AGREEMENT AND PLAN OF
CONTRIBUTION, INVESTMENT AND MERGER
This Agreement and Plan of Contribution, Investment and Merger, dated
as of May 9, 1999 (hereinafter, the "Agreement"), among National Broadcasting
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Company, Inc., a Delaware corporation ("NBC"), GE Investments Subsidiary, Inc.,
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a Delaware corporation ("GE Investments Sub"), Neon Media Corporation, a
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Delaware corporation ("NMC"), Xenon 2, Inc., a Delaware corporation ("Xenon 2")
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and XXXX.xxx, Inc., a Delaware corporation ("Xoom").
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W I T N E S S E T H:
WHEREAS, NBC owns all of the outstanding capital stock of NBC
Multimedia, Inc., a Delaware corporation ("NBC Multimedia");
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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
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3"), SNAP! LLC, a Delaware limited liability company ("SNAP") and CNET, Inc., a
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Delaware corporation ("CNET"), are parties to an Agreement and Plan of
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Contribution and Merger dated as of the date hereof (the "Xenon 2 Merger
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Agreement") pursuant to which, among other things, the parties thereto have
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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;
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;
2
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
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1.1 Definitions. (a) Capitalized terms used and not defined in this
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Agreement shall have the following meanings:
"Advertising Agreement" means the advertising agreement between Xenon
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2 and NBC to be dated as of the Closing Date having the terms set forth in
Exhibit A hereto.
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"Affiliate" means with respect to a specified Person, any Person that
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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.
"Business Day" means a day, other than Saturday or Sunday, on which
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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
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value per share, of Xenon 2.
"Class B Common Stock" means the Class B common stock, $0.0001 par
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value per share, of Xenon 2.
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"XXXX.xxx" means the entity to be formed by NBC or its Subsidiaries
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pursuant to Section 6.10 to conduct business through the XXXX.xxx universal
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resource locator.
"CNET Standstill Agreement" means a Standstill Agreement between Xenon
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2 and CNET to be dated as of the Closing Date substantially in the form of
Exhibit B hereto.
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"CNET Voting Agreement" means a Voting and Right of First Offer
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Agreement between CNET and NBC to be dated as of the Closing Date substantially
in the form of Exhibit C hereto.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Contributed Assets" means the Xoom Stock, the interests in SNAP and
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the NBC Multimedia Assets.
"Environmental Laws" means any and all laws, rules, orders,
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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
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amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Final Determination" means a determination as defined in Section
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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
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Nevada limited partnership.
"GAAP" means generally accepted accounting principles in the United
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States.
"Governance Agreement" means the governance agreement between Xenon 2
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and NBC to be dated as of the Closing Date substantially in the form set forth
in Exhibit D hereto.
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"Governmental Authority" means any nation or government, any state or
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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
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1976, as amended.
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"Implementing Agreements" means, the NBC Note, the Xenon 2 Convertible
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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
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independent certified public accountants selected and retained by the mutual
agreement of NBC and Xenon 2.
"Intellectual Property" shall mean any patents, patent registrations,
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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
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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
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have satisfied the foregoing requirements by making appropriate investigations
and inquiries of its officers and employees listed on Schedule 1.1(a), and no
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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
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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
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and NBC to be dated as of the date hereof substantially in the form set forth in
Exhibit E hereto.
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"Lien" means any mortgage, pledge, security interest, encumbrance,
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lien or charge of any kind.
"Losses and Expenses" means any and all damages, claims, losses,
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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"
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shall not include any lost profits or other incidental, consequential or
punitive damages.
"Material Adverse Effect" means, for any party, a material adverse
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effect on (i) the assets, liabilities, business, results of operations or
financial condition of (A) Xoom, Xenon 2
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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 the date of this
Agreement 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
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do not affect such party in a disproportionate manner).
"Materials of Environmental Concern" means any gasoline or petroleum
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(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
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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.
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"XXX.xxx" means the XXX.xxx universal resource locator and the
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business conducted through it.
"NBC-IN" means the XXX-XX.xxx universal resource locator and the
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business conducted through it.
"NBC Multimedia Assets" means the assets, properties and other rights
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of NBC and NBC Multimedia listed on Schedule 1.1(b) which are to be contributed
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to NMC on the Closing Date.
"NBC Multimedia Businesses" means, collectively, XXX.xxx, Videoseeker
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and NBC-IN.
"NBC Multimedia Liabilities" means the liabilities of NBC Multimedia
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listed on Schedule 1.1(c) which are to be assumed by NMC on the Closing Date.
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"NBC Note" means the $340,000,000 note issued by NBC to GE Investments
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Sub to be transferred to Xenon 2 on the Closing Date.
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"Option Agreement" means the Stock Option Agreement, dated as of the
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date hereof, between NBC and Xoom.
"Other Property or Money" means other property or money within the
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meaning of Section 351(b) of the Code.
"Permitted Liens" means (i) Liens for Taxes that (x) are not yet due
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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
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venture, trust, incorporated organization, limited liability company, other form
of business or legal entity or Governmental Authority.
"Post-Closing Tax Period" means any Tax period (or portion thereof)
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ending after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion thereof)
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ending on or before the Closing Date.
"Registration Rights Agreement" means the registration rights
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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.
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"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
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"SNAP" means SNAP! LLC, a Delaware limited liability company.
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"SNAP LLC Agreement" means the limited liability agreement of SNAP, as
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amended from time to time.
"SNAP Units" means the units representing limited liability company
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interests under the SNAP LLC Agreement.
"Subsidiary" or "Subsidiaries" of any Person means any corporation,
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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
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jurisdiction over Taxes.
"Taxes" shall mean all federal, state, local and foreign taxes, fees,
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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
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returns, declarations, statements, reports, schedules, forms and information
returns and any amended tax returns relating to Taxes.
"Videoseeker" means the Xxxxxxxxxxx.xxx universal resource locator and
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the business conducted through it.
"Voting Agreement" means the Voting Agreement, dated as of the date
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hereof, among Xoom, NBC, CNET, Xxxxx Xxxxx and Flying Disc.
"Xoom Preferred Stock" means shares of preferred stock, par value
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$.0001 per share, of Xoom.
"Xoom Stock" means shares of common stock, par value $.0001 per share,
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of Xoom.
"Xenon 2 Convertible Note" means the $486,894,758 Zero Coupon
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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.
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"Xenon 2 Merger Agreement" means the Agreement and Plan of
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Contribution and Merger, dated as of the date hereof, among Xoom, Xxxxx 0, Xxxxx
3, SNAP and CNET.
Term Section
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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
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)
Xoom Budget 4.3(k)
Xoom ESPP 4.3(g)
Xoom Intellectual Property 4.3(n)
Xoom Options 6.8
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ARTICLE II
CONTRIBUTIONS AND ISSUANCES
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2.1 Contributions to NBC Multimedia. (a) Subject to the satisfaction or
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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), NBC shall
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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.
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(b) In connection with the transactions described in Section 2.1(a),
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NBC shall execute, and shall cause NBC Multimedia to execute all contribution,
transfer, assumption and 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).
2.2 Contributions to NMC; Issuances of NMC Capital Stock. (a) Subject to
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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),
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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
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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
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13,764,726 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.
2.3 Contributions To Xenon 2; Issuances of Xenon 2 Capital Stock. (a)
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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
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SNAP LLC Agreement to increase the number of SNAP Units held by NBC Multimedia
as provided in such agreement.
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(b) In connection with the transactions described in Section 2.3(a),
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NBC, NBC Multimedia and Xenon 2 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 2.3(a) shall be transferred free and
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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 2.3(a), at the Closing and concurrently therewith, Xenon 2
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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
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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 2.3(c), and
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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."
2.4 Note Issuances. (a) Subject to the satisfaction or waiver of the
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conditions set forth in this Agreement, after the Effective Time and the
consummation of all of the transactions contemplated by Section 2.1, Section 2.2
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and Section 2.3 of this Agreement, GE Investments Sub shall purchase the Xenon 2
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Convertible Note from Xenon 2 in exchange for $30 million and an assignment of
the NBC Note from GE Investments Sub to Xenon 2.
(b) In connection with the transactions described in Section 2.4(a),
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NBC, GE Investments Sub and Xenon 2 shall execute all purchase, transfer and
other agreements which counsel for NBC and Xoom determine are reasonably
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.
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2.5 Required Consents. Notwithstanding anything to the contrary contained
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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
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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.
2.6 Tax Refunds. Notwithstanding anything herein to the contrary, Xenon 2
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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
3.1 The Merger. Upon the terms and subject to the conditions set forth in
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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
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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").
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3.2 Closing. Subject to the satisfaction or waiver (subject to applicable
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law) of the conditions set forth in Article VII, the closing of the Merger and
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the transactions contemplated by this Agreement (the "Closing") will take place
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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
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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
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be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, unless another place is agreed to in writing by the
parties hereto.
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3.3 Effective Time. As soon as practicable following the satisfaction of
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the conditions set forth in Article VII, the parties shall (i) file a
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certificate of merger (the "Certificate of Merger") executed in accordance with
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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").
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3.4 Effects of the Merger. At and after the Effective Time, the Merger
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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.
3.5 Certificates of Incorporation. Xoom shall cause the certificate of
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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
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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.
3.6 By-Laws. Xoom shall cause the by-laws of Xenon 2 to be amended and
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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
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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.
3.7 Officers and Directors of Surviving Corporation and Xenon 2. The
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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
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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.
3.8 Effect on Capital Stock. (a) At the Effective Time by virtue of the
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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
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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") 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
13
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."
3.9 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).
--------------
3.10 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.
3.11 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
14
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.
3.12 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
---------------------------------------------
4.1 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 this Agreement and of 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 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 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
15
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 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 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, 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 the
---------------
date hereof, 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.
16
(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 2.1. 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 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 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.
(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
17
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 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 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
18
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 NMC 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.
(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.
19
(q) Entire Business. Except as set forth in Schedule 4.1(q), the NBC
--------------- ---------------
Multimedia Assets, together with 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 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
20
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 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 the date of this Agreement 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 the date hereof.
NMC has not conducted any
21
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,
--------------------
there are no Liabilities of NBC or its Subsidiaries that will be transferred or
assigned to, or assumed by, NMC in connection with the transactions set forth in
Section 2.2(a) or as to which NMC or Xenon 2 could be liable.
--------------
4.2 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 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.
22
(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 the date hereof, 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 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.
23
(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 the date hereof, 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 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
24
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 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
25
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 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.
26
(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 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
27
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 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
28
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 the date hereof, 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 the date hereof, all of which units
remain subject to SNAP Options unexercised as of the date hereof. 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 the date hereof. 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
29
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
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 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 this Agreement is advisable for Xoom and its stockholders,
approved 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 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
30
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, individual ly 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
the date hereof, with respect to the fairness of the transactions contemplated
by this Agreement from a financial point of view.
(f) Capital Stock. (i) 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 the date hereof. 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 the date hereof, 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 the date hereof. 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
31
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 the date hereof, 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 the date hereof, of which 2,043,556 shares remain subject to Xoom Plan
Options unexercised as of the date hereof and 981,212 shares remain subject to
Xoom Non-Plan Options unexercised as of the date hereof. 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 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 the date hereof. 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
32
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 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 the date hereof, (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
33
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 the date hereof, 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, 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
34
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 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
35
(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 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
36
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.
(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.
37
(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.
(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
38
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 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
the date of this Agreement 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.
39
(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 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.
4.5 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).
--------------
4.6 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 VI
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME
-------------------------------------------
5.1 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 the date hereof 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;
40
(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 the date hereof, 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 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;
41
(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;
(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 the
date of this Agreement, (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 the date hereof 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.
5.2 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
42
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 the date
hereof until the Closing, except as expressly permitted or contemplated by this
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 the date
hereof 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;
43
(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 the date hereof without payment of any termination fee or penalty;
(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 the
date of this Agreement, (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.
5.3 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
44
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 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 the date hereof 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 the date of this Agreement 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, other than in the ordinary course of business, consistent with past
practice;
(c) permit or allow any of the NBC Multimedia Assets to become subject
to any Liens, except for Permitted Liens or waive any material claims or rights
relating to the NBC Multimedia Assets;
(d) transfer any rights of material value included in the NBC
Multimedia Assets;
(e) authorize any of, or commit or agree to take any of, the foregoing
actions.
5.4 Access to Information. From the date hereof 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
45
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 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.
5.5 No Solicitation. (a) From and after the date hereof 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 the date hereof 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
46
of Directors of Xoom for the adoption of the Xenon 2 Merger Agreement or vote in
favor of 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.
5.6 Non-Solicitation of Employees. The parties hereto agree that
-----------------------------
beginning on the date hereof and continuing until one year after the Effective
Time, no party shall, directly or
47
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.
5.7 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 the date hereof)
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 VII
OTHER AGREEMENTS
----------------
6.1 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 of the parties hereto shall promptly furnish to
the other party all information concerning itself, its
48
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 (ii 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.
6.2 Stockholder Meeting. Xoom shall promptly after the date hereof 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 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
49
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.
6.3 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.
6.4 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 the Implementing
Agreements, taken as a whole or adversely affect any other business of such
party or its Affiliates.
50
(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.
6.5 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.
6.6 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 the date of this Agreement,
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 the date
hereof 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
51
to benefit each Indemnified Party each of whom shall have third party
beneficiary rights hereunder.
6.7 Employee Matters.
----------------
(a) Employees and Offers of Employment. Between the date of this
----------------------------------
Agreement 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 the date of this Agreement; 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.
(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
52
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.
6.8 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 the date hereof, 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 the date hereof, 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 the date hereof, 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 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.
53
(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.
6.9 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 the date hereof in accordance with the terms of this Agreement.
6.10 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.
6.11 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.
------------
(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):
54
(i) The transfer of the Contributed Assets pursuant to the
Agreement will qualify under Section 351(b) 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).
(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 (S) 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
55
(which tax return shall be timely filed) the information required by Treas. Reg
(S) 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. (S) 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. (S) 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.
6.12 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.
(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
56
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.
------------
6.13 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 $200 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.
6.14 Transition Services. Promptly after the date of this Agreement, 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.
57
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.
(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 the date of
this Agreement 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
58
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.
-----------
7.3 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 the date of this
Agreement 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 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 IX
INDEMNIFICATION
---------------
8.1 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,
59
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.
------------
8.2 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.
------
8.3 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 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 Agreement.
(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
60
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.
8.4 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 X
TERMINATION
-----------
9.1 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;
(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
61
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
(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.
9.2 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.
62
ARTICLE XI
MISCELLANEOUS AGREEMENTS OF THE PARTIES
---------------------------------------
10.1 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:
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
63
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.
10.2 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.
10.3 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 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.
10.4 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.
10.5 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.
64
10.6 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.
10.7 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.
10.8 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).
------
10.9 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 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 the courts of the
State of New York 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.
10.10 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.
10.11 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.
65
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: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
GE INVESTMENTS SUBSIDIARY, INC.
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title:
NEON MEDIA CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
XENON 2, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title:
XXXX.XXX, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Chairman
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 May 9, 1999
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS................................................................................... 2
1.1 Definitions............................................................................. 2
ARTICLE II
CONTRIBUTIONS AND ISSUANCES................................................................... 9
2.1 Contributions to NBC Multimedia....................................................... 9
2.2 Contributions to NMC; Issuances of NMC Capital Stock.................................. 9
2.3 Contributions To Xenon 2; Issuances of Xenon 2 Capital Stock.......................... 10
2.4 Note Issuances........................................................................ 11
2.5 Required Consents..................................................................... 11
2.6 Tax Refunds........................................................................... 12
ARTICLE III
THE MERGER.................................................................................... 12
3.1 The Merger............................................................................ 12
3.2 Closing............................................................................... 12
3.3 Effective Time........................................................................ 12
3.4 Effects of the Merger................................................................. 12
3.5 Certificates of Incorporation......................................................... 12
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....................................................... 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES................................................. 14
4.1 Representations and Warranties of NBC................................................. 14
4.2 Representations and Warranties with respect to SNAP................................... 21
4.3 Representations and Warranties of Xoom and Xenon 2.................................... 29
4.4 Representations and Warranties with respect to GE Investments Sub..................... 39
4.5 Survival of Representations and Warranties............................................ 39
4.6 No Other Representation or and Warranties............................................. 40
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME........................................................... 40
i
5.1 Conduct of the Business of Xoom Pending the Closing.................................................. 40
5.2 Conduct of the Business of SNAP Pending the Closing.................................................. 42
5.3 Conduct of the NBC Multimedia Businesses Pending the Closing......................................... 44
5.4 Access to Information................................................................................ 45
5.5 No Solicitation...................................................................................... 45
5.6 Non-Solicitation of Employees........................................................................ 47
5.7 Amendments to Schedules.............................................................................. 47
ARTICLE VI
OTHER AGREEMENTS.................................................................................................... 48
6.1 Registration Statement; Preparation of Proxy Statement............................................... 48
6.2 Stockholder Meeting.................................................................................. 49
6.3 Public Statements.................................................................................... 49
6.4 Reasonable Commercial Efforts........................................................................ 50
6.5 Notification of Certain Matters...................................................................... 50
6.6 Xenon 2 Directors.................................................................................... 51
6.7 Employee Matters..................................................................................... 51
6.8 Xenon 2 Options...................................................................................... 52
6.9 SNAP Indebtedness.................................................................................... 53
6.10 Organization of XXXX.xxx............................................................................. 54
6.11 Tax Cooperation and Consistent Reporting............................................................. 54
6.12 Tax Benefit Payments................................................................................. 55
6.13 Xoom Cash............................................................................................ 57
ARTICLE VII
CONDITIONS TO CLOSING....................................................................................... 57
7.1 Conditions Precedent to Obligations of Each Party.................................................... 57
7.2 Conditions Precedent to Obligation of NBC............................................................ 58
7.3 Conditions Precedent to Obligations of Xenon 2....................................................... 58
ARTICLE VIII
INDEMNIFICATION............................................................................................. 59
8.1 Indemnification by Xenon 2........................................................................... 59
8.2 Indemnification by NBC............................................................................... 59
8.3 Claims Procedure..................................................................................... 59
8.4 Exclusive Remedy..................................................................................... 60
ARTICLE IX
TERMINATION................................................................................................. 60
9.1 Termination Events................................................................................... 60
9.2 Effect of Termination................................................................................ 62
ARTICLE X
MISCELLANEOUS AGREEMENTS OF THE PARTIES..................................................................... 62
ii
10.1 Notices........................................................................................... 62
10.2 Integration; Amendments........................................................................... 63
10.3. Waiver............................................................................................ 63
10.4. No Assignment; Successors and Assigns............................................................. 64
10.5. Expenses.......................................................................................... 64
10.6. Severability...................................................................................... 64
10.7 Section Headings; Table of Contents............................................................... 64
10.8. Third Parties..................................................................................... 64
10.9 GOVERNING LAW; SUBMISSION TO JURISDICTION......................................................... 64
10.10 Specific Performance.............................................................................. 65
10.11 Counterparts...................................................................................... 65
iii
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 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
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
iv
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
v
