Exhibit 2
AMENDED AND RESTATED AGREEMENT
AND PLAN OF CONTRIBUTION, INVESTMENT AND MERGER
among
NATIONAL BROADCASTING COMPANY, INC.
GE INVESTMENTS SUBSIDIARY, INC.
NEON MEDIA CORPORATION
XENON 2, INC.
and
XXXX.XXX, INC.
Dated as of June 11, 1999
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..............................................................................................2
1.1 Definitions.....................................................................................2
ARTICLE II
CONTRIBUTIONS AND ISSUANCES..............................................................................9
2.1 Contributions to NBC and NBC Multimedia.........................................................9
2.2 Contributions to NMC; Issuances of NMC Capital Stock...........................................10
2.3 GE Investments Sub Purchase of Videoseeker Assets..............................................10
2.4 Contributions To Xenon 2; Issuances of Xenon 2 Capital Stock...................................10
2.5 Note Issuances.................................................................................11
2.6 Required Consents..............................................................................12
2.7 Tax Refunds....................................................................................12
ARTICLE III
THE MERGER..............................................................................................12
3.1 The Merger.....................................................................................12
3.2 Closing........................................................................................12
3.3 Effective Time.................................................................................13
3.4 Effects of the Merger..........................................................................13
3.5 Certificates of Incorporation..................................................................13
3.6 By-Laws........................................................................................13
3.7 Officers and Directors of Surviving Corporation and Xenon 2....................................13
3.8 Effect on Capital Stock........................................................................13
3.9 Exchange Procedures. .........................................................................14
3.10 No Further Ownership Rights in NMC Common Stock. .............................................14
3.11 Further Assurances. ..........................................................................14
3.12 Federal Income Tax Consequences. .............................................................15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES...........................................................15
4.1 Representations and Warranties of NBC..........................................................15
4.2 Representations and Warranties with respect to SNAP............................................22
4.3 Representations and Warranties of Xoom and Xenon 2.............................................30
4.4 Representations and Warranties with respect to GE Investments Sub..............................40
4.5 Survival of Representations and Warranties.....................................................41
4.6 No Other Representation or and Warranties......................................................41
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME.............................................................41
5.1 Conduct of the Business of Xoom Pending the Closing............................................41
5.2 Conduct of the Business of SNAP Pending the Closing............................................43
5.3 Conduct of the NBC Multimedia Businesses Pending the Closing...................................45
5.4 Access to Information..........................................................................46
5.5 No Solicitation................................................................................47
5.6 Non-Solicitation of Employees..................................................................49
5.7 Amendments to Schedules........................................................................49
i
ARTICLE VI
OTHER AGREEMENTS........................................................................................49
6.1 Registration Statement; Preparation of Proxy Statement.........................................49
6.2 Stockholder Meeting............................................................................50
6.3 Public Statements..............................................................................51
6.4 Reasonable Commercial Efforts..................................................................51
6.5 Notification of Certain Matters................................................................52
6.6 Xenon 2 Directors..............................................................................52
6.7 Employee Matters...............................................................................53
6.8 Xenon 2 Options. ............................................................................54
6.9 SNAP Indebtedness..............................................................................55
6.10 Organization of XXXX.xxx.......................................................................55
6.11 Tax Cooperation and Consistent Reporting.......................................................55
6.12 Tax Benefit Payments...........................................................................57
6.13 Xoom Cash......................................................................................58
ARTICLE VII
CONDITIONS TO CLOSING...................................................................................59
7.1 Conditions Precedent to Obligations of Each Party..............................................59
7.2 Conditions Precedent to Obligation of NBC......................................................60
7.3 Conditions Precedent to Obligations of Xenon 2.................................................60
ARTICLE VIII
INDEMNIFICATION.........................................................................................61
8.1 Indemnification by Xenon 2.....................................................................61
8.2 Indemnification by NBC.........................................................................61
8.3 Claims Procedure...............................................................................61
8.4 Exclusive Remedy...............................................................................62
ARTICLE IX
TERMINATION.............................................................................................62
9.1 Termination Events.............................................................................62
9.2 Effect of Termination..........................................................................64
ARTICLE X
MISCELLANEOUS AGREEMENTS OF THE PARTIES.................................................................64
10.1 Notices........................................................................................64
10.2 Integration; Amendments........................................................................65
10.3. Waiver.........................................................................................65
10.4. No Assignment; Successors and Assigns..........................................................66
10.5. Expenses.......................................................................................66
10.6. Severability...................................................................................66
10.7 Section Headings; Table of Contents............................................................66
10.8. Third Parties..................................................................................66
10.9 GOVERNING LAW; SUBMISSION TO JURISDICTION......................................................66
10.10 Specific Performance...........................................................................67
10.11 Counterparts...................................................................................67
10.12 Amendment and Restatement......................................................................67
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EXHIBITS
Exhibit A Advertising Agreement Term Sheet
Exhibit B Standstill Agreement
Exhibit C Voting and Right of First Offer Agreement
Exhibit D Governance and Investor Rights Agreement
Exhibit E Brand Integration and License Agreement
Exhibit F Registration Rights Term Sheet
Exhibit G Summary of Principal Terms of Xenon 2 Convertible
Note
Exhibit H NBC Note- Summary of Principal Terms
Exhibit 3.5 Restated Certificate of Incorporation of Xenon 2, Inc.
Exhibit 3.6 Bylaws of Xenon 2, Inc.
SCHEDULES
Schedule 1.1(a) Knowledge Definition
Schedule 1.1(b) NBC Multimedia Assets
Schedule 1.1(c) NBC Multimedia Liabilities
Schedule 1.1(d) Videoseeker Assets
Schedule 1.1(e) Videoseeker Liabilities
Schedule 2.1 Rights and Obligations of CNBC, Inc. Interests
Schedule 3.7 Officers and Directors
Schedule 4.1(c) Governmental Approvals; Consents
Schedule 4.1(e) Financial Information
Schedule 4.1(f) Absence of Certain Changes or Events
Schedule 4.1(h) Properties, Contracts, Permits and Other Data
Schedule 4.1(i) Legal Proceedings
Schedule 4.1(j) Labor Controversies
Schedule 4.1(k) Intellectual Property and Technology
Schedule 4.1(l) Government Licenses, Permits, Etc.
Schedule 4.1(n) Environmental Matters
Schedule 4.1(o) Employee Benefit Matters
Schedule 4.1(q) Entire Business
Schedule 4.2(c) Governmental Approvals; Consents
Schedule 4.2(e) Equity Interests
Schedule 4.2(f) Financial Information; Liabilities
Schedule 4.2(g) Absence of Certain Changes or Events
Schedule 4.2(h) Title to Properties; Liens
Schedule 4.2(i) Properties, Contracts, Permits
Schedule 4.2(j) Legal Proceedings
iii
Schedule 4.2(k) Labor Controversies
Schedule 4.2(l) Intellectual Property and Technology
Schedule 4.2(m) Government Licenses, Permits
Schedule 4.2(o) Environmental Matters
Schedule 4.2(p) Employee Benefit Matters
Schedule 4.2(r) Tax Matters
Schedule 4.2(t) Acceleration of Options
Schedule 4.3(c) Governmental Approvals; Consents
Schedule 4.3(g) Stock Options
Schedule 4.3(h) Obligations with Respect to Capital Stock
Schedule 4.3(j) Absence of Certain Changes or Events
Schedule 4.3(k) Properties, Contracts, Permits and Other Data
Schedule 4.3(l) Legal Proceedings
Schedule 4.3(m) Labor Controversies
Schedule 4.3(n) Intellectual Property
Schedule 4.3(o) Government Licenses, Permits, Etc.
Schedule 4.3(q) Employee Benefits Matters
Schedule 4.3(q)(iii) Exception to Employee Benefit Plan Compliance
Schedule 4.3(q)(vii) Benefit Payments Required
Schedule 4.3(s) Tax Matters
Schedule 4.3(u) Year 2000 Compliance
Schedule 5.1 Conduct of the Business of Xoom Pending the Closing
Schedule 5.2 Conduct of the Business of SNAP Pending the Closing
Schedule 6.4 Required Consents
Schedule 6.7(a) Transferred Employees
Schedule 6.9 SNAP Indebtedness
Schedule 6.10 Organization of CNBC
iv
AMENDED AND RESTATED AGREEMENT
AND PLAN OF CONTRIBUTION, INVESTMENT AND MERGER
This Amended and Restated Agreement and Plan of Contribution,
Investment and Merger, dated as of June 11, 1999 (hereinafter, the "AGREEMENT"),
among National Broadcasting Company, Inc., a Delaware corporation ("NBC"), GE
Investments Subsidiary, Inc., a Delaware corporation ("GE INVESTMENTS SUB"),
Neon Media Corporation, a Delaware corporation ("NMC"), Xenon 2, Inc., a
Delaware corporation ("XENON 2") and XXXX.xxx, Inc., a Delaware corporation
("XOOM").
W I T N E S S E T H:
WHEREAS, the parties hereto are party to the Agreement and
Plan of Contribution, Investment and Merger, dated as of May 9, 1999 (the
"EXISTING MERGER AGREEMENT");
WHEREAS, the parties hereto have agreed to amend and restate
the Existing Merger Agreement as set forth in this Agreement, all on the terms
and conditions hereinafter set forth so that, as amended and restated, the
Existing Merger Agreement reads in its entirety as provided in this Agreement;
WHEREAS, NBC owns all of the outstanding capital stock of NBC
Multimedia, Inc., a Delaware corporation ("NBC MULTIMEDIA");
WHEREAS, NBC Multimedia formed NMC for the purpose of
effecting the transactions contemplated by this Agreement and all of its
outstanding capital stock is owned by NBC Multimedia;
WHEREAS, Xoom, Xxxxx 0, Xxxxx 3, Inc., a Delaware corporation
("XENON 3"), SNAP! LLC, a Delaware limited liability company ("SNAP") and CNET,
Inc., a Delaware corporation ("CNET"), are parties to an Agreement and Plan of
Contribution and Merger dated as of May 9, 1999 (the "XENON 2 MERGER AGREEMENT")
pursuant to which, among other things, the parties thereto have agreed that (i)
Xenon 3 will merge with and into Xoom, with Xoom as the surviving corporation,
and each outstanding share of common stock of Xoom, par value $0.0001 per share,
will be converted into the right to receive one share of Class A Common Stock of
Xenon 2 and (ii) CNET will contribute to Xenon 2 certain assets in exchange for
shares of Class A Common Stock of Xenon 2;
WHEREAS, Xoom owns all of the outstanding capital stock of
Xenon 2, and Xenon 2 owns all of the outstanding stock of Xenon 3;
WHEREAS, the closing of the transactions contemplated by the
Xenon 2 Merger Agreement is a condition to the closing of the transactions
contemplated by this Agreement;
2
WHEREAS, while the closing under the Xenon 2 Merger Agreement
and the closing under this Agreement are not contingent on each other, it is
intended that both transactions represent a series of steps in the formation of
Xenon 2 whereby the rights of all the parties are defined;
WHEREAS, the consummation of the transactions contemplated by
the Xenon 2 Merger Agreement and this Agreement would combine certain assets of
NBC and CNET with the existing business of Xoom in a new holding company
structure intended to achieve important business objectives;
WHEREAS, the Board of Directors of each of Xoom, Xenon 2 and
Xenon 3 believe it is advisable for such parties to enter into this Agreement
and to consummate the transactions provided for herein;
WHEREAS, concurrently with the execution hereof, in order to
induce NBC to enter into this Agreement, NBC, Xoom and certain stockholders of
Xoom are entering into a voting agreement providing for certain voting and other
restrictions with respect to shares of Xoom common stock owned by such
stockholders, all upon the terms and conditions specified therein; and
WHEREAS, NBC, GE Investments Sub, NMC, Xoom and Xenon 2 desire
to make certain representations, warranties, covenants and other agreements in
connection with the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the
mutual promises contained herein, and intending to be legally bound, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. (a) Capitalized terms used and not defined in
this Agreement shall have the following meanings:
"ADVERTISING AGREEMENT" means the advertising agreement
between Xenon 2 and NBC to be dated as of the Closing Date having the terms set
forth in EXHIBIT A hereto.
"AFFILIATE" means with respect to a specified Person, any
Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the specified
Person. As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, as trustee or executor, by contract or credit arrangement or
otherwise.
3
"BUSINESS DAY" means a day, other than Saturday or Sunday, on
which commercial banks in New York City are open for the general transaction of
business.
"CLASS A COMMON STOCK" means the Class A common stock, $0.0001
par value per share, of Xenon 2.
"CLASS B COMMON STOCK" means the Class B common stock, $0.0001
par value per share, of Xenon 2.
"XXXX.XXX" means the entity to be formed by NBC or its
Subsidiaries pursuant to SECTION 6.10 to conduct business through the XXXX.xxx
universal resource locator.
"CNET STANDSTILL AGREEMENT" means a Standstill Agreement
between Xenon 2 and CNET to be dated as of the Closing Date substantially in the
form of EXHIBIT B hereto.
"CNET VOTING AGREEMENT" means a Voting and Right of First
Offer Agreement between CNET and NBC to be dated as of the Closing Date
substantially in the form of EXHIBIT C hereto.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRIBUTED ASSETS" means the Xoom Stock, the interests in
SNAP and the NBC Multimedia Assets.
"ENVIRONMENTAL LAWS" means any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirement (including, without limitation, common law) of any
foreign government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health, or employee health and safety.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FINAL DETERMINATION" means a determination as defined in
Section 1313(a) of the Code or any other event which finally and conclusively
establishes the amount of any liability for Taxes.
"FLYING DISC" means Flying Disc Investments Limited
Partnership, a Nevada limited partnership.
4
"GAAP" means generally accepted accounting principles in the
United States.
"GOVERNANCE AGREEMENT" means the governance agreement between
Xenon 2 and NBC to be dated as of the Closing Date substantially in the form set
forth in EXHIBIT D hereto.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"IMPLEMENTING AGREEMENTS" means, the NBC Note, the Xenon 2
Convertible Note, the Governance Agreement, the Registration Rights Agreement,
the License Agreement, the Advertising Agreement, the CNET Voting Agreement and
the CNET Standstill Agreement.
"INDEPENDENT ACCOUNTANTS" means a nationally recognized firm
of independent certified public accountants selected and retained by the mutual
agreement of NBC and Xenon 2.
"INTELLECTUAL PROPERTY" shall mean any patents, patent
registrations, patent applications, trademarks, trademark registrations,
trademark applications, tradenames, copyrights, copyright applications,
copyright registrations, franchises, universal resource locators, domain names,
permits, licenses, processes, formulae, proprietary technology, inventions,
trade secrets, know-how, product descriptions and specifications.
"KNOWLEDGE OF" or "BEST KNOWLEDGE OF" a party hereto when
modifying any representation and warranty shall mean that such party has no
actual knowledge that such representation and warranty is not true and correct
to the extent provided therein and that (i) such party has made appropriate
investigations and inquiries of its officers and responsible employees and (ii)
nothing has come to its attention in the course of such investigation and
inquiries which would cause such party, in the exercise of due care, to believe
that such representation and warranty is not true and correct to the extent
provided therein; PROVIDED that each of the parties hereto shall be deemed to
have satisfied the foregoing requirements by making appropriate investigations
and inquiries of its officers and employees listed on SCHEDULE 1.1(A), and no
knowledge of any other director, officer or employee of such party shall be
imputed to the persons listed on the Schedule or to such party.
"LIABILITY" means, as to any Person, all debts, liabilities
and obligations, direct, indirect, absolute or contingent of such Person,
whether accrued, vested or otherwise, whether known or unknown and whether or
not actually reflected, or required to be reflected, in such Person's balance
sheets.
"LICENSE AGREEMENT" means the license agreement between NBC
Multimedia and NBC to be dated as of May 9, 1999 substantially in the form set
forth in EXHIBIT E hereto.
5
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind.
"LOSSES AND EXPENSES" means any and all damages, claims,
losses, expenses, costs, obligations and Liabilities, including, without
limiting the generality of the foregoing, Liabilities for all reasonable
attorneys' fees and expenses (including attorney and expert fees and expenses
incurred to enforce the terms of this Agreement), PROVIDED, HOWEVER, that
"Losses and Expenses" shall not include any lost profits or other incidental,
consequential or punitive damages.
"MATERIAL ADVERSE EFFECT" means, for any party, a material
adverse effect on (i) the assets, liabilities, business, results of operations
or financial condition of (A) Xoom, Xenon 2 and their respective Subsidiaries,
taken as a whole, in the case of Xoom or (B) the NBC Multimedia Businesses and
SNAP, taken as a whole, in the case of NBC; or (ii) the ability of such party to
perform its obligations hereunder, under the Voting Agreement, the Option
Agreement or under the Implementing Agreements to which it is a party.
Notwithstanding the foregoing, the occurrence of one of the following events,
without the occurrence of any other events, shall not be deemed by itself to
constitute a Material Adverse Effect: (i) a change in the market price or
trading volume of the outstanding equity securities of a party that is publicly
traded, (ii) the failure of a party to meet earnings estimates of equity
analysts as reflected in the First Call consensus estimates for any period (or
for which earnings are released) on or after May 9, 1999 and prior to the
Effective Time or (iii) adverse conditions affecting the U.S. economy as a whole
or affecting the multi-media industry (including internet-related businesses) as
a whole (PROVIDED that in each case such changes do not affect such party in a
disproportionate manner).
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or
petroleum (including, without limitation, crude oil or any fraction thereof) or
petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other substances of
any kind, whether or not any such substance is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"MEMBER OF THE CONTROLLED GROUP" means each trade or business,
whether or not incorporated, which would be treated as a single employer with
the named trade or business under Section 4001 of ERISA or Section 414(b), (c),
(m) or (o) of the Code.
"NASDAQ" means the Nasdaq National Market.
"XXX.XXX" means the XXX.xxx universal resource locator and the
business conducted through it.
"NBC-IN" means the XXX-XX.xxx universal resource locator and
the business conducted through it.
6
"NBC MULTIMEDIA ASSETS" means the assets, properties and other
rights of NBC and NBC Multimedia listed on SCHEDULE 1.1(B) which are to be
contributed to NMC on the Closing Date.
"NBC MULTIMEDIA BUSINESSES" means, collectively, XXX.xxx,
Videoseeker and NBC- IN.
"NBC MULTIMEDIA LIABILITIES" means the liabilities of NBC
Multimedia listed on SCHEDULE 1.1(C) which are to be assumed by NMC on the
Closing Date.
"NBC NOTE" means the $340,000,000 note issued by NBC to GE
Investments Sub to be transferred to Xenon 2 on the Closing Date.
"OPTION AGREEMENT" means the Stock Option Agreement, dated as
of May 9,1999, between NBC and Xoom.
"OTHER PROPERTY OR MONEY" means other property or money within
the meaning of Section 351(b) of the Code.
"PERMITTED LIENS" means (i) Liens for Taxes that (x) are not
yet due or delinquent or (y) are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in accordance
with GAAP; (ii) statutory Liens or landlords', carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business with respect to amounts not yet overdue for a
period of 45 days or amounts being contested in good faith by appropriate
proceedings if a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor; (iii) Liens incurred or deposits
made in connection with workers' compensation, unemployment insurance and other
types of social security or similar benefits; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, government contracts, performance and return-of-money
bonds and other obligations of like nature; (v) easements, rights-of-way,
restrictions and other similar charges or encumbrances on real property
interests which, individually or in the aggregate, do not materially interfere
with the ordinary conduct of the relevant entity or business, taken as a whole
or the use of any such real property for its current uses; (vi) leases or
subleases granted to others which do not materially interfere with the ordinary
conduct of the relevant entity or business, taken as a whole; (vii) with respect
to real property, title defects or irregularities that do not in the aggregate
materially impair the use of the property; (viii) any other Liens imposed by
operation of law that do not, individually or in the aggregate, have a Material
Adverse Effect on the relevant entity or business, taken as a whole; and (ix) as
to any real property leases with respect to which the relevant entity is a
lessee, any Lien affecting the interest of the landlord thereunder.
"PERSON" means any individual, corporation, partnership, joint
venture, trust, incorporated organization, limited liability company, other form
of business or legal entity or Governmental Authority.
7
"POST-CLOSING TAX PERIOD" means any Tax period (or portion
thereof) ending after the Closing Date.
"PRE-CLOSING TAX PERIOD" means any Tax period (or portion
thereof) ending on or before the Closing Date.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement among Xenon 2, NBC, CNET and Flying Disc to be dated as of the Closing
Date having the terms set forth in EXHIBIT F hereto.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SNAP" means SNAP! LLC, a Delaware limited liability company.
"SNAP LLC AGREEMENT" means the limited liability agreement of
SNAP, as amended from time to time.
"SNAP UNITS" means the units representing limited liability
company interests under the SNAP LLC Agreement.
"SUBSIDIARY" or "SUBSIDIARIES" of any Person means any
corporation, partnership, limited liability company, joint venture or other
legal entity of which such Person (either alone or through or together with any
other subsidiary) owns, directly or indirectly, more than 50% of the stock or
other equity interests, the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity and any partnership of which such Person
serves as general partner.
"TAX AUTHORITY" shall mean any Governmental Authority having
jurisdiction over Taxes.
"TAXES" shall mean all federal, state, local and foreign
taxes, fees, charges and other assessments of a similar nature, whether imposed
directly or through withholding, including, without limitation, any net income,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, payroll, employment, excise, severance, stamp,
capital stock, occupation, property, environmental or windfall tax, premium,
custom, duty or other tax, together with any interest, additions to tax, or
penalties applicable thereto.
"TAX RETURNS" shall mean all federal, state, local and foreign
tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended tax returns relating to Taxes.
8
"VIDEOSEEKER" means the Xxxxxxxxxxx.xxx universal resource
locator and the business conducted through it.
"VIDEOSEEKER ASSETS" means the assets, properties and other
rights of NBC and NBC Multimedia listed on SCHEDULE 1.1(D) which are to be
purchased by Xenon 2 from GE Investments Sub on the Closing Date.
"VIDEOSEEKER LIABILITIES" means the liabilities of NBC
Multimedia listed on SCHEDULE 1.1(E).
"VOTING AGREEMENT" means the Voting Agreement, dated as of May
9, 1999, among Xoom, NBC, CNET, Xxxxx Xxxxx and Flying Disc.
"XOOM PREFERRED STOCK" means shares of preferred stock, par
value $.0001 per share, of Xoom.
"XOOM STOCK" means shares of common stock, par value $.0001
per share, of Xoom.
"XENON 2 CONVERTIBLE NOTE" means the $486,894,758 Zero Coupon
Convertible Debenture due 2006 issued by Xenon 2 to GE Investments Sub on the
Closing Date having the terms set forth in EXHIBIT G hereto.
"XENON 2 MERGER AGREEMENT" means the Agreement and Plan of
Contribution and Merger, dated as of May 9, 1999, among Xoom, Xenon 2, Xenon 3,
SNAP and CNET.
Term Section
---- -------
Certificate of Merger 3.3
Claim Notice 8.3
Class A Common Stock 1.1
Class B Common Stock 1.1
Closing 3.2
Closing Date 3.2
Effective Time 3.3
Financial Information 4.1(e)
Form S-4 6.1
Indemnified Party 6.6(d)
Intellectual Property 1.1
Material Transaction Proposal 5.5(c)
Merger 3.1
9
Term Section
---- -------
Merger Consideration 3.8
NBC Multimedia Business Intellectual Property 4.1(k)
NBC Plans 6.7(b)(i)
Nominees 6.6
Non-Plan Option 6.8
Notice Period 8.3
Option Plan 6.8
Proxy Statement 6.1
Required Consents 6.4
SEC Documents 4.3(h)(i)
SNAP Balance Sheet 4.2(f)
SNAP Budget 4.2(i)
SNAP Intellectual Property 4.2(l)
SNAP Plans 4.2(p)
Stockholder Approvals 5.5
Stockholder Meeting 6.2
Surviving Corporation 3.1
Takeover Proposal 5.5(c)
Vacation Policy 6.7(b)(v)
Xenon 2 Stockholder Approval 4.3(b)
Xoom Budget 4.3(k)
Xoom ESPP 4.3(g)
Xoom Intellectual Property 4.3(n)
Xoom Options 6.8
Xoom Stockholder Approval 5.5
ARTICLE II
CONTRIBUTIONS AND ISSUANCES
II.1 CONTRIBUTIONS TO NBC AND NBC MULTIMEDIA. (a) Subject to the
satisfaction or waiver of the conditions set forth in this Agreement, at the
Closing and immediately prior to the Effective Time (as defined in SECTION 3.3),
(i) NBC shall contribute to NBC Multimedia, and NBC Multimedia shall accept, a
10% equity interest in XXXX.xxx, which interest shall be subject to the rights
and obligations set forth on SCHEDULE 2.1 and (ii) NBC Multimedia shall dividend
to NBC, and NBC shall accept and assume, all the Videoseeker Assets owned by NBC
Multimedia and all the Videoseeker Liabilities.
(b) In connection with the transactions described in SECTION
2.1(A), NBC shall execute, and shall cause NBC Multimedia to execute all
contribution, transfer, assumption and
10
other agreements which are reasonably necessary to effect the transactions
described therein. The XXXX.xxx interest shall be transferred free and clear of
all Liens, except those set forth on Schedule 2.1(a). The Videoseeker Assets
shall be transferred free and clear of all Liens, except those set forth on
Schedule 1.1(e).
II.2 CONTRIBUTIONS TO NMC; ISSUANCES OF NMC CAPITAL STOCK. (a) Subject
to the satisfaction or waiver of the conditions set forth in this Agreement, at
the Closing and immediately prior to the Effective Time, NBC shall, or shall
cause NBC Multimedia, to assign and contribute to NMC, and NMC shall accept, all
of NBC's and NBC Multimedia's right, title and interest in the NBC Multimedia
Assets, and NBC and NBC Multimedia shall assign and contribute to NMC, and NMC
shall assume, all of the NBC Multimedia Liabilities.
(b) In connection with the transactions described in SECTION
2.2(A), NBC, NBC Multimedia, and NMC shall execute all contribution, transfer,
assumption and other agreements which counsel for NBC and Xoom determine are
reasonably necessary to effect the transactions described therein. All of the
assets transferred pursuant to SECTION 2.2(A) shall be transferred free and
clear of all Liens (other than any Liens imposed by or on behalf of Xenon 2).
(c) In exchange for the assignments and contributions set
forth in SECTION 2.2(A), at the Closing and concurrently therewith, NMC shall
issue 12,173,111 shares of its common stock, par value $.0001 per share, which
until the Effective Time shall represent all of the outstanding capital stock of
NMC, to NBC Multimedia.
II.3 GE INVESTMENTS SUB PURCHASE OF VIDEOSEEKER ASSETS. (a) Subject to
the satisfaction or waiver of the conditions set forth in this Agreement, at the
Closing and immediately prior to the Effective Time, GE Investments Sub will
purchase and NBC will sell, assign, transfer, convey and deliver the Videoseeker
Assets, free and clear of all Liens except those set forth on Schedule 1.1(e),
in consideration for a reduction in the amount of indebtedness of NBC owing to
GE Investments Sub.
(b) In connection with the transactions described in SECTION
2.3(A), GE Investments Sub and NBC shall execute all bills of sale and other
agreements which are reasonably necessary to affect the transactions described
therein.
II.4 CONTRIBUTIONS TO XENON 2; ISSUANCES OF XENON 2 CAPITAL STOCK. (a)
Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, at the Closing and immediately after the Effective Time, NBC shall
cause NBC Multimedia to transfer to Xenon 2, and Xenon 2 shall accept, all of
the right, title and interest to the SNAP Units held by NBC Multimedia,
including NBC Multimedia's rights pursuant to SECTION 7.3 and SECTION 7.4 of the
SNAP LLC Agreement to increase the number of SNAP Units held by NBC Multimedia
as provided in such agreement.
(b) In connection with the transactions described in SECTION
2.4(A), NBC, NBC Multimedia and Xenon 2 shall execute all contribution,
transfer, assumption and other
11
agreements which counsel for NBC and Xoom determine are reasonably necessary to
effect the transactions described therein. All of the assets transferred
pursuant to SECTION 2.4(A) shall be transferred free and clear of all Liens
(other than any Liens imposed by or on behalf of Xenon 2).
(c) In exchange for the assignment and contribution of the
SNAP Units set forth in SECTION 2.4(A), at the Closing and concurrently
therewith, Xenon 2 shall issue 11,417,569 shares of Class B Common Stock to NBC
Multimedia; PROVIDED, that in no event shall NBC and its Affiliates be issued
shares of Common Stock of Xenon 2 that would result in their aggregate holding
of such shares being equal to or greater than 50% of the outstanding shares of
Common Stock of Xenon 2 after giving effect to all of the issuances of such
Common Stock on the Closing Date.
(d) Upon the original issuance of the shares of Class B Common
Stock by Xenon 2 to NBC Multimedia pursuant to SECTION 2.2 and SECTION 2.4(C),
and until such time as the same is no longer required hereunder or under the
applicable requirements of the Securities Act or applicable state securities
laws, any certificate issued representing any such Class B Common Stock shall
bear the following legend:
"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 (A) THEY ARE SO REGISTERED OR (B) AN EXEMPTION FROM REGISTRATION
IS AVAILABLE AND THE ISSUER IS FURNISHED WITH AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER TO THAT EFFECT. IN ADDITION, SUCH
SHARES MAY ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF A
GOVERNANCE AND INVESTOR RIGHTS AGREEMENT, DATED AS OF ______, 1999, AS
AMENDED FROM TIME TO TIME, AMONG NATIONAL BROADCASTING COMPANY, INC.
AND THE ISSUER COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF
THE ISSUER."
II.5 NOTE ISSUANCES; PURCHASE OF VIDEOSEEKER ASSETS BY XENON 2. (a)
Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, after the Effective Time and the consummation of all of the
transactions contemplated by SECTIONS 2.1, 2.2, 2.3 and 2.4 of this Agreement,
GE Investments Sub shall purchase the Xenon 2 Convertible Note from Xenon 2 in
exchange for an assignment of the NBC Note from GE Investments Sub to Xenon 2
and the assignment and sale by GE Investments Sub of the Videoseeker Assets to
Xenon 2, free and clear of all Liens, except those set forth on Schedule 1.1(e).
(b) In connection with the transactions described in SECTION
2.5(A), NBC, GE Investments Sub and Xenon 2 shall execute all deeds, bills of
sale, assignments and purchase, transfer and other agreements which counsel for
NBC and Xoom determine are reasonably
12
necessary to effect the transactions described therein. Upon surrender of the
NBC Note to NBC, NBC shall issue a new note payable to Xenon 2 having the terms
set forth in EXHIBIT H.
II.6 REQUIRED CONSENTS. Notwithstanding anything to the contrary
contained in this Agreement, to the extent that the sale, conveyance, transfer,
assignment or delivery or attempted sale, conveyance, transfer, assignment or
delivery to NMC or Xenon 2 of any of the assets (including any assumed contract,
license or other agreement) is prohibited by applicable law or would require any
governmental or third-party authorization, approval, consent or waiver and such
authorization, approval, consent or waiver shall not have been obtained prior to
the Closing, this Agreement shall not constitute a sale, conveyance, transfer,
assignment or delivery, or an attempted sale, conveyance, transfer, assignment
or delivery thereof if any of the foregoing would constitute a breach of
applicable law or the rights of any third party. Following the Closing, the
parties shall use their reasonable commercial efforts, and shall cooperate with
each other, to obtain promptly such authorizations, approvals, consents or
waivers; PROVIDED, HOWEVER, that neither NBC, Xenon 2 nor any of their
respective Affiliates shall be required to pay any consideration therefor, other
than filing, recordation or similar fees payable to any governmental authority,
which fees shall be paid by Xenon 2. Pending or in the absence of such
authorization, approval, consent or waiver, the parties shall use their
reasonable commercial efforts to enter into reasonable and lawful arrangements
designed to provide to Xenon 2 the benefits and liabilities of use of such
assets from and after the Effective Time.
II.7 TAX REFUNDS. Notwithstanding anything herein to the contrary,
Xenon 2 shall be entitled to all refunds of Taxes with respect to the
activities, properties or employees of NMC or SNAP attributable to the period
after the Closing Date.
ARTICLE III
THE MERGER
III.1 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), NMC shall be merged (the "MERGER") with and into Xenon 2 at
the Effective Time. Following the Merger, the separate corporate existence of
NMC shall cease and Xenon 2 shall continue as the surviving corporation (the
"SURVIVING CORPORATION").
III.2 CLOSING. Subject to the satisfaction or waiver (subject to
applicable law) of the conditions set forth in ARTICLE VII, the closing of the
Merger and the transactions contemplated by this Agreement (the "CLOSING") will
take place on the second Business Day after all the conditions to Closing (other
than conditions that, by their terms, cannot be satisfied until the Closing
Date) set forth in ARTICLE VII shall have been satisfied or waived, unless this
Agreement has been theretofore terminated pursuant to its terms, unless another
time or date is agreed to in writing by the parties hereto (the actual time and
date of the Closing being referred to herein as the "CLOSING DATE"). The Closing
shall be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 425
00
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, unless another place is agreed to
in writing by the parties hereto.
III.3 EFFECTIVE TIME. As soon as practicable following the satisfaction
of the conditions set forth in ARTICLE VII, the parties shall (i) file a
certificate of merger (the "CERTIFICATE OF MERGER") executed in accordance with
the relevant provisions of the DGCL and (ii) make all other filings or
recordings required under the DGCL. The Merger shall become effective at such
time as shall be specified in the Certificate of Merger (the date and time the
Merger becomes effective being the "EFFECTIVE TIME").
III.4 EFFECTS OF THE MERGER. At and after the Effective Time, the
Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of NMC and Xenon 2 shall be
vested in the Surviving Corporation, and all debts, liabilities and duties of
NMC and Xenon 2 shall become the debts, liabilities and duties of the Surviving
Corporation.
III.5 CERTIFICATES OF INCORPORATION. Xoom shall cause the certificate
of incorporation of Xenon 2 to be amended and restated immediately prior to the
Effective Time to change the name of Xenon 2 to "NBC Internet, Inc." and so as
to otherwise read in its entirety as set forth in EXHIBIT 3.5, with such changes
therein as NBC and Xenon 2 may agree upon prior to the Effective Time, and such
amended and restated certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
III.6 BY-LAWS. Xoom shall cause the by-laws of Xenon 2 to be amended
and restated effective prior to the Effective Time so as to read in their
entirety as set forth in EXHIBIT 3.6, with such changes therein as NBC and Xenon
2 may agree upon prior to the Effective Time, and such amended and restated
by-laws shall be the by-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
III.7 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION AND XENON 2. The
officers and directors of the Surviving Corporation shall be as provided in
SCHEDULE 3.7, which individuals will serve as officers and directors of the
Surviving Corporation until the earlier of their resignation or removal or
otherwise ceasing to be an officer or director or until their respective
successors are duly elected and qualified.
III.8 EFFECT ON CAPITAL STOCK. (a) At the Effective Time by virtue of
the Merger and without any action on the part of the holder thereof, each share
of common stock, par value $0.0001, of NMC (the "NMC COMMON STOCK") issued and
outstanding immediately prior to the Effective Time (other than shares of NMC
Common Stock held by NMC, all of which shall be canceled as provided in SECTION
3.8(C)) shall be converted into one share of Class B common stock, par value
$0.0001 per share, of the Surviving Corporation (the "MERGER CONSIDERATION")
14
and all shares of common stock of the Surviving Corporation issued and
outstanding at the Effective Time shall remain outstanding after the Merger.
(b) As a result of the Merger and without any action on the
part of the holders thereof, at the Effective Time, all shares of NMC Common
Stock shall be canceled and shall cease to exist, and each holder of a
certificate which immediately prior to the Effective Time represented any such
shares of NMC Common Stock (a "CERTIFICATE") shall thereafter cease to have any
rights with respect to such shares of NMC Common Stock, except as provided
herein or by law.
(c) Each share of NMC Common Stock held by NMC at the
Effective Time shall, by virtue of the Merger, cease to be outstanding and shall
be canceled and no stock of Xenon 2 or other consideration shall be delivered in
exchange therefor.
(d) Upon the original issuance of the shares of Class B Common
Stock by Xenon 2 in connection with the Merger, and until such time as the same
is no longer required hereunder or under the applicable requirements of the
Securities Act or applicable state securities laws, any certificate issued
representing any such Class B Common Stock shall bear the following legend:
"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 (A) THEY ARE SO REGISTERED OR (B) AN EXEMPTION FROM REGISTRATION
IS AVAILABLE AND THE ISSUER IS FURNISHED WITH AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER TO THAT EFFECT. IN ADDITION, SUCH
SHARES MAY ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF A
GOVERNANCE AND INVESTOR RIGHTS AGREEMENT, DATED AS OF ________, 1999,
AS AMENDED FROM TIME TO TIME AMONG NATIONAL BROADCASTING COMPANY, INC.
AND THE ISSUER COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF
THE ISSUER."
III.9 EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, NBC shall cause NBC Multimedia to deliver its Certificate to
Xenon 2 and NBC Multimedia shall be entitled to receive in exchange a
certificate representing, in the aggregate, the number of shares into which the
NMC Common Stock was converted pursuant to SECTION 3.8(A).
III.10 NO FURTHER OWNERSHIP RIGHTS IN NMC COMMON STOCK. All shares of
Class B Common Stock issued upon conversion of NMC Common Stock in accordance
with the terms of this ARTICLE III shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of NMC Common Stock formerly
represented thereby.
15
III.11 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of NMC or Xenon 2, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of NMC or Xenon 2, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right,
title and interest in, to and under any of the rights, properties or assets
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
III.12 FEDERAL INCOME TAX CONSEQUENCES. For federal income tax
purposes, it is intended that the transfers described in SECTION 2.1, SECTION
2.2 and SECTION 2.3 and the Merger qualify as a contribution to Xenon 2
qualifying under Section 351 of the Code.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
IV.1 REPRESENTATIONS AND WARRANTIES OF NBC. NBC represents and
warrants to Xoom and Xenon 2 as follows, PROVIDED that none of the
representations or warranties contained in this SECTION 4.1 are made with
respect to SNAP, its assets, Liabilities or the business conducted thereby
except paragraphs (a), (b) and (c) and the second sentence of paragraph (g) to
the extent related to the ownership or transfer of the SNAP Units:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. NBC, NMC and
each of Neon's Subsidiaries that is a party to an Implementing Agreement is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the requisite power and authority to own,
lease and operate its properties and to conduct its business as now conducted by
it. NBC, NMC and each of Neon's Subsidiaries that is a party to an Implementing
Agreement has all requisite power and authority to enter into this Agreement and
the Implementing Agreements to which it is a party and to perform its
obligations hereunder and thereunder. NBC, NMC and each of Neon's Subsidiaries
that is a party to an Implementing Agreement is qualified to do business and is
in good standing in all jurisdictions in which it conducts its business, except
where the failure to do so would not, individually or in the aggregate, taken as
a whole, have a Material Adverse Effect.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENTS. The execution,
delivery and performance by NBC and its Subsidiaries of the Existing Merger
Agreement, this Agreement and the Implementing Agreements to which it or its
Subsidiaries is a party and the consummation by NBC and its Subsidiaries of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or other governance action (including any required approval
from NBC Parent) on the part of NBC and its Subsidiaries. Each of the Existing
Merger Agreement, this Agreement, the Option Agreement and the Voting Agreement
has been, and each of the Implementing Agreements to which NBC or any of its
Subsidiaries is a party will on the Closing Date be, duly executed and delivered
by NBC and its Subsidiaries and constitutes or, in the case of the Implementing
Agreements, upon execution thereof will constitute, a valid
16
and legally binding obligation of NBC and its Subsidiaries, enforceable against
each in accordance with its terms.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in
SCHEDULE 4.1(C), the execution, delivery and performance of this Agreement, the
Option Agreement and the Implementing Agreements by NBC and its Subsidiaries and
the consummation by such Persons of the transactions contemplated hereby and
thereby will not (i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws or other governing documents of NBC or
its Subsidiaries; (ii) require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Authority; (iii) require
the consent or approval of any Person (other than a Governmental Authority or
any approvals required under SECTION 4.1(B)) or violate or conflict with, or
result in a breach of any provision of, constitute a default (or an event which
with notice or lapse of time or both would become a default) or give to any
third party any right of termination, cancellation, amendment or acceleration
under, or result in the creation of a Lien on any of the NBC Multimedia Assets
or the Videoseeker Assets under, any of the terms, conditions or provisions of
any contract or license to which NBC or any of its Subsidiaries is a party or by
which it or its assets or property are bound; or (iv) violate or conflict with
any order, writ, injunction, decree, statute, rule or regulation applicable to
NBC or any of its Subsidiaries; other than any consents, approvals,
authorizations and permits the failure of which to obtain and any violations,
conflicts, breaches defaults and other matters set forth pursuant to clauses
(ii), (iii) and (iv) above which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(d) CERTAIN FEES. Neither NBC or any of its Subsidiaries nor
the officers, directors or employees, thereof have employed any broker or finder
or incurred any other Liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated hereby; except that NBC
has employed BT Alex. Xxxxx Incorporated whose fees and expenses will be paid in
accordance with SECTION 10.5 if the transactions contemplated by this Agreement
are consummated and will otherwise be paid by NBC.
(e) FINANCIAL INFORMATION, LIABILITIES. NBC has provided Xenon
2 with certain historical financial information relating to the NBC Multimedia
Businesses set forth on SCHEDULE 4.1(E) hereto (the "FINANCIAL INFORMATION").
The Financial Information has been prepared in accordance with the accounting
principles and procedures set forth on SCHEDULE 4.1(E) and is true and correct
in all material respects. All of the NBC Multimedia Liabilities and Videoseeker
Liabilities primarily relate to the NBC Multimedia Businesses.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
on SCHEDULE 4.1(F), since December 31, 1998, NBC and its Subsidiaries have
conducted the NBC Multimedia Businesses in all material respects only in the
ordinary course, consistent with past practice and there has not been (i) any
material adverse change in the assets, liabilities, business, results of
operations or financial condition of the NBC Multimedia Businesses or (ii)
except in the ordinary course of business consistent with past practice and
except for such matters that would not reasonably be expected to have a Material
Adverse Effect, any damage, destruction, loss,
17
conversion, condemnation or taking by eminent domain related to any material NBC
Multimedia Asset. In addition, except as disclosed on SCHEDULE 4.1(F), from
December 31, 1998 to May 9, 1999, neither NBC nor any of its Subsidiaries has
(A) acquired or disposed of any material assets of an NBC Multimedia Business or
entered into any agreement or other arrangement for any such acquisition or
disposition or (B) relinquished, forgiven or canceled any material debts or
claims with respect to an NBC Multimedia Business.
(g) TITLE TO PROPERTIES; ABSENCE OF LIENS. NBC or its
Subsidiaries have, and at the Closing, NMC will acquire, good title to (or, in
the case of real estate or equipment leases, a valid lease to) all properties,
assets and other rights included in the NBC Multimedia Assets, free and clear of
all Liens except for Permitted Liens and Liens described on Schedule 1.1(c). NBC
or its Subsidiaries have, and at the Closing, immediately prior to the Effective
Time, GE Investments Sub will acquire, and after the Effective Time Xenon 2 will
acquire, good title to (or in the case of real estate or equipment leases, a
valid lease to) all properties, assets and other rights included in the
Videoseeker Assets, free and clear of all Liens except for Permitted Liens and
Liens described on Schedule 1.1(e). NBC or its Subsidiaries have, and at the
Closing, Xenon 2 will acquire, good title to all of the SNAP Units held by NBC
and its Subsidiaries, free and clear of all Liens (other than Liens created,
imposed or granted by Xenon 2 and as set forth in the SNAP LLC Agreement).
Assuming the consummation of the transactions contemplated by the Xenon 2 Merger
Agreement in accordance with the terms and conditions thereof, at the Closing,
Xenon 2 will acquire good title to all of the SNAP Units.
(h) PROPERTIES, CONTRACTS, PERMITS AND OTHER DATA. Except as
specified in SCHEDULE 4.1(H) hereto, all rights, licenses, leases,
registrations, applications, contracts, commitments and other agreements of NBC
and its Subsidiaries with respect to the NBC Multimedia Businesses or by which
the NBC Multimedia Assets or Videoseeker Assets are bound are in full force and
effect and are valid and enforceable in accordance with their respective terms
except for such failures to be in full force and effect and valid and
enforceable that would not, individually or in the aggregate, have a Material
Adverse Effect. No NBC Multimedia Business is in breach or default in the
performance of any obligation thereunder and no event has occurred or has failed
to occur whereby any of the other parties thereto have been or will be released
therefrom or will be entitled to refuse to perform thereunder, the enforcement
of which would have, either individually or in the aggregate, a Material Adverse
Effect.
(i) LEGAL PROCEEDINGS. Except as described in SCHEDULE 4.1(I),
there is no litigation, proceeding or governmental investigation to which NBC or
its Subsidiaries is a party pending or, to the best Knowledge of NBC, threatened
against it or its Subsidiaries which, either individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect or which, as
of May 9, 1999, seeks to restrain or enjoin the consummation of any of the
transactions contemplated hereby. NBC and its Subsidiaries are not party to, nor
are the NBC Multimedia Assets or Videoseeker Assets subject to, any judgment,
writ, decree, injunction or order entered by any court or governmental authority
(domestic or foreign) that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
18
(j) LABOR CONTROVERSIES. Except as set forth on SCHEDULE
4.1(J), (i) there have been no labor strikes, slow-downs, work stoppages,
lock-outs or other material labor controversies or disputes during the past two
years, nor is any such strike, slow-down, work stoppage or other material labor
controversy or dispute pending or, to the best Knowledge of NBC, threatened, in
each case with respect to the current or former employees of the NBC Multimedia
Businesses, (ii) none of the NBC Multimedia Businesses are a party to any labor
contract, collective bargaining agreement, contract, letter of understanding or,
to Neon's Knowledge, any other agreement, formal or informal, with any labor
union or organization, nor are any of the NBC Multimedia Businesses' employees
represented by any labor union or organization, and (iii) no NBC Multimedia
Business has closed any facility, effectuated any layoffs of employees or
implemented any early retirement, separation or window program within the past
two years nor has any NBC Multimedia Business planned or announced any such
action or program for the future.
(k) INTELLECTUAL PROPERTY. NBC or its Subsidiaries own or are
licensed or otherwise have the right to use, all Intellectual Property currently
used in the NBC Multimedia Businesses (the "NBC MULTIMEDIA BUSINESS INTELLECTUAL
PROPERTY"), except as would not, individually or in the aggregate, have a
Material Adverse Effect. No NBC Multimedia Business has infringed upon or is in
conflict with the Intellectual Property of any third party nor has any NBC
Multimedia Business received any written notice of any claim that any NBC
Multimedia Business has infringed upon or is in conflict with any Intellectual
Property of any third party, except as would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth on SCHEDULE
4.1(K), none of the rights of NBC or its Subsidiaries to the NBC Multimedia
Business Intellectual Property will be impaired in any way by the transactions
provided for herein, and all of the rights of NBC and its Subsidiaries to the
NBC Multimedia Business Intellectual Property will be fully enforceable by NMC
after the Closing Date to the same extent as such rights would have been
enforceable by NBC or its Subsidiaries before the Closing, without the consent
or agreement of any other party other than any consents and agreements the
failure of which to obtain, individually or in the aggregate, would not have a
Material Adverse Effect. There have been no claims (whether private or
governmental) against NBC or its Subsidiaries asserting the invalidity or
unenforceability of its ownership, license or other right to use any of the
registered NBC Multimedia Business Intellectual Property.
(l) GOVERNMENT LICENSES, PERMITS, ETC. Except as set forth on
SCHEDULE 4.1(L), NBC and its Subsidiaries have all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Authorities
required for the conduct of each NBC Multimedia Business as presently conducted,
except where failure would not, individually or in the aggregate, have a
Material Adverse Effect.
(m) CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. NBC and its Subsidiaries have complied with all
applicable laws, ordinances, regulations or orders or other requirements of any
Governmental Authority applicable to the NBC Multimedia Businesses, including,
without limitation, all rules, regulations and administrative orders relating to
anti-competitive practices, discrimination, employment, health
19
and safety, except where the failure to be in such compliance would not have,
either individually or in the aggregate, a Material Adverse Effect.
(n) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
4.1(N) and except for matters that, individually or in the aggregate, would not
have a Material Adverse Effect, (i) NBC and its Subsidiaries comply and have
complied with all Environmental Laws applicable to the NBC Multimedia
Businesses, and possess and comply with and have possessed and complied with all
Environmental Permits for each NBC Multimedia Business; (ii) there are and have
been no Materials of Environmental Concern, or other conditions, at any property
owned or leased by NBC or any of its Subsidiaries and included in the NBC
Multimedia Assets or Videoseeker Assets that could give rise to any liability
under any Environmental Law or result in costs arising out of any Environmental
Law; (iii) no judicial, administrative, or arbitral proceeding (including any
notice of violation or alleged violation) under any Environmental Law to which
any NBC or any of its Subsidiaries is, or to the Knowledge of NBC and its
Subsidiaries will be, named as a party is pending or, to the Knowledge of NBC,
threatened, with respect to any NBC Multimedia Business nor is any NBC
Multimedia Business the subject of any investigation in connection with any such
proceeding or potential proceeding; (iv) there are no past, present, or
anticipated future events, conditions, circumstances, practices, plans, or legal
requirements that could be expected to prevent, or materially increase the
burden on any NBC Multimedia Business of complying with applicable Environmental
Laws or of obtaining, renewing, or complying with all Environmental Permits
required under such laws; and (v) NBC has provided to the other parties true and
complete copies of all Environmental Reports relating to the NBC Multimedia
Businesses in the possession or control of NBC and its Subsidiaries.
(o) EMPLOYEE BENEFIT MATTERS. (i) Neither NBC nor any of its
Subsidiaries nor any Member of the Controlled Group of which it is a member has
(A) engaged in, or is a successor or parent corporation to an entity that has
engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA or (B)
incurred, or could reasonably be expected to incur, any liability under (I)
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA or (II) Section 4971 of the Code that in either case could become a
liability of Xenon 2 or any Subsidiary after the Closing Date. The assets of NBC
and all of its Subsidiaries are not now, nor will they after the passage of time
be, subject to any lien imposed under Code Section 412(n) by reason of a failure
of any of NBC or any Subsidiary or any Member of the Controlled Group of which
it is a member to make timely installments or other payments required under Code
Section 412. SCHEDULE 6.7(A) sets forth (i) the names and salaries of each
employee to whom Xenon 2 shall offer employment pursuant to SECTION 6.7 and (ii)
any employment agreements between such employees and NBC or any of its
Subsidiaries.
(ii) Except as provided on SCHEDULE 4.1(O), no plan exists
with respect to the Transferred Employees that could result in the payment to
them of any money or other property or accelerate or provide any other rights or
benefits to them as a result of the transaction contemplated by this Agreement,
whether or not such payment would constitute a parachute payment within the
meaning of Code Section 280G.
20
(p) ABSENCE OF CERTAIN BUSINESS PRACTICES. No officer,
employee or agent of any NBC Multimedia Business, nor any other Person acting on
behalf of any NBC Multimedia Business, has, directly or indirectly, within the
past five years given or agreed to give any gift or similar benefit to any
customer, supplier, governmental employee or other Person or entity who is or
may be in a position to help or hinder any NBC Multimedia Business (or assist
such NBC Multimedia Business in connection with any actual or proposed
transaction) which (x) subjects any party or any of their respective
Subsidiaries, to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (y) if not given in the past, would have had a
Material Adverse Effect or (z) if not continued in the future, would have a
Material Adverse Effect or which might subject any party or any of their
respective Subsidiaries, to suit or penalty in any private or governmental
litigation or proceeding.
(q) ENTIRE BUSINESS. Except as set forth in SCHEDULE 4.1(Q),
the NBC Multimedia Assets and the Videoseeker Assets, including the License
Agreement, will enable Xenon 2 to conduct the NBC Multimedia Businesses after
the Effective Time in substantially the same manner as they are currently being
conducted.
(r) TAX MATTERS. (i) NBC and each of its Subsidiaries have
timely filed (or have had timely filed on their behalf) or will timely file or
cause to be timely filed, all Tax Returns required by applicable law to be filed
by any of them prior to the Effective Time with respect to the NBC Multimedia
Businesses or the assets, employees or businesses of or to be contributed by NBC
or its Affiliates to XXXX.xxx. All such Tax Returns are or will be true,
complete and correct in all material respects. There are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any of such Tax Returns and neither NBC nor any of its Subsidiaries has
requested any extension of time within which to file any material Tax Return
with respect to the NBC Multimedia Businesses or the assets, employees or
businesses of or to be contributed by NBC or its Affiliates to XXXX.xxx, which
return has not yet been filed. There is no pending claim by any authority of a
jurisdiction where NBC or any of its Subsidiaries has not filed Tax Returns that
NBC or such Subsidiary is or may have been subject to taxation by that
jurisdiction with respect to the NBC Multimedia Businesses or the assets,
employees or businesses of or to be contributed by NBC or its Affiliates to
XXXX.xxx. All Taxes required to be withheld by NBC or its Affiliates with
respect to the NBC Multimedia Businesses or XXXX.xxx or their activities,
properties, employees or independent contractors have been withheld and paid
over to the appropriate Tax Authority.
(ii) NBC and each of its Subsidiaries have paid
(or have had paid on their behalf), or where payment is not yet due, have
established (or have had established on their behalf and for their sole benefit
and recourse), or will establish or cause to be established on or before the
Effective Time, an adequate accrual for the payment of, all Taxes due with
respect to any period beginning prior to the Effective Time with respect to the
NBC Multimedia Businesses or the assets, employees or businesses of or to be
contributed by NBC or its Affiliates to XXXX.xxx. No deficiency or adjustment
for any Taxes has been threatened, proposed, asserted or assessed against NBC or
any of its Subsidiaries with respect to the NBC
21
Multimedia Businesses or the assets, employees or businesses of or to be
contributed by NBC or its Affiliates to XXXX.xxx. There are no liens for Taxes
upon the assets of NBC or any of its Subsidiaries, except for liens for current
Taxes not yet due, with respect to the NBC Multimedia Businesses or the assets,
employees or businesses of or to be contributed by NBC or its Affiliates to
XXXX.xxx.
(iii) With respect to the NBC Multimedia
Businesses or the assets, employees or businesses of or to be contributed by NBC
or its Affiliates to CNBC, neither NBC nor any of its Subsidiaries is required
to include in income any adjustment pursuant to Section 481(a) of the Code or
any similar applicable provision by reason of a voluntary change in accounting
method initiated by NBC or any of its Subsidiaries, and neither the Internal
Revenue Service nor any taxing authority has proposed in writing any such
adjustment or change in accounting method. Neither NBC nor any of its
Subsidiaries has received a tax ruling or entered into a closing agreement with
any taxing authority that would have a Material Adverse Effect upon the NBC
Multimedia Businesses or the assets, employees or businesses of or to be
contributed by NBC or its Affiliates to CNBC.
(iv) With respect to the NBC Multimedia Business,
neither NBC nor any of its Subsidiaries has made any payments, is obligated to
make any payments, or is a party to any agreement, in each case, that could
obligate it to make any payments that would not be deductible pursuant to
Section 280G of the Code.
(v) None of the NBC Multimedia Businesses or the
business of XXXX.xxx has a "permanent establishment," as defined in any
applicable Tax treaty or convention of the United States of America, or fixed
place of business in any foreign country. NBC and its Affiliates are in
compliance with the terms and conditions of any applicable tax exemptions,
agreements or orders of any foreign government to which it may be subject or
which it may have claimed with respect to the NBC Multimedia Businesses or the
assets, employees or businesses of or to be contributed by NBC or its Affiliates
to XXXX.xxx, and the transactions contemplated by this Agreement will not have
any adverse effect on such compliance.
(vi) XXXX.xxx shall initially be treated as a
partnership for federal income tax purposes.
(s) ACCREDITED INVESTOR. NBC is an "accredited investor"
within the meaning of Rule 501 of Regulation D under the Securities Act. NBC (i)
is acquiring the Class B Common Stock for investment for its own account and not
with a view to, or for sale in connection with, any distribution thereof, in
violation of the Securities Act; (ii) has had an opportunity to ask questions of
the officers and directors of, and has had access to information concerning,
Xenon 2 and its Subsidiaries; (iii) has knowledge, sophistication and experience
in business and financial matters and risks of such investment; (iv) is able to
bear the economic risk of such investment; and (v) is able to afford a complete
loss of such investment.
(t) YEAR 2000 COMPLIANCE. With respect to the NBC Multimedia
Businesses, NBC has adopted and implemented a commercially reasonable plan to
provide (x) that the
22
change of the year from 1999 to the year 2000 will not have a Material Adverse
Effect and (y) that the impacts of such change on the venders and customers of
the NBC Multimedia Businesses will not have a Material Adverse Effect. In Neon's
reasonable best estimate, no expenditures materially in excess of currently
budgeted items previously disclosed to Xenon 2 will be required in order to
cause the information and business systems of the NBC Multimedia Businesses to
operate properly following the change of the year 1999 to the year 2000. NBC
reasonably expects any material issues related to such change of the year will
be resolved in accordance with the timetable set forth in such plan (and in any
event on a timely basis in order to be resolved before the year 2000). Between
May 9, 1999 and the Effective Time, NBC shall continue to use commercially
reasonable efforts to implement such plan.
(u) NMC. The authorized capital stock of NMC consists of 100
shares of common stock, par value $0.0001 per share, of which 100 shares have
been issued and are outstanding and held by NBC Multimedia as of May 9, 1999.
NMC has not conducted any activities other than in connection with its
organization, the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby. Prior to the Closing Date,
NMC's certificate of incorporation will be amended to provide for an authorized
capital stock sufficient to permit NMC to issue shares of its common stock as
described in SECTION 2.2(C).
(v) NO OTHER LIABILITIES. Other than the NBC Multimedia
Liabilities or Videoseeker Liabilities or as set forth on Schedule 1.1(e), there
are no Liabilities of NBC or its Subsidiaries or GE Investments Sub that will be
transferred or assigned to, or assumed by, NMC in connection with the
transactions set forth in SECTION 2 or as to which NMC or Xenon 2 could be
liable.
IV.2 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO SNAP. NBC
represents and warrants to Xenon 2 as follows:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. SNAP is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the requisite power and authority to own,
lease and operate its properties and to conduct its business as now conducted by
it. SNAP is qualified to do business and is in good standing in all
jurisdictions in which it conducts its business, except where the failure to do
so would not, individually or in the aggregate, taken as a whole, have a
Material Adverse Effect. SNAP has no Subsidiaries other than SNAP International
LLC which has not commenced business operations and has no material assets or
liabilities.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The transfer of
the interests in SNAP pursuant hereto have been duly authorized by all necessary
action on the part of SNAP.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in
SCHEDULE 4.2(C), the execution, delivery and performance by NBC of this
Agreement and the Implementing Agreements to which it is a party and the
consummation by NBC of the transactions
23
contemplated hereby and thereby will not (i) conflict with or result in a breach
of any provision of the SNAP LLC Agreement; (ii) require any consent, approval,
authorization or permit of, or filing with, or notification to, any Governmental
Authority; (iii) require the consent or approval of any Person (other than a
Governmental Authority) or violate or conflict with, or result in a breach of
any provision of, constitute a default (or an event which with notice or lapse
of time or both would become a default) or give to any third party any right of
termination, cancellation, amendment or acceleration under, or result in the
creation of a Lien on any of the assets of SNAP under any of the terms,
conditions or provisions of any contract or license to which SNAP is a party or
by which it or its assets or property are bound; or (iv) violate or conflict
with any order, writ, injunction, decree, statute, rule or regulation applicable
to SNAP; other than any consents, approvals, authorizations and permits the
failure of which to obtain and any violations, conflicts, breaches defaults and
other matters set forth pursuant to clauses (ii), (iii) and (iv) above which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(d) CERTAIN FEES. Neither SNAP nor any of the officers,
directors or employees, thereof has employed any broker or finder or incurred
any other Liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby except that SNAP has
employed of BT Alex. Xxxxx Incorporated whose fees and expenses will be paid in
accordance with SECTION 10.5 of the transactions contemplated by this Agreement
are consummated and otherwise will be paid by SNAP.
(e) EQUITY INTERESTS. As of May 9, 1999, the outstanding
equity interests in SNAP and the holders thereof are set forth on SCHEDULE
4.2(E) hereto. All outstanding SNAP Units are duly authorized, validly issued,
fully paid and non-assessable and are not subject to any preemptive rights
except as set forth in the SNAP LLC Agreement and have been issued in compliance
with federal and state securities laws. There are no declared or accrued unpaid
distributions with respect to any SNAP Units. The limited liability company
interests of SNAP International LLC have been duly authorized and issued, and
are fully paid and non-assessable and are owned by SNAP free and clear of all
Liens. Except for the capital stock of its Subsidiaries, SNAP does not own,
directly or indirectly, more than 10% of the capital stock or other ownership
interest in any Person and to the extent it owns less than 10% of the capital
stock or other ownership interest in any Person, such interests in the aggregate
do not constitute a material part of SNAP's assets. Except as set forth on
SCHEDULE 4.2(E) hereto or as provided under the terms of this Agreement, no SNAP
Units are reserved for issuance, and there are no contracts, agreements,
commitments or arrangements obligating SNAP to (i) offer, sell, issue or grant
any equity interests in, or any options, warrants or rights of any kind to
acquire any equity interests in, or any other securities that are convertible
into or exchangeable for any equity interests in SNAP or (ii) to redeem,
purchase or acquire, or offer to purchase or acquire, any outstanding equity
interests in or any outstanding options, warrants or rights of any kind to
acquire any equity interests in, or any other outstanding securities that are
convertible into or exchangeable for any equity interests in SNAP. At the
Effective Time, after giving effect to the transactions contemplated by the
Xenon 2 Merger Agreement and this Agreement, Xenon 2 will
24
own all of the outstanding SNAP Units, other than SNAP Units issued pursuant to
the exercise of SNAP Options, free and clear of all Liens.
(f) FINANCIAL INFORMATION, LIABILITIES. The unaudited balance
sheet for SNAP as at December 31, 1998 (the "SNAP BALANCE SHEET") and the
related unaudited income statement for the six months ending December 31, 1998,
copies of which are attached hereto as SCHEDULE 4.2(F) present fairly in all
material respects the financial condition and results of operations of SNAP as
at December 31, 1998 and for the period then ended subject to normal year-end
audit adjustments and financial statement footnote disclosure. Except as set
forth on SCHEDULE 4.2(G), except as and to the extent disclosed in the SNAP
Balance Sheet, and except for liabilities incurred in connection with the
transactions contemplated by this Agreement and the Implementing Agreements,
there are no liabilities, whether absolute, accrued, contingent or otherwise, of
SNAP, that would be required to be reflected on, or reserved against, in such
consolidated balance sheet of SNAP, except for (x) liabilities which, singly or
in the aggregate, would not have a Material Adverse Effect and (y) liabilities
incurred subsequent to the date of such balance sheet by SNAP in the ordinary
course of business consistent with past practice.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
on SCHEDULE 4.2(G) since December 31, 1998, SNAP has conducted its business in
all material respects only in the ordinary course consistent with past practice
and there has not been (i) any material adverse change in the assets,
liabilities, business, results of operations or financial condition of SNAP, or
(ii) except in the ordinary course of business consistent with past practice and
except for such matters that would not reasonably be expected to have a Material
Adverse Effect, any damage, destruction, loss, conversion, condemnation or
taking by eminent domain related to any of its material assets. In addition,
except as disclosed on SCHEDULE 4.2(G), from December 31, 1998 to May 9, 1999,
SNAP has not (A) acquired or disposed of any material assets or entered into any
agreement or other arrangement for any such acquisition or disposition or (B)
relinquished, forgiven or canceled any material debts or claims.
(h) TITLE TO PROPERTIES; ABSENCE OF LIENS. Except as disclosed
on SCHEDULE 4.2(H), SNAP has good title to (or, in the case of real estate or
equipment leases, a valid lease to) all of its properties, assets and other
rights, free and clear of all Liens except for Permitted Liens and such assets
will enable Xenon 2 to conduct the business of SNAP after the Effective Time in
substantially the same manner as it is currently being conducted.
(i) PROPERTIES, CONTRACTS, PERMITS AND OTHER DATA. Except as
specified in SCHEDULE 4.2(I) hereto, all rights, licenses, leases,
registrations, applications, contracts, commitments and other agreements of SNAP
or by which SNAP is bound are in full force and effect and are valid and
enforceable in accordance with their respective terms except for such failures
to be in full force and effect and valid and enforceable that would not,
individually or in the aggregate, have a Material Adverse Effect. SNAP is not in
breach or default in the performance of any obligation thereunder and no event
has occurred or has failed to occur whereby any of the other parties thereto
have been or will be released therefrom or will be entitled to refuse to perform
thereunder, the enforcement of which would have, either
25
individually or in the aggregate, a Material Adverse Effect. SNAP has provided
to Xoom complete and accurate copies of SNAP's current annual budget and
operating plan (the "SNAP BUDGET").
(j) LEGAL PROCEEDINGS. Except as described in SCHEDULE 4.2(J),
there is no litigation, proceeding or governmental investigation to which SNAP
is a party pending or, to the best Knowledge of SNAP, threatened against it or
its assets which, either individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect or which, as of May 9, 1999,
seeks to restrain or enjoin the consummation of any of the transactions
contemplated hereby. SNAP is not a party to nor are its assets subject to any
judgment, writ, decree, injunction or order entered by any court or governmental
authority (domestic or foreign) that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
(k) LABOR CONTROVERSIES. Except as set forth on SCHEDULE
4.2(K), (i) there have been no labor strikes, slow-downs, work stoppages,
lock-outs or other material labor controversies or disputes during the past two
years, nor is any such strike, slow-down, work stoppage or other material labor
controversy or dispute pending or, to the best Knowledge of NBC, threatened with
respect to the current or former employees of SNAP, (ii) SNAP is not a party to
any labor contract, collective bargaining agreement, contract, letter of
understanding or, to Neon's Knowledge, any other agreement, formal or informal
with any labor union or organization, nor are any of SNAP's employees
represented by any labor union or organization and (iii) SNAP has not closed any
facility, effectuated any layoffs of employees or implemented any early
retirement, separation or window program within the past two years nor planned
or announced any such action or program for the future.
(l) INTELLECTUAL PROPERTY. SNAP owns or is licensed or
otherwise has the right to use, all Intellectual Property currently used in its
business (the "SNAP INTELLECTUAL PROPERTY"), except as would not, individually
or in the aggregate, have a Material Adverse Effect. SNAP has not infringed upon
or is in conflict with the Intellectual Property of any third party nor has SNAP
received any written notice of any claim that it has infringed upon or is in
conflict with any Intellectual Property of any third party, except as would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth on SCHEDULE 4.2(L), none of the rights of SNAP to the SNAP Intellectual
Property will be impaired in any way by the transactions provided for herein,
and all of the rights of SNAP to the SNAP Intellectual Property will be fully
enforceable by SNAP after the Closing Date to the same extent as such rights
would have been enforceable by SNAP before the Closing, without the consent or
agreement of any other party other than any consents and agreements the failure
of which to obtain, individually or in the aggregate, would not have a Material
Adverse Effect. There have been no claims (whether private or governmental)
against SNAP asserting the invalidity or unenforceability of its ownership,
license or other right to use any of the registered SNAP Intellectual Property.
(m) GOVERNMENT LICENSES, PERMITS, ETC. Except as set forth on
SCHEDULE 4.2(M), SNAP has all licenses, permits, consents, approvals,
authorizations, qualifications and
26
orders of Governmental Authorities required for the conduct of its business as
presently conducted, except where failure would not, individually or in the
aggregate, have a Material Adverse Effect.
(n) CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. SNAP has complied with all applicable laws,
ordinances, regulations or orders or other requirements of any Governmental
Authority including, without limitation, all rules, regulations and
administrative orders relating to anti-competitive practices, discrimination,
employment, health and safety, except where the failure to be in such compliance
would not have, either individually or in the aggregate, a Material Adverse
Effect.
(o) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
4.2(O) and except for matters that, individually or in the aggregate, would not
have a Material Adverse Effect, (i) SNAP complies and has complied with all
applicable Environmental Laws, and possesses and complies with and has possessed
and complied with all Environmental Permits; (ii) there are and have been no
Materials of Environmental Concern, or other conditions, at any property owned
or leased by SNAP that could give rise to any liability under any Environmental
Law or result in costs arising out of any Environmental Law; (iii) no judicial,
administrative, or arbitral proceeding (including any notice of violation or
alleged violation) under any Environmental Law to which SNAP is, or to the
Knowledge of SNAP will be, named as a party is pending or, to the Knowledge of
SNAP, threatened, nor is SNAP the subject of any investigation in connection
with any such proceeding or potential proceeding; (iv) there are no past,
present, or anticipated future events, conditions, circumstances, practices,
plans, or legal requirements that could be expected to prevent, or materially
increase the burden on SNAP of complying with applicable Environmental Laws or
of obtaining, renewing, or complying with all Environmental Permits required
under such laws; and (v) SNAP has provided to the other parties true and
complete copies of all Environmental Reports relating to it in the possession or
control of such party.
(p) EMPLOYEE BENEFIT MATTERS. (i) SCHEDULE 4.2(P) contains a
true and complete list of each "employee benefit plan" (within the meaning of
section 3(3) of ERISA, and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of SNAP or its Subsidiaries has any
present or future right to benefits and under which SNAP or its Subsidiaries has
any present or future liability. All such plans, agreements, programs, policies
and arrangements shall be collectively referred to as the "SNAP PLANS".
(ii) With respect to each SNAP Plan which is maintained solely
by SNAP (the "PORTAL LEVEL PLANS"), SNAP has made available to NBC a current,
accurate and complete copy (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable: (A) any related trust
agreement or other funding instrument; (B) the most recent
27
determination letter, if applicable; (C) any summary plan description and other
written communications (or a description of any oral communications) by SNAP or
its Subsidiaries to their employees concerning the extent of the benefits
provided under a SNAP Plan; and (D) for the most recent two years (I) the Form
5500 and attached schedules and (II) audited financial statements.
(iii) (A) Each SNAP Plan has been established and administered
in accordance with its terms, and in compliance with the applicable provisions
of ERISA, the Code and other applicable laws, rules and regulations; (B) each
SNAP Plan which is intended to be qualified within the meaning of Code section
401(a) is so qualified and has received a favorable determination letter as to
its qualification (or is established using a prototype plan form which has
received such a letter), and nothing has occurred, whether by action or failure
to act, that could reasonably be expected to cause the loss of such
qualification; (C) for each SNAP Plan with respect to which a Form 5500 has been
filed, no material change has occurred with respect to the matters covered by
the most recent Form since the date thereof; (D) no non-exempt "prohibited
transaction" (as such term is defined in ERISA section 406 and Code section
4975) with respect to any SNAP Plan; and (E) no SNAP Plan provides retiree
welfare benefits and neither SNAP nor its Subsidiaries have any obligations to
provide any retiree welfare benefits except as provided under Section 4980B of
the Code.
(iv) No SNAP Plan is subject to Title IV of ERISA (including a
multiemployer plan within the meaning of Section 3(37) of ERISA), no SNAP Plan
is a multiple employer plan; and no SNAP Plan is subject to the minimum funding
requirements of ERISA Section 302 or Code Section 412.
(v) Neither SNAP nor any of its Subsidiaries nor any member of
the Controlled group of which it is a member has (A) engaged in, or is a
successor or parent corporation to an entity that has engaged in, a transaction
described in Sections 4069 or 4212(c) of ERISA or (B) incurred, or could
reasonably be expected to incur, any liability under (I) Title IV of ERISA
arising in connection with the termination of, or a complete or partial
withdrawal from, any plan covered or previously covered by Title IV of ERISA or
(II) Section 4971 of the Code that in either case could become a liability of
the SNAP or any Subsidiary or NMC after the Closing Date. The assets of SNAP and
all of its Subsidiaries are not now, nor will they after the passage of time be,
subject to any lien imposed under Code Section 412(n) by reason of a failure of
any of the SNAP or any Subsidiary or any member of the Controlled Group of which
it is a member to make timely installments or other payments required under Code
Section 412.
(vi) With respect to any SNAP Plan, (A) no actions, suits or
claims (other than routine claims for benefits in the ordinary course) are
pending or, to the Knowledge of SNAP or its Subsidiaries, threatened and (B) no
facts or circumstances exist that could reasonably be expected to give rise to
any such actions, suits or claims.
(vii) Except as provided on SCHEDULE 4.2(P), no SNAP Plan
exists that could result in the payment to any present or former employee of
SNAP or its Subsidiaries of any
28
money or other property or accelerate or provide any other rights or benefits to
any present or former employee of SNAP or its Subsidiaries as a result of the
transaction contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code Section 280G.
(q) ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither SNAP, nor
any officer, employee or agent of SNAP, nor any other Person acting on behalf of
SNAP, has, directly or indirectly, within the past five years given or agreed to
give any gift or similar benefit to any customer, supplier, governmental
employee or other Person or entity who is or may be in a position to help or
hinder SNAP (or assist SNAP in connection with any actual or proposed
transaction) which (x) subjects any party or NMC or any of their respective
Affiliates, to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (y) if not given in the past, could have had a
Material Adverse Effect or (z) if not continued in the future, could have a
Material Adverse Effect or which might subject any party or NMC or any of their
respective Affiliates to suit or penalty in any private or governmental
litigation or proceeding.
(r) TAX MATTERS. Except as set forth on SCHEDULE 4.2(R), (i)
SNAP and its Subsidiaries have timely filed (or have had timely filed on their
behalf) or will timely file or cause to be timely filed, all Tax Returns
required by applicable law to be filed by SNAP and its Subsidiaries prior to the
Effective Time. All such Tax Returns are or will be true, complete and correct
in all material respects. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any of such Tax
Returns and SNAP and its Subsidiaries has not requested any extension of time
within which to file any material Tax Return, which return has not yet been
filed. There is no pending claim by any Tax Authority of a jurisdiction where
SNAP or any of its Subsidiaries have not filed Tax Returns that SNAP are any of
its Subsidiaries are or may have been subject to taxation by that jurisdiction.
All Taxes required to be withheld by SNAP or its Affiliates with respect to
their activities, properties, employees or independent contractors have been
withheld and paid over to the appropriate Tax Authority.
(ii) SNAP and its Subsidiaries have paid (or have had paid on
their behalf), or where payment is not yet due, have established (or have had
established on their behalf and for their sole benefit and recourse), or will
establish or cause to be established on or before the Effective Time, an
adequate accrual for the payment of, all Taxes due with respect to any period
beginning prior to the Effective Time. No deficiency or adjustment for any Taxes
has been threatened, proposed, asserted or assessed against SNAP or its
Subsidiaries. There are no liens for Taxes upon the assets of SNAP or its
Subsidiaries, except for liens for current Taxes not yet due.
(iii) SNAP and its Subsidiaries are not required to include in
income any adjustment pursuant to Section 481(a) of the Code or any similar
applicable provision by reason of a voluntary change in accounting method
initiated by SNAP or its Subsidiaries, and neither the Internal Revenue Service
nor any taxing authority has proposed in writing any such adjustment or change
in accounting method. SNAP and its Subsidiaries have not received a tax
29
ruling or entered into a closing agreement with any taxing authority that would
have a Material Adverse Effect on SNAP or its Subsidiaries.
(iv) SNAP and its Subsidiaries have not made any payments, are
not obligated to make any payments, and are not a party to any agreement that
could obligate it to make any payments that would not be deductible pursuant to
Section 280G of the Code.
(v) SNAP has been and currently is taxable as a partnership
for federal income tax purposes and in all jurisdictions in which it is subject
to Taxes or files Tax Returns. Each of SNAP's Subsidiaries has been and
currently is (A) wholly owned by SNAP and (B) an entity disregarded from its
owner pursuant to Section 301.7701-2 of the Treasury Regulations. Neither SNAP
nor any Subsidiary is a party to any safe harbor lease within the meaning of
Section 168(f)(8) of the Code, as in effect prior to amendment by the Tax Equity
and Fiscal Responsibility Act of 1982. SNAP and its Subsidiaries are not a party
to any joint venture, partnership, or other agreement, contract, or arrangement
(either in writing or verbally, formally or informally) which could be treated
as partnership for federal income tax purposes.
(vi) Neither SNAP nor any of its Subsidiaries has a "permanent
establishment," as defined in any applicable Tax treaty or convention of the
United States of America, or fixed place of business in any foreign country.
SNAP and its Subsidiaries are in compliance with the terms and conditions of any
applicable tax exemptions, agreements or orders of any foreign government to
which it may be subject or which it may have claimed, and the transactions
contemplated by this Agreement will not have any adverse effect on such
compliance.
(vii) Neither SNAP nor any of its Subsidiaries is or has been
bound by any tax sharing or tax allocation agreement, and it has no contractual
obligation to indemnify any other person with respect to Taxes.
(s) YEAR 2000 COMPLIANCE. SNAP has adopted and implemented a
commercially reasonable plan to provide (x) that the change of the year from
1999 to the year 2000 will not have a Material Adverse Effect and (y) that the
impacts of such change on the venders and customers of SNAP will not have a
Material Adverse Effect. In SNAP's reasonable best estimate, no expenditures
materially in excess of currently budgeted items previously disclosed to Xenon 2
will be required in order to cause the information and business systems of SNAP
to operate properly following the change of the year 1999 to the year 2000. SNAP
reasonably expects any material issues related to such change of the year will
be resolved in accordance with the timetable set forth in such plan (and in any
event on a timely basis in order to be resolved before the year 2000). Between
the date of this Agreement and the Effective Time, SNAP shall continue to use
commercially reasonable efforts to implement such plan.
(t) OPTIONS. Except for the SNAP 1998 LLC Option Plan, SNAP
has never adopted or maintained any option plan or other plan providing for
equity compensation of any Person. As of May 9, 1999, SNAP has reserved
1,604,938 units for issuance pursuant to the SNAP 1998 LLC Option Plan ("SNAP
OPTIONS"), of which 1,432,970 have been issued as of
30
May 9, 1999, all of which units remain subject to SNAP Options unexercised as of
May 9, 1999. Except as set forth in SCHEDULE 4.2(T), none of the SNAP Options
will be accelerated in any way by the transactions contemplated by this
Agreement. SNAP has made available to NBC accurate and complete copies of all
option plans pursuant to which SNAP has granted options and the applicable
vesting schedule for each such option. All units subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and non-assessable. Except as set forth in SCHEDULE
4.2(T), there are no commitments or agreements of any character to which SNAP is
bound obligating SNAP to accelerate the vesting of any SNAP Options as a result
of this Agreement. SCHEDULE 4.2(E) lists each outstanding SNAP Option and
identifies with respect to each such SNAP Option; its exercise price; its grant
date; its vesting schedule; and what portion of such SNAP Option remains
outstanding as of May 9, 1999. NBC shall prepare and deliver to Xenon 2 and Xoom
an updated version of SCHEDULE 4.2(E) prior to the Effective Time as of a date
no earlier than 5 days prior to the Effective Time.
4.3 REPRESENTATIONS AND WARRANTIES OF XOOM AND XENON 2. Xoom and Xenon
2 represent and warrant to NBC and NMC as follows:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. Xoom, Xenon 2
and each of their respective Subsidiaries is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, and has
the requisite power and authority to own, lease and operate its properties and
to conduct its business as now conducted by it. Xoom, Xenon 2 and each of their
respective Subsidiaries party to an Implementing Agreement has all requisite
power and authority to enter into this Agreement, the Xenon 2 Merger Agreement,
the Voting Agreement, the Option Agreement and the Implementing Agreements to
which it is a party and to perform its obligations hereunder and thereunder.
Xoom, Xenon 2 and each of their respective Subsidiaries is qualified to do
business and is in good standing in all jurisdictions in which it conducts its
business, except where the failure to do so would not, individually or in the
aggregate, taken as a whole, have a Material Adverse Effect.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution,
delivery and performance by Xoom, Xenon 2 and each of their respective
Subsidiaries of the Existing Merger Agreement, this Agreement, the Xenon 2
Merger Agreement, the Voting Agreement, the Option Agreement and the
Implementing Agreements to which Xoom, Xenon 2 or their respective Subsidiaries
is a party and the consummation by Xoom, Xenon 2 and each of their respective
Subsidiaries of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Xoom, Xenon 2 and
each of their respective Subsidiaries, subject to obtaining, in the case of the
Xenon 2 Merger Agreement, the Stockholder Approval (as defined therein), and, in
the case of the Existing Merger Agreement and this Agreement, the affirmative
vote of the holders of a majority of the outstanding shares of common stock of
Xenon 2 (the "XENON 2 STOCKHOLDER APPROVAL"). The Board of Directors of Xoom, by
resolutions duly adopted by unanimous vote with one abstention at a meeting duly
called and held and not subsequently rescinded or modified in any way, has duly
determined that each of the Existing Merger Agreement and this Agreement is
advisable for Xoom and its stockholders,
31
approved each of the Existing Merger Agreement and this Agreement and the Merger
and recommended that the stockholders of Xoom adopt the Xenon 2 Merger Agreement
and approve the transactions contemplated thereby and vote in favor of Xoom, as
sole stockholder of Xenon 2, adopting the NMC Agreement at the Xenon 2
Stockholder Meeting. Each of the Existing Merger Agreement, this Agreement, the
Xenon 2 Merger Agreement, the Option Agreement and the Voting Agreement has
been, and each of the other Implementing Agreements to which Xoom, Xenon 2 or
any of their respective Subsidiaries is a party will on the Closing Date be,
duly executed and delivered by Xoom, Xenon 2 and each of their respective
Subsidiaries and constitutes or, in the case of the other Implementing
Agreements, upon execution thereof will constitute, a valid and legally binding
obligation of Xoom, Xenon 2 and each of their respective Subsidiaries,
enforceable against each in accordance with their respective terms.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in
SCHEDULE 4.3(C), the execution, delivery and performance of this Agreement, the
Xenon 2 Merger Agreement, the Voting Agreement, the Option Agreement and the
Implementing Agreements by Xoom, Xenon 2 and each of their respective
Subsidiaries and the consummation by such party of the transactions contemplated
hereby and thereby will not (i) conflict with or result in a breach of any
provision of the certificate of incorporation or bylaws or other governing
documents of Xoom, Xenon 2 or their respective Subsidiaries; (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority; (iii) require the consent or approval of any
Person (other than a Governmental Authority) or violate or conflict with, or
result in a breach of any provision of, constitute a default (or an event which
with notice or lapse of time or both would become a default) or give to any
third party any right of termination, cancellation, amendment or acceleration
under, or result in the creation of a Lien on any of the assets of Xoom, Xenon 2
or any of their respective Subsidiaries under, any of the terms, conditions or
provisions of any contract or license to which Xoom, Xenon 2 or any of their
respective Subsidiaries is a party or by which it or its assets or property are
bound; or (iv) violate or conflict with any order, writ, injunction, decree,
statute, rule or regulation applicable to Xoom, Xenon 2 or any of their
respective Subsidiaries; other than any consents, approvals, authorizations and
permits the failure of which to obtain and any violations, conflicts, breaches
defaults and other matters set forth pursuant to clauses (ii), (iii) and (iv)
above which, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
(d) CERTAIN FEES. None of Xoom, Xenon 2 or any of their
respective Subsidiaries nor the officers, directors or employees thereof have
employed any broker or finder or incurred any other Liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated hereby; except that Xoom has employed Bear, Xxxxxxx & Co., Inc. and
Xxxxxxxxx & Xxxxx, LLC whose fees and expenses will be paid in accordance with
SECTION 10.5 if the transactions contemplated by this Agreement are consummated
and otherwise will be paid by Xoom. Xoom has provided NBC a copy of the
engagement letter entered into with Xxxxxxxxx & Xxxxx, LLC related to the
transactions contemplated hereby.
(e) OPINION OF FINANCIAL ADVISOR. Xoom has received the
opinion of each of Bear, Xxxxxxx & Co. Inc. and Xxxxxxxxx & Xxxxx, LLC, in each
case as of May 9, 1999, with
32
respect to the fairness of the transactions contemplated by the Existing Merger
Agreement from a financial point of view which fairness opinion shall remain in
effect upon entering into this Agreement.
(f) CAPITAL STOCK. (i) As of May 9, 1999, the authorized
capital stock of Xoom consists of 40,000,000 shares of Xoom Stock and 5,000,000
shares of Xoom Preferred Stock, of which 17,162,056 shares of Xoom Stock and no
shares of Xoom Preferred Stock have been issued and are outstanding as of May 9,
1999. All outstanding shares of Xoom Stock are duly authorized, validly issued,
fully paid and non-assessable and not subject to preemptive rights created by
statute, the certificate of incorporation or bylaws of Xoom or any agreement to
which Xoom is a party or by which it is bound and have been issued in compliance
with federal and state securities laws. There are no declared or accrued unpaid
dividends with respect to any shares of Xoom Stock. All of the shares of capital
stock of each of the Subsidiaries of Xoom are duly authorized and issued, fully
paid and nonassessable and are owned by Xoom or another Subsidiary of Xoom free
and clear of all Liens. Except for the capital stock of its Subsidiaries, Xoom
does not own, directly or indirectly, any capital stock or other ownership
interest in any Person.
(ii) As of May 9, 1999, the authorized capital stock of Xenon
2 consists of 100 shares of common stock, par value $0.0001 per share, of which
100 shares have been issued and are outstanding as of May 9, 1999. Prior to the
Closing Date, Xenon 2's certificate of incorporation will be amended to provide
for an authorized capital stock sufficient to permit Xenon 2 to issue all of the
Class A Common Stock and Class B Common Stock to be issued by Xenon 2 pursuant
to this Agreement and the Xenon 2 Merger Agreement. All capital stock issued by
Xenon 2 pursuant to the Xenon 2 Merger Agreement and this Agreement will be duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights created by statute, the certificate of incorporation or bylaws
of Xenon 2 or any agreement to which Xenon 2 is a party or by which it is bound
and issued in compliance with federal and state securities laws. All of the
shares of capital stock of each of the Subsidiaries of Xenon 2 are duly
authorized and issued, fully paid and nonassessable and are owned by Xenon 2
free and clear of all Liens. Except for the capital stock of its Subsidiaries,
Xenon 2 does not own, directly or indirectly, any capital stock or other
ownership interest in any Person.
(g) STOCK OPTIONS. Except for the Xoom 1998 Employee Stock
Purchase Plan (the "XOOM ESPP"), the Xoom Option Plan pursuant to which the Xoom
Plan Options were issued, and the Xoom Non-Plan Options (together with the Xoom
Plan Options, the "XOOM OPTIONS"), none of Xoom, Xenon 2 or any of their
respective Subsidiaries has ever adopted or maintained any stock option plan or
other plan providing for equity compensation of any person. As of May 9, 1999,
Xoom has reserved 3,535,224 shares of Xoom Stock for issuance pursuant to the
Xoom ESPP, Xoom Plan Options and Xoom Non-Plan Options, of which 3,336,157 have
been issued as of May 9, 1999, of which 2,043,556 shares remain subject to Xoom
Plan Options unexercised as of May 9, 1999 and 981,212 shares remain subject to
Xoom Non-Plan Options unexercised as of May 9, 1999. Except pursuant to SECTION
6.8 and as reflected on SCHEDULE 4.3(G) none of the Xoom Options will be
accelerated in any way by the transactions
33
contemplated by this Agreement. Xoom, Xenon 2 and their respective Subsidiaries
have made available to NMC accurate and complete copies of all stock option
plans pursuant to which Xoom, Xenon 2 and their respective Subsidiaries have
granted stock options that are currently outstanding, the form of all stock
option agreements evidencing such options and the applicable vesting schedule
for each such option. All shares of Xoom Stock and Class A Common Stock subject
to issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and non-assessable. Except as set forth in SCHEDULE
4.3(G) or as contemplated by this Agreement, there are no commitments or
agreements of any character to which Xoom, Xenon 2 or any of their respective
Subsidiaries are bound obligating Xoom, Xenon 2 or any of their respective
Subsidiaries to accelerate the vesting of any Xoom Option as a result of this
Agreement. SCHEDULE 4.3(G) lists each outstanding Xoom Option and identifies
with respect to each such Xoom Option whether it is a Xoom Plan Option or a Xoom
Non-Plan Option; its exercise price; its grant date; its vesting schedule; and
what portion of such Xoom Option remains outstanding as of May 9, 1999. Xoom,
Xenon 2 and their respective Subsidiaries shall prepare and deliver to NMC an
updated version of SCHEDULE 4.3(G) prior to the Effective Time as of a date no
earlier than 5 days prior to the Effective Time.
(h) OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set
forth in SECTION 4.3(F) and SECTION 4.3(G) and on SCHEDULE 4.3(H), there are no
equity securities, partnership interests or similar ownership interests of any
class of any equity security of Xoom, Xenon 2 or any of their respective
Subsidiaries, or any securities exchangeable or convertible into or exercisable
for such equity securities, partnership interests or similar ownership
interests, issued, reserved for issuance or outstanding. Except as set forth in
SCHEDULE 4.3(H) or as set forth in SECTION 4.3(G) hereof, there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Xoom, Xenon 2 or any of
their respective Subsidiaries is a party or by which Xoom, Xenon 2 or any of
their respective Subsidiaries is bound obligating Xoom, Xenon 2 or any of their
respective Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition of, any shares of capital stock,
partnership interests or similar ownership interests of Xoom, Xenon 2 or any of
their respective Subsidiaries or obligating Xoom, Xenon 2 or any of their
respective Subsidiaries to grant, extend, accelerate the vesting of or enter
into any such subscription, option, warrant, equity security, call, right,
commitment or agreement. Except as contemplated by this Agreement, there are no
registration rights and there is no voting trust, proxy, stockholder rights
plan, antitakeover plan or other agreement or understanding to which Xoom, Xenon
2 or any of their respective Subsidiaries is a party or by which they are bound
with respect to any equity security, partnership interest or similar ownership
interest of any class of any equity security of Xoom, Xenon 2 or any of their
respective Subsidiaries.
(i) SEC FILINGS, FINANCIAL INFORMATION, LIABILITIES. Xoom has
filed and made publicly available a true and complete copy of each report,
schedule, registration statement and definitive proxy statement required to be
filed with the SEC since December 9, 1998 (the "SEC
34
DOCUMENTS"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, applicable to such SEC Documents. None of the SEC
Documents when filed contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of Xoom included in the
SEC Documents comply as to form in all material respect with the applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with GAAP during the
period involved (except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Form 10-Q of the SEC, or for normal
year-end adjustments) and fairly present in all material respects the
consolidated financial position of Xoom and its consolidated Subsidiaries as at
the dates thereof and the consolidated results of their operations and cash for
the periods then ended. Except as set forth in the SEC Documents (including any
item accounted for in the financial statements contained in the SEC Documents or
set forth in the notes thereto) as of December 31, 1998, neither Xoom nor any of
its Subsidiaries had, and since such date neither Xoom or any of its
Subsidiaries has incurred, any claims, liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually or in
the aggregate, would have a Material Adverse Effect on Xoom (other than claims,
liabilities or obligations contemplated by this Agreement or expressly permitted
to be incurred pursuant to this Agreement). In addition, since December 31,
1998, there has not been any declaration, setting aside or payment of a dividend
or other distribution with respect to Xoom Stock or any material change in
accounting methods or practices by Xoom or any of its Subsidiaries.
(j) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
on SCHEDULE 4.3(J) since December 31, 1998, Xoom, Xenon 2 and each of their
respective Subsidiaries have conducted their businesses in all material respects
only in the ordinary course, consistent with past practice and there has not
been prior to May 9, 1999, (x) any material adverse change in the assets,
liabilities, business, results of operations or financial condition of Xoom,
Xenon 2, or any of their respective Subsidiaries or (y) except in the ordinary
course of business consistent with past practice and except for such matters
that would not reasonably be expected to have a Material Adverse Effect, any
damage, destruction, loss, conversion, condemnation or taking by eminent domain
related to any material asset of Xoom, Xenon 2 and any of their respective
Subsidiaries, taken as a whole. In addition, except as disclosed on SCHEDULE
4.3(J), from December 31, 1998 to May 9, 1999, none of Xoom, Xenon 2 or any of
their respective Subsidiaries has (A) acquired or disposed of any material
assets or entered into any agreement or other arrangement for any such
acquisition or disposition or (B) relinquished, forgiven or canceled any
material debts or claims.
(k) PROPERTIES, CONTRACTS, PERMITS AND OTHER DATA. Except as
specified in SCHEDULE 4.3(K) hereto, all rights, licenses, leases,
registrations, applications, contracts, commitments and other agreements of
Xoom, Xenon 2 and their respective Subsidiaries are in full force and effect and
are valid and enforceable in accordance with their respective terms except for
such failures to be in full force and effect and valid and enforceable that
would not,
35
individually or in the aggregate, have a Material Adverse Effect. None of Xoom,
Xenon 2 or any of their respective Subsidiaries is in breach or default in the
performance of any obligation thereunder and no event has occurred or has failed
to occur whereby any of the other parties thereto have been or will be released
therefrom or will be entitled to refuse to perform thereunder, the enforcement
of which would have, either individually or in the aggregate, a Material Adverse
Effect. Xoom has provided to NBC complete and accurate copies of its current
annual budget and operating plan (the "XOOM BUDGET").
(l) LEGAL PROCEEDINGS. Except as described in SCHEDULE 4.3(L),
there is no litigation, proceeding or governmental investigation to which Xoom,
Xenon 2 or their respective Subsidiaries is a party pending or, to the best
Knowledge of Xoom, Xenon 2 and their respective Subsidiaries, threatened against
Xoom, Xenon 2 or any of their respective Subsidiaries which, either individually
or in the aggregate, would reasonably be expected to result in a Material
Adverse Effect or which, as of May 9, 1999, seeks to restrain or enjoin the
consummation of any of the transactions contemplated hereby. None of Xoom, Xenon
2, or any of their respective Subsidiaries is a party to, nor are any of their
respective assets subject to, any judgment, writ, decree, injunction or order
entered by any court or governmental authority (domestic or foreign) that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(m) LABOR CONTROVERSIES. Except as set forth on SCHEDULE
4.3(M), (i) there have been no labor strikes, slow-downs, work stoppages,
lock-outs or other material labor controversies or disputes during the past two
years, nor is any such strike, slow-down, work stoppage or other material labor
controversy or dispute pending or, to the best Knowledge of such party,
threatened with respect to the current or former employees of Xoom, Xenon 2 and
their respective Subsidiaries, (ii) none of Xoom, Xenon 2 or any of their
respective Subsidiaries is a party to any labor contract, collective bargaining
agreement, contract, letter of understanding or, to such party's Knowledge, any
other agreement, formal or informal with any labor union or organization, nor
are any of Xoom's, Xoom 2's or any of their respective Subsidiaries' employees
represented by any labor union or organization nor have there been any labor
union organizing activities at any Xoom, Xenon 2 or any of their respective
Subsidiaries' facilities within the last three years and (iii) none of Xoom,
Xenon 2 or any of their respective Subsidiaries has closed any facility,
effectuated any layoffs of employees or implemented any early retirement,
separation or window program within the past two years nor has Xoom, Xenon 2 or
any of their respective Subsidiaries planned or announced any such action or
program for the future.
(n) INTELLECTUAL PROPERTY. Xoom, Xenon 2 and their respective
Subsidiaries own or are licensed or otherwise have the right to use, all
Intellectual Property currently used by Xoom, Xenon 2 and each of their
respective Subsidiaries (the "XOOM INTELLECTUAL PROPERTY"), except as would not,
individually or in the aggregate, have a Material Adverse Effect. None of Xoom,
Xenon 2 or any of their respective Subsidiaries has infringed upon or is in
conflict with the Intellectual Property of any third party nor has Xoom, Xenon 2
or any of their
36
respective Subsidiaries received any written notice of any claim that Xoom,
Xenon 2 or any of their respective Subsidiaries has infringed upon or is in
conflict with any Intellectual Property of any third party, except as would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth on SCHEDULE 4.3(N), none of the rights of Xoom, Xenon 2 or their
respective Subsidiaries to the Xoom Intellectual Property will be impaired in
any way by the transactions provided for herein, and all of the rights of Xoom,
Xenon 2 and their respective Subsidiaries to the Xoom Intellectual Property will
be fully enforceable by Xenon 2 after the Closing Date to the same extent as
such rights would have been enforceable by Xoom, Xenon 2 and their respective
Subsidiaries before the Closing, without the consent or agreement of any other
party other than any consents and agreements the failure of which to obtain,
individually or in the aggregate, would not have a Material Adverse Effect.
There have been no claims (whether private or governmental) against Xoom, Xenon
2 or their respective Subsidiaries asserting the invalidity or unenforceability
of its ownership, license or other right to use to any of the registered Xoom
Intellectual Property.
(o) GOVERNMENT LICENSES, PERMITS, ETC. Except as set forth on
SCHEDULE 4.3(O), Xoom, Xenon 2 and their respective Subsidiaries have all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Authorities required for the conduct of its Business as
presently conducted, except where failure would not, individually or in the
aggregate, have a Material Adverse Effect.
(p) CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. Xoom, Xenon 2 and their respective Subsidiaries have
complied with all applicable laws, ordinances, regulations or orders or other
requirements of any Governmental Authority, including, without limitation, all
rules, regulations and administrative orders relating to anti-competitive
practices, discrimination, employment, health and safety, except where the
failure to be in such compliance would not have, either individually or in the
aggregate, a Material Adverse Effect.
(q) EMPLOYEE BENEFIT MATTERS. (i) SCHEDULE 4.3(Q)(I) contains
a true and complete list of each "employee benefit plan" (within the meaning of
section 3(3) of ERISA), and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of Xoom, Xenon 2 or their respective
Subsidiaries has any present or future right to benefits and under which Xoom,
Xenon 2 or their respective Subsidiaries has any present or future liability.
All such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "XOOM PLANS".
(ii) With respect to each Xoom Plan, Xoom, Xenon 2 and their
respective Subsidiaries have made available to NBC a current, accurate and
complete copy (or, to the extent no such copy exists, an accurate description)
thereof and, to the extent applicable: (A) any related
37
trust agreement or other funding instrument; (B) the most recent determination
letter, if applicable; (C) any summary plan description and other written
communications (or a description of any oral communications) by Xoom, Xenon 2 or
their respective Subsidiaries to their employees concerning the extent of the
benefits provided under a Xoom Plan; and (D) for the most recent two years (I)
the Form 5500 and attached schedules and (II) audited financial statements.
(iii) (A) Except as set forth on SCHEDULE 4.3(Q)(III), each
Xoom Plan has been established and administered in accordance with its terms,
and in compliance with the applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations; (B) each Xoom Plan which is intended to
be qualified within the meaning of Code section 401(a) is so qualified and has
received a favorable determination letter as to its qualification (or
established using a prototype plan form which has received such a letter), and
nothing has occurred, whether by action or failure to act, that could reasonably
be expected to cause the loss of such qualification; (C) for each Xoom Plan with
respect to which a Form 5500 has been filed, no material change has occurred
with respect to the matters covered by the most recent Form since the date
thereof; (D) no nonexempt "prohibited transaction" (as such term is defined in
ERISA section 406 and Code section 4975) with respect to Xoom Plans; and (E) no
Xoom Plan provides retiree welfare benefits and none of Xoom, Xenon 2 or any of
their respective Subsidiaries have any obligations to provide any retiree
welfare benefits except as provided under Section 4980B of the Code.
(iv) No Xoom Plan is subject to Title IV of ERISA (including a
multiemployer plan within the meaning of Section 3(37) of ERISA), no Xoom Plan
is a multiple employer plan; and no Xoom Plan is subject to the minimum funding
requirements of ERISA Section 302 or Code Section 412.
(v) None of Xoom, Xenon 2 or any of their respective
Subsidiaries nor any Member of the Controlled Group of which it is a member has
(A) engaged in, or is a successor or parent corporation to an entity that has
engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA or (B)
incurred, or could reasonably be expected to incur, any liability under (I)
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA or (II) Section 4971 of the Code that in either case could become a
liability of Xenon 2, Xoom or NMC or any of their respective Subsidiaries after
the Closing Date. The assets of Xoom, Xenon 2 and all of their respective
Subsidiaries are not now, nor will they after the passage of time be, subject to
any lien imposed under Code Section 412(n) by reason of a failure of any of any
Subsidiary or any Member of the Controlled Group of which it is a member to make
timely installments or other payments required under Code Section 412.
(vi) With respect to any Xoom Plan, (A) no actions, suits or
claims (other than routine claims for benefits in the ordinary course) are
pending or, to the Knowledge of Xoom, Xenon 2 or their respective Subsidiaries,
threatened and (B) no facts or circumstances exist that could reasonably be
expected to give rise to any such actions, suits or claims.
38
(vii) Except as provided on SCHEDULE 4.3(Q)(VII), no Xoom Plan
exists that could result in the payment to any present or former employee of
Xoom, Xenon 2 or their respective Subsidiaries of any money or other property or
accelerate or provide any other rights or benefits to any present or former
employee of Xoom, Xenon 2 or their respective Subsidiaries as a result of the
transaction contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code Section 280G.
(r) ABSENCE OF CERTAIN BUSINESS PRACTICES. None of Xoom, Xenon
2 or any of their respective Subsidiaries, nor any officer, employee or agent
thereof, nor any other Person acting on behalf of such Persons, has, directly or
indirectly, within the past five years given or agreed to give any gift or
similar benefit to any customer, supplier, governmental employee or other Person
or entity who is or may be in a position to help or hinder Xoom, Xenon 2 or
their respective Subsidiaries (or assist Xoom, Xenon 2 or their respective
Subsidiaries in connection with any actual or proposed transaction) which (x)
subjects any party or Xenon 2 or any of their respective Subsidiaries, to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, (y) if not given in the past, could have had a Material Adverse
Effect or (z) if not continued in the future, could have a Material Adverse
Effect or which might subject any party or Xenon 2 or any of their respective
Subsidiaries to suit or penalty in any private or governmental litigation or
proceeding.
(s) TAX MATTERS. Except as set forth on SCHEDULE 4.3(S), (i)
Xoom, Xenon 2 and each of their respective Subsidiaries have timely filed (or
have had timely filed on their behalf) or will timely file or cause to be timely
filed, all Tax Returns required by applicable law to be filed by any of them
prior to the Effective Time. All such Tax Returns are or will be true, complete
and correct in all material respects. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any of such
Tax Returns and none of Xoom, Xenon 2 nor any of their respective Subsidiaries
has requested any extension of time within which to file any material Tax
Return, which return has not yet been filed. There is no pending claim by any
Tax Authority of a jurisdiction where Xoom, Xenon 2 or any of their respective
Subsidiaries has not filed Tax Returns that Xoom, Xenon 2 or such Subsidiary is
or may have been subject to taxation by that jurisdiction. All Taxes required to
be withheld by Xoom, Xenon 2 or their respective Affiliates with respect to
their activities, properties, employees or independent contractors have been
withheld and paid over to the appropriate Tax Authority.
(ii) Xoom, Xenon 2 and each of their respective Subsidiaries
have paid (or have had paid on their behalf), or where payment is not yet due,
have established (or have had established on their behalf and for their sole
benefit and recourse), or will establish or cause to be established on or before
the Effective Time, an adequate accrual for the payment of, all Taxes due with
respect to any period beginning prior to the Effective Time. No deficiency or
adjustment for any Taxes has been threatened, proposed, asserted or assessed
against Xoom, Xenon 2 or any of their respective Subsidiaries. There are no
liens for Taxes upon the assets of Xoom, Xenon 2 or any of their respective
Subsidiaries, except for liens for current Taxes not yet due.
39
(iii) None of Xoom, Xenon 2 or any of their respective
Subsidiaries is required to include in income any adjustment pursuant to Section
481(a) of the Code or any similar applicable provision by reason of a voluntary
change in accounting method initiated by Xoom, Xenon 2 or any of their
respective Subsidiaries, and neither the Internal Revenue Service nor any taxing
authority has proposed in writing any such adjustment or change in accounting
method. None of Xoom, Xenon 2 or any of their respective Subsidiaries has
received a tax ruling or entered into a closing agreement with any taxing
authority that would have a continuing Material Adverse Effect upon Xoom, Xenon
2 or any of their respective Subsidiaries.
(iv) None of Xoom, Xenon 2 or any of their respective
Subsidiaries has made any payments, is obligated to make any payments, or is a
party to any agreement that could obligate it to make any payments that would
not be deductible pursuant to Section 280G of the Code.
(v) None of Xoom, Xenon 2 or any of their respective
Subsidiaries has a "permanent establishment," as defined in any applicable Tax
treaty or convention of the United States of America, or fixed place of business
in any foreign country. Xoom, Xenon 2 and their respective Affiliates are in
compliance with the terms and conditions of any applicable tax exemptions,
agreements or orders of any foreign government to which it may be subject or
which it may have claimed, and the transactions contemplated by this Agreement
will not have any adverse effect on such compliance.
(vi) Neither Xoom nor any Subsidiary is a party to any safe
harbor lease within the meaning of Section 168(f)(8) of the Code, as in effect
prior to amendment by the Tax Equity and Fiscal Responsibility Act of 1982. Xoom
and its Subsidiaries are not a party to any joint venture, partnership, or other
agreement, contract, or arrangement (either in writing or verbally, formally or
informally) which could be treated as partnership for federal income tax
purposes.
(vii) Neither Xoom nor any of its Subsidiaries is or has been
bound by any tax sharing or tax allocation agreement, and it has no contractual
obligation to indemnify any other person with respect to Taxes.
(t) SECTION 203. The Boards of Directors of Xoom, Xenon 2 and
each of their respective Subsidiaries has taken appropriate action so that the
provisions of Section 203 of the DGCL restricting "business combinations" with
"interested stockholders" (each as defined in such Section 203) will not, prior
to the termination of this Agreement pursuant to ARTICLE IX hereof, apply to NBC
or NMC or any of their Affiliates with respect to this Agreement, the Xenon 2
Merger Agreement, the Option Agreement, the Voting Agreement, any of the
Implementing Agreements or any of the transactions contemplated hereby or
thereby.
(u) YEAR 2000 COMPLIANCE. Except as set forth on SCHEDULE
4.3(V), Xoom, Xenon 2 and each of their respective Subsidiaries has adopted and
implemented a commercially reasonable plan to provide (x) that the change of the
year from 1999 to the year 2000 will not have a Material Adverse Effect and (y)
that the impacts of such change on the venders and
40
customers of Xoom, Xenon 2 and each of their respective Subsidiaries will not
have a Material Adverse Effect. In the reasonable best estimate of Xoom, Xenon 2
and each of their respective Subsidiaries, no expenditures materially in excess
of currently budgeted items previously disclosed to Xenon 2 will be required in
order to cause the information and business systems of Xoom, Xenon 2 and each of
their respective Subsidiaries to operate properly following the change of the
year 1999 to the year 2000. Xoom, Xenon 2 and each of their respective
Subsidiaries reasonably expects any material issues related to such change of
the year will be resolved in accordance with the timetable set forth in such
plan (and in any event on a timely basis in order to be resolved before the year
2000). Between May 9, 1999 and the Effective Time, Xoom, Xenon 2 and each of
their respective Subsidiaries shall continue to use commercially reasonable
efforts to implement such plan.
(v) NO BUSINESS ACTIVITIES. Neither Xenon 2 nor Xenon 3 has
conducted any activities other than in connection with their organization, the
negotiation and execution of this Agreement and the NMC Merger Agreement and the
consummation of the transactions contemplated hereby and thereby.
4.4 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO GE INVESTMENTS SUB.
GE Investments Sub represents and warrants to Xoom and Xenon 2 as follows:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. GE Investments Sub is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the requisite power and authority to own,
lease and operate its properties and to conduct its business as now conducted by
it. GE Investments Sub has all requisite power and authority to enter into this
Agreement and to perform its obligations hereunder and thereunder. GE
Investments Sub is qualified to do business and is in good standing in all
jurisdictions in which it conducts its business, except where the failure to do
so would not, individually or in the aggregate, taken as a whole, have a
Material Adverse Effect.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution, delivery
and performance by GE Investments Sub of this Agreement and the consummation by
GE Investments Sub of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of GE Investments
Sub. This Agreement has been duly executed and delivered by GE Investments Sub
and constitutes a valid and legally binding obligation of GE Investments Sub,
enforceable against GE Investments Sub in accordance with its terms.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in SCHEDULE
4.1(C), the execution, delivery and performance of this Agreement and the
consummation by GE Investments Sub of the transactions contemplated hereby will
not (i) conflict with or result in a breach of any provision of the certificate
of incorporation or bylaws or other governing documents of GE Investments Sub;
(ii) require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Authority; (iii) require the consent or
approval of any Person (other than a Governmental Authority) or violate or
conflict with, or result in a breach of any provision of, constitute a default
(or an event which with notice or lapse of time or
41
both would become a default) or give to any third party any right of
termination, cancellation, amendment or acceleration under, or result in the
creation of a Lien on any of the assets of GE Investments Sub under, any of the
terms, conditions or provisions of any contract or license to which GE
Investments Sub is a party or by which it or its assets or property are bound;
or (iv) violate or conflict with any order, writ, injunction, decree, statute,
rule or regulation applicable to GE Investments Sub; other than any consents,
approvals, authorizations and permits the failure of which to obtain and any
violations, conflicts, breaches defaults and other matters set forth pursuant to
clauses (ii), (iii) and (iv) above which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
IV.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties given by the parties in ARTICLE IV and in the
certificates delivered pursuant to ARTICLE VII shall survive the Closing other
than the representations and warranties set forth in SECTION 4.1(C)(III) and
SECTION 4.1(V).
IV.6 NO OTHER REPRESENTATION OR AND WARRANTIES. Except for the
representations and warranties set forth in this ARTICLE IV, the parties hereto
make no other representations or warranties, express or implied.
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME
V.1 CONDUCT OF THE BUSINESS OF XOOM PENDING THE CLOSING. Xoom agrees
that except with the prior written consent of NBC and except as may be expressly
permitted by this Agreement or as set forth on SCHEDULE 5.1, prior to the
Closing, it shall, and shall cause, its Subsidiaries to operate their businesses
only in the usual, regular and ordinary manner, on a basis consistent with past
practice and, to the extent consistent with such operation, use its reasonable
efforts to preserve its present business organization intact, keep available the
services of its present employees, preserve its present business relationships
(consistent with past practice) and maintain all rights, privileges and
franchises in the normal conduct of Xoom's businesses. Without limitation of the
foregoing, from May 9, 1999 until the Effective Time, except as expressly
permitted by this Agreement or as set forth on SCHEDULE 5.1, Xoom shall not:
(a) amend its certificate of incorporation or bylaws;
(b) issue, purchase or redeem, or authorize or propose the
issuance, purchase or redemption of, or declare or pay any dividend with respect
to, any shares of capital stock of Xoom or any class of securities convertible
into, or rights, warrants or options to acquire, any such shares of other
convertible securities other than (i) issuances of Xoom Stock pursuant to Xoom
Options outstanding on May 9, 1999, the Option Agreement or the obligations to
issue Xoom Stock set forth on SCHEDULE 4.3(H) and (ii) (x) Xoom Options with an
exercise price of not less than the fair market value on the date of grant and
vesting over not less than 2 years to be
42
issued to employees currently holding Xoom Plan Options exercisable in the
aggregate for not more than that number of shares of Xoom Plan Stock that equals
15% of the shares of Xoom stock for which Xoom Plan Options will remain unvested
and nonexercisable after giving effect to the acceleration of vesting described
in SECTION 6.8; and (y) Xoom Options with an exercise price of not less than 85%
of the fair market value on the date of grant, and vesting over not less than 3
years, to be issued to employees currently holding Xoom Non-Plan Options
exercisable in the aggregate for not more than the lesser of (i) that number of
shares of Xoom that equals two times the number of shares of Xoom for which Xoom
Non-Plan Options will remain unvested and nonexercisable and terminate after
giving effect to the acceleration of vesting described in SECTION 6.8 or (ii)
150,000 shares of Xoom.
(c) adopt any stockholders rights plan or take any other
action which would restrict or impede the ability of NBC or its Subsidiaries to
acquire any shares of Xoom Stock to the extent permitted by the terms hereof;
(d) acquire any business or any assets (other than inventory
and any other assets acquired solely for use in an existing business in the
ordinary course consistent with past practice of such business) or acquire any
minority investment in any Person, except for any acquisitions for consideration
not in excess of $10,000,000 individually or $25,000,000 in the aggregate taken
together with all such acquisitions.
(e) dispose of any business or any assets (other than
inventory and any other assets acquired solely for use in an existing business
in the ordinary course consistent with past practice of such business) or
dispose of any minority investment in any Person, except for any dispositions
having a fair market value not in excess of $10,000,000 individually or
$25,000,000 in the aggregate taken together with all such dispositions;
(f) except as otherwise permitted by this SECTION 5.1, make
any expenditures other than in the ordinary course of business and in any event
not in excess of the aggregate budgeted expenditures provided in the Xoom
Budget;
(g) except as otherwise permitted by SECTION 5.1(D),enter into
any transaction involving a cash expenditure other than in the ordinary course
of business consistent with past practice;
(h) except as otherwise permitted by this SECTION 5.1, enter
into any transaction involving the incurrence of indebtedness other than in the
ordinary course of business consistent with past practice;
(i) enter into any transaction involving the merger,
consolidation or sale of all or substantially all of the assets of Xoom;
(j) file any voluntary petition for bankruptcy or receivership
of Xoom or fail to oppose any other person's petition for bankruptcy or action
to appoint a receiver of Xoom;
43
(k) except as required by applicable law, as contemplated in
this Agreement or the Xenon 2 Merger Agreement or to the extent required under
existing employee benefit plans, agreements or arrangements as in effect on May
9, 1999, (A) increase the compensation or fringe benefits of any present or
former director, officer or employee of Xoom or its Subsidiaries, except for
increases, in the ordinary course of business, in salary or wages of employees
who are not officers, (B) except in the ordinary course of business grant any
severance or termination pay to any present or former director, officer or
employee of Xoom or its Subsidiaries or (C) enter into or amend or terminate any
collective bargaining, bonus, profit sharing, thrift, compensation, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
present or former director, officer or employee of Xoom or its Subsidiaries;
(l) allow any payables or other obligations to become
delinquent, except where the amount or validity of such payables or obligations
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been recorded, or
change or modify the usual, regular and ordinary manner of collecting
receivables from past practice;
(m) except with respect to transactions permitted by SECTION
5.1(D) and SECTION 5.1(E), enter into any contract, agreement, joint venture or
other commitment that is not terminable in Xoom's sole discretion on or prior to
one year from May 9, 1999 without payment of any termination fee or penalty;
(n) settle any claim, action or proceeding involving money
damages in excess of $50,000 in the aggregate or that could result in any
injunction or prohibition on any part of the business of Xoom;
(o) amend, supplement or otherwise modify the Xenon 2 Merger
Agreement or terminate the Xenon 2 Merger Agreement other than in accordance
with Section 9.1(f) thereof; or
(p) authorize any of, or commit or agree to take any of, the
foregoing actions.
V.2 CONDUCT OF THE BUSINESS OF SNAP PENDING THE CLOSING. NBC agrees
that except with the prior written consent of Xoom, and except as may be
expressly permitted or contemplated by this Agreement or as set forth on
SCHEDULE 5.2, prior to the Closing Date, NBC shall use reasonable efforts to
cause each of SNAP and its Subsidiary to be operated only in the usual, regular
and ordinary manner, on a basis consistent with past practice and, to the extent
consistent with such operation, use its reasonable efforts to preserve its
present business organization intact, keep available the services of its present
employees, preserve its present business relationships and maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of SNAP's
businesses. Without limiting the generality of the foregoing, from May 9, 1999
until the Closing, except as expressly permitted or contemplated by this
44
Agreement or as set forth on SCHEDULE 5.2, NBC shall use reasonable efforts not
to permit SNAP to:
(a) amend the SNAP LLC Agreement;
(b) issue, purchase or redeem, or authorize or propose the
issuance, purchase or redemption of, or make any distribution with respect to,
any equity interests of SNAP or any class of securities convertible into, or
rights, warrants or options to acquire, any such equity interests or other
convertible securities other than (i) pursuant to employee options outstanding
on May 9, 1999 or (ii) SNAP Options with an exercise price of not less than the
fair market value on the date of grant to be issued to employees exercisable in
the aggregate for not more than 195,132 units of SNAP;
(c) acquire any business or any assets (other than inventory
and any other assets acquired solely for use in an existing business in the
ordinary course consistent with past practice of such business) or acquire any
minority investment in any Person, except for any acquisitions for consideration
not in excess of $10,000,000 individually or $25,000,000 in the aggregate taken
together with all such acquisitions;
(d) dispose of any business or any assets (other than
inventory and any other assets acquired solely for use in an existing business
in the ordinary course consistent with past practice of such business) or
dispose of any minority investment in any Person, except for any dispositions
having a fair market value not in excess of $10,000,000 individually or
$25,000,000 in the aggregate taken together with all such dispositions;
(e) except as otherwise permitted by this SECTION 5.2, make
any expenditures other than in the ordinary course of business and in any event
not in excess of the aggregate budgeted expenditures provided in the SNAP
Budget;
(f) except as otherwise permitted by SECTION 5.2(C), enter
into any transaction involving a cash expenditure by SNAP other than in the
ordinary course of business consistent with past practice;
(g) except as otherwise permitted by this SECTION 5.2, enter
into any transaction involving the incurrence of indebtedness by SNAP other than
in the ordinary course of business consistent with past practice;
(h) file any voluntary petition for bankruptcy or receivership
of SNAP or fail to oppose any other person's petition for bankruptcy or action
to appoint a receiver of SNAP;
(i) except with respect to transactions permitted by SECTION
5.2 (C) and SECTION 5.2(D), enter into any contract, agreement, joint venture or
other commitment that is not terminable in SNAP's sole discretion on or prior to
one year from May 9, 1999 without payment of any termination fee or penalty;
45
(j) except as required by applicable law, as contemplated in
this Agreement or the Xenon 2 Merger Agreement or to the extent required under
existing employee benefit plans, agreements or arrangements as in effect on May
9, 1999, (A) increase the compensation or fringe benefits of any employee of
SNAP, except for increases, in the ordinary course of business, in salary or
wages of employees who are not officers, (B) except in the ordinary course of
business grant any severance or termination pay to any employee of SNAP, (C)
hire, except in the ordinary course of business, any new employees or
consultants, or (D) enter into or amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any employee of SNAP;
(k) allow any payables or other obligations to become
delinquent, except where the amount or validity of such payables or obligations
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been recorded, or
change or modify the usual, regular and ordinary manner of collecting
receivables from past practice;
(l) except as otherwise permitted by SECTION 5.2(D), dispose
of or abandon outside the ordinary course of business any assets of SNAP that
are material, individually or in the aggregate, to SNAP and not transfer any
rights of material value of SNAP;
(m) permit or allow any of the material assets of SNAP to
become subject to any Liens, except for Permitted Liens or waive any material
claims or rights of SNAP;
(n) except as otherwise permitted by SECTION 5.2(C), acquire
or agree to acquire outside the ordinary course of business any assets that are
material, individually or in the aggregate, to SNAP;
(o) enter into any transaction involving the merger,
consolidation or sale of all or substantially all of the assets of SNAP;
(p) settle any claim, action or proceeding involving money
damages in excess of $50,000 in the aggregate or that could result in any
injunction or prohibition on any part of the business of SNAP; or
(q) authorize any of, or commit or agree to take any of, the
foregoing actions.
V.3 CONDUCT OF THE NBC MULTIMEDIA BUSINESSES PENDING THE CLOSING. NBC
agrees that except with the prior written consent of Xoom and except as may be
expressly permitted or contemplated by this Agreement or as set forth on
SCHEDULE 5.2, prior to the Closing Date, it shall, and shall cause its
Subsidiaries to, operate the NBC Multimedia Businesses only in the usual,
regular and ordinary manner, on a basis consistent with past practice and, to
the extent consistent with such operation, use its reasonable efforts to
preserve the NBC Multimedia
46
Businesses' present business organization intact, keep available the services of
the NBC Multimedia Businesses' present employees, preserve their present
business relationships and maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of the NBC Multimedia Businesses.
NBC shall not cause or permit NMC to conduct any business or take other actions
other than for the purposes of effectuating the transactions contemplated
hereby. Without limiting the generality of the foregoing, from May 9, 1999 until
the Closing, except as expressly permitted or contemplated by this Agreement or
as set forth on SCHEDULE 5.2, NBC shall not:
(a) except as required by applicable law or to the extent
required under existing employee benefit plans, agreements or arrangements as in
effect on May 9, 1999 or as contemplated by this Agreement, (A) increase the
compensation or fringe benefits of any Transferred Employee (including, for all
purposes in this section, persons eligible to become Transferred Employees upon
occurrence of future events such as the acceptance of offers of employment),
except for increases, in the ordinary course of business, in salary or wages of
employees who are not officers, (B) except in the ordinary course of business
grant any severance or termination pay to any Transferred Employee or (C) enter
into or amend or terminate any collective bargaining, bonus, profit sharing,
thrift, compensation, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any Transferred Employee;
(b) transfer, dispose of or abandon any of the material NBC
Multimedia Assets or Videoseeker Assets, other than in the ordinary course of
business, consistent with past practice;
(c) permit or allow any of the NBC Multimedia Assets or
Videoseeker Assets to become subject to any Liens, except for Permitted Liens or
waive any material claims or rights relating to the NBC Multimedia Assets or the
Videoseeker Assets;
(d) transfer any rights of material value included in the NBC
Multimedia Assets or Videoseeker Assets;
(e) authorize any of, or commit or agree to take any of, the
foregoing actions.
V.4 ACCESS TO INFORMATION. From May 9, 1999 to the Closing Date, each
of Xoom and NBC and their respective Subsidiaries shall afford the officers,
employees, auditors and other agents of NBC and Xoom reasonable access during
normal business hours to the officers, employees, properties, offices, plants
and other facilities of (i) SNAP and the NBC Multimedia Businesses, in the case
of NBC and (ii) Xoom and its Subsidiaries, in the case of Xoom and Xenon 2, and
to the contracts, commitments, books, records and Tax Returns relating thereto,
and shall furnish such Persons all such documents and such financial, operating
and other data and information regarding such businesses and Persons that are in
the possession of such Person as NBC or Xoom, as applicable, through their
respective officers, employees or agents may from time to time reasonably
request. All such information, as well as any information provided prior
47
to the date hereof, shall be used only for the purposes of the transactions
contemplated hereby and, unless required by subpoena or otherwise required by
law, the parties agree not to disclose to any third party (other than their
respective professional advisors) any portion of the information so provided
which constitutes confidential information (i.e., information that is not
otherwise publicly available). The confidential information shall not, without
the other parties' prior written consent, be disclosed to third parties. The
parties will disclose the information internally only to persons who require
knowledge thereof for the purposes of the transactions contemplated hereby.
V.5 NO SOLICITATION. (a) From and after May 9, 1999 until the earlier
of the Effective Time or the termination of this Agreement in accordance with
its terms, Xoom shall not, nor shall it permit any of its Subsidiaries to, nor
shall it authorize or permit any officer, director or employee of, or any
investment banker, attorney or other advisor or representative of, Xoom or any
of its Subsidiaries to, directly or indirectly, (i) take any action to solicit,
initiate, encourage or knowingly facilitate any Material Transaction Proposal
(as defined below) or the submission of a Material Transaction Proposal or (ii)
enter into or participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, a Material Transaction
Proposal; PROVIDED that, prior to obtaining the affirmative vote of the holders
of a majority of the outstanding shares of common stock of Xoom to adopt the
Xenon 2 Merger Agreement (the "XOOM STOCKHOLDER APPROVAL" and, together with the
Xenon 2 Stockholder Approval, the "STOCKHOLDER APPROVALS"), in response to an
unsolicited BONA FIDE Takeover Proposal, Xoom may, to the extent that the Board
of Directors of Xoom determines in good faith based on the advice of outside
legal counsel that such action is required to comply with their fiduciary duties
under applicable law, (A) furnish information with respect to Xoom and its
Subsidiaries to the person making such Takeover Proposal and its representatives
and discuss such information with such person and its representatives and (B)
participate in negotiations regarding such Takeover Proposal. Xoom will promptly
notify NBC of receipt of any request for information or any Material Transaction
Proposal, the material terms and conditions of such request or Material
Transaction Proposal and the identity of the person making any such request or
Material Transaction Proposal, and will keep NBC fully informed on a current
basis of the status and details of any such request or Material Transaction
Proposal, PROVIDED that, prior to providing any information to any Person or
participating in negotiations with any Person, Xoom shall have received an
executed confidentiality agreement. Xoom will immediately cease and cause to be
terminated any existing activities, discussions and negotiations conducted
heretofore with respect to any Material Transaction Proposal.
(b) From and after May 9, 1999 until the earlier of the
Effective Time or the termination of this Agreement in accordance with its
terms, the Board of Directors of Xoom shall not (i) approve or recommend or
propose publicly to approve or recommend any Material Transaction Proposal, (ii)
cause or agree to cause Xoom or any of its Subsidiaries to enter into any
agreement (including, without limitation, any letter of intent or agreement in
principle) related to a Material Transaction Proposal or (iii) prior to the Xoom
Stockholder Approval, withdraw or modify, in a manner adverse to NBC, the
approval or recommendation of the Board of Directors of Xoom for the adoption of
the Xenon 2 Merger Agreement or vote in favor of
48
Xoom, as sole stockholder of Xenon 2, adopting the NMC Merger Agreement at the
Xenon 2 Stockholder Meeting. Notwithstanding the foregoing, if the Board of
Directors of Xoom receives a Takeover Proposal without having violated SECTION
5.5(A) hereof, the Board of Directors of Xoom may, prior to obtaining the Xoom
Stockholder Approval, to the extent it determines in good faith based on the
advice of outside legal counsel that such action is required to comply with
their fiduciary duties under applicable law, take any action specified in
clauses (i), (ii) or (iii) above with respect to such Takeover Proposal, but in
each case only (x) at a time that is at least five (5) business days after
receipt by NBC of written notice from Xoom advising NBC that the Board of
Directors of Xoom has resolved to take such action and (y) if Xoom
simultaneously therewith terminates this Agreement pursuant to SECTION 9.1(G)
hereof. Nothing contained in this Agreement shall prohibit Xoom or its board of
directors from complying with Rules 14D-9 and 14e-2 under the Exchange Act with
respect to any Takeover Proposal.
(c) As used herein, "MATERIAL TRANSACTION PROPOSAL" means any
inquiry, proposal or offer from any Person relating to (i) the direct or
indirect acquisition or purchase of 20% or more of the assets (based on the fair
market value thereof) of Xoom and its Subsidiaries, taken as a whole, or of 20%
or more of any class of equity securities of Xoom or any of its Subsidiaries or
any tender offer or exchange offer (including by Xoom or its Subsidiaries) that
if consummated would result in any person beneficially owning 20% or more of any
class of equity securities of Xoom or any of its Subsidiaries, or (ii) any
merger, consolidation, business combination, sale of all or substantially all
assets, recapitalization, liquidation, dissolution or similar transaction
involving Xoom or any of its Subsidiaries other than the Transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that in no event shall any
merger, consolidation, sale or similar transaction involving only Xoom and one
or more of its wholly-owned subsidiaries or involving only any two or more of
such wholly-owned subsidiaries be deemed to be a Material Transaction Proposal
if such transaction is not entered into in violation of the terms of this
Agreement.. As used herein, "TAKEOVER PROPOSAL" means any inquiry, proposal or
offer from any Person relating to (A) any of the matters set forth in clause (i)
of the definition of Material Transaction Proposal but replacing "20%" with
"50%" each place "20%" is used in such definition, (B) a sale of all or
substantially all of the assets of Xoom and its Subsidiaries or (C) a merger or
consolidation of Xoom as a result of which the stockholders of Xoom immediately
prior to such transaction would not beneficially own immediately after such
transaction 50% or more of the resulting or surviving entity (or the parent
thereof).
(d) The parties acknowledge that there may be no adequate
remedy at law for a breach of SECTION 5.5 and that money damages may not be an
adequate remedy for breach of such Section. Therefore, the parties agree that
NBC and Xoom each shall have the right, in addition to any other rights it may
have, to injunctive relief and specific performance in the event of any breach
of this SECTION 5.5. The remedy set forth in the preceding two sentences is
cumulative and shall in no way limit any other remedy any party hereto has at
law, in equity or pursuant hereto.
V.6 NON-SOLICITATION OF EMPLOYEES. The parties hereto agree that
beginning on May 9, 1999 and continuing until one year after the Effective Time,
no party shall, directly or
49
indirectly, solicit for employment any person who is now employed by any of the
other parties in an executive position, technical position or is otherwise
considered a key employee; PROVIDED, HOWEVER, that a party shall not be
precluded from hiring any such employee who (i) initiates discussions regarding
such employment without any direct or indirect solicitation by such party, (ii)
responds to any general public advertisement placed by such party or (iii) has
been terminated by the other party prior to commencement of employment
discussions between such party and the employee.
V.7 AMENDMENTS TO SCHEDULES. If no later than five business days prior
to the Closing Date, Xoom, Xenon 2, NBC, SNAP or GE Investments Sub becomes
aware of any fact or circumstance (whether or not it existed prior to May 9,
1999) which would make any representation, warranty, covenant or agreement of
such party untrue, then such party shall be permitted to amend any Schedule to
this Agreement so as to identify such fact or circumstance to the extent
necessary to make such representation, warranty, covenant or agreement true and
correct; PROVIDED that if any such amendment, individually or in the aggregate
with all such other amendments, discloses facts and circumstances that
constitute a Material Adverse Effect, then notwithstanding anything to the
contrary in this Agreement, the other party (which shall be Xoom in the case of
amendments by NBC, SNAP or GE Investments Sub and shall be NBC in the case of
amendments by Xoom or Xenon 2) shall have the right to terminate this Agreement.
Notwithstanding the foregoing, any change to a Schedule that refers solely to an
item previously disclosed in the SEC Documents shall not be deemed to have a
Material Adverse Effect on Xenon if such reference is to a specific section of a
specific SEC Document.
ARTICLE VI
OTHER AGREEMENTS
VI.1 REGISTRATION STATEMENT; PREPARATION OF PROXY STATEMENT. (a) As
soon as practicable after the execution of this Agreement, Xoom shall prepare
and cause to be filed with the SEC preliminary proxy materials (the "PROXY
STATEMENT") for the solicitation of approval by the stockholders of Xoom of the
Xenon 2 Merger Agreement and of Xoom, in its capacity as sole stockholder of
Xenon 2, approving this Agreement, the Merger and the other transactions
contemplated hereby and the other Implementing Agreements as may reasonably
require approval of Xenon 2's stockholders. Xoom shall cause Xenon 2 to include
the Proxy Statement as part of the prospectus to be included in the registration
statement on Form S-4 (the "FORM S-4") that Xenon 2 is preparing and filing with
respect to the shares of Class A Common Stock issuable pursuant to the
transactions contemplated by the Xenon 2 Merger Agreement. Each of Xenon 2 and
Xoom shall cause the Form S-4 and the Proxy Statement related thereto to comply
with applicable law and the rules and regulations promulgated by the SEC, to
respond promptly to any comments of the SEC or its staff and to have such
registration statement declared effective under the Securities Act as promptly
as practicable after it is filed with the SEC and Xoom shall use its best
efforts to cause the proxy statement to be mailed to Xoom's stockholders as
promptly as practicable after the registration statement is declared effective
under the Securities Act. Each
50
of the parties hereto shall promptly furnish to the other party all information
concerning itself, its stockholders and its Affiliates that may be required or
reasonably requested in connection with any action contemplated by this SECTION
6.1. If any event relating to any party occurs, or if any party becomes aware of
any information, that should be disclosed in an amendment or supplement to the
Form S-4 or the Proxy Statement, then such party shall inform the other thereof
and shall cooperate with each other in filing such amendment or supplement with
the SEC and, if appropriate, in mailing such amendment or supplement to the
stockholders of Xoom. The Proxy Statement shall include the recommendation of
the Board of Directors of Xoom in favor of the adoption of this Agreement and
the Xenon 2 Merger Agreement and the approval of the transactions contemplated
hereby and thereby.
(b) Prior to the Effective Time, Xoom shall cause Xenon 2 to
use reasonable efforts to obtain all regulatory approvals needed to ensure that
the Class A Common Stock to be issued in connection with the transactions
contemplated the Xenon 2 Merger Agreement (i) will be registered or qualified
under the "blue sky" laws of every jurisdiction of the United States in which
any registered holder of the outstanding Xoom common stock who is receiving
registered shares of Class A Common Stock has an address of record or be exempt
from such registration; and (ii) will be approved for quotation at the Effective
Time on Nasdaq.
(c) Each of Xoom, Xenon 2 and NBC agrees with respect to the
information to be supplied by such party that: (i) none of the information to be
supplied by such party or its Affiliates for inclusion in the Form S-4 will, at
the time the Form S-4 becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading; (ii) none
of the information to be supplied by such party or its Affiliates for inclusion
in the Proxy Statement will, at the time the Proxy Statement is mailed to the
stockholders of Xoom or as of the Effective Time, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (iii) as to
matters respecting such party, the Proxy Statement and the Form S-4 will comply
as to form in all material respects with the provisions of the Securities Act
and the Exchange Act, as applicable, and the rules and regulations promulgated
by the SEC thereunder.
VI.2 STOCKHOLDER MEETING. Xoom shall promptly after May 9, 1999
take all action necessary in accordance with applicable law and its certificate
of incorporation and bylaws to duly call, hold and convene a meeting of Xoom's
stockholders (the "XOOM STOCKHOLDER MEETING") and a meeting of Xoom 2's
stockholder (the "XENON 2 STOCKHOLDER MEETING). Except as required by the SEC or
applicable court order, Xoom shall not postpone or adjourn (other than for the
absence of a quorum) the Xoom Stockholder Meeting or the Xenon 2 Stockholder
Meeting without the consent of NBC. Notwithstanding anything in this Agreement
to the contrary, Xenon 2 shall, and Xoom shall cause Xenon 2, to duly call, hold
and convene the Xenon 2 Stockholder Meeting immediately after Xoom Stockholders
Meeting, and Xoom, in its capacity as sole stockholder of Xenon 2, shall vote
with respect to the adoption of this
51
Agreement at the Xenon 2 Stockholder Meeting as instructed by the votes of at
least a majority of the Xoom Stockholders at the Xoom Stockholder Meeting. Each
of Xenon 2 and Xoom shall not authorize or permit (i) the Xenon 2 Stockholder
Meeting to occur at or after the effectiveness of the merger contemplated by the
Xenon 2 Merger Agreement or (ii) the adoption of this Agreement by the
stockholder of Xenon 2 to be effected by a written consent to action without a
meeting. Neither NBC, Xenon 2 nor Xoom shall in any way challenge the validity,
enforceability or effectiveness of the voting agreements or proxies entered into
by certain stockholders of Xoom in connection with this Agreement or the Xenon 2
Merger Agreement and the transactions contemplated hereby and thereby. Xoom
shall take all other action necessary or advisable to secure the Stockholder
Approvals subject to the fiduciary duty set forth in SECTION 5.5. Without
limiting the generality of the foregoing but subject to its rights to terminate
the Agreement pursuant to SECTION 9.1(G), Xoom agrees that its obligations
pursuant to this SECTION 6.2 shall not be affected by the commencement, public
proposal, public disclosure or communication to Xoom of any Material Transaction
Proposal.
VI.3 PUBLIC STATEMENTS. Before any party or any Affiliate of such party
shall release any information concerning this Agreement or the matters
contemplated hereby which is intended for or may result in public dissemination
thereof, such party shall cooperate with the other parties, shall furnish drafts
of all documents or proposed oral statements to the other parties, provide the
other parties the opportunity to review and comment upon any such documents or
statements and shall not release or permit release of any such information
without the consent of the other parties, except to the extent required by
applicable law or the rules of any securities exchange or automated quotation
system on which its securities or those of its Affiliate are traded.
VI.4 REASONABLE COMMERCIAL EFFORTS. (a) Subject to the terms and
conditions provided in this Agreement, each party shall use reasonable
commercial efforts to take promptly, or cause to be taken, all actions, and to
do promptly, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated hereby, to obtain all necessary waivers, consents and
approvals and to effect all necessary registrations and filings, including,
without limitation, an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions contemplated hereby,
and the filings and consents set forth on SCHEDULE 6.4 hereto (the "REQUIRED
CONSENTS") and to remove any injunctions or other impediments or delays, legal
or otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
the benefits contemplated by this Agreement; PROVIDED that notwithstanding
anything to the contrary in this Agreement, no party nor any of their Affiliates
shall be required to make any disposition, including, without limitation, any
disposition of, or any agreement to hold separate, any Subsidiary, asset or
business, and no party hereto nor any of their Affiliates shall be required to
make any payment of money nor shall any party or its Affiliates be required to
comply with any condition or undertaking or take any action which, individually
or in the aggregate, would materially adversely affect the economic benefits to
such party of the transactions contemplated hereby and
52
the Implementing Agreements, taken as a whole or adversely affect any other
business of such party or its Affiliates.
(b) Each of the parties hereto shall execute and cause its
Subsidiaries to execute on or prior to the Closing Date each Implementing
Agreement to which it or they are a party on the terms set forth in the relevant
Exhibits hereto.
(c) Each of the parties hereto agrees, from time to time, to
execute and deliver, or use reasonable commercial efforts to cause to be
executed and delivered, such additional instruments, certificates or documents
(including bills of sale and assignment and assumption agreements), and take all
such actions, reasonably necessary to implement or effectuate the transactions
contemplated by this Agreement.
VI.5 NOTIFICATION OF CERTAIN MATTERS. Each party to this Agreement
shall give prompt notice to each other party of (i) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which is likely
to cause any representation or warranty of any party contained in this Agreement
to be untrue or inaccurate at or prior to the Effective Time and (ii) any
failure of any party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER,
that the delivery of any notice pursuant to this SECTION 6.5 shall not limit or
otherwise affect any remedies available to the parties receiving such notice. No
disclosure by any party pursuant to this SECTION 6.5, however, shall be deemed
to amend or supplement the disclosures set forth on the Schedules to ARTICLE IV
or prevent or cure any misrepresentations, breach of warranty or breach of
covenant.
VI.6 XENON 2 DIRECTORS. (a) NBC shall have the right to select six
persons to serve as members of the Board of Directors of Xenon 2 to be elected
by the holders of the Class B Common Stock, voting separately as a class (such
persons, or any replacement persons, the "NOMINEES"), and Xoom and Xenon 2 shall
cause the Nominees to be appointed to the Board of Directors of Xenon 2 (to the
extent the Nominees so consent) as of the Effective Time.
(b) Xoom and Xenon 2 shall also cause to be appointed to the
Board of Directors of Xenon 2 (to the extent they so consent) as of the
Effective Time the current Chairman of the Board of Xoom, the four current
outside directors of Xoom and an additional person designated by Xoom.
(c) Xoom and Xenon 2 shall also cause to be appointed to the
Board of Directors of Xenon 2 as of the Effective Time one additional person
mutually agreed upon by NBC and Xoom who shall not be affiliated with either
party.
(d) Xenon 2 will cause the Surviving Corporation to indemnify
each person who is now, or has been at any time prior to May 9, 1999, or who
becomes prior to the Effective Time, a director or officer of NMC from and after
the Effective Time (individually an "INDEMNIFIED PARTY" and collectively the
"INDEMNIFIED PARTIES"), with respect to acts or omissions occurring prior to the
Effective Time to the full extent provided as of May 9, 1999
53
under the certificate of incorporation, bylaws, other similar organizational
documents of NMC or applicable law. The rights under this SECTION 6.6(D) are
contingent upon the occurrence of, and will survive consummation of, the
transactions contemplated hereby and are expressly intended to benefit each
Indemnified Party each of whom shall have third party beneficiary rights
hereunder.
VI.7 EMPLOYEE MATTERS.
(a) EMPLOYEES AND OFFERS OF EMPLOYMENT. Between May 9, 1999
and the Closing Date, Xenon 2 shall offer employment as of the Closing Date to
each individual who is listed on SCHEDULE 6.7(A) and who, on the Closing Date,
is employed by NBC or its Affiliates or who is absent from work by reason of
vacation, sick leave, short-term disability or due to authorized leave of
absence or military service; PROVIDED that for any such employee who, as of the
Closing Date, is absent from work due to sick leave, short-term disability or
due to authorized leave of absence or military service, such offer of employment
shall be effective as of the date such employee is able to commence active
employment with Xenon 2. Each offer of employment shall include salary, title
and level of responsibility which are no less favorable in the aggregate than
those in effect for such employee on May 9, 1999; PROVIDED that nothing shall
prohibit Xenon 2 from terminating the employment of any Transferred Employee at
any time. Such employees who accept and commence employment with Xenon 2 are
herein collectively referred to as "TRANSFERRED EMPLOYEES".
(b) EMPLOYEE BENEFIT PLANS
(i) As of the Closing Date, except as otherwise expressly
provided under the applicable employee benefit plan of NBC or its Affiliates
(the "NBC PLANS") the Transferred Employees shall cease to accrue further
benefits under NBC Plans and shall immediately commence participation in the
Xenon 2 plans (which, except as otherwise provided in this Agreement, shall
initially be the Xoom Plans) on a basis no less favorable than similarly
situated employees of Xenon 2 or Xoom. Xenon 2 or Xoom shall cause each Xenon 2
Plan to treat the prior service of each Transferred Employee with NBC or its
affiliates as service rendered to Xenon 2 or Xoom for purposes of eligibility,
vesting and benefit accrual (but not for purposes of benefit accruals) under any
defined benefit plan to the same extent such service was taken into
consideration under comparable NBC Plans.
(ii) NBC shall retain responsibility for and continue to pay
all medical, life insurance, disability and other welfare plan expenses and
benefits for each Transferred Employee with respect to claims incurred by such
Employees or their covered dependents prior to the Closing Date. Expenses and
benefits with respect to claims incurred by Transferred Employees or their
covered dependents on or after the Closing Date shall be the responsibility of
Xenon 2. For purposes of this paragraph, a claim is deemed incurred when the
services that are the subject of the claim are performed; in the case of life
insurance, when the death occurs, in the case of long-term disability benefits,
when the disability occurs and, in the case of a hospital stay, when the
employee first enters the hospital.
54
(iii) With respect to any welfare benefit plans (as defined in
section 3(1) of ERISA) maintained by Xenon 2 or its Subsidiaries for the benefit
of Transferred Employees and SNAP Employees on and after the Closing Date, Xenon
2 or its Subsidiaries shall use best efforts to (A) cause there to be waived any
pre-existing condition limitations and (B) give effect, in determining any
deductible and maximum out-of-pocket limitations, to claims incurred and amounts
paid by, and amounts reimbursed to, such employees with respect to similar plans
maintained by NBC for their benefit immediately prior to the Closing Date.
(iv) NBC shall retain all assets and liabilities and
obligations under NBC Plans with respect to the Transferred Employees.
Notwithstanding the foregoing, Xenon 2 shall be responsible, with respect to
Transferred Employees, for all accrued bonuses for the year of Closing.
(v) With respect to any accrued but unused vacation time to
which any Transferred Employee is entitled pursuant to the vacation policy
applicable to such Transferred Employee immediately prior to the Closing Date
(the "VACATION POLICY"), Xenon 2 shall allow such Transferred Employee to use
such accrued vacation; PROVIDED, HOWEVER, that if Xenon 2 deems it necessary to
disallow such Transferred Employee from taking such accrued vacation, Xenon 2
shall be liable for and pay in cash to each such Transferred Employee an amount
equal to such vacation time in accordance with terms of the Vacation Policy.
VI.8 XENON 2 OPTIONS. (a) Prior to the Effective Time, with respect to
each option to purchase shares of Xenon 2 into which options to purchase shares
of Xoom (a "XOOM OPTION"), which were granted pursuant to the Xoom 1998 Stock
Incentive Plan (the "XOOM OPTION PLAN") prior to May 9, 1999, were converted
(the "CONVERTED XOOM PLAN OPTIONS"), Xenon 2 shall cause the Administrator (as
defined in the Xoom Option Plan) to exercise its discretion to provide, and
shall take any other necessary action to provide, that each Converted Xoom Plan
Option shall vest and become exercisable with respect to all shares as to which
such options would otherwise have vested within 12 months following the
Effective Time. With respect to each option to purchase shares of Xenon 2 into
which Xoom Options, which were not granted pursuant to the Xoom Option Plan
prior to May 9, 1999, were converted (the "CONVERTED XOOM NON-PLAN OPTIONS"),
Xenon 2 shall take any necessary action to provide that such Converted Xoom
Non-Plan Options shall to the extent provided in the award agreement evidencing
such option vest and become exercisable with respect to 75% of the then unvested
portion of such Converted Xoom Non-Plan Option and any portion of a Converted
Xoom Non-Plan Option which remains unexercised upon the occurrence of the
Effective Time shall terminate upon the occurrence of the Effective Time. In
addition, with respect to each option to purchase shares of Xenon 2 into which
Xoom Options, which were granted after May 9, 1999, were converted (the
"CONVERTED NEW XOOM OPTIONS"), Xenon 2 shall cause the Administrator to exercise
its discretion to provide, and shall take any other necessary action to provide,
that each option Converted New Xoom Option shall not immediately vest (but
rather, shall vest in accordance with its stated vesting schedule) with respect
to any of the shares subject thereto. Xenon 2 and Xoom acknowledge that the
transaction contemplated hereby shall constitute a "Corporate
55
Transaction" for purposes of both the Xoom Option Plan and the Converted Xoom
Non-Plan Options and the Administrator, the Board of Directors of Xoom and the
Board of Directors of Xenon 2 shall take all necessary action to effect the
foregoing.
(b) In the event that any Xoom employee incurs an excise tax
under Section 4999 of the Code as a result of the accelerated vesting of the
Xoom Options pursuant to SECTION 6.8(A), Xenon 2 shall make available to such
employee a loan (the "TAX LOAN") in an amount sufficient to pay such excise tax.
The determination of whether any such excise tax will be payable and the amount
of such excise tax will be made by Xoom 2's independent auditors. The Tax Loan
will (i) have a term of two years, and (ii) bear interest at the lowest
permissible rate without imputation of income, compounded annually and (iii) to
the extent not previously forgiven become immediately due and payable upon the
termination of such employee's employment with Xenon 2 and its Affiliates for
cause or due to such employee's voluntary resignation. The Tax Loan, will be
forgiven with respect to 1/24 of the initial principal amount of the Tax Loan
(together with accrued interest thereon) on the last day of each 1 month
anniversary of the Effective Time if the employee has remained continually
employed with Xenon 2 and its Affiliates through such date or if such employee's
employment with Xenon 2 and its Affiliates is terminated without cause or due to
the employee's death or disability.
VI.9 SNAP INDEBTEDNESS. Immediately following Closing, Xenon 2 will
repay and terminate the commitments with respect to the indebtedness for money
borrowed (including all interest, fees and other amounts payable in respect
thereof) set forth on SCHEDULE 6.9 and Xenon 2 shall use its best efforts to
cause the guarantee of such indebtedness by General Electric Company to be fully
released. Neither SNAP nor NBC or any of its Subsidiaries shall be required to
repay prior to Closing any indebtedness of SNAP, including any incurred from and
after May 9, 1999 in accordance with the terms of this Agreement.
VI.10 ORGANIZATION OF XXXX.XXX. NBC shall organize an entity and
contribute the assets, properties and other rights set forth on SCHEDULE 6.10 to
such entity on or before the Closing Date.
VI.11 TAX COOPERATION AND CONSISTENT REPORTING.
(a) Xenon 2 and NBC agree to furnish or cause to be furnished
to each other, upon request, as promptly as practicable, such information and
assistance relating to the Contributed Assets as is reasonably necessary for the
filing of all Tax Returns, and making of any election related to Taxes, the
preparation for any audit by any Tax Authority, and the prosecution or defense
of any claim, suit or proceeding relating to any Tax Return. Xenon 2 and NBC
will cooperate with each other in the conduct of any audit or other proceeding
related to Taxes and all other Tax matters relating to the Contributed Assets,
and each will execute and deliver such powers of attorney and other documents as
are necessary to carry out the intent of this SECTION 6.11.
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(b) Unless there has been a Final Determination to the
contrary, NBC, Xenon 2 and Xoom covenant and agree, for all Tax purposes
including all Tax Returns and any Tax controversies to (and to cause any
Affiliate or successor to their assets or business to) take each of the
positions set forth below (and not to take any positions inconsistent
therewith):
(i) The transfer of the Contributed Assets pursuant to the
Agreement will qualify under Section 351(a) of the Code.
(ii) None of the consideration received for the Contributed
Assets pursuant to the Agreement will be treated as Other Property or Money.
(iii) None of the Class A Common Stock or Class B Common Stock
issued to NBC or CNET pursuant to the terms of the Agreement will be paid or
issued for services.
(iv) The tax basis of each Contributed Asset to be received by
Xenon 2 will be the same as the tax basis of such asset in the hands of the
transferor increased by the amount of any gain recognized by the transferor on
the transfer of such asset.
(v) The holding period of each Contributed Asset will include
the period during which such asset was held by the transferor.
(vi) Neither Xenon 2, Xoom, any affiliate thereof, nor any
successor to their assets or businesses will be entitled to claim any deduction
in respect of any assumed Liability to the extent previously deducted by the
transferor.
(c) Xenon 2 represents, covenants and agrees that (A) it has
no plan or intention to (i) issue additional shares of stock after the Merger,
or take any other action, that would result in NBC, NBC Multimedia, CNBC, CNET
and the Xoom shareholders losing control of Xenon 2, (ii) liquidate or merge
Xenon 2; (iii) sell or otherwise dispose of any of its assets (or of any of the
assets acquired from NBC Multimedia), except for dispositions made in the
ordinary course of business, transfers permitted under Section 368(a)(2)(C) of
the Code, or transfers prescribed by Section 1.368-1(d) that will not affect
Xoom 2's satisfaction of the "continuity of business enterprise" requirement
under Section 368 of the Code for purposes of qualifying the Merger as a
"reorganization" under said section, and (iv) reacquire any of the shares of its
stock issued pursuant to this Agreement, and (B) the historic business of NBC
Multimedia will be continued or a significant portion of NBC Multimedia's
historic business assets will be used in a business.
(d) (i) NBC and Xenon 2 agree to report to the other any
communication from or with the Internal Revenue Service which relates in any way
to the characterization of the transactions contemplated by the Agreement.
Notwithstanding any such communication, Xenon 2 and Xoom covenant and agree to
(and to cause any Affiliate or successor to their assets or business to)
continue to take each of the positions specified in SECTION 6.11(B) for all Tax
purposes (unless there has been a Final Determination contrary to such
position).
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(ii) Without limiting the generality of SECTION 6.11(D)(I),
(A) NBC will file with its federal income tax return for the taxable year in
which the Agreement is consummated (which tax return shall be timely filed) the
information required by Treas. Reg ss. 1.351-3(a), and will deliver a copy of
that statement to Xenon 2 within ten days thereafter, and (B) Xenon 2 will file
with its federal income tax return for the taxable year in which the Agreement
is consummated (which tax return shall be timely filed) the information required
by Treas. Reg ss. 1.351-3(b), and will deliver a copy of that statement to NBC
within ten days thereafter. Within ninety days after the Closing Date, NBC will
deliver to Xenon 2 all of the cost and other basis information relating to the
Contributed Assets and assumed Liabilities for federal income tax purposes
reasonably required for Xenon 2 to prepare the statement required by Treas. Reg.
ss. 1.351-3(b)(2). Such information will be delivered in the form normally
maintained by NBC and will include reasonably complete data relating to the tax
basis, year of acquisition, depreciable life, and amount and method of
depreciation of tangible and intangible property. NBC and Xenon 2 also will
maintain such records as are required by Treas. Reg. ss. 1.351-3(c).
(iii) Without limiting the generality of SECTION 6.11(D)(I),
(A) Xenon 2 and NBC Multimedia will comply with the record-keeping and
information filing requirements of Section 1.368-3 of the Treasury Regulations
with respect to the Merger, and (B) Xenon 2 will file with its federal income
tax return for the taxable year in which the Agreement is consummated (which tax
return shall be timely filed) the information required by Treasury Regulations
Section 1.351-3(b) and maintain such records as are required by Treasury
Regulations Section 1.351-3(c) with respect to the Merger.
VI.12 TAX BENEFIT PAYMENTS.
(a) If a Final Determination is made contrary to any of the
positions described in 6.11(b)(i), (ii), or (iii), then (in addition to any
other remedies which may be available to NBC but without duplication thereof)
Xenon 2 will pay to NBC for each Post-Closing Tax Period an amount equal to the
excess of (A) the liability for federal, state and local Taxes to which Xenon 2,
Xoom or any other Affiliates or any successor to their assets or businesses
(collectively, the "TAXPAYER") would have been subject for all Post-Closing Tax
Periods in each relevant jurisdiction had the positions described in SECTION
6.11(B)(I), SECTION 6.11(B)(II) and SECTION 6.11(B)(III) been sustained (and had
Xenon 2 not been required to make any payments pursuant to this SECTION 6.12),
over (B) the Taxpayer's actual liability for such Taxes for such periods. Such
payment will be due (subject to a ten business-day grace period) when, as, and
to the extent the Taxpayer derives an actual benefit (in the form of any refund,
reduction in Tax liability, or otherwise) as the result of such excess. If any
payment required under this SECTION 6.12(A) for any Post-Closing Tax Period is
not made on or before the due date (without extensions) of the return of such
period, then such payment will be made together with interest at the rate per
annum determined from time to time under Section 6621(a)(2) of the Code
compounded daily for the period from such due date to the date on which the
payment is actually made.
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(b) In addition, Xenon 2 will pay to NBC, no later than ten
business days after each date on which the Taxpayer receives a refund of
federal, state or local Taxes for a Pre-Closing Tax Period, the excess of such
refunds over such refunds to which the Taxpayer would have been entitled had the
positions described in SECTION 6.11(B) been sustained (and had Xenon 2 not been
required to make any payments under this SECTION 6.12). If any payment required
under this SECTION 6.12(B) is not made on or before the date such payment is
due, then such payment will be made together with interest at the rate per annum
determined from time to time under Section 6621(a)(2) of the Code compounded
daily for the period from the date such payment was due to the date on which
such payment is actually made.
(c) In the event of any adjustment to the Taxpayer's liability
for federal, state or local Taxes or entitlement to a refund, as a result of
audit, carryover, or otherwise, the amounts previously payable under this
SECTION 6.12 will be appropriately adjusted and Xenon 2 or NBC, as the case may
be, will pay to the other the amount, required as a result of such adjustment,
together with interest at the rate per annum determined from time to time under
Section 6621(a)(2) of the Code compounded daily for the period from the original
payment date affected by the adjustment to the date on which the payment is
made. At the time of any payment under this SECTION 6.12 (or at the request of
NBC if Xenon 2 has determined that no payment is due), Xenon 2 will submit a
schedule showing in reasonable detail its calculation of the payment to be made
(or the basis for its determination that no payment is due). Any dispute
concerning the calculation of payments due under this SECTION 6.12 will be
resolved by the Independent Accountants.
(d) Any payment to NBC under this SECTION 6.12 will be
allocated between principal and interest for purposes of Section 483, Section
1273, and any other relevant provision of the Code by using as a discount rate
the rate per annum determined from time to time under Section 6621(a)(2) of the
Code compounded daily for the period from the date of Closing to the date on
which the payment is made. The portion of any such payment created as principal
will be treated as additional exchange consideration. Any payment to Xenon 2
under this SECTION 6.12 (other than interest) will be treated as a reduction of
the exchange consideration.
(e) NBC will pay (i) any fees or other amounts due to the
Independent Accountants in respect of the resolution of any dispute pursuant to
SECTION 6.12(C), and (ii) all reasonable costs (including the reasonable
internal costs of Xenon 2 or any Affiliate or successor thereto) incurred by
Xenon 2 (or by such Affiliate or successor) to comply with the provisions of
this SECTION 6.12.
VI.13 XOOM CASH. As long as the Effective Time occurs on or prior to
September 30, 1999, Xoom covenants and agrees immediately prior to the Effective
Time that it will have cash, net of outstanding indebtedness of Xoom, in an
amount at least equal to the sum of $230 million less any cash used in
connection with acquisitions made in accordance with the terms of SECTION 5.1;
PROVIDED that if the Effective Time occurs after that date, the foregoing amount
shall also be less $7.5 million for each month after September 30, 1999 and
prior to the Effective Time.
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VI.14 TRANSITION SERVICES. Promptly after May 9, 1999, NBC, Xoom and
Xenon 2 shall use their good faith efforts to negotiate a transition services
agreement pursuant to which NBC shall provide certain administrative and support
services and facilities relating to the NBC Multimedia Businesses to Xenon 2 for
a transition period after the Effective Time on terms mutually acceptable to the
parties.
VI.15 CONVERSION OF NBC'S CLASS A COMMON STOCK. On the Closing Date,
any Class A Common Stock purchased pursuant to the Stock Purchase Agreement,
dated as of June 11, 1999, between Xoom and NBC held by NBC or its Affiliates
will be automatically converted into Class B Common Stock pursuant to the
certificate of incorporation attached hereto as Exhibit 3.5. As soon as
reasonably practicable after the Effective Time, NBC or its Affiliates, as the
case may be, shall deliver any certificates representing such Class A Common
Stock to Xenon 2 and NBC or its Affiliates, as the case may be, shall be
entitled to receive in exchange a certificate representing the same number of
shares of Class B Common Stock, which certificate shall, until such time as the
same is no longer required hereunder or under the applicable requirements of the
Securities Act or applicable state securities laws, bear the legend set forth in
Section 3.8(d).
ARTICLE VII
CONDITIONS TO CLOSING
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each party to this Agreement to consummate this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction or waiver
by the appropriate party of each of the following conditions on or prior to the
Closing Date:
(a) NO INJUNCTIONS OR RESTRAINTS. At the Closing Date, there
shall be (i) no injunction, restraining order or other decree of any nature of
any court of competent jurisdiction or other Governmental Authority that is in
effect that restrains or prohibits the consummation of any of the transactions
contemplated hereby, and (ii) no action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated hereby, which makes the consummation of this Agreement and the
transactions herein illegal; PROVIDED, HOWEVER, that the parties hereto shall
use their reasonable commercial efforts to have such injunction, order, decree,
claim, action, suit, statute, rule or regulation vacated or declared
inapplicable as expeditiously as practicable.
(b) REGULATORY AUTHORIZATIONS. All orders, consents and
approvals of any Governmental Authorities legally required for the consummation
of the transactions contemplated by this Agreement, including the Required
Consents, shall have been obtained, and all waiting periods applicable under the
HSR Act and other applicable antitrust, merger control or competition laws or
regulations shall have expired or been terminated, except those for which
failure to obtain such consents and approvals would not, individually and in the
aggregate, have a Material Adverse Effect.
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(c) STOCKHOLDER APPROVALS. The Stockholder Approvals shall
have been obtained.
(d) XENON 2 MERGER AGREEMENT. The transactions contemplated by
the Xenon 2 Merger Agreement to occur at the closing thereunder shall have been
consummated as set forth therein.
7.2 CONDITIONS PRECEDENT TO OBLIGATION OF NBC. The obligation of NBC to
consummate this Agreement and the transactions contemplated hereby shall be
subject to the satisfaction of each of the following conditions, or by the
waiver of such condition by NBC, on or prior to the Closing Date:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF XOOM AND
XENON 2. The representations and warranties of Xoom contained in this Agreement
shall be true and correct in all material respects, in each case on and as of
May 9, 1999 and on and as of the Closing Date as though made on and as of such
time, except to the extent such representations and warranties by their terms
speak as of a specified date, in which case they shall be true and correct in
all material respects as of such date; and NBC shall have received from Xoom a
certificate to such effect dated as of the Closing Date signed by an officer
thereof.
(b) COVENANTS OF XOOM. Xoom shall have complied in all
material respects with all covenants contained in this Agreement to be performed
by it on or prior to the Closing; and NBC shall have received from Xoom a
certificate to such effect dated as of the Closing Date signed by an officer
thereof.
(c) IMPLEMENTING AND OTHER AGREEMENTS. Each of CNET, Xenon 2
and Xoom shall have entered into, or shall have caused their respective
Subsidiaries to have entered into, each of the Implementing Agreements to which
such Person is a party.
(d) DIRECTORS AND OFFICERS OF XENON 2. The officers and
directors of Xenon 2 shall, as of the Effective Time, consist of the Persons set
forth on SCHEDULE 3.7, who shall have been elected or appointed in accordance
with SECTION 6.6 hereof.
VII.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF XENON 2. The obligation of
Xenon 2 to consummate this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction of each of the following conditions, or the
waiver of such condition by NBC, on or prior to the Closing Date:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF NBC. The
representations and warranties of NBC contained in this Agreement shall be true
and correct in all material respects, in each case on and as of May 9, 1999 and
on and as of the Closing Date as though made on and as of such time, except to
the extent such representations and warranties by their terms speak as of a
specified date, in which case they shall be true and correct in all material
61
respects as of such date; and Xenon 2 shall have received from NBC a certificate
to such effect with respect to such party dated as of the Closing Date signed by
an officer thereof.
(b) COVENANTS OF NBC. NBC and its Subsidiaries shall have
complied in all material respects with all covenants contained in this Agreement
to be performed on or prior to the Closing; and Xenon 2 shall have received from
NBC a certificate to such effect dated as of the Closing Date signed by an
officer thereof.
(c) IMPLEMENTING AND OTHER AGREEMENTS. NBC shall have entered
into, or shall have caused its Subsidiaries to have entered into, each of the
Implementing Agreements to which such Person is a party.
ARTICLE VIII
INDEMNIFICATION
VIII.1 INDEMNIFICATION BY XENON 2. From and after the Closing, Xenon 2
shall indemnify and hold harmless NBC and its Affiliates and each of its
directors, officers, employees, agents, heirs, executors, successors and assigns
from and against any and all Losses and Expenses suffered or incurred by any
such indemnified Person arising from, relating to or otherwise in respect of any
breach of the covenant of Xoom contained in SECTION 6.13 of this Agreement.
VIII.2 INDEMNIFICATION BY NBC. From and after the Closing Date, NBC
shall indemnify and hold harmless Xenon 2 and its Affiliates and each of the
foregoing's respective directors, officers, employees and agents, heirs,
executors, successors and assigns of any of the foregoing from and against any
and all Losses and Expenses suffered or incurred by any such indemnified Person
arising from, relating to or otherwise in respect of any breach of the
representations and warranties set forth in SECTION 4.1(C)(III) and SECTION
4.1(V) of this Agreement.
VIII.3 CLAIMS PROCEDURE. (a) If a claim by a third party is made
against an indemnified Person hereunder, and if such indemnified Person intends
to seek indemnity with respect thereto under this Article, such indemnified
Person shall promptly notify the indemnifying Person in writing of such claims
setting forth such claims in reasonable detail (the "CLAIM NOTICE"), PROVIDED
that failure of such indemnified Person to give prompt notice as provided herein
shall not relieve the indemnifying Person of any of its obligations hereunder,
except to the extent that the indemnifying Person is materially prejudiced by
such failure. The indemnifying Person shall have twenty (20) days after receipt
of such notice (the "NOTICE PERIOD") to undertake, through counsel of its own
choosing, subject to the reasonable approval of such indemnified Person, and at
its own expense, the settlement or defense thereof, and the indemnified Person
shall cooperate with it in connection therewith; PROVIDED, HOWEVER, that the
indemnified Person may participate in such settlement or defense through counsel
chosen by such indemnified Person, PROVIDED that the fees and expenses of such
counsel shall be borne by such indemnified Person. If the
62
indemnifying Person shall assume the defense of a claim, it shall not settle
such claim without the prior written consent of the indemnified Person, unless
(i) such settlement includes as an unconditional term thereof the giving by the
claimant of a release of the indemnified Person from all Liability with respect
to such claim or (ii) such settlement does not involve the imposition of
equitable remedies or the imposition of any material obligations on such
indemnified Person other than financial obligations for which such indemnified
party will be indemnified hereunder. If the indemnifying Person shall assume the
defense of a claim, the fees of any separate counsel retained by the indemnified
Person shall be borne by such indemnified Person unless there exists a material
conflict between them as to their respective legal defenses (other than one that
is of a monetary nature), in which case the indemnified Person shall be entitled
to retain one law firm (plus any necessary local counsel) as its separate
counsel, the reasonable fees and expenses of which shall be reimbursed by the
indemnifying Person. If the indemnifying Person does not notify the indemnified
Person within twenty (20) days after the receipt of the indemnified Person's
notice of a claim of indemnity hereunder that it elects to undertake the defense
thereof, the indemnified Person shall have the right to contest, settle or
compromise the claim but shall not thereby waive any right to indemnity therefor
pursuant to this Agree ment.
(b) OTHER CLAIMS. In the event the indemnified party should
have a claim against the indemnifying party hereunder which does not involve a
claim or demand being asserted against or sought to be collected from it by a
third party, the indemnified party shall promptly send a Claim Notice with
respect to such claim to the indemnifying party. If the indemnifying party does
not notify the indemnified party within the Notice Period that they dispute such
claim, the amount of such claim shall be conclusively deemed a liability of the
indemnifying party hereunder.
VIII.4 EXCLUSIVE REMEDY. From and after the Closing, the
indemnification obligations under this ARTICLE VIII and the obligations of NBC
in SECTION 9.2 constitute the sole and exclusive remedy of each party for any
breach of, or inaccuracy in, any representation or warranty of another party
contained in this Agreement or in any certificate delivered pursuant hereto or
any breach of any covenant in this Agreement in each case to the extent they
survive the Closing.
ARTICLE IX
TERMINATION
IX.1 TERMINATION EVENTS. Without prejudice to other remedies which may
be available to the parties by law or this Agreement, this Agreement may be
terminated and the transactions contemplated herein may be abandoned at any time
prior to the Effective Time:
(a) by mutual written consent of NBC and Xenon 2;
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(b) by either NBC or Xenon 2 by written notice to the other
parties if the transactions contemplated by this Agreement have not been
consummated by December 31, 1999, unless extended by written agreement of the
parties hereto, PROVIDED that the party terminating this Agreement shall not be
in material default or breach hereunder and PROVIDED, FURTHER, that the right to
terminate this Agreement under this clause (b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure to consummate the transactions
contemplated by this Agreement on or before such date;
(c) by either NBC or Xenon 2 if (i) any Governmental
Authority, the consent or approval of which is required for the consummation of
the transactions contemplated hereby, shall have determined not to grant its
consent or approval and all appeals of such determination shall have been taken
and have been unsuccessful or (ii) any court of competent jurisdiction in the
United States shall have issued a final and unappealable permanent injunction,
order, judgment or other decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby, PROVIDED that the party seeking to terminate
this Agreement under this clause (c) is not then in material breach of this
Agreement and PROVIDED, FURTHER, that the right to terminate this Agreement
under this clause (c) shall not be available to any party who shall not have
used reasonable commercial efforts to avoid the issuance of such order, decree
or ruling;
(d) by either NBC or Xenon 2 if upon a vote at a duly held
Xoom Stockholders Meeting or any adjournment thereof, the Xoom Stockholder
Approval shall not have been obtained or by NBC if upon a vote at a duly held
Xenon 2 Stockholders Meeting or any adjournment thereof, the Xenon 2 Stockholder
Approval shall not have been obtained;
(e) by NBC if the Board of Directors of Xoom or Xenon 2 or any
committee thereof shall have withdrawn or modified in a manner adverse to NBC
its approval or recommendation of this Agreement, the Xenon 2 Merger Agreement
or any of the transactions contemplated hereby or thereby;
(f) by NBC if the Board of Directors of Xoom shall have
accepted or recommended a Takeover Proposal or shall have resolved to do so;
(g) by Xoom or Xenon 2, prior to the receipt of the Xoom
Stockholder Approval, on five business days written notice, if, Xoom receives,
without violating its obligations under SECTION 5.5 hereof, a bona fide Takeover
Proposal from a third party on terms which the Board of Directors of Xoom (i)
determines in good faith and after consultation with a financial advisor of
nationally recognized reputation to be more favorable to the Xoom stockholders
than the transactions contemplated by this Agreement and (ii) concludes in good
faith based on the advice of outside legal counsel that termination of this
Agreement is required to comply with its fiduciary duties under applicable law;
or
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(h) by either NBC or Xenon 2 in the event there has been a
material default or breach by (x) NBC, where Xenon 2 is terminating this
Agreement, or (y) Xoom or Xenon 2, where NBC is terminating this Agreement, in
each case which default or breach is not curable, or if curable, is not cured
within 30 days after written notice of such breach is given by the non-breaching
party.
(i) automatically and without any action by the parties upon
the termination of the Xenon 2 Merger Agreement.
IX.2 EFFECT OF TERMINATION. In the event of any termination of the
Agreement as provided in SECTION 9.1 hereto, this Agreement shall forthwith
become wholly void and of no further force and effect (except SECTION 5.6,
SECTION 6.3, SECTION 9.2 and ARTICLE X hereof) and there shall be no liability
on the part of any parties hereto or their respective officers or directors,
except as provided in such sections and article. Notwithstanding the foregoing,
no party hereto shall be relieved from liability for any willful breach of this
Agreement; PROVIDED, HOWEVER, that if NBC wilfully fails to close the
transactions contemplated by this Agreement after all of the conditions to
closing set forth in SECTION 7.1 and SECTION 7.2 have been satisfied, within 2
business days of the termination of this Agreement by Xenon 2, NBC shall pay to
Xenon 2 $475 million, which amount shall constitute the sole and exclusive
remedy of Xoom and Xenon 2 for such breach by NBC.
ARTICLE X
MISCELLANEOUS AGREEMENTS OF THE PARTIES
X.1 NOTICES. Any notice in connection with this Agreement shall be in
writing and shall be delivered by air courier or by facsimile at the addresses
or facsimile numbers given below. If notice is given by: (a) air courier, notice
shall be deemed given when recorded on the records of the air courier as
received by the receiving party; or (b) facsimile, notice shall be deemed given
upon transmission, if on a business day and during business hours in the country
of receipt; otherwise, notice shall be deemed to have been given at 9:00 A.M. on
the next Business Day in the country of receipt.
If to NBC, NMC or GE Investments Sub:
National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
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Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
If to Xoom or Xenon 2:
Xenon 2, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx Xxxx Xxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
or to such other address as any such party shall designate by written notice to
the other parties hereto.
X.2 INTEGRATION; AMENDMENTS. This Agreement (including the Schedules
and Exhibits hereto) contains the entire agreement and understanding of the
parties with regard to the matters contained herein and supercedes any prior
written or oral agreement with respect to the subject matter hereto. This
Agreement may not be amended or modified except in a writing signed by all
parties hereto.
X.3. WAIVER. No waiver by any of the parties hereto of any of the
provisions hereof shall be effective unless explicitly set forth in writing and
executed by the party so waiving. Except as provided in the preceding sentence,
no action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to
66
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants, or agreements contained herein, and in
any documents delivered or to be delivered pursuant to this Agreement and in
connection with the Closing hereunder. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
X.4. NO ASSIGNMENT; SUCCESSORS AND ASSIGNS. The parties' respective
rights and obligations hereunder may not be assigned, transferred, pledged, or
encumbered, in any manner, direct or indirect, contingent or otherwise, in whole
or in part, voluntarily or by operation of law, without the prior written
consent of the other parties, PROVIDED that NBC may assign, in whole or in part,
any of its rights and obligations hereunder and under the Implementing
Agreements to one or more of its Affiliates without the consent of the other
parties hereto, but NBC will remain liable for its obligations hereunder and
under each of the Implementing Agreements to which it is a party. Subject to the
preceding sentence, this Agreement shall be binding on the parties hereto and
their respective successors and permitted assigns.
X.5. EXPENSES. Except as set forth in this Agreement, if the
transactions contemplated by this Agreement are consummated, all legal and other
costs and expenses (including fees and expenses of any financial advisors,
accountants or other professional advisors) incurred by Xoom, SNAP or NBC in
connection with this Agreement and the transactions contemplated hereby shall be
paid or reimbursed by Xenon 2. If the transactions contemplated by this
Agreement are not consummated, all legal and other costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs.
X.6. SEVERABILITY. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect, and the parties hereto shall negotiate in
good faith to replace such illegal, void or unenforceable provision with a
provision that corresponds as closely as possible to the intentions of the
parties as expressed by such illegal, void or unenforceable provision.
X.7 SECTION HEADINGS; TABLE OF CONTENTS. The section headings
contained in this Agreement and the table of contents to this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
X.8. THIRD PARTIES. This Agreement does not create any rights, claims
or benefits inuring to any person that is not a party hereto nor create or
establish any third party beneficiary hereto, except as set forth in SECTION
6.6(D).
X.9 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED WITHIN SUCH STATE (EXCEPT TO THE
EXTENT THAT THE DGCL APPLIES TO THE MERGER), AND EACH PARTY HEREBY SUBMITS TO
THE EXCLUSIVE
67
JURISDICTION OF ANY STATE OR U.S. FEDERAL COURT SITTING WITHIN THE
COUNTY OF NEW YORK. EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN XXX XXXXXX XX XXX
XXXXX XX XXX XXXX SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK,
AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
X.10 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.
X.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
X.12 AMENDMENT AND RESTATEMENT. (a) This Agreement amends certain
provisions of the Existing Merger Agreement and restates the terms of the
Existing Merger Agreement in their entirety so as to reflect and give effect to
such amendments. Except as provided in SECTION 10.12(B), all amendments to the
Existing Merger Agreement effected by this Agreement, and all other covenants,
agreements, terms and provisions of this Agreement, shall have effect from the
date of the Existing Merger Agreement.
(b) Each of the representations and warranties made in
SECTIONS 4.1, 4.2 and 4.3 shall be deemed (i) to be made on the date of the
Existing Merger Agreement (other than the representations and warranties in
respect of this Agreement that are contained in SECTIONS 4.1(B) and 4.3(B) which
are made as of the date hereof) and as of the Closing Date and (ii) not made on
the date hereof (except as set forth in the parenthetical in clause (i) of this
SECTION 10.12(B)).
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
NATIONAL BROADCASTING COMPANY,
INC.
By:
------------------------------
Name:
Title:
GE INVESTMENTS SUBSIDIARY, INC.
By:
------------------------------
Name:
Title:
NEON MEDIA CORPORATION
By:
------------------------------
Name:
Title:
XENON 2, INC.
By:
------------------------------
Name:
Title:
XXXX.XXX, INC.
By:
------------------------------
Name:
Title:
