Exhibit 10.6
STANDSTILL AGREEMENT
STANDSTILL AGREEMENT, dated as of November 30, 1999,
between NBC Internet, Inc., formerly known as Xenon 2, Inc., a Delaware
corporation (together with its successors, the "COMPANY"), and CNET, Inc., a
Delaware corporation (together with its successors, "CNET").
W I T N E S S E T H :
WHEREAS, CNET, Xxxx.xxx, Inc., a Delaware corporation
("XOOM"), the Company and Xenon 3, a Delaware corporation, have entered into
that certain Agreement and Plan of Contribution and Merger, dated as of May
9, 1999, as amended (the "MERGER AGREEMENT"), pursuant to which CNET will
become a holder of shares of the Class A common stock, $.0001 par value, of
the Company (the "COMMON STOCK"); capitalized terms not otherwise defined
herein shall bear the meaning given to them in the Merger Agreement;
WHEREAS, the Company and CNET desire, in connection with
CNET's investment in the Company pursuant to the Merger Agreement, to make
certain covenants and agreements with one another pursuant to this Agreement;
and
WHEREAS, it is a condition to the execution of the Merger
Agreement and the closing of the transactions contemplated thereby that the
parties enter into this Agreement.
NOW THEREFORE, in consideration of the mutual agreements
and understandings set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth below:
"AFFILIATE" shall mean, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by, or is
under common control with, such Person. As used in this definition,
"control" (including its correlative meanings, "controlled by" and
"under common control with") shall mean the possession, directly or
indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"AGREEMENT" shall mean this Agreement as in effect on the date
hereof and as hereafter from time to time amended, modified or
supplemented in accordance with the terms hereof.
"BENEFICIALLY OWN" shall have the meaning set forth in Rule
13d-3 under the Exchange Act, except that a Person shall be deemed to
"Beneficially Own" all securities that such Person has a right to
acquire, whether such right is exercisable immediately or only after
the passage of time.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company as from time to time hereafter constituted.
"CNET" shall have the meaning set forth in the preamble hereto
"COMMON STOCK" shall mean the Class A common stock, par value
$0.0001 per share, of the Company and any securities of the Company
into which such Common Stock may be reclassified, exchanged or
converted.
"COMPANY" shall have the meaning set forth in the preamble
hereto.
"DISINTERESTED STOCKHOLDERS" shall mean any stockholder of the
Company who is not a Restricted Party.
"EXCHANGE ACT" shall mean, as of any date, the Securities
Exchange Act of 1934, as amended, or any similar federal statute then
in effect and superseding such act, and any reference to a particular
section thereof shall include a reference to the comparable section, if
any, of such similar federal statute, and the rules and regulations
thereunder.
"NBC" shall mean National Broadcasting Company, a Delaware
corporation, together with its successors.
"NBC VOTING AGREEMENT" shall mean the Voting Agreement, dated
as of the date hereof, between CNET and NBC, as the same may be
amended, supplemented or otherwise modified form time to time.
"PERSON" shall mean an individual or a corporation,
association, partnership, limited liability company, joint venture,
organization, business, trust or any other entity or organization,
including a government or any subdivision or agency thereof.
"REPRESENTATIVES" shall mean, with respect to any Person, such
Person's directors, officers, employees, agents and other
representatives acting in such capacity.
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"RESTRICTED PARTIES" shall mean each of CNET and its
Subsidiaries.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SECURITIES ACT" shall mean, as of any date, the Securities
Act of 1933, as amended, or any similar federal statute then in effect
and superseding such act, and any reference to a particular section
thereof shall include a reference to the comparable section, if any, of
any such similar federal statute, and the rules and regulations
thereunder.
"STANDSTILL PERIOD" shall mean the period beginning on the
date hereof and ending on the earlier of (i) the fifth anniversary of
the date hereof and (ii) the first date after the date hereof on which
the Restricted Parties do not Beneficially Own in the aggregate 5% or
more of the outstanding Common Stock.
"SUBSIDIARY" shall mean, as to any Person, another Person of
which outstanding securities having the power to elect a majority of
the members of the board of directors (or comparable body or authority
performing similar functions) of such other Person are at the time
owned, directly or indirectly through one or more intermediaries, or
both, by such first Person.
"THIRD PARTY TENDER OFFER" shall mean a bona fide public
tender offer subject to the provisions of Regulation 14D under the
Exchange Act, when first commenced within the meaning of Rule 14d-2 of
the Exchange Act by a Person 13D Group (which is not made by and does
not include any of the Company or any Affiliate or a Restricted Party
or any 13D Group that includes the Company or an Affiliate or a
Restricted Party) to purchase or exchange for cash or other
consideration any Voting Stock and which consists of an offer to
acquire 50% or more of the then outstanding Voting Stock of the
Company.
"13D GROUP" means any "group" (within the meaning of Section
13(d) of the Exchange Act) formed for the purpose of acquiring,
holding, voting or disposing of Voting Stock.
"TRANSFER" shall have the meaning set forth in Section 2.2.
"VOTING STOCK" shall mean shares of the Common Stock and any
other securities of the Company or its Subsidiaries having the ordinary
power to vote in the election of members of the Board of Directors or
the board of directors of any Subsidiary of the Company.
ARTICLE II
STANDSTILL AGREEMENTS
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Section 2.1 STANDSTILL AGREEMENT.
CNET covenants and agrees as follows:
(a) During the Standstill Period no Restricted Party will,
directly or indirectly, nor will it authorize or direct any of its
Representatives to (and will take appropriate action against such
Representatives to discourage), in each case unless specifically requested to
do so in writing in advance by the Board of Directors:
(i) acquire or agree, offer, seek or propose to acquire, or
cause to be acquired, ownership of any assets or businesses of the
Company or any of its Subsidiaries having a fair market value in excess
of 5% of the fair market value of all of the Company's and its
Subsidiaries' assets, or any rights or options to acquire any such
ownership (including from a third party);
(ii) acquire or agree, offer, seek or propose to acquire, or
cause to be acquired, Beneficial Ownership of any Voting Stock of the
Company or any of its Subsidiaries, or any options, warrants or other
rights (including, without limitation, any convertible or exchangeable
securities) to acquire any such Voting Stock, in any case other than
the Common Stock Beneficially Owned by the Restricted Parties on the
date hereof.
(iii) make, or in any way participate in, any "solicitation"
of "proxies" (as such terms are used in the proxy rules of the SEC)
with respect to the voting of any securities of the Company or any of
its Subsidiaries, except pursuant to the NBC Voting Agreement;
(iv) deposit any securities of the Company or any of its
Subsidiaries in a voting trust or subject any such securities to any
arrangement or agreement with any Person (other than one or more
Restricted Parties and/or NBC and/or any Affiliate of NBC);
(v) form, join, or in any way become a member of a 13D Group
with respect to any voting securities of the Company or any of its
Subsidiaries (other than a "group" consisting solely of Restricted
Parties and/or NBC and/or any Affiliate of NBC);
(vi) arrange any financing for, or provide any financing
commitment for, the purchase of any voting securities or securities
convertible or exchangeable into or exercisable for any voting
securities or assets of the Company or any of its Subsidiaries, except
for such assets as are then being offered for sale by the Company or
such Subsidiary;
(vii) except pursuant to the NBC Voting Agreement, otherwise
act, whether alone or in concert with others, to seek to propose to the
Company any tender or exchange offer, merger, business combination,
restructuring, liquidation, recapitalization
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or similar transaction involving the Company or any of its
Subsidiaries, or nominate any person as a director of the Company,
or propose any matter to be voted upon by the stockholders of the
Company; PROVIDED that the provisions of this clause (vii) will not
prohibit or restrict any Restricted Party from entering into any
agreement, arrangement or understanding relating to the Transfer of
any securities in accordance with Section 2.2 or engaging in any
discussion or negotiations relating to any potential Transfer of any
securities in accordance with Section 2.2;
(viii) nominate any person for election as director of the
Company; or
(viii) publicly announce or disclose any intention, plan or
arrangement inconsistent with the foregoing.
(b) In addition, during the Standstill Period no Restricted
Party will, nor will they authorize or direct any of their respective
Representatives to, take any action that would require the Company to make a
public announcement regarding any of the matters set forth in Section 2.1(a).
Section 2.2 TRANSFER RESTRICTIONS.
CNET covenants and agrees as follows:
(a) During the Standstill Period, the Restricted Parties
shall not, directly or indirectly, sell, transfer or otherwise dispose of
(collectively, "TRANSFER") any shares of Common Stock Beneficially Owned by
such Persons, except for Transfers: (i) to Restricted Parties or to
Affiliates who agree to be Restricted Parties bound by the provisions of this
Agreement, (ii) which have been consented to by the Company, (iii) pursuant
to a Third Party Tender Offer, (iv) pursuant to a merger, consolidation or
reorganization to which the Company is a party, (v) in a BONA FIDE public
distribution, bona fide underwritten public offering or open market sales
through a resale or otherwise, (vi) pursuant to Rule 144 of the Securities
Act, (vii) in a private sale or pursuant to Rule 144A of the Securities Act
or (viii) to NBC or any Affiliate of NBC. Notwithstanding anything herein to
the contrary, nothing herein shall prohibit or restrict the Restricted
Parties in any way from (i) pledging or hypothecating any shares of Common
Stock Beneficially Owned by the Restricted Parties to a financial institution
in a bona fide financing transaction so long as the Restricted Parties
control the voting of such Common Stock prior to the occurrence of a default
or (ii) entering into hedging strategies or transactions such as, for
example, the purchase and sale of puts, calls, options, straddles and other
hedging mechanisms with respect to such shares so long as the aggregate
hedging transactions of any time outstanding with any Person and its
Affiliates do not relate to an aggregate number of shares of Common Stock and
Class B Common Stock of the Company in excess of 5% of the outstanding shares
of Common Stock at the time such transactions were entered into (or an
equivalent position).
(b) Subject to the provisions of Section 2.2(a), if any
Restricted Party decides to dispose of any of the Common Stock, each
Restricted Party understands and agrees that it may do so only pursuant to an
effective registration statement under the Securities Act or pursuant to an
exemption from registration under the Securities Act. Each Restricted Party
agrees to the
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imprinting, so long as appropriate, of substantially the following legends on
certificates representing any of the securities referenced in the preceding
sentence:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION FROM REGISTRATION
IS AVAILABLE AND THE COMPANY IS FURNISHED WITH AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THAT EFFECT. IN ADDITION,
SUCH SHARES MAY ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF THE
STANDSTILL AGREEMENT, DATED AS OF ______ ___, 1999, BETWEEN THE COMPANY
AND CNET, INC. AS THE SAME MAY BE AMENDED FROM TIME TO TIME, COPIES OF
WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
The legend set forth above shall be removed if and when (i)
the securities represented by such certificate are disposed of pursuant to an
effective registration statement under the Securities Act or (ii) CNET
delivers to the Company an opinion of counsel reasonably acceptable to the
Company to the effect that such legends are no longer necessary.
ARTICLE III
MISCELLANEOUS
Section 3.1 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by telecopier or sent by overnight courier as follows:
(a) If to CNET, to:
CNET, Inc.
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with copies to:
Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: R. Xxxxxxx Xxxxxxx
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Facsimile: (000) 000-0000 CNET, Inc.
(b) If to the Company, to:
NBC Internet, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: General Counsel
Facsimile: (000) 000-0000
with copies to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx Xxxx Xxxx
Facsimile: (000) 000-0000
Xxxxxxxx & Xxxxxxxx LLP
1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
or to such other address or addresses as shall be designated in writing. All
notices shall be effective when received.
Section 3.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement
sets forth the entire agreement between the parties hereto with respect to
the transactions contemplated by this Agreement. Any provision of this
Agreement may be amended or modified in whole or in part at any time by an
agreement in writing between the parties hereto executed in the same manner
as this Agreement. No failure on the part of any party to exercise, and no
delay in exercising, any right shall operate as a waiver thereof nor shall
any single or partial exercise by any party of any right preclude any other
or future exercise thereof or the exercise of any other right.
Section 3.3 SEVERABILITY. In the event that any one or more
of the provisions contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument.
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Section 3.4 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same
document.
Section 3.5 GOVERNING LAW; JURISDICTION; WAIVER OF JURY
TRIAL . This Agreement shall be governed and construed in accordance with the
laws of the State of Delaware applicable to contracts executed and performed
within such state.
Section 3.6 SUCCESSORS AND ASSIGNS; THIRD PARTY
BENEFICIARIES. Neither party to this Agreement may assign any of its rights
or delegate any of its duties under this Agreement to any other Person
without the prior written consent of the other party to this Agreement. Any
purported assignment in violation of this Section shall be void. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any Person other than CNET and the Company and their respective
successors, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for the sole and
exclusive benefit of CNET and the Company and their respective successors,
and for the benefit of no other Person.
Section 3.7 SPECIFIC PERFORMANCE. The parties hereto agree
that irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions of
this Agreement in addition to any other remedy to which they are entitled at
law or in equity.
Section 3.8 HEADINGS, CAPTIONS AND TABLE OF CONTENTS. The
section headings, captions and table of contents contained in this Agreement
are for reference purposes only, are not part of this Agreement and shall not
affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto or by their respective duly authorized representatives, all as of the
date first above written.
NBC INTERNET, INC.
By: /s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: EVP Finance and CFO
CNET, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: CFO
