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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-B
FOR REGISTRATION OF SECURITIES OF CERTAIN SUCCESSOR ISSUERS
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SANCTUARY WOODS MULTIMEDIA CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 75-2444109
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(State of incorporation or organization) (IRS Employer Identification No.)
1825 South Grant Street
San Mateo, CA 94402
(Address of principal executive offices) (Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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<S> <C>
None None
</TABLE>
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value per share
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(Title of Class)
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Item 1. General Information.
(a) The jurisdiction of incorporation of the registrant, Sanctuary
Woods Multimedia Corporation, a Delaware corporation (the
"Registrant"), was moved from British Columbia, Canada to
Delaware by means of a "continuance" under Canadian law and a
"domestication" under Delaware law, effective on April 15,
1997.
(b) Registrant's fiscal year ends on March 31.
Item 2. Transaction of Succession.
(a) The predecessor to the Registrant was Sanctuary Woods
Multimedia Corporation, a British Columbia, Canada corporation
("Sanctuary Woods Canada"). Sanctuary Woods Canada had Common
Stock registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the "Exchange Act").
(b) Sanctuary Woods Canada changed its jurisdiction of
incorporation from British Columbia, Canada to Delaware,
U.S.A., by means of a "continuance" under Canadian law and a
"domestication" under Delaware law. On April 15, 1997, the
Registrant filed a Certificate of Domestication and a
Certificate of Incorporation (collectively, the
"Certificates") with the State of Delaware Secretary of State
(the "Domestication"). Pursuant to Section 388 of the
Delaware General Corporations Code, upon the filing of the
Certificates, the Registrant became a Delaware corporation as
if it had originally been incorporated in Delaware and its
incorporation in British Columbia was discontinued. The
holdings of the shareholders were not changed by the
Domestication and each share of Sanctuary Woods Canada's
Common Stock, no par value, was automatically converted into
one share of the Registrant's Common Stock, $0.001 par value.
Each stock certificate representing issued and outstanding
shares of Sanctuary Woods Canada's Common Stock, no par value,
from the date of the Domestication represented the same number
of shares of the Registrant's Common Stock, $.001 par value.
Item 3. Securities to be Registered.
The authorized capital stock of Registrant consists of 50,000,000
shares of Common Stock, $.001 par value per share. As of March 7, 1997,
23,431,640 shares of Common Stock were outstanding. On April 15, 1997, the
Registrant effected a one-for-twenty share consolidation of its outstanding
Common Stock (the "Consolidation"). As a result, approximately 1,171,582 shares
of Common Stock were outstanding after the Consolidation. None of such issued
shares were held in treasury as of March 7, 1997.
The Registrant also has authorized, but does not seek to register,
5,000,000 shares of Preferred Stock, $.001 par value per share of which 100,000
shares are designated Series A Preferred Stock (the "Series A").
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Item 4. Description of Securities to be Registered.
The holders of Common Stock are entitled to one vote for each share
held of record on all matters to be voted upon by the stockholders. An
affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the
then-outstanding shares of voting stock of the Registrant entitled to vote
generally in the election of directors voting together as a single class (the
"Voting Stock") is required (i) for the adoption, amendment or repeal of
sections 2.2 (Annual Meeting) and 2.3 (Special Meeting) of the Registrant's
Bylaws; (ii) for the removal of any director without cause; or (iii) to alter,
amend or repeal the voting requirements in (i) or (ii) above.
Subject to preferences that may be applicable to any outstanding
Preferred Stock, the holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time by Registrant's
Board of Directors out of funds legally available therefor.
Subject to preferences that may be applicable to any outstanding
Preferred Stock, in the event of a liquidation, dissolution or winding up of
Registrant, and after payment of liabilities, the holders of the Registrant's
Common Stock are entitled to share ratably in the remaining assets of the
Company.
The Common Stock has no cumulative voting, preemptive or conversion
rights. There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are fully paid and
non-assessable.
The Amended and Restated Certificate of Incorporation of the
Registrant authorizes 5,000,000 shares of Preferred Stock, with a par value of
$.001 per share of which 100,000 shares have been designated Series A.
Pursuant to the Registrant's Amended and Restated Certificate of Incorporation,
the Board of Directors has the authority, without further vote or action by the
stockholders, to fix the designation, powers, preferences, and rights of the
shares of any additional series of Preferred Stock and the qualifications,
limitations or restrictions thereof including, but not limited to, dividend
rights, conversion privileges, voting rights, terms of redemption and
liquidation preferences.
The Amended and Restated Certificate of Incorporation of the
Registrant provides that to the fullest extent permitted by Delaware law, no
director of the Registrant shall be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director.
The Amended and Restated Certificate of Incorporation also incorporates any
future amendments to Delaware law with respect to the elimination of such
liability.
Section 203 of the Delaware General Corporation Law, from which the
Registrant has not opted out in its Amended and Restated Certificate of
Incorporation, restricts certain "business combinations" with interested
stockholders" for three years following the date that a person or entity
becomes an interested stockholder, unless the Board of Directors approves the
business combination and/or certain other requirements are met.
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Item 5. Financial Statements and Exhibits.
(a) Financial Statements. Not applicable. The capital structure
and balance sheets of the Registrant immediately after the
Domestication were substantially the same as those of
Sanctuary Woods Canada.
(b) Exhibits.
(i) Proxy Statement/Prospectus. Not applicable. The
capital structure and balance sheets of the Registrant
immediately after the Domestication were substantially the
same as those of Sanctuary Woods Canada.
(ii) Other Exhibits.
<TABLE>
<S> <C>
2.1 Certificate of Domestication
3.1 Certificate of Incorporation of Registrant
3.2 Amended and Restated Certificate of Incorporation of Registrant
3.3 Bylaws of Registrant
4.1 Specimen Common Stock Certificate
10.1 Employee Incentive Share Purchase Option between the Registrant and
Brinton E. Coxe dated as of December 23, 1992 (1)
10.4 License Agreement between the Registrant and Ripley Entertainment, Inc.
dated September 7, 1993 (PORTIONS OMITTED - CONFIDENTIAL
TREATMENT GRANTED)(2)
10.7 Licensing Agreement between the Registrant and Journeyman 2, Inc., dated
as of August 3, 1994 (PORTIONS OMITTED - CONFIDENTIAL
TREATMENT REQUESTED)(3)
10.9 Sub-Lease dated November 23, 1994 between the Registrant and
Heublein, Inc., for premises located at 1825 South Grant Street,
San Mateo, California 94402(4)
10.13 Form of Warrant to Purchase Common Stock issued by the Registrant to
the placement agent for the July 1995 private placement(5)
10.18 Amendment to Loan Agreement between Sanctuary Woods Multimedia,
Inc. and a bank, dated April 2, 1996 and related warrant(6)
10.19 Second Amendment to Loan Agreement between Registrant and Imperial
Bank dated May 29, 1996(7)
10.20 Warrant granted in connection with Second Amendment to Loan
Agreement between the Registrant and Imperial Bank(8)
10.21 Agreement with Strategic Marketing Partners dated May 13, 1996(9)
10.22 Amendment 1 to License Agreement between Ripley Entertainment, Inc.
and the Registrant (effective date June 17, 1996)(10)
10.23 Amendment 1 to License Agreement between Ripley Entertainment, Inc.
and the Registrant (effective date August 1, 1996)(11)
</TABLE>
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<TABLE>
<S> <C>
10.24 Form of Securities Purchase Agreement for the purchase of 8%
Convertible Subordinated Debentures and warrants with related
Debenture and warrant(12)
10.25 Form of Indemnification Agreement Executed by Registrant and each of
its officers and directors
11.1 Computation of Net Income (Loss) Per Common Share(13)
21.1 Subsidiaries of Registrant(14)
</TABLE>
____________
(1) Incorporated by reference to Exhibit 2-B to Form 20 F/A.
(2) Incorporated herein by reference to Exhibit 10.22 to Registrant's
Registration Statement on Form F-1, filed November 12, 1993.
(3) Incorporated by reference to Exhibit 10.34 to Registrant's Report on
Form 10-K filed March 31, 1995.
(4) Incorporated by reference to Exhibit 10.36 to Registrant's Report on
Form 10-K filed March 31, 1995.
(5) Incorporated by reference to Exhibit 7.5 to Registrant's Report on
Form 8-K dated February 14, 1995.
(6) Incorporated by reference to Exhibit 10.18 to Registrant's Report on
Form 10-K/A-1 filed April 15, 1996.
(7) Incorporated by reference to Exhibit 10.19 to Registrant's Report on
Form 10-Q filed June 19, 1996.
(8) Incorporated by reference to Exhibit 10.20 of Registrant's Report on
Form 10-Q dated June 19, 1996.
(9) Incorporated by reference to Exhibit 10.21 of Registrant's Report on
Form 10-Q dated June 19, 1996.
(10) Incorporated by reference to Exhibit 10.22 to Registrant's Report on
Form 10-Q filed August 14, 1996.
(11) Incorporated by reference to Exhibit 10.23 to Registrant's Report on
Form 10-Q filed August 14, 1996.
(12) Incorporated by reference to Exhibit 10.24 to Registrant's Report on
Form 8-K dated September 3, 1996.
(13) Incorporated herein by reference to Exhibit 11.1 of Registrant's
Report on Form 10-Q dated December 31, 1996.
(14) Incorporated herein by reference to Exhibit 21.1 to Registrant's
Report on Form 10-K/A-3 filed January 16, 1997.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
SANCTUARY WOODS MULTIMEDIA CORPORATION
Date: April 30, 1997
By: /s/ Charlotte J. Walker
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Charlotte J. Walker, President and
Chief Executive Officer (Principal
Executive Officer)
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LIST OF ATTACHED EXHIBITS
<TABLE>
<S> <C>
2.1 Certificate of Domestication
3.1 Certificate of Incorporation of Registrant
3.2 Amended and Restated Certificate of Incorporation of Registrant
3.3 Bylaws of Registrant
4.1 Specimen Common Stock Certificate
10.25 Form of Indemnification Agreement Executed by
Registrant and each of its officers and directors
</TABLE>
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EXHIBIT 2.1
CERTIFICATE
OF
DOMESTICATION
The undersigned, Charlotte J. Walker, President, Chief Executive
Officer and Chairman of the Board, of Sanctuary Woods Multimedia Corporation,
in accordance with the provisions of Section 388 of Title 8 of the Delaware
Code does hereby certify:
FIRST: The corporation was first formed on April 15, 1991 in British
Columbia, Canada.
SECOND: The name of the corporation immediately prior to the filing of
this Certificate of Domestication was Sanctuary Woods Multimedia Corporation.
THIRD: The name of the corporation as set forth in its certificate of
incorporation Sanctuary Woods Multimedia Corporation.
FOURTH: The jurisdiction that constituted the seat, siege social,
principal place of business or central administration of the corporation
immediately prior to the filing of this Certificate of Domestication was
British Columbia, Canada.
IN WITNESS WHEREOF, I, being the President, Chief Executive Officer
and Chairman of the Board of Sanctuary Woods Multimedia Corporation and being
duly authorized to sign this Certificate of Domestication on behalf of the
corporation have made, signed and sealed this Certificate of Domestication on
this 15th day of April, 1997.
/s/ CHARLOTTE J. WALKER
------------------------------------------
Charlotte J. Walker
Title: President, Chief Executive Officer
and Chairman of the Board
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EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
SANCTUARY WOODS MULTIMEDIA CORPORATION
FIRST: The name of this Corporation is Sanctuary Woods Multimedia
Corporation.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The purpose of this Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: This Corporation is authorized to issue two classes of shares
to be designated, respectively, Common Stock and Preferred Stock. The total
number of shares of Common Stock which this Corporation is authorized to issue
is 100,000,000, with a par value of $.001, and the total number of shares of
Preferred Stock which this Corporation is authorized to issue is 5,000,000,
with a par value of $.001, of which 100,000 shares are designated Series A
Preferred Stock (the "Series A").
The Preferred Stock may be issued from time to time in one or more
series pursuant to a resolution or resolutions providing for such issue duly
adopted by the Board of Directors (authority to do so being hereby expressly
vested in the Board). The Board of Directors is further authorized to
determine or alter the rights, preferences, privileges, and restrictions
granted to or imposed upon any wholly unissued series of Preferred Stock and to
fix the number of shares of any such series of Preferred Stock and the
designation of any such series of Preferred Stock. The Board of Directors is
authorized, within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting any series, to increase or decrease (but not below the number of
shares thereof then outstanding) the number of shares of any such series
subsequent to the issue of shares of that series, to determine the designation
of any series, and to fix the number of shares of any series.
1. Dividends. The holders of the Common Stock and Series A shall
be entitled, when, as and if declared by the board of directors of the
Corporation, to noncumulative dividends out of funds legally available
therefor.
2. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary,
distributions to the stockholders of the Corporation shall be made in the
following manner:
(a) The holders of the Series A shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason
of their ownership of such shares, an amount equal to $53.02 per share for each
share of Series A then held by them, adjusted for any stock splits,
combinations, consolidations, or stock distributions or dividends with respect
to such shares, plus declared but unpaid dividends. If the assets and funds
thus distributed among the holders of the Series A shall be insufficient to
permit
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the payment to such holders of the full aforesaid preferential amount, then the
entire assets and funds of the Corporation legally available for distribution
shall be distributed among the holders of the Series A in proportion to the
shares of Series A then held by them.
(b) After payment has been made to the holders of Series
A of the preferential amounts set forth in Section 2(a) above, any remaining
assets of the Corporation shall be distributed ratably among the holders of the
Common Stock based upon the number of shares of Common Stock held.
(c) For purposes of this Section 2, a merger or
consolidation of the Corporation with or into any other corporation or
corporations or the merger of any other corporation or corporations into the
Corporation, in which consolidation or merger the stockholders of the
Corporation receive distributions in cash or securities of another corporation
or corporations as a result of such consolidation or merger, or a sale of all
or substantially all of the assets of the Corporation, shall be treated as a
liquidation, dissolution or winding up of the Corporation.
3. Voting Rights. Except as otherwise required by law, the
holder of each share of Common Stock issued and outstanding shall have one vote
and the holder of each share of Series A shall be entitled to the number of
votes equal to the number of shares of Common Stock into which such share of
Series A could be converted at the record date for determination of the
stockholders entitled to vote on such matters, or, if no such record date is
established, at the date such vote is taken, such votes to be counted together
with all other shares of the Corporation having general voting power and not
separately as a class. Fractional votes by the holders of Series A shall not,
however, be permitted.
4. Conversion. The holders of Series A shall have conversion
rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Corporation or any transfer agent
for the Series A. Each share of Series A shall be convertible into the number
of fully paid and nonassessable shares of Common Stock which results from
dividing $53.02 by the Conversion Price per share determined as hereinafter
provided, in effect at the time of conversion (the "Conversion Rate"). The
Series A Conversion Price shall initially be $0.12. Such initial Series A
Conversion Price shall be subject to adjustment from time to time as provided
below.
(b) Automatic Conversion. Each share of Preferred Stock
shall automatically be converted into shares of Common Stock at the then
effective Series A Conversion Rate on July 31, 1999 or upon either (i) the
closing of an equity financing for the account of the Corporation at a price
per share of at least $0.22 (as adjusted for stock splits, reverse stock splits
and the like) and an aggregate offering price of not less than $2,000,000, (ii)
such time as the closing price of the Corporation's Common Stock shall have
been at least 250% of the Series A Conversion Price for any 21 trading days in
any consecutive 40 day period after the date of the issuance of the first share
of
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Series A or (iii) at the election of the holders of at least seventy-five
percent (75%) of the outstanding shares of Series A Preferred Stock.
(c) Mechanics of Conversion. Before any holder of Series
A shall be entitled to convert the same into full shares of Common Stock and
receive Common Stock certificates therefor, he shall surrender the Series A
certificate or certificates, duly endorsed, at the office of the Corporation or
of any transfer agent for the Series A, and shall give written notice to the
Corporation at such office that such holder elects to convert the same;
provided, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such
conversion unless the certificates evidencing such shares of Series A are
either delivered to the Corporation or its transfer agent as provided above, or
the holder notifies the Corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates. The Corporation shall, as
soon as practicable after such delivery, or such agreement regarding
indemnification in the case of a lost, stolen or destroyed certificate, issue
and deliver at such office to such holder of Series A, a certificate or
certificates (as requested by such holder) representing the aggregate number
of shares of Common Stock to which the holder shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash amounts payable in
lieu of fractional shares of Common Stock. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of Series A to be converted and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on such date.
(d) Fractional Shares. In lieu of any fractional shares
to which the holder of Series A would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the fair market value of
one share of Common Stock, as determined by the board of directors of the
Corporation. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Series A of each holder at the time converting into Common Stock and the number
of shares of Common Stock issuable upon such aggregate conversion.
(e) Adjustment of Conversion Price. The applicable
Conversion Price of the Series A shall be subject to adjustment from time to
time as follows:
(i) If the number of shares of Common Stock
outstanding at any time after the date hereof is increased by
a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then, on
the date such payment is made or such change is effective, the
Conversion Price of the Series A shall be appropriately
decreased and the number of shares of Common Stock issuable on
conversion of any shares of Series A shall be increased in
proportion to such increase of outstanding shares.
(ii) If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by
a combination of the outstanding shares of Common Stock, then,
on the effective date of such combination, the Conversion
Price of the
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Series A shall be appropriately increased and the number of
shares of Common Stock issuable on conversion of any shares of
the Series A shall be decreased in proportion to such decrease
in outstanding shares.
(iii) In case, at any time after the date hereof,
of any capital reorganization, or any reclassification of the
stock of the Corporation (other than as a result of a stock
dividend or subdivision, split-up or combination of shares),
or the consolidation or merger of the Corporation with or into
another person (other than a consolidation or merger in which
the Corporation is the continuing entity and which does not
result in any change in the Common Stock), or the sale or
other disposition of all or substantially all the properties
and assets of the Corporation, the shares of Series A shall,
after such reorganization, reclassification, consolidation,
merger, sale or other disposition, be convertible into the
kind and number of shares of stock or other securities or
property of the Corporation or otherwise to which such holder
would have been entitled if immediately prior to such
reorganization, reclassification, consolidation, merger, sale
or other disposition he had converted his shares of Series A
into Common Stock. The provisions of this clause (iii) shall
similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales or other
dispositions.
(f) Minimal Adjustments. No adjustment in the Conversion Price of
the Series A shall be made if such adjustment would result in a change in the
Conversion Price of less than $0.01.
(g) No Impairment. The Corporation will not through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 4
and in the taking of all such action as may be necessary or appropriate to
protect the Conversion Rights of the holders of Series A against impairment.
This provision shall not restrict the Corporation's right to amend its
Certificate of Incorporation with the requisite stockholder consent.
(h) Certificate as to Adjustments. Upon the occurrence of any
event requiring any adjustment or readjustment of the Conversion Price pursuant
to this Section 4, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon written request at any time
of any holder of Series A, furnish or cause to be furnished to such holder a
like certificate setting forth (i) all such adjustments and readjustments, (ii)
the Conversion Price of the Series A at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of such holder's shares
of Series A.
(i) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the
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purpose of effecting the conversion of the shares of Series A such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of Series A; and if at any time the
number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of Series A,
the Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(j) Reissuance of Converted Shares. No shares of Series A which
have been converted into Common Stock after the original issuance thereof shall
ever again be reissued and all such shares so converted or redeemed shall upon
such conversion cease to be a part of the authorized shares of the Corporation.
FIFTH: The Corporation is to have perpetual existence.
SIXTH:
1. The management of the business and the conduct of the affairs
of the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions adopted from time to time by the Board
of Directors. Each director shall serve until his or her successor is duly
elected and qualified or until his or her death, resignation, or removal. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
Any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal, or other causes shall be filled by
either (i) the affirmative vote of the holders of a majority of the voting
power of the then-outstanding shares of voting stock of the Corporation
entitled to vote generally in the election of directors voting together as a
single class (the "Voting Stock"); or (ii) by the affirmative vote of a
majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. Newly created directorships resulting from
any increase in the number of directors shall, unless the Board of Directors
determines by resolution that any such newly created directorship shall be
filled by the stockholders, be filled only by the affirmative vote of the
directors then in office, even though less than a quorum of the Board of
Directors.
2. In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter,
amend, or repeal the Bylaws of the Corporation.
3. The directors of the Corporation need not be elected by
written ballot unless a stockholder demands election by written ballot at the
meeting and before voting begins, or unless the Bylaws so provide.
4. The affirmative vote of sixty-six and two-thirds percent
(66 2/3%) of the voting power of the then outstanding shares of Voting Stock,
voting together as a single class, shall be required for the adoption,
amendment or repeal of the following sections of the Corporation's Bylaws by
the stockholders of this Corporation: 2.2 (Annual Meeting) and 2.3 (Special
Meeting).
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5. No action shall be taken by the stockholders of the
Corporation except at an annual or special meeting of the stockholders called
in accordance with the Bylaws.
6. Advance notice of stockholder nomination for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in
the Bylaws of the Corporation.
7. Any director, or the entire Board of Directors, may be removed
from office at any time (i) with cause by the affirmative vote of the holders
of at least a majority of the voting power of all of the then-outstanding
shares of the Voting Stock, voting together as a single class; or (ii) without
cause by the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the voting power of all of the then-outstanding
shares of the Voting Stock.
SEVENTH: Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser
vote or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this
Certificate of Incorporation or any Preferred Stock Designation, the
affirmative vote of the holders of at least sixty-six and two-thirds percent
(66 2/3%) of the voting power of all of the then-outstanding shares of the
Voting Stock, voting together as a single class, shall be required to alter,
amend or repeal Article SIXTH or this Article SEVENTH.
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, except as provided in Article
SEVENTH of this Certificate, and all rights conferred upon the stockholders
herein are granted subject to this right.
NINTH:
1. To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or as may hereafter be amended, a director
of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
2. The Corporation may indemnify to the fullest extent permitted
by law any person made or threatened to be made a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by reason
of the fact that he, his testator or intestate is or was a director, officer or
employee of the Corporation or any predecessor of the Corporation or serves or
served at any other enterprise as a director, officer or employee at the
request of the Corporation or any predecessor to the Corporation.
3. Neither any amendment nor repeal of this Article NINTH, nor
the adoption of any provision of the Corporation's Certificate of Incorporation
inconsistent with this Article NINTH, shall eliminate or reduce the effect of
this Article NINTH, in respect of any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article NINTH, would
accrue or arise, prior to such amendment, repeal, or adoption of an
inconsistent provision.
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<PAGE> 7
TENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. The books of the Corporation may
be kept (subject to any provision contained in the statutes) outside of the
State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the Bylaws of the Corporation.
The undersigned incorporator hereby acknowledges that the foregoing
Certificate of Incorporation is the act and deed of such incorporator and that
the facts stated therein are true.
/s/ THOMAS N. STEPHENS
----------------------------------
Thomas N. Stephens, Incorporator
650 Page Mill Road
Palo Alto, CA 94304
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<PAGE> 1
EXHIBIT 3.2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SANCTUARY WOODS MULTIMEDIA CORPORATION
Sanctuary Woods Multimedia Corporation, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), hereby
certifies that :
A. The name of this Corporation, and the name under which it was
originally incorporated, is Sanctuary Woods Multimedia Corporation.
B. The date of filing of this Corporation's original Certificate of
Incorporation with the Secretary of State of Delaware was April 15, 1997.
C. Pursuant to Sections 241 and 245 of the Delaware General
Corporation Law, this Amended and Restated Certificate of Incorporation
restates, integrates and amends the provisions of the Corporation's Certificate
of Incorporation as follows:
FIRST: The name of this Corporation is Sanctuary Woods Multimedia
Corporation.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The purpose of this Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: Effective upon the date of the filing of this Amended and
Restated Certificate of Incorporation with the Secretary of State of Delaware
(the "Effective Date"), shares of the Corporation's Common Stock which were
outstanding immediately prior to the Effective Date, shall be consolidated on
the basis of one common share, for every twenty common shares. Fractional
shares of Common Stock which would result from such consolidation shall be
rounded up to the nearest whole share, provided that all certificates held by
one stockholder shall be aggregated in making such computation.
<PAGE> 2
This Corporation is authorized to issue two classes of shares to be
designated, respectively, Common Stock and Preferred Stock. The total number of
shares of Common Stock which this Corporation is authorized to issue, after
giving effect to the one-for-twenty share consolidation, is 50,000,000, with a
par value of $.001, and the total number of shares of Preferred Stock which
this Corporation is authorized to issue is 5,000,000, with a par value of
$.001, of which 100,000 shares are designated Series A Preferred Stock (the
"Series A")."
The Preferred Stock may be issued from time to time in one or more
series pursuant to a resolution or resolutions providing for such issue duly
adopted by the Board of Directors (authority to do so being hereby expressly
vested in the Board). The Board of Directors is further authorized to
determine or alter the rights, preferences, privileges, and restrictions
granted to or imposed upon any wholly unissued series of Preferred Stock and to
fix the number of shares of any such series of Preferred Stock and the
designation of any such series of Preferred Stock. The Board of Directors is
authorized, within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting any series, to increase or decrease (but not below the number of
shares thereof then outstanding) the number of shares of any such series
subsequent to the issue of shares of that series, to determine the designation
of any series, and to fix the number of shares of any series.
1. Dividends. The holders of the Common Stock and Series A shall
be entitled, when, as and if declared by the board of directors of the
Corporation, to noncumulative dividends out of funds legally available
therefor.
2. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary,
distributions to the stockholders of the Corporation shall be made in the
following manner:
(a) The holders of the Series A shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason
of their ownership of such shares, an amount equal to $53.02 per share for each
share of Series A then held by them, adjusted for any stock splits,
combinations, consolidations, or stock distributions or dividends with respect
to such shares, plus declared but unpaid dividends. If the assets and funds
thus distributed among the holders of the Series A shall be insufficient to
permit the payment to such holders of the full aforesaid preferential amount,
then the entire assets and funds of the Corporation legally available for
distribution shall be distributed among the holders of the Series A in
proportion to the shares of Series A then held by them.
(b) After payment has been made to the holders of Series
A of the preferential amounts set forth in Section 2(a) above, any remaining
assets of the Corporation shall be distributed ratably among the holders of the
Common Stock based upon the number of shares of Common Stock held.
(c) For purposes of this Section 2, a merger or
consolidation of the Corporation with or into any other corporation or
corporations or the merger of any other corporation or
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<PAGE> 3
corporations into the Corporation, in which consolidation or merger the
stockholders of the Corporation receive distributions in cash or securities of
another corporation or corporations as a result of such consolidation or
merger, or a sale of all or substantially all of the assets of the Corporation,
shall be treated as a liquidation, dissolution or winding up of the
Corporation.
3. Voting Rights. Except as otherwise required by law, the
holder of each share of Common Stock issued and outstanding shall have one vote
and the holder of each share of Series A shall be entitled to the number of
votes equal to the number of shares of Common Stock into which such share of
Series A could be converted at the record date for determination of the
stockholders entitled to vote on such matters, or, if no such record date is
established, at the date such vote is taken, such votes to be counted together
with all other shares of the Corporation having general voting power and not
separately as a class. Fractional votes by the holders of Series A shall not,
however, be permitted.
4. Conversion. The holders of Series A shall have conversion
rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Corporation or any transfer agent
for the Series A. Each share of Series A shall be convertible into the number
of fully paid and nonassessable shares of Common Stock which results from
dividing $53.02 by the Conversion Price per share determined as hereinafter
provided, in effect at the time of conversion (the "Conversion Rate"). The
Series A Conversion Price shall initially be $0.12. Such initial Series A
Conversion Price shall be subject to adjustment from time to time as provided
below.
(b) Automatic Conversion. Each share of Preferred Stock
shall automatically be converted into shares of Common Stock at the then
effective Series A Conversion Rate on July 31, 1999 or upon either (i) the
closing of an equity financing for the account of the Corporation at a price
per share of at least $4.40 (as adjusted for stock splits, reverse stock splits
and the like) and an aggregate offering price of not less than $2,000,000, (ii)
such time as the closing price of the Corporation's Common Stock shall have
been at least 250% of the Series A Conversion Price for any 21 trading days in
any consecutive 40 day period after the date of the issuance of the first share
of Series A or (iii) at the election of the holders of at least seventy-five
percent (75%) of the outstanding shares of Series A Preferred Stock.
(c) Mechanics of Conversion. Before any holder of Series
A shall be entitled to convert the same into full shares of Common Stock and
receive Common Stock certificates therefor, he shall surrender the Series A
certificate or certificates, duly endorsed, at the office of the Corporation or
of any transfer agent for the Series A, and shall give written notice to the
Corporation at such office that such holder elects to convert the same;
provided, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such
conversion unless the certificates evidencing such shares of Series A are
either delivered to the Corporation or its transfer agent as provided above, or
the holder notifies the Corporation or its transfer agent that such
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<PAGE> 4
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates. The Corporation shall, as
soon as practicable after such delivery, or such agreement regarding
indemnification in the case of a lost, stolen or destroyed certificate, issue
and deliver at such office to such holder of Series A, a certificate or
certificates (as requested by such holder) representing the aggregate number
of shares of Common Stock to which the holder shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash amounts payable in
lieu of fractional shares of Common Stock. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of Series A to be converted and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on such date.
(d) Fractional Shares. In lieu of any fractional shares
to which the holder of Series A would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the fair market value of
one share of Common Stock, as determined by the board of directors of the
Corporation. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Series A of each holder at the time converting into Common Stock and the number
of shares of Common Stock issuable upon such aggregate conversion.
(e) Adjustment of Conversion Price. The applicable
Conversion Price of the Series A shall be subject to adjustment from time to
time as follows:
(i) If the number of shares of Common Stock
outstanding at any time after the date hereof is increased by
a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then, on
the date such payment is made or such change is effective, the
Conversion Price of the Series A shall be appropriately
decreased and the number of shares of Common Stock issuable on
conversion of any shares of Series A shall be increased in
proportion to such increase of outstanding shares.
(ii) If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by
a combination of the outstanding shares of Common Stock, then,
on the effective date of such combination, the Conversion
Price of the Series A shall be appropriately increased and the
number of shares of Common Stock issuable on conversion of any
shares of the Series A shall be decreased in proportion to
such decrease in outstanding shares.
(iii) In case, at any time after the date hereof,
of any capital reorganization, or any reclassification of the
stock of the Corporation (other than as a result of a stock
dividend or subdivision, split-up or combination of shares),
or the consolidation or merger of the Corporation with or into
another person (other than a consolidation or merger in which
the Corporation is the continuing entity and which does not
result in any change in the Common Stock), or the sale or
other disposition of all or substantially all the properties
and assets of the Corporation, the shares of Series A shall,
after such
-4-
<PAGE> 5
reorganization, reclassification, consolidation, merger, sale
or other disposition, be convertible into the kind and number
of shares of stock or other securities or property of the
Corporation or otherwise to which such holder would have been
entitled if immediately prior to such reorganization,
reclassification, consolidation, merger, sale or other
disposition he had converted his shares of Series A into
Common Stock. The provisions of this clause (iii) shall
similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales or other
dispositions.
(f) Minimal Adjustments. No adjustment in the Conversion Price of
the Series A shall be made if such adjustment would result in a change in the
Conversion Price of less than $0.01.
(g) No Impairment. The Corporation will not through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 4
and in the taking of all such action as may be necessary or appropriate to
protect the Conversion Rights of the holders of Series A against impairment.
This provision shall not restrict the Corporation's right to amend its
Certificate of Incorporation with the requisite stockholder consent.
(h) Certificate as to Adjustments. Upon the occurrence of any
event requiring any adjustment or readjustment of the Conversion Price pursuant
to this Section 4, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A, a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon written request at any time
of any holder of Series A, furnish or cause to be furnished to such holder a
like certificate setting forth (i) all such adjustments and readjustments, (ii)
the Conversion Price of the Series A at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of such holder's shares
of Series A.
(i) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of Series A such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of Series A, the Corporation will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purpose.
(j) Reissuance of Converted Shares. No shares of Series A which
have been converted into Common Stock after the original issuance thereof shall
ever again be reissued and all such shares so converted or redeemed shall upon
such conversion cease to be a part of the authorized shares of the Corporation.
-5-
<PAGE> 6
FIFTH: The Corporation is to have perpetual existence.
SIXTH:
1. The management of the business and the conduct of the affairs
of the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions adopted from time to time by the Board
of Directors. Each director shall serve until his or her successor is duly
elected and qualified or until his or her death, resignation, or removal. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
Any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal, or other causes shall be filled by
either (i) the affirmative vote of the holders of a majority of the voting
power of the then-outstanding shares of voting stock of the Corporation
entitled to vote generally in the election of directors voting together as a
single class (the "Voting Stock"); or (ii) by the affirmative vote of a
majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. Newly created directorships resulting from
any increase in the number of directors shall, unless the Board of Directors
determines by resolution that any such newly created directorship shall be
filled by the stockholders, be filled only by the affirmative vote of the
directors then in office, even though less than a quorum of the Board of
Directors.
2. In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter,
amend, or repeal the Bylaws of the Corporation.
3. The directors of the Corporation need not be elected by
written ballot unless a stockholder demands election by written ballot at the
meeting and before voting begins, or unless the Bylaws so provide.
4. The affirmative vote of sixty-six and two-thirds percent
(66 2/3%) of the voting power of the then outstanding shares of Voting Stock,
voting together as a single class, shall be required for the adoption,
amendment or repeal of the following sections of the Corporation's Bylaws by
the stockholders of this Corporation: 2.2 (Annual Meeting) and 2.3 (Special
Meeting).
5. No action shall be taken by the stockholders of the
Corporation except at an annual or special meeting of the stockholders called
in accordance with the Bylaws.
6. Advance notice of stockholder nomination for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in
the Bylaws of the Corporation.
7. Any director, or the entire Board of Directors, may be removed
from office at any time (i) with cause by the affirmative vote of the holders
of at least a majority of the voting power of all of the then-outstanding
shares of the Voting Stock, voting together as a single class; or (ii) without
cause
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<PAGE> 7
by the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66 2/3%) of the voting power of all of the then-outstanding shares of
the Voting Stock.
SEVENTH: Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser
vote or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this
Certificate of Incorporation or any Preferred Stock Designation, the
affirmative vote of the holders of at least sixty-six and two-thirds percent
(66 2/3%) of the voting power of all of the then-outstanding shares of the
Voting Stock, voting together as a single class, shall be required to alter,
amend or repeal Article SIXTH or this Article SEVENTH.
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, except as provided in Article
SEVENTH of this Certificate, and all rights conferred upon the stockholders
herein are granted subject to this right.
NINTH:
1. To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or as may hereafter be amended, a director
of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach fiduciary duty as a director.
2. The Corporation may indemnify to the fullest extent permitted
by law any person made or threatened to be made a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by reason
of the fact that he, his testator or intestate is or was a director, officer or
employee of the Corporation or any predecessor of the Corporation or serves or
served at any other enterprise as a director, officer or employee at the
request of the Corporation or any predecessor to the Corporation.
3. Neither any amendment nor repeal of this Article NINTH, nor
the adoption of any provision of the Corporation's Certificate of Incorporation
inconsistent with this Article NINTH, shall eliminate or reduce the effect of
this Article NINTH, in respect of any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article NINTH, would
accrue or arise, prior to such amendment, repeal, or adoption of an
inconsistent provision.
TENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. The books of the Corporation may
be kept (subject to any provision contained in the statutes) outside of the
State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the Bylaws of the Corporation.
-7-
<PAGE> 8
IN WITNESS WHEREOF, Sanctuary Woods Multimedia Corporation has caused
this Amended and Restated Certificate of Incorporation to be signed by
Charlotte J. Walker, its President and Chief Executive Officer, and attested by
Judith M. O'Brien, its Secretary, this 15th day of April, 1997.
SANCTUARY WOODS MULTIMEDIA
CORPORATION
/s/ CHARLOTTE J. WALKER
-------------------------------------
Charlotte J. Walker
President and Chief Executive Officer
Attest:
/s/ JUDITH M. O'BRIEN
- -------------------------------
Judith M. O'Brien
Secretary
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<PAGE> 1
EXHIBIT 3.3
BYLAWS
OF
SANCTUARY WOODS MULTIMEDIA CORPORATION
(A DELAWARE CORPORATION)
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
ARTICLE I -- CORPORATE OFFICES......................................................... 1
1.1 Registered Office......................................................... 1
1.2 Other Offices............................................................. 1
ARTICLE II -- MEETINGS OF STOCKHOLDERS................................................. 1
2.1 Place of Meetings......................................................... 1
2.2 Annual Meeting............................................................ 1
2.3 Special Meeting........................................................... 2
2.4 Notice of Stockholders' Meetings.......................................... 3
2.5 Manner of Giving Notice; Affidavit of Notice.............................. 3
2.6 Quorum.................................................................... 3
2.7 Adjourned Meeting; Notice................................................. 3
2.8 Voting.................................................................... 4
2.9 Validation of Meetings; Waiver of Notice; Consent......................... 4
2.10 Stockholder Action by Written Consent Without a Meeting................... 4
2.11 Record Date for Stockholder Notice; Voting; Giving Consents............... 5
2.12 Proxies................................................................... 5
2.13 Inspectors of Election.................................................... 5
ARTICLE III -- DIRECTORS............................................................... 6
3.1 Powers.................................................................... 6
3.2 Number and Term of Office................................................. 6
3.3 Resignation and Vacancies................................................. 6
3.4 Removal................................................................... 7
3.5 Place of Meetings; Meetings by Telephone.................................. 7
3.6 First Meetings............................................................ 7
3.7 Regular Meetings.......................................................... 7
3.8 Special Meetings; Notice.................................................. 8
3.9 Quorum.................................................................... 8
3.10 Waiver of Notice.......................................................... 8
3.11 Adjournment............................................................... 8
3.12 Notice of Adjournment..................................................... 8
3.13 Board Action by Written Consent Without a Meeting......................... 8
3.14 Fees and Compensation of Directors........................................ 9
3.15 Approval of Loans to Officers............................................. 9
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
ARTICLE IV -- COMMITTEES............................................................... 9
4.1 Committees of Directors................................................... 9
4.2 Meetings and Action of Committees......................................... 9
ARTICLE V -- OFFICERS.................................................................. 10
5.1 Officers.................................................................. 10
5.2 Election of Officers...................................................... 10
5.3 Subordinate Officers...................................................... 10
5.4 Removal and Resignation of Officers....................................... 10
5.5 Vacancies in Offices...................................................... 10
5.6 Chairman of the Board..................................................... 10
5.7 President/Chief Executive Officer......................................... 11
5.8 Vice Presidents........................................................... 11
5.9 Secretary................................................................. 11
5.10 Chief Financial Officer................................................... 11
ARTICLE VI -- INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS.......
12
6.1 Indemnification of Directors and Officers................................. 12
6.2 Indemnification of Others................................................. 12
6.3 Insurance................................................................. 12
ARTICLE VII -- RECORDS AND REPORTS..................................................... 12
7.1 Maintenance and Inspection of Records..................................... 12
7.2 Inspection by Directors................................................... 13
7.3 Annual Statement to Stockholders.......................................... 13
7.4 Representation of Shares of Other Corporations............................ 13
ARTICLE VIII -- GENERAL MATTERS........................................................ 13
8.1 Record Date for Purposes Other Than Notice and Voting..................... 13
8.2 Checks; Drafts; Evidences of Indebtedness................................. 14
8.3 Corporate Contracts and Instruments: How Executed......................... 14
8.4 Stock Certificates; Partly Paid Shares.................................... 14
8.5 Special Designation on Certificates....................................... 14
8.6 Lost Certificates......................................................... 15
8.7 Construction; Definitions................................................. 15
ARTICLE IX -- AMENDMENTS............................................................... 15
ARTICLE X -- DISSOLUTION............................................................... 15
ARTICLE XI -- CUSTODIAN................................................................ 16
11.1 Appointment of a Custodian in Certain Cases............................... 16
11.2 Duties of Custodian....................................................... 16
</TABLE>
ii
<PAGE> 3
BYLAWS
OF
SANCTUARY WOODS MULTIMEDIA CORPORATION
(A DELAWARE CORPORATION)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation shall be fixed in the Certificate
of Incorporation of the corporation.
1.2 OTHER OFFICES
The board of directors may at any time establish branch or subordinate
offices at any place or places where the corporation is qualified to do
business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at any place within or outside the
State of Delaware designated by the board of directors. In the absence of any
such designation, stockholders' meetings shall be held at the registered office
of the corporation.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date and at
a time designated by the board of directors. In the absence of such designation,
the annual meeting of stockholders shall be held on the fourth Tuesday of July
in each year at 9:00 a.m. However, if such day falls on a legal holiday, then
the meeting shall be held at the same time and place on the next succeeding full
business day. At the meeting, directors shall be elected, and any other proper
business may be transacted.
(b) At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be: (A) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (B) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (C) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not less than one hundred twenty
(120) calendar days in advance of the date specified in the corporation's proxy
statement released to stockholders in connection with the previous year's annual
meeting of stockholders; provided, however, that in the event that no annual
meeting was held in the previous year or the date of the annual meeting has been
changed by more than thirty (30) days from the date contemplated at the time of
the previous year's proxy statement, notice by the stockholder to be timely must
be so received a reasonable time before the solicitation is made. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting: (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on the corporation's books, of the stockholder proposing such
business, (iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder, (iv) any material interest of the
stockholder in such business and (v) any other information that is required to
be provided by the stockholder pursuant to
1
<PAGE> 4
Regulation 14A under the Securities Exchange Act of 1934, as amended (the "1934
Act"), in his capacity as a proponent to a stockholder proposal. Notwithstanding
the foregoing, in order to include information with respect to a stockholder
proposal in the proxy statement and form of proxy for a stockholder's meeting,
stockholders must provide notice as required by the regulations promulgated
under the 1934 Act. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The chairman of the annual meeting
shall, if the facts warrant, determine and declare at the meeting that business
was not properly brought before the meeting and in accordance with the
provisions of this paragraph (b), and, if he should so determine, he shall so
declare at the meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are nominated in accordance with the procedures set
forth in this paragraph (c) shall be eligible for election as Directors.
Nominations of persons for election to the Board of Directors of the corporation
may be made at a meeting of stockholders by or at the direction of the Board of
Directors or by any stockholder of the corporation entitled to vote in the
election of Directors at the meeting who complies with the notice procedures set
forth in this paragraph (c). Such nominations, other than those made by or at
the direction of the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary of the corporation in accordance with the provisions
of paragraph (b) of this Section 2.2 with respect to annual meetings. If persons
are to be nominated for election to the Board of Directors by any stockholder of
the corporation at a Special Meeting of Shareholders, a stockholder must give
timely notice thereof in writing to the Secretary of the corporation. To be
timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not less than sixty (60)
calendar days prior to the date of the Special Meeting. Such stockholder's
notice shall set forth (i) as to each person, if any, whom the stockholder
proposes to nominate for election or re-election as a Director: (A) the name,
age, business address and residence address of such person, (B) the principal
occupation or employment of such person, (C) the class and number of shares of
the corporation which are beneficially owned by such person, (D) a description
of all arrangements or understandings between the stockholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nominations are to be made by the stockholder, and (E) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for elections of Directors, or is otherwise required,
in each case pursuant to Regulation 14A under the 1934 Act (including without
limitation such person's written consent to being named in the proxy statement,
if any, as a nominee and to serving as a Director if elected); and (ii) as to
such stockholder giving notice, the information required to be provided pursuant
to paragraph (b) of this Section 2.2. At the request of the Board of Directors,
any person nominated by a stockholder for election as a Director shall furnish
to the Secretary of the corporation that information required to be set forth in
the stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a Director of the corporation unless nominated
in accordance with the procedures set forth in this paragraph (c). The chairman
of the meeting shall, if the facts warrants, determine and declare at the
meeting that a nomination was not made in accordance with the procedures
prescribed by these Bylaws, and if he should so determine, he shall so declare
at the meeting, and the defective nomination shall be disregarded.
2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
Board of Directors, or by the chairman of the board, or in the absence of the
chairman of the board by the chief executive officer, or by one or more
stockholders holding shares in the aggregate entitled to cast not less than ten
percent (10%) of the votes at that meeting, but such special meetings may not be
called by any other person or persons.
If a special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the time of such
meeting and the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the chairman of the board, the president, chief
executive officer, or the secretary of the corporation. No business may be
transacted at such special meeting otherwise than specified in such notice. The
officer receiving the request shall cause notice to be promptly given to the
stockholders entitled to vote, in
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accordance with the provisions of Sections 2.4 and 2.5, that a meeting will be
held at the time requested by the person or persons who called the meeting, not
less than thirty-five (35) nor more than sixty (60) days after the receipt of
the request. If the notice is not given within twenty (20) days after the
receipt of the request, the person or persons requesting the meeting may give
the notice. Nothing contained in this paragraph of this Section 2.3 shall be
construed as limiting, fixing, or affecting the time when a meeting of
stockholders called by action of the board of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
Except as set forth in Section 2.3, all notices of meetings of stockholders
shall be sent or otherwise given in accordance with Section 2.5 of these bylaws
not less than ten (10) nor more than sixty (60) days before the date of the
meeting. The notice shall specify the place, date, and hour of the meeting and
(i) in the case of a special meeting, the general nature of the business to be
transacted (no business other than that specified in the notice may be
transacted) or (ii) in the case of the annual meeting, those matters which the
board of directors, at the time of giving the notice, intends to present for
action by the stockholders (but any proper matter may be presented at the
meeting for such action). The notice of any meeting at which directors are to be
elected shall include the name of any nominee or nominees who, at the time of
the notice, the board intends to present for election.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the corporation or given by the shareholder to the
corporation for the purpose of notice. If no such address appears on the
corporation's books or is given, notice shall be deemed to have been given if
sent to that stockholder by mail or telegraphic or other written communication
to the corporation's principal executive office, or if published at least once
in a newspaper of general circulation in the county where that office is
located. Notice shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by telegram or other means of
written communication.
If any notice addressed to a stockholder at the address of that stockholder
appearing on the books of the corporation is returned to the corporation by the
United States Postal Service marked to indicate that the United States Postal
Service is unable to deliver the notice to the stockholder at that address, then
all future notices or reports shall be deemed to have been duly given without
further mailing if the same shall be available to the stockholder on written
demand of the stockholder at the principal executive office of the corporation
for a period of one (1) year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice.
2.6 QUORUM
The presence in person or by proxy of the holders of a majority of the
shares entitled to vote thereat constitutes a quorum for the transaction of
business at all meetings of stockholders. The stockholders present at a duly
called or held meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the withdrawal of enough stockholders to
leave less than a quorum, if any action taken (other than adjournment) is
approved by at least a majority of the shares required to constitute a quorum.
2.7 ADJOURNED MEETING; NOTICE
Any stockholders' meeting, annual or special, whether or not a quorum is
present, may be adjourned from time to time by the vote of the majority of the
shares represented at that meeting, either in person or by proxy. In the absence
of a quorum, no other business may be transacted at that meeting except as
provided in Section 2.6 of these bylaws.
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When any meeting of stockholders, either annual or special, is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place are announced at the meeting at which the adjournment is taken.
However, if a new record date for the adjourned meeting is fixed or if the
adjournment is for more than thirty (30) days from the date set for the original
meeting, then notice of the adjourned meeting shall be given. Notice of any such
adjourned meeting shall be given to each stockholder of record entitled to vote
at the adjourned meeting in accordance with the provisions of Sections 2.4 and
2.5 of these bylaws. At any adjourned meeting the corporation may transact any
business which might have been transacted at the original meeting.
2.8 VOTING
The stockholders entitled to vote at any meeting of stockholders shall be
determined in accordance with the provisions of Section 2.11 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint
owners, and to voting trusts and other voting agreements).
Except as may be otherwise provided in the Certificate of Incorporation,
each outstanding share, regardless of class, shall be entitled to one vote on
each matter submitted to a vote of the stockholders. Any stockholder entitled to
vote on any matter may vote part of the shares in favor of the proposal and
refrain from voting the remaining shares or, except when the matter is the
election of directors, may vote them against the proposal; but, if the
stockholder fails to specify the number of shares which the stockholder is
voting affirmatively, it will be conclusively presumed that the stockholder's
approving vote is with respect to all shares which the stockholder is entitled
to vote.
If a quorum is present, the affirmative vote of the majority of the shares
represented and voting at a duly held meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the stockholders, unless the vote of a greater number or a vote by classes is
required by law or by the Certificate of Incorporation.
2.9 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT
The transactions of any meeting of stockholders, either annual or special,
however called and noticed, and wherever held, shall be as valid as though they
had been taken at a meeting duly held after regular call and notice, if a quorum
be present either in person or by proxy, and if, either before or after the
meeting, each person entitled to vote, who was not present in person or by
proxy, signs a written waiver of notice or a consent to the holding of the
meeting or an approval of the minutes thereof. The waiver of notice or consent
or approval need not specify either the business to be transacted or the purpose
of any annual or special meeting of stockholders. All such waivers, consents,
and approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver of
notice of and presence at that meeting, except when the person objects at the
beginning of the meeting to the transaction of any business because the meeting
is not lawfully called or convened. Attendance at a meeting is not a waiver of
any right to object to the consideration of matters required by law to be
included in the notice of the meeting but not so included, if that objection is
expressly made at the meeting.
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise provided in the Certificate of Incorporation, any action
which may be taken at any annual or special meeting of stockholders may be taken
without a meeting and without prior notice, if a consent in writing, setting
forth the action so taken, is signed by the holders of outstanding shares having
not less than the minimum number of votes that would be necessary to authorize
or take that action at a meeting at which all shares entitled to vote on that
action were present and voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is
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consented to is such as would have required the filing of a certificate under
any section of the General Corporation Law of Delaware if such action had been
voted on by stockholders at a meeting thereof, then the certificate filed under
such section shall state, in lieu of any statement required by such section
concerning any vote of stockholders, that written notice and written consent
have been given as provided in Section 228 of the General Corporation Law of
Delaware.
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat or entitled to give consent to corporate action
without a meeting, the board of directors may fix, in advance, a record date,
which shall not be more than sixty (60) days nor less than ten (10) days before
the date of any such meeting nor more than sixty (60) days before any such
action without a meeting, and in such event only stockholders of record on the
date so fixed are entitled to notice and to vote or to give consents, as the
case may be, notwithstanding any transfer of any shares on the books of the
corporation after the record date.
If the board of directors does not so fix a record date:
(a) the record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business
on the business day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held; and
(b) the record date for determining stockholders entitled to give
consent to corporate action in writing without a meeting, (i) when no prior
action by the board has been taken, shall be the day on which the first
written consent is given, or (ii) when prior action by the board has been
taken, shall be at the close of business on the day on which the board
adopts the resolution relating to that action.
The record date for any other purpose shall be as provided in Article VIII
of these bylaws.
2.12 PROXIES
Every person entitled to vote for directors, or on any other matter, shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the secretary of the
corporation, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless the proxy provides for a longer period. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy (whether
by manual signature, typewriting, telefax, facsimile or other electronic
transmission or otherwise) by the stockholder or the stockholder's
attorney-in-fact. The revocability of a proxy that states on its face that it is
irrevocable shall be governed by the provisions of Section 212(c) of the General
Corporation Law of Delaware.
2.13 INSPECTORS OF ELECTION
Before any meeting of stockholders, the board of directors may appoint an
inspector or inspectors of election to act at the meeting or its adjournment. If
no inspector of election is so appointed, then the chairman of the meeting may,
and on the request of any stockholder or a stockholder's proxy shall, appoint an
inspector or inspectors of election to act at the meeting. The number of
inspectors shall be either one (1) or three (3). If inspectors are appointed at
a meeting pursuant to the request of one (1) or more stockholders or proxies,
then the holders of a majority of shares or their proxies present at the meeting
shall determine whether one (1) or three (3) inspectors are to be appointed. If
any person appointed as inspector fails to appear or fails or refuses to act,
then the chairman of the meeting may, and upon the request of any stockholder or
a stockholder's proxy shall, appoint a person to fill that vacancy.
Such inspectors shall:
(a) determine the number of shares outstanding and the voting power of
each, the number of shares represented at the meeting, the existence of a
quorum, and the authenticity, validity, and effect of proxies;
(b) receive votes, ballots or consents;
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(c) hear and determine all challenges and questions in any way arising
in connection with the right to vote;
(d) count and tabulate all votes or consents;
(e) determine when the polls shall close;
(f) determine the result; and
(g) do any other acts that may be proper to conduct the election or
vote with fairness to all stockholders.
ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware and to
any limitations in the Certificate of Incorporation or these bylaws relating to
action required to be approved by the stockholders or by the outstanding shares,
the business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the board of directors.
3.2 NUMBER AND TERM OF OFFICE
The authorized number of directors shall be not less than seven (7) nor
more than nine (9). The exact number of directors shall be seven (7) until
changed, within the limits specified above, by a bylaw amending this Section
3.2, duly adopted by the board of directors or by the stockholders. The
indefinite number of directors may be changed, or a definite number may be fixed
without provision for an indefinite number, by a duly adopted amendment to the
Certificate of Incorporation or by an amendment to this bylaw adopted by the
vote or written consent of holders of a majority of the outstanding shares
entitled to vote or by resolution of a majority of the board of directors.
No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires. If for any
cause, the directors shall not have been elected at an annual meeting, they may
be elected as soon thereafter as convenient at a special meeting of the
stockholders called for that purpose in the manner provided in these Bylaws.
3.3 RESIGNATION AND VACANCIES
Any director may resign effective on giving written notice to the chairman
of the board, the president/chief executive officer, the secretary or the board
of directors, unless the notice specifies a later time for that resignation to
become effective. If the resignation of a director is effective at a future
time, the board of directors may elect a successor to take office when the
resignation becomes effective.
Vacancies in the board of directors may be filled by a majority of the
remaining directors, even if less than a quorum, or by a sole remaining
director; however, a vacancy created by the removal of a director by the vote or
written consent of the stockholders or by court order may be filled only by the
affirmative vote of a majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute a majority of the required quorum), or by the unanimous written
consent of all shares entitled to vote thereon. Each director so elected shall
hold office until the next annual meeting of the stockholders and until a
successor has been elected and qualified.
Unless otherwise provided in the Certificate of Incorporation or these
bylaws:
(i) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or
by a sole remaining director.
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(ii) Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the provisions of
the certificate of incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by a majority of the
directors elected by such class or classes or series thereof then in
office, or by a sole remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.
If, at the time of filling any vacancy or any newly created directorship,
the directors then in office constitute less than a majority of the whole board
(as constituted immediately prior to any such increase), then the Court of
Chancery may, upon application of any stockholder or stockholders holding at
least ten (10) percent of the total number of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office as aforesaid, which
election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
3.4 REMOVAL
Subject to any limitations imposed by law, and unless otherwise provided in
the Certificate of Incorporation, the Board of Directors, or any individual
Director, may be removed from office at any time by the affirmative vote of the
holders of at least a majority of the then outstanding shares of the capital
stock of the corporation entitled to vote at an election of Directors.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the board of directors may be held at any place within
or outside the State of Delaware that has been designated from time to time by
resolution of the board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the corporation. Special
meetings of the board may be held at any place within or outside the State of
Delaware that has been designated in the notice of the meeting or, if not stated
in the notice or if there is no notice, at the principal executive office of the
corporation.
Any meeting, regular or special, may be held by conference telephone or
similar communication equipment, so long as all directors participating in the
meeting can hear one another; and all such directors shall be deemed to be
present in person at the meeting.
3.6 FIRST MEETINGS
The first meeting of each newly elected board of directors shall be held at
such time and place as shall be fixed by the vote of the stockholders at the
annual meeting and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present. In the event of the failure of the stockholders to fix the
time or place of such first meeting of the newly elected board of directors, or
in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
board of directors, or as shall be specified in a written waiver signed by all
of the directors.
3.7 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice if
the times of such meetings are fixed by the board of directors.
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3.8 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes may
be called at any time by the chairman of the board, or in the absence of the
chairman of the board by the chief executive officer or any four directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. If the notice is mailed, it
shall be deposited in the United States mail at least seven (7) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or facsimile or other electronic transmission, it shall be delivered
personally or by telephone or facsimile or other electronic transmission at
least seventy-two (72) hours before the time of the holding of the meeting. Any
oral notice given personally or by telephone may be communicated either to the
director or to a person at the office of the director who the person giving the
notice has reason to believe will promptly communicate it to the director. The
notice need not specify the purpose or the place of the meeting, if the meeting
is to be held at the principal executive office of the corporation.
3.9 QUORUM
A majority of the authorized number of directors shall constitute a quorum
for the transaction of business, except to adjourn as provided in Section 3.11
of these bylaws. Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be
regarded as the act of the board of directors, subject to the provisions of the
Certificate of Incorporation and applicable law.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for that meeting.
3.10 WAIVER OF NOTICE
Notice of a meeting need not be given to any director (i) who signs a
waiver of notice or a consent to holding the meeting or an approval of the
minutes thereof, whether before or after the meeting, or (ii) who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to such directors. All such waivers, consents, and approvals shall be
filed with the corporate records or made part of the minutes of the meeting. A
waiver of notice need not specify the purpose of any regular or special meeting
of the board of directors.
3.11 ADJOURNMENT
A majority of the directors present, whether or not constituting a quorum,
may adjourn any meeting to another time and place.
3.12 NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting need not be
given unless the meeting is adjourned for more than twenty-four (24) hours. If
the meeting is adjourned for more than twenty-four (24) hours, then notice of
the time and place of the adjourned meeting shall be given before the adjourned
meeting takes place, in the manner specified in Section 3.8 of these bylaws, to
the directors who were not present at the time of the adjournment.
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the board of directors may
be taken without a meeting, provided that all members of the board individually
or collectively consent in writing to that action. Such action by written
consent shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent and any counterparts thereof shall be filed with
the minutes of the proceedings of the board.
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3.14 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if any,
for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.14 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
3.15 APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one (1) or more committees, each
consisting of two or more directors, to serve at the pleasure of the board. The
board may designate one (1) or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the committee.
The appointment of members or alternate members of a committee requires the vote
of a majority of the authorized number of directors. Any committee, to the
extent provided in the resolution of the board, shall have all the authority of
the board, but no such committee shall have the power or authority to (i) amend
the Certificate of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the board of directors as provided in Section 151(a) of the
General Corporation Law of Delaware, fix any of the preferences or rights of
such shares relating to dividends, redemption, dissolution, any distribution of
assets of the corporation or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation), (ii) adopt an agreement of
merger or consolidation under Sections 251 or 252 of the General Corporation Law
of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, (iv)
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution, or (v) amend the bylaws of the corporation; and, unless the
board resolution establishing the committee, the bylaws or the Certificate of
Incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the provisions of Article III of these bylaws, Section 3.5
(place of meetings), Section 3.7 (regular meetings), Section 3.8 (special
meetings and notice), Section 3.9 (quorum), Section 3.10 (waiver of notice),
Section 3.11 (adjournment), Section 3.12 (notice of adjournment), and Section
3.13 (action without meeting), with such changes in the context of those bylaws
as are necessary to substitute the committee and its members for the board of
directors and its members; provided, however, that the time of regular meetings
of committees may be determined either by resolution of the board of directors
or by resolution of the committee, that special meetings of committees may also
be called by resolution of the board of directors, and that notice of special
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meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The board of directors
may adopt rules for the government of any committee not inconsistent with the
provisions of these bylaws.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the corporation shall be a chairman of the board, a
president, a secretary and a chief financial officer. The corporation may also
have, at the discretion of the board of directors, one or more vice presidents,
one or more assistant secretaries, one or more treasurers or assistant
treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 5.3 of these bylaws. Any number of offices may be held by
the same person.
5.2 ELECTION OF OFFICERS
The officers of the corporation, except such officers as may be appointed
in accordance with the provisions of Section 5.3 or Section 5.5 of these bylaws,
shall be chosen by the board, subject to the rights, if any, of an officer under
any contract of employment.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or may empower the president/chief
executive officer to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such period, have
such authority, and perform such duties as are provided in these bylaws or as
the board of directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by the
board of directors at any regular or special meeting of the board or, except in
case of an officer chosen by the board of directors, by any officer upon whom
such power of removal may be conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall serve as
the corporation's general manager, and shall have general supervision, direction
and control of the corporation's business and its officers, and, if present,
preside at meetings of the stockholders and the board of directors and exercise
and perform such other powers and duties as may from time to time be assigned to
him by the board of directors or as may be prescribed by these bylaws. If there
is no president/chief executive officer, then the chairman of the board shall
also be the president/chief executive officer of the corporation and shall have
the powers and duties prescribed in Section 5.7 of these bylaws. The chairman of
the board shall report to the board of directors.
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5.7 PRESIDENT
Subject to such powers, if any, as may be given by the board of directors
to the chairman of the board, if there be such an officer, the president shall,
subject to the control of the chairman of the board, or the board of directors
if there is no chairman of the board, have general supervision, direction, and
control of the business and the officers of the corporation. He or she shall
preside at all meetings of the stockholders and the board of directors, in the
absence or nonexistence of a chairman of the board. He or she shall have the
general powers and duties of management usually vested in the office of
president of a corporation, and shall have such other powers and duties as may
be prescribed by the board of directors or these bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, the vice presidents, if any,
in order of their rank as fixed by the board of directors or, if not ranked, a
vice president designated by the board of directors, shall perform all the
duties of the president and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the president. The vice presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors, these bylaws, the
president or the chairman of the board.
5.9 SECRETARY
The secretary shall keep or cause to be kept, at the principal executive
office of the corporation or such other place as the board of directors may
direct, a book of minutes of all meetings and actions of directors, committees
of directors and stockholders. The minutes shall show the time and place of each
meeting, whether regular or special (and, if special, how authorized and the
notice given), the names of those present at directors' meetings or committee
meetings, the number of shares present or represented at stockholders' meetings,
and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal executive
office of the corporation or at the office of the corporation's transfer agent
or registrar, as determined by resolution of the board of directors, a share
register, or a duplicate share register, showing the names of all stockholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates evidencing such shares, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings of
the stockholders and of the board of directors required to be given by law or by
these bylaws. He or she shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such other
duties as may be prescribed by the board of directors or by these bylaws.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be kept
and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable times
be open to inspection by any director.
The chief financial officer shall deposit all money and other valuables in
the name and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He or she shall disburse the funds of the
corporation as may be ordered by the board of directors, shall render to the
president and directors, whenever they request it, an account of all of his or
her transactions as chief financial officer and of the financial condition of
the corporation, and shall have such other powers and perform such other duties
as may be prescribed by the board of directors or these bylaws.
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ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the maximum extent and in the manner permitted by
the General Corporation Law of Delaware, indemnify each of its directors and
officers against expenses (including attorneys' fees), judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of the corporation. For purposes of this Section 6.1, a "director" or
"officer" of the corporation includes any person (i) who is or was a director or
officer of the corporation, (ii) who is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was a director or officer of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware, to indemnify each
of its employees and agents (other than directors and officers) against expenses
(including attorneys' fees), judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with any proceeding, arising by
reason of the fact that such person is or was an agent of the corporation. For
purposes of this Section 6.2, an "employee" or "agent" of the corporation (other
than a director or officer) includes any person (i) who is or was an employee or
agent of the corporation, (ii) who is or was serving at the request of the
corporation as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was an employee or agent of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
6.3 INSURANCE
The corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify him or her
against such liability under the provisions of the General Corporation Law of
Delaware.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive office or at such
place or places as designated by the board of directors, keep a record of its
stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records.
Any stockholder of record, in person or by attorney or other agent, shall,
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the
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attorney or other agent to so act on behalf of the stockholder. The demand under
oath shall be directed to the corporation at its registered office in Delaware
or at its principal place of business.
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders and its other books and records for a purpose
reasonably related to his or her position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, the president, any vice president, the chief
financial officer, the secretary or assistant secretary of this corporation, or
any other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority herein
granted may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any other lawful
action (other than action by stockholders by written consent without a meeting),
the board of directors may fix, in advance, a record date, which shall not be
more than sixty (60) days before any such action. In that case, only
stockholders of record at the close of business on the date so fixed are
entitled to receive the dividend, distribution or allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date so fixed, except as
otherwise provided by law.
If the board of directors does not so fix a record date, then the record
date for determining stockholders for any such purpose shall be at the close of
business on the day on which the board adopts the applicable resolution or the
sixtieth (60th) day before the date of that action, whichever is later.
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8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The board of directors, except as otherwise provided in these bylaws, may
authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
8.4 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of a corporation shall be represented by certificates, provided
that the board of directors of the corporation may provide by resolution or
resolutions that some or all of any or all classes or series of its stock shall
be uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by, the chairman or vice-chairman
of the board of directors, or the president or vice-president, and by the chief
financial officer, the secretary or an assistant secretary representing the
number of shares registered in certificate form. Any or all of the signatures on
the certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation with the same
effect as if he or she were such officer, transfer agent or registrar at the
date of issue.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.5 SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock or
more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
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8.6 LOST CERTIFICATES
Except as provided in this Section 8.6, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and canceled at the same time. The board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the board may require; the board
may require indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against any claim that
may be made against it, including any expense or liability, on account of the
alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
8.7 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a corporation and a natural
person.
ARTICLE IX
AMENDMENTS
The original or other bylaws of the corporation may be adopted, amended or
repealed by the stockholders entitled to vote; provided, however, that the
corporation may, in its Certificate of Incorporation, confer the power to adopt,
amend or repeal bylaws upon the directors. The fact that such power has been so
conferred upon the directors shall not divest the stockholders of the power, nor
limit their power to adopt, amend or repeal bylaws.
ARTICLE X
DISSOLUTION
If it should be deemed advisable in the judgment of the board of directors
of the corporation that the corporation should be dissolved, the board, after
the adoption of a resolution to that effect by a majority of the whole board at
any meeting called for that purpose, shall cause notice to be mailed to each
stockholder entitled to vote thereon of the adoption of the resolution and of a
meeting of stockholders to take action upon the resolution.
At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the outstanding stock of the corporation entitled
to vote thereon votes for the proposed dissolution, then a certificate stating
that the dissolution has been authorized in accordance with the provisions of
Section 275 of the General Corporation Law of Delaware and setting forth the
names and residences of the directors and officers shall be executed,
acknowledged, and filed and shall become effective in accordance with Section
103 of the General Corporation Law of Delaware. Upon such certificate's becoming
effective in accordance with Section 103 of the General Corporation Law of
Delaware, the corporation shall be dissolved.
Whenever all the stockholders entitled to vote on a dissolution consent in
writing, either in person or by duly authorized attorney, to a dissolution, no
meeting of directors or stockholders shall be necessary. The consent shall be
filed and shall become effective in accordance with Section 103 of the General
Corporation Law of Delaware. Upon such consent's becoming effective in
accordance with Section 103 of the General Corporation Law of Delaware, the
corporation shall be dissolved. If the consent is signed by an attorney, then
the original power of attorney or a photocopy thereof shall be attached to and
filed with the consent. The consent filed with the Secretary of State shall have
attached to it the affidavit of the secretary or some other officer of the
corporation stating that the consent has been signed by or on behalf of all the
stockholders entitled to vote on a dissolution; in addition, there shall be
attached to the consent a certification by the secretary or some other officer
of the corporation setting forth the names and residences of the directors and
officers of the corporation.
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ARTICLE XI
CUSTODIAN
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
The Court of Chancery, upon application of any stockholder, may appoint one
or more persons to be custodians and, if the corporation is insolvent, to be
receivers, of and for the corporation when:
(i) at any meeting held for the election of directors the stockholders
are so divided that they have failed to elect successors to directors whose
terms have expired or would have expired upon qualification of their
successors; or
(ii) the business of the corporation is suffering or is threatened
with irreparable injury because the directors are so divided respecting the
management of the affairs of the corporation that the required vote for
action by the board of directors cannot be obtained and the stockholders
are unable to terminate this division; or
(iii) the corporation has abandoned its business and has failed within
a reasonable time to take steps to dissolve, liquidate or distribute its
assets.
11.2 DUTIES OF CUSTODIAN
The custodian shall have all the powers and title of a receiver appointed
under Section 291 of the General Corporation Law of Delaware, but the authority
of the custodian shall be to continue the business of the corporation and not to
liquidate its affairs and distribute its assets, except when the Court of
Chancery otherwise orders and except in cases arising under Sections 226(a)(3)
or 352(a)(2) of the General Corporation Law of Delaware.
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<PAGE> 1
EXHIBIT 4.1
NUMBER SHARES
[ILLUSTRATION] [ILLUSTRATION] [ILLUSTRATION]
COMMON STOCK COMMON STOCK
SANCTUARY
WOODS
THIS CERTIFICATE IS TRANSFERABLE
IN BOSTON, MA OR NEW YORK, NY
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CUSIP 79971E 20 7
THIS CERTIFIES THAT
SEE REVERSE FOR CERTAIN
DEFINITIONS AND A STATEMENT
AS TO THE RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS
OF SHARES
IS THE OWNER OF
FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $.001 PAR VALUE PER
SHARE, OF
SANCTUARY WOODS MULTIMEDIA CORPORATION
transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid until countersigned and registered by the Transfer Agent and
Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
[SIGNATURE] [CORPORATE SEAL] [SIGNATURE]
SECRETARY PRESIDENT AND
CHIEF EXECUTIVE OFFICER
COUNTERSIGNED AND REGISTERED:
THE FIRST NATIONAL BANK OF BOSTON
TRANSFER AGENT AND REGISTRAR
BY [SIGNATURE]
AUTHORIZED SIGNATURE
[AMERICAN BANK NOTE COMPANY STAMP]
<PAGE> 2
A statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or
series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights as established, from time to time, by the Certificate
of Incorporation of the Corporation and by any certificate of determination,
the number of shares constituting each class and series, and the designations
thereof, may be obtained by the holder hereof upon request and without charge
at the principal office of the Corporation.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
[SECTION ILLEGIBLE]
FOR VALUE RECEIVED, __________________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________________
| |
| |
| |
| |
|_______________________________________|
______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE
______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________________Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
______________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premisee.
Dated _________________________
X _____________________________________
X _____________________________________
NOTICE: [SECTION ILLEGIBLE]
Signature(s) Guaranteed
By ______________________________________
[SECTION ILLEGIBLE]
[AMERICAN BANK NOTE STAMP]
<PAGE> 1
EXHIBIT 10.25
SANCTUARY WOODS MULTIMEDIA CORPORATION
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is effective as of , 1997 by
and between Sanctuary Woods Multimedia Corporation, a Delaware corporation (the
"Company"), and , ("Indemnitee").
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and its related
entities;
WHEREAS, in order to induce Indemnitee to provide or continue to provide
services to the Company, the Company wishes to provide for the indemnification
of, and the advancement of expenses to, Indemnitee to the maximum extent
permitted by law;
WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company's directors, officers, employees,
agents and fiduciaries, the significant increases in the cost of such insurance
and the general reductions in the coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and
WHEREAS, the Company and Indemnitee desire to provide indemnification and
advancement of expenses to the Indemnitee to the maximum extent permitted by
Delaware law;
WHEREAS, in view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the Company as set
forth herein;
NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below.
1. Certain Definitions.
(a) "Change in Control" shall mean, and shall be deemed to have occurred
if, on or after the date of this Agreement, (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) or group acting in concert, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company acting in such
capacity or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing more
than 50% of the total voting power represented by the Company's then outstanding
Voting Securities, (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two thirds ( 2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof, (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the Company's assets.
(b) "Claim" shall mean with respect to a Covered Event: any threatened,
pending or completed action, suit, proceeding or alternative dispute resolution
mechanism, or any hearing, inquiry or investigation that Indemnitee in good
faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.
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<PAGE> 2
(c) References to the "Company" shall include, in addition to Sanctuary
Woods Multimedia Corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger to which
Sanctuary Woods Multimedia Corporation (or any of its wholly owned subsidiaries)
is a party which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(d) "Covered Event" shall mean any event or occurrence related to the fact
that Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity.
(e) "Expenses" shall mean any and all expenses (including attorneys' fees
and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement.
(f) "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgement in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.
(g) "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other Indemnitees under similar
indemnity agreements).
(h) References to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on Indemnitee with
respect to an employee benefit plan; and references to "serving at the request
of the Company" shall include any service as a director, officer, employee,
agent or fiduciary of the Company which imposes duties on, or involves services
by, such director, officer, employee,
agent or fiduciary with respect to an employee benefit plan, its participants or
its beneficiaries; and if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have
acted in a manner "not opposed to the best interests of the Company" as referred
to in this Agreement.
(i) "Reviewing Party" shall mean, subject to the provisions of Section
2(d), any person or body appointed by the Board of Directors in accordance with
applicable law to review the Company's obligations hereunder and under
applicable law, which may include a member or members of the Company's Board of
Directors, Independent Legal Counsel or any other person or body not a party to
the particular Claim for which Indemnitee is seeking indemnification.
(j) "Section" refers to a section of this Agreement unless otherwise
indicated.
(k) "Voting Securities" shall mean any securities of the Company that vote
generally in the election of directors.
2. Indemnification.
(a) Indemnification of Expenses. Subject to the provisions of Section 2(b)
below, the Company shall indemnify Indemnitee for Expenses to the fullest extent
permitted by law if Indemnitee was or is or becomes a
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party to or witness or other participant in, or is threatened to be made a party
to or witness or other participant in, any Claim (whether by reason of or
arising in part out of a Covered Event), including all interest, assessments and
other charges paid or payable in connection with or in respect of such Expenses.
(b) Review of Indemnification Obligations. Notwithstanding the foregoing,
in the event any Reviewing Party shall have determined (in a written opinion, in
any case in which Independent Legal Counsel is the Reviewing Party) that
Indemnitee is not entitled to be indemnified hereunder under applicable law, (i)
the Company shall have no further obligation under Section 2(a) to make any
payments to Indemnitee not made prior to such determination by such Reviewing
Party, and (ii) the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to reimburse the Company) for all Expenses theretofore paid
to Indemnitee to which Indemnitee is not entitled hereunder under applicable
law; provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee is entitled to be indemnified hereunder under applicable law,
any determination made by any Reviewing Party that Indemnitee is not entitled to
be indemnified hereunder under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expenses
theretofore paid in indemnifying Indemnitee until a final judicial determination
is made with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). Indemnitee's obligation to reimburse the Company for
any Expenses shall be unsecured and no interest shall be charged thereon.
(c) Indemnitee Rights on Unfavorable Determination; Binding Effect. If any
Reviewing Party determines that Indemnitee substantively is not entitled to be
indemnified hereunder in whole or in part under applicable law, Indemnitee shall
have the right to commence litigation seeking an initial determination by the
court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.
(d) Selection of Reviewing Party; Change in Control. If there has not been
a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control), any
Reviewing Party with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification of Expenses under this Agreement or any
other agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, or under any other applicable law, if desired by
Indemnitee, shall be Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any other provision of this Agreement, the
Company shall not be required to pay Expenses of more than one Independent Legal
Counsel in connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnitees unless (i) the employment of separate counsel by one or more
Indemnitees has been previously authorized by the Company in writing, or (ii) an
Indemnitee shall have provided to the Company a written statement that such
Indemnitee has reasonably concluded that there may be a conflict of interest
between such Indemnitee and the other Indemnitees with respect to the matters
arising under this Agreement.
(e) Mandatory Payment of Expenses. Notwithstanding any other provision of
this Agreement other than Section 10 hereof, to the extent that Indemnitee has
been successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any Claim, Indemnitee
shall be indemnified against all Expenses incurred by Indemnitee in connection
therewith.
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3. Expense Advances.
(a) Obligation to Make Expense Advances. Upon receipt of a written
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefor by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.
(b) Form of Undertaking. Any obligation to repay any Expense Advances
hereunder pursuant to a written undertaking by the Indemnitee shall be unsecured
and no interest shall be charged thereon.
(c) Determination of Reasonable Expense Advances. The parties agree that
for the purposes of any Expense Advance for which Indemnitee has made written
demand to the Company in accordance with this Agreement, all Expenses included
in such Expense Advance that are certified by affidavit of Indemnitee's counsel
as being reasonable shall be presumed conclusively to be reasonable.
4. Procedures for Indemnification and Expense Advances.
(a) Timing of Payments. All payments of Expenses (including without
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by law as soon as
practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than thirty (30) business days after such written
demand by Indemnitee is presented to the Company, except in the case of Expense
Advances, which shall be made no later than ten (10) business days after such
written demand by Indemnitee is presented to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to Indemnitee's right to be indemnified or Indemnitee's right to
receive Expense Advances under this Agreement, give the Company notice in
writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by this Agreement or applicable
law. In addition, neither the failure of any Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
this Agreement under applicable law, shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In connection with any
determination by any Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder under applicable law, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the Company of a
notice of a Claim pursuant to Section 4(b) hereof, the Company has liability
insurance in effect which may cover such Claim, the Company shall give prompt
notice of the commencement of such Claim to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such Claim in accordance
with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be obligated
hereunder to provide indemnification for or make any Expense Advances with
respect to the Expenses of any Claim, the Company, if
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<PAGE> 5
appropriate, shall be entitled to assume the defense of such Claim with counsel
approved by Indemnitee (which approval shall not be unreasonably withheld) upon
the delivery to Indemnitee of written notice of the Company's election to do so.
After delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees or expenses of separate counsel
subsequently retained by or on behalf of Indemnitee with respect to the same
Claim; provided that, (i) In the event of a conflict, Indemnitee shall have the
right to employ Indemnitee's separate counsel in any such Claim at the Company's
expense and (ii) if (A) the employment of separate counsel by Indemnitee has
been previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the Company shall not
continue to retain such counsel to defend such Claim, then the fees and expenses
of Indemnitee's separate counsel shall be Expenses for which Indemnitee may
receive indemnification or Expense Advances hereunder.
5. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. The Company hereby agrees to indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 10(a) hereof.
(b) Nonexclusivity. The indemnification and the payment of Expense
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the
payment of Expense Advances provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though subsequent thereto Indemnitee may have ceased to serve in
such capacity.
6. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.
7. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
Expenses incurred in connection with any Claim, but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.
8. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
9. Liability Insurance. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are provided to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director
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<PAGE> 6
of the Company but is an officer; or of the Company's key employees, agents or
fiduciaries, if Indemnitee is not an officer or director but is a key employee,
agent or fiduciary.
10. Exceptions. Notwithstanding any other provision of this Agreement,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Excluded Action or Omissions. To indemnify or make Expense
Advances to Indemnitee with respect to Claims arising out of acts,
omissions or transactions for which Indemnitee is prohibited from receiving
indemnification under applicable law.
(b) Claims Initiated by Indemnitee. To indemnify or make Expense
Advances to Indemnitee with respect to Claims initiated or brought
voluntarily by Indemnitee and not by way of defense, counterclaim or
crossclaim, except (i) with respect to actions or proceedings brought to
establish or enforce a right to indemnification under this Agreement or any
other agreement or insurance policy or under the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect relating to Claims for
Covered Events, (ii) in specific cases if the Board of Directors has
approved the initiation or bringing of such Claim, or (iii) as otherwise
required under Section 145 of the Delaware General Corporation Law,
regardless of whether Indemnitee ultimately is determined to be entitled to
such indemnification, Expense Advances, or insurance recovery, as the case
may be.
(c) Lack of Good Faith. To indemnify Indemnitee for any Expenses
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that
each of the material assertions made by the Indemnitee as a basis for such
action was not made in good faith or was frivolous, or (ii) by or in the
name of the Company to enforce or interpret this Agreement, if a court
having jurisdiction over such action determines as provided in Section 13
that each of the material defenses asserted by Indemnitee in such action
was made in bad faith or was frivolous.
(d) Claims Under Section 16(b). To indemnify Indemnitee for Expenses
and the payment of profits arising from the purchase and sale by Indemnitee
of securities in violation of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or any similar successor statute.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. This Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
a director, officer, employee, agent or fiduciary (as applicable) of the Company
or of any other enterprise at the Company's request.
13. Expenses Incurred in Action Relating to Enforcement or
Interpretation. In the event that any action is instituted by Indemnitee under
this Agreement or under any liability insurance policies maintained by the
Company to enforce or interpret any of the terms hereof or thereof, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee with
respect to such action (including without limitation attorneys' fees),
regardless of whether Indemnitee is ultimately successful in such action, unless
as a part of such action a court having jurisdiction over such action makes a
final judicial determination (as to which all rights of appeal therefrom have
been exhausted or lapsed) that each of the material assertions made by
Indemnitee as a basis for such action was not made in good faith or was
frivolous; provided, however, that until such final judicial determination is
made, Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action. In the event of an action
instituted by or in the
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name of the Company under this Agreement to enforce or interpret any of the
terms of this Agreement, Indemnitee shall be entitled to be indemnified for all
Expenses incurred by Indemnitee in defense of such action (including without
limitation costs and expenses incurred with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action a court having jurisdiction over such action makes a final judicial
determination (as to which all rights of appeal therefrom have been exhausted or
lapsed) that each of the material defenses asserted by Indemnitee in such action
was made in bad faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to
receive payment of Expense Advances hereunder with respect to such action.
14. Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
15. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.
16. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
17. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including without limitation each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
18. Choice of Law. This Agreement, and all rights, remedies, liabilities,
powers and duties of the parties to this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
in the State of Delaware without regard to principles of conflicts of laws.
19. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
20. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver.
21. Integration and Entire Agreement. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
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22. No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.
SANCTUARY WOODS MULTIMEDIA
CORPORATION
By:
Print Name:
Title:
Address: 1825 South Grant Street
San Mateo, California 94402
AGREED TO AND ACCEPTED
INDEMNITEE:
(signature)
Print Name:
Address:
8
