4.12 Status of Proprietary Assets. Asymetrix owns all right, title or
----------------------------
interest in, or has the rights to use, sell or license, all Intellectual
Property Rights necessary or required for the conduct of, or used in, its
business as presently conducted (such Intellectual Property Rights being
hereinafter collectively referred to as the "Asymetrix IP Rights") and such
-------------------
rights to use, sell or license are reasonably sufficient for the conduct of its
business as presently conducted. Except for matters which would not have a
Material Adverse Effect, neither the manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by Asymetrix or currently
under development by Asymetrix violates any license or agreement between
Asymetrix and any third party or infringes any Intellectual Property Right of
any other party; and, except for matters which would not have a Material Adverse
Effect, there is no pending or, to the best knowledge of Asymetrix, threatened
claim or litigation contesting the validity, ownership or right to use, sell,
license or dispose of any Asymetrix IP Right; nor, to the best knowledge of
Asymetrix without any independent investigation thereof, is there any basis for
any such claim; nor has Asymetrix received any notice asserting that any
Asymetrix IP Right or the proposed use, sale, license or disposition thereof
conflicts or will conflict with the rights of any other party, nor, to the best
knowledge of Asymetrix, is there any basis for any such assertion.
4.13 Compliance with Laws. Asymetrix and each Merger Sub has complied, or
--------------------
prior to the Closing Date will have complied, and is or will be at the Closing
Date in full compliance, in all material respects, with all applicable laws,
ordinances and regulations, and rules, and all orders, writs, injunctions,
awards, judgments and decrees, applicable to it or to its assets, properties,
and business (the violation of which would have a Material Adverse Effect),
including, without limitation: (a) all applicable federal and state securities
laws and regulations, (b) all applicable federal, state and local laws,
ordinances and regulations, and all orders, writs, injunctions, awards,
judgments and decrees, pertaining to (i) the sale, licensing, leasing, ownership
or management of Asymetrix's owned, leased or licensed real or personal
property, products and technical data, and (ii) employment and employment
practices, terms and conditions of employment, and wages and hours, (c) the
Export Administration Act and regulations promulgated thereunder and all other
laws, regulations, rules, orders, writs, injunctions, judgments and decrees
applicable to the export or re-export of controlled commodities or technical
data and (d) the Immigration Reform and Control Act. Asymetrix has received all
permits and approvals from, and has made all filings with, third parties,
including government agencies and authorities, that are necessary in connection
with its present business and which, if not received or filed, would have a
Material Adverse Effect. There are no legal or administrative proceedings or
investigations pending or threatened, that, if enacted or determined adversely
to Asymetrix, would result in any Material Adverse Effect.
4.14 Certain Transactions and Agreements. None of the executive officers,
-----------------------------------
directors or affiliates (other than SOFTVEN No. 2 Investment Enterprises
Partnership, or its designated director or the designated director of the former
stockholders of Aimtech corporation) of Asymetrix (each, an "Asymetrix Insider")
-----------------
nor any member of their immediate families is or has been directly or indirectly
interested in any contract or informal arrangement with Asymetrix within the
last twelve (12) months, except for compensation as an officer, director or
employee of Asymetrix. None of the Asymetrix Insiders nor any member of their
immediate families has any interest in any property, real or personal, tangible
or intangible, including inventions, patents, copyrights, trademarks or trade
names or trade secrets, used in or pertaining to the business of Asymetrix,
except for the normal rights of a shareholder.
4.15 Governmental Consents. No consent, approval, order or authorization
---------------------
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of Asymetrix or any
Merger Sub is required in connection with the consummation of the transactions
contemplated by this Agreement, except for such qualifications or filings under
------ ---
the 1933 Act and the regulations thereunder and all other applicable securities
laws as may be required in connection with the transactions contemplated by this
Agreement. All such qualifications and filings will, in the case of
qualifications, be effective on the Closing and will, in the case of filings, be
made within the time prescribed by law.
4.16 ERISA and Labor Issues.
----------------------
4.16.1 Asymetrix does not have any Employee Pension Benefit Plan as
defined in Section 3 of ERISA.
4.16.2 To the knowledge of Asymetrix and except for matters which
would not have a Material Adverse Effect, Asymetrix is in compliance in all
material respects with all applicable laws, agreements and contracts relating to
employment, employment practices, wages, employee benefit plans as defined in
Section 3(3) of ERISA, hours, and terms and conditions of employment, including,
but not limited to, employee compensation matters, ERISA and the Code.
4.16.3 To the knowledge of Asymetrix and except for matters which
would not have a Material Adverse Effect, no employee of Asymetrix is in
violation of any term of any employment contract, patent disclosure agreement,
noncompetition agreement, or any other contract or written agreement, or any
restrictive covenant contained in any such agreement relating to the right of
any such employee to be employed thereby, or to use trade secrets or proprietary
information of others, and the employment of such employees does not subject
Asymetrix to any material liability.
4.16.4 Asymetrix is not bound by or subject to any contract,
commitment or arrangement with any labor union, employees association or similar
organization, and to the Asymetrix's best knowledge, no labor union, employees
association or similar organization has requested, sought or attempted to
represent any employees, representatives or agents of Asymetrix. There is no
strike or other labor dispute involving Asymetrix pending nor, to
Asymetrix's best knowledge, threatened, nor is Asymetrix aware of any labor
organization activity involving its employees.
4.17 Corporate Documents. Asymetrix has made available to the Xxxxx
-------------------
Companies and the Principals for examination all documents and information
listed in the Asymetrix Schedule of Exceptions or other exhibits called for by
this Agreement or which have been requested by the Xxxxx Companies and the
Principals' counsel, including, without limitation, the following: (a) copies
of Asymetrix's and its subsidiaries' Articles or Articles of Organization and
Bylaws and as currently in effect; (b) Asymetrix's Minute Book containing all
records that Asymetrix has of all proceedings, consents, actions and meetings of
the stockholders, the board of directors and any committees thereof; (c)
Asymetrix's and its subsidiaries' stock ledger or stockholder lists and journal
reflecting stock issuances and transfers; (d) all material permits, orders, and
consents issued by any regulatory agency with respect to Asymetrix, or any
securities of Asymetrix, and all applications for such permits, orders, and
consents; and (e) copies or forms of all stock purchase agreements, warrants,
option plans, grants and exercise agreements and, where forms of agreements are
provided rather than copies of the signed documents, a true and complete list
showing the names of the security holder, numbers of shares, exercise or
purchase prices, grant dates, vesting dates, exercise dates, expiration dates
and all other relevant data necessary for Asymetrix to issue the Asymetrix
Merger Stock.
4.18 No Brokers. Neither Asymetrix nor any Merger Sub is obligated for the
----------
payment of fees or expenses of any investment banker, broker or finder in
connection with the origin, negotiation or execution of this Agreement or the
Asymetrix Ancillary Agreements or in connection with any transaction
contemplated hereby or thereby.
4.19 Disclosure. Neither this Agreement, its exhibits and schedules, nor
----------
any of the Certificates or documents to be delivered by Asymetrix or any Merger
Sub to the Xxxxx Companies and the Principals under this Agreement, taken
together, contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances under which such statements were made,
not misleading.
4.20 Insurance. Asymetrix maintains and at all times during the prior
---------
three years has maintained fire and casualty, general liability, business
interruption and product liability insurance which it believes to be reasonably
prudent for similarly sized and similarly situated businesses.
4.21 Environmental Matters.
---------------------
4.22.1 During the period that Asymetrix has leased or owned its
properties or owned or operated any facilities, there have been no disposals or
releases of Hazardous Materials (as defined below) by Asymetrix, or to
Asymetrix's knowledge, by others, on, from or under such properties or
facilities, the liability for which would have a Material Adverse Effect.
Asymetrix has no knowledge of any presence, generation, manufacturing, disposals
or releases of Hazardous Materials on, from or under any of such properties or
facilities, which may have occurred prior to Asymetrix having taken possession
of any of such properties or facilities, the liability for which
would have a Material Adverse Effect. For the purposes of this Agreement, the
terms "disposal" and "release" shall have the definitions assigned thereto by
-------- -------
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. (S) 9601 et seq., as amended ("CERCLA"). For the purposes of
------
this Agreement, "Hazardous Materials" shall mean any hazardous or toxic
-------------------
substance, material or waste which is or becomes prior to the Closing Date
regulated under, or defined as a "hazardous substance," "pollutant,"
"contaminant," "toxic chemical," "hazardous material," "toxic substance" or
"hazardous chemical" under (i) CERCLA; (ii) the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. (S) 1801 et seq.; (iii) the Toxic Substance Control
Act, 15 U.S.C. (S) 2601 et seq.; (iv) the Occupational Safety and Health Act of
1970, 29 U.S.C. (S) 651 et seq.; (v) any applicable federal, state or local
statute or ordinance that has a scope or purpose similar to those identified
above; or (vi) regulations promulgated under any of the laws or statutes
identified above.
4.22.2 None of the properties or facilities of Asymetrix is in
material violation of any federal, state or local law, ordinance, regulation or
order relating to industrial hygiene or to the environmental conditions on,
under or about such properties or facilities, including, but not limited to,
soil and ground water condition. During the time that Asymetrix has owned or
leased its properties and facilities, neither Asymetrix nor, to Asymetrix's
knowledge, any third party, has used, generated, manufactured or stored on,
under or about such properties or facilities or transported to or from such
properties or facilities any Hazardous Materials except in substantial
accordance with applicable environmental laws.
4.22.3 During the time that Asymetrix has owned or leased its
properties and facilities, there has been no litigation brought or, to the
knowledge of Asymetrix, threatened against Asymetrix by, or any settlement
reached by Asymetrix with, any party or parties alleging the presence, disposal,
release or threatened release of any Hazardous Materials on, from or under any
of such properties or facilities.
4.23 Real Property Holding Corporation Status. Asymetrix and each Merger
----------------------------------------
Sub is not and has at no time been a "United States real property holding
corporation" within the meaning of Section 897(c) of the Code.
4.24 Shares Issued in Merger. The Asymetrix Merger Stock to be issued to
-----------------------
the stockholders of the Xxxxx Companies in the Merger, when issued by Asymetrix
pursuant to the terms of this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable, free and clear of all liens, claims,
pledges, options, adverse claims, assessments or charges of any nature
whatsoever, and will have been issued materially in compliance with all
registration or qualification requirements (or applicable exemptions therefrom)
of applicable federal and state securities laws. The Statement of Designation
shall be filed on or before the Effective Time, and no further amendments to the
Asymetrix's Articles of Incorporation shall have been adopted or filed.
4.25 Books and Records. To the knowledge of Asymetrix and each Merger Sub,
-----------------
the books, records and accounts of Asymetrix (a) are in all material respects
true, complete and correct, (b) have been maintained in accordance with good
business practices on a basis
consistent with prior years, (c) are stated in reasonable detail and accurately
and fairly reflect the material transactions and dispositions of the assets of
Asymetrix, and (d) accurately and fairly reflect the basis for the Asymetrix
Financial Statements.
4.26 Certain Dispositions. Asymetrix has no present plan or intention, or
--------------------
any binding commitment, to dispose, subsequent to the Effective Time, of a
quantity of Common Stock of any Xxxxx Company that would cause Asymetrix to lose
"control" of any Merger Sub within the meaning of Section 368(c) of the Code.
4.27 Control of Merger Subs. At all times prior to and as of the Effective
----------------------
Time, Asymetrix will be in "control" of each Merger Sub, as such term is defined
in Section 368(c) of the Code.
5. XXXXX PRECLOSING COVENANTS
During the period from the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement pursuant to Section 10
hereof, each of the Xxxxx Companies and the Principals covenants and agrees as
follows:
5.1 Advice of Changes. Each of the Xxxxx Companies will, and the
-----------------
Principals will cause each of the Xxxxx Companies to, promptly advise Asymetrix
in writing (a) of any event occurring subsequent to the date of this Agreement
that would render any representation or warranty of any of the Xxxxx Companies
or the Principals contained in this Agreement, if made on or as of the date of
such event or the Closing Date, untrue or inaccurate in any material respect and
(b) of any change in the business, results of operations or financial condition
of any of the Xxxxx Companies that could reasonably be expected to have a
Material Adverse Effect.
5.2 Conduct of Business. Each of the Xxxxx Companies will, and the
-------------------
Principals will cause each of the Xxxxx Companies to, continue to conduct its
business and use commercially reasonable efforts to maintain its business
relationships in the ordinary and usual course and will not, and each of the
Principals will cause the Xxxxx Companies not to, without the prior written
consent of Asymetrix (other than actions required by this Agreement, as required
by law or in connection with the performance of agreements disclosed in the
Xxxxx Schedule of Exceptions):
(a) borrow any money;
(b) enter into any transaction not in the ordinary course of business
or which involves an expense or capital commitment by any one or more of the
Xxxxx Companies in excess of $25,000, or which obligates any Xxxxx Company for a
period exceeding six months;
(c) encumber or permit to be encumbered any of its assets or grant
liens therein;
(d) dispose of any portion of any of the assets of the Xxxxx Companies
with a value exceeding $10,000 (other than in the ordinary course of business);
(e) enter into any lease or contract for the purchase or sale of any
property, real or personal, except in the ordinary course of business consistent
with past practice;
(f) fail to maintain any of the equipment and other assets of the
Xxxxx Companies in good working condition and repair according to the standards
such Xxxxx Company has maintained to the date of this Agreement, subject only to
ordinary wear and tear;
(g) pay any bonus, royalty, increased salary or special remuneration
to any officer, employee or consultant or agree to same or enter into any new
employment, severance, "golden parachute" or consulting agreement with any such
person;
(h) change accounting methods;
(i) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its or any other Xxxxx Company' capital stock;
(j) amend or terminate any contract, agreement or license to which an
Xxxxx Company is a party except those amended or terminated in the ordinary
course of business consistent with past practice, and which are not material in
amount or effect;
(k) lend any amount to any person or entity, other than advances for
travel and expenses which are incurred in the ordinary course of business
consistent with past practice;
(l) guarantee or act as a surety for any obligation except for the
endorsement of checks and other negotiable instruments in the ordinary course of
business consistent with past practice;
(m) waive or release any material right or claim except in the
ordinary course of business consistent with past practice;
(n) split or combine the outstanding shares of its capital stock of
any class or enter into any recapitalization affecting the number of outstanding
shares of its capital stock of any class or affecting any other of its
securities;
(o) merge, consolidate or reorganize with, or acquire any entity;
(p) amend its Articles of Organization or Bylaws;
(q) issue or sell any shares of its capital stock of any class;
(r) license any of its or any other Xxxxx Company's technology or
intellectual property except in the ordinary course of business consistent with
past practice;
(s) agree to any audit assessment by any tax authority (unless the
amount thereof is not material or has been adequately accrued or reserved on the
Xxxxx Financial Statements) or file any federal or state income or franchise tax
return unless (i) the amount
payable with respect thereto is not material or has been adequately accrued or
reserved on the Xxxxx Financial Statements or (ii) copies of such returns have
been delivered to Asymetrix for its review and approved by Asymetrix prior to
filing;
(t) change any insurance coverage or issue any Certificates of
insurance except as is routinely done in the ordinary course of business of the
Xxxxx Companies;
(u) hire any employee or consultant;
(v) adopt or amend any employee benefit plan;
(w) enter into any contracts for the sale of advertising in an amount
exceeding $10,000 or for longer than 30 days; or
(x) agree to do any of the things described in the preceding clauses
5.2(a) through (w).
5.4 Regulatory Approvals. Each of the Xxxxx Companies will, and the
--------------------
Principals will cause the Xxxxx Companies to, execute and file, or join in the
execution and filing, of any application or other document that may be required
to be filed by it in order to obtain the authorization, approval or consent of
any governmental body (federal, state, local or foreign) which may be reasonably
required, in connection with the consummation of the transactions contemplated
by this Agreement. Each of the Xxxxx Companies will, and the Principals will
cause the Xxxxx Companies to, use its best efforts to obtain all such
authorizations, approvals and consents.
5.5 Necessary Consents. The Xxxxx Companies will, and the Principals
------------------
shall cause the Xxxxx Company to, use commercially reasonable efforts to obtain
such written consents and take such other actions as may be necessary or
appropriate in addition to those set forth in Section 5.4 (including, without
limitation those consents set forth on Schedule 9.6) to allow the consummation
of the transactions contemplated hereby and to allow Asymetrix to carry on the
business of the Xxxxx Companies business after the Closing.
5.6 Litigation. The Xxxxx Companies and the Principals will notify
----------
Asymetrix in writing promptly after learning of any actions, suits, proceedings
or investigations by or before any court, board or governmental agency,
initiated by or against the Xxxxx Companies, or known by the Xxxxx Companies or
the Principals to be threatened against the Xxxxx Companies.
5.7 No Other Negotiations. From the date hereof until the earlier of the
---------------------
termination of this Agreement or consummation of the Merger, the Xxxxx Company
will not, and the Principals will not permit the Xxxxx Companies to, and will
not authorize any officer or director of the Xxxxx Companies or any other person
on its behalf to, directly or indirectly, solicit, encourage, negotiate or
accept any offer from any party concerning the possible disposition of all or
any substantial portion of any of the Xxxxx Companies' business, assets or
capital stock by merger, sale or any other means or any other transaction that
would involve a change in control of any of the Xxxxx Companies, or any
transaction in which any of the Xxxxx Companies
contemplates issuing equity or debt securities. The Xxxxx Companies and the
Principals will promptly notify Asymetrix in writing of any third party
inquiries or proposals.
5.8 Access to Information. Until the Closing, each of the Xxxxx Companies
---------------------
and the Principals will allow Asymetrix and its agents reasonable access to the
files, books, records and offices of each of the Xxxxx Companies, including,
without limitation, any and all information relating to each of the Xxxxx
Company' taxes, commitments, contracts, leases, licenses, and real, personal and
intangible property (including its intellectual property) and financial
condition. Each of the Xxxxx Companies, and the Principals will cause the Xxxxx
Companies' accountants to cooperate with Asymetrix and its agents in making
available all financial information reasonably requested, including, without
limitation, the right to examine all working papers pertaining to all financial
statements prepared or audited by such accountants.
5.9 Satisfaction of Conditions Precedent. Each of the Xxxxx Companies and
------------------------------------
each of the Principals will use its or his commercially reasonable efforts to
satisfy or cause to be satisfied all the conditions precedent which are set
forth in Section 9, and each such person will use its or his commercially
reasonable efforts to cause the transactions contemplated by this Agreement to
be consummated, and, without limiting the generality of the foregoing, to obtain
all consents and authorizations of third parties (including without limitation,
those third parties described in Section 9.6) and to make all filings with, and
give all notices to, third parties that may be necessary or reasonably required
on their part in order to effect the transactions contemplated hereby. The
Xxxxx Parties and the Principals will promptly notify Asymetrix in writing of
any failure or inability to comply fully with this Section.
5.10 Blue Sky Laws. Each of the Xxxxx Companies and the Principals will
-------------
cooperate with Asymetrix in connection with Asymetrix's efforts to comply with
the securities and Blue Sky laws of all jurisdictions which are applicable in
connection with the Mergers.
6. ASYMETRIX PRECLOSING COVENANTS
During the period from the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement pursuant to Section 10
hereof, Asymetrix and Merger Subs covenant and agree as follows:
6.1 Advice of Changes; Conduct of Business. Asymetrix and Merger Subs
--------------------------------------
will promptly advise the Xxxxx Companies in writing (a) of any event occurring
subsequent to the date of this Agreement that would render any representation or
warranty of Asymetrix or Merger Subs contained in this Agreement, if made on or
as of the date of such event or the Closing Date, untrue or inaccurate in any
material respect; or (b) of any material adverse change in the business, results
of operations or financial condition of Asymetrix. Asymetrix will use
commercially reasonable efforts to continue to conduct its business and maintain
its business relationships in the ordinary and usual course and will not,
without the prior written consent of the Xxxxx Companies (other than action
required by this Agreement, as required by law or in connection with the
performance of agreements, arrangements or pending transactions disclosed in the
Asymetrix Schedule of Exceptions);
(a) enter into any material transaction not in the ordinary course of
business other than an investment in, or the spin-off of, its SuperCede, Inc.
subsidiary a "SuperCede Transaction";
---------------------
(b) declare, set aside or pay any material cash or stock dividend or
other material distribution in respect of capital stock, or redeem or otherwise
acquire any material portion of its capital stock other than in connection with
a SuperCede Transaction;
(c) dispose of (including by license), whether to a third party, a
partially or wholly-owned subsidiary or otherwise, any material portion of its
assets (other than in the ordinary course of business) other than in connection
with the SuperCede Transaction;
(d) encumber or permit to be encumbered in any material respect any of
its assets or grant liens thereon;
(e) issue or sell a material number of shares of its capital stock of
any class (except upon the exercise of an Asymetrix option held by Asymetrix
employees) or any other of its securities, or issue or create any material
warrants, obligations, subscriptions, options, convertible securities or other
commitments to issue shares of capital stock other than in connection with the
SuperCede Transaction; or
(f) merge, consolidate or reorganize with, or acquire, any entity.
6.2 Regulatory Approvals. Asymetrix and Merger Subs will execute and
--------------------
file, or join in the execution and filing, of any application or other document
that may be necessary in order to obtain the authorization, approval or consent
of any governmental body, federal, state, local or foreign, which may be
reasonably required, in connection with the consummation of the transactions
contemplated by this Agreement. Asymetrix will use its best efforts to obtain
all such authorizations, approvals and consents.
6.3 Satisfaction of Conditions Precedent. Each of Asymetrix and each
------------------------------------
Merger Sub will use its commercially reasonable efforts to satisfy or cause to
be satisfied all the conditions precedent which are set forth in Section 8, and
each of Asymetrix and each Merger Sub will use its commercially reasonable
efforts to cause the transactions contemplated by this Agreement to be
consummated and, without limiting the generality of the foregoing, to obtain all
consents and authorizations of third parties and to make all filings with, and
give all notices to, third parties that may be necessary or reasonably required
on its part in order to effect the transactions contemplated hereby.
6.4 Blue Sky Laws. Asymetrix shall take such steps as may be necessary to
-------------
comply with the securities and Blue Sky laws of all jurisdictions which are
applicable in connection with the Mergers.
6.5 Access to Information. Until the Closing, Asymetrix will allow the
---------------------
Xxxxx Companies and their respective agents reasonable access to the files,
books, records and offices of Asymetrix, including, without limitation, any and
all information relating to Asymetrix's
taxes, commitments, contracts, leases, licenses, and real, personal and
intangible property (including its intellectual property) and financial
condition. Asymetrix will cause its accountants to cooperate with the Xxxxx
Companies and their respective agents in making available all financial
information reasonably requested, including, without limitation, the right to
examine all working papers pertaining to all financial statements prepared or
audited by such accountants.
7. CLOSING MATTERS
7.1 The Closing. Subject to termination of this Agreement as provided in
-----------
Section 10 below, the Closing will take place at the offices of Fenwick & West
LLP, Two Palo Alto Square, Palo Alto, California on or before September 30,
1997, or, if all conditions to closing have not been satisfied or waived by such
date, such other place, time and date as the Xxxxx Companies and Asymetrix may
mutually select (the "Closing Date"). Concurrently with the Closing, each of
------------
the Articles of Merger will be filed in the office of the Massachusetts
Secretary of State.
7.2 Exchange of Certificates.
------------------------
7.2.1 As of the Effective Time, all shares of Xxxxx Interactive
Common Stock, TopShelf Common Stock and Acorn Common Stock that are outstanding
immediately prior thereto will, by virtue of the Mergers and without further
action, cease to exist and will be converted into the right to receive from
Asymetrix the number of shares of Asymetrix Merger Stock determined as set forth
in Section 2.1, 2.2, or 2.3, as applicable, subject to Section 2.4.
7.2.2 As soon as practicable after the Effective Time, each holder of
shares of Xxxxx Interactive Common Stock, TopShelf Common Stock or Acorn Common
will surrender the Certificate(s) for such shares (the "Certificates"), duly
------------
endorsed as requested by Asymetrix, to Asymetrix for cancellation. Promptly
after the Effective Time and receipt of such Certificates, Asymetrix will issue
to each tendering holder a Certificates for the number of shares of Asymetrix
Merger Stock to which such holder is entitled pursuant to Sections 2.1, 2.2 or
2.3 hereof, as applicable and distribute any cash payable under Section 2.4.
7.2.3 No dividends or distributions payable to holders of record of
Asymetrix Merger Stock after the Effective Time, or cash payable in lieu of
fractional shares, will be paid to the holder of any unsurrendered
Certificates(s) until the holder of the Certificates(s) surrenders such
Certificates(s), or if such Certificates are lost, stolen or destroyed, provides
an indemnity reasonably acceptable to Asymetrix. Subject to the effect, if any,
of applicable escheat and other laws, following surrender of any Certificates,
there will be delivered to the person entitled thereto, without interest, the
amount of any dividends and distributions therefor paid with respect to
Asymetrix Merger Stock so withheld as of any date subsequent to the Effective
Time and prior to such date of delivery.
7.2.4 All Asymetrix Merger Stock (and, if applicable, cash in lieu of
fractional shares) delivered upon the surrender of Xxxxx Interactive Common
Stock, TopShelf Common Stock or Acorn Common Stock in accordance with the terms
hereof will be deemed to have been delivered in full satisfaction of all rights
pertaining to such Xxxxx Interactive Common Stock, TopShelf Common Stock or
Acorn Common Stock. There will be no further registration of
transfers on the stock transfer books of any of the Xxxxx Companies or the
transfer agent of such Xxxxx Interactive Common Stock, TopShelf Common Stock or
Acorn Common Stock. If, after the Effective Time, Certificates are presented for
any reason, they will be canceled and exchanged as provided in this Section.
7.2.5 Until Certificates representing Xxxxx Interactive Common Stock,
TopShelf Common Stock or Acorn Common Stock outstanding prior to the Merger are
surrendered pursuant to Section 7.2.2 above, such Certificates will be deemed,
for all purposes, to evidence ownership of the number of shares of Asymetrix
Merger Stock into which Xxxxx Interactive Common Stock, TopShelf Common Stock or
Acorn Common Stock will have been converted pursuant to Sections 2.1, 2.2 or 2.3
hereof, as applicable.
7.2.6 Certificates which are not presented to Asymetrix within three
years after the Closing shall be canceled and the holder thereof will no longer
be entitled to receive any Asymetrix securities in consideration thereof.
8. CONDITIONS TO OBLIGATIONS OF THE XXXXX COMPANIES AND THE
PRINCIPALS
The Xxxxx Companies' and the Principals' obligations hereunder are subject
to the fulfillment or satisfaction, on and as of the Closing, of each of the
following conditions (any one or more of which may be waived by the Xxxxx
Company and the Principals, but only in a writing signed by the Xxxxx Companies
and the Principals):
8.1 Accuracy of Representations and Warranties. The representations and
------------------------------------------
warranties of Asymetrix and each Merger Sub set forth in Section 4 that are not
made as a specific date shall be true and accurate in all material respects on
and as of the date of this Agreement, and the Xxxxx Companies shall receive a
Certificate to such effect executed by Asymetrix's Chief Executive Officer.
8.2 Covenants. Each of Asymetrix and each Merger Sub shall have performed
---------
and complied in all material respects with all of its covenants contained in
Section 6 on or before the Closing, and the Xxxxx Companies shall receive a
Certificate to such effect signed by Asymetrix's Chief Executive Officer and
Chief Financial Officer.
8.3 Compliance with Law. There shall be no order, decree, or ruling by
-------------------
any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
8.4 Government Consents. There shall have been obtained at or prior to
-------------------
the Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Mergers by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken, including but not limited to, requirements under
applicable federal and state securities laws.
8.5 Opinion of Asymetrix's Counsel. The Xxxxx Companies shall have
------------------------------
received from the General Counsel of Asymetrix, an opinion substantially in the
form of Exhibit 8.5.
-----------
8.6 Stockholder Approval. The principal terms of this Agreement and the
--------------------
Articles of Merger shall have been approved and adopted by the stockholders of
the applicable Xxxxx Company, as required by applicable law and each of the
Xxxxx Companies' Articles of Organization and Bylaws.
8.7 Registration Rights Agreement. Asymetrix shall have executed and
-----------------------------
delivered a registration rights agreement substantially in the form of Exhibit
-------
8.7.
---
8.8 Voting and Co-Sale Agreement. Asymetrix and Xxxx Xxxxx shall have
----------------------------
executed and delivered a voting and co-sale agreement in the form of Exhibit
-------
8.8, and Xxxxx Xxxxx shall have been elected to the Board of Directors of
---
Asymetrix effective upon the Effective Time.
8.9 Employment Agreements. Asymetrix shall have executed and delivered (i)
---------------------
an employment agreement with Xxxxx Xxxxx in the form of Exhibit 8.9(a) (the
--------------
"Xxxxx Employment Agreement"), and (ii) an employment agreement with Xxxx Xxxxxx
---------------------------
in the form of Exhibit 8.9(b) (the "Xxxxxx Employment Agreement").
-------------- ---------------------------
8.10 Payment on Note. Asymetrix shall have paid the Xxxxx Companies an
---------------
aggregate amount of $350,000, which represents partial payment of the
outstanding principal amount of indebtedness of Xxxxx Interactive to Xxxxxx
Xxxxx and such payments shall be promptly applied to the repayment of such
indebtedness.
8.11 Release of Guaranties. Each of Xxxxx Xxxxx and Xxxxxx Xxxxx shall be
---------------------
released from the guaranty obligations under those guarantees set forth in
Schedule 8.11, subject only to the occurrence of the Effective Time, provided,
-------------
however, that in the event such releases are not obtained prior to the Closing,
in lieu of obtaining such releases, the parties agree that the provisions of
Section 11.2.3(c) shall satisfy the closing condition set forth in this Section
8.11.
9. CONDITIONS TO OBLIGATIONS OF ASYMETRIX
The obligations of Asymetrix and Merger Subs hereunder are subject to the
fulfillment or satisfaction on, and as of the Closing, of each of the following
conditions (any one or more of which may be waived by Asymetrix, but only in a
writing signed by Asymetrix):
9.1 Accuracy of Representations and Warranties. The representations and
------------------------------------------
warranties of the Xxxxx Companies and the Principals set forth in Section 3 and
Section 3A that are not made as a specific date shall be true and accurate in
all material respects on and as of the date of this Agreement, and Asymetrix
shall receive Certificates to such effect executed by the Chief Executive
Officer and Chief Financial Officer of each of the Xxxxx Companies and by the
Principals.
9.2 Covenants. Each of the Xxxxx Companies and the Principals shall have
---------
performed and complied in all material respects with all of its covenants
contained in Section 5
on or before the Closing, and Asymetrix shall receive Certificates to such
effect executed by the Chief Executive Officer and Chief Financial Officer of
each of the Xxxxx Companies and by the Principals.
9.3 Compliance with Law. There shall be no order, decree, or ruling by
-------------------
any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
9.4 Government Consents. There shall have been obtained at or prior to
-------------------
the Closing Date such consents, permits or authorizations, and there shall have
been taken such other action, as are listed on Schedule 9.4.
------------
9.5 Opinion of Counsel. Asymetrix shall have received from counsel to the
------------------
Xxxxx Companies and the Principals, an opinion substantially in the form of
Exhibit 9.5.
-----------
9.6 Consents. Asymetrix or the Xxxxx Companies shall have received duly
--------
executed copies of all material third party consents, approvals, assignments,
waivers, authorizations or other Certificates contemplated by this Agreement or
the Xxxxx Schedule of Exceptions or reasonably deemed necessary by Asymetrix's
counsel to provide for the continuation in full force and effect of any and all
material contracts and leases of the Xxxxx Companies (including. without
limitation, the consents as to Material Contracts hereto and the Customer
Agreements) and for the Xxxxx Companies and the Principals to consummate the
transactions contemplated hereby in form and substance reasonably satisfactory
to Asymetrix, except for such consents and approvals thereof as Asymetrix and
the Xxxxx Companies and the Principals shall have agreed shall not be obtained.
9.7 No Litigation. No litigation or proceeding shall be overtly
-------------
threatened or pending to enjoin or prevent the consummation of any of the
transactions contemplated by this Agreement, or which could be reasonably
expected to have a Material Adverse Effect.
9.8 Requisite Approvals. The principal terms of this Agreement and the
-------------------
Articles of Merger shall have been approved and adopted by the holders of all of
the Xxxxx Interactive Common Stock, TopShelf Common Stock and Acorn Common Stock
outstanding, and by a majority of the Board of Directors of each of the Xxxxx
Companies.
9.9 Resignation of Directors. The directors of each Xxxxx Companies in
------------------------
office immediately prior to the Effective Time of the Mergers shall have
resigned as directors of the Xxxxx Company effective as of the Effective Time of
the Mergers.
9.10 Investment Representation Agreements. Asymetrix shall have received
------------------------------------
from all of the holders of the Xxxxx Interactive Common Stock, TopShelf Common
Stock and Acorn Common Stock an executed Investment Representation Agreement
substantially in the form of Exhibit 9.10 hereto.
------------
9.11 Employment Agreements. Asymetrix shall have received the Xxxxx
---------------------
Employment Agreement executed by Xxxxx Xxxxx and the Xxxxxx Employment Agreement
executed by Xxxx Xxxxxx.
9.12 Employees. Each of the Xxxxx Companies shall have still employed,
---------
with any current expressed intent to resign, the number of employees with the
job responsibilities as indicated on Schedule 9.12.
-------------
9.13 Absence of Material Adverse Changes. There shall not have been in the
-----------------------------------
reasonable judgment of Asymetrix, any material adverse change in the financial
conditions, properties, assets, liabilities, business, prospectus or results of
operations of any of the Xxxxx Companies.
9.14 Note. The Xxxxx Note shall have been amended substantially in the
----
form attached hereto as Exhibit 9.14 and shall evidence all remaining
------------
indebtedness of the Xxxxx Companies to Xxxxxx Xxxxx (after taking into account
the repayment described in Section 8.10).
10. TERMINATION OF AGREEMENT
10.1 Termination of Agreement. Asymetrix on the one hand and the Xxxxx
------------------------
Companies and the Principals on the other may terminate this Agreement prior to
the Effective Time (whether before or after stockholder approval has been
obtained) solely as provided below:
10.1.1 Asymetrix may terminate this Agreement by giving written
notice to the Xxxxx Companies and the Principals in the event any of the Xxxxx
Companies or the Principals is in breach, and the Xxxxx Company and the
Principals may terminate this Agreement by giving written notice to Asymetrix in
the event Asymetrix is in breach, of any material representation, warranty, or
covenant contained in this Agreement, and such breach is not remedied within 10
days of delivery of written notice thereof;
10.1.2 Asymetrix may terminate this Agreement by giving written
notice to the Xxxxx Companies and the Principals if the Closing shall not have
occurred on or before September 30, 1997 by reason of the failure of any
condition precedent under Section 9 hereof (unless the failure results primarily
for a breach by Asymetrix of any representation, warranty or covenant contained
in this Agreement); or
10.1.3 The Xxxxx Companies and the Principals may terminate this
Agreement by giving written notice to Asymetrix if the Closing shall not have
occurred on or before September 30, 1997 by reason of the failure of any
condition precedent under Section 8 hereof (unless the failure results primarily
from a breach by any of the Xxxxx Companies or the Principals of any
representation, warranty or covenant contained in this Agreement made by him or
it).
10.2 No Liability. Any termination of this Agreement pursuant to this
------------
Section 10 will be without further obligation or liability upon any party in
favor of the other party hereto other than the obligations provided in Sections
11.2, 12.8 and 12.16 and in the Nondisclosure
agreement between Asymetrix and Principals dated August 1, 1997, other than any
liability of any party for breaches of this Agreement, which will survive
termination of this Agreement; provided, however, that nothing herein will limit
the obligation of the Xxxxx Companies and the Principals on the one hand and
Asymetrix on the other to use their best efforts to cause the Merger to be
consummated, as set forth in Sections 5.12 and 6.3 hereof, respectively.
11. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING
COVENANTS
11.1 Survival of Representations. All representations, warranties and
---------------------------
covenants of the Xxxxx Companies, the Principals and Asymetrix contained in this
Agreement will survive the Effective Time and remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the parties
to this Agreement, until the earlier of (a) the termination of this Agreement or
(b) two (2) years after the Closing Date, whereupon such representations,
warranties and covenants will expire (except for covenants that by their terms
survive for a longer period); provided, however, that, if the Closing occurs,
representations and warranties in Section 3.3, 3.7, 3.12, 4.3, 4.7 and 4.12
shall expire three (3) years after the Closing Date; provided further, however,
that representations, warranties and covenants involving intentional fraud or
willful misconduct shall survive the Closing without the limitations of
subsections (a) or (b) above. The period of such survival shall be referred to
herein as the "Survival Period."
---------------
11.2 Agreement to Indemnify.
----------------------
11.2.1 Subject to the limitations set forth in this Section 11, the
Principals (during the time period specified below) shall indemnify Asymetrix
and the surviving corporations of the Mergers (the "Asymetrix Indemnified
---------------------
Persons") in respect of, and hold the Asymetrix Indemnified Persons harmless
-------
against, any and all claims, demands, actions, causes of actions, losses, costs,
damages, liabilities and expenses including, without limitation, reasonable
legal fees that have actually been paid (hereinafter referred to as "Damages"):
-------
(a) arising out of any misrepresentation or breach of or
default in connection with any of the representations, warranties and covenants
given or made by any of the Xxxxx Companies or the Principals in this Agreement
(including any Schedule or Exhibit hereto) which indemnity shall survive for the
time period specified in Section 11.1;
(b) resulting from any failure of any of the Principals or
the Other Former Xxxxx Interactive Stockholder to have good, valid and
marketable title to the issued and outstanding Xxxxx Interactive Common Stock,
TopShelf Common Stock and Acorn Common Stock held by such stockholders, free and
clear of all liens, claims, pledges, options, adverse claims, assessments or
charges of any nature whatsoever, which indemnity shall survive for a three year
period; or
(c) arising out of, related to, in connection with or
otherwise resulting from any Prior Agreement whatsoever, which indemnity shall
survive for a three year period.
11.2.2 The indemnification provided for in paragraphs (a), (b) and
(c) of subsection 11.2.1 shall not apply unless and until the aggregate Damages
for which one or more Asymetrix Indemnified Persons seeks indemnification under
such paragraphs (a), (b) and (c), exclusive of legal fees, exceeds $150,000 (the
"Basket") and then only to the extent that aggregate Damages exceed the Basket.
------
From the Effective Time until the date of the closing of an initial public
offering (the "Pre-IPO Period") under the Securities Act of any capital stock of
--------------
Asymetrix (the "IPO Date") the maximum aggregate liability of the Principals
--------
under paragraphs (a) and (b) of this subsection 11.2.2 shall be equal to
$1,110,000, provided, however, that in lieu of making cash payments in
-------- -------
satisfaction of the Principals' indemnification obligations hereunder, during
the Pre-IPO Period, the Principals can elect, in lieu of such cash payment, to
surrender a number of shares of Merger Stock equal to the amount of the Damages
divided by the Stated Value (appropriately adjusted for stock splits,
recapitalizations and stock dividends). From and after the IPO Date (the "Post-
----
IPO Period"), the maximum aggregate liability of the Principals under paragraphs
----------
(a) and (b) of this subsection 11.2.2 shall be equal to the greater of (i)
$3,200,000 or (ii) the product of (A) 320,000 and (B) the price at which the
shares of Asymetrix capital stock are initially offered to the public in the
initial public offering occurring on the IPO Date; provided further, that in
-------- -------
lieu of making cash payments in satisfaction of the Principals' indemnification
obligations hereunder, during the Post-IPO Period, the Principals can elect, in
lieu of such cash payment, to surrender a number of shares of Asymetrix Common
Stock equal to the amount of the Damages divided by the fair market value per
share of the Asymetrix Common Stock, in which case any brokers' fees,
commissions or transfer taxes shall be borne by the Principals. For the
purposes hereof, the term "fair market value per share" shall mean the closing
price of the Asymetrix Common Stock on the Nasdaq National Market or other stock
exchange or quotation service on which the Asymetrix Common Stock is primarily
traded on the trading date immediately prior to the date the payment is to be
made. Asymetrix will use its best efforts to obtain recoveries under all
applicable insurance policies for all Damages. Except for intentional fraud or
willful misconduct, the remedies set forth in this Section shall be the
exclusive remedies of the Asymetrix Indemnified Persons against any of the
Principals.
11.2.3 Subject to the limitations set forth in this Section 11,
Asymetrix will indemnify and hold harmless the Principals (collectively, the
"Xxxxx Indemnified Persons") from and against any and all Damages:
--------------------------
(a) arising out of any misrepresentation or breach of or default in
connection with any of the representations, warranties and covenants given or
made by Asymetrix in this Agreement or in any Certificate, document or
instrument delivered by or on behalf of Asymetrix pursuant hereto;
(b) resulting from any failure on the part of Asymetrix to issue to
the Principals and the other Former Xxxxx Interactive Stockholders good, valid
and marketable title to the Asymetrix Merger Stock as provided in this
Agreement, free and clear of all liens, claims, pledges, options, adverse
claims, assessments or charges of any nature whatsoever; or
(c) the obligations of Xxxxx Xxxxx and Xxxxxx Xxxxx to repay the
indebtedness subject to the guarantees listed on Schedule 8.11 from which Xxxxx
Xxxxx and Xxxxxx Xxxxx are not released prior to the Closing.
Asymetrix's maximum aggregate liability under paragraphs (a) and (b)
of this subsection 11.2.3 shall be equal to the product of the Stated Value Per
Share times the total number of shares issued to the Principals and the other
Former Xxxxx Interactive Stockholder in the Mergers.
11.2.4 Any Asymetrix Indemnified Person or any Xxxxx Indemnified
Person seeking indemnification hereunder shall give prompt written notification
to the Principals (in the case of indemnification sought by the Asymetrix
Indemnified Person) or to Asymetrix (in the case of indemnification sought by an
Xxxxx Indemnified Person) (as applicable, the "Indemnification Representative")
------------------------------
of the commencement of any action, suit or proceeding relating to a third party
claim for which indemnification pursuant to this Section 11 may be sought;
provided, however, that no delay on the part of the Indemnified Person in
providing such notice shall relieve the Principals or Asymetrix, as the case may
be, of any liability or obligation hereunder except to the extent of any damage
or liability caused by or arising out of such failure. Within 20 days after
delivery of such notification, the Indemnification Representative may, upon
written notice thereof to the Indemnified Person, assume control of the defense
of such action, suit or proceeding with counsel reasonably satisfactory to the
Indemnified Person, provided that the Indemnification Representative
acknowledges in writing to the Indemnified Person that any damages, fines, costs
or other liabilities that may be assessed against the Indemnified Person in
connection with such action, suit or proceeding constitute Damages for which the
Indemnified Person shall be entitled to indemnification pursuant to this Section
11. If the Indemnification Representative does not so assume control of such
defense, the Indemnified Person shall control such defense. The party not
controlling such defense may participate therein at it own expense; provided
that if the Indemnification Representative assumes control of such defense and
the Indemnified Person reasonably concludes that the indemnifying parties and
the Indemnified Person have conflicting interests or different defenses
available with respect to such action, suit or proceeding, the reasonable fees
and expenses of counsel to the Indemnified Person shall be considered "Damage"
for purpose of this Agreement. The party controlling such defense shall keep
the other party advised of the status of such action, suit or proceeding and the
defense thereof and shall consider in good faith recommendations made by the
other party with respect thereto. The Indemnified Person shall not agree to any
settlement of such action, suit or proceeding without the prior written consent
of the Indemnification Representative.
11.2.5 Treatment of Indemnity Payments. Any payment made to an
-------------------------------
Indemnified Person pursuant to this Section 11 shall be treated as a reduction
in the Merger consideration.
11.3 Employee Stock Options. Asymetrix shall take all action necessary to
----------------------
reserve for issuance under the Asymetrix Option Plan, and as soon as reasonably
practicable following the Closing, grant Asymetrix Options to purchase an
aggregate of 350,000 shares of Asymetrix Common Stock at an exercise price of
$4.50 per share for awards to those employees of the Xxxxx Companies who become
Asymetrix employees, as shall be agreed upon between
Asymetrix and the Principals. The vesting schedule for such options shall
commence as of the date such grantees shall have commenced employment with the
applicable Xxxxx Company.
11.4 Insurance. Asymetrix shall maintain in effect for the three year
---------
period following the date of this Agreement the insurance policies of the Xxxxx
Companies set forth on Schedule 3.19 of the Xxxxx Schedule of Exceptions or
other insurance coverage with substantially similar or greater coverage then the
policies set forth on Schedule 3.19 of the Xxxxx Schedule of Exceptions.
11.5 Employment Agreements. As soon as reasonably practicable after the
---------------------
Closing, Asymetrix shall enter into an Employment Agreement with each of Xxx
Xxxxx and Xxxx Xxxxxx on terms to be mutually agreed upon between Asymetrix and
Xxx Xxxxx or Xxxx Xxxxxx, as applicable.
12. MISCELLANEOUS
12.1 Governing Law. The internal laws of the State of Washington
-------------
(irrespective of its conflict of law principles) will govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
12.2 Assignment; Binding Upon Successors and Assigns. Neither party hereto
-----------------------------------------------
may assign any of its rights or obligations hereunder without the prior written
consent of the other party hereto and any attempt to do so will be void. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
12.3 Severability. If any provision of this Agreement, or the application
------------
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
12.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories. Facsimile copies of such
counterparts are acceptable.
12.5 Other Remedies. Except as otherwise provided herein, any and all
--------------
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
12.6 Amendment and Waivers. Any term or provision of this Agreement may be
---------------------
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by the party to be bound thereby. The waiver by a
party of any breach hereof or default in the performance hereof will not be
deemed to constitute a waiver of any other default or any succeeding breach or
default. The Agreement may be amended by the parties hereto at any time before
or after approval of the stockholders of the Xxxxx Companies but, after such
approval, no amendment will be made which by applicable law requires the further
approval of the stockholders of the Xxxxx Companies obtaining such further
approval.
12.7 No Waiver. The failure of any party to enforce any of the provisions
---------
hereof will not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.
12.8 Expenses. Each party will bear its respective expenses and fees of its
--------
own accountants, attorneys and other professionals incurred with respect to this
Agreement and the transactions contemplated hereby.
12.9 Attorneys' Fees. Should suit be brought to enforce or interpret any
---------------
part of this Agreement, the prevailing party will be entitled to recover, as an
element of the costs of suit, reasonable attorneys' fees to be fixed by the
court (including without limitation, costs, expenses and fees on any appeal).
The prevailing party will be entitled to recover its costs of suit, regardless
of whether such suit proceeds to final judgment.
12.10 Notices. Any notice or other communication required or permitted to
-------
be given under this Agreement will be in writing, will be delivered personally,
by registered or certified mail, postage prepaid, by confirmed facsimile or by
nationally recognized courier service, and will be deemed given upon delivery,
if delivered personally, or five days after deposit in the mails, if mailed, or
upon receipt if delivered by confirmed facsimile or by nationally recognized
courier service, to the following addresses:
(i) If to Asymetrix:
---------------
Asymetrix Corporation
000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
With a copy to:
--------------
Xxxx X. Xxxxxxx, Esq.
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
(ii) If to the Xxxxx Companies:
-------------------------
Facsimile:
Attention:
With a copy to:
--------------
Facsimile:
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 12.10.
12.11 Construction of Agreement. This Agreement has been negotiated by the
-------------------------
respective parties hereto and their attorneys and the language hereof will not
be construed for or against either party. A reference to a Section or an exhibit
will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
12.12 No Joint Venture. Nothing contained in this Agreement will be deemed
----------------
or construed as creating a joint venture or partnership between any of the
parties hereto. No party is by virtue of this Agreement authorized as an agent,
employee or legal representative of any other party. No party will have the
power to control the activities and operations of any other and their status is,
and at all times, will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
12.13 Further Assurances. Each party agrees to cooperate fully with the
------------------
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
12.14 Absence of Third Party Beneficiary Rights. No provisions of this
-----------------------------------------
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
12.15 Public Announcement. Upon execution of the Agreement by both
-------------------
parties, and until the consummation of the Mergers, all press releases and other
public communications shall be made by the parties only with the mutual consent
of the Xxxxx Companies and Asymetrix.
12.16 Confidentiality. Asymetrix, each of the Xxxxx Companies and the
---------------
Principals each recognize that they have received and will receive confidential
information concerning the other during the course of the negotiations and
preparations for the Mergers. Accordingly, each party agrees (a) to use its
respective best efforts to prevent the unauthorized disclosure of any
confidential information concerning the other that was or is disclosed during
the course of such negotiations and preparations, and is clearly designated in
writing as confidential at the time of disclosure, and (b) to not make use of or
permit to be used any such confidential information other than for the purpose
of effectuating the Mergers and related transactions. The obligations of this
Section will not apply to information that (i) is or becomes part of the public
domain, (ii) is disclosed by the disclosing party to third parties without
restrictions on disclosure, (iii) is received by the receiving party from a
third party without breach of a nondisclosure obligation to the other party or
(iv) is required to be disclosed by law. If this Agreement is terminated, all
copies of documents containing confidential information shall be returned by the
receiving party to the disclosing party.
12.17 Entire Agreement. This Agreement and the exhibits hereto constitute
----------------
the entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties. The express terms hereof control and supersede any course
of performance or usage of the trade inconsistent with any of the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"ASYMETRIX" "XXXXX INTERACTIVE"
Asymetrix Corporation Xxxxx Interactive Incorporated
By: /s/ X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx Xx.
--------------------------- ------------------------------
Name: XXXXX XXXXXXXXX Name: XXXXXX X. XXXXX X.X.
-------------------------- ------------------------------
Its: CHIEF EXECUTIVE OFFICER Its: TREASURER
--------------------------- ------------------------------
By: /s/ Xxxxx Xxxxx
------------------------------
Name: XXXXX XXXXX
------------------------------
Its: PRESIDENT
------------------------------
"XXXXX SUB" "TOPSHELF"
Xxxxx Acquisition Corp. TopShelf Multimedia, Inc.
By: /s/ X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------- ------------------------------
Name: XXXXX XXXXXXXXX Name: XXXXXX X. XXXXX
------------------------- -----------------------------
Its: PRESIDENT Its: TREASURER
-------------------------- ------------------------------
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxx Xxxxx
-------------------------- ------------------------------
Name: XXXXXX XXXX Name: XXXXX XXXXX
------------------------- -----------------------------
Its: CLERK Its: PRESIDENT
-------------------------- ------------------------------
[SIGNATURE PAGE FOR AGREEMENT AND PLAN OF REORGANIZATION]
"ACORN SUB" "ACORN"
Acorn Acquisition Corp. Acorn Associates Incorporated
By: /s/ X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------- -----------------------------
Name: XXXXX XXXXXXXXX Name: XXXXXX X. XXXXX
------------------------ ----------------------------
Its: PRESIDENT Its: TREASURER
------------------------- -----------------------------
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxx Xxxxx
------------------------- -----------------------------
Name: XXXXXX XXXX Name: XXXXX XXXXX
------------------------ ----------------------------
Its: CLERK Its: PRESIDENT
------------------------- -----------------------------
"TOPSHELF SUB" "PRINCIPALS"
TopShelf Acquisition Corp.
By: /s/ X. Xxxxxxxxx /s/ Xxxxxx Xxxxx
------------------------- ----------------------------------
Xxxxxx Xxxxx
Name: XXXXX XXXXXXXXX
------------------------
Its: PRESIDENT /s/ Xxxxx Xxxxx
------------------------- ----------------------------------
Xxxxx Xxxxx
By: /s/ Xxxxxx Xxxx
-------------------------
Name: XXXXXX XXXX
------------------------
Its: CLERK
-------------------------
[SIGNATURE PAGE FOR AGREEMENT AND PLAN OF REORGANIZATION]
LIST OF EXHIBITS AND SCHEDULES
------------------------------
Exhibit A-1 Xxxxx Interactive Articles of Merger
Exhibit A-2 TopShelf Articles of Merger
Exhibit A-3 Acorn Articles of Merger
Exhibit 1.12 Statement of Designation
Exhibit 2.11A Asymetrix Officers' Certificate
Exhibit 2.11B Xxxxx Interactive Officers' Certificate
Exhibit 2.11C TopShelf Officers' Certificate
Exhibit 2.11D Acorn Officers' Certificate
Exhibit 3.0 Xxxxx Schedule of Exceptions
Exhibit 4.0 Asymetrix Schedule of Exceptions
Exhibit 8.5 Form of Opinion of General Counsel of Asymetrix
Exhibit 8.7 Registration Rights Agreement
Exhibit 8.8 Voting and Co-Sale Agreement
Exhibit 8.9(a) Xxxxx Employment Agreement
Exhibit 8.9(b) Xxxxxx Employment Agreement
Schedule 8.11 Guarantees
Exhibit 9.4 Government Consents
Exhibit 9.5 Form of Opinion of Counsel to Xxxxx Companies and Principals
Exhibit 9.10 Investment Representation Agreement
Schedule 9.12 Xxxxx Employees
Exhibit 9.14 Amended Xxxxx Note
FEDERAL IDENTIFICATION FEDERAL IDENTIFICATION
NO. _____________________ NO. 00-0000000
---------------------
Xxxxx Interactive
Incorporated
THE COMMONWEALTH OF MASSACHUSETTS
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
Xxx Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000
ARTICLES OF * / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
* /*merger of
_________________________________________
Xxxxx Acquisition Corp.
-----------------------------------------
AND
-----------------------------------------
Xxxxx Interactive Incorporated
-----------------------------------------
,
-----------------------------------------
the constituent corporations, into
Xxxxx Interactive Incorporated
-----------------------------------------
*a new corporation / *one of the
constituent corporations.
The undersigned officers of each of the constituent corporations certify under
the penalties of perjury as follows:
1. An agreement of * /*merger has been duly adopted in compliance
with the requirements of General Laws, Chapter 156B, Section 78, and will be
kept as provided by Subsection (d) thereof. The *resulting / *surviving
corporation will furnish a copy of said agreement to any of its stockholders, or
to any person who was a stockholder of any constituent corporation, upon written
request and without charge.
2. The effective date of the * /*merger determined pursuant to the
agreement of * /*merger shall be the date approved and filed by
the Secretary of the Commonwealth. If a later effective date is desired,
specify such date which shall not be more than thirty days after the date of
filing.
3. (FOR A MERGER)
** The following amendments to the Articles of Organization of the surviving
corporation have been effected pursuant to the agreement of merger.
NONE
* Delete the inapplicable word. **If there are no provisions state "None".
NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON THIS FORM IS
INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON SEPARATE 81/2 X 11 SHEETS OF PAPER
WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MOVE THAN ONE ARTICLE MAY BE
MADE ON A SINGLE SHEET AS LONG AS EACH ARTICLE REQUIRING EACH ADDITION IS
CLEARLY INDICATED.
(FOR A CONSOLIDATION)
(a) The purpose of the resulting corporation is to engage in the following
business activities:
N/A
(b) State the total number of shares and the par value, if any, of each class of
stock which the resulting corporation is authorized to issue.
N/A
----------------------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
----------------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
----------------------------------------------------------------------------------------
Common: Common:
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Preferred: Preferred:
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
**(c) If more than one class of stock is authorized, state a distinguishing
designation for each class and provide a description of the preferences, voting
powers, qualifications, and special or relative rights or privileges of each
class and of each series then established.
N/A
**(d) The restrictions, if any, on the transfer of stock contained in the
agreement of consolidation are:
N/A
**(e) Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
NONE
**If there are no provisions state "None".
4. The information contained in Item 4 is not a permanent part of the Articles
of Organization of the *resulting / *surviving corporation.
(a) The street address of the *resulting / *surviving corporation in
Massachusetts is: (post office boxes are not acceptable)
000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
(b) The name, residential address, and post office address of each director and
officer of the *resulting / *surviving corporation is:
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
President: Xxxxx Xxxxxxxxx 00000 XX 000xx Xx. XXXX
Xxxxxxxxxxx, XX 00000
Treasurer: Xxxx Xxxxxxx 0000 000xx Xx. X.X. XXXX
Xxxxxxxx, XX 00000
Clerk: Xxxxxx Xxxx 00000 Xxxxxx Xxxx Xxxxx X.X. XXXX
Xxxxxxx, XX 00000
Directors: Xxxxx Xxxxxxxxx SAME AS ABOVE SAME AS ABOVE
(c) The fiscal year (i.e. tax year) of the * /*surviving corporation
shall end on the last day of the month of: December
(d) The name and business address of the resident agent, if any, of the
* /*surviving corporation is:
Xxxxxx X. Xxxxxxx, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000
The undersigned officers of the several constituent corporations listed above
further state under the penalties of perjury as to their respective corporations
that the agreement of * /*merger has been duly executed on behalf
of such corporation and duly approved by the stockholders of such corporation in
the manner required by General Laws, Xxxxxxx 000X, Xxxxxxx 00.
_________________________________________________________, *President/ *
____________________________________________________________, *Clerk/ *
of Xxxxx Acquisition Corp.
----------------------------------------------------------------------------
(Name of constituent corporation)
_________________________________________________________, *President/ *
____________________________________________________________, *Clerk/ *
of Xxxxx Interactive Incorporated
----------------------------------------------------------------------------
(Name of constituent corporation)
*Delete the inapplicable words.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF * / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
==============================================
I hereby approve the within Articles of * /
*Merger and, the filing fee in the amount of
$ 250.00, having been paid, said articles are
deemed to have been filed with me this 30th
day of September, 1997
Effective Date: 9/30/97
------------------------------
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Xxxxxx Xxxx
----------------------------------------------------
000 - 000xx Xxxxxx XX, Xxxxx 000
----------------------------------------------------
Xxxxxxxx, XX 00000
----------------------------------------------------
Telephone: (000) 000-0000
------------------------------------------
FEDERAL IDENTIFICATION FEDERAL IDENTIFICATION
NO. ____________________ NO. 00-0000000
----------------------------
TopShelf Multimedia, Inc.
THE COMMONWEALTH OF MASSACHUSETTS
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
Xxx Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000
ARTICLES OF * / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
* /*merger of
_____________________________________________
Top Shelf Acquisition Corp.
---------------------------------------------
AND
---------------------------------------------
TopShelf Multimedia, Inc.
---------------------------------------------
,
---------------------------------------------
the constituent corporations, into
TopShelf Multimedia, Inc.
---------------------------------------------
* / *one of the constituent corporations.
The undersigned officers of each of the constituent corporations certify under
the penalties of perjury as follows:
1. An agreement of * / *merger has been duly adopted in compliance
with the requirements of General Laws, Chapter 156B, Section 78, and will be
kept as provided by Subsection (d) thereof. The * / *surviving
corporation will furnish a copy of said agreement to any of its stockholders, or
to any person who was a stockholder of any constituent corporation, upon written
request and without charge.
2. The effective date of the * / *merger determined pursuant to the
agreement of * / *merger shall be the date approved and filed by
the Secretary of the Commonwealth. If a later effective date is desired,
specify such date which shall not be more than thirty days after the date of
filing.
3. (FOR A MERGER)
**The following amendments to the Articles of Organization of the surviving
corporation have been effected pursuant to the agreement of merger.
NONE
*Delete the inapplicable word. **If there are no provisions state "None".
NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON THIS FORM IS
INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON SEPARATE 8 1/2 X 11 SHEETS OF
PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MORE THAN ONE ARTICLE
MAY BE MADE ON A SINGLE SHEET AS LONG AS EACH ARTICLE REQUIRING EACH ADDITION IS
CLEARLY INDICATED.
(FOR A CONSOLIDATION)
(a) The purpose of the resulting corporation is to engage in the following
business activities:
N/A
(b) State the total number of shares and the par value, if any, of each class of
stock which the resulting corporation is authorized to issue.
N/A
------------------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
------------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
------------------------------------------------------------------------------------
Common: Common:
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Preferred: Preferred:
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
**(c) If more than one class of stock is authorized, state a distinguishing
designation for each class and provide a description of the preferences, voting
powers, qualifications, and special or relative rights or privileges of each
class and of each series then established.
N/A
**(d) The restrictions, if any, on the transfer of stock contained in the
agreement of consolidation are:
N/A
**(e) Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
NONE
*If there are no provisions state "None".
4. The information contained in Item 4 is not a permanent part of the Articles
of Organization of the *resulting / *surviving corporation.
(a) The street address of the * / *surviving corporation in
Massachusetts is: (post office boxes are not acceptable)
000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
(b) The name, residential address, and post office address of each director and
officer of the * / *surviving corporation is:
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
President: Xxxxx Xxxxxxxxx 00000 XX 000xx Xx. XXXX
Xxxxxxxxxxx, XX 00000
Treasurer: Xxxx Xxxxxxx 0000 000xx Xx. X.X. XXXX
Xxxxxxxx, XX 00000
Clerk: Xxxxxx Xxxx 00000 Xxxxxx Xxxx Xxxxx X.X. XXXX
Xxxxxxx, XX 00000
Directors: Xxxxx Xxxxxxxxx SAME AS ABOVE SAME AS ABOVE
(c) The fiscal year (i.e. tax year) of the * / *surviving corporation
shall end on the last day of the month of: December
(d) The name and business address of the resident agent, if any, of the
* / *surviving corporation is:
Xxxxxx X. Xxxxxxx, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000
The undersigned officers of the several constituent corporations listed above
further state under the penalties of perjury as to their respective corporations
that the agreement of * / *merger has been duly executed on behalf
of such corporation and duly approved by the stockholders of such corporation in
the manner required by General Laws, Chapter 156B, Section 78.
____________________________________________________________, *President / *
____________________________________________________________, *Clerk / *
of TopShelf Multimedia Inc.
------------------------------------------------------------------------------
(Name of constituent corporation)
____________________________________________________________, *President / *
____________________________________________________________, *Clerk / *
of TopShelf Acquisition Inc.
------------------------------------------------------------------------------
(Name of constituent corporation)
Delete the inapplicable words.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF * / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
==================================================
I hereby approve the within Articles of * /
*Merger and, the filing fee in the amount of
$ 250.00, having been paid, said articles are
deemed to have been filed with me this 30th day
of September, 1997
Effective Date: 9/30/97
----------------------------------
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Xxxxxx Xxxx
-------------------------------------------
000 - 000xx Xxxxxx XX, Xxxxx 000
-------------------------------------------
Xxxxxxxx, XX 00000
-------------------------------------------
Telephone: (000) 000-0000
---------------------------------
FEDERAL IDENTIFICATION FEDERAL IDENTIFICATION
NO. _____________________ NO. 00-0000000
---------------------
Acorn Associates
Incorporated
THE COMMONWEALTH OF MASSACHUSETTS
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
Xxx Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000
ARTICLES OF * / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
* / *merger of
__________________________________________________
Acorn Acquisition Corp.
--------------------------------------------------
AND
--------------------------------------------------
Acorn Associates Incorporated
--------------------------------------------------
,
--------------------------------------------------
the constituent corporations, into
Acorn Associates Incorporated
--------------------------------------------------
* / *one of the constituent corporations.
The undersigned officers of each of the constituent corporations certify under
the penalties of perjury as follows:
1. An agreement of * / *merger has been duly adopted in compliance
with the requirements of General Laws, Chapter 156B, Section 78, and will be
kept as provided by Subsection (d) thereof. The * / *surviving
corporation will furnish a copy of said agreement to any of its stockholders, or
to any person who was a stockholder of any constituent corporation, upon written
request and without charge.
2. The effective date of the * / *merger determined pursuant to the
agreement of * / *merger shall be the date approved and filed by
the Secretary of the Commonwealth. If a later effective date is desired,
specify such date which shall not be more than thirty days after the date of
filing.
3. (FOR A MERGER)
** The following amendments to the Articles of Organization of the surviving
corporation have been effected pursuant to the agreement of merger.
NONE
*Delete the inapplicable word. **If there are no provisions state "None".
NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON THIS FORM IS
INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON SEPARATE 8 1/2 X 11 SHEETS OF
PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MORE THAN ONE ARTICLE
MAY BE MADE ON A SINGLE SHEET AS LONG AS EACH ARTICLE REQUIRING EACH ADDITION IS
CLEARLY INDICATED.
(FOR A CONSOLIDATION)
(a) The purpose of the resulting corporation is to engage in the following
business activities:
N/A
(b) State the total number of shares and the par value, if any, of each class of
stock which the resulting corporation is authorized to issue.
N/A
------------------------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
------------------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
------------------------------------------------------------------------------------------
Common: Common:
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Preferred: Preferred:
------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
**(c) If more than one class of stock is authorized, state a distinguishing
designation for each class and provide a description of the preferences, voting
powers, qualifications, and special or relative rights or privileges of each
class and of each series then established.
N/A
**(d) The restrictions, if any, on the transfer of stock contained in the
agreement of consolidation are:
N/A
**(e) Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
NONE
**If there are no provisions state "None".
4. The information contained in Item 4 is not a permanent part of the Articles
of Organization of the * / *surviving corporation.
(a) The street address of the * / *surviving corporation in
Massachusetts is: (post office boxes are not acceptable)
000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
(b) The name, residential address, and post office address of each director and
officer of the * / *surviving corporation is:
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
President: Xxxxx Xxxxxxxxx 00000 XX 000xx Xx. XXXX
Xxxxxxxxxxx, XX 00000
Treasurer: Xxxx Xxxxxxx 0000 000xx Xx. X.X. XXXX
Xxxxxxxx, XX 00000
Clerk: Xxxxxx Xxxx 00000 Xxxxxx Xxxx Xxxxx X.X. XXXX
Xxxxxxx, XX 00000
Directors: Xxxxx Xxxxxxxxx SAME AS ABOVE SAME AS ABOVE
(c) The fiscal year (i.e. tax year) of the * / *surviving corporation
shall end on the last day of the month of: December
(d) The name and business address of the resident agent, if any, of the
* / *surviving corporation is:
Xxxxxx X. Xxxxxxx, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX
00000
The undersigned officers of the several constituent corporations listed above
further state under the penalties of perjury as to their respective corporations
that the agreement of * / *merger has been duly executed on behalf
of such corporation and duly approved by the stockholders of such corporation in
the manner required by General Laws, Chapter 156B, Section 78.
VICE
__________________________________________________________, *President/ *
_____________________________________________________________, *Clerk/ *
of Acorn Associates Incorporated
------------------------------------------------------------------------------
(Name of constituent corporation)
__________________________________________________________, *President/ *
_____________________________________________________________, *Clerk/ *
of Acorn Acquisition Corp.
------------------------------------------------------------------------------
(Name of constituent corporation)
*Delete the applicable words.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF * / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
====================================================
I hereby approve the within Articles of * /
*Merger and, the filing in the amount of $ 250.00,
having been paid, said articles are deemed to have
been filed with me this 30th day of September, 1997
Effective Date: 9/30/97
-----------------------------------
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Xxxxxx Xxxx
------------------------------------------------
000 - 000xx Xxxxxx XX, Xxxxx 000
-------------------------------------------------
Xxxxxxxx, XX 00000
-------------------------------------------------
Telephone: (000) 000-0000
---------------------------------------
EXHIBIT 1.12
DESIGNATION OF RIGHTS PREFERENCES AND LIMITATIONS OF
ASYMETRIX SERIES 5 CLASS B STOCK
SERIES 5 CLASS B STOCK, $0.01 PAR VALUE
1. Equivalent to Common Stock. Except as otherwise set forth in this
--------------------------
Statement of Designation of Rights, Preferences and Limitations of Series 5
Class B Stock, the Series 5 Class B Stock of Asymetrix Corporation (the
"Company") shall have rights, preferences and limitations identical with those
of the Company's $.01 par value common stock ("Common Stock") and the Company's
Series 4 Class B Stock, $0.01 par value ("Series 4 Class B Stock"). In the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company, the holders of any shares of the Series 5 Class B Stock, of the
Series 4 Class B Stock and of the Common Stock shall be entitled to receive pro
rata on an equal priority, pari passu basis, any payment or distribution of the
assets of the Company (whether capital, surplus or earnings), but not until
payment in full of any amounts due the holders of the Series 1 Class B Stock,
the Series A Preferred Stock, the Series B Preferred Stock and any future series
of Class B Stock that may be entitled to priority over the Common Stock in the
payment or distribution of the assets of the Company in the event of any such
dissolution or winding-up.
2. Voting. Except as may otherwise be agreed in writing, the holders of
------
shares of Series 5 Class B Stock shall be entitled to vote upon all matters upon
which holders of the Common Stock have the right to vote, and each share of
Series 5 Class B Stock shall be entitled to the number of votes equal to the
largest number of full shares of Common Stock into which such shares of Series 5
Class B Stock could be converted pursuant to the applicable provisions of
Section 3 below, at the record date established by the Board of Directors of the
Company for the determination of the shareholders entitled to vote on such
matters, or, if no such record date is so established, at the record date
provided by law, such votes to be counted together with all other shares of
capital stock having general voting powers and not separately as a class. The
holders of the Series 5 Class B Stock shall be entitled to receive notice of any
meeting of the shareholders in accordance with applicable law and with the
bylaws of the Company as in effect at the time of such notice. Except as
otherwise expressly required by law, in no event shall the holders of shares of
Series 5 Class B Stock have the right to vote separately as a class.
3. Conversion. The Series 5 Class B Stock shall be converted into Common
----------
Stock as follows:
(a) Conversion Events. Each outstanding share of Series 5 Class B
-----------------
Stock shall automatically be converted, without any further act of the Company
or its shareholders, into fully paid and nonassessable shares of Common Stock
pursuant to the formula as set forth in subsection 3(c) below upon the earliest
to occur of: (i) the distribution by the Company to holders of its securities
(other than the holders of Series 5 Class B Stock and Series 4 Class B Stock) of
a controlling interest in SuperCede, Inc., a wholly-owned subsidiary of the
Company, in a spin-off transaction; (ii) the distribution by the Company to
holders of its securities (other than the holders of Series 5 Class B Stock and
Series 4 Class B Stock) of the consideration
received by the Company in one of the following transactions with respect to
SuperCede, Inc.: (1) the sale of all or substantially all of the assets of
SuperCede, Inc., (2) the sale of a controlling interest in SuperCede, Inc. to a
third party, or (3) the acquisition of SuperCede, Inc. by another entity by
means of merger, consolidation or otherwise, in which the Company does not,
immediately after such merger, consolidation or other transaction, retain stock
representing a majority of the voting power of SuperCede, Inc.; (iii)
immediately prior to the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended, covering the offer and sale of Common Stock
for the account of the Company at an aggregate offering price to the Company of
not less than $10,000,000; or (iv) upon acquisition of the Company by another
entity by means of merger, consolidation or otherwise, in which the holders of
the Company's shares outstanding immediately before such merger, consolidation
or other transaction do not, immediately after such merger, consolidation or
other transaction, retain stock representing a majority of the voting power of
the surviving corporation of such merger, consolidation or other transaction.
(b) Series 5 Conversion Ratio. Each share of Series 5 Class B Stock
-------------------------
shall be converted into one share of Common Stock. The Series 5 Conversion
Ratio shall be subject to adjustment as set forth in subsection 3(e).
(c) Mechanics of Conversion. Upon the occurrence of one of the events
-----------------------
specified in subsection 3(a), the outstanding shares of Series 5 Class B Stock
shall be converted automatically without any further action by the holders of
such shares and whether or not the certificates representing such shares are
surrendered to the Company or its transfer agent; provided that the Company
--------
shall not be obligated to issue to any such holder certificates evidencing the
shares of Common Stock issuable upon such conversion unless certificates
evidencing the shares of Series 5 Class B Stock are delivered to the Company or
any transfer agent of the Company. Conversion of the Series 5 Class B Stock
shall be deemed to have been effected on the date on which the event specified
with respect to such Series 5 Class B Stock in subsection 3(a) shall have
occurred, and such date is referred to herein with respect to the Series 5 Class
B Stock as the "Series 5 Conversion Date." The holder in whose name the
certificate or certificates for Common Stock are to be issued shall be deemed to
have become a holder of record of such Common Stock on the applicable Series 5
Conversion Date. Following the Conversion Date, upon the request of any holder
of Series 5 Class B Stock so converted and after surrender of the certificate or
certificates representing such holder's shares of Series 5 Class B Stock to the
Company or any transfer agent of the Company (except in the case of conversions
pursuant to subsection 3(a)(iv)), the Company shall issue and deliver to such
holder a certificate or certificates for the number of full shares of Common
Stock to which such holder is entitled and a check or cash with respect to any
fractional interest in a share of Common Stock as provided in subsection 3(d).
(d) Fractional Shares. No fractional shares of Common Stock or scrip
-----------------
shall be issued upon conversion of shares of Series 5 Class B Stock, but the
number of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series 5 Class B
Stock so converted. Instead of any fractional shares of Common Stock which
would otherwise be issuable upon conversion of any shares of Series 5
2
Class B Stock, the Company shall pay a cash adjustment in respect of such
fractional interest in an amount equal to that fractional interest of the then
fair value per share of Common Stock, as determined by the Board of Directors.
(e) Conversion Ratio Adjustments for the Series 5 Class B Stock. The
-----------------------------------------------------------
Conversion Ratio for the Series 5 Class B Stock shall be subject to adjustment
from time to time as follows:
(i) Stock Dividends. If the number of shares of Common Stock
---------------
outstanding at any time after the date of issuance of the Series 5 Class B Stock
is increased by a stock dividend or other distribution on Common Stock payable
in shares of Common Stock or by a subdivision, split-up or reclassification of
outstanding shares of Common Stock, then immediately after the record date fixed
for the determination of holders of Common Stock entitled to receive such stock
dividend or the effective date of such subdivision, split-up or
reclassification, as the case may be, the Series 5 Conversion Ratio shall be
appropriately adjusted so that the holder of any shares of Series 5 Class B
Stock thereafter converted shall be entitled to receive the number of shares of
Common Stock of the Company which the holder would have owned immediately
following such action had such shares of Series 5 Class B Stock been converted
immediately prior thereto.
(ii) Combination of Stock. If the number of shares of Common
--------------------
Stock outstanding at any time after the date of issuance of the Series 5 Class B
Stock is decreased by a combination or reclassification of the outstanding
shares of Common Stock, then, immediately after the effective date of such
combination or reclassification, the Series 5 Conversion Ratio shall be
appropriately adjusted so that the holder of any shares of Series 5 Class B
Stock thereafter converted shall be entitled to receive the number of shares of
Common Stock of the Company which the holder would have owned immediately
following such action had such shares of Series 5 Class B Stock been converted
immediately prior thereto.
(iii) Capital Reorganization or Reclassification. If the Common
------------------------------------------
Stock issuable upon the conversion of the Series 5 Class B Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
elsewhere in this subsection 3(e)), then and in each such event the holder of
each share of Series 5 Class B Stock shall have the right thereafter to convert
such share into the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or other change
by the holders of the number of shares of Common Stock into which such share of
Series 5 Class Stock might have been converted immediately prior to such
reorganization, reclassification or change, all subject to further adjustment as
provided herein.
(iv) Rounding of Calculations; Minimum Adjustment. All
--------------------------------------------
calculations under this subsection (e) shall be made to the nearest one
hundredth (1/100th) of a share. Any provision of this Section 3 to the contrary
notwithstanding, no adjustment in the Series 5 Conversion Ratio shall be made if
the amount of such adjustment would be less than 1% of the
3
Series 5 Conversion Ratio then in effect, but any such amount shall be carried
forward and an adjustment with respect thereto shall be made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate 1% or more of the
Series 5 Conversion Ratio then in effect.
(f) Statement Regarding Adjustments. In each case of an adjustment or
-------------------------------
readjustment of the Conversion Ratio for the Series 5 Class B Stock, the
Company, at its expense, shall cause its Chief Financial Officer to compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each registered holder of
the Series 5 Class B Stock at the holder's address as shown in the Company's
books.
(g) Costs. The Company shall pay all documentary, stamp, transfer or
-----
other transactional taxes attributable to the issuance or delivery of shares of
Common Stock of the Company upon conversion of any shares of Series 5 Class B
Stock; provided that the Company shall not be required to pay any taxes which
--------
may be payable in respect of any transfer involved in the issuance or delivery
of any certificate for such shares in a name other than that of the holder of
the shares of Series 5 Class B Stock in respect of which such shares are being
issued.
(h) Reservation of Shares. So long as any shares of Series 5 Class B
---------------------
Stock remain outstanding, the Company shall reserve out of its authorized but
unissued shares of Common Stock, free from preemptive rights, sufficient shares
of Common Stock to provide for the conversion of all shares of Series 5 Class B
Stock outstanding, solely for the purpose of effecting such conversion.
(i) Valid Issuance. All shares of Common Stock which may be issued
--------------
upon conversion of the shares of Series 5 Class B Stock will upon issuance by
the Company be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof and the
Company shall take no action which will cause a contrary result (including
without limitation, any action which would cause the Series 5 Conversion Ratio
to be less than the par value, if any, of the Common Stock).
(j) Notices. Any notice required by the provisions of this Section 3
-------
to be given to the holders of shares of the Series 5 Class B Stock shall be
deemed given upon the earlier of actual receipt or three business days after
deposit in the United States mail, by certified or registered mail, return
receipt requested, postage prepaid, addressed to each holder of record at the
address of such holder appearing on the books of the Company.
4. Dividends. Dividends shall be declared and set aside for any shares of
---------
the Series 5 Class B Stock only upon resolution of the Board of Directors of the
Company. Except as otherwise set forth in this Section 4, no dividends (other
than Common Stock dividends in a transaction described in Section 3(e)(i)) shall
be paid to the holders of the Common Stock or the Series 4 Class B Stock unless
an equivalent dividend is concurrently paid to the holders of the Series 5 Class
B Stock (on a as-converted to Common Stock basis); provided, that this
--------
restriction shall not apply to Permitted Repurchases. Notwithstanding the
foregoing, no holder of Series 5
4
Class B Stock shall be entitled to receive in any distribution thereof to the
holders of any other securities of the Company, including Common Stock: (i) any
shares of SuperCede, Inc. or (ii) any consideration received by the Company in
any of the following transactions with respect to SuperCede, Inc.; (1) the sale
of all or substantially all of the assets of SuperCede, Inc., (2) the sale of a
controlling interest in SuperCede, Inc. to a third party, or (3) the acquisition
of SuperCede, Inc. by another entity by means of merger, consolidation or
otherwise, in which the Company does not, immediately after such merger,
consolidation or other transaction, retain stock representing a majority of the
voting power of SuperCede, Inc.; "Permitted Repurchases" means the repurchase by
the Company of shares of Common Stock held by employees, officers, directors,
consultants, independent contractors, advisors, or other persons performing
services for the Company or a subsidiary that are subject to restricted stock
purchase agreements or stock option exercise agreements under which the Company
has the option to repurchase such shares.
5
September 30, 1997
Xxxxx Interactive Incorporated
One Multimedia Plaza
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
TopShelf Multimedia, Inc.
Xxx Xxxxxxxxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Acorn Associates Incorporated
One Multimedia Plaza
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Ladies and Gentlemen:
This opinion refers to the Agreement and Plan of Reorganization, dated as
of September 30, 1997, by and among Asymetrix Corporation, a Washington
corporation ("ASYMETRIX"), Xxxxx Acquisition Corp., a Massachusetts corporation
and a wholly owned subsidiary of Asymetrix ("XXXXX INTERACTIVE SUB"), TopShelf
Acquisition Corp., a Massachusetts corporation and a wholly owned subsidiary of
Asymetrix ("TOPSHELF SUB"), Acorn Acquisition Corp., a Massachusetts corporation
and a wholly owned subsidiary of Asymetrix ("ACORN SUB" and, together with Xxxxx
Interactive Sub and TopShelf Sub, the "ACQUISITION COMPANIES"), Xxxxx
Interactive Incorporated, a Massachusetts corporation ("XXXXX INTERACTIVE"),
TopShelf Multimedia, Inc., a Massachusetts corporation ("TOPSHELF"), Acorn
Associates Incorporated, a Massachusetts corporation ("ACORN" and, together with
Xxxxx Interactive and TopShelf, the "XXXXX COMPANIES"), Xxxxxx Xxxxx and Xxxxx
Xxxxx, such agreement, together with all Exhibits and Schedules thereto, being
referred to as the "REORGANIZATION AGREEMENT." Pursuant to the Reorganization
Agreement, upon the Effective Time (as defined in the Reorganization Agreement)
each of the Acquisition Companies will merge with and into the respective Xxxxx
Company (the "MERGERS"). Unless otherwise indicated, all capitalized terms used
herein have the meanings given to those terms in the Reorganization Agreement.
In order to render this opinion I have examined the documents described on
Attachment A to this letter. I have not examined any documents other than those
------------
described on Attachment A or made any independent factual investigation. I have
------------
examined such matters of law as I have deemed necessary. I have not caused the
search of any docket of any court,
Xxxxx Interactive Corporation
TopShelf Multimedia, Inc.
Acorn Associates Corporation
September 30, 1997
Page 2
tribunal, agency or, except as listed on Attachment A, similar authority or any
------------
other record of any governmental agency or third party.
In my examination of documents for purposes of this opinion, I have assumed
(to the extent that I do not have actual knowledge of), and express no opinion
as to, the genuineness of all signatures on original documents, the authenticity
of all documents submitted as originals, the conformity to originals of all
documents submitted as copies, the lack of any undisclosed terminations,
modifications, waivers or amendments to any agreements reviewed by me, the legal
competence or capacity of all natural persons executing the same, and (except
with respect to due execution and delivery of the Reorganization Agreement by
Asymetrix) the due authorization, execution and delivery of all documents where
due authorization, execution and delivery are prerequisites to the effectiveness
thereof.
As to matters of fact relevant to this opinion, I have relied solely upon
my examination of the documents referred to on Attachment A and my actual
------------
knowledge, and have assumed the current accuracy and completeness of the
information obtained from public officials and records included in the documents
referred to on Attachment A, and (b) the representations and warranties of the
------------
parties to the Reorganization Agreement as set forth therein. I have made no
attempt to verify the accuracy of any of such information, representations or
warranties or to determine the existence or non-existence of any other factual
matters; however, I am not aware of any facts that would lead me to believe that
-------
any of the opinions expressed herein are not accurate.
As used in this opinion, the phrases "my actual knowledge," "I am not
aware", "to my knowledge," or "known to me" refer only to my actual knowledge
and I have made no investigation of such matters other than my examination of
documents referred to on Attachment A. No inference as to my knowledge of any
------------
matters bearing on the accuracy of any such statement should be drawn from the
fact of my representation of Asymetrix.
For the purposes of this opinion, I have also assumed that: (a) each party
(other than Asymetrix) has all requisite power and authority, and has taken any
and all corporate or other action necessary, for the due authorization by such
party of the execution, delivery and performance by it of the Reorganization
Agreement and each Xxxxx Ancillary Agreement to which it is a party and the
performance by it of all its obligations thereunder; (b) each of the Xxxxx
Companies and the Principals has fully performed all the other obligations which
it is to perform at or before the Effective Time; (c) all the representations
and warranties made by any party other than Asymetrix or the Acquisition
Companies in, or pursuant to, the Reorganization Agreement and each Xxxxx
Ancillary Agreement are true and complete in all material respects; and (d) the
Reorganization Agreement and each Xxxxx Ancillary Agreement is duly enforceable
in accordance with its terms against, and constitutes the legal, valid and
binding obligations of, the parties thereto other than Asymetrix or the
Acquisition Companies.
2
Xxxxx Interactive Corporation
TopShelf Multimedia, Inc.
Acorn Associates Corporation
September 30, 1997
Page 3
This opinion is qualified by, and is subject to, and I render no opinion
with respect to, the limitations and exceptions to the enforceability of
contracts and obligations generally, including, without limitation:
(a) the effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent conveyance and other similar laws
relating to or affecting the rights of creditors generally;
(b) the effect of principles of public policy, general principles of
equity and similar principles, including, without limitation, concepts of
materiality, reasonableness and unconscionability and the possible
unavailability of specific performance, injunctive relief or other
equitable remedies, regardless of whether considered in a proceeding in
equity or at law.
I render no opinion with respect to: (a) compliance or noncompliance with
provisions of applicable state and federal statutes, rules and regulations
concerning the issuance and sale of securities; (b) as to the tax consequences
of the Mergers under applicable federal, state and local income tax laws and
regulations, (c) the enforceability of the voting provisions contained in the
Voting and Co-Sale Agreement; and (d) the non-competition covenants contained in
the Xxxxx Employment Agreement and Xxxxxx Employment Agreement.
I am admitted to practice law in the State of Washington, and I express no
opinion herein with respect to the application or effect of the laws of any
jurisdiction other than the existing laws of the State of Washington and the
existing federal laws of the United States of America. Special rulings of such
authorities or opinions of other counsel have not been sought or obtained. My
opinion is limited to such Washington and United States statutes, laws, rules or
regulations as in my experience are of general application to transactions of
the sort contemplated by the Reorganization Agreement.
Based upon the foregoing, subject to the assumptions and qualifications
referred to herein and except as may be otherwise set forth in the
Reorganization Agreement, the Exhibits thereto, the Asymetrix Schedule of
Exceptions, or the Asymetrix Ancillary Agreements, it is my opinion that as of
immediately prior to the Effective Time on the date hereof:
1. Asymetrix had the requisite corporate right, power and authority
to enter into, execute and deliver the Reorganization Agreement and each
Asymetrix Ancillary Agreement to which it is a party. All corporate action
required to be taken by or on the part of Asymetrix to authorize Asymetrix to
enter into, execute and deliver the Reorganization Agreement and each Asymetrix
Ancillary Agreement to which it is a party has been duly and validly taken.
2. No consents, approvals, authorizations, registrations,
declarations or filings by or with the State of Washington are required to be
obtained by Asymetrix for the execution, delivery or performance by Asymetrix of
the Reorganization Agreement or the Asymetrix Ancillary Agreements to which it
is a party, except such as have been obtained or
3
Xxxxx Interactive Corporation
TopShelf Multimedia, Inc.
Acorn Associates Corporation
September 30, 1997
Page 4
made, except for the filing of a Form D with respect to the issuance of the
Asymetrix Merger Stock in the Mergers and except for filings made under
applicable securities laws.
3. The Reorganization Agreement and each Asymetrix Ancillary
Agreement to which Asymetrix is a party have been duly authorized, executed and
delivered by Asymetrix, and are valid and binding obligations of Asymetrix,
enforceable against Asymetrix in accordance with their respective terms.
4. The authorized capital stock of Asymetrix consists of 40,000,000
shares of Asymetrix Common Stock, $0.01 par value, 8,078,172 of which are
outstanding, and 5,000,000 shares of Class B Stock, $0.01 par value, of which
50,000 shares are designated as Series 1 Class B Stock, 37,500 shares of which
are outstanding, of which 388,395 shares are designated as Series A Stock, all
of which are outstanding, of which 388,395 shares are designated as Series B
Stock, all of which are outstanding, of which 2,500,000 shares are designated as
Series 4 Class B Stock, 2,383,894 shares of which are outstanding, and of which
1,512,500 shares are designated as Series 5 Class B Stock, none of which are
outstanding.
5. The shares of Asymetrix Series 5 Class B Stock that are issuable
upon, and in exchange for, the outstanding shares of Common Stock of each of the
Xxxxx Companies in the Mergers, when so issued in accordance with the terms and
conditions of the Reorganization Agreement, will be duly and validly issued,
fully paid and non-assessable.
6. Neither the execution nor the delivery by Asymetrix of the
Reorganization Agreement or any Asymetrix Ancillary Agreement to which it is a
party, nor the consummation of the transactions provided for therein, are in
conflict with any provision of: (a) the Articles of Incorporation or Bylaws of
Asymetrix, as applicable, as currently in effect or (b) to my knowledge, any
judgment, order or decree of any court or arbitrator to which Asymetrix is a
party or is subject.
In rendering the opinions above, I am opining only as to the specific legal
issues expressly set forth herein, and no opinion shall be inferred as to other
matters. This opinion is intended solely for the use of the Xxxxx Companies
pursuant to Section 8.5 of the Reorganization Agreement, and is not to be made
available to, or relied upon for any other purpose, or by any other person or
entity, without my prior written consent. I assume no obligation to advise you
of any fact, circumstance, event or change in the law or the facts that may
hereafter be brought to my attention whether or not they would affect or modify
the opinions expressed herein.
Very truly yours,
Xxxxxx Xxxx
General Counsel
4
ATTACHMENT A
DOCUMENTS REVIEWED
(1) The Reorganization Agreement.
(2) Registration Rights Agreement dated as of the date hereof between
Asymetrix, Xxxxxx Xxxxx, Xxxxx Xxxxx and Xxxx Xxxxxx.
(3) The Voting and Co-Sale Agreement dated as of the date hereof between
Asymetrix, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxx Xxxxxx and Xxxx Xxxxx.
(4) Employment Agreement made effective as of September 30, 1997 between
Asymetrix and Xxxxx Xxxxx.
(5) Employment Agreement made effective as of September 30, 1997 between
Asymetrix and Xxxx Xxxxxx.
(6) A copy of Asymetrix's Articles of Incorporation.
(7) A copy of each of the Acquisition Companies' Certificates of Organization,
certified by the Secretary of the Commonwealth of the Commonwealth of
Massachusetts on September 29, 1997.
(8) A copy of the Bylaws of each of Asymetrix and the Acquisition Companies.
(9) Action by Unanimous Written Consent of the Board of Directors of Asymetrix
dated as of September 30, 1997.
(10) Action by Unanimous Written Consent of the Board of Directors and of the
sole stockholder of each of the Acquisition Companies dated as of September
30, 1997.
EXHIBIT 8.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of September 30, 1997, by and between ASYMETRIX CORPORATION, a
Washington corporation (the "COMPANY"), and XXXXXX XXXXX, XXXXX XXXXX and XXXX
XXXXXX (collectively, the "SHAREHOLDERS" and each individually, a "SHAREHOLDER")
who immediately prior to the Effective Time of the Mergers (as defined below)
are all of the stockholders of Xxxxx Interactive, Inc., a Massachusetts
corporation ("XXXXX"), TopShelf Multimedia, Inc., a Massachusetts corporation
("TOPSHELF") and Acorn Associates Incorporated, a Massachusetts corporation
("ACORN" and, collectively with Xxxxx and TopShelf, the "XXXXX COMPANIES").
A. Each of the Xxxxx Businesses and the Company, Xxxxx Interactive
Acquisition Corp., TopShelf Acquisition Corp., and Acorn Acquisition Corp. have
entered into an Agreement and Plan of Merger dated as of September 30, 1997 (the
"PLAN"), pursuant to which a wholly owned subsidiary of Asymetrix will merge
with and into each of the Xxxxx Companies in reverse triangular mergers, with
each of the Xxxxx Companies to be the surviving corporation of each merger (the
"MERGERS").
B. As a condition precedent to the consummation of the Mergers, Section
8.7 of the Plan provides that the Shareholders shall be granted certain
registration rights with respect to the shares of the Company's Common Stock
issuable upon conversion of the Asymetrix Series 5 Class B Stock that are issued
to the Shareholders in the Mergers, subject to the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. REGISTRATION RIGHTS
1.1 Certain Definitions. For purposes of this Agreement:
-------------------
(a) Registration. The terms "register," "registered," and
------------ -------- ----------
"registration" refer to a registration effected by preparing and filing a
------------
registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement.
(b) Registrable Securities. The term "Registrable Securities"
---------------------- ----------------------
means: (1) all the shares of Common Stock of the Company issued or issuable upon
the conversion of any shares of Series 5 Class B Stock issued pursuant to the
Plan; and (2) any shares of Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, all such shares of Common Stock described in clause (1) of
this subsection (b); excluding in all cases, however,
---------
(i) any Registrable Securities sold by a person in a transaction in which rights
under this Section 1 are not assigned in accordance with this Agreement, (ii)
any Registrable Securities sold to the public or sold pursuant to Rule 144
promulgated under the Securities Act or (iii) any Registrable Securities which
may be sold in the public market in a three-month period without registration
under the Securities Act pursuant to Rule 144 under the Securities Act.
(c) Registrable Securities Then Outstanding. The number of shares
---------------------------------------
of "Registrable Securities then outstanding" shall mean the number of shares of
---------------------------------------
Common Stock which are Registrable Securities and (1) are then issued and
outstanding or (2) are then issuable pursuant to the exercise or conversion of
then outstanding and then exercisable options, warrants or convertible
securities.
(d) Holder. For purposes of this Section 1 and Section 2 hereof,
------
the term "Holder" means any person owning of record Registrable Securities that
------
have not been sold to the public or pursuant to Rule 144 promulgated under the
Securities Act or any assignee of record of such Registrable Securities to whom
rights under this Section 1 have been duly assigned in accordance with this
Agreement; provided, however, a record holder of shares of Series 5 Class B
-------- -------
Stock convertible into such Registrable Securities shall be deemed to be the
Holder of such Registrable Securities; and provided, further, that the Company
-------- -------
shall in no event be obligated to register shares of Series 5 Class B Stock.
(e) SEC. The term "SEC" or "Commission" means the U.S. Securities
--- --- ----------
and Exchange Commission .
1.2 Piggyback Registrations. The Company shall notify all Holders of
-----------------------
Registrable Securities in writing at least thirty (30) days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to any employee benefit
---------
plan or to any acquisition, merger, consolidation or other corporate
reorganization) and will afford each such Holder an opportunity to include in
such registration statement all or any part of the Registrable Securities then
held by such Holder. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by such Holder
shall, within twenty (20) days after receipt of the above-described notice from
the Company, so notify the Company in writing, and in such notice shall inform
the Company of the number of Registrable Securities such Holder wishes to
include in such registration statement. If a Holder decides not to include all
of its Registrable Securities in any registration statement thereafter filed by
the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If a registration statement under which the
------------
Company gives notice under this Section 1.2 is for an underwritten offering,
then the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any
2
such Holder's Registrable Securities to be included in a registration pursuant
to this Section 1.2 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the managing underwriter
or underwriter(s) selected for such underwriting. Notwithstanding any other
provision of this Agreement, if the managing underwriter determine(s) in good
faith that marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude shares (including
Registrable Securities) from the registration and the underwriting, and the
number of shares that may be included in the registration and the underwriting
shall be allocated, first, to the Company, second to holders of the Company's
----- ------
Series A Preferred Stock and Series B Preferred Stock (or Registrable Securities
issuable upon conversion of such Series A Preferred Stock or Series B Preferred
Stock), third, to the holders of "registrable securities" as that term is
-----
defined in, and pursuant to, that certain Registration Rights Agreement, dated
as of September 11, 1997, by and among the Company and certain shareholders of
Aimtech Corporation, a Delaware corporation, and fourth, to the Holders
------
requesting inclusion of their Registrable Securities in such registration
statement pursuant to this Section 1.2 on a pro rata basis based on the total
number of Registrable Securities held by each such Holder. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration. For any
Holder which is a partnership or corporation, the partners, retired partners and
shareholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "Holder", and any pro rata
reduction with respect to such "Holder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "Holder," as defined in this sentence.
(b) Expenses. All expenses incurred in connection with a
--------
registration pursuant to this Section 1.2 (excluding underwriters' and brokers'
discounts and commissions and the fees and expenses of Holders' counsel),
including, without limitation all federal and "blue sky" registration,
qualification and filing fees, printers' and accounting fees, fees and
disbursements of counsel for the Company shall be borne by the Company.
1.3 Obligations of the Company. Whenever required to effect the
--------------------------
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as commercially reasonable:
(a) Furnish to the Holders and to the underwriters, if any, such
number of copies of the registration statement, prospectus, and preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as they may
3
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(b) Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(c) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(d) Use its best efforts either to (i) cause all the Registrable
Securities covered by any Registration Statement to be listed on a national
securities exchange, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure the quotation of the
Registrable Securities on the Nasdaq National Market.
1.4 Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company to take any action pursuant to Section 1.2 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be reasonably required to timely effect
the registration of their Registrable Securities.
1.5 Delay of Registration. No Holder shall have any right to obtain
---------------------
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.6 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under Sections 1.2:
(a) By the Company. To the extent permitted by law, the Company
--------------
will indemnify and hold harmless each Holder, the partners, officers, directors
of each Holder, any underwriter (as defined in the Securities Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended, (the "1934 Act"), against any expenses, losses, claims, damages, or
--------
liabilities (joint or several) (or actions in respect thereof) to which they may
become subject under the Securities Act, the 1934 Act or other federal or state
law, insofar as such expenses, losses, claims, damages, or liabilities (or
actions in respect thereof)
4
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"):
---------
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, preliminary
prospectus, final prospectus, offering circular or other document
contained therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the
Securities Act, the 1934 Act, any federal or state securities law or
any rule or regulation promulgated under the Securities Act, the 1934
Act or any federal or state securities law in connection with the
offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer, director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating, defending or
settling any such loss, claim, damage, liability or action; provided however,
-------- -------
that the indemnity agreement contained in this subsection 1.6(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by such Holder or its agent, partner,
officer, director, underwriter or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each selling
------------------
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, directors or officers or any
person who controls such Holder within the meaning of the Securities Act or the
1934 Act, against any losses, claims, damages or liabilities (joint or several)
to which the Company or any such director, officer, controlling person,
underwriter or other such Holder, partner or director, officer or controlling
person of such other Holder may become subject under the Securities Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder or its agent expressly for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any
5
such director, officer, controlling person, underwriter or other Holder,
partner, officer, director or controlling person of such other Holder in
connection with investigating, defending or settling any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
-------- -------
contained in this subsection 1.6(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and provided further, that the total amounts
-------- -------
payable in indemnity by a Holder under this Section 1.6(b) in respect of any
Violation shall not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under
------
this Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
-------- -------
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.6, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.6.
(d) Defect Eliminated in Final Prospectus. The foregoing
-------------------------------------
indemnity agreements of the Company and Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
but which Violation is eliminated or remedied in the amended prospectus on file
with the SEC at the time the registration statement in question becomes
effective or the amended prospectus filed with the SEC pursuant to SEC Rule
424(b) (the "Final Prospectus), such indemnity agreement shall not inure to the
----------------
benefit of any person if a copy of the Final Prospectus was furnished to the
indemnified party and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
(e) Contribution. In order to provide for just and equitable
------------
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 1.6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification
6
may not be enforced in such case notwithstanding the fact that this Section 1.6
provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any such selling Holder or any
such controlling person in circumstances for which indemnification is provided
under this Section 1.6; then, and in each such case, the Company and such Holder
will contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such expense, loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of each such
party in connection with such statements or omissions as well as any other
relevant considerations; provided, however, that, in any such case, (A) the
-------- -------
total amounts payable in contribution by any Holder under this Section 1.6(e)
shall not exceed the net proceeds received by such Holder in the registered
offering out of which such responsibility arises; and (B) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under
--------
this Section 1.6 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
1.7 "Market Stand-Off" Agreement. Each Holder hereby agrees that
---------------------------
it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any
Registrable Securities or any shares of capital stock of the Company then owned
by such Holder (other than to donees or partners of the Holder who agree to be
similarly bound) for up to one hundred eighty (180) days following the effective
date of any registration statement (other than a registration statement relating
to any employee benefit plan or to any acquisition, merger, consolidation or
other corporate reorganization) of the Company filed under the Securities Act
(whether filed pursuant to the provisions of this Agreement or otherwise);
provided, however, that:
-------- -------
(a) such agreement shall not apply to shares of capital stock of
the Company sold pursuant to such registration statement;
(b) all executive officers and directors of the Company then
holding Common Stock of the Company enter into a similar agreement, and any
other stockholder of the Company owning at least as many shares of the Company's
Common Stock as such Holder is also requested by the Company or the underwriter
to enter into a similar agreement; and
(c) in an offering other than the Company's initial public
offering, such agreement shall apply only for a period of 90 days from the
effective date of the registration statement filed under the Securities Act with
respect thereto.
7
In order to enforce the foregoing covenant, the Company shall have the
right to place restrictive legends on the certificates representing the shares
subject to this Section and to impose stop transfer instructions with respect to
the shares of stock of each Holder (and the shares or securities of every other
person subject to the foregoing restriction) until the end of such period.
1.8 Rule 144 Reporting. With a view to making available the benefits
------------------
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the 1934
Act (at any time after it has become subject to such reporting requirements);
and
(c) So long as a Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
of the Securities Act and the 1934 Act (at any time after it has become subject
to the reporting requirements of the 1934 Act), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents of the
Company as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration (at any time after the Company has become subject to the
reporting requirements of the 1934 Act).
2. ASSIGNMENT
Notwithstanding anything herein to any the contrary, the registration
rights of a Holder under Section 1 hereof may be assigned by a Holder only to a
party who acquires at least 75,000 shares of Series 5 Class B Stock issued under
the Plan, and/or an equivalent number (on an as-converted basis) of Registrable
Securities issued upon conversion thereof; provided, however that no party may
-------- -------
be assigned any of the foregoing rights unless the Company is given written
notice by the assigning party at the time of such assignment stating the name
and address of the assignee and identifying the securities of the Company as to
which the rights in question are being assigned; and provided further that any
-------- -------
such assignee shall receive such assigned rights subject to all the terms and
conditions of this Agreement, including without limitation the provisions of
this Section 2.
8
3. GENERAL PROVISIONS
3.1 Amendment of Rights. Any provision of this Agreement may be
-------------------
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Holders of a majority of all Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 3.1 shall be binding upon each Holder, each permitted successor or
assignee of such Holder and the Company
3.2 Governing Law. The internal laws of the State of Washington
-------------
(irrespective of its conflict of law principles) will govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
3.3 Severability. If any provision of this Agreement, or the
------------
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.
3.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories. Facsimile copies of such
counterparts are acceptable.
3.5 Notices. Any notice or other communication required or permitted
-------
to be given under this Agreement will be in writing, will be delivered
personally, by registered or certified mail, postage prepaid, by confirmed
facsimile or by nationally recognized courier service, and will be deemed given
upon delivery, if delivered personally, or five days after deposit in the mails,
if mailed, or upon receipt if delivered by confirmed facsimile or nationally
recognized courier service to the following addresses:
(i) If to Asymetrix:
---------------
Asymetrix Corporation
000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
9
With a copy to:
--------------
Xxxx X. Xxxxxxx, Esq.
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
(ii) If to Shareholder:
-----------------
To the address set forth on Exhibit A hereto
---------
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 3.5.
3.6 Absence of Third Party Beneficiary Rights. No provisions of this
-----------------------------------------
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
3.7 Entire Agreement. This Agreement and the exhibits hereto
----------------
constitute the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the parties. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date and year first above written.
ASYMETRIX CORPORATION THE SHAREHOLDERS
By:__________________________ _______________________________
Xxxxxx Xxxxx
Print Name:__________________ _______________________________
Xxxxx Xxxxx
Title:_______________________ _______________________________
Xxxx Xxxxxx
[SIGNATURE PAGE FOR REGISTRATION RIGHTS AGREEMENT]
11
EXHIBIT A
---------
LIST OF SHAREHOLDERS
NUMBER OF SHARES OF
ASYMETRIX CORPORATION
NAME AND ADDRESS SERIES 5 CLASS B STOCK HELD
---------------- ---------------------------
Xxxxxx Xxxxx
[ADDRESS]
Xxxxx Xxxxx
[ADDRESS]
Xxxx Xxxxxx
[ADDRESS]
12
EXHIBIT 8.8
VOTING AND CO-SALE AGREEMENT
THIS VOTING AND CO-SALE AGREEMENT (this "AGREEMENT") is made and entered
into as of September 30, 1997 (the "EFFECTIVE DATE") by and among ASYMETRIX
CORPORATION, a Washington corporation, (the "COMPANY"), XXXXX XXXXX (the
"DESIGNEE"), XXXXXX XXXXX, XXXX XXXXXX and XXXX XXXXX (the "SHAREHOLDER").
R E C I T A L S
- - - - - - - -
A. The Company, Xxxxx Interactive Acquisition Corp., a Massachusetts
corporation, TopShelf Acquisition Corp., a Massachusetts corporation, Acorn
Acquisition Corp., a Massachusetts corporation, Xxxxx Interactive Incorporated,
a Massachusetts corporation ("XXXXX"), TopShelf Multimedia, Inc., a
Massachusetts corporation ("TOPSHELF"), Acorn Associates Incorporated, a
Massachusetts corporation ("ACORN" and, collectively with Xxxxx and TopShelf,
the "XXXXX COMPANIES"), Xxxxxx Xxxxx and the Designee have entered into that
certain Agreement and Plan of Reorganization (the "PLAN") dated as of September
__, 1997 pursuant to which a wholly owned subsidiary of Asymetrix will merge
with and into each of the Xxxxx Companies in a reverse triangular merger.
B. As an inducement to the Xxxxx Companies, Xxxxxx Xxxxx and the
Designee to enter into the Plan, the Company and the Shareholder desire to enter
into this Agreement to set forth their agreement and understanding with respect
to the voting of shares of the Company's capital stock held by Shareholder on
certain matters.
NOW THEREFORE, in consideration of the above recitals and the mutual
covenants made herein, the parties hereby agree as follows:
1. ELECTION OF DESIGNEE TO BOARD OF DIRECTORS. During the term of
------------------------------------------
this Agreement, Shareholder agrees to vote all shares of capital stock of the
Company now or hereafter directly or indirectly owned (of record or
beneficially) by Shareholder, in such manner as may be necessary to elect (and
maintain in office), as a member of the Company's Board of Directors, the
Designee
2. FURTHER ASSURANCES. The Shareholder and the Company agree not to
------------------
vote any shares of Company stock, or to take any other actions, that would in
any manner defeat, impair, be inconsistent with or adversely affect the stated
intentions of the parties under Section 1 of this Agreement, and each party
agrees to cooperate fully with the other parties and execute such further
instruments, documents and agreements and to give such further written
assurances as may be reasonably requested by any other party to evidence and
reflect the transactions described herein and contemplated hereby and to carry
into effect the intents and purposes of this Agreement.
3. ENFORCEMENT OF AGREEMENT. The Shareholder acknowledges and agrees
------------------------
that any breach by him of this Agreement shall cause the Designee irreparable
harm which may
not be adequately compensable by money damages. Accordingly, in the event of a
breach or threatened breach by Shareholder of any provision of this Agreement,
the Company and the Designee shall each be entitled to the remedies of specific
performance, injunction or other preliminary or equitable relief, including the
right to compel Shareholder, as appropriate, to vote Shareholder's shares of
capital stock of the Company in accordance with the provisions of this
Agreement, in addition to such other rights remedies as may be available to the
Designee for any such breach or threatened breach, including but not limited to
the recovery of money damages.
4. TERM. This Agreement shall commence on the Effective Date and
----
shall terminate upon the first to occur of the following:
(a) The execution by the Shareholder, the Company and the
Designee of a written agreement to terminate this Agreement;
(b) The consummation of the first sale of securities of the
Company to the public pursuant to an effective registration statement filed by
the Company under the Securities Act of 1933, as amended;
(c) The first date on which the outstanding capital stock of
the Company owned by the Designee, Xxxxxx Xxxxx and Xxxx Xxxxxx (calculated on
an as-converted-into-Common Stock basis) constitutes less than thirty percent
(30%) of the number of shares of the Company's Series 5 Class B Stock issued to
such persons pursuant to the Plan; or
(d) Immediately prior to the closing of (i) any consolidation
or merger of the Company with or into any other corporation or corporations in
which the holders of the Company's outstanding shares immediately before such
consolidation or merger do not, immediately after such consolidation or merger,
retain stock representing a majority of the voting power of the surviving
corporation of such consolidation or merger or stock representing a majority of
the voting power of a corporation that wholly owns, directly or indirectly, the
surviving corporation of such consolidation or merger; (ii) the sale, transfer
or assignment of securities of the Company representing a majority of the voting
power of all the Company's outstanding voting securities by the holders thereof
to an acquiring party in a single transaction or series of related transactions;
(iii) any other sale, transfer or assignment of securities of the Company
representing over fifty percent (50%) of the voting power of the Company's then
outstanding voting securities by the holders thereof to an acquiring party; or
(iv) the sale of all or substantially all the Company's assets.
5. CO-SALE RIGHT.
-------------
5.1 Notice of Sales; Assignment of Company Right of First
-----------------------------------------------------
Refusal. Should Shareholder propose to sell, dispose of or otherwise transfer in
-------
any one or series of transactions, an aggregate of 500,000 shares or more of the
Company's Common Stock to any person or entity other than to an entity who is
not controlled by, undercommon control with or otherwise affiliated with
Shareholder (a "Disposition"), then Shareholder shall promptly deliver a notice
-----------
(the "Notice") to Designee, Xxxx Xxxxxx and Xxxxxx Xxxxx stating the terms and
------
conditions of such Disposition including, without limitation, the number of
shares of the
2
Company's capital stock to be sold or transferred, the nature of such sale or
transfer, the consideration to be paid, and the name and address of each
prospective purchaser or transferee.
5.2 Co-Sale Right. Each of the Designee, Xxxx Xxxxxx and Xxxxxx
-------------
Xxxxx shall have the right (the "Co-Sale Right"), exercisable upon written
-------------
notice to the Shareholder within ten (10) days of receipt of the Notice, to
participate in Shareholder's sale of Shares pursuant to the specified terms and
conditions of such proposed Disposition. To the extent Designee, Xxxx Xxxxxx or
Xxxxxx Xxxxx exercises such Co-Sale right in accordance with the terms and
conditions set forth below, the number of Shares which Shareholder may sell in
such Disposition shall, if necessary, be correspondingly reduced if the proposed
transferee of Shareholder is unwilling to purchase any shares in addition to
those specified in the Notice. In the event of such a reduction, the Co-Sale
Right of each of Xxxxxx Xxxxx, Xxxx Xxxxxx and Designee and the proposed
Disposition by Shareholder shall be subject to the following terms and
conditions:
(a) Calculation of Shares. Xxxxxx Xxxxx, Xxxx Xxxxxx and
---------------------
Designee may collectively sell their Pro Rata Share of the shares to be sold in
the proposed Disposition. For purposes of this Section 5.2(a), "Pro Rata Share"
--------------
shall be defined as a fraction, the numerator of which is the aggregate number
of shares of the Company's capital stock then owned by Xxxxxx Xxxxx, Xxxx Xxxxxx
and Designee, and the denominator of which is the number of shares of the
Company's capital stock then owned by Xxxxxx Xxxxx and Designee plus the number
of shares of the Company's capital stock then owned by Shareholder (including
entities which are controlled by, under common control with or otherwise
affiliated with Shareholder).
(b) Delivery of Certificates. Each of Xxxxxx Xxxxx, Xxxx
------------------------
Xxxxxx and Designee may effect his participation in the sale by delivering to
the Shareholder for transfer one or more certificates, properly endorsed for
transfer, which represent the number of shares of which such person elects to
sell.
6. MISCELLANEOUS.
-------------
6.1 Governing Law. The internal laws of the State of Washington
-------------
(irrespective of its conflict of law principles) will govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
6.2 Assignment; Binding Upon Successors and Assigns. Neither
-----------------------------------------------
party hereto may assign any of its rights or obligations hereunder without the
prior written consent of the other party hereto and any attempt to do so will be
void. This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and shall
be binding upon any transferee of capital stock of the Company held by
Shareholder and, upon such transfer, Shareholder shall cause such transferee to
assume Shareholder's obligations under this Agreement.
3
6.3 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories. Facsimile copies of such
counterparts are acceptable.
6.4 Entire Agreement. This Agreement and the exhibits hereto
----------------
constitute the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the parties. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
6.5 Amendments and Waivers. Any terms of this Agreement may be
----------------------
amended and the observance of any term of the Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Shareholder, the Company, Xxxxxx
Xxxxx, Xxxx Xxxxxx and the Designee. Any amendment or waiver effected in
accordance with this Section shall be binding upon all parties hereto and their
permitted transferees and assignees.
4
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
COMPANY: DESIGNEE:
------- --------
By:____________________________ _________________________
Xxxxx Xxxxx
Printed Name: _________________
Title: ________________________
SHAREHOLDER:
-----------
_______________________________ _________________________
Xxxx Xxxxx Xxxxxx Xxxxx
_________________________
Xxxx Xxxxxx
5
[SIGNATURE PAGE TO VOTING AND CO-SALE AGREEMENT]
September 30, 1997
Asymetrix Corporation
000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Re: Agreement and Plan of Reorganization dated as of September 30, 1997
(the "Agreement") by and among Asymetrix, the Merger Subs, the Xxxxx
Companies and the Principals (each as identified in the Agreement)
Ladies and Gentlemen:
I have acted as counsel to the Xxxxx Companies and the Principals in
connection with this transaction.
This opinion is delivered to you in connection with the Agreement and the
transactions identified therein. In connection with the opinions rendered
herein, I have examined the following documents, each of which is of even date
herewith unless otherwise specified (collectively the "Transaction Documents"):
1. the Agreement;
2. Articles of Merger between Xxxxx Interactive Incorporated ("Xxxxx
Interactive") and Xxxxx Acquisition Corp.;
3. Articles of Merger between TopShelf Multimedia, Inc. ("TopShelf") and
TopShelf Acquisition Corp.;
4. Articles of Merger between Acorn Associates Incorporated ("Acorn") and
Acorn Acquisition Corp.;
5. Voting and Co-Sale Agreement by and among Asymetrix Corporation, Xxxxx
Xxxxx, Xxxxxx Xxxxx, Xxxxxxx X. Xxxxxx and Xxxx Xxxxx; and
6. Registration Rights Agreement by and among Asymetrix Corporation,
Xxxxxx Xxxxx, Xxxxx Xxxxx and Xxxxxxx X. Xxxxxx.
I have also examined and relied upon the following:
A. Articles of Organization of Xxxxx Interactive as filed with the
Massachusetts Secretary of State (the "Secretary of State") on June 19, 1995.
B. Articles of Organization of TopShelf as filed with the Secretary of
State on March 1, 1996.
Asymetrix Corporation
September 30, 1997
Page 2
C. Articles of Organization of Acorn Associates, Incorporated as filed
with the Secretary of State on April 11, 1997.
D. The By-Laws of Xxxxx Interactive.
E. The By-Laws of TopShelf.
F. The By-Laws of Acorn.
G. Certificate of Corporate Good Standing of Xxxxx Interactive issued by
the Secretary of State on September 22, 1997.
H. Certificate of Corporate Good Standing issued by the Secretary of
State on September 22, 1997.
I. Certificate of Corporate Good Standing of Acorn issued by the
Secretary of State on September 22, 1997.
(The Certificates of Corporate Good Standing of each of Xxxxx
Interactive, TopShelf and Acorn are collectively referred to as the "Good
Standing Certificates").
J. The Definitive Agreements as defined in the Agreement.
K. Such other certificates, documents and materials as I have deemed
necessary in connection with this opinion.
Based upon the foregoing, and subject to the qualifications set forth
herein, I am of the opinion that:
1. Each of the Xxxxx Companies is a corporation validly existing under
the laws of the Commonwealth of Massachusetts (the "Commonwealth") and, based on
the Good Standing Certificates, is in good standing as defined in Massachusetts
General Laws, Chapter 156B, Section 116, with full power to (i) own, lease and
operate its properties; (ii) carry on its business as now conducted and (iii) to
execute deliver and perform its obligations under each of the Transaction
Documents to which it is a party.
2. The execution and delivery of each of the Transaction Documents
requiring execution by the Xxxxx Companies and the Principals (a) have been duly
authorized by the Xxxxx Companies; (b) will not conflict with any provisions of
the Articles of Organization or By-Laws of any of the Xxxxx Companies; and (c)
except as set forth in the Xxxxx Companies Schedule of Exceptions to the
Agreement, are not in violation of any Definitive Agreement nor to the best of
my knowledge and except as set forth in the Xxxxx Companies Schedule of
Exceptions, any permit, decree, ordinance or applicable governmental regulation
presently in effect.
2
Asymetrix Corporation
September 30, 1997
Page 3
3. Each of the Transaction Documents requiring execution by any of the
Xxxxx Companies or the Principals has been duly executed and delivered by Xxxxx
Interactive, TopShelf, Acorn and the Principals; is the legal, valid and binding
obligation of Xxxxx Interactive, TopShelf, Acorn and the Principals; and is
enforceable against the Xxxxx Companies and the Principals in accordance with
its terms.
4. No government consents, approvals, authorization, registrations,
declarations or filings are required to be obtained by the Principals or any of
the Xxxxx Companies for the execution, delivery or performance by or on behalf
of the Xxxxx Companies of the Transaction Documents to which each such
corporation or Principal is a party, except such as have been obtained or made.
5. The authorized capital stock of each of the Xxxxx Companies consists
of 200,000 shares of Common Stock, without par value, of which in each case, 200
shares are issued, outstanding and owned of record solely by those persons
listed on Schedule 3.3 of the Agreement in the respective amounts shown on
Schedule 3.3 of the Agreement. All presently issued and outstanding shares of
the Xxxxx Companies capital stock have been duly authorized and validly issued
and are fully paid and nonassessable. There are, to my knowledge, (a) no
outstanding subscriptions, warrants, options, calls, claims, commitments,
convertible securities or other agreements or arrangements under which any of
the Xxxxx Companies may be obligated to issue any shares of its capital stock,
(b) no preemptive rights to subscribe for or to purchase capital stock of any of
the Xxxxx Companies, and (c) no outstanding rights to cause shares of any of the
Xxxxx Companies to be registered under the Securities Act of 1933, as amended,
or under the laws of the Commonwealth of Massachusetts. The Principals and
Xxxxxxx X. Xxxxxx are the only shareholders of record of Xxxxx Interactive and
the Principals are the only shareholders of record of TopShelf and Acorn. To my
knowledge, no other party has any right to, or has made any claim of, ownership
of shares of any of the Xxxxx Companies, and no other party has any right to, or
has made any claim to, receive shares of any of the Xxxxx Companies.
6. To the best of my knowledge, and without having made any independent
investigation and except as otherwise set forth on Schedule 3.6 of the
Agreement, there is no action, suit, proceeding or investigation pending or
threatened against any of the Xxxxx Companies which if adversely determined
would have a material adverse effect on the financial condition business or
properties of the Xxxxx Companies or would impair the enforceability of the
Transaction Documents and none of the Xxxxx Companies is subject to any order,
writ, judgment, decree or injunction.
The opinions expressed herein are subject to the following assumptions,
limitations and qualifications:
A. In my examination and in rendering this opinion, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the power
and authority of all persons, other than the Xxxxx Companies and the Principals,
the authenticity and completeness of all documents submitted to me as originals,
the conformity to original documents of all documents
3
Asymetrix Corporation
September 30, 1997
Page 4
submitted to me as certified or photostatic copies and the authenticity of the
originals of such latter documents. I have assumed the due issuance and
validity of all governmental approvals, licenses, permits, consents,
authorizations and certificates.
B. As to matters of fact material to my opinions expressed herein, I have
relied upon: (i) the representations and warranties made by the Xxxxx Companies
and the Principals in the Transaction Documents; (ii) the certifications
contained in the Good Standing Certificates and (iii) with respect to matters
set forth in paragraph 5 hereof, the minute books of each Xxxxx Company.
C. I have assumed that Asymetrix and the Merger Subs have all requisite
power and authority and have taken all necessary corporate action to enter into
the Agreement and to effect the transactions contemplated thereby.
D. My opinions set forth herein as to the validity, binding effect and
enforceability of the Transaction Documents are specifically qualified to the
extent that the validity, binding effect or enforceability of any obligations of
Xxxxx Companies under any of the Transaction Documents may be subject to or
affected by (i) applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other statutory or decisional laws, heretofore or
hereafter enacted or in effect, affecting the rights of creditors generally or
(ii) the exercise of judicial or administrative discretion in accordance with
general equitable principles.
E. I express no opinion as to liens arising under state or federal laws
or regulations pertaining to hazardous waste.
F. I am a member of the Bar of the Commonwealth of Massachusetts and
opinions expressed herein are based upon and limited to the laws of the
Commonwealth of Massachusetts, and the federal laws of the United States. I
express no opinion herein concerning the laws of any other jurisdictions.
This opinion is limited to the matters set forth herein and no opinion is
implied or may be inferred beyond the matters expressly stated. No person or
entity other than you may rely or claim reliance upon this opinion. This
opinion is given to you as of the date hereof and I assume no obligation to
advise you of changes that may hereafter be brought to my attention.
Very truly yours
Xxxxxx X. Xxxxxxx
DJA/lmw
4
EXHIBIT 9.11
September 30, 1997
Asymetrix Corporation
000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
INVESTMENT REPRESENTATION LETTER
The undersigned holder ("STOCKHOLDER") of Common Stock (the "XXXXX
COMPANIES STOCK") of Xxxxx Interactive Incorporated, a Massachusetts corporation
("XXXXX"), TopShelf Multimedia, Inc., a Massachusetts corporation ("TOPSHELF")
and/or Acorn Associates Incorporated, a Massachusetts corporation ("ACORN" and,
together with Xxxxx and TopShelf, the "XXXXX COMPANIES"), is acquiring shares of
the capital stock of Asymetrix Corporation, a Washington corporation
("ASYMETRIX") pursuant to that certain Agreement and Plan of Reorganization (the
"PLAN") dated as of September 30, 1997 among Asymetrix, Xxxxx Interactive
Acquisition Corp., a Massachusetts corporation, TopShelf Acquisition Corp., a
Massachusetts corporation, Acorn Acquisition Corp., a Massachusetts corporation,
Xxxxxx Xxxxx, Xxxxx Xxxxx and each of the Xxxxx Companies, pursuant to which a
wholly owned subsidiary of Asymetrix will merge with and into an Xxxxx Company
in a reverse triangular merger, with the applicable Xxxxx Company to be the
surviving corporation of each merger (the "MERGERS"), and all of the outstanding
capital stock of each Xxxxx Company will be converted into shares of Asymetrix
Series 5, Class B Stock (the "RESTRICTED SECURITIES") pursuant to a private
placement effected pursuant to Section 4(2) of the U.S. Securities Act of 1933,
as amended (the "SECURITIES ACT") and/or Regulation D promulgated thereunder.
Unless otherwise defined herein, all capitalized terms used herein shall have
the meanings given to such terms in the Plan.
In connection with the Merger, Stockholder hereby represents and warrants
to Asymetrix as follows:
(1) Status of Stockholder. Stockholder is an "accredited investor" within
---------------------
the meaning of Regulation D promulgated under the Securities Act. Stockholder
has the knowledge and experience in financial and business matters necessary to
evaluate and make an informed decision regarding the exchange of Stockholder's
shares of Xxxxx Companies Stock for the Restricted Securities and to make the
investment in the Restricted Securities pursuant to the
Mergers. Stockholder has the capacity to protect its own interests in connection
with the Mergers.
(2) Plan. Stockholder acknowledges that Stockholder has received, read and
----
understood the Plan.
(3) Access to Other Information. Stockholder acknowledges that Asymetrix
---------------------------
has made available to Stockholder the opportunity to examine such additional
documents and to ask questions of, and receive answers from, Asymetrix and its
management concerning, among other things, Asymetrix, its business, financial
condition, management, activities and any other information which Stockholder
considers relevant, important or material in making the decision to participate
in the Mergers and to invest in the Restricted Securities.
(4) Risks of Investment. Stockholder acknowledges that the Restricted
-------------------
Securities involve a degree of risk and is aware of the lack of liquidity of the
Restricted Securities. Stockholder appreciates the financial hazards involved
in making the investment and understands the tax consequences of investing in
the Restricted Securities. Stockholder has not relied on Asymetrix or its
counsel for any advice regarding the tax consequences of the Mergers and/or
Stockholder's investment in the Restricted Securities.
(5) Investment Intent. Stockholder is acquiring the Restricted Securities
-----------------
in the Mergers for investment purposes for Stockholder's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act. Stockholder has no present intention
of disposing of the Restricted Securities and no one other than the
beneficiaries of Stockholder has any beneficial interest in the Restricted
Securities.
(6) Restricted Securities; Registration Rights. Stockholder acknowledges
------------------------------------------
and understands that the terms of the Mergers have not been reviewed by the
Securities and Exchange Commission (the "SEC") or by any state securities
authorities, that the Restricted Securities to be received by Stockholder
pursuant to the Mergers have not been registered under the Securities Act and
constitute "restricted securities" within the meaning of Rule 144 promulgated
under the Securities Act ("RULE 144"), and have been issued in reliance on the
exemptions for non-public offerings provided by Section 4(2) of the Securities
Act and/or Regulation D promulgated thereunder, which exemptions depend upon,
among other things, the representations made and information furnished by
Stockholder herein, including but not limited to the bona fide nature of
Stockholder's investment intent as expressed above. Stockholder and Asymetrix
acknowledge that Stockholder has certain "piggyback" registration rights to
cause Asymetrix to include such Restricted Securities in a registration
statement under the Securities Act, if any such registration statement is filed
by Asymetrix and subject to the limitations set forth in the Registration Rights
Agreement being entered into by and among the Aimtech Stockholders and Asymetrix
pursuant to the Plan and that Asymetrix is not otherwise obligated to register
the Restricted Securities to be issued to Stockholder.
(7) Rule 144. Stockholder acknowledges that, absent such registration of
--------
the Restricted Securities, Stockholder will not be able to publicly sell the
Restricted Securities until one year after the Effective Time of the Merger.
After that date, Stockholder may sell the Restricted Securities in compliance
with Rule 144. Stockholder is familiar with the provisions of Rule 144 which
permit limited public resales of "restricted securities," subject to the
satisfaction
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of certain conditions regarding the restrictions on the transfer of the
Restricted Securities imposed by Rule 144. Stockholder understands that in the
event all of the applicable requirements of Rule 144 are not satisfied,
registration under the Securities Act or some other exemption from the
registration requirements of the Securities Act will be required in order to
enable Stockholder to dispose of the Restricted Securities, and that Stockholder
may be required to hold the Restricted Securities for a significant period of
time prior to reselling them. Stockholder acknowledges that if it is or becomes
an "affiliate" of Asymetrix, then certain restrictions, including volume limits,
imposed by Rule 144 will continue to apply to Stockholder beyond the second
anniversary of the date on which Stockholder acquires the Restricted Securities.
(8) Procedures for Transfer. Stockholder will not sell, transfer,
-----------------------
exchange, pledge or otherwise dispose of, or make any offer or agreement
relating to any of the foregoing with respect to, any Restricted Securities, or
any option, right or other interest with respect to any Restricted Securities,
unless: (i) such transaction is permitted pursuant to Rule 144; (ii) counsel
representing Stockholder shall have advised Asymetrix in a written opinion
letter reasonably satisfactory to Asymetrix and Asymetrix's legal counsel, and
upon which Asymetrix and its legal counsel may reasonably rely, that no
registration under the Securities Act would be required in connection with the
proposed sale, transfer or other disposition of Restricted Securities; or (iii)
a registration statement under the Securities Act covering the Restricted
Securities proposed to be sold, transferred or otherwise disposed of, describing
the manner and terms of the proposed sale, transfer or other disposition, and
containing a current prospectus, shall have been filed with the SEC and be
effective under the Securities Act.
(9) Legends. Stockholder also understands and agrees that there will be
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placed on the certificates evidencing the ownership of the Restricted
Securities, the following legend (in addition to any legends required by
applicable state laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED, OR TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT (AND CURRENT PROSPECTUS) IS IN EFFECT AS TO
THE SECURITIES, (2) AN EXEMPTION THEREFROM IS AVAILABLE, OR (3)
THE SECURITIES ARE SOLD PURSUANT TO RULE 144 OF THE SECURITIES
ACT. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(10) Stop Transfer Instructions; No Requirement to Transfer. Stockholder
------------------------------------------------------
agrees that, in order to ensure compliance with the restrictions referred to
herein, Asymetrix may issue appropriate "stop transfer" instructions to its
transfer agent, if any. Asymetrix shall not be required (i) to transfer or have
transferred on its books any Restricted Securities that have been sold or
otherwise transferred in violation of any of the provisions of this letter or
the Plan or (ii) to treat as owner of such Restricted Securities or to accord
the right to vote or pay dividends to
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any purchaser or other transferee to whom such Restricted Securities shall have
been so transferred in violation of any provision of this letter or the Plan.
(11) Ability to Bear Economic Risk. Stockholder represents that it (i) is
-----------------------------
able to bear the economic risk of its investment in the Restricted Securities,
(ii) is able to hold the Restricted Securities for an indefinite period of time,
(iii) can afford a complete loss of its investment in the Restricted Securities
and (iv) has adequate means of providing for its current needs and possible
contingencies and has no need for liquidity in this investment.
(12) No Public Solicitation. Stockholder represents that at no time was
----------------------
such Stockholder presented with or solicited by any general mailing, leaflet,
public promotional meeting, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising or general solicitation
in connection with the Mergers.
Sincerely,
_______________________________
Name of Stockholder
By:____________________________
Name:__________________________
Title:_________________________
[SIGNATURE PAGE TO INVESTMENT REPRESENTATION LETTER]
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