This STOCK OPTION AGREEMENT, dated as of December 21, 2007, is made
and entered into by and between Velocity Interactive Management, LLC on behalf
of itself and its affiliates and designees (the "Purchaser"), and XXXX PARTNERS
LLC, on behalf of funds and accounts managed by it and its affiliates (the
"SELLER"). Capitalized terms not otherwise defined herein have the meanings set
forth in Article IV.
WHEREAS, the Purchaser desires to acquire from the Seller an option to
acquire shares (the "SHARES") of the common stock, par value $0.0001 per share,
of CNET Networks, Inc. ("CNET"), on the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
GRANT OF OPTION, SALES OF SHARES AND CLOSING
1.01 GRANT OF OPTION. The Seller hereby grants to the Purchaser the
right and option to purchase 1,000,000 Shares at a strike price of $10.00 per
Share (the "OPTION"). The Purchasers may exercise the Option, in whole or in
part, from time to time, from the date hereof through the date which is six (6)
months after the date hereof, by delivery of one or more notices (each an
"EXERCISE NOTICE") to the Seller by fax to Xxxxxxx Xxxxxx at fax number (212)
000-0000, at or prior to 3:00 p.m. New York City time on the date of exercise,
to be accompanied by a phone call to the Seller as follows: Xxxxxxx Xxxxxx at
(000) 000-0000 or Xxxxxxxx Fanjiang at (000) 000-0000, indicating that such
notice has been sent. Each Exercise Notice shall contain instructions (i)
specifying the number of Shares to be purchased by each individual Purchaser and
(ii) identifying the account(s) to which such Shares are to be delivered.
Notwithstanding anything herein to the contrary, the Option shall not be
exercisable, or if it has already been exercised the Shares received pursuant to
such exercise shall be returned to Seller in exchange for the consideration
received, in the event that Xxx Xxxxxx ("Xxxxxx") (i) does not become a member
of a slate of nominees of XXXX Master Fund, Ltd., (the "NOMINATING PARTY") to
stand for election as a director of CNET, other than as a result of the
Nominating Party's decision not to so elect, or (ii) does not serve as a
director of CNET if so elected or appointed, in each case as set forth in and in
accordance with the terms of the nominee agreement between Xxxxxx and XXXX dated
as of the date hereof, or (iii) shall not have entered into such agreement.
1.02 PURCHASE AND SALE. The Seller agrees to and shall sell to the
Purchasers, and the Purchasers agree to purchase from the Seller, those Shares
subject to each such Exercise Notice at the closing for such Shares as
contemplated in Section 1.04 below, on the terms set forth in this Agreement.
1.03 PURCHASE PRICE. The applicable purchase price of $10.00 per Share
is payable in immediately available United States funds at the closing for such
Shares in the manner provided in SECTION 1.04.
1.04 CLOSING. The Shares to be sold in any particular closing will be
delivered by the Seller via DTC-book entry transfers from the Seller to the
account of the Purchaser designated in the applicable notice, against delivery
of the applicable purchase price, in transactions to be closed not later than
the close of trading on the fifth Nasdaq trading day following the date of
delivery of the applicable Exercise Notice.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchasers, as of the
date hereof and as of the date of each closing, as follows:
2.01 EXISTENCE OF THE SELLER. The Seller is duly organized, validly
existing and in good standing under the Laws of its jurisdiction of organization
or incorporation. The Seller has full power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby, including without limitation to sell and
transfer (pursuant to this Agreement) the Shares.
2.02 AUTHORITY. This Agreement has been duly and validly executed and
delivered by the Seller and constitutes a legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms.
2.03 SHARES. The Shares are owned beneficially by the Seller free and
clear of all Liens, and at each closing the Seller will transfer to the
Purchasers good and valid title to the Shares purchased thereby, free and clear
of all Liens.
2.04 NO CONFLICTS. The execution and delivery by the Seller of this
Agreement does not, and the performance by the Seller of its obligations under
this Agreement and the consummation of the transactions contemplated hereby will
not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the organizational documents of the Seller or
of the funds and accounts under its management; or
(b) conflict with or result in a violation or breach of any term or
provision of any Contract, Law or Order applicable to the Seller, the funds and
accounts under its management or any of the respective Assets and Properties.
2.05 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out on behalf of the Seller
directly with the Purchasers without the intervention of any person on behalf of
the Seller in such manner as to give rise to any valid claim by any person
against the Purchasers for a finder's fee, brokerage commission or similar
payment.
2.06 HOLDINGS. At all times after the execution of this Agreement up
to an including the date that is six (6) months from the date hereof, the Seller
shall continue to hold beneficial ownership of the Shares subject to the Option
and one or more custodians for the Seller shall hold record ownership thereof
and the Seller shall not loan or sell, or permit the loan or sale of, such
Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
The Purchaser hereby represents and warrants to the Seller as follows:
3.01 ORGANIZATION OF THE PURCHASERS. The Purchaser is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization or incorporation. The Purchaser has full authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
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consummate the transactions contemplated hereby, including, without limitation,
to buy (pursuant to this Agreement) the Shares.
3.02 AUTHORITY. This Agreement has been duly and validly executed and
delivered by the Purchaser and constitutes a legal, valid and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with its
terms.
3.03 NO CONFLICTS. The execution and delivery by the Purchaser of this
Agreement do not, and the performance by the Purchaser of its obligations under
this Agreement and the consummation of the transactions contemplated hereby will
not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of its organizational documents; or
(b) conflict with or result in a violation or breach of any term or
provision of any Contract, Law or Order applicable to the Purchaser or any of
its Assets and Properties.
3.04 BROKERS. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by the Purchaser directly with the
Seller without the intervention of any Person on behalf of the Purchaser in such
manner as to give rise to any valid claim by any Person against the Seller for a
finder's fee, brokerage commission or similar payment.
ARTICLE IV
DEFINITIONS
4.01 DEFINITIONS.
(a) DEFINED TERMS. As used in this Agreement, the following defined
terms have the meanings indicated below:
"AGREEMENT" means this Stock Option Agreement, as the same shall be
amended from time to time.
"ASSETS AND PROPERTIES" of any Person means all assets and properties
of every kind, nature, character and description (whether real, personal or
mixed, whether tangible or intangible, and wherever situated), including the
goodwill related thereto, operated, owned or leased by such Person.
"CONTRACT" means any agreement, lease, license, evidence of
indebtedness, mortgage, indenture, security agreement or other contract.
"EXERCISE NOTICE" has the meaning ascribed to it in Section 1.01 of
this Agreement.
"SELLER" has the meaning ascribed to it in the forepart of this
Agreement.
"LAWS" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States or any state,
county, city or other political subdivision or of any governmental or regulatory
authority.
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"LIENS" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"OPTION" has the meaning ascribed to it in Section 1.01 of this
Agreement.
"PERSON" means any natural person, corporation, limited liability
company, general partnership, limited partnership, proprietorship, other
business organization, trust, union, association or governmental or regulatory
authority.
"PURCHASER" has the meaning ascribed to it in the forepart of this
Agreement.
"SELLER" has the meaning ascribed to it in the forepart of this
Agreement.
"SHARES" has the meaning ascribed to it in the forepart of this
Agreement.
ARTICLE V
MISCELLANEOUS
5.01 ENTIRE AGREEMENT. This Agreement and the Amended and Restated
Agreement supersedes all prior discussions and agreements between the parties
with respect to the subject matter hereof and contains the sole and entire
agreement between the parties hereto with respect to the subject matter hereof.
5.02 EXPENSES. Each party will pay its own costs and expenses incurred
in connection with the negotiation, execution and closing of this Agreement and
the transactions contemplated hereby.
5.03 WAIVER. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
5.04 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
5.05 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person.
5.06 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except for assignments and transfers by operation of Law.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
5.07 HEADINGS. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
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5.08 INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.
5.09 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the Laws of the State of New York applicable to a Contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
5.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
5.11 AUTHORITY OF AGENT. The Seller hereby represents and warrants to
the Purchasers that the Seller has full authority to execute and deliver this
Agreement on behalf of the funds and accounts under its management and that the
Purchasers may deal with and take instructions from, and rely in dealing with
and taking instruction from, the Seller, in all respects with respect to this
Agreement and any matter arising in connection therewith.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
Purchaser:
VELOCITY INTERACTIVE MANAGEMENT, LLC
By:/s/Xxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxxxx
Title: Authorized Signatory
Seller:
XXXX PARTNERS LLC
By:/s/Xxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxx Xxxxx
Title: Partner
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