EXHIBIT 2.1.12
FORM OF CROSBY,
HEAFEY, ▇▇▇▇▇ & MAY
OPINION
____________, 2000
Cobalt Networks, Inc.
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▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you pursuant to Section 7.3 of the
Agreement and Plan of Reorganization dated March 22, 2000 (the "Reorganization
Agreement") by and among Cobalt Networks, Inc., a Delaware corporation
("Parent"), Blue Tortilla Acquisition Corp., a California corporation and
wholly-owned subsidiary of Parent ("Sub") and Chili!Soft, Inc., a California
corporation (the "Company"). The Reorganization Agreement provides for the
acquisition of the Company by Parent pursuant to a reverse triangular merger of
Sub with and into the Company subject to the terms and conditions set forth in
the Reorganization Agreement (the "Merger"). Unless otherwise defined below,
the capitalized terms used in this letter have the meanings given to them in the
Reorganization Agreement.
We have acted as counsel for the Company in connection with the negotiation
of the Reorganization Agreement and the effectuation of the Merger. As such
counsel, we have made such legal and factual examinations and inquiries as we
have deemed advisable or necessary for the purpose of rendering this letter. In
addition, we have examined originals or copies of such corporate records of the
Company, certificates of public officials and such other documents and questions
of law that we consider necessary or advisable for the purpose of rendering this
opinion. In such examination we have assumed the genuineness of all signatures
on original documents, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all copies submitted to us as
copies thereof, the legal capacity of natural persons, and the due execution and
delivery of all documents (except as to due
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execution and delivery by the Company) where due execution and delivery are a
prerequisite to the effectiveness thereof.
As used in this letter, the expression "to our knowledge" or "known to us"
with reference to matters of fact means that, after an examination of documents
provided to us by the Company, and after inquiries of officers of the Company,
but without any further independent factual investigation, we find no reason to
believe that the opinions expressed herein are factually incorrect. Further,
such expressions with reference to matters of fact refer only to the current
actual knowledge of the attorneys of this firm who have worked on matters for
the Company related to or in connection with the Reorganization Agreement and
the transactions contemplated thereby. We have not undertaken any independent
investigation to determine the existence or absence of any fact, and no
inference as to our knowledge of the existence or absence of any fact should be
drawn from our representation of the Company or the rendering of the opinions
set forth below.
For purposes of this letter, we are assuming that you have all requisite
power and authority, and have taken any and all necessary corporate action, to
execute and deliver the Reorganization Agreement, and we are assuming that the
representations and warranties made by you in the Reorganization Agreement and
pursuant thereto are true and correct. We are also assuming that the
representations and warranties made by the Company in the Reorganization
Agreement and pursuant thereto are true and correct as to matters of fact.
The opinions hereinafter expressed are subject to the following additional
qualifications:
(a) We express no opinion as to the effect or availability of rules
of law governing specific performance, injunctive relief or other equitable
remedies (regardless of whether any such remedy is considered in a proceeding at
law or in equity).
(b) We express no opinion as to the effect of applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, arrangement,
moratorium or other similar federal or state laws affecting the rights of
creditors.
(c) We have assumed that there are no documents, agreements,
understandings or negotiations between or among the Company, Parent or Sub which
would expand, modify or otherwise affect the respective rights and obligations
of the parties set forth in the Reorganization Agreement, the Merger Agreement
between the Company and Sub dated [ ] or the other agreements referred to
therein.
(d) We express no opinion as to the effect on enforceability of
contracts of general principles of equity or similar principles, including
without limitation concepts
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of materiality, reasonableness, good faith and fair dealing, unconscionability,
and public policy.
(e) We express no opinion in this letter as to (i) any registration,
qualification, antifraud or other requirements or provisions of applicable
federal or state securities laws, (ii) compliance with federal or state
antitrust laws, (iii) any consequences under federal, state or local tax laws,
or (iv) the enforceability of any employment or noncompetition agreements.
(f) We express no opinion as to the enforceability of contractual
provisions which purport to indemnify any party against, or to exonerate or
release any party from (i) liability for a party's wrongful or negligent acts,
or (ii) liability for attorney's fees or expenses arising from or related to
such liability or actions.
(g) In connection with the opinion expressed in paragraph 3 below, we have
examined the Articles of Incorporation and Bylaws of the Company, the stock
journal of the Company, and the Company's minute books as provided to us by the
Company. The Company has represented to us, and we have assumed, that these
records are true, correct and complete and constitute all documents with respect
to the issuance of shares of the Company's capital stock. We have relied on the
Company's representations to us as to the nature of the consideration received
for such shares and that the shares are fully paid and nonassessable. The
statements provided in paragraph 3 as to the number of shares of outstanding
capital stock, the number of shares of common stock into which preferred stock
is convertible, and whether such shares are fully paid and nonassessable are
based solely on the foregoing examination and other matters known to us.
(h) We are members of the Bar of the State of California and we express no
opinion as to matters relating to laws of any jurisdiction other than the
existing federal laws of the United States of America and the existing laws of
the State of California.
(i) We note that Section 10.8 of the Reorganization Agreement selects the
laws of Delaware to govern the Reorganization Agreement and the laws of
California to govern the Merger Agreement. We express no opinion as to whether
the laws of any particular jurisdiction apply to any of the agreements or other
matters addressed in this letter. Solely for purposes of this letter, we have
further assumed that the internal laws of the State of California as applied to
a contract made between residents of that state present in that state when the
contract is made (and without regard to principles of conflicts of law) apply
exclusively to govern the Reorganization Agreement and Merger Agreement.
(j) Certain assumptions and qualifications are implicit in opinions of
lawyers, as referred to in several opinion letter reports of certain committees
of the California State Bar, and the listing of certain specific qualifications
and assumptions in this letter shall
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not be considered to limit or preclude our reliance upon other qualifications
and assumptions otherwise deemed to be included by standard practice of
California lawyers. No opinion shall be implied in this letter beyond the
specific statements made in this letter.
Based upon and subject to the foregoing, and except as set forth in the
schedules to the Reorganization Agreement, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the state of its incorporation, and has
the corporate power and corporate authority to own, operate and lease its
properties and to carry on its business as now conducted.
2. The Company has all requisite corporate power and corporate authority
to execute and deliver the Reorganization Agreement and the Merger Agreement and
to carry out and perform its obligations under the Reorganization Agreement.
3. The authorized capital stock of the Company, as of the date hereof,
consists of 20,000,000 shares of Common Stock, and 10,000,000 shares of
Preferred Stock, of which 1,955,620 shares are designated as Series A Preferred
Stock and 1,535,000 shares are designated as Series B Preferred Stock, and
6,509,380 of which are undesignated as to series and are not issued or
outstanding. As of the date hereof, there are issued and outstanding:
_______________ shares of Common Stock, 1,907,608 shares of Series A Preferred
Stock, each of which is convertible into one share of Common Stock, and
1,531,364 shares of Series B Preferred Stock, each of which is convertible into
one share of Common Stock. All issued and outstanding shares of Common Stock and
Preferred Stock have been duly authorized and validly issued, are fully paid and
nonassessable. To our knowledge, other than as set forth in the Reorganization
Agreement and the schedules attached thereto, there are no options, warrants,
conversion privileges, preemptive rights or other rights presently outstanding
to purchase or otherwise acquire any authorized but unissued shares of capital
stock or other securities of the Company.
4. The execution and delivery of the Reorganization Agreement and the
Merger Agreement by the Company and compliance by the Company with the terms of
the Reorganization Agreement and the Merger Agreement do not violate any
provision of the Company's Articles of Incorporation or Bylaws, or to our
knowledge, any provision of applicable federal or California law, rule or
regulation.
5. The Reorganization Agreement and the Merger Agreement have been
duly and validly authorized, executed and delivered by the Company, and the
Reorganization Agreement and the Merger Agreement constitute valid and binding
agreements of the Company enforceable against the Company in accordance with
their terms. The execution, delivery and performance of the Reorganization
Agreement and the
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transactions contemplated thereby have been duly authorized by all necessary
corporate action of the Company, the Company's Board of Directors and the
Company's shareholders.
6. To our knowledge, no consent, waiver, approval, order or authorization
of, or registration, permit, order, designation, declaration or filing with, any
Governmental Entity is required by or with respect to the Company in connection
with the execution and delivery of the Reorganization Agreement or the
consummation by the Company of the transactions contemplated thereby except for
(a) the filing of the Merger Agreement with the Secretary of State of the State
of California, and (b) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
state and federal securities laws.
7. To our knowledge: (a) all preferential rights of the Preferred
Stock in connection with the sale of substantially all of the assets of the
Company or a merger involving the Company aset forth in the Articles of
Incorporation of the Company as last amended by the Amended and Restated
Certificate of Determination of the Company filed with the California Secretary
of State on July 20, 1998, (b) the holders of the Common Warrants and the
Company options have been given or have waived any required notice to those
holders prior to the Merger, and (c) all holders of the Company's securities
having investor rights granted by agreement or contract with the Company,
including but not limited to co-sale, voting, registration, first refusal, board
observation or information or operational covenants, have given their written
consent to terminate such rights.
We hereby confirm that, to our knowledge and except as set forth in the
schedules to the Reorganization Agreement, there is no action, proceeding or
investigation pending or overtly threatened against the Company before any court
or administrative agency that questions the validity of the Reorganization
Agreement or the Merger Agreement or that might result, either individually or
in the aggregate, in any material adverse change in the assets, financial
condition or results of operations of the Company.
This opinion is furnished to you solely for your benefit in connection with
the Reorganization Agreement and the Merger Agreement, and may not be relied
upon by any other person or for any other purpose without our prior written
consent.
Very truly yours,
Crosby, Heafey, ▇▇▇▇▇ & May
Professional Corporation
