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________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 24, 1996
Commission File No. 0-25940
VIEW TECH, INC.
(Exact name of registrant as specified in its charter)
California
(State of incorporation)
77-0312442
(IRS Employer Identification No.)
950 Flynn Road
Camarillo, California 93012
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (805) 482-8277
________________________________________________________________________________
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 24, 1996, View Tech, Inc., a California corporation
("View Tech"), completed its acquisition of GroupNet, Inc., a Massachusetts
corporation ("GroupNet"), pursuant to an Agreement and Plan of Merger, dated as
of August 30, 1996 (the "Merger Agreement"), by and among View Tech, GroupNet
and Andrew W. Jamison, the president and sole shareholder of GroupNet (the
"Merger"). The aggregate purchase price for all outstanding shares of GroupNet
common stock consists of (i) 150,000 shares of View Tech common stock, valued at
$7.00 per share or $1,050,000 in the aggregate, issued on September 24, 1996,
and (ii) $330,000 in cash, of which (A) $110,000 was paid on August 30, 1996,
upon execution of the Merger Agreement, and (B) a promissory note in the amount
of $220,000 payable in two equal installments of $110,000 due on each of October
15, 1996 and December 16, 1996.
GroupNet, based in Boston, Massachusetts, was an authorized dealer for
PictureTel Corporation in video communication product distribution in the
northeastern United States.
In connection with the Merger and pursuant to a Registration Rights
Agreement dated August 30, 1996, between View Tech and Mr. Jamison, View Tech
granted certain "piggyback" registration rights to Mr. Jamison.
The Merger was structured as a tax-free reorganization in which
neither View Tech nor GroupNet or its security holders recognized taxable gain.
It is intended that the Merger will be accounted for as a purchase transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired
As of the date of this Current Report on Form 8-K, it is impracticable
for View Tech to file the historical financial statements pursuant to Rule
310(c) of Regulation S-B. View Tech hereby undertakes to file such financial
statements and information by filing an amendment to this Current Report on Form
8-K as soon as practicable but in no event later than 60 days after the date of
this Current Report on Form 8-K.
(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of August 30, 1996, by and
among View Tech, Inc., GroupNet, Inc. and Andrew W. Jamison.
10.1 Promissory Note, dated August 30, 1996, of View Tech, Inc. payable to
Andrew W. Jamison.
10.2 Registration Rights Agreement, dated August 30, 1996, between View
Tech, Inc. and Andrew W. Jamison.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VIEW TECH, INC.
By: /s/ William M. McKay
-----------------------
William M. McKay
Chief Financial Officer, Treasurer and
Secretary
Dated: September 24, 1996
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER entered into as of August 30, 1996 by and among
View Tech, Inc., a California corporation (the "Surviving Corporation"),
GroupNet, Inc., a Massachusetts corporation (the "Merging Corporation"), and
Andrew W. Jamison, the sole shareholder of Merging Corporation (the "Merging
Corporation Sole Shareholder"). The Surviving Corporation, the Merging
Corporation Sole Shareholder and the Merging Corporation are referred to
collectively herein as the "Parties."
WHEREAS, upon the terms and subject to the conditions of this Agreement, in
accordance with the corporation laws of the Parties' states of incorporation,
the Surviving Corporation and the Merging Corporation will carry out a business
combination pursuant to which the Merging Corporation will merge with and into
the Surviving Corporation, and in consideration thereof, the Merging Corporation
Sole Shareholder will be issued 150,000 shares of the common stock of the
Surviving Corporation and will receive an additional $330,000, all in accordance
with Code (S)368(a)(1)(A).
WHEREAS, the Board of Directors of the Surviving Corporation and the Merging
Corporation unanimously have determined that the Merger is fair to, and in the
best interests of, their respective companies and shareholders, and have
approved and adopted this Agreement and the Merger, and have recommended
approval and adoption of this Agreement and the Merger by their respective
shareholders.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
SECTION 1. MERGER
On the Effective Date, the Merging Corporation shall be merged with and into
the Surviving Corporation. The separate existence of the Merging Corporation
shall cease, and both the Merging and Surviving Corporation shall be a single
corporation which shall be the Surviving Corporation. The title to all real
estate and other property owned by the Merging Corporation and the Surviving
Corporation shall be vested in the Surviving Corporation without reversion or
impairment, and without further act or deed. The Surviving Corporation shall
assume all liabilities and obligations of the Merging Corporation and the
Surviving Corporation as of the Effective Date. Any proceeding pending against
the Merging Corporation or the Surviving Corporation may be continued as if the
merger did not occur, or the Surviving Corporation may be substituted in the
proceeding for the Merging Corporation.
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SECTION 2. SHAREHOLDER APPROVAL
Forthwith upon the full execution of this agreement, the Merging Corporation
shall submit this agreement to its shareholder for approval in accordance with
Business Corporation Act of the Commonwealth of Massachusetts.
SECTION 3. EFFECTIVE DATE AND CLOSING
3.1 Effective Date. The merger of the Merging Corporation and the Surviving
Corporation shall be effective (Effective Date) upon the filing of the Articles
of Merger in accordance with the Business Corporation Act of the Commonwealth of
Massachusetts and the Certificate of Merger and this Agreement with the
Secretary of State of California in accordance with the Corporations Code of the
State of California.
3.2 Closing. Subject to the satisfaction of the conditions set forth in
Sections 10 and 11 of this agreement, the closing of this merger shall take
place at the office of the Surviving Corporation on August 27, 1996, or at such
other place or at such other time as may be agreed upon by the Surviving
Corporation and the Merging Corporation. At the time of the closing:
3.2.1 Filing of Articles of Merger and Certificate of Merger. The
Surviving Corporation and the Merging Corporation shall cause the Articles
of Merger and Certificate of Merger, respectively, to be filed.
3.2.2 Certificates. The Merging Corporation and the Surviving
Corporation shall each deliver to the other certified copies of the
resolutions of the Board of Directors and Shareholder (of the Merging
Corporation) of the delivering corporation approving the merger.
3.2.3 Registration Rights Agreement. The Surviving Corporation shall
deliver to the Merging Corporation Sole Shareholder an executed
Registration Rights Agreement.
3.3 Further Assurances. From time to time after the closing, the parties
shall execute and deliver such other documents and take such other actions as
may reasonably be required to accomplish the merger.
SECTION 4. SHARES OF STOCK AND PAYMENT OF MONEY
4.1 Exchange of Shares and Payment of Money. On or after the Effective Date,
the Surviving Corporation, upon the receipt of properly endorsed stock
certificates representing the outstanding shares of common stock of the Merging
Corporation, shall (i) direct its transfer agent, U.S. Stock Transfer
Corporation, to issue to the shareholders of the Merging Corporation stock
certificates representing 150,000 shares of the fully paid and nonassessable
common stock of the Surviving Corporation for all of the outstanding shares of
the Merging Corporation held by the Merging Corporation Sole Shareholder, and
(ii) pay the Merging Corporation Sole Shareholder upon receipt of his stock
certificate $110,000, and (iii) give the Merging Corporation Sole Shareholder a
promissory note for $220,000, such note to be in the form of Exhibit C attached
hereto.
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4.2 Cancellation of Shares. On the Effective Date, each share of stock of
the Merging Corporation that is then issued and outstanding shall, by virtue of
the merger and without any action on the part of the Merging Corporation or the
Surviving Corporation, be immediately canceled.
4.3 Continuation of Shares. Each share of stock of the Surviving Corporation
that is issued and outstanding as of the Effective Date shall continue to be an
issued and outstanding share of the Surviving Corporation notwithstanding the
merger.
SECTION 5. CORPORATE INCIDENTS
5.1 Articles of Incorporation. The Articles of Incorporation of the
Surviving Corporation, as in effect immediately prior to the Effective Date,
shall be the Articles of Incorporation of the Surviving Corporation following
this merger.
5.2 Bylaws. The Bylaws of the Surviving Corporation, as in effect
immediately prior to the Effective Date, shall be the Bylaws of the Surviving
Corporation following this merger.
5.3 Board of Directors and Officers. The Board of Directors of the Surviving
Corporation following this merger shall consist of the persons who are members
of the Board of Directors of the Surviving Corporation immediately prior to the
Effective Date, and they shall hold office until their successors have been
elected and qualified. The officers of the Surviving Corporation following this
merger shall be the persons who are the officers of the Surviving Corporation
immediately prior to the Effective Date, and they shall hold office at the
pleasure of the Board of Directors of the Surviving Corporation.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF MERGING CORPORATION AND THE
MERGING CORPORATION MAJORITY SHAREHOLDER
6.1 Organization. The Merging Corporation is a corporation duly organized
and existing in good standing under the laws of the Commonwealth of
Massachusetts and has the corporate power to own its properties and to carry on
its business as now conducted, and is qualified to do business in no other
jurisdiction. No proceeding is pending or threatened involving the Merging
Corporation in which it is alleged that the nature of its business makes
qualification necessary in any additional jurisdiction.
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6.2 Capitalization. The issued and outstanding stock of the Merging
Corporation consists solely of 10,000 shares of common stock without par value.
All of the issued and outstanding shares of the Merging Corporation are validly
issued and outstanding, fully paid and nonassessable. There are no existing
options, warrants, calls, preemptive rights (except certain statutory rights not
affecting the transactions hereunder), or commitments of any kind relating to
the Merging Corporation's authorized and unissued capital stock.
6.3 Subsidiaries. The Merging Corporation has no subsidiaries.
6.4 Valid and Binding Agreement. The execution and delivery of this
agreement has been approved by the Board of Directors of the Merging
Corporation, and this agreement constitutes a valid and binding obligation of
the Merging Corporation in accordance with its terms. The execution and
delivery of this agreement and the consummation thereof do not and will not
violate any provision of any judicial or governmental decree, order, or judgment
or conflict with, or result in a breach of, or constitute a default under, the
Articles of Organization or bylaws of the Merging Corporation, or any material
agreement or instrument to which the Merging Corporation is a party or by which
it is bound.
6.5 Financial Statements. The Merging Corporation has furnished Surviving
Corporation with the Merging Corporation's unaudited balance sheet as of
December 31, 1995 and its unaudited income statement for the year ended on such
date. The Merging Corporation has also furnished the Merging Corporation's
unaudited balance sheet as of July 31, 1996 (Latest Balance Sheet) and its
unaudited income statement for the seven (7) months ended on such date, a copy
of which is attached hereto as Exhibit B. The Merging Corporation will also
provide the Surviving Corporation at the Closing with a preliminary balance
sheet and income statement as of the date of Closing and with its final balance
sheet and income statement as of the Closing Date or as soon as reasonably
possible thereafter. All such financial statements (including the notes
thereto) are correct and complete, and the audited financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present in the financial position of the Merging
Corporation on the dates thereof and the results of its operations for the
periods then ended.
6.6 Undisclosed Liabilities. Except as disclosed in Exhibit A or on the
notes to the Merging Corporation's financial statements, the Merging Corporation
has no liability or obligation, absolute or contingent, including without
limitation, liabilities for federal, state, local or foreign taxes, that is not
reflected on the Latest Balance Sheet, except for changes in the amounts of the
liabilities shown on the Latest Balance Sheet that have arisen since the date of
the Latest Balance Sheet in the ordinary course of business and that are not
materially adverse to the business, assets, or operations of the Merging
Corporation.
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6.7 Title to Properties. Except as disclosed on the Merging Corporation's
financial statements, the Merging Corporation has good and marketable title to
all of its properties and assets, real and personal reflected in the Latest
Balance Sheet except as since sold or otherwise disposed of in the ordinary
course of business, free and clear of all liens and encumbrances except as set
forth on Exhibit A. The Merging Corporation has received no notice of violation
of any law, regulation, ordinance, or other requirement relating to its business
or operations or its owned or leased real or personal properties. Physical
assets owned or leased by the Merging Corporation are listed on Exhibit A
hereto.
6.8 Condition of Personal Property. Except as disclosed in the Latest
Balance Sheet or on Exhibit A: (1) the machinery and equipment of the Merging
Corporation is in good and useable condition, reasonable wear and tear excepted;
(2) substantially all its inventories, as valued in the Latest Balance Sheet,
are good and saleable, and not obsolete, and will be sold, used, or consumed in
the usual and ordinary course of business of the Merging Corporation as now
conducted; and (3) the accounts receivable of the Merging Corporation as shown
on the Latest Balance Sheet are good and collectible at the aggregate recorded
amount after reserves thereof, subject to no counterclaims or setoffs.
6.9 Condition of Real Property. The real property of the Merging
Corporation, and to the best of the Merging Corporation's knowledge, the
surrounding areas, are not currently and have not ever been subject to hazardous
or toxic substances or wastes or to their effects, and there are no claims,
litigation, administrative or other proceedings, whether actual or threatened,
or judgment or orders, relating to any hazardous or toxic substances or wastes,
discharges, emissions, or other forms of pollution relating in any way to the
real property or improvements of the Merging Corporation.
6.10 Adequacy of Rights; Patents and Trademarks. The Merging Corporation
does not own or possess any patents, franchises, licenses or other rights to use
all trade names, trademarks, patents, copyrights, trade secrets, formulae,
design rights, or other intangible assets for the conduct of its business, or to
purchase and sell the products now being purchased and sold, or to perform the
services now being performed by it, except as listed on Exhibit A hereto.
6.11 Obligations; Litigation. Except as disclosed on Exhibit A, the Merging
Corporation has performed all material obligations required to be performed by
it to date, and is not in default under any agreement, lease or other document
to which it is a party, or under any law or order of any court or other
governmental agency, which has or may have a material effect on the business,
operations, or financial conditions of the Merging Corporation. There are no
claims, actions, suits, or proceedings pending or threatened at law or in equity
or before or by any federal, state, or other governmental agency, which if
adversely determined would have a material adverse effect on the business,
operations, or financial condition of the Merging Corporation or would prevent
or hinder the consummation of the merger. No party with whom the Merging
Corporation has an agreement, lease or other arrangement which is of material
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importance to the Merging Corporation is in default thereunder, except as noted
on Exhibit A hereto.
6.12 Compliance With Laws. The business of the Merging Corporation has been
conducted consistent with the material provisions of all applicable laws and
regulations of federal, state, and local governments (including, without
limitation, any applicable building, zoning, health, safety, or environmental
ordinance or regulation). No improper gifts or illegal payments have been made
or received on behalf of the Merging Corporation by any of its officers,
directors, employees, or agents.
6.13 Contracts. The Merging Corporation has disclosed to the Surviving
Corporation all major contracts relating to the Merging Corporation's business
including (1) all contracts with sales representatives which are not terminable
on 30 days' notice or less; (2) any other contract or commitment, not in the
ordinary course of business, involving a liability by or to the Merging
Corporation to pay in the aggregate more than $25,000; and (3) any other
contract, agreement, or arrangement, not in the ordinary course of business,
which is or may be material to the business, operations, or financial condition
of the Merging Corporation. The Merging Corporation has not entered into any
employment contract or any other contract, agreement, or commitment which will
require the Merging Corporation to provide goods or services more than 90 days
from the date hereof, whether in the ordinary course of business or otherwise.
6.14 Long-Term Debt. Except as disclosed in its Financial Statements, the
Merging Corporation has no obligations for the repayment of borrowed money which
has a maturity date of more than one year from the date such obligation was
incurred.
6.15 Tax Matters. Copies of the state and federal tax returns of the Merging
Corporation for its fiscal year ended December 31, 1995 have been furnished to
the Surviving Corporation. The Merging Corporation has filed all federal,
state, local, and foreign tax returns required to be filed by it and has paid
all federal, state, local, and foreign tax required to be paid. All taxes and
governmental charges levied or assessed against the property or the business of
the Merging Corporation have been paid, other than taxes or charges the payment
of which is not yet due or which, if due, are not yet delinquent or which have
not been finally determined or which are being contested in good faith. Except
as disclosed on Exhibit A, the amounts set up as provisions for taxes on the
Latest Balance Sheet are sufficient for the payment of all unpaid taxes and
other governmental charges applicable to the property or the business of the
Merging Corporation for the period ended on the date of the Latest Balance Sheet
and all periods prior thereto. All federal, state, local or foreign taxes for
periods prior to the Closing Date will be paid by the Merging Corporation Sole
Shareholder.
6.16 Labor Matters. The Merging Corporation is not a party to any collective
bargaining agreement, and there is no pension or profit-sharing plan for the
Merging Corporation's employees, except as described in Exhibit A. The Merging
Corporation has complied with all laws and regulations which relate to employee
civil rights and equal employment opportunities and there are no presently
pending or threatened labor
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problems which do or may in the future adversely affect the business,
operations, or financial condition of the Merging Corporation.
6.17 Insurance. Immediately prior to the Closing Date, the Merging
Corporation was insured under those insurance policies listed on Exhibit A
hereto.
6.18 Suppliers and Customers. Except as disclosed on Exhibit A, the Merging
Corporation is not aware that any major customer or supplier of the Merging
Corporation intends to discontinue or diminish its business relationship with
the Merging Corporation on account of the transactions contemplated hereunder or
otherwise.
6.19 Completeness of Disclosure. Neither this agreement nor any certificate,
exhibit, schedule, or other instrument furnished or to be furnished by the
Merging Corporation to the Surviving Corporation pursuant to this agreement, or
in connection with the merger, contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained not misleading. There is no fact known
to the Merging Corporation or the Merging Corporation Sole Shareholder (other
than generally available public information) which materially adversely affects
or may, in the future, materially adversely affect the business, operations, or
condition (financial or otherwise) of the Merging Corporation which has not been
set forth in this agreement or in any Exhibit, certificate, or schedule
furnished under this agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF SURVIVING CORPORATION
7.1 Organization. The Surviving Corporation is a corporation duly organized
and existing in good standing under the laws of the state of California and has
the corporate power to own its properties and to carry on its business as now
conducted.
7.2 Capitalization. The issued and outstanding stock of the Surviving
Corporation consists solely of 10 million shares of common stock, $0.01 par
value, of which 2,943,057 shares are issued and outstanding and 5,000,000 shares
of preferred stock, of which no shares are issued and outstanding. All of the
issued and outstanding shares of the Surviving Corporation are validly issued
and outstanding, fully paid and nonassessable. Except as listed in Exhibit F,
there are no existing options, warrants, calls, preemptive rights (except
certain statutory rights not affecting the transactions hereunder), or
commitments of any kind relating to the Surviving Corporation's authorized and
unissued capital stock.
7.3 Shares Issued in Merger. The shares of stock of the Surviving
Corporation to be issued to the shareholders of the Merging Corporation in the
merger shall be fully paid and nonassessable. However, the issuance of shares by
the Surviving Corporation will not be registered under the Securities Act of
1933, as amended (Act), nor the securities law of any state, and the Certificate
for the Shares shall bear a legend stating that the shares shall not be offered,
sold, pledged, hypothecated, or otherwise transferred or disposed of without
registration under the Act and any applicable state securities law or an opinion
of counsel or other evidence satisfactory to counsel for the Corporation that an
exemption from such registrations is available. The Surviving Corporation will
enter into a Registration Rights Agreement in the form of Exhibit D whereby it
will agree to register the shares under certain circumstances.
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7.4 Valid and Binding Agreement. The execution and delivery of this
agreement has been approved by the Board of Directors of the Surviving
Corporation, and this agreement constitutes a valid and binding obligation of
the Surviving Corporation in accordance with its terms. The execution and
delivery of this agreement and the consummation thereof do not and will not
violate any provision of any judicial or governmental decree, order, or judgment
or conflict with, or result in a breach of, or constitute a default under, the
Articles of Incorporation or bylaws of the Surviving Corporation, or any
material agreement or instrument to which the Surviving Corporation is a party
or by which it is bound.
7.5 Financial Statements. The Surviving Corporation has furnished the Merging
Corporation with the Surviving Corporation's balance sheet as of June 30, 1995
and 1994 and its income statement for the years ended on such dates, together
with the report of Carpenter, Kuhen & Sprayberry, independent certified public
accountants. The Surviving Corporation has also furnished the Merging
Corporation's unaudited balance sheet as of March 31, 1996 (Latest Balance
Sheet) and its income statement for the nine months ended on such date. All
such financial statements (including the notes thereto) are correct and
complete, and the audited financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present in the financial position of the Surviving Corporation on the dates
thereof and the results of its operations for the periods then ended.
7.6 Litigation. There are no claims, actions, suits, or proceedings pending
or threatened at law or in equity or before or by any federal, state, or other
governmental agency, which if adversely determined would have an adverse effect
on the business, operations, or financial condition of the Surviving Corporation
or would prevent or hinder the consummation of the merger.
7.7 Completeness of Disclosure. Neither this agreement nor any certificate,
exhibit, schedule, or other instrument furnished or to be furnished by the
Surviving Corporation to the Merging Corporation pursuant to this agreement, or
in connection with the merger contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements contained not misleading. There is no fact known to the
Surviving Corporation which materially adversely affects or may, in the future,
materially adversely affect the business, operations, or condition (financial or
otherwise) of the Surviving Corporation which has not been set forth in this
agreement or in any exhibit, certificate, or schedule furnished under this
agreement.
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SECTION 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties of the Merging Corporation and the Merging
Corporation Sole Shareholder and the Surviving Corporation shall be true and
complete as of the closing and shall survive the closing.
SECTION 9. CONDUCT OF BUSINESS PENDING CLOSING
Pending the closing of the merger, the Merging Corporation shall, without the
prior written consent of the Surviving Corporation, refrain from engaging in
transactions other than in the ordinary course of business; entering into any
transactions involving a capital expenditure (including any borrowings in
connection with such transaction) of more than $10,000 or the disposal of any
property or asset (other than inventory) with a value of more than $5,000;
making any changes in their articles of incorporation or bylaws; issuing,
reclassifying, or altering any shares of their outstanding or unissued capital
stock; granting options, warrants, or other rights of any kind to purchase, or
issuing any shares of their capital stock; purchasing, redeeming, or otherwise
acquiring for a consideration any shares of their capital stock; declaring,
paying, setting aside, or making any dividends or other distributions or payment
in respect to their capital stock.
SECTION 10. CONDITIONS PRECEDENT TO OBLIGATIONS OF MERGING CORPORATION
The obligation of the Merging Corporation to consummate the merger is, at the
option of the Merging Corporation, subject to the fulfillment, prior to or at
the closing, of each of the following conditions:
10.1 Representations and Performance. The representations and warranties
made under this agreement by the Surviving Corporation shall be true and correct
in all material respects at the time of the closing, and the Surviving
Corporation shall have performed and complied with all agreements, covenants,
and conditions required of the Surviving Corporation by the closing under the
terms of this agreement.
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10.2 Adverse Changes. There shall not have been any material adverse changes
in the conditions, financial or otherwise, or business of the Surviving
Corporation since the date of the Latest Balance Sheet of the Surviving
Corporation.
10.3 Due Diligence. The Merging Corporation shall have completed its due
diligence and all outstanding issues relating thereto shall have been
satisfactorily resolved by the Parties.
10.4 Employment Agreement. The Surviving Corporation and the Merging
Corporation Sole Shareholder shall have entered into an employment agreement in
the form of Exhibit E hereto effective as of the Closing Date.
10.5 Opinion of Counsel for Surviving Corporation. The Merging Corporation
shall receive an opinion, addressed to the Merging Corporation and the
shareholders of the Merging Corporation, dated as of the date of the closing, of
Howard J. Kern, Esq. or such other attorney as may be reasonably satisfactory to
the Merging Corporation, in form satisfactory to the Merging Corporation to the
effect that:
10.5.1 The Surviving Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of the states of California.
10.5.2 The execution, delivery and performance of this agreement by the
Surviving Corporation have been duly authorized by all requisite corporate
action, and this agreement has been duly executed and delivered and
constitutes a valid and binding obligation of the Surviving Corporation in
accordance with its terms.
10.5.3 To the best knowledge of such counsel, the authorized, issued and
outstanding capital stock of the Surviving Corporation is correctly set
forth and described in Section 7.2 of this agreement.
10.5.4 The shares of stock of the Surviving Corporation to be received by
the shareholders of the Merging Corporation pursuant to this agreement have
been validly authorized and issued and upon delivery will be fully paid and
nonassessable.
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10.5.5 The execution and delivery of this agreement and the consummation
of the merger do not conflict with, or result in a breach of, or constitute
a default under, the Articles of Incorporation or bylaws of the Merging
Corporation, or any agreement or instrument, of which such counsel has
knowledge and to which the Merging Corporation is a party or by which it is
bound.
10.5.6 Except as may be specified in writing by such counsel, counsel does
not know of any material default or any meritorious basis for any claim of
such default of any litigation, proceeding, or governmental investigation
which is pending or threatened against or relates to the Merging
Corporation, its property or business, or which seeks to restrain or obtain
damages or other relief in connection with this agreement or the
consummation of the merger.
10.6 Registration Rights Agreement. The Merging Corporation and the Merging
Corporation Sole Shareholder shall have entered into a Registration Rights
Agreement, effective as of the Closing Date, in the form of Exhibit D attached
hereto.
SECTION 11. CONDITIONS TO OBLIGATIONS OF SURVIVING CORPORATION
The obligation of the Surviving Corporation to consummate the merger is, at
the option of the Surviving Corporation, subject to the fulfillment, prior to or
at the closing, of each of the following conditions:
11.1 Representations and Performance. The representations and warranties
made under this agreement by the Merging Corporation shall be true and correct
in all material respects at the time of the closing, and the Merging Corporation
shall have performed and complied with all agreements, covenants, and conditions
required of the Merging Corporation by the closing under the terms of this
agreement.
11.2 Adverse Changes. There shall not have been any material adverse changes
in the conditions, financial or otherwise, or business of the Merging
Corporation since the date of the Latest Balance Sheet of the Merging
Corporation.
11.3 Due Diligence. The Surviving Corporation shall have completed its due
diligence and all outstanding issues relating thereto shall have been
satisfactorily resolved by the Parties.
11.4 Employment Agreement. The Surviving Corporation and the Merging
Corporation Sole Shareholder shall have entered into an employment in the form
of Exhibit E hereto effective as of the Closing Date.
11.5 Investment Representations. The shareholders of the Merging Corporation
receiving stock of the Surviving Corporation in the merger shall execute and
deliver to Surviving Corporation an investment representation certificate
warranting and representing that the shareholder:
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11.5.1 Has sufficient knowledge and experience to evaluate the merits and
risks of his investment in the shares of the Surviving Corporation.
11.5.2 Has been provided with, or given reasonable access to, full and
fair disclosure of all information material to his or her investment in the
shares of the Surviving Corporation.
11.5.3 Has not received any advertisement or general solicitation with
respect to the sale of the shares of the Surviving Corporation.
11.5.4 Is acquiring the shares of the Surviving Corporation for the
shareholder's own account for investment purposes only and not with a view
to their distribution.
11.5.5 Understands that the shares will not be registered under the
Securities Act of 1933, as amended (Act), nor the securities law of any
state, and accordingly these securities may not be offered, sold, pledged,
hypothecated, or otherwise transferred or disposed of in the absence of
registration or the availability of an exemption from registration under
the Act and any applicable state securities law. The shareholder further
understands that except as provided in the Registration Rights Agreement of
even date herewith, the Surviving Corporation is under no obligation to
register the shares on behalf of the shareholder or to assist the
shareholder in complying with an exemption from registration.
11.5.6 Understands that the certificate for the shares of the Surviving
Corporation will bear a legend that the shares shall not be offered, sold,
pledged, hypothecated, or otherwise transferred or disposed of without
registration under the Act and any applicable state securities law or an
opinion of counsel or other evidence satisfactory to counsel for the
Corporation that an exemption from such registrations is available.
11.5.7 Understands that the certificate for 75,000 of the shares of the
Surviving Corporation will bear a legend and will have a stop order with
the transfer agent that will prevent the shares from being transferred for
twelve months following the Closing Date. At the expiration of said twelve
month period, the Surviving Corporation will take all necessary actions to
remove such restrictions.
11.5.8 Is a resident of the Commonwealth of Massachusetts.
11.6 Opinion of Counsel for Merging Corporation. The Surviving Corporation
shall receive an opinion, addressed to the Surviving Corporation and dated as of
the date of the closing, of Van Wert & Zimmer, P.C., in form satisfactory to
the Surviving Corporation to the effect that:
<PAGE>
11.6.1 The Merging Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of the states of
Massachusetts and has the corporate power to own its property and to
conduct its business as then being conducted.
11.6.2 The execution, delivery, and performance of this agreement by
Merging Corporation have been duly authorized by all requisite corporate
action, and this agreement has been duly executed and delivered and
constitutes a valid and binding obligation of the Merging Corporation in
accordance with its terms.
11.6.3 To the best knowledge of such counsel, the authorized, issued, and
outstanding capital stock of the Merging Corporation is correctly set forth
and described in Section 6.2 of this agreement, and all of the issued and
outstanding shares of the Merging Corporation are duly authorized, validly
issued and outstanding, fully paid, and nonassessable.
11.6.4 The execution and delivery of this agreement and the consummation
of the merger do not conflict with, or result in a breach of, or constitute
a default under, the Articles of Incorporation or bylaws of the Merging
Corporation, or any agreement or instrument, of which such counsel has
knowledge and to which the Merging Corporation is a party or by which it is
bound.
11.6.5 Except as may be specified in writing by such counsel, counsel does
not know of any material default or any meritorious basis for any claim of
such default of any litigation, proceeding, or governmental investigation
which is pending or threatened against or relates to the Merging
Corporation, its property or business, or which seeks to restrain or obtain
damages or other relief in connection with this agreement or the
consummation of the merger.
11.7 Condition to Obligations of Both Corporations. The obligations of the
Merging Corporation and the Surviving Corporation to consummate the merger are,
at the option of either party, subject to the condition that, at the time of the
closing, no suit, action, or other proceeding is pending or threatened before
any court or other governmental agency in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this agreement
or the consummation of the merger.
SECTION 12. EXPENSES
Subject to the following sentences, the Surviving Corporation and the Merging
Corporation shall each bear their own expenses, including legal and accounting
fees, incurred in connection with this transaction. Prior to the execution of
this Agreement, the Merging Corporation has paid its counsel and accountant a
retainer for services in connection with the Merger.
<PAGE>
SECTION 13. INDEMNIFICATION
13.1 Obligation to Indemnify. The Merging Corporation Sole Shareholder shall
indemnify the Surviving Corporation and shall hold the Surviving Corporation
harmless from all loss, cost, damage, or expense, including attorneys' fees
arising from:
13.1.1 Taxes. Any federal, state, or local tax liabilities, including
penalties and assessments, of the Merging Corporation accrued in respect of
and measured by the income of the Merging Corporation prior to August 30,
1996, arising out of transactions entered into or a state of facts arising
prior to August 30, 1996, or accrued in respect to property of the Merging
Corporation for periods prior to August 30, 1996.
13.1.2 Representations and Warranties. Any breach of any of the
representations or warranties, whether made by the Merging Corporation Sole
Shareholder or the Merging Corporation, contained in Section 6 of this
Agreement.
13.2 Settlement. The Merging Corporation Sole Shareholder shall have full
power and authority to take any and all action with respect to proceedings
relating to any liability, claim, or tax of the Merging Corporation that are
subject to this indemnification obligation, including the right to appeal,
settle, compromise, or dispose of any such proceedings in the name of the
Surviving Corporation. The Merging Corporation Sole Shareholder's obligation to
indemnify the Surviving Corporation shall be subject to the condition that the
Surviving Corporation give written notice to the Merging Corporation Sole
Shareholder promptly upon being informed of or becoming aware of any such
liability, claim, or tax covered by this indemnity. The Merging Corporation
Sole Shareholder shall allow the Surviving Corporation or its designated
representatives, to fully participate in (but not control) the determination,
settlement, or defense of any such liability, claim, or tax.
13.3 $50,000 Minimum Indemnification Required to Activate Merging Corporation
Sole Shareholder's Obligation. The obligation of the Merging Corporation Sole
Shareholder to indemnify and hold harmless the Surviving Corporation from the
types of items set forth in Section 13.1 does not inure to the benefit of the
Surviving Corporation until the amount of indemnification provided under Section
13.1 exceeds $50,000. However, once the claim for indemnification is activated,
the Merging Corporation Sole Shareholder is retroactively liable for all
indemnification provided for under Section 13.2.
13.4 Termination of Indemnification Rights. The Surviving Corporation's right
to seek indemnification terminates 18 months following the Effective Date.
However, the Merging Corporation Sole Shareholder shall be obligated to provide
indemnification under this Section 13 for all claims made by the Surviving
Corporation prior to the expiration of such 18 month period and that are covered
by this indemnity.
<PAGE>
13.5 Limitation on Indemnification. The Merging Corporation Sole Shareholder's
liability for indemnification under this Section 13 shall not exceed $1,380,000,
i.e., the value of the shares of the Surviving Corporation common stock and the
cash consideration paid in exchange for the shares of the Merging Corporation
common stock.
SECTION 14. INTENT
It is the intent of the parties that the transaction contemplated by this
agreement shall constitute a merger under the Business Corporation Act of the
Commonwealth of Massachusetts and the Corporations Code of the State of
California and qualify as a tax-free corporate reorganization within the meaning
of IRC Sec. 368(a)(1)(A).
SECTION 15. MISCELLANEOUS PROVISIONS
15.1 Time of Essence. Time is of the essence of this agreement.
15.2 Commissions. Each of the parties represents to the other that, to the
best of the party's knowledge, no person has right to a fee, commission, or
other payment for services in connection with the merger. Each of the parties
shall indemnify the other and hold the other harmless from any claim for any
such fee, commission, or other payment arising out of the actual or purported
act or agreement of the party.
15.3 Binding Effect. The provisions of this agreement shall be binding upon
and inure to the benefit of the successors and assigns of the parties.
15.4 Notice. Any notice or other communication required or permitted to be
given under this agreement shall be in writing and shall be mailed by certified
mail, return receipt requested, postage prepaid, addressed to the parties as
follows:
If to Merging Corporation:
Andrew W. Jamison
18 Winding Way
Plymouth, MA 02360
With a copy to:
Thomas M. Zimmer, Esq.
Van Wert & Zimmer, P.C.
One Militia Drive
Lexington, MA 02173
<PAGE>
If to Surviving Corporation:
Robert G. Hatfield
Chief Executive Officer
View Tech, Inc.
950 Flynn Road
Camarillo, CA 93012
With a copy to:
Howard J. Kern
Law Offices of Howard J. Kern
4057 Rhodes Avenue
Studio City, CA 91604
All notices and other communications shall be deemed to be given at the
expiration of three days after the date of mailing. The address of a party to
which notices or other communications shall be mailed may be changed from time
to time by giving written notice to the other party.
15.5 Termination; Effect of Termination.
15.5.1 Termination of Agreement. Either the Surviving Corporation or the
Merging Corporation may terminate this Agreement with the prior authorization of
its board of directors (whether before or after stockholder approval) as
provided below:
(i) the Surviving Corporation and the Merging Corporation may terminate
this Agreement by mutual written consent at any time prior to the Effective
Time;
(ii) the Surviving Corporation may terminate this Agreement by giving
written notice to the Merging Corporation at any time prior to the
Effective Time (A) in the event the Merging Corporation has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, the Surviving Corporation has notified the Merging
Corporation of this breach, and the breach has continued without cure for a
period of five (5) days after the notice of breach or (B) if the Closing
shall not have occurred on or before August 31, 1996, by reason of the
failure of any condition precedent under Section 11 hereof (unless the
failure results primarily from the Surviving Corporation breaching any
representation, warranty, or covenant contained in this Agreement);
(iii) the Merging Corporation may terminate this Agreement by giving
written notice to the Surviving Corporation at any time prior to the
Effective Time (A) in the event the Surviving Corporation has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, the Merging Corporation has notified the Surviving
Corporation of the breach, and the breach has continued without cure for a
period of five (5) days after the notice of breach or (B) if the Closing
shall not have occurred on or before August 31, 1996, by reason of the
failure of any condition precedent under Section 10 hereof (unless the
failure results primarily from the Merging Corporation breaching any
representation, warranty, or covenant contained in this Agreement) so long
as the Merging Corporation has repaid all amounts that are owed by the
Merging Corporation to the Surviving Corporation; or
<PAGE>
(iv) the Surviving Corporation may terminate this Agreement by giving
written notice to the Merging Corporation at any time prior to the
Effective Time in the event the Surviving Corporation's board of directors
concludes that termination would be in the best interests of the Surviving
Corporation and its stockholders.
15.5.2 Effect of Termination. If any Party terminates this Agreement pursuant
to (S)15.5.1 above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach).
15.6 Litigation Expense. In the event of a default under this agreement, the
defaulting party shall reimburse the nondefaulting party or parties for all
costs and expenses reasonably incurred by the nondefaulting party or parties in
connection with the default, including without limitation attorney's fees.
Additionally, in the event a suit or action is filed to enforce this agreement
or with respect to this agreement, the prevailing party or parties shall be
reimbursed by the other party for all costs and expenses incurred in connection
with the suit or action, including without limitation reasonable attorney's fees
at the trial level and on appeal.
15.7 Waiver. No waiver of any provision of this agreement shall be deemed,
or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
15.8 Applicable Law. This agreement shall be governed by and shall be
construed in accordance with the laws of the State of California.
15.9 Venue; Jurisdiction. All actions with respect to this Agreement will be
instituted in a state court sitting in Ventura County, California or Suffolk
County, Massachusetts or in a federal court for the Central District of
California, or the Eastern District of Massachusetts, subject to the provisions
on arbitration in (S)15.10 below. By the execution of this Agreement, each
Party irrevocably and unconditionally submits to the jurisdiction (both subject
matter and personal) of each such court and irrevocably and unconditionally
waives: (a) any objection such Party might now or hereafter have to the venue
in any such court; and (b) any claim that any action or proceeding brought in
any such court has been brought in an inconvenient forum.
<PAGE>
15.10 Arbitration. Any disputes arising out of this Agreement and the
transactions among the Parties contemplated by this Agreement shall be settled
by binding arbitration to be held in (i) Ventura County, California if such
arbitration proceeding is initiated by the Merging Corporation or the Merging
Corporation Sole Shareholder and (ii) in Suffolk County, Massachusetts if such
arbitration proceeding is initiated by the Surviving Corporation, in each case
in accordance with the rules of the American Arbitration Association. Judgment
upon any award rendered by any arbitrator may be entered in any court having
jurisdiction. The statute of limitations, estoppel, waiver, laches, and similar
doctrines which would otherwise be applicable in an action brought by a party
shall be applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an action for these
purposes.
15.11 Entire Agreement. This agreement constitutes the entire agreement
between the parties pertaining to its subject matter, and it supersedes all
prior contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by all parties.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
View Tech, Inc.
By: \s\ Robert G. Hatfield
---------------------------------
Title: Chief Executive Officer
------------------------------
GroupNet, Inc.
By: \s\ Andrew W. Jamison
-------------------------------
Title: President
----------------------------
\s\ Andrew W. Jamison
- ---------------------
Andrew W. Jamison
<PAGE>
EXHIBIT 10.1
PROMISSORY NOTE
$220,000 Camarillo, California
August 30, 1996
FOR VALUE RECEIVED, VIEW TECH, INC., a California corporation (the
"Payor"), promises to pay to the order of ANDREW W. JAMISON, his its heirs,
beneficiaries, and successors (the "Payee") at 18 Winding Way, Plymouth,
Massachusetts 02360, or at such other place as might be designated in writing by
the Payee, the principal sum of Two Hundred Twenty Thousand and 00/100 Dollars
($220,000.00) or so much thereof that remains unpaid, together with interest
thereon at the rate of ten (10%) percent per annum. Interest will be calculated
on the basis of the actual days elapsed based on a per diem charge computed over
a year composed of three hundred sixty (360) days.
Principal and interest will be paid as follows: The Payor shall make two
(2) equal installments of $110,000, including all accrued and unpaid interest,
on (i) October 15, 1996, and (ii) December 16, 1996. Interest due shall be
calculated from August 30, 1996.
Payments under this Note will be recorded by the Payor, which will be prima
facie evidence of such payments and the unpaid balance of this Note, absent a
showing of manifest error.
The Payor will have the right at any time and from time to time to prepay
the unpaid principal balance of this Note in whole or in part without penalty,
but with interest on the unpaid principal balance accrued to the date of
prepayment.
The Payor agrees that if, and as often as, this Note is placed in the hands
of an attorney for collection or to defend or enforce any of the Payee's rights
under this Note or otherwise relating to the indebtedness hereby evidenced, the
Payor will pay the Payee's reasonable attorneys' fees, all court costs and all
other expenses incurred by the Payee in connection therewith. The Payee may
collect a late charge equal to five percent (5%) of each payment which is not
received by the Payee within ten (10) days after the due date of such payment.
Such late charge represents the estimate of reasonable compensation for the loss
which will be sustained by the Payee arising from the Payor's failure to make
timely payments and may be collected without prejudice to the rights of the
Payee to collect any other amounts arising from the occurrence of an Event of
Default. During the existence of any Event of Default, the Payee may apply
payments received on any amount due hereunder or under the terms of any
instrument now or hereafter evidencing or securing payment of this indebtedness
as the Payee determines from time to time.
This Note is issued by the Payor and accepted by the Payee pursuant to a
merger transaction negotiated, consummated and to be performed in the States of
California and Massachusetts. This Note is to be construed according to the
internal laws of the State of California. All actions with respect to this Note
will be instituted in a state court sitting in Ventura County, California or in
a federal district court for the Central District of California or in a state
court sitting in Suffolk County, Massachusetts or in a federal district court
for the Eastern Division of the District Court of Massachusetts. By the
execution of this Note, the Payor irrevocably and unconditionally submits to the
jurisdiction (both subject matter and personal) of each such court and
irrevocably and unconditionally waives: (a) any objection the Payor might now or
hereafter have to the venue in any such court; and (b) any claim that any action
or proceeding brought in any such court has been brought in an inconvenient
forum.
1
<PAGE>
This Note is not assignable by the Payee because the Payor's obligations
are limited to the extent that the Payee breaches any of its representations and
warranties set forth in the Merger Agreement.
On the breach by the Payor of any provision of this Note, at the option of
the Payee, the entire indebtedness evidenced by this Note will become
immediately due, payable and collectible then or thereafter as the Payee might
elect, regardless of the date of maturity of this Note in accordance with the
provisions of this Note. Failure by the Payee to exercise such option will not
constitute a waiver of the right to exercise the same on the occurrence of any
subsequent Event of Default.
This Note is intended to strictly conform with all usury laws to the
extent applicable to the transactions contemplated hereby. The provisions of
this Note and of all agreements between the Payor and the Payee are hereby
expressly limited so that in no contingency or event whatsoever, shall the
amount contracted for, charged, paid or agreed to be paid to the Payee exceed
the maximum rate permitted by law therefor. If, from any circumstance
whatsoever, performance or fulfillment of any provision hereof or of any
agreement between the Payor and the Payee shall, at the time of the execution
and delivery thereof, or at the time or performance of such provision shall be
due, involve or purport to require any payment in excess of the limits
prescribed by law, the obligation to be performed or fulfilled shall be reduced
automatically to the limit prescribed by law without the necessity of the
execution of any amendment or new document.
The following events shall be deemed "Events of Default:"
a. Nonpayment. The nonpayment when due of any installment of interest or
----------
principal owing under this Note within 5 days of the date of written
notice of such non-payment.
b. Breach of Agreement. The failure by the
-------------------
Payor to perform or observe any written representation, warranty or
agreement provided to Payee.
c. Representations and Warranties. Any representation, statement,
certificate, schedule or report made or furnished to the Payee by or
on behalf of the Payor proves to be false or erroneous in any respect
at the time of the making thereof.
d. Insolvency; Bankruptcy. The insolvency (meaning an inability to pay
----------------------
debts as the same become due or the existence of liabilities in excess
of assets) of Payor, or the institution of bankruptcy, reorganization,
liquidation, receivership or conservatorship proceeding by or against
Payor.
Judgment. Entry by any court of a final uninsured judgment against
--------
Payor which is not discharged or stayed to the satisfaction of the
Payee.
f. Adverse Change. The occurrence of a material adverse change subsequent
--------------
to the Payor's June 30, 1996 Balance Sheet in the financial condition,
business, operations, assets, properties, or prospects of Payor.
2
<PAGE>
g. Corporate Existence. Any act or omission (formal or informal) of
-------------------
Payor or its officers, directors or shareholders leading to, or
resulting in, the termination, invalidation (partial or total),
revocation, suspension, interruption or unenforceability of its
corporate existences, rights, licenses, franchises or permits, or the
transfer or disposition (whether by sale, lease or otherwise) to any
person of all or a substantial part of their property.
Within five (5) business days of the date of written notice (the "Cure
Period") of the occurrence of an Event of Default as defined herein, Payor shall
cure any such Event of Default.
IN WITNESS WHEREOF, the Payor has executed this instrument effective
the date first above written.
Payor: VIEW TECH, INC.
By: /s/ William M. McKay
---------------------------------------------------------
Name: William M. McKay
Title: Chief Financial Officer
3
<PAGE>
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (the "Agreement") is made as of this
30th day of August, 1996, by and among View Tech, Inc., a California corporation
(the "Company"), and Andrew W. Jamison (the "Holder").
RECITALS
--------
WHEREAS, the Company and the Holder are parties to an Agreement and Plan of
Merger by and among the Company, the Holder, and Groupnet, Inc., a Massachusetts
corporation ("Groupnet") (the "Merger Agreement"), as of even date herewith,
whereby the Company issued 150,000 shares of the Company's Common Stock to the
Holder;
WHEREAS, the Merger Agreement sets forth certain provisions with respect to
certain rights of the Holder to include shares of the Company's Common Stock
held by him in a registered public offering of the Company's capital stock on
Form S-3 (as defined in Section 1.1(d)); and
NOW, THEREFORE, the parties hereby agree as follows:
I. REGISTRATION RIGHTS
Section 1.1 Definitions. For purposes of this Section 1:
-----------
(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The term "Affiliate" means a person or entity that directly,
or indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, a specified person or entity.
(c) The term "Common Stock" means the Company's Common Stock
authorized for issuance under its Articles of Incorporation.
(d) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(e) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof.
(f) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
<PAGE>
(g) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(h) The term "Registrable Securities" means (i) shares of Common
Stock issued to the Holder pursuant to the Merger Agreement and (ii) any 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 the shares
referenced in (i) above, excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which such person's rights under
this Section 1 are not assigned.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
Section 1.2 Registration on Form S-3. The Company shall use its best
-------------------------
efforts to file on or prior to October 31, 1996 a registration statement on Form
S-3 to register all of the Registrable Securities held by the Holder and to
cause such Form S-3 to become effective as soon as reasonably practicable
thereafter.
Section 1.3 Obligations of the Company. Whenever effecting the
--------------------------
registration of any Registrable Securities under this Section 1, the Company
shall, as expeditiously as reasonably possible:
(a) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by
them.
(b) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(c) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(d) The Company shall use its best efforts to keep the
registration statement continuously effective and usable for a period of 24
months after its effectiveness or if shorter when (i) all the Registrable
Securities have been sold pursuant to the registration statement, or (ii) the
first date after the second anniversary of the effective date hereof on which
the largest number of Registrable Securities then held by any Holder constitutes
less than one (1%) percent of the then outstanding shares of Common Stock of the
Company.
2
<PAGE>
(e) The Company shall use its best efforts to qualify all the
Registrable Securities under any applicable state securities laws.
(f) From time to time, the Company will amend or supplement the
registration statement and any prospectus contained therein to the extent
necessary to comply with the Securities Act and any applicable state securities
statutes or regulations. The Company will also provide the Holder with as many
copies of the prospectus contained in the appropriate registration statement and
such other documents as such Holder may reasonably request (including without
limitation a copy of all documents filed with and correspondence from or to the
SEC in connection with the appropriate registration statement).
Section 1.4 Furnish Information. It shall be a condition precedent to
-------------------
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding himself, the
Registrable Securities held by him, and the intended method of disposition of
such securities as the Company may reasonably request in writing and as shall be
required to effect the registration of such Holder's Registrable Securities.
Section 1.5 Expenses of Company Registration. The Company shall bear and
--------------------------------
pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to registrations pursuant
to Section 1.2 for each Holder, including (without limitation) all registration,
filing, and qualification fees, "Blue Sky" fees and expenses, printers and
accounting fees relating or apportionable thereto, but excluding any
underwriting discounts and commissions relating to Registrable Securities, and
any attorneys' fees other than the fees for the Company's counsel.
Section 1.6 Delay of Registration. No Holder shall have any right to
---------------------
obtain or seek an injunction restraining or otherwise delaying any such
registration statement filed with and declared effective by the SEC as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
Section 1.7 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under this Section 1:
3
<PAGE>
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
or the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) 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, including
any preliminary prospectus or final prospectus 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 Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, or the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 1.7(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 underwriter or controlling person. Notwithstanding the
foregoing, the Company shall not be required to indemnify any Holder pursuant to
this Section 1.7(a) against any loss, claim, damage, liability, or action
arising from any untrue or misleading statement or omission contained in any
preliminary prospectus, if such deficiency is corrected in the final prospectus
and the Company made timely delivery of the final prospectus to all purchasers
of shares of the Company's capital stock pursuant to the public offering of such
shares.
(b) 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 has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, or 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 expressly
for use in connection with such registration; and each such Holder will pay, any
legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this Section 1.7(b), in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Section 1.7(b) shall not apply to
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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); provided, that, in no event shall any
indemnity under this Section 1.7(b) exceed the gross proceeds from the offering
received by such Holder. Notwithstanding the foregoing, no Holder shall be
required to indemnify the Company, its directors, its officers or any
controlling person pursuant to this Section 1.7(b) against any loss, claim,
damage, or liability arising from any untrue or misleading statement or omission
contained in any preliminary prospectus if such deficiency is corrected in the
final prospectus and the Company made timely delivery of the final prospectus to
all purchasers of shares of the Company's capital stock pursuant to the public
offering of such shares.
(c) Promptly after receipt by an indemnified party under this
Section 1.7 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 1.7, 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
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party if the
indemnified party, acting reasonably, determines that representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing 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 1.7, 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 1.7.
(d) If the indemnification provided for in this Section 1.7 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
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 loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
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(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement, which shall be customary for registration of the type then proposed,
shall control.
(f) The obligations of the Company and Holders under this Section
1.7 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
Section 1.8 Compliance with Exchange Act. The Company shall timely file
----------------------------
with the SEC such information as the SEC may require under Section 13 or 15(d)
of the Exchange Act; and in such event, the Company shall use its best efforts
to take all action pursuant to Rule 144(c) as may be required as a condition to
the availability of Rule 144 under the Securities Act (or any successor
exemptive rule hereinafter in effect) with respect to the Common Stock of the
Company.
Section 1.9 Termination of Registration Rights. No Holder shall be
----------------------------------
entitled to exercise any right provided for in this Section 1 beyond two (2)
years following the date of this Agreement.
II. COVENANTS OF HOLDERS
Section 2.1 Covenants of Holders. The Holders, and their duly appointed
--------------------
representatives, shall obtain and provide to the Company, promptly upon request,
any and all information reasonably required by the Company to comply with state
and federal securities laws and other requirements, including but not limited
to, beneficial ownership information and all shall cooperate with any state or
federal licensing agency in any investigation by such agencies.
III. MISCELLANEOUS
Section 3.1 Successors and Assigns. Except as otherwise provided herein,
----------------------
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferee of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
Section 3.2 Governing Law. This Agreement shall be governed by and
-------------
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
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Section 3.3 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 3.4 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
Section 3.5 Notices. All notices, requests, demands and other
-------
communications which a party is required to or may desire to give any other
party in connection with this Agreement shall be in writing, and shall be
personally delivered, delivered by facsimile transmission, or delivered by
United States registered or certified mail, postage prepaid with return receipt
requested, addressed as follows:
If to the Company: View Tech, Inc.
950 Flynn Road
Camarillo, CA 93012
Attention: Mr. Robert G. Hatfield
Fax No. 805/482-3825
With a copy to: Howard J. Kern, Esq.
4057 Rhodes Avenue
Studio City, CA 91064
Fax No. 818/980-6004
With a copy to: V. Joseph Stubbs, Esq.
Brobeck, Phleger & Harrison LLP
550 South Hope Street, 21st Floor
Los Angeles, CA 90071
Fax No. 213/-745-3331
If to the Holder: Andrew W. Jamison
18 Winding Way
Plymouth, MA 02360
With a copy to: Thomas M. Zimmer, Esq.
Van Wert & Zimmer, P.C.
One Militia Drive
Lexington, MA
Fax No. 617/862-1941
If notice is given by personal delivery in accordance with the provisions of
this Section 3.5, said notice shall conclusively be deemed given at the time of
delivery. If notice is given by confirmed facsimile transmission in accordance
with the provisions of this Section 3.5, said notice shall conclusively be
deemed given at the time of the transmission. If notice is given by mail in
accordance with the provisions of this section, said notice shall conclusively
be deemed given 48 hours after deposit thereof in the United States mail. The
addressees or addresses set forth above may be changed from time to time by a
notice sent to the other parties.
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Section 3.6 Expenses. If any action at law or in equity is necessary to
--------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
Section 3.7 Amendments and Waivers. Any term 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 with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
Section 3.8 Severability. If one or more provisions of this Agreement
------------
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
Section 3.9 Entire Agreement. This Agreement (including the exhibits and
----------------
schedules hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
This Agreement supersedes any registration rights granted to the Holder
including, without limitation, any registration rights granted under the Merger
Agreement. Each party to this Agreement acknowledges and represents that no
representations, warranties, covenants, conditions, inducements, promises or
agreements, oral or otherwise, other than as set forth herein, have been made by
any party hereto, or anyone acting on behalf of any party.
Section 3.10 Facsimile Signatures. This Agreement may be executed
--------------------
manually or by facsimile signatures, all of which signatures shall have the same
force and effect. Any party executing this Agreement by facsimile shall as soon
as practicable thereafter deliver to counsel for the other parties a manually
signed copy of this Agreement.
Section 3.11 Venue; Jurisdiction. All actions with respect to this
-------------------
Agreement will be instituted in a state court sitting in Ventura County,
California or Suffolk County, Massachusetts or in a federal court for the
Central District of California, or the Eastern District of Massachusetts,
subject to the provisions on arbitration in (S)3.13 below. By the execution of
this Agreement, each Party irrevocably and unconditionally submits to the
jurisdiction (both subject matter and personal) of each such court and
irrevocably and unconditionally waives: (a) any objection such Party might now
or hereafter have to the venue in any such court; and (b) any claim that any
action or proceeding brought in any such court has been brought in an
inconvenient forum.
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Section 3.12 Arbitration. Any disputes arising out of this Agreement and
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the transactions among the Parties contemplated by this Agreement shall be
settled by binding arbitration to be held in (i) Ventura County, California if
such arbitration proceeding is initiated by the Holder and (ii) in Suffolk
County, Massachusetts if such arbitration proceeding is initiated by the
Company, in each case in accordance with the rules of the American Arbitration
Association. Judgment upon any award rendered by any arbitrator may be entered
in any court having jurisdiction. The statute of limitations, estoppel, waiver,
laches, and similar doctrines which would otherwise be applicable in an action
brought by a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement of an
action for these purposes.
Section 3.13 Attorneys' Fees. Each Party agrees that the losing party in
---------------
any suit or action shall reimburse the prevailing party for its reasonable
costs, expenses, and attorney's fees incurred in any action brought to determine
the rights of the Parties hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
THE COMPANY: VIEW TECH, INC., a California corporation
By: /s/ William M. McKay
----------------------------------
Name: William M. McKay
Title: Chief Financial Officer
HOLDER:
By: /s/ Andrew W. Jamison
----------------------------------
Name: Andrew W. Jamison
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