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