<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Information to Be Included in Statements Filed Pursuant
To Rule 13d-1(a) and Amendments Thereto Filed Pursuant to Rule 13d-2(a)
(Amendment No. __)
NBC INTERNET, INC.
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(Name of Issuer)
Class A Common Stock, par value $.0001 per share
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(Title of Class of Securities)
62873D-10-5
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(CUSIP Number)
Richard Cotton, Executive Vice President and General Counsel,
National Broadcasting Company, Inc.
30 Rockefeller Plaza, New York, NY 10012,
(212) 664-7024
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
November 30, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for
other parties to whom copies are to be sent.
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, SEE the
NOTES).
<PAGE>
SCHEDULE 13D
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CUSIP No. 62873D-10-5 Page 2 of 31 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NATIONAL BROADCASTING COMPANY, INC. 14-1682529
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /x/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 24,550,708**
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
24,550,708**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,550,708**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES**
/X/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.3%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 24,550,708 shares issuable upon conversion of Class B
common stock of the Issuer, par value $.0001 per share, and excludes 471,031
shares issuable upon conversion of 471,031 shares of Class B common stock of
the Issuer, par value $.0001 per share, issuable upon conversion of a
convertible debenture which cannot be so converted until after November 30,
2000, and excludes 30,000 shares held by Robert C. Wright.
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SCHEDULE 13D
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CUSIP No. _________ Page 3 of 31 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GENERAL ELECTRIC COMPANY 14-0689340
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /x/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7 SOLE VOTING POWER
-0-
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Beneficial Ownership of all Shares disclaimed by General Electric Company
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Not Applicable (see 11 above)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP No. _________ Page 4 of 31 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NATIONAL BROADCASTING COMPANY HOLDING, INC. 13-3448662
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /x/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
-0-
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Beneficial Ownership of all Shares disclaimed by National Broadcasting
Company Holding, Inc.
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Not Applicable (see 11 above)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP No. _________ Page 5 of 31 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NBC MULTIMEDIA, INC. 13-3716867
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
(b) /x/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) /_/
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 24,550,708**
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
24,550,708**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,550,708**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES**
/x/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.3%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 24,550,708 shares issuable upon conversion of Class B common
stock of the Issuer, par value $.0001 per share, and excludes 471,031 shares
issuable upon conversion of 471,031 shares of Class B common stock of the
Issuer, par value $.0001 per share, issuable upon conversion of a convertible
debenture which cannot be so converted until after November 30, 2000, and
excludes 30,000 shares held by Robert C. Wright.
<PAGE>
SCHEDULE 13D
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CUSIP No. _________ Page 6 of 31 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GE INVESTMENTS SUBSIDIARY, INC. _______________
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
(b) /x/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) /_/
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
-0-
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES**
/x/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Not Applicable (see 11 above)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Does not include 5,338,357 shares issuable upon conversion of 5,338,357
shares of Class B common stock of the Issuer, par value $.0001 per share,
issuable upon conversion of a convertible debenture which cannot be so converted
until after November 30, 2000.
<PAGE>
CUSIP _____________
Page 7 of 31 Pages
STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
ITEM 1. Security and Issuer.
The title and class of equity security to which this statement on
Schedule 13D relates is the Class A common stock, par value $.0001 per share
("Class A Stock"), of NBC Internet, Inc., a Delaware corporation (the
"Issuer"). The Issuer also has outstanding Class B common stock, par value
$.0001 per share, which is convertible into Class A Stock and which is not
publicly traded ("Class B Stock"). The address of the Issuer's principal
executive offices is 300 Montgomery Street, 3rd Floor, San Francisco,
California 94104.
ITEM 2. Identity and Background.
This statement is being filed by National Broadcasting Company, Inc.
("NBC"), a Delaware corporation, for and on behalf of itself, General
Electric Company ("GE"), National Broadcasting Company Holding, Inc. ("NBC
Holding"), NBC Multimedia, Inc. ("Multimedia") and GE Investments Subsidiary,
Inc. ("Investments Sub"). Multimedia is a wholly-owned subsidiary of NBC. NBC
is a wholly-owned subsidiary of NBC Holding, and NBC Holding is a
wholly-owned subsidiary of GE. Investments Sub is a wholly-owned subsidiary
of GE. NBC, GE, NBC Holding, Multimedia and Investments Sub are referred
to herein as the "Reporting Persons". An agreement among the Reporting
Persons with respect to the filing of this statement is attached hereto as
Exhibit 1.
NBC is a Delaware corporation with its principal executive offices
located at 30 Rockefeller Plaza, New York, New York 10112. The principal
business activities of NBC are the operation of television and cable
broadcast networks and television stations and the provision of related media
and Internet services. Multimedia is a Delaware corporation with its
principal executive offices located at 30 Rockefeller Plaza, New York,
New York 10112. The principal business activities of Multimedia are the
development and operation of and investment in interactive and other new
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CUSIP _____________
Page 8 of 31 Pages
media ventures. NBC Holding is a Delaware corporation with its principal
executive offices located at 30 Rockefeller Plaza, New York, New York 10112.
NBC Holding is a holding company which owns all the common stock of NBC. GE
is a New York corporation with its principal executive offices located at
3135 Easton Turnpike, Fairfield, Connecticut 06431. GE engages in providing a
wide variety of industrial, commercial and consumer products and services.
Investments Sub is a Delaware corporation with its principal executive
offices located at 3135 Easton Turnpike, Fairfield, Connecticut 06431.
Investments Sub is engaged in the business of investing in debt and equity
instruments and managing its portfolio of such investments.
Robert C. Wright is the President and Chief Executive Officer of
NBC, and his business address is 30 Rockefeller Plaza, New York, New York
10112.
The name, business address, present principal occupation or
employment, and citizenship of each director and executive officer of each of
the Reporting Persons are set forth on Schedules A, B and C attached hereto.
Except as set forth on Schedule D hereto, during the last five years
none of the Reporting Persons, nor, to the best of their knowledge, any of
their directors or executive officers, has been (i) convicted of any criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to federal or state securities
laws or finding any violation with respect to such laws.
This statement is being filed while the Reporting Persons are in the
process of verifying information required herein from their respective
directors and executive officers. If the Reporting Persons obtain information
concerning such individuals which would cause a material change in the
disclosure contained herein, an amendment to this statement will be filed
that will disclose such change.
ITEM 3. Source and Amount of Funds or Other Consideration.
On July 30, 1999 NBC acquired 960,028 shares of common stock of
Xoom.com ("Xoom"), par value $0.0001 per share ("Xoom Common Stock"), for
$57.29 per share in cash under a stock purchase agreement dated June 11,
1999. The source of funds used to purchase the shares of Xoom Common Stock
was the working capital of NBC.
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CUSIP _____________
Page 9 of 31 Pages
On November 29 and 30, 1999, a series of transactions contemplated
by the Second Amended and Restated Agreement and Plan of Contribution,
Investment and Merger (which is attached as Exhibit 2 hereto), as amended by
the amendment attached as Exhibit 3 hereto (as amended, the "Second Amended
and Restated Agreement") among Xoom and certain of its subsidiaries and NBC
and certain of its affiliates was consummated. Initially, on November 29,
1999, each share of Xoom Common Stock was converted into the right to receive
one share of Class A Stock, and as a result, Multimedia received 960,028
shares of Class A Stock (which on November 30, 1999 was automatically
converted into Class B Stock in connection with the merger of Neon Media
Corporation ("NMC") and the Issuer described below).
On November 30, 1999, (A) each share of NMC common stock was
exchanged for one share of Class B Stock, which resulted in the issuance of
12,173,111 shares of Class B Stock to Multimedia; and (B) Multimedia, in
exchange for its ownership interests in SNAP! LLC (including its options to
purchase additional equity interests in SNAP! LLC), received (x) 11,417,569
shares of Class B Stock and (y) a $39,477,953 zero coupon convertible
debenture due 2006 from the Issuer, a copy of which is attached as Exhibit 4
to this Schedule 13D ("Convertible Note 1"), which will be convertible by its
holder into 471,031 shares of Class B Stock at any time after November 30,
2000.
Also on November 30, 1999, Investments Sub received a $447,416,805
zero coupon convertible debenture due 2006 from the Issuer, a copy of which
is attached as Exhibit 5 to this Schedule 13D ("Convertible Note 2", and
together with Convertible Note 1, the "Convertible Notes") in exchange for
the assignment to the Issuer of a promissory note of NBC in the amount of
$340 million. Convertible Note 2 may be converted by its holder into
5,338,357 shares of Class B Stock at any time after November 30, 2000.
Each Convertible Note matures on November 30, 2006, the seventh
anniversary of the closing of the transactions contemplated by the Second
Amended and Restated Agreement. In the event of a change of control, merger
or similar transaction, each Convertible Note is redeemable at the
purchaser's option at a price equal to the aggregate principal amount or
equivalent value in shares. The Issuer may redeem each of the Convertible
Notes after the fifth anniversary of the closing at a redemption price equal
to the principal at maturity less any original issue discount not accrued on
the redemption date. Payments of principal and interest are subordinated in
right of payment to the prior payment in full of the Issuer's other
indebtedness. However, such subordination does not limit payments of
principal or interest unless, at the time of such payment, there
is a default in payments of principal or interest under the Issuer's
other indebtedness.
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CUSIP _____________
Page 10 of 31 Pages
On November 17, 1999, Robert C. Wright, the President and Chief
Executive Officer of NBC, acquired 17,000 shares of Xoom Common Stock for an
aggregate purchase price of $1,056,349, each share of which was automatically
converted into the right to receive one share of Class A Stock in connection
with the transactions occurring on November 29, 1999 described above. On
December 8, 1999, Mr. Wright purchased an additional 13,000 shares of Class A
Stock for an aggregate purchase price of $808,025. Mr. Wright used his
personal funds in payment of the purchase price of each acquisition.
ITEM 4. Purpose of Transaction.
The Reporting Persons entered into the transactions under the Second
Amended and Restated Agreement and acquired the shares of Class B Stock as
described in this Item 4 of this Schedule 13D in order to acquire a
substantial equity interest in the Issuer and consolidate the businesses of
Xoom, SNAP! LLC and certain of NBC's Internet assets in a single operating
entity. The Reporting Persons have acquired certain rights and assumed
certain obligations with respect to the Issuer which are set forth in the
various related agreements that were entered into with respect to these
transactions, each of which is filed as an exhibit hereto (as indicated
below) and incorporated by reference herein. As the holders of the
outstanding Class B Stock, the Reporting Persons also are entitled to certain
rights under the Issuer's Restated Certificate of Incorporation.
In particular, the Governance and Investor Rights Agreement, a copy
of which is attached as Exhibit 6 hereto (the "Governance and Investor Rights
Agreement") sets forth terms pertaining to, among other things, restrictions
on acquisition and disposition of the Issuer's securities by NBC and board
representation rights. As of the date hereof, NBC and Multimedia beneficially
owned 24,550,708 shares of the Class A Stock (including shares issuable upon
conversion of Class B Stock, but excluding shares issuable upon conversion of
the Convertible Notes), which amounted to approximately 47.3% of the
outstanding common stock of the Issuer. If the Convertible Notes are
converted after November 30, 2000, NBC and its affiliates could own
approximately 52.6% (assuming no issuances of additional shares) of the
common stock of the Issuer. Only the Class A Stock is publicly traded. Except
for certain matters specified in the Governance and Investor Rights Agreement
and the Issuer's restated certificate of incorporation, the Class A Stock and
Class B Stock have the same voting rights.
The holders of the Class B Stock have the right to appoint six of
the 13 members of the Issuer's board of directors (and will retain such right
so long as such holders own 20% of the outstanding shares of common stock of
the Issuer) and the holders of the Class A Stock have the right to appoint
the remaining seven members, with the seventh member requiring the
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CUSIP _____________
Page 11 of 31 Pages
nomination of at least seven members of the Issuer's board of directors.
However, if the Convertible Notes are converted in full at a time when NBC
and its affiliates owns 35% or more of the outstanding shares of common stock
of the Issuer, then the holders of the Class B Stock would have the right to
appoint seven of the 13 members of the Issuer's board of directors and the
holders of the Class A Stock would have the right to appoint the remaining
six members. As long as the directors elected by the holders of the Class B
Stock do not constitute a majority of the Issuer's board of directors,
certain actions by the Issuer will require the approval of the directors
elected by the holder of Class B Stock. As long as the holders of the Class B
Stock have the right to elect seven directors to the Issuer's board of
directors, certain actions by the Issuer will require the approval of the
directors elected by the holders of the Class A Stock.
The foregoing description of the Governance and Investor Rights
Agreement and Convertible Notes does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the provisions of
the Governance and Investor Rights Agreement and the Convertible Notes filed
as exhibits hereto.
In addition, CNET, Inc., a Delaware corporation ("CNET") has entered
into an agreement with NBC, as further described below in Item 6 of this
Schedule 13D, under which (i) CNET has agreed to vote its shares of Class A
Stock in the same manner as NBC with respect to certain change in control
transactions involving the Issuer and (ii) NBC has a right of first offer to
purchase shares of Class A Stock owned by CNET.
Subject to the terms of the Governance and Investor Rights
Agreement, while it is not their present intention to do so, the Reporting
Persons may seek to acquire additional shares of Class A Stock or other
securities of the Issuer through open market purchases, privately negotiated
transactions, a public tender offer, a merger, reorganization or comparable
transaction or otherwise. Alternatively, while it is not their present
intention to do so and the Governance and Investor Rights Agreement restricts
their ability to do so, the Reporting Persons may dispose of some or all of
their interest in the securities of Issuer held by them in the open market,
in privately negotiated transactions with third parties, through a public
offering upon exercise of the registration rights outlined in Item 6 of this
Schedule 13D, or otherwise, depending on the course of action the Reporting
Persons pursue, market conditions and other factors. Although the foregoing
represents the range of activities that may be taken by the Reporting Persons
with respect to the Issuer, the possible activities of the Reporting Persons
are subject to change at any time. All such activities would be performed in
compliance with all applicable laws and regulations.
Except as set forth above, none of the Reporting Persons has any
present plans or
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CUSIP _____________
Page 12 of 31 Pages
proposals which relate to or would result in any actions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. Interest in Securities of the Issuer.
(a) The responses of the Reporting Persons to Rows (7) through (13)
of the cover page of this statement on Schedule 13D are incorporated herein
by reference. As of the date hereof, (i) NBC beneficially owned in the
aggregate 24,550,708 shares of Class A Stock, representing approximately
47.3% of the outstanding shares of Class A Stock, (ii) Multimedia beneficially
owned in the aggregate 24,550,708 shares of Class A Stock, representing
approximately 47.3% of the outstanding shares of Class A Stock, and (iii)
Robert C. Wright beneficially owned 30,000 shares of Class A Stock,
representing less than 1% of the outstanding shares of Class A Stock,
in each case including shares of Class A Stock issuable upon
conversion of outstanding shares of Class B Stock, but excluding all shares
of Class A Stock issuable upon conversion of shares of Class B Stock issuable
upon conversion of the Convertible Notes, which may not be converted until
after November 30, 2000. GE, Investments Sub and NBC Holding disclaim
beneficial ownership of all shares owned by NBC and Multimedia. Each of the
Reporting Persons disclaims beneficial ownership of the shares of Class A
Stock owned by Mr. Wright.
All percentages set forth in this Item 5 are calculated including
(i) approximately 27,365,472 shares of Class A Stock outstanding on the date
hereof and (ii) 24,550,708 shares of Class A Stock issuable upon conversion
of the outstanding Class B Stock. All percentages set forth in this Item 5
are calculated excluding all shares of Class B Stock issuable upon conversion
of the Convertible Notes. All numbers and percentages set forth in this Item
5 assume that all shares of Class B Stock owned by the Reporting Persons are
converted into shares of Class A Stock.
Except as disclosed in Item 3 and this Item 5(a), none of the
Reporting Persons, nor, to the best of their knowledge, any of their
directors or executive officers, beneficially owns any shares of Class A
Stock.
(b) The responses of the Reporting Persons to (i) Rows (7) through
(13) of the cover pages of this statement on Schedule 13D and (ii) Item 5(a)
hereof are incorporated herein by reference.
Except as disclosed in this Item 5, none of the Reporting Persons,
nor to the best of their knowledge, any of their directors or executive
officers, presently has the power to vote or to direct the vote or to dispose
or direct the disposition of any shares of Class A Stock other than shares of
Class A Stock which they may be deemed to beneficially own.
(c) Except as disclosed in Item 3 hereof, none of the Reporting
Persons, nor, to the best of their knowledge, any of their directors or
executive officers, has effected any transaction
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CUSIP _____________
Page 13 of 31 Pages
in the Common Stock of the Company during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The responses to Items 3 and 4 of this Schedule 13D are incorporated
herein by reference.
NBC, the Issuer, Investments Sub, CNET, Flying Disc Investments
Limited Partnership and Chris Kitze have entered into a registration rights
agreement, a copy of which is attached as Exhibit 7 hereto (the "Registration
Rights Agreement"). Under the Registration Rights Agreement, the Issuer will
have the obligation to file a registration statement with the Securities and
Exchange Commission upon the request of NBC, CNET, Mr. Kitze or any of
their respective transferees for an offering to be made on a continuous basis
covering a minimum of $50 million of shares of Class A Stock at any time
following the later of the 12-month anniversary of the date of the
Registration Rights Agreement (November 30, 1999) and the date upon which the
Issuer is first able to file such registration statement on Form S-3. At any
time and from time to time during the period in which there is no effective
shelf registration statement covering all of the Class A Stock registrable
under the Registration Rights Agreement, NBC, CNET, Mr. Kitze or any of their
respective transferees may make a written demand that the Issuer effect the
registration under the Securities Act of all or part of their shares of Class
A Stock, provided that NBC and its transferees, on behalf of NBC and
Investments Sub, shall have only four such demand rights and the market value
of the shares to be included in each demand registration on Form S-1 must be
at least $25,000,000, valued at the time of such request. If, at any time,
the Issuer proposes to register any of its equity securities, whether for its
own account or for the account of a third party, each party to the
Registration Rights Agreement may request that the Issuer include any or all
of their shares in the registration. The Registration Rights Agreement also
contains other terms and conditions customary for similar transactions. The
description of the Registration Rights agreement contained in this Schedule
13D is qualified in its entirety by reference to the Registration Rights
Agreement attached hereto as Exhibit 7.
The Issuer has also issued the Convertible Notes to Multimedia and
Investments Sub as described in Item 3 above. If both Convertible
Notes are converted in full at a time when NBC and its affiliates own 35% or
more of the outstanding shares of the Issuer's common stock, the holders of
the Class B Stock would have the right to elect seven of the 13 members of
the Issuer's board of directors and the holders of the Class A Stock would
have the right to elect the remaining six directors. If both of the
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CUSIP _____________
Page 14 of 31 Pages
Convertible Notes are not converted in full, the holders of the Class B Stock
will have the right to elect six of the 13 members of the Issuer's board of
directors. The holders of the Class A Stock will have the right to elect the
remaining seven directors. The description of the Convertible Notes contained
in this Schedule 13D is qualified in its entirety by reference to the
Convertible Notes attached hereto as Exhibits 4 and 5.
NBC and the Issuer have entered into the Governance and Investor
Rights Agreement with respect to the governance of the Issuer. Pursuant to
the Governance and Investor Rights Agreement, NBC agreed not to, and to cause
each of the Reporting Persons and its affiliates not to, without the prior
approval of the directors nominated by the Class A Stock and subject to
certain exceptions: (a) acquire, offer to propose to acquire, or agree to
acquire additional shares of the Issuer; (b) solicit proxies in connection
with an amendment to the Issuer's restated certificate of incorporation or
for the election of Class A directors; or (c) propose to the holders of the
Class A Stock a merger, business combination or similar transaction ((a),(b)
and (c) collectively, the "Standstill Restrictions"). In addition to certain
specified exceptions, the foregoing Standstill Restrictions on NBC and its
affiliates only apply until the earliest to occur of the following events:
(i) November 30, 2002; (ii) the first anniversary of the date on which NBC
and its restricted affiliates or any filing group of which they are a part no
longer owns any shares of Class B Common Stock; (iii) a third party tender
offer; (iv) the date the Issuer enters into an agreement that will result in
a change of control of the Issuer or (v) any change of control of the Issuer.
The restrictions may, however, be reinstated if the third party tender offer
giving rise to their termination is withdrawn or terminated.
The Governance and Investor Rights Agreement also contains
restrictions on transfer by NBC and its affiliates and provisions which grant
NBC certain rights to purchase a proportional share of additional shares of
Class B Stock in the event the Issuer issues shares of capital stock and the
right to designate nominees to the board of directors of the Issuer. The
description of the Governance and Investor Rights Agreement contained in this
Schedule 13D is qualified in its entirety by reference to the Governance and
Investor Rights Agreement attached hereto as Exhibit 6.
CNET has entered into an agreement with NBC, a copy of which is
attached as Exhibit 8 hereto (the "Voting and Right of First Offer
Agreement") under which CNET has agreed to vote its shares of Class A Stock
in the same manner as NBC with respect to the following transactions
involving the Issuer: (a) change in control transactions, including a merger,
business combination and sale of substantially all assets or equity
securities of the Issuer; and (b) other material transactions, including any
sale of more than 5% of the total assets or equity securities of the Issuer.
In addition, NBC has a right of first offer to purchase shares of Class A
Stock owned by CNET upon CNET's notice to NBC describing the material terms
of the proposed sale or transfer
<PAGE>
CUSIP _____________
Page 15 of 31 Pages
to a third party other than NBC. The description of the Voting and Right of
First Offer Agreement contained in this Schedule 13D is qualified in its
entirety by reference to the Voting and Right of First Offer Agreement
attached hereto as Exhibit 8.
Except as set forth in this Schedule 13D, to the best knowledge of
the Reporting Persons, there are no other contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named
in Item 2 of this Schedule 13D and between such persons and any person with
respect to any securities of the Issuer, including, but not limited to,
transfer or voting of any of the securities of the Issuer, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division
of profits or loss, or the giving or withholding of proxies, or a pledge or
contingency the occurrence of which would give another person voting power or
investment power over the securities of the Issuer.
ITEM 7. Material to Be Filed as Exhibits.
<TABLE>
<S> <C>
Exhibit 1 Joint Filing Agreement by and among the Reporting Persons.
Exhibit 2 Second Amended and Restated Agreement and Plan of
Contribution, Investment and Merger, dated July 8, 1999,
among the Issuer, NBC, Investments Sub, NMC, Xenon 2, Inc.
and Xoom.
Exhibit 3 First Amendment to the Second Amended and Restated
Agreement and Plan of Contribution, Investment and Merger,
dated October 20, 1999, among the Issuer, NBC, Investments
Sub, NMC, Xenon 2, Inc. and Xoom.
Exhibit 4 $39,477,953 Subordinated Zero Coupon Convertible Debenture
due 2006.
Exhibit 5 $447,416,845 Subordinated Zero Coupon Convertible
Debenture due 2006.
Exhibit 6 Governance and Investor Rights Agreement, dated as of
November 30, 1999, between the Issuer and NBC.
Exhibit 7 Registration Rights Agreement, dated as of November 30,
1999, among the Issuer, CNET, NBC, Investments Sub, Flying
Disc Investments Limited Partnership and Chris Kitze.
Exhibit 8 Voting and Right of First Offer Agreement, dated as of
November 30, 1999, between NBC and CNET.
</TABLE>
<PAGE>
CUSIP _____________
Page 16 of 31 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC COMPANY
By: /s/ Robert E. Healing
--------------------
Name: Robert E. Healing
Title: Attorney-in-Fact
NATIONAL BROADCASTING COMPANY HOLDING, INC.
By: /s/ Mark W. Begor
--------------------
Name: Mark W. Begor
Title: Vice President
NATIONAL BROADCASTING COMPANY,
INC.
By: /s/ Mark W. Begor
--------------------
Name: Mark W. Begor
Title: Executive Vice President
NBC MULTIMEDIA, INC.
By: /s/ Martin J. Yudkovitz
--------------------
Name: Martin J. Yudkovitz
Title: President
<PAGE>
CUSIP _____________
Page 17 of 31 Pages
GE INVESTMENTS SUBSIDIARY, INC.
By: /s/ Robert E. Healing
--------------------
Name: Robert E. Healing
Title: Vice President
Dated: December 10, 1999
<PAGE>
CUSIP _____________
Page 18 of 31 Pages
SCHEDULE A TO SCHEDULE 13D
Filed by National Broadcasting Company, Inc.
National Broadcasting Company, Inc.
Directors and Executive Officers
<TABLE>
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
Directors
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman, Illinois
Suite 103 Tool Works
Lake Forest, IL 60045
Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer, Avon
New York, NY 10105 Products, Inc.
G.G. Michelson Federated Department Stores Former Member of the Board
151 West 34th Street of Directors, Federated
New York, NY 10001 Department Stores
S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, GA 30303
J.D. Opie General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer,
Fairfield, CT 06431 General Electric Company
R.S. Penske Penske Corporation Chairman of the Board and
13400 Outer Drive, West President, Penske
Detroit, MI 48239-4001 Corporation
F.H.T. Rhodes Cornell University President Emeritus, Cornell
3104 Snee Building University
Ithaca, NY 14853
A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO and former
1 Champion Plaza Director, Champion
<PAGE>
CUSIP _____________
Page 19 of 31 Pages
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
Stamford, CT 06921 International Corporation
D.A. Warner III J.P. Morgan & Co., Inc. and Chairman of the Board,
Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer, J.P.
New York, NY 10260 Morgan & Co. Incorporated
and Morgan Guaranty Trust
Company
J.F. Welch, Jr. General Electric Company Chairman of the Board and
3135 Easton Turnpike Chief Executive Officer,
Fairfield, CT 06431 General Electric Company
Executive Officers
John F. Welch Jr. National Broadcasting Chairman
Company, Inc.
3135 Easton Turnpike
Fairfield, CT 06431
Robert C. Wright National Broadcasting Chief Executive Officer &
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Garth Ancier National Broadcasting Executive Vice President
Company, Inc.
3000 West Alameda Avenue
Burbank, CA 91523
Mark W. Begor National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
William Bolster CNBC, Inc. Executive Vice President
2200 Fletcher Avenue
Fort Lee, NJ 07024
Richard Cotton National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Duncan Ebersol National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
John W. Eck National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
<PAGE>
CUSIP _____________
Page 20 of 31 Pages
Randel A. Falco National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
</TABLE>
<PAGE>
CUSIP _____________
Page 21 of 31 Pages
<TABLE>
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
Andrew Lack National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Scott Sassa National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Edward Scanlon National Broadcasting Executive Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Pamela Thomas-Graham CNBC.com LLC Executive Vice President
2200 Fletcher Avenue
Ft. Lee, NJ 07024
Kassie Canter National Broadcasting Senior Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
</TABLE>
Each person listed above is a citizen of the United States of America except
Andrea Jung, who is a citizen of Canada.
<PAGE>
CUSIP _____________
Page 22 of 31 Pages
<TABLE>
<CAPTION>
NBC Multimedia, Inc.
Directors and Executive Officers
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
Directors
Mark W. Begor National Broadcasting Company, Inc. Executive Vice President,
30 Rockefeller Plaza National Broadcasting
New York, NY 10112 Company, Inc
Martin J. Yudkovitz National Broadcasting Company, Inc. President, NBC Interactive
30 Rockefeller Plaza Media
New York, NY 10112
Executive Officers
Martin J. Yudkovitz National Broadcasting Company, Inc. President, NBC Interactive
30 Rockefeller Plaza Media
New York, NY 10112
Margaret Murphy National Broadcasting Company, Inc. Vice President, NBC Interactive
30 Rockefeller Plaza Media
New York, NY 10112
</TABLE>
Each person listed above is a citizen of the United States of America.
<PAGE>
CUSIP _____________
Page 23 of 31 Pages
SCHEDULE B TO SCHEDULE 13D
Filed by General Electric Company
General Electric Company
Directors and Executive Officers
<TABLE>
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
Directors
J.I. Cash, Jr. Harvard Business School Professor of Business
Baker Library 187 Administration-Graduate
Soldiers Field School of Business
Boston, MA 02163 Administration, Harvard
University
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman, Illinois
Suite 103 Tool Works
Lake Forest, IL 60045
D.D. Dammerman General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer,
Fairfield, CT 06431 General Electric Company;
Chairman and Chief Executive
Officer, General Electric
Capital Services, Inc.
P. Fresco Fiat SpA Chairman of the Board, Fiat
via Nizza 250 SpA
10126 Torino, Italy
A.M. Fudge Kraft Foods, Inc. Executive Vice President
555 South Broadway
Tarrytown, NY 10591
C.X. Gonzalez Kimberly-Clark de Mexico, Chairman of the Board and
S.A. de C.V. Chief Executive Officer,
Jose Luis Lagrange 103, Kimberly-Clark de Mexico,
Tercero Piso S.A. de C.V.
Colonia Los Morales
Mexico, D.F. 11510, Mexico
Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer, Avon
New York, NY 10105 Products, Inc.
<PAGE>
CUSIP _____________
Page 24 of 31 Pages
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
K.G. Langone Invemed Associates, Inc. Chairman, President and
375 Park Avenue Chief Executive Officer,
New York, NY 10152 Invemed Associates, Inc.
G.G. Michelson Federated Department Stores Former Member of the Board
151 West 34th Street of Directors, Federated
New York, NY 10001 Department Stores
S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, GA 30303
J.D. Opie General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer,
Fairfield, CT 06431 General Electric Company
R.S. Penske Penske Corporation Chairman of the Board and
13400 Outer Drive, West President, Penske
Detroit, MI 48239-4001 Corporation
F.H.T. Rhodes Cornell University President Emeritus, Cornell
3104 Snee Building University
Ithaca, NY 14853
A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO and former
1 Champion Plaza Director, Champion
Stamford, CT 06921 International Corporation
D.A. Warner III J.P. Morgan & Co., Inc. Chairman of the Board,
and Morgan Guaranty President, and Chief
Trust Co. Executive Officer, J.P.
60 Wall Street Morgan & Co. Incorporated
New York, NY 10260 and Morgan Guaranty Trust
Company
J.F. Welch, Jr. General Electric Company Chairman of the Board and
3135 Easton Turnpike Chief Executive Officer,
Fairfield, CT 06431 General Electric Company
Executive Officers
J.F. Welch, Jr. General Electric Company Chairman of the Board and
3135 Easton Turnpike Chief Executive Officer
<PAGE>
CUSIP _____________
Page 25 of 31 Pages
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
Fairfield, CT 06431
P.D. Ameen General Electric Company Vice President and
3135 Easton Turnpike Comptroller
Fairfield, CT 06431
J.R. Bunt General Electric Company Vice President and Treasurer
3135 Easton Turnpike
Fairfield, CT 06431
D.L. Calhoun General Electric Company Senior Vice President - GE
Nela Park Lighting
Cleveland, OH 44122
W.J. Conaty General Electric Company Senior Vice President -
3135 Easton Turnpike Human Resources
Fairfield, CT 06431
D.M. Cote General Electric Company Senior Vice President - GE
3135 Easton Turnpike Appliances
Fairfield, CT 06431
D.D. Dammerman General Electric Company Vice Chairman of the Board
and Executive Officer,
General Electric Company;
Chairman and Chief Executive
Officer, General Electric
Capital Services, Inc.
L.S. Edelheit General Electric Company Senior Vice President -
P.O. Box 8 Corporate Research and
Schenectady, NY 12301 Development
B.W. Heineman, Jr. General Electric Company Senior Vice President -
3135 Easton Turnpike General Counsel and
Fairfield, CT 06431 Secretary
J.R. Immelt General Electric Company Senior Vice President - GE
P.O. Box 414 Medical Systems
Milwaukee, WI 53201
G.S. Malm General Electric Company Senior Vice President - Asia
<PAGE>
CUSIP _____________
Page 26 of 31 Pages
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
3135 Easton Turnpike
Fairfield, CT 06431
W.J. McNerney, Jr. General Electric Company Senior Vice President - GE
1 Neumann Way Aircraft Engines
Cincinnati, OH 05215
R.L. Nardelli General Electric Company Senior Vice President - GE
1 River Road Power Systems
Schenectady, NY 12345
R.W. Nelson General Electric Company Vice President - Corporate
3135 Easton Turnpike Financial Planning and
Fairfield, CT 06431 Analysis
J.D. Opie General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer
Fairfield, CT 06431
G.M. Reiner General Electric Company Senior Vice President -
3135 Easton Turnpike Chief Information Officer
Fairfield, CT 06431
J.G. Rice General Electric Company Vice President - GE
2901 East Lake Road Transportation Systems
Erie, PA 16531
G.L. Rogers General Electric Company Senior Vice President - GE
1 Plastics Avenue Plastics
Pittsfield, MA 01201
K.S. Sherin General Electric Company Senior Vice President -
3135 Easton Turnpike Finance and Chief Financial
Fairfield, CT 06431 Officer
L.G. Trotter General Electric Company Senior Vice President - GE
41 Woodward Avenue Industrial Systems
Plainville, CT 06062
</TABLE>
Each person listed above is a citizen of the United States of America except:
C.X. Gonzalez, who is a citizen of Mexico; P. Fresco, who is a citizen of Italy;
Andrea Jung, who is a citizen of Canada; and G.S. Malm, who is a citizen of
Sweden.
<PAGE>
CUSIP _____________
Page 27 of 31 Pages
GE Investments Subsidiary, Inc.
Directors and Executive Officers
<TABLE>
<CAPTION>
NAME PRESENT BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION
- -------- -------------------------- ------------------------------
<S> <C> <C>
Directors
Philip D. Ameen General Electric Company Vice President and
3135 Easton Turnpike Comptroller, General
Fairfield, CT 06431 Electric Company
James R. Bunt General Electric Company Vice President and
3135 Easton Turnpike Treasurer, General
Fairfield, CT 06431 Electric Company
John M. Samuels General Electric Company Vice President and Senior
3135 Easton Turnpike Counsel, General Electric
Fairfield, CT 06431 Company
Executive Officers
James R. Bunt General Electric Company Vice President and
3135 Easton Turnpike Treasurer, General
Fairfield, CT 06431 Electric Company
John M. Samuels General Electric Company Vice President and Senior
3135 Easton Turnpike Counsel, General Electric
Fairfield, CT 06431 Company
Philip D. Ameen General Electric Company Vice President and
3135 Easton Turnpike Comptroller, General
Fairfield, CT 06431 Electric Company
Robert E. Healing General Electric Company Corporate Counsel,
3135 Easton Turnpike General Electric Company
Fairfield, CT 06431
Eliza W. Fraser General Electric Company Associate Corporate
3135 Easton Turnpike Counsel, General Electric
Fairfield, CT 06431 Company
Mark E. Buchanan General Electric Company Manager, State Tax,
3135 Easton Turnpike General Electric Company
Fairfield, CT 06431
Barbara A. Melita General Electric Company Tax Specialist
3135 Easton Turnpike General Electric Company
Fairfield, CT 06431
Robert J. Zalucki General Electric Company Tax Counsel and Quality
3135 Easton Turnpike Leader, General
Fairfield, CT 06431 Electric Company
</TABLE>
<PAGE>
CUSIP _____________
Page 28 of 31 Pages
SCHEDULE C TO SCHEDULE 13D
Filed by National Broadcasting Company Holding, Inc.
National Broadcasting Company Holding, Inc.
Directors and Executive Officers
<TABLE>
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
Directors
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman, Illinois
Suite 103 Tool Works
Lake Forest, IL 60045
Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer, Avon
New York, NY 10105 Products, Inc.
G.G. Michelson Federated Department Stores Former Member of the Board
151 West 34th Street of Directors, Federated
New York, NY 10001 Department Stores
S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, GA 30303
J.D. Opie General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer,
Fairfield, CT 06431 General Electric Company
R.S. Penske Penske Corporation Chairman of the Board and
13400 Outer Drive, West President, Penske
Detroit, MI 48239-4001 Corporation
F.H.T. Rhodes Cornell University President Emeritus, Cornell
3104 Snee Building University
Ithaca, NY 14853
<PAGE>
CUSIP _____________
Page 29 of 31 Pages
<CAPTION>
Name Present Business Address Present Principal Occupation
- ---- ------------------------ ----------------------------
<S> <C> <C>
A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO and former
1 Champion Plaza Director, Champion
Stamford, CT 06921 International Corporation
D.A. Warner III J.P. Morgan & Co., Inc. Chairman of the Board,
and Morgan Guaranty President, and Chief
Trust Co. Executive Officer, J.P.
60 Wall Street Morgan & Co. Incorporated
New York, NY 10260 and Morgan Guaranty Trust
Company
J.F. Welch, Jr. General Electric Company Chairman of the Board and
3135 Easton Turnpike Chief Executive Officer,
Fairfield, CT 06431 General Electric Company
Executive Officers
Robert C. Wright National Broadcasting Chief Executive Officer and
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Mark W. Begor National Broadcasting Vice President and Treasurer
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
</TABLE>
Each person listed above is a citizen of the United States of America except
Andrea Jung, who is a citizen of Canada.
<PAGE>
CUSIP _____________
Page 30 of 31 Pages
SCHEDULE D TO SCHEDULE 13D
GE CONVICTIONS WITHIN THE PAST FIVE YEARS
-----------------------------------------
1. Her Majesty's Inspectorate of Pollution v. IGE Medical Systems Limited
(St. Albans Magistrates Court, St. Albans, Hertsfordshire, England, Case No.
04/00320181)
In April 1994, IGE Medical Systems Limited ("IGEMS"), a U.K. subsidiary
of GE Medical Systems, discovered the loss of a radioactive barium source at the
Radlett, England facility. The lost source, used to calibrate nuclear camera
detectors, emits a very low level of radiation. IGEMS immediately reported the
loss as required by the U.K. Radioactive Substances Act. An ensuing
investigation, conducted in cooperation with government authorities, failed to
locate the source. On July 21, 1994, Her Majesty's Inspectorate of Pollution
("HMIP") charged IGEMS with violating the Radioactive Substances Act by failing
to comply with a condition of registration. The Act provides that a registrant
like IGEMS, which "does not comply with a limitation or condition subject to
which (it) is so registered ... shall be guilty of (a criminal) offense."
Condition 7 of IGEMS' registration states that it "shall so far as is reasonably
practicable prevent ... loss of any registered source."
At the beginning of trial on February 24, 1995, IGEMS entered a guilty
plea and agreed to pay a fine of GBP 5,000 and assessed costs of GBP 5,754. The
prosecutor's presentation focused primarily on the 1991 change in internal IGEMS
procedures and, in particular, the source logging procedure. The prosecutor
complimented IGEMS' investigation and efforts to locate the source and advised
the court that IGEMS had no previous violations of the Radioactive Substances
Act. He also told the court that the Radlett plant had been highlighted as an
exemplary facility to HMIP inspectors as part of their training. In mitigation,
IGEMS emphasized the significant infrastructure and expense undertaken by IGEMS
to provide security for radiation sources and the significant effort and expense
incurred in attempting to locate the missing source.
<PAGE>
CUSIP _____________
Page 31 of 31 Pages
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
Exhibit 1 Joint Filing Agreement by and among the Reporting Persons.
Exhibit 2 Second Amended and Restated Agreement and Plan of
Contribution, Investment and Merger, dated July 8, 1999,
among the Issuer, NBC, Investments Sub, NMC, Xenon 2, Inc.
and XOOM.
Exhibit 3 First Amendment to the Second Amended and Restated
Agreement and Plan of Contribution, Investment and Merger,
dated October 20, 1999, among the Issuer, NBC, Investments
Sub, NMC, Xenon 2, Inc. and XOOM.
Exhibit 4 $39,477,953 Subordinated Zero Coupon Convertible Debenture
due 2006.
Exhibit 5 $447,416,845 Subordinated Zero Coupon Convertible
Debenture due 2006.
Exhibit 6 Governance and Investor Rights Agreement, dated as of
November 30, 1999, among the Issuer and NBC.
Exhibit 7 Registration Rights Agreement, dated as of November 30,
1999, among the Issuer, CNET, NBC, Investments Sub, Flying
Disc Investments Limited Partnership and Chris Kitze.
Exhibit 8 Voting and Right of First Offer Agreement, dated as of
November 30, 1999, among NBC and CNET.
</TABLE>
<PAGE>
Exhibit 1
JOINT FILING AGREEMENT
We, the signatories of the statement on Schedule 13D to which this
Agreement is attached, hereby agree that such statement is, and any amendments
thereto filed by any of us will be, filed on behalf of each of us.
Dated: December 10, 1999
GENERAL ELECTRIC COMPANY
By: /s/ Robert E. Healing
--------------------
Name: Robert E. Healing
Title: Attorney-in-Fact
NATIONAL BROADCASTING COMPANY HOLDING, INC.
By: /s/ Mark W. Begor
--------------------
Name: Mark W. Begor
Title: Vice President
NATIONAL BROADCASTING COMPANY,
INC.
By: /s/ Mark W. Begor
--------------------
Name: Mark W. Begor
Title: Executive Vice President
<PAGE>
NBC MULTIMEDIA, INC.
By: /s/ Martin J. Yudkovitz
--------------------
Name: Martin J. Yudkovitz
Title: President
GE INVESTMENTS SUBSIDIARY, INC.
By: /s/ Robert E. Healing
--------------------
Name: Robert E. Healing
Title: Vice President
<PAGE>
Exhibit 2
AMENDED AND RESTATED AGREEMENT
AND PLAN OF CONTRIBUTION, INVESTMENT AND MERGER
among
NATIONAL BROADCASTING COMPANY, INC.
GE INVESTMENTS SUBSIDIARY, INC.
NEON MEDIA CORPORATION
XENON 2, INC.
and
XOOM.COM, INC.
Dated as of June 11, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS..............................................................................................2
1.1 Definitions.....................................................................................2
ARTICLE II
CONTRIBUTIONS AND ISSUANCES..............................................................................9
2.1 Contributions to NBC and NBC Multimedia.........................................................9
2.2 Contributions to NMC; Issuances of NMC Capital Stock...........................................10
2.3 GE Investments Sub Purchase of Videoseeker Assets..............................................10
2.4 Contributions To Xenon 2; Issuances of Xenon 2 Capital Stock...................................10
2.5 Note Issuances.................................................................................11
2.6 Required Consents..............................................................................12
2.7 Tax Refunds....................................................................................12
ARTICLE III
THE MERGER..............................................................................................12
3.1 The Merger.....................................................................................12
3.2 Closing........................................................................................12
3.3 Effective Time.................................................................................13
3.4 Effects of the Merger..........................................................................13
3.5 Certificates of Incorporation..................................................................13
3.6 By-Laws........................................................................................13
3.7 Officers and Directors of Surviving Corporation and Xenon 2....................................13
3.8 Effect on Capital Stock........................................................................13
3.9 Exchange Procedures. .........................................................................14
3.10 No Further Ownership Rights in NMC Common Stock. .............................................14
3.11 Further Assurances. ..........................................................................14
3.12 Federal Income Tax Consequences. .............................................................15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES...........................................................15
4.1 Representations and Warranties of NBC..........................................................15
4.2 Representations and Warranties with respect to SNAP............................................22
4.3 Representations and Warranties of Xoom and Xenon 2.............................................30
4.4 Representations and Warranties with respect to GE Investments Sub..............................40
4.5 Survival of Representations and Warranties.....................................................41
4.6 No Other Representation or and Warranties......................................................41
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME.............................................................41
5.1 Conduct of the Business of Xoom Pending the Closing............................................41
5.2 Conduct of the Business of SNAP Pending the Closing............................................43
5.3 Conduct of the NBC Multimedia Businesses Pending the Closing...................................45
5.4 Access to Information..........................................................................46
5.5 No Solicitation................................................................................47
5.6 Non-Solicitation of Employees..................................................................49
5.7 Amendments to Schedules........................................................................49
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI
OTHER AGREEMENTS........................................................................................49
6.1 Registration Statement; Preparation of Proxy Statement.........................................49
6.2 Stockholder Meeting............................................................................50
6.3 Public Statements..............................................................................51
6.4 Reasonable Commercial Efforts..................................................................51
6.5 Notification of Certain Matters................................................................52
6.6 Xenon 2 Directors..............................................................................52
6.7 Employee Matters...............................................................................53
6.8 Xenon 2 Options. ............................................................................54
6.9 SNAP Indebtedness..............................................................................55
6.10 Organization of CNBC.com.......................................................................55
6.11 Tax Cooperation and Consistent Reporting.......................................................55
6.12 Tax Benefit Payments...........................................................................57
6.13 Xoom Cash......................................................................................58
ARTICLE VII
CONDITIONS TO CLOSING...................................................................................59
7.1 Conditions Precedent to Obligations of Each Party..............................................59
7.2 Conditions Precedent to Obligation of NBC......................................................60
7.3 Conditions Precedent to Obligations of Xenon 2.................................................60
ARTICLE VIII
INDEMNIFICATION.........................................................................................61
8.1 Indemnification by Xenon 2.....................................................................61
8.2 Indemnification by NBC.........................................................................61
8.3 Claims Procedure...............................................................................61
8.4 Exclusive Remedy...............................................................................62
ARTICLE IX
TERMINATION.............................................................................................62
9.1 Termination Events.............................................................................62
9.2 Effect of Termination..........................................................................64
ARTICLE X
MISCELLANEOUS AGREEMENTS OF THE PARTIES.................................................................64
10.1 Notices........................................................................................64
10.2 Integration; Amendments........................................................................65
10.3. Waiver.........................................................................................65
10.4. No Assignment; Successors and Assigns..........................................................66
10.5. Expenses.......................................................................................66
10.6. Severability...................................................................................66
10.7 Section Headings; Table of Contents............................................................66
10.8. Third Parties..................................................................................66
10.9 GOVERNING LAW; SUBMISSION TO JURISDICTION......................................................66
10.10 Specific Performance...........................................................................67
10.11 Counterparts...................................................................................67
10.12 Amendment and Restatement......................................................................67
</TABLE>
ii
<PAGE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Advertising Agreement Term Sheet
Exhibit B Standstill Agreement
Exhibit C Voting and Right of First Offer Agreement
Exhibit D Governance and Investor Rights Agreement
Exhibit E Brand Integration and License Agreement
Exhibit F Registration Rights Term Sheet
Exhibit G Summary of Principal Terms of Xenon 2 Convertible
Note
Exhibit H NBC Note- Summary of Principal Terms
Exhibit 3.5 Restated Certificate of Incorporation of Xenon 2, Inc.
Exhibit 3.6 Bylaws of Xenon 2, Inc.
SCHEDULES
Schedule 1.1(a) Knowledge Definition
Schedule 1.1(b) NBC Multimedia Assets
Schedule 1.1(c) NBC Multimedia Liabilities
Schedule 1.1(d) Videoseeker Assets
Schedule 1.1(e) Videoseeker Liabilities
Schedule 2.1 Rights and Obligations of CNBC, Inc. Interests
Schedule 3.7 Officers and Directors
Schedule 4.1(c) Governmental Approvals; Consents
Schedule 4.1(e) Financial Information
Schedule 4.1(f) Absence of Certain Changes or Events
Schedule 4.1(h) Properties, Contracts, Permits and Other Data
Schedule 4.1(i) Legal Proceedings
Schedule 4.1(j) Labor Controversies
Schedule 4.1(k) Intellectual Property and Technology
Schedule 4.1(l) Government Licenses, Permits, Etc.
Schedule 4.1(n) Environmental Matters
Schedule 4.1(o) Employee Benefit Matters
Schedule 4.1(q) Entire Business
Schedule 4.2(c) Governmental Approvals; Consents
Schedule 4.2(e) Equity Interests
Schedule 4.2(f) Financial Information; Liabilities
Schedule 4.2(g) Absence of Certain Changes or Events
Schedule 4.2(h) Title to Properties; Liens
Schedule 4.2(i) Properties, Contracts, Permits
Schedule 4.2(j) Legal Proceedings
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
Schedule 4.2(k) Labor Controversies
Schedule 4.2(l) Intellectual Property and Technology
Schedule 4.2(m) Government Licenses, Permits
Schedule 4.2(o) Environmental Matters
Schedule 4.2(p) Employee Benefit Matters
Schedule 4.2(r) Tax Matters
Schedule 4.2(t) Acceleration of Options
Schedule 4.3(c) Governmental Approvals; Consents
Schedule 4.3(g) Stock Options
Schedule 4.3(h) Obligations with Respect to Capital Stock
Schedule 4.3(j) Absence of Certain Changes or Events
Schedule 4.3(k) Properties, Contracts, Permits and Other Data
Schedule 4.3(l) Legal Proceedings
Schedule 4.3(m) Labor Controversies
Schedule 4.3(n) Intellectual Property
Schedule 4.3(o) Government Licenses, Permits, Etc.
Schedule 4.3(q) Employee Benefits Matters
Schedule 4.3(q)(iii) Exception to Employee Benefit Plan Compliance
Schedule 4.3(q)(vii) Benefit Payments Required
Schedule 4.3(s) Tax Matters
Schedule 4.3(u) Year 2000 Compliance
Schedule 5.1 Conduct of the Business of Xoom Pending the Closing
Schedule 5.2 Conduct of the Business of SNAP Pending the Closing
Schedule 6.4 Required Consents
Schedule 6.7(a) Transferred Employees
Schedule 6.9 SNAP Indebtedness
Schedule 6.10 Organization of CNBC
iv
<PAGE>
AMENDED AND RESTATED AGREEMENT
AND PLAN OF CONTRIBUTION, INVESTMENT AND MERGER
This Amended and Restated Agreement and Plan of Contribution,
Investment and Merger, dated as of June 11, 1999 (hereinafter, the "AGREEMENT"),
among National Broadcasting Company, Inc., a Delaware corporation ("NBC"), GE
Investments Subsidiary, Inc., a Delaware corporation ("GE INVESTMENTS SUB"),
Neon Media Corporation, a Delaware corporation ("NMC"), Xenon 2, Inc., a
Delaware corporation ("XENON 2") and XOOM.com, Inc., a Delaware corporation
("XOOM").
W I T N E S S E T H:
WHEREAS, the parties hereto are party to the Agreement and
Plan of Contribution, Investment and Merger, dated as of May 9, 1999 (the
"EXISTING MERGER AGREEMENT");
WHEREAS, the parties hereto have agreed to amend and restate
the Existing Merger Agreement as set forth in this Agreement, all on the terms
and conditions hereinafter set forth so that, as amended and restated, the
Existing Merger Agreement reads in its entirety as provided in this Agreement;
WHEREAS, NBC owns all of the outstanding capital stock of NBC
Multimedia, Inc., a Delaware corporation ("NBC MULTIMEDIA");
WHEREAS, NBC Multimedia formed NMC for the purpose of
effecting the transactions contemplated by this Agreement and all of its
outstanding capital stock is owned by NBC Multimedia;
WHEREAS, Xoom, Xenon 2, Xenon 3, Inc., a Delaware corporation
("XENON 3"), SNAP! LLC, a Delaware limited liability company ("SNAP") and CNET,
Inc., a Delaware corporation ("CNET"), are parties to an Agreement and Plan of
Contribution and Merger dated as of May 9, 1999 (the "XENON 2 MERGER AGREEMENT")
pursuant to which, among other things, the parties thereto have agreed that (i)
Xenon 3 will merge with and into Xoom, with Xoom as the surviving corporation,
and each outstanding share of common stock of Xoom, par value $0.0001 per share,
will be converted into the right to receive one share of Class A Common Stock of
Xenon 2 and (ii) CNET will contribute to Xenon 2 certain assets in exchange for
shares of Class A Common Stock of Xenon 2;
WHEREAS, Xoom owns all of the outstanding capital stock of
Xenon 2, and Xenon 2 owns all of the outstanding stock of Xenon 3;
WHEREAS, the closing of the transactions contemplated by the
Xenon 2 Merger Agreement is a condition to the closing of the transactions
contemplated by this Agreement;
<PAGE>
2
WHEREAS, while the closing under the Xenon 2 Merger Agreement
and the closing under this Agreement are not contingent on each other, it is
intended that both transactions represent a series of steps in the formation of
Xenon 2 whereby the rights of all the parties are defined;
WHEREAS, the consummation of the transactions contemplated by
the Xenon 2 Merger Agreement and this Agreement would combine certain assets of
NBC and CNET with the existing business of Xoom in a new holding company
structure intended to achieve important business objectives;
WHEREAS, the Board of Directors of each of Xoom, Xenon 2 and
Xenon 3 believe it is advisable for such parties to enter into this Agreement
and to consummate the transactions provided for herein;
WHEREAS, concurrently with the execution hereof, in order to
induce NBC to enter into this Agreement, NBC, Xoom and certain stockholders of
Xoom are entering into a voting agreement providing for certain voting and other
restrictions with respect to shares of Xoom common stock owned by such
stockholders, all upon the terms and conditions specified therein; and
WHEREAS, NBC, GE Investments Sub, NMC, Xoom and Xenon 2 desire
to make certain representations, warranties, covenants and other agreements in
connection with the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the
mutual promises contained herein, and intending to be legally bound, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. (a) Capitalized terms used and not defined in
this Agreement shall have the following meanings:
"ADVERTISING AGREEMENT" means the advertising agreement
between Xenon 2 and NBC to be dated as of the Closing Date having the terms set
forth in EXHIBIT A hereto.
"AFFILIATE" means with respect to a specified Person, any
Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the specified
Person. As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, as trustee or executor, by contract or credit arrangement or
otherwise.
<PAGE>
3
"BUSINESS DAY" means a day, other than Saturday or Sunday, on
which commercial banks in New York City are open for the general transaction of
business.
"CLASS A COMMON STOCK" means the Class A common stock, $0.0001
par value per share, of Xenon 2.
"CLASS B COMMON STOCK" means the Class B common stock, $0.0001
par value per share, of Xenon 2.
"CNBC.COM" means the entity to be formed by NBC or its
Subsidiaries pursuant to SECTION 6.10 to conduct business through the CNBC.com
universal resource locator.
"CNET STANDSTILL AGREEMENT" means a Standstill Agreement
between Xenon 2 and CNET to be dated as of the Closing Date substantially in the
form of EXHIBIT B hereto.
"CNET VOTING AGREEMENT" means a Voting and Right of First
Offer Agreement between CNET and NBC to be dated as of the Closing Date
substantially in the form of EXHIBIT C hereto.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRIBUTED ASSETS" means the Xoom Stock, the interests in
SNAP and the NBC Multimedia Assets.
"ENVIRONMENTAL LAWS" means any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirement (including, without limitation, common law) of any
foreign government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health, or employee health and safety.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FINAL DETERMINATION" means a determination as defined in
Section 1313(a) of the Code or any other event which finally and conclusively
establishes the amount of any liability for Taxes.
"FLYING DISC" means Flying Disc Investments Limited
Partnership, a Nevada limited partnership.
<PAGE>
4
"GAAP" means generally accepted accounting principles in the
United States.
"GOVERNANCE AGREEMENT" means the governance agreement between
Xenon 2 and NBC to be dated as of the Closing Date substantially in the form set
forth in EXHIBIT D hereto.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"IMPLEMENTING AGREEMENTS" means, the NBC Note, the Xenon 2
Convertible Note, the Governance Agreement, the Registration Rights Agreement,
the License Agreement, the Advertising Agreement, the CNET Voting Agreement and
the CNET Standstill Agreement.
"INDEPENDENT ACCOUNTANTS" means a nationally recognized firm
of independent certified public accountants selected and retained by the mutual
agreement of NBC and Xenon 2.
"INTELLECTUAL PROPERTY" shall mean any patents, patent
registrations, patent applications, trademarks, trademark registrations,
trademark applications, tradenames, copyrights, copyright applications,
copyright registrations, franchises, universal resource locators, domain names,
permits, licenses, processes, formulae, proprietary technology, inventions,
trade secrets, know-how, product descriptions and specifications.
"KNOWLEDGE OF" or "BEST KNOWLEDGE OF" a party hereto when
modifying any representation and warranty shall mean that such party has no
actual knowledge that such representation and warranty is not true and correct
to the extent provided therein and that (i) such party has made appropriate
investigations and inquiries of its officers and responsible employees and (ii)
nothing has come to its attention in the course of such investigation and
inquiries which would cause such party, in the exercise of due care, to believe
that such representation and warranty is not true and correct to the extent
provided therein; PROVIDED that each of the parties hereto shall be deemed to
have satisfied the foregoing requirements by making appropriate investigations
and inquiries of its officers and employees listed on SCHEDULE 1.1(A), and no
knowledge of any other director, officer or employee of such party shall be
imputed to the persons listed on the Schedule or to such party.
"LIABILITY" means, as to any Person, all debts, liabilities
and obligations, direct, indirect, absolute or contingent of such Person,
whether accrued, vested or otherwise, whether known or unknown and whether or
not actually reflected, or required to be reflected, in such Person's balance
sheets.
"LICENSE AGREEMENT" means the license agreement between NBC
Multimedia and NBC to be dated as of May 9, 1999 substantially in the form set
forth in EXHIBIT E hereto.
<PAGE>
5
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind.
"LOSSES AND EXPENSES" means any and all damages, claims,
losses, expenses, costs, obligations and Liabilities, including, without
limiting the generality of the foregoing, Liabilities for all reasonable
attorneys' fees and expenses (including attorney and expert fees and expenses
incurred to enforce the terms of this Agreement), PROVIDED, HOWEVER, that
"Losses and Expenses" shall not include any lost profits or other incidental,
consequential or punitive damages.
"MATERIAL ADVERSE EFFECT" means, for any party, a material
adverse effect on (i) the assets, liabilities, business, results of operations
or financial condition of (A) Xoom, Xenon 2 and their respective Subsidiaries,
taken as a whole, in the case of Xoom or (B) the NBC Multimedia Businesses and
SNAP, taken as a whole, in the case of NBC; or (ii) the ability of such party to
perform its obligations hereunder, under the Voting Agreement, the Option
Agreement or under the Implementing Agreements to which it is a party.
Notwithstanding the foregoing, the occurrence of one of the following events,
without the occurrence of any other events, shall not be deemed by itself to
constitute a Material Adverse Effect: (i) a change in the market price or
trading volume of the outstanding equity securities of a party that is publicly
traded, (ii) the failure of a party to meet earnings estimates of equity
analysts as reflected in the First Call consensus estimates for any period (or
for which earnings are released) on or after May 9, 1999 and prior to the
Effective Time or (iii) adverse conditions affecting the U.S. economy as a whole
or affecting the multi-media industry (including internet-related businesses) as
a whole (PROVIDED that in each case such changes do not affect such party in a
disproportionate manner).
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or
petroleum (including, without limitation, crude oil or any fraction thereof) or
petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other substances of
any kind, whether or not any such substance is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"MEMBER OF THE CONTROLLED GROUP" means each trade or business,
whether or not incorporated, which would be treated as a single employer with
the named trade or business under Section 4001 of ERISA or Section 414(b), (c),
(m) or (o) of the Code.
"NASDAQ" means the Nasdaq National Market.
"NBC.COM" means the NBC.com universal resource locator and the
business conducted through it.
"NBC-IN" means the NBC-IN.com universal resource locator and
the business conducted through it.
<PAGE>
6
"NBC MULTIMEDIA ASSETS" means the assets, properties and other
rights of NBC and NBC Multimedia listed on SCHEDULE 1.1(B) which are to be
contributed to NMC on the Closing Date.
"NBC MULTIMEDIA BUSINESSES" means, collectively, NBC.com,
Videoseeker and NBC- IN.
"NBC MULTIMEDIA LIABILITIES" means the liabilities of NBC
Multimedia listed on SCHEDULE 1.1(C) which are to be assumed by NMC on the
Closing Date.
"NBC NOTE" means the $340,000,000 note issued by NBC to GE
Investments Sub to be transferred to Xenon 2 on the Closing Date.
"OPTION AGREEMENT" means the Stock Option Agreement, dated as
of May 9,1999, between NBC and Xoom.
"OTHER PROPERTY OR MONEY" means other property or money within
the meaning of Section 351(b) of the Code.
"PERMITTED LIENS" means (i) Liens for Taxes that (x) are not
yet due or delinquent or (y) are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in accordance
with GAAP; (ii) statutory Liens or landlords', carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business with respect to amounts not yet overdue for a
period of 45 days or amounts being contested in good faith by appropriate
proceedings if a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor; (iii) Liens incurred or deposits
made in connection with workers' compensation, unemployment insurance and other
types of social security or similar benefits; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, government contracts, performance and return-of-money
bonds and other obligations of like nature; (v) easements, rights-of-way,
restrictions and other similar charges or encumbrances on real property
interests which, individually or in the aggregate, do not materially interfere
with the ordinary conduct of the relevant entity or business, taken as a whole
or the use of any such real property for its current uses; (vi) leases or
subleases granted to others which do not materially interfere with the ordinary
conduct of the relevant entity or business, taken as a whole; (vii) with respect
to real property, title defects or irregularities that do not in the aggregate
materially impair the use of the property; (viii) any other Liens imposed by
operation of law that do not, individually or in the aggregate, have a Material
Adverse Effect on the relevant entity or business, taken as a whole; and (ix) as
to any real property leases with respect to which the relevant entity is a
lessee, any Lien affecting the interest of the landlord thereunder.
"PERSON" means any individual, corporation, partnership, joint
venture, trust, incorporated organization, limited liability company, other form
of business or legal entity or Governmental Authority.
<PAGE>
7
"POST-CLOSING TAX PERIOD" means any Tax period (or portion
thereof) ending after the Closing Date.
"PRE-CLOSING TAX PERIOD" means any Tax period (or portion
thereof) ending on or before the Closing Date.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement among Xenon 2, NBC, CNET and Flying Disc to be dated as of the Closing
Date having the terms set forth in EXHIBIT F hereto.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SNAP" means SNAP! LLC, a Delaware limited liability company.
"SNAP LLC AGREEMENT" means the limited liability agreement of
SNAP, as amended from time to time.
"SNAP UNITS" means the units representing limited liability
company interests under the SNAP LLC Agreement.
"SUBSIDIARY" or "SUBSIDIARIES" of any Person means any
corporation, partnership, limited liability company, joint venture or other
legal entity of which such Person (either alone or through or together with any
other subsidiary) owns, directly or indirectly, more than 50% of the stock or
other equity interests, the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity and any partnership of which such Person
serves as general partner.
"TAX AUTHORITY" shall mean any Governmental Authority having
jurisdiction over Taxes.
"TAXES" shall mean all federal, state, local and foreign
taxes, fees, charges and other assessments of a similar nature, whether imposed
directly or through withholding, including, without limitation, any net income,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, payroll, employment, excise, severance, stamp,
capital stock, occupation, property, environmental or windfall tax, premium,
custom, duty or other tax, together with any interest, additions to tax, or
penalties applicable thereto.
"TAX RETURNS" shall mean all federal, state, local and foreign
tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended tax returns relating to Taxes.
<PAGE>
8
"VIDEOSEEKER" means the Videoseeker.com universal resource
locator and the business conducted through it.
"VIDEOSEEKER ASSETS" means the assets, properties and other
rights of NBC and NBC Multimedia listed on SCHEDULE 1.1(D) which are to be
purchased by Xenon 2 from GE Investments Sub on the Closing Date.
"VIDEOSEEKER LIABILITIES" means the liabilities of NBC
Multimedia listed on SCHEDULE 1.1(E).
"VOTING AGREEMENT" means the Voting Agreement, dated as of May
9, 1999, among Xoom, NBC, CNET, Chris Kitze and Flying Disc.
"XOOM PREFERRED STOCK" means shares of preferred stock, par
value $.0001 per share, of Xoom.
"XOOM STOCK" means shares of common stock, par value $.0001
per share, of Xoom.
"XENON 2 CONVERTIBLE NOTE" means the $486,894,758 Zero Coupon
Convertible Debenture due 2006 issued by Xenon 2 to GE Investments Sub on the
Closing Date having the terms set forth in EXHIBIT G hereto.
"XENON 2 MERGER AGREEMENT" means the Agreement and Plan of
Contribution and Merger, dated as of May 9, 1999, among Xoom, Xenon 2, Xenon 3,
SNAP and CNET.
Term Section
---- -------
<S> <C>
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
</TABLE>
<PAGE>
9
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Merger Consideration 3.8
NBC Multimedia Business Intellectual Property 4.1(k)
NBC Plans 6.7(b)(i)
Nominees 6.6
Non-Plan Option 6.8
Notice Period 8.3
Option Plan 6.8
Proxy Statement 6.1
Required Consents 6.4
SEC Documents 4.3(h)(i)
SNAP Balance Sheet 4.2(f)
SNAP Budget 4.2(i)
SNAP Intellectual Property 4.2(l)
SNAP Plans 4.2(p)
Stockholder Approvals 5.5
Stockholder Meeting 6.2
Surviving Corporation 3.1
Takeover Proposal 5.5(c)
Vacation Policy 6.7(b)(v)
Xenon 2 Stockholder Approval 4.3(b)
Xoom Budget 4.3(k)
Xoom ESPP 4.3(g)
Xoom Intellectual Property 4.3(n)
Xoom Options 6.8
Xoom Stockholder Approval 5.5
</TABLE>
ARTICLE II
CONTRIBUTIONS AND ISSUANCES
II.1 CONTRIBUTIONS TO NBC AND NBC MULTIMEDIA. (a) Subject to the
satisfaction or waiver of the conditions set forth in this Agreement, at the
Closing and immediately prior to the Effective Time (as defined in SECTION 3.3),
(i) NBC shall contribute to NBC Multimedia, and NBC Multimedia shall accept, a
10% equity interest in CNBC.com, which interest shall be subject to the rights
and obligations set forth on SCHEDULE 2.1 and (ii) NBC Multimedia shall dividend
to NBC, and NBC shall accept and assume, all the Videoseeker Assets owned by NBC
Multimedia and all the Videoseeker Liabilities.
(b) In connection with the transactions described in SECTION
2.1(A), NBC shall execute, and shall cause NBC Multimedia to execute all
contribution, transfer, assumption and
<PAGE>
10
other agreements which are reasonably necessary to effect the transactions
described therein. The CNBC.com interest shall be transferred free and clear of
all Liens, except those set forth on Schedule 2.1(a). The Videoseeker Assets
shall be transferred free and clear of all Liens, except those set forth on
Schedule 1.1(e).
II.2 CONTRIBUTIONS TO NMC; ISSUANCES OF NMC CAPITAL STOCK. (a) Subject
to the satisfaction or waiver of the conditions set forth in this Agreement, at
the Closing and immediately prior to the Effective Time, NBC shall, or shall
cause NBC Multimedia, to assign and contribute to NMC, and NMC shall accept, all
of NBC's and NBC Multimedia's right, title and interest in the NBC Multimedia
Assets, and NBC and NBC Multimedia shall assign and contribute to NMC, and NMC
shall assume, all of the NBC Multimedia Liabilities.
(b) In connection with the transactions described in SECTION
2.2(A), NBC, NBC Multimedia, and NMC shall execute all contribution, transfer,
assumption and other agreements which counsel for NBC and Xoom determine are
reasonably necessary to effect the transactions described therein. All of the
assets transferred pursuant to SECTION 2.2(A) shall be transferred free and
clear of all Liens (other than any Liens imposed by or on behalf of Xenon 2).
(c) In exchange for the assignments and contributions set
forth in SECTION 2.2(A), at the Closing and concurrently therewith, NMC shall
issue 12,173,111 shares of its common stock, par value $.0001 per share, which
until the Effective Time shall represent all of the outstanding capital stock of
NMC, to NBC Multimedia.
II.3 GE INVESTMENTS SUB PURCHASE OF VIDEOSEEKER ASSETS. (a) Subject to
the satisfaction or waiver of the conditions set forth in this Agreement, at the
Closing and immediately prior to the Effective Time, GE Investments Sub will
purchase and NBC will sell, assign, transfer, convey and deliver the Videoseeker
Assets, free and clear of all Liens except those set forth on Schedule 1.1(e),
in consideration for a reduction in the amount of indebtedness of NBC owing to
GE Investments Sub.
(b) In connection with the transactions described in SECTION
2.3(A), GE Investments Sub and NBC shall execute all bills of sale and other
agreements which are reasonably necessary to affect the transactions described
therein.
II.4 CONTRIBUTIONS TO XENON 2; ISSUANCES OF XENON 2 CAPITAL STOCK. (a)
Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, at the Closing and immediately after the Effective Time, NBC shall
cause NBC Multimedia to transfer to Xenon 2, and Xenon 2 shall accept, all of
the right, title and interest to the SNAP Units held by NBC Multimedia,
including NBC Multimedia's rights pursuant to SECTION 7.3 and SECTION 7.4 of the
SNAP LLC Agreement to increase the number of SNAP Units held by NBC Multimedia
as provided in such agreement.
(b) In connection with the transactions described in SECTION
2.4(A), NBC, NBC Multimedia and Xenon 2 shall execute all contribution,
transfer, assumption and other
<PAGE>
11
agreements which counsel for NBC and Xoom determine are reasonably necessary to
effect the transactions described therein. All of the assets transferred
pursuant to SECTION 2.4(A) shall be transferred free and clear of all Liens
(other than any Liens imposed by or on behalf of Xenon 2).
(c) In exchange for the assignment and contribution of the
SNAP Units set forth in SECTION 2.4(A), at the Closing and concurrently
therewith, Xenon 2 shall issue 11,417,569 shares of Class B Common Stock to NBC
Multimedia; PROVIDED, that in no event shall NBC and its Affiliates be issued
shares of Common Stock of Xenon 2 that would result in their aggregate holding
of such shares being equal to or greater than 50% of the outstanding shares of
Common Stock of Xenon 2 after giving effect to all of the issuances of such
Common Stock on the Closing Date.
(d) Upon the original issuance of the shares of Class B Common
Stock by Xenon 2 to NBC Multimedia pursuant to SECTION 2.2 and SECTION 2.4(C),
and until such time as the same is no longer required hereunder or under the
applicable requirements of the Securities Act or applicable state securities
laws, any certificate issued representing any such Class B Common Stock shall
bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS (A) THEY ARE SO REGISTERED OR (B) AN EXEMPTION FROM REGISTRATION
IS AVAILABLE AND THE ISSUER IS FURNISHED WITH AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER TO THAT EFFECT. IN ADDITION, SUCH
SHARES MAY ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF A
GOVERNANCE AND INVESTOR RIGHTS AGREEMENT, DATED AS OF ______, 1999, AS
AMENDED FROM TIME TO TIME, AMONG NATIONAL BROADCASTING COMPANY, INC.
AND THE ISSUER COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF
THE ISSUER."
II.5 NOTE ISSUANCES; PURCHASE OF VIDEOSEEKER ASSETS BY XENON 2. (a)
Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, after the Effective Time and the consummation of all of the
transactions contemplated by SECTIONS 2.1, 2.2, 2.3 and 2.4 of this Agreement,
GE Investments Sub shall purchase the Xenon 2 Convertible Note from Xenon 2 in
exchange for an assignment of the NBC Note from GE Investments Sub to Xenon 2
and the assignment and sale by GE Investments Sub of the Videoseeker Assets to
Xenon 2, free and clear of all Liens, except those set forth on Schedule 1.1(e).
(b) In connection with the transactions described in SECTION
2.5(A), NBC, GE Investments Sub and Xenon 2 shall execute all deeds, bills of
sale, assignments and purchase, transfer and other agreements which counsel for
NBC and Xoom determine are reasonably
<PAGE>
12
necessary to effect the transactions described therein. Upon surrender of the
NBC Note to NBC, NBC shall issue a new note payable to Xenon 2 having the terms
set forth in EXHIBIT H.
II.6 REQUIRED CONSENTS. Notwithstanding anything to the contrary
contained in this Agreement, to the extent that the sale, conveyance, transfer,
assignment or delivery or attempted sale, conveyance, transfer, assignment or
delivery to NMC or Xenon 2 of any of the assets (including any assumed contract,
license or other agreement) is prohibited by applicable law or would require any
governmental or third-party authorization, approval, consent or waiver and such
authorization, approval, consent or waiver shall not have been obtained prior to
the Closing, this Agreement shall not constitute a sale, conveyance, transfer,
assignment or delivery, or an attempted sale, conveyance, transfer, assignment
or delivery thereof if any of the foregoing would constitute a breach of
applicable law or the rights of any third party. Following the Closing, the
parties shall use their reasonable commercial efforts, and shall cooperate with
each other, to obtain promptly such authorizations, approvals, consents or
waivers; PROVIDED, HOWEVER, that neither NBC, Xenon 2 nor any of their
respective Affiliates shall be required to pay any consideration therefor, other
than filing, recordation or similar fees payable to any governmental authority,
which fees shall be paid by Xenon 2. Pending or in the absence of such
authorization, approval, consent or waiver, the parties shall use their
reasonable commercial efforts to enter into reasonable and lawful arrangements
designed to provide to Xenon 2 the benefits and liabilities of use of such
assets from and after the Effective Time.
II.7 TAX REFUNDS. Notwithstanding anything herein to the contrary,
Xenon 2 shall be entitled to all refunds of Taxes with respect to the
activities, properties or employees of NMC or SNAP attributable to the period
after the Closing Date.
ARTICLE III
THE MERGER
III.1 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), NMC shall be merged (the "MERGER") with and into Xenon 2 at
the Effective Time. Following the Merger, the separate corporate existence of
NMC shall cease and Xenon 2 shall continue as the surviving corporation (the
"SURVIVING CORPORATION").
III.2 CLOSING. Subject to the satisfaction or waiver (subject to
applicable law) of the conditions set forth in ARTICLE VII, the closing of the
Merger and the transactions contemplated by this Agreement (the "CLOSING") will
take place on the second Business Day after all the conditions to Closing (other
than conditions that, by their terms, cannot be satisfied until the Closing
Date) set forth in ARTICLE VII shall have been satisfied or waived, unless this
Agreement has been theretofore terminated pursuant to its terms, unless another
time or date is agreed to in writing by the parties hereto (the actual time and
date of the Closing being referred to herein as the "CLOSING DATE"). The Closing
shall be held at the offices of Simpson Thacher & Bartlett, 425
<PAGE>
13
Lexington Avenue, New York, New York, 10017, unless another place is agreed to
in writing by the parties hereto.
III.3 EFFECTIVE TIME. As soon as practicable following the satisfaction
of the conditions set forth in ARTICLE VII, the parties shall (i) file a
certificate of merger (the "CERTIFICATE OF MERGER") executed in accordance with
the relevant provisions of the DGCL and (ii) make all other filings or
recordings required under the DGCL. The Merger shall become effective at such
time as shall be specified in the Certificate of Merger (the date and time the
Merger becomes effective being the "EFFECTIVE TIME").
III.4 EFFECTS OF THE MERGER. At and after the Effective Time, the
Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of NMC and Xenon 2 shall be
vested in the Surviving Corporation, and all debts, liabilities and duties of
NMC and Xenon 2 shall become the debts, liabilities and duties of the Surviving
Corporation.
III.5 CERTIFICATES OF INCORPORATION. Xoom shall cause the certificate
of incorporation of Xenon 2 to be amended and restated immediately prior to the
Effective Time to change the name of Xenon 2 to "NBC Internet, Inc." and so as
to otherwise read in its entirety as set forth in EXHIBIT 3.5, with such changes
therein as NBC and Xenon 2 may agree upon prior to the Effective Time, and such
amended and restated certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
III.6 BY-LAWS. Xoom shall cause the by-laws of Xenon 2 to be amended
and restated effective prior to the Effective Time so as to read in their
entirety as set forth in EXHIBIT 3.6, with such changes therein as NBC and Xenon
2 may agree upon prior to the Effective Time, and such amended and restated
by-laws shall be the by-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
III.7 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION AND XENON 2. The
officers and directors of the Surviving Corporation shall be as provided in
SCHEDULE 3.7, which individuals will serve as officers and directors of the
Surviving Corporation until the earlier of their resignation or removal or
otherwise ceasing to be an officer or director or until their respective
successors are duly elected and qualified.
III.8 EFFECT ON CAPITAL STOCK. (a) At the Effective Time by virtue of
the Merger and without any action on the part of the holder thereof, each share
of common stock, par value $0.0001, of NMC (the "NMC COMMON STOCK") issued and
outstanding immediately prior to the Effective Time (other than shares of NMC
Common Stock held by NMC, all of which shall be canceled as provided in SECTION
3.8(C)) shall be converted into one share of Class B common stock, par value
$0.0001 per share, of the Surviving Corporation (the "MERGER CONSIDERATION")
<PAGE>
14
and all shares of common stock of the Surviving Corporation issued and
outstanding at the Effective Time shall remain outstanding after the Merger.
(b) As a result of the Merger and without any action on the
part of the holders thereof, at the Effective Time, all shares of NMC Common
Stock shall be canceled and shall cease to exist, and each holder of a
certificate which immediately prior to the Effective Time represented any such
shares of NMC Common Stock (a "CERTIFICATE") shall thereafter cease to have any
rights with respect to such shares of NMC Common Stock, except as provided
herein or by law.
(c) Each share of NMC Common Stock held by NMC at the
Effective Time shall, by virtue of the Merger, cease to be outstanding and shall
be canceled and no stock of Xenon 2 or other consideration shall be delivered in
exchange therefor.
(d) Upon the original issuance of the shares of Class B Common
Stock by Xenon 2 in connection with the Merger, and until such time as the same
is no longer required hereunder or under the applicable requirements of the
Securities Act or applicable state securities laws, any certificate issued
representing any such Class B Common Stock shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS (A) THEY ARE SO REGISTERED OR (B) AN EXEMPTION FROM REGISTRATION
IS AVAILABLE AND THE ISSUER IS FURNISHED WITH AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER TO THAT EFFECT. IN ADDITION, SUCH
SHARES MAY ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF A
GOVERNANCE AND INVESTOR RIGHTS AGREEMENT, DATED AS OF ________, 1999,
AS AMENDED FROM TIME TO TIME AMONG NATIONAL BROADCASTING COMPANY, INC.
AND THE ISSUER COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF
THE ISSUER."
III.9 EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, NBC shall cause NBC Multimedia to deliver its Certificate to
Xenon 2 and NBC Multimedia shall be entitled to receive in exchange a
certificate representing, in the aggregate, the number of shares into which the
NMC Common Stock was converted pursuant to SECTION 3.8(A).
III.10 NO FURTHER OWNERSHIP RIGHTS IN NMC COMMON STOCK. All shares of
Class B Common Stock issued upon conversion of NMC Common Stock in accordance
with the terms of this ARTICLE III shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of NMC Common Stock formerly
represented thereby.
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15
III.11 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of NMC or Xenon 2, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of NMC or Xenon 2, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right,
title and interest in, to and under any of the rights, properties or assets
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
III.12 FEDERAL INCOME TAX CONSEQUENCES. For federal income tax
purposes, it is intended that the transfers described in SECTION 2.1, SECTION
2.2 and SECTION 2.3 and the Merger qualify as a contribution to Xenon 2
qualifying under Section 351 of the Code.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
IV.1 REPRESENTATIONS AND WARRANTIES OF NBC. NBC represents and
warrants to Xoom and Xenon 2 as follows, PROVIDED that none of the
representations or warranties contained in this SECTION 4.1 are made with
respect to SNAP, its assets, Liabilities or the business conducted thereby
except paragraphs (a), (b) and (c) and the second sentence of paragraph (g) to
the extent related to the ownership or transfer of the SNAP Units:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. NBC, NMC and
each of Neon's Subsidiaries that is a party to an Implementing Agreement is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the requisite power and authority to own,
lease and operate its properties and to conduct its business as now conducted by
it. NBC, NMC and each of Neon's Subsidiaries that is a party to an Implementing
Agreement has all requisite power and authority to enter into this Agreement and
the Implementing Agreements to which it is a party and to perform its
obligations hereunder and thereunder. NBC, NMC and each of Neon's Subsidiaries
that is a party to an Implementing Agreement is qualified to do business and is
in good standing in all jurisdictions in which it conducts its business, except
where the failure to do so would not, individually or in the aggregate, taken as
a whole, have a Material Adverse Effect.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENTS. The execution,
delivery and performance by NBC and its Subsidiaries of the Existing Merger
Agreement, this Agreement and the Implementing Agreements to which it or its
Subsidiaries is a party and the consummation by NBC and its Subsidiaries of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or other governance action (including any required approval
from NBC Parent) on the part of NBC and its Subsidiaries. Each of the Existing
Merger Agreement, this Agreement, the Option Agreement and the Voting Agreement
has been, and each of the Implementing Agreements to which NBC or any of its
Subsidiaries is a party will on the Closing Date be, duly executed and delivered
by NBC and its Subsidiaries and constitutes or, in the case of the Implementing
Agreements, upon execution thereof will constitute, a valid
<PAGE>
16
and legally binding obligation of NBC and its Subsidiaries, enforceable against
each in accordance with its terms.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in
SCHEDULE 4.1(C), the execution, delivery and performance of this Agreement, the
Option Agreement and the Implementing Agreements by NBC and its Subsidiaries and
the consummation by such Persons of the transactions contemplated hereby and
thereby will not (i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws or other governing documents of NBC or
its Subsidiaries; (ii) require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Authority; (iii) require
the consent or approval of any Person (other than a Governmental Authority or
any approvals required under SECTION 4.1(B)) or violate or conflict with, or
result in a breach of any provision of, constitute a default (or an event which
with notice or lapse of time or both would become a default) or give to any
third party any right of termination, cancellation, amendment or acceleration
under, or result in the creation of a Lien on any of the NBC Multimedia Assets
or the Videoseeker Assets under, any of the terms, conditions or provisions of
any contract or license to which NBC or any of its Subsidiaries is a party or by
which it or its assets or property are bound; or (iv) violate or conflict with
any order, writ, injunction, decree, statute, rule or regulation applicable to
NBC or any of its Subsidiaries; other than any consents, approvals,
authorizations and permits the failure of which to obtain and any violations,
conflicts, breaches defaults and other matters set forth pursuant to clauses
(ii), (iii) and (iv) above which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(d) CERTAIN FEES. Neither NBC or any of its Subsidiaries nor
the officers, directors or employees, thereof have employed any broker or finder
or incurred any other Liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated hereby; except that NBC
has employed BT Alex. Brown Incorporated whose fees and expenses will be paid in
accordance with SECTION 10.5 if the transactions contemplated by this Agreement
are consummated and will otherwise be paid by NBC.
(e) FINANCIAL INFORMATION, LIABILITIES. NBC has provided Xenon
2 with certain historical financial information relating to the NBC Multimedia
Businesses set forth on SCHEDULE 4.1(E) hereto (the "FINANCIAL INFORMATION").
The Financial Information has been prepared in accordance with the accounting
principles and procedures set forth on SCHEDULE 4.1(E) and is true and correct
in all material respects. All of the NBC Multimedia Liabilities and Videoseeker
Liabilities primarily relate to the NBC Multimedia Businesses.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
on SCHEDULE 4.1(F), since December 31, 1998, NBC and its Subsidiaries have
conducted the NBC Multimedia Businesses in all material respects only in the
ordinary course, consistent with past practice and there has not been (i) any
material adverse change in the assets, liabilities, business, results of
operations or financial condition of the NBC Multimedia Businesses or (ii)
except in the ordinary course of business consistent with past practice and
except for such matters that would not reasonably be expected to have a Material
Adverse Effect, any damage, destruction, loss,
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17
conversion, condemnation or taking by eminent domain related to any material NBC
Multimedia Asset. In addition, except as disclosed on SCHEDULE 4.1(F), from
December 31, 1998 to May 9, 1999, neither NBC nor any of its Subsidiaries has
(A) acquired or disposed of any material assets of an NBC Multimedia Business or
entered into any agreement or other arrangement for any such acquisition or
disposition or (B) relinquished, forgiven or canceled any material debts or
claims with respect to an NBC Multimedia Business.
(g) TITLE TO PROPERTIES; ABSENCE OF LIENS. NBC or its
Subsidiaries have, and at the Closing, NMC will acquire, good title to (or, in
the case of real estate or equipment leases, a valid lease to) all properties,
assets and other rights included in the NBC Multimedia Assets, free and clear of
all Liens except for Permitted Liens and Liens described on Schedule 1.1(c). NBC
or its Subsidiaries have, and at the Closing, immediately prior to the Effective
Time, GE Investments Sub will acquire, and after the Effective Time Xenon 2 will
acquire, good title to (or in the case of real estate or equipment leases, a
valid lease to) all properties, assets and other rights included in the
Videoseeker Assets, free and clear of all Liens except for Permitted Liens and
Liens described on Schedule 1.1(e). NBC or its Subsidiaries have, and at the
Closing, Xenon 2 will acquire, good title to all of the SNAP Units held by NBC
and its Subsidiaries, free and clear of all Liens (other than Liens created,
imposed or granted by Xenon 2 and as set forth in the SNAP LLC Agreement).
Assuming the consummation of the transactions contemplated by the Xenon 2 Merger
Agreement in accordance with the terms and conditions thereof, at the Closing,
Xenon 2 will acquire good title to all of the SNAP Units.
(h) PROPERTIES, CONTRACTS, PERMITS AND OTHER DATA. Except as
specified in SCHEDULE 4.1(H) hereto, all rights, licenses, leases,
registrations, applications, contracts, commitments and other agreements of NBC
and its Subsidiaries with respect to the NBC Multimedia Businesses or by which
the NBC Multimedia Assets or Videoseeker Assets are bound are in full force and
effect and are valid and enforceable in accordance with their respective terms
except for such failures to be in full force and effect and valid and
enforceable that would not, individually or in the aggregate, have a Material
Adverse Effect. No NBC Multimedia Business is in breach or default in the
performance of any obligation thereunder and no event has occurred or has failed
to occur whereby any of the other parties thereto have been or will be released
therefrom or will be entitled to refuse to perform thereunder, the enforcement
of which would have, either individually or in the aggregate, a Material Adverse
Effect.
(i) LEGAL PROCEEDINGS. Except as described in SCHEDULE 4.1(I),
there is no litigation, proceeding or governmental investigation to which NBC or
its Subsidiaries is a party pending or, to the best Knowledge of NBC, threatened
against it or its Subsidiaries which, either individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect or which, as
of May 9, 1999, seeks to restrain or enjoin the consummation of any of the
transactions contemplated hereby. NBC and its Subsidiaries are not party to, nor
are the NBC Multimedia Assets or Videoseeker Assets subject to, any judgment,
writ, decree, injunction or order entered by any court or governmental authority
(domestic or foreign) that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
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18
(j) LABOR CONTROVERSIES. Except as set forth on SCHEDULE
4.1(J), (i) there have been no labor strikes, slow-downs, work stoppages,
lock-outs or other material labor controversies or disputes during the past two
years, nor is any such strike, slow-down, work stoppage or other material labor
controversy or dispute pending or, to the best Knowledge of NBC, threatened, in
each case with respect to the current or former employees of the NBC Multimedia
Businesses, (ii) none of the NBC Multimedia Businesses are a party to any labor
contract, collective bargaining agreement, contract, letter of understanding or,
to Neon's Knowledge, any other agreement, formal or informal, with any labor
union or organization, nor are any of the NBC Multimedia Businesses' employees
represented by any labor union or organization, and (iii) no NBC Multimedia
Business has closed any facility, effectuated any layoffs of employees or
implemented any early retirement, separation or window program within the past
two years nor has any NBC Multimedia Business planned or announced any such
action or program for the future.
(k) INTELLECTUAL PROPERTY. NBC or its Subsidiaries own or are
licensed or otherwise have the right to use, all Intellectual Property currently
used in the NBC Multimedia Businesses (the "NBC MULTIMEDIA BUSINESS INTELLECTUAL
PROPERTY"), except as would not, individually or in the aggregate, have a
Material Adverse Effect. No NBC Multimedia Business has infringed upon or is in
conflict with the Intellectual Property of any third party nor has any NBC
Multimedia Business received any written notice of any claim that any NBC
Multimedia Business has infringed upon or is in conflict with any Intellectual
Property of any third party, except as would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth on SCHEDULE
4.1(K), none of the rights of NBC or its Subsidiaries to the NBC Multimedia
Business Intellectual Property will be impaired in any way by the transactions
provided for herein, and all of the rights of NBC and its Subsidiaries to the
NBC Multimedia Business Intellectual Property will be fully enforceable by NMC
after the Closing Date to the same extent as such rights would have been
enforceable by NBC or its Subsidiaries before the Closing, without the consent
or agreement of any other party other than any consents and agreements the
failure of which to obtain, individually or in the aggregate, would not have a
Material Adverse Effect. There have been no claims (whether private or
governmental) against NBC or its Subsidiaries asserting the invalidity or
unenforceability of its ownership, license or other right to use any of the
registered NBC Multimedia Business Intellectual Property.
(l) GOVERNMENT LICENSES, PERMITS, ETC. Except as set forth on
SCHEDULE 4.1(L), NBC and its Subsidiaries have all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Authorities
required for the conduct of each NBC Multimedia Business as presently conducted,
except where failure would not, individually or in the aggregate, have a
Material Adverse Effect.
(m) CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. NBC and its Subsidiaries have complied with all
applicable laws, ordinances, regulations or orders or other requirements of any
Governmental Authority applicable to the NBC Multimedia Businesses, including,
without limitation, all rules, regulations and administrative orders relating to
anti-competitive practices, discrimination, employment, health
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19
and safety, except where the failure to be in such compliance would not have,
either individually or in the aggregate, a Material Adverse Effect.
(n) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
4.1(N) and except for matters that, individually or in the aggregate, would not
have a Material Adverse Effect, (i) NBC and its Subsidiaries comply and have
complied with all Environmental Laws applicable to the NBC Multimedia
Businesses, and possess and comply with and have possessed and complied with all
Environmental Permits for each NBC Multimedia Business; (ii) there are and have
been no Materials of Environmental Concern, or other conditions, at any property
owned or leased by NBC or any of its Subsidiaries and included in the NBC
Multimedia Assets or Videoseeker Assets that could give rise to any liability
under any Environmental Law or result in costs arising out of any Environmental
Law; (iii) no judicial, administrative, or arbitral proceeding (including any
notice of violation or alleged violation) under any Environmental Law to which
any NBC or any of its Subsidiaries is, or to the Knowledge of NBC and its
Subsidiaries will be, named as a party is pending or, to the Knowledge of NBC,
threatened, with respect to any NBC Multimedia Business nor is any NBC
Multimedia Business the subject of any investigation in connection with any such
proceeding or potential proceeding; (iv) there are no past, present, or
anticipated future events, conditions, circumstances, practices, plans, or legal
requirements that could be expected to prevent, or materially increase the
burden on any NBC Multimedia Business of complying with applicable Environmental
Laws or of obtaining, renewing, or complying with all Environmental Permits
required under such laws; and (v) NBC has provided to the other parties true and
complete copies of all Environmental Reports relating to the NBC Multimedia
Businesses in the possession or control of NBC and its Subsidiaries.
(o) EMPLOYEE BENEFIT MATTERS. (i) Neither NBC nor any of its
Subsidiaries nor any Member of the Controlled Group of which it is a member has
(A) engaged in, or is a successor or parent corporation to an entity that has
engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA or (B)
incurred, or could reasonably be expected to incur, any liability under (I)
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA or (II) Section 4971 of the Code that in either case could become a
liability of Xenon 2 or any Subsidiary after the Closing Date. The assets of NBC
and all of its Subsidiaries are not now, nor will they after the passage of time
be, subject to any lien imposed under Code Section 412(n) by reason of a failure
of any of NBC or any Subsidiary or any Member of the Controlled Group of which
it is a member to make timely installments or other payments required under Code
Section 412. SCHEDULE 6.7(A) sets forth (i) the names and salaries of each
employee to whom Xenon 2 shall offer employment pursuant to SECTION 6.7 and (ii)
any employment agreements between such employees and NBC or any of its
Subsidiaries.
(ii) Except as provided on SCHEDULE 4.1(O), no plan exists
with respect to the Transferred Employees that could result in the payment to
them of any money or other property or accelerate or provide any other rights or
benefits to them as a result of the transaction contemplated by this Agreement,
whether or not such payment would constitute a parachute payment within the
meaning of Code Section 280G.
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20
(p) ABSENCE OF CERTAIN BUSINESS PRACTICES. No officer,
employee or agent of any NBC Multimedia Business, nor any other Person acting on
behalf of any NBC Multimedia Business, has, directly or indirectly, within the
past five years given or agreed to give any gift or similar benefit to any
customer, supplier, governmental employee or other Person or entity who is or
may be in a position to help or hinder any NBC Multimedia Business (or assist
such NBC Multimedia Business in connection with any actual or proposed
transaction) which (x) subjects any party or any of their respective
Subsidiaries, to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (y) if not given in the past, would have had a
Material Adverse Effect or (z) if not continued in the future, would have a
Material Adverse Effect or which might subject any party or any of their
respective Subsidiaries, to suit or penalty in any private or governmental
litigation or proceeding.
(q) ENTIRE BUSINESS. Except as set forth in SCHEDULE 4.1(Q),
the NBC Multimedia Assets and the Videoseeker Assets, including the License
Agreement, will enable Xenon 2 to conduct the NBC Multimedia Businesses after
the Effective Time in substantially the same manner as they are currently being
conducted.
(r) TAX MATTERS. (i) NBC and each of its Subsidiaries have
timely filed (or have had timely filed on their behalf) or will timely file or
cause to be timely filed, all Tax Returns required by applicable law to be filed
by any of them prior to the Effective Time with respect to the NBC Multimedia
Businesses or the assets, employees or businesses of or to be contributed by NBC
or its Affiliates to CNBC.com. 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 CNBC.com, 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
CNBC.com. All Taxes required to be withheld by NBC or its Affiliates with
respect to the NBC Multimedia Businesses or CNBC.com 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 CNBC.com. 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
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21
Multimedia Businesses or the assets, employees or businesses of or to be
contributed by NBC or its Affiliates to CNBC.com. 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
CNBC.com.
(iii) With respect to the NBC Multimedia
Businesses or the assets, employees or businesses of or to be contributed by NBC
or its Affiliates to CNBC, neither NBC nor any of its Subsidiaries is required
to include in income any adjustment pursuant to Section 481(a) of the Code or
any similar applicable provision by reason of a voluntary change in accounting
method initiated by NBC or any of its Subsidiaries, and neither the Internal
Revenue Service nor any taxing authority has proposed in writing any such
adjustment or change in accounting method. Neither NBC nor any of its
Subsidiaries has received a tax ruling or entered into a closing agreement with
any taxing authority that would have a Material Adverse Effect upon the NBC
Multimedia Businesses or the assets, employees or businesses of or to be
contributed by NBC or its Affiliates to CNBC.
(iv) With respect to the NBC Multimedia Business,
neither NBC nor any of its Subsidiaries has made any payments, is obligated to
make any payments, or is a party to any agreement, in each case, that could
obligate it to make any payments that would not be deductible pursuant to
Section 280G of the Code.
(v) None of the NBC Multimedia Businesses or the
business of CNBC.com 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 CNBC.com, and the transactions contemplated by this Agreement will not have
any adverse effect on such compliance.
(vi) CNBC.com 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
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22
change of the year from 1999 to the year 2000 will not have a Material Adverse
Effect and (y) that the impacts of such change on the venders and customers of
the NBC Multimedia Businesses will not have a Material Adverse Effect. In Neon's
reasonable best estimate, no expenditures materially in excess of currently
budgeted items previously disclosed to Xenon 2 will be required in order to
cause the information and business systems of the NBC Multimedia Businesses to
operate properly following the change of the year 1999 to the year 2000. NBC
reasonably expects any material issues related to such change of the year will
be resolved in accordance with the timetable set forth in such plan (and in any
event on a timely basis in order to be resolved before the year 2000). Between
May 9, 1999 and the Effective Time, NBC shall continue to use commercially
reasonable efforts to implement such plan.
(u) NMC. The authorized capital stock of NMC consists of 100
shares of common stock, par value $0.0001 per share, of which 100 shares have
been issued and are outstanding and held by NBC Multimedia as of May 9, 1999.
NMC has not conducted any activities other than in connection with its
organization, the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby. Prior to the Closing Date,
NMC's certificate of incorporation will be amended to provide for an authorized
capital stock sufficient to permit NMC to issue shares of its common stock as
described in SECTION 2.2(C).
(v) NO OTHER LIABILITIES. Other than the NBC Multimedia
Liabilities or Videoseeker Liabilities or as set forth on Schedule 1.1(e), there
are no Liabilities of NBC or its Subsidiaries or GE Investments Sub that will be
transferred or assigned to, or assumed by, NMC in connection with the
transactions set forth in SECTION 2 or as to which NMC or Xenon 2 could be
liable.
IV.2 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO SNAP. NBC
represents and warrants to Xenon 2 as follows:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. SNAP is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the requisite power and authority to own,
lease and operate its properties and to conduct its business as now conducted by
it. SNAP is qualified to do business and is in good standing in all
jurisdictions in which it conducts its business, except where the failure to do
so would not, individually or in the aggregate, taken as a whole, have a
Material Adverse Effect. SNAP has no Subsidiaries other than SNAP International
LLC which has not commenced business operations and has no material assets or
liabilities.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The transfer of
the interests in SNAP pursuant hereto have been duly authorized by all necessary
action on the part of SNAP.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in
SCHEDULE 4.2(C), the execution, delivery and performance by NBC of this
Agreement and the Implementing Agreements to which it is a party and the
consummation by NBC of the transactions
<PAGE>
23
contemplated hereby and thereby will not (i) conflict with or result in a breach
of any provision of the SNAP LLC Agreement; (ii) require any consent, approval,
authorization or permit of, or filing with, or notification to, any Governmental
Authority; (iii) require the consent or approval of any Person (other than a
Governmental Authority) or violate or conflict with, or result in a breach of
any provision of, constitute a default (or an event which with notice or lapse
of time or both would become a default) or give to any third party any right of
termination, cancellation, amendment or acceleration under, or result in the
creation of a Lien on any of the assets of SNAP under any of the terms,
conditions or provisions of any contract or license to which SNAP is a party or
by which it or its assets or property are bound; or (iv) violate or conflict
with any order, writ, injunction, decree, statute, rule or regulation applicable
to SNAP; other than any consents, approvals, authorizations and permits the
failure of which to obtain and any violations, conflicts, breaches defaults and
other matters set forth pursuant to clauses (ii), (iii) and (iv) above which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(d) CERTAIN FEES. Neither SNAP nor any of the officers,
directors or employees, thereof has employed any broker or finder or incurred
any other Liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby except that SNAP has
employed of BT Alex. Brown Incorporated whose fees and expenses will be paid in
accordance with SECTION 10.5 of the transactions contemplated by this Agreement
are consummated and otherwise will be paid by SNAP.
(e) EQUITY INTERESTS. As of May 9, 1999, the outstanding
equity interests in SNAP and the holders thereof are set forth on SCHEDULE
4.2(E) hereto. All outstanding SNAP Units are duly authorized, validly issued,
fully paid and non-assessable and are not subject to any preemptive rights
except as set forth in the SNAP LLC Agreement and have been issued in compliance
with federal and state securities laws. There are no declared or accrued unpaid
distributions with respect to any SNAP Units. The limited liability company
interests of SNAP International LLC have been duly authorized and issued, and
are fully paid and non-assessable and are owned by SNAP free and clear of all
Liens. Except for the capital stock of its Subsidiaries, SNAP does not own,
directly or indirectly, more than 10% of the capital stock or other ownership
interest in any Person and to the extent it owns less than 10% of the capital
stock or other ownership interest in any Person, such interests in the aggregate
do not constitute a material part of SNAP's assets. Except as set forth on
SCHEDULE 4.2(E) hereto or as provided under the terms of this Agreement, no SNAP
Units are reserved for issuance, and there are no contracts, agreements,
commitments or arrangements obligating SNAP to (i) offer, sell, issue or grant
any equity interests in, or any options, warrants or rights of any kind to
acquire any equity interests in, or any other securities that are convertible
into or exchangeable for any equity interests in SNAP or (ii) to redeem,
purchase or acquire, or offer to purchase or acquire, any outstanding equity
interests in or any outstanding options, warrants or rights of any kind to
acquire any equity interests in, or any other outstanding securities that are
convertible into or exchangeable for any equity interests in SNAP. At the
Effective Time, after giving effect to the transactions contemplated by the
Xenon 2 Merger Agreement and this Agreement, Xenon 2 will
<PAGE>
24
own all of the outstanding SNAP Units, other than SNAP Units issued pursuant to
the exercise of SNAP Options, free and clear of all Liens.
(f) FINANCIAL INFORMATION, LIABILITIES. The unaudited balance
sheet for SNAP as at December 31, 1998 (the "SNAP BALANCE SHEET") and the
related unaudited income statement for the six months ending December 31, 1998,
copies of which are attached hereto as SCHEDULE 4.2(F) present fairly in all
material respects the financial condition and results of operations of SNAP as
at December 31, 1998 and for the period then ended subject to normal year-end
audit adjustments and financial statement footnote disclosure. Except as set
forth on SCHEDULE 4.2(G), except as and to the extent disclosed in the SNAP
Balance Sheet, and except for liabilities incurred in connection with the
transactions contemplated by this Agreement and the Implementing Agreements,
there are no liabilities, whether absolute, accrued, contingent or otherwise, of
SNAP, that would be required to be reflected on, or reserved against, in such
consolidated balance sheet of SNAP, except for (x) liabilities which, singly or
in the aggregate, would not have a Material Adverse Effect and (y) liabilities
incurred subsequent to the date of such balance sheet by SNAP in the ordinary
course of business consistent with past practice.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
on SCHEDULE 4.2(G) since December 31, 1998, SNAP has conducted its business in
all material respects only in the ordinary course consistent with past practice
and there has not been (i) any material adverse change in the assets,
liabilities, business, results of operations or financial condition of SNAP, or
(ii) except in the ordinary course of business consistent with past practice and
except for such matters that would not reasonably be expected to have a Material
Adverse Effect, any damage, destruction, loss, conversion, condemnation or
taking by eminent domain related to any of its material assets. In addition,
except as disclosed on SCHEDULE 4.2(G), from December 31, 1998 to May 9, 1999,
SNAP has not (A) acquired or disposed of any material assets or entered into any
agreement or other arrangement for any such acquisition or disposition or (B)
relinquished, forgiven or canceled any material debts or claims.
(h) TITLE TO PROPERTIES; ABSENCE OF LIENS. Except as disclosed
on SCHEDULE 4.2(H), SNAP has good title to (or, in the case of real estate or
equipment leases, a valid lease to) all of its properties, assets and other
rights, free and clear of all Liens except for Permitted Liens and such assets
will enable Xenon 2 to conduct the business of SNAP after the Effective Time in
substantially the same manner as it is currently being conducted.
(i) PROPERTIES, CONTRACTS, PERMITS AND OTHER DATA. Except as
specified in SCHEDULE 4.2(I) hereto, all rights, licenses, leases,
registrations, applications, contracts, commitments and other agreements of SNAP
or by which SNAP is bound are in full force and effect and are valid and
enforceable in accordance with their respective terms except for such failures
to be in full force and effect and valid and enforceable that would not,
individually or in the aggregate, have a Material Adverse Effect. SNAP is not in
breach or default in the performance of any obligation thereunder and no event
has occurred or has failed to occur whereby any of the other parties thereto
have been or will be released therefrom or will be entitled to refuse to perform
thereunder, the enforcement of which would have, either
<PAGE>
25
individually or in the aggregate, a Material Adverse Effect. SNAP has provided
to Xoom complete and accurate copies of SNAP's current annual budget and
operating plan (the "SNAP BUDGET").
(j) LEGAL PROCEEDINGS. Except as described in SCHEDULE 4.2(J),
there is no litigation, proceeding or governmental investigation to which SNAP
is a party pending or, to the best Knowledge of SNAP, threatened against it or
its assets which, either individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect or which, as of May 9, 1999,
seeks to restrain or enjoin the consummation of any of the transactions
contemplated hereby. SNAP is not a party to nor are its assets subject to any
judgment, writ, decree, injunction or order entered by any court or governmental
authority (domestic or foreign) that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
(k) LABOR CONTROVERSIES. Except as set forth on SCHEDULE
4.2(K), (i) there have been no labor strikes, slow-downs, work stoppages,
lock-outs or other material labor controversies or disputes during the past two
years, nor is any such strike, slow-down, work stoppage or other material labor
controversy or dispute pending or, to the best Knowledge of NBC, threatened with
respect to the current or former employees of SNAP, (ii) SNAP is not a party to
any labor contract, collective bargaining agreement, contract, letter of
understanding or, to Neon's Knowledge, any other agreement, formal or informal
with any labor union or organization, nor are any of SNAP's employees
represented by any labor union or organization and (iii) SNAP has not closed any
facility, effectuated any layoffs of employees or implemented any early
retirement, separation or window program within the past two years nor planned
or announced any such action or program for the future.
(l) INTELLECTUAL PROPERTY. SNAP owns or is licensed or
otherwise has the right to use, all Intellectual Property currently used in its
business (the "SNAP INTELLECTUAL PROPERTY"), except as would not, individually
or in the aggregate, have a Material Adverse Effect. SNAP has not infringed upon
or is in conflict with the Intellectual Property of any third party nor has SNAP
received any written notice of any claim that it has infringed upon or is in
conflict with any Intellectual Property of any third party, except as would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth on SCHEDULE 4.2(L), none of the rights of SNAP to the SNAP Intellectual
Property will be impaired in any way by the transactions provided for herein,
and all of the rights of SNAP to the SNAP Intellectual Property will be fully
enforceable by SNAP after the Closing Date to the same extent as such rights
would have been enforceable by SNAP before the Closing, without the consent or
agreement of any other party other than any consents and agreements the failure
of which to obtain, individually or in the aggregate, would not have a Material
Adverse Effect. There have been no claims (whether private or governmental)
against SNAP asserting the invalidity or unenforceability of its ownership,
license or other right to use any of the registered SNAP Intellectual Property.
(m) GOVERNMENT LICENSES, PERMITS, ETC. Except as set forth on
SCHEDULE 4.2(M), SNAP has all licenses, permits, consents, approvals,
authorizations, qualifications and
<PAGE>
26
orders of Governmental Authorities required for the conduct of its business as
presently conducted, except where failure would not, individually or in the
aggregate, have a Material Adverse Effect.
(n) CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. SNAP has complied with all applicable laws,
ordinances, regulations or orders or other requirements of any Governmental
Authority including, without limitation, all rules, regulations and
administrative orders relating to anti-competitive practices, discrimination,
employment, health and safety, except where the failure to be in such compliance
would not have, either individually or in the aggregate, a Material Adverse
Effect.
(o) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
4.2(O) and except for matters that, individually or in the aggregate, would not
have a Material Adverse Effect, (i) SNAP complies and has complied with all
applicable Environmental Laws, and possesses and complies with and has possessed
and complied with all Environmental Permits; (ii) there are and have been no
Materials of Environmental Concern, or other conditions, at any property owned
or leased by SNAP that could give rise to any liability under any Environmental
Law or result in costs arising out of any Environmental Law; (iii) no judicial,
administrative, or arbitral proceeding (including any notice of violation or
alleged violation) under any Environmental Law to which SNAP is, or to the
Knowledge of SNAP will be, named as a party is pending or, to the Knowledge of
SNAP, threatened, nor is SNAP the subject of any investigation in connection
with any such proceeding or potential proceeding; (iv) there are no past,
present, or anticipated future events, conditions, circumstances, practices,
plans, or legal requirements that could be expected to prevent, or materially
increase the burden on SNAP of complying with applicable Environmental Laws or
of obtaining, renewing, or complying with all Environmental Permits required
under such laws; and (v) SNAP has provided to the other parties true and
complete copies of all Environmental Reports relating to it in the possession or
control of such party.
(p) EMPLOYEE BENEFIT MATTERS. (i) SCHEDULE 4.2(P) contains a
true and complete list of each "employee benefit plan" (within the meaning of
section 3(3) of ERISA, and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of SNAP or its Subsidiaries has any
present or future right to benefits and under which SNAP or its Subsidiaries has
any present or future liability. All such plans, agreements, programs, policies
and arrangements shall be collectively referred to as the "SNAP PLANS".
(ii) With respect to each SNAP Plan which is maintained solely
by SNAP (the "PORTAL LEVEL PLANS"), SNAP has made available to NBC a current,
accurate and complete copy (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable: (A) any related trust
agreement or other funding instrument; (B) the most recent
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27
determination letter, if applicable; (C) any summary plan description and other
written communications (or a description of any oral communications) by SNAP or
its Subsidiaries to their employees concerning the extent of the benefits
provided under a SNAP Plan; and (D) for the most recent two years (I) the Form
5500 and attached schedules and (II) audited financial statements.
(iii) (A) Each SNAP Plan has been established and administered
in accordance with its terms, and in compliance with the applicable provisions
of ERISA, the Code and other applicable laws, rules and regulations; (B) each
SNAP Plan which is intended to be qualified within the meaning of Code section
401(a) is so qualified and has received a favorable determination letter as to
its qualification (or is established using a prototype plan form which has
received such a letter), and nothing has occurred, whether by action or failure
to act, that could reasonably be expected to cause the loss of such
qualification; (C) for each SNAP Plan with respect to which a Form 5500 has been
filed, no material change has occurred with respect to the matters covered by
the most recent Form since the date thereof; (D) no non-exempt "prohibited
transaction" (as such term is defined in ERISA section 406 and Code section
4975) with respect to any SNAP Plan; and (E) no SNAP Plan provides retiree
welfare benefits and neither SNAP nor its Subsidiaries have any obligations to
provide any retiree welfare benefits except as provided under Section 4980B of
the Code.
(iv) No SNAP Plan is subject to Title IV of ERISA (including a
multiemployer plan within the meaning of Section 3(37) of ERISA), no SNAP Plan
is a multiple employer plan; and no SNAP Plan is subject to the minimum funding
requirements of ERISA Section 302 or Code Section 412.
(v) Neither SNAP nor any of its Subsidiaries nor any member of
the Controlled group of which it is a member has (A) engaged in, or is a
successor or parent corporation to an entity that has engaged in, a transaction
described in Sections 4069 or 4212(c) of ERISA or (B) incurred, or could
reasonably be expected to incur, any liability under (I) Title IV of ERISA
arising in connection with the termination of, or a complete or partial
withdrawal from, any plan covered or previously covered by Title IV of ERISA or
(II) Section 4971 of the Code that in either case could become a liability of
the SNAP or any Subsidiary or NMC after the Closing Date. The assets of SNAP and
all of its Subsidiaries are not now, nor will they after the passage of time be,
subject to any lien imposed under Code Section 412(n) by reason of a failure of
any of the SNAP or any Subsidiary or any member of the Controlled Group of which
it is a member to make timely installments or other payments required under Code
Section 412.
(vi) With respect to any SNAP Plan, (A) no actions, suits or
claims (other than routine claims for benefits in the ordinary course) are
pending or, to the Knowledge of SNAP or its Subsidiaries, threatened and (B) no
facts or circumstances exist that could reasonably be expected to give rise to
any such actions, suits or claims.
(vii) Except as provided on SCHEDULE 4.2(P), no SNAP Plan
exists that could result in the payment to any present or former employee of
SNAP or its Subsidiaries of any
<PAGE>
28
money or other property or accelerate or provide any other rights or benefits to
any present or former employee of SNAP or its Subsidiaries as a result of the
transaction contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code Section 280G.
(q) ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither SNAP, nor
any officer, employee or agent of SNAP, nor any other Person acting on behalf of
SNAP, has, directly or indirectly, within the past five years given or agreed to
give any gift or similar benefit to any customer, supplier, governmental
employee or other Person or entity who is or may be in a position to help or
hinder SNAP (or assist SNAP in connection with any actual or proposed
transaction) which (x) subjects any party or NMC or any of their respective
Affiliates, to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (y) if not given in the past, could have had a
Material Adverse Effect or (z) if not continued in the future, could have a
Material Adverse Effect or which might subject any party or NMC or any of their
respective Affiliates to suit or penalty in any private or governmental
litigation or proceeding.
(r) TAX MATTERS. Except as set forth on SCHEDULE 4.2(R), (i)
SNAP and its Subsidiaries have timely filed (or have had timely filed on their
behalf) or will timely file or cause to be timely filed, all Tax Returns
required by applicable law to be filed by SNAP and its Subsidiaries prior to the
Effective Time. All such Tax Returns are or will be true, complete and correct
in all material respects. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any of such Tax
Returns and SNAP and its Subsidiaries has not requested any extension of time
within which to file any material Tax Return, which return has not yet been
filed. There is no pending claim by any Tax Authority of a jurisdiction where
SNAP or any of its Subsidiaries have not filed Tax Returns that SNAP are any of
its Subsidiaries are or may have been subject to taxation by that jurisdiction.
All Taxes required to be withheld by SNAP or its Affiliates with respect to
their activities, properties, employees or independent contractors have been
withheld and paid over to the appropriate Tax Authority.
(ii) SNAP and its Subsidiaries have paid (or have had paid on
their behalf), or where payment is not yet due, have established (or have had
established on their behalf and for their sole benefit and recourse), or will
establish or cause to be established on or before the Effective Time, an
adequate accrual for the payment of, all Taxes due with respect to any period
beginning prior to the Effective Time. No deficiency or adjustment for any Taxes
has been threatened, proposed, asserted or assessed against SNAP or its
Subsidiaries. There are no liens for Taxes upon the assets of SNAP or its
Subsidiaries, except for liens for current Taxes not yet due.
(iii) SNAP and its Subsidiaries are not required to include in
income any adjustment pursuant to Section 481(a) of the Code or any similar
applicable provision by reason of a voluntary change in accounting method
initiated by SNAP or its Subsidiaries, and neither the Internal Revenue Service
nor any taxing authority has proposed in writing any such adjustment or change
in accounting method. SNAP and its Subsidiaries have not received a tax
<PAGE>
29
ruling or entered into a closing agreement with any taxing authority that would
have a Material Adverse Effect on SNAP or its Subsidiaries.
(iv) SNAP and its Subsidiaries have not made any payments, are
not obligated to make any payments, and are not a party to any agreement that
could obligate it to make any payments that would not be deductible pursuant to
Section 280G of the Code.
(v) SNAP has been and currently is taxable as a partnership
for federal income tax purposes and in all jurisdictions in which it is subject
to Taxes or files Tax Returns. Each of SNAP's Subsidiaries has been and
currently is (A) wholly owned by SNAP and (B) an entity disregarded from its
owner pursuant to Section 301.7701-2 of the Treasury Regulations. Neither SNAP
nor any Subsidiary is a party to any safe harbor lease within the meaning of
Section 168(f)(8) of the Code, as in effect prior to amendment by the Tax Equity
and Fiscal Responsibility Act of 1982. SNAP and its Subsidiaries are not a party
to any joint venture, partnership, or other agreement, contract, or arrangement
(either in writing or verbally, formally or informally) which could be treated
as partnership for federal income tax purposes.
(vi) Neither SNAP nor any of its Subsidiaries has a "permanent
establishment," as defined in any applicable Tax treaty or convention of the
United States of America, or fixed place of business in any foreign country.
SNAP and its Subsidiaries are in compliance with the terms and conditions of any
applicable tax exemptions, agreements or orders of any foreign government to
which it may be subject or which it may have claimed, and the transactions
contemplated by this Agreement will not have any adverse effect on such
compliance.
(vii) Neither SNAP nor any of its Subsidiaries is or has been
bound by any tax sharing or tax allocation agreement, and it has no contractual
obligation to indemnify any other person with respect to Taxes.
(s) YEAR 2000 COMPLIANCE. SNAP has adopted and implemented a
commercially reasonable plan to provide (x) that the change of the year from
1999 to the year 2000 will not have a Material Adverse Effect and (y) that the
impacts of such change on the venders and customers of SNAP will not have a
Material Adverse Effect. In SNAP's reasonable best estimate, no expenditures
materially in excess of currently budgeted items previously disclosed to Xenon 2
will be required in order to cause the information and business systems of SNAP
to operate properly following the change of the year 1999 to the year 2000. SNAP
reasonably expects any material issues related to such change of the year will
be resolved in accordance with the timetable set forth in such plan (and in any
event on a timely basis in order to be resolved before the year 2000). Between
the date of this Agreement and the Effective Time, SNAP shall continue to use
commercially reasonable efforts to implement such plan.
(t) OPTIONS. Except for the SNAP 1998 LLC Option Plan, SNAP
has never adopted or maintained any option plan or other plan providing for
equity compensation of any Person. As of May 9, 1999, SNAP has reserved
1,604,938 units for issuance pursuant to the SNAP 1998 LLC Option Plan ("SNAP
OPTIONS"), of which 1,432,970 have been issued as of
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30
May 9, 1999, all of which units remain subject to SNAP Options unexercised as of
May 9, 1999. Except as set forth in SCHEDULE 4.2(T), none of the SNAP Options
will be accelerated in any way by the transactions contemplated by this
Agreement. SNAP has made available to NBC accurate and complete copies of all
option plans pursuant to which SNAP has granted options and the applicable
vesting schedule for each such option. All units subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and non-assessable. Except as set forth in SCHEDULE
4.2(T), there are no commitments or agreements of any character to which SNAP is
bound obligating SNAP to accelerate the vesting of any SNAP Options as a result
of this Agreement. SCHEDULE 4.2(E) lists each outstanding SNAP Option and
identifies with respect to each such SNAP Option; its exercise price; its grant
date; its vesting schedule; and what portion of such SNAP Option remains
outstanding as of May 9, 1999. NBC shall prepare and deliver to Xenon 2 and Xoom
an updated version of SCHEDULE 4.2(E) prior to the Effective Time as of a date
no earlier than 5 days prior to the Effective Time.
4.3 REPRESENTATIONS AND WARRANTIES OF XOOM AND XENON 2. Xoom and Xenon
2 represent and warrant to NBC and NMC as follows:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. Xoom, Xenon 2
and each of their respective Subsidiaries is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, and has
the requisite power and authority to own, lease and operate its properties and
to conduct its business as now conducted by it. Xoom, Xenon 2 and each of their
respective Subsidiaries party to an Implementing Agreement has all requisite
power and authority to enter into this Agreement, the Xenon 2 Merger Agreement,
the Voting Agreement, the Option Agreement and the Implementing Agreements to
which it is a party and to perform its obligations hereunder and thereunder.
Xoom, Xenon 2 and each of their respective Subsidiaries is qualified to do
business and is in good standing in all jurisdictions in which it conducts its
business, except where the failure to do so would not, individually or in the
aggregate, taken as a whole, have a Material Adverse Effect.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution,
delivery and performance by Xoom, Xenon 2 and each of their respective
Subsidiaries of the Existing Merger Agreement, this Agreement, the Xenon 2
Merger Agreement, the Voting Agreement, the Option Agreement and the
Implementing Agreements to which Xoom, Xenon 2 or their respective Subsidiaries
is a party and the consummation by Xoom, Xenon 2 and each of their respective
Subsidiaries of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Xoom, Xenon 2 and
each of their respective Subsidiaries, subject to obtaining, in the case of the
Xenon 2 Merger Agreement, the Stockholder Approval (as defined therein), and, in
the case of the Existing Merger Agreement and this Agreement, the affirmative
vote of the holders of a majority of the outstanding shares of common stock of
Xenon 2 (the "XENON 2 STOCKHOLDER APPROVAL"). The Board of Directors of Xoom, by
resolutions duly adopted by unanimous vote with one abstention at a meeting duly
called and held and not subsequently rescinded or modified in any way, has duly
determined that each of the Existing Merger Agreement and this Agreement is
advisable for Xoom and its stockholders,
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31
approved each of the Existing Merger Agreement and this Agreement and the Merger
and recommended that the stockholders of Xoom adopt the Xenon 2 Merger Agreement
and approve the transactions contemplated thereby and vote in favor of Xoom, as
sole stockholder of Xenon 2, adopting the NMC Agreement at the Xenon 2
Stockholder Meeting. Each of the Existing Merger Agreement, this Agreement, the
Xenon 2 Merger Agreement, the Option Agreement and the Voting Agreement has
been, and each of the other Implementing Agreements to which Xoom, Xenon 2 or
any of their respective Subsidiaries is a party will on the Closing Date be,
duly executed and delivered by Xoom, Xenon 2 and each of their respective
Subsidiaries and constitutes or, in the case of the other Implementing
Agreements, upon execution thereof will constitute, a valid and legally binding
obligation of Xoom, Xenon 2 and each of their respective Subsidiaries,
enforceable against each in accordance with their respective terms.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in
SCHEDULE 4.3(C), the execution, delivery and performance of this Agreement, the
Xenon 2 Merger Agreement, the Voting Agreement, the Option Agreement and the
Implementing Agreements by Xoom, Xenon 2 and each of their respective
Subsidiaries and the consummation by such party of the transactions contemplated
hereby and thereby will not (i) conflict with or result in a breach of any
provision of the certificate of incorporation or bylaws or other governing
documents of Xoom, Xenon 2 or their respective Subsidiaries; (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority; (iii) require the consent or approval of any
Person (other than a Governmental Authority) or violate or conflict with, or
result in a breach of any provision of, constitute a default (or an event which
with notice or lapse of time or both would become a default) or give to any
third party any right of termination, cancellation, amendment or acceleration
under, or result in the creation of a Lien on any of the assets of Xoom, Xenon 2
or any of their respective Subsidiaries under, any of the terms, conditions or
provisions of any contract or license to which Xoom, Xenon 2 or any of their
respective Subsidiaries is a party or by which it or its assets or property are
bound; or (iv) violate or conflict with any order, writ, injunction, decree,
statute, rule or regulation applicable to Xoom, Xenon 2 or any of their
respective Subsidiaries; other than any consents, approvals, authorizations and
permits the failure of which to obtain and any violations, conflicts, breaches
defaults and other matters set forth pursuant to clauses (ii), (iii) and (iv)
above which, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
(d) CERTAIN FEES. None of Xoom, Xenon 2 or any of their
respective Subsidiaries nor the officers, directors or employees thereof have
employed any broker or finder or incurred any other Liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated hereby; except that Xoom has employed Bear, Stearns & Co., Inc. and
Hambrecht & Quist, 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 Hambrecht & Quist, LLC related to the
transactions contemplated hereby.
(e) OPINION OF FINANCIAL ADVISOR. Xoom has received the
opinion of each of Bear, Stearns & Co. Inc. and Hambrecht & Quist, LLC, in each
case as of May 9, 1999, with
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32
respect to the fairness of the transactions contemplated by the Existing Merger
Agreement from a financial point of view which fairness opinion shall remain in
effect upon entering into this Agreement.
(f) CAPITAL STOCK. (i) As of May 9, 1999, the authorized
capital stock of Xoom consists of 40,000,000 shares of Xoom Stock and 5,000,000
shares of Xoom Preferred Stock, of which 17,162,056 shares of Xoom Stock and no
shares of Xoom Preferred Stock have been issued and are outstanding as of May 9,
1999. All outstanding shares of Xoom Stock are duly authorized, validly issued,
fully paid and non-assessable and not subject to preemptive rights created by
statute, the certificate of incorporation or bylaws of Xoom or any agreement to
which Xoom is a party or by which it is bound and have been issued in compliance
with federal and state securities laws. There are no declared or accrued unpaid
dividends with respect to any shares of Xoom Stock. All of the shares of capital
stock of each of the Subsidiaries of Xoom are duly authorized and issued, fully
paid and nonassessable and are owned by Xoom or another Subsidiary of Xoom free
and clear of all Liens. Except for the capital stock of its Subsidiaries, Xoom
does not own, directly or indirectly, any capital stock or other ownership
interest in any Person.
(ii) As of May 9, 1999, the authorized capital stock of Xenon
2 consists of 100 shares of common stock, par value $0.0001 per share, of which
100 shares have been issued and are outstanding as of May 9, 1999. Prior to the
Closing Date, Xenon 2's certificate of incorporation will be amended to provide
for an authorized capital stock sufficient to permit Xenon 2 to issue all of the
Class A Common Stock and Class B Common Stock to be issued by Xenon 2 pursuant
to this Agreement and the Xenon 2 Merger Agreement. All capital stock issued by
Xenon 2 pursuant to the Xenon 2 Merger Agreement and this Agreement will be duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights created by statute, the certificate of incorporation or bylaws
of Xenon 2 or any agreement to which Xenon 2 is a party or by which it is bound
and issued in compliance with federal and state securities laws. All of the
shares of capital stock of each of the Subsidiaries of Xenon 2 are duly
authorized and issued, fully paid and nonassessable and are owned by Xenon 2
free and clear of all Liens. Except for the capital stock of its Subsidiaries,
Xenon 2 does not own, directly or indirectly, any capital stock or other
ownership interest in any Person.
(g) STOCK OPTIONS. Except for the Xoom 1998 Employee Stock
Purchase Plan (the "XOOM ESPP"), the Xoom Option Plan pursuant to which the Xoom
Plan Options were issued, and the Xoom Non-Plan Options (together with the Xoom
Plan Options, the "XOOM OPTIONS"), none of Xoom, Xenon 2 or any of their
respective Subsidiaries has ever adopted or maintained any stock option plan or
other plan providing for equity compensation of any person. As of May 9, 1999,
Xoom has reserved 3,535,224 shares of Xoom Stock for issuance pursuant to the
Xoom ESPP, Xoom Plan Options and Xoom Non-Plan Options, of which 3,336,157 have
been issued as of May 9, 1999, of which 2,043,556 shares remain subject to Xoom
Plan Options unexercised as of May 9, 1999 and 981,212 shares remain subject to
Xoom Non-Plan Options unexercised as of May 9, 1999. Except pursuant to SECTION
6.8 and as reflected on SCHEDULE 4.3(G) none of the Xoom Options will be
accelerated in any way by the transactions
<PAGE>
33
contemplated by this Agreement. Xoom, Xenon 2 and their respective Subsidiaries
have made available to NMC accurate and complete copies of all stock option
plans pursuant to which Xoom, Xenon 2 and their respective Subsidiaries have
granted stock options that are currently outstanding, the form of all stock
option agreements evidencing such options and the applicable vesting schedule
for each such option. All shares of Xoom Stock and Class A Common Stock subject
to issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and non-assessable. Except as set forth in SCHEDULE
4.3(G) or as contemplated by this Agreement, there are no commitments or
agreements of any character to which Xoom, Xenon 2 or any of their respective
Subsidiaries are bound obligating Xoom, Xenon 2 or any of their respective
Subsidiaries to accelerate the vesting of any Xoom Option as a result of this
Agreement. SCHEDULE 4.3(G) lists each outstanding Xoom Option and identifies
with respect to each such Xoom Option whether it is a Xoom Plan Option or a Xoom
Non-Plan Option; its exercise price; its grant date; its vesting schedule; and
what portion of such Xoom Option remains outstanding as of May 9, 1999. Xoom,
Xenon 2 and their respective Subsidiaries shall prepare and deliver to NMC an
updated version of SCHEDULE 4.3(G) prior to the Effective Time as of a date no
earlier than 5 days prior to the Effective Time.
(h) OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set
forth in SECTION 4.3(F) and SECTION 4.3(G) and on SCHEDULE 4.3(H), there are no
equity securities, partnership interests or similar ownership interests of any
class of any equity security of Xoom, Xenon 2 or any of their respective
Subsidiaries, or any securities exchangeable or convertible into or exercisable
for such equity securities, partnership interests or similar ownership
interests, issued, reserved for issuance or outstanding. Except as set forth in
SCHEDULE 4.3(H) or as set forth in SECTION 4.3(G) hereof, there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Xoom, Xenon 2 or any of
their respective Subsidiaries is a party or by which Xoom, Xenon 2 or any of
their respective Subsidiaries is bound obligating Xoom, Xenon 2 or any of their
respective Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition of, any shares of capital stock,
partnership interests or similar ownership interests of Xoom, Xenon 2 or any of
their respective Subsidiaries or obligating Xoom, Xenon 2 or any of their
respective Subsidiaries to grant, extend, accelerate the vesting of or enter
into any such subscription, option, warrant, equity security, call, right,
commitment or agreement. Except as contemplated by this Agreement, there are no
registration rights and there is no voting trust, proxy, stockholder rights
plan, antitakeover plan or other agreement or understanding to which Xoom, Xenon
2 or any of their respective Subsidiaries is a party or by which they are bound
with respect to any equity security, partnership interest or similar ownership
interest of any class of any equity security of Xoom, Xenon 2 or any of their
respective Subsidiaries.
(i) SEC FILINGS, FINANCIAL INFORMATION, LIABILITIES. Xoom has
filed and made publicly available a true and complete copy of each report,
schedule, registration statement and definitive proxy statement required to be
filed with the SEC since December 9, 1998 (the "SEC
<PAGE>
34
DOCUMENTS"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, applicable to such SEC Documents. None of the SEC
Documents when filed contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of Xoom included in the
SEC Documents comply as to form in all material respect with the applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with GAAP during the
period involved (except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Form 10-Q of the SEC, or for normal
year-end adjustments) and fairly present in all material respects the
consolidated financial position of Xoom and its consolidated Subsidiaries as at
the dates thereof and the consolidated results of their operations and cash for
the periods then ended. Except as set forth in the SEC Documents (including any
item accounted for in the financial statements contained in the SEC Documents or
set forth in the notes thereto) as of December 31, 1998, neither Xoom nor any of
its Subsidiaries had, and since such date neither Xoom or any of its
Subsidiaries has incurred, any claims, liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually or in
the aggregate, would have a Material Adverse Effect on Xoom (other than claims,
liabilities or obligations contemplated by this Agreement or expressly permitted
to be incurred pursuant to this Agreement). In addition, since December 31,
1998, there has not been any declaration, setting aside or payment of a dividend
or other distribution with respect to Xoom Stock or any material change in
accounting methods or practices by Xoom or any of its Subsidiaries.
(j) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
on SCHEDULE 4.3(J) since December 31, 1998, Xoom, Xenon 2 and each of their
respective Subsidiaries have conducted their businesses in all material respects
only in the ordinary course, consistent with past practice and there has not
been prior to May 9, 1999, (x) any material adverse change in the assets,
liabilities, business, results of operations or financial condition of Xoom,
Xenon 2, or any of their respective Subsidiaries or (y) except in the ordinary
course of business consistent with past practice and except for such matters
that would not reasonably be expected to have a Material Adverse Effect, any
damage, destruction, loss, conversion, condemnation or taking by eminent domain
related to any material asset of Xoom, Xenon 2 and any of their respective
Subsidiaries, taken as a whole. In addition, except as disclosed on SCHEDULE
4.3(J), from December 31, 1998 to May 9, 1999, none of Xoom, Xenon 2 or any of
their respective Subsidiaries has (A) acquired or disposed of any material
assets or entered into any agreement or other arrangement for any such
acquisition or disposition or (B) relinquished, forgiven or canceled any
material debts or claims.
(k) PROPERTIES, CONTRACTS, PERMITS AND OTHER DATA. Except as
specified in SCHEDULE 4.3(K) hereto, all rights, licenses, leases,
registrations, applications, contracts, commitments and other agreements of
Xoom, Xenon 2 and their respective Subsidiaries are in full force and effect and
are valid and enforceable in accordance with their respective terms except for
such failures to be in full force and effect and valid and enforceable that
would not,
<PAGE>
35
individually or in the aggregate, have a Material Adverse Effect. None of Xoom,
Xenon 2 or any of their respective Subsidiaries is in breach or default in the
performance of any obligation thereunder and no event has occurred or has failed
to occur whereby any of the other parties thereto have been or will be released
therefrom or will be entitled to refuse to perform thereunder, the enforcement
of which would have, either individually or in the aggregate, a Material Adverse
Effect. Xoom has provided to NBC complete and accurate copies of its current
annual budget and operating plan (the "XOOM BUDGET").
(l) LEGAL PROCEEDINGS. Except as described in SCHEDULE 4.3(L),
there is no litigation, proceeding or governmental investigation to which Xoom,
Xenon 2 or their respective Subsidiaries is a party pending or, to the best
Knowledge of Xoom, Xenon 2 and their respective Subsidiaries, threatened against
Xoom, Xenon 2 or any of their respective Subsidiaries which, either individually
or in the aggregate, would reasonably be expected to result in a Material
Adverse Effect or which, as of May 9, 1999, seeks to restrain or enjoin the
consummation of any of the transactions contemplated hereby. None of Xoom, Xenon
2, or any of their respective Subsidiaries is a party to, nor are any of their
respective assets subject to, any judgment, writ, decree, injunction or order
entered by any court or governmental authority (domestic or foreign) that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(m) LABOR CONTROVERSIES. Except as set forth on SCHEDULE
4.3(M), (i) there have been no labor strikes, slow-downs, work stoppages,
lock-outs or other material labor controversies or disputes during the past two
years, nor is any such strike, slow-down, work stoppage or other material labor
controversy or dispute pending or, to the best Knowledge of such party,
threatened with respect to the current or former employees of Xoom, Xenon 2 and
their respective Subsidiaries, (ii) none of Xoom, Xenon 2 or any of their
respective Subsidiaries is a party to any labor contract, collective bargaining
agreement, contract, letter of understanding or, to such party's Knowledge, any
other agreement, formal or informal with any labor union or organization, nor
are any of Xoom's, Xoom 2's or any of their respective Subsidiaries' employees
represented by any labor union or organization nor have there been any labor
union organizing activities at any Xoom, Xenon 2 or any of their respective
Subsidiaries' facilities within the last three years and (iii) none of Xoom,
Xenon 2 or any of their respective Subsidiaries has closed any facility,
effectuated any layoffs of employees or implemented any early retirement,
separation or window program within the past two years nor has Xoom, Xenon 2 or
any of their respective Subsidiaries planned or announced any such action or
program for the future.
(n) INTELLECTUAL PROPERTY. Xoom, Xenon 2 and their respective
Subsidiaries own or are licensed or otherwise have the right to use, all
Intellectual Property currently used by Xoom, Xenon 2 and each of their
respective Subsidiaries (the "XOOM INTELLECTUAL PROPERTY"), except as would not,
individually or in the aggregate, have a Material Adverse Effect. None of Xoom,
Xenon 2 or any of their respective Subsidiaries has infringed upon or is in
conflict with the Intellectual Property of any third party nor has Xoom, Xenon 2
or any of their
<PAGE>
36
respective Subsidiaries received any written notice of any claim that Xoom,
Xenon 2 or any of their respective Subsidiaries has infringed upon or is in
conflict with any Intellectual Property of any third party, except as would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth on SCHEDULE 4.3(N), none of the rights of Xoom, Xenon 2 or their
respective Subsidiaries to the Xoom Intellectual Property will be impaired in
any way by the transactions provided for herein, and all of the rights of Xoom,
Xenon 2 and their respective Subsidiaries to the Xoom Intellectual Property will
be fully enforceable by Xenon 2 after the Closing Date to the same extent as
such rights would have been enforceable by Xoom, Xenon 2 and their respective
Subsidiaries before the Closing, without the consent or agreement of any other
party other than any consents and agreements the failure of which to obtain,
individually or in the aggregate, would not have a Material Adverse Effect.
There have been no claims (whether private or governmental) against Xoom, Xenon
2 or their respective Subsidiaries asserting the invalidity or unenforceability
of its ownership, license or other right to use to any of the registered Xoom
Intellectual Property.
(o) GOVERNMENT LICENSES, PERMITS, ETC. Except as set forth on
SCHEDULE 4.3(O), Xoom, Xenon 2 and their respective Subsidiaries have all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Authorities required for the conduct of its Business as
presently conducted, except where failure would not, individually or in the
aggregate, have a Material Adverse Effect.
(p) CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. Xoom, Xenon 2 and their respective Subsidiaries have
complied with all applicable laws, ordinances, regulations or orders or other
requirements of any Governmental Authority, including, without limitation, all
rules, regulations and administrative orders relating to anti-competitive
practices, discrimination, employment, health and safety, except where the
failure to be in such compliance would not have, either individually or in the
aggregate, a Material Adverse Effect.
(q) EMPLOYEE BENEFIT MATTERS. (i) SCHEDULE 4.3(Q)(I) contains
a true and complete list of each "employee benefit plan" (within the meaning of
section 3(3) of ERISA), and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of Xoom, Xenon 2 or their respective
Subsidiaries has any present or future right to benefits and under which Xoom,
Xenon 2 or their respective Subsidiaries has any present or future liability.
All such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "XOOM PLANS".
(ii) With respect to each Xoom Plan, Xoom, Xenon 2 and their
respective Subsidiaries have made available to NBC a current, accurate and
complete copy (or, to the extent no such copy exists, an accurate description)
thereof and, to the extent applicable: (A) any related
<PAGE>
37
trust agreement or other funding instrument; (B) the most recent determination
letter, if applicable; (C) any summary plan description and other written
communications (or a description of any oral communications) by Xoom, Xenon 2 or
their respective Subsidiaries to their employees concerning the extent of the
benefits provided under a Xoom Plan; and (D) for the most recent two years (I)
the Form 5500 and attached schedules and (II) audited financial statements.
(iii) (A) Except as set forth on SCHEDULE 4.3(Q)(III), each
Xoom Plan has been established and administered in accordance with its terms,
and in compliance with the applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations; (B) each Xoom Plan which is intended to
be qualified within the meaning of Code section 401(a) is so qualified and has
received a favorable determination letter as to its qualification (or
established using a prototype plan form which has received such a letter), and
nothing has occurred, whether by action or failure to act, that could reasonably
be expected to cause the loss of such qualification; (C) for each Xoom Plan with
respect to which a Form 5500 has been filed, no material change has occurred
with respect to the matters covered by the most recent Form since the date
thereof; (D) no nonexempt "prohibited transaction" (as such term is defined in
ERISA section 406 and Code section 4975) with respect to Xoom Plans; and (E) no
Xoom Plan provides retiree welfare benefits and none of Xoom, Xenon 2 or any of
their respective Subsidiaries have any obligations to provide any retiree
welfare benefits except as provided under Section 4980B of the Code.
(iv) No Xoom Plan is subject to Title IV of ERISA (including a
multiemployer plan within the meaning of Section 3(37) of ERISA), no Xoom Plan
is a multiple employer plan; and no Xoom Plan is subject to the minimum funding
requirements of ERISA Section 302 or Code Section 412.
(v) None of Xoom, Xenon 2 or any of their respective
Subsidiaries nor any Member of the Controlled Group of which it is a member has
(A) engaged in, or is a successor or parent corporation to an entity that has
engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA or (B)
incurred, or could reasonably be expected to incur, any liability under (I)
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA or (II) Section 4971 of the Code that in either case could become a
liability of Xenon 2, Xoom or NMC or any of their respective Subsidiaries after
the Closing Date. The assets of Xoom, Xenon 2 and all of their respective
Subsidiaries are not now, nor will they after the passage of time be, subject to
any lien imposed under Code Section 412(n) by reason of a failure of any of any
Subsidiary or any Member of the Controlled Group of which it is a member to make
timely installments or other payments required under Code Section 412.
(vi) With respect to any Xoom Plan, (A) no actions, suits or
claims (other than routine claims for benefits in the ordinary course) are
pending or, to the Knowledge of Xoom, Xenon 2 or their respective Subsidiaries,
threatened and (B) no facts or circumstances exist that could reasonably be
expected to give rise to any such actions, suits or claims.
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38
(vii) Except as provided on SCHEDULE 4.3(Q)(VII), no Xoom Plan
exists that could result in the payment to any present or former employee of
Xoom, Xenon 2 or their respective Subsidiaries of any money or other property or
accelerate or provide any other rights or benefits to any present or former
employee of Xoom, Xenon 2 or their respective Subsidiaries as a result of the
transaction contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code Section 280G.
(r) ABSENCE OF CERTAIN BUSINESS PRACTICES. None of Xoom, Xenon
2 or any of their respective Subsidiaries, nor any officer, employee or agent
thereof, nor any other Person acting on behalf of such Persons, has, directly or
indirectly, within the past five years given or agreed to give any gift or
similar benefit to any customer, supplier, governmental employee or other Person
or entity who is or may be in a position to help or hinder Xoom, Xenon 2 or
their respective Subsidiaries (or assist Xoom, Xenon 2 or their respective
Subsidiaries in connection with any actual or proposed transaction) which (x)
subjects any party or Xenon 2 or any of their respective Subsidiaries, to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, (y) if not given in the past, could have had a Material Adverse
Effect or (z) if not continued in the future, could have a Material Adverse
Effect or which might subject any party or Xenon 2 or any of their respective
Subsidiaries to suit or penalty in any private or governmental litigation or
proceeding.
(s) TAX MATTERS. Except as set forth on SCHEDULE 4.3(S), (i)
Xoom, Xenon 2 and each of their respective Subsidiaries have timely filed (or
have had timely filed on their behalf) or will timely file or cause to be timely
filed, all Tax Returns required by applicable law to be filed by any of them
prior to the Effective Time. All such Tax Returns are or will be true, complete
and correct in all material respects. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any of such
Tax Returns and none of Xoom, Xenon 2 nor any of their respective Subsidiaries
has requested any extension of time within which to file any material Tax
Return, which return has not yet been filed. There is no pending claim by any
Tax Authority of a jurisdiction where Xoom, Xenon 2 or any of their respective
Subsidiaries has not filed Tax Returns that Xoom, Xenon 2 or such Subsidiary is
or may have been subject to taxation by that jurisdiction. All Taxes required to
be withheld by Xoom, Xenon 2 or their respective Affiliates with respect to
their activities, properties, employees or independent contractors have been
withheld and paid over to the appropriate Tax Authority.
(ii) Xoom, Xenon 2 and each of their respective Subsidiaries
have paid (or have had paid on their behalf), or where payment is not yet due,
have established (or have had established on their behalf and for their sole
benefit and recourse), or will establish or cause to be established on or before
the Effective Time, an adequate accrual for the payment of, all Taxes due with
respect to any period beginning prior to the Effective Time. No deficiency or
adjustment for any Taxes has been threatened, proposed, asserted or assessed
against Xoom, Xenon 2 or any of their respective Subsidiaries. There are no
liens for Taxes upon the assets of Xoom, Xenon 2 or any of their respective
Subsidiaries, except for liens for current Taxes not yet due.
<PAGE>
39
(iii) None of Xoom, Xenon 2 or any of their respective
Subsidiaries is required to include in income any adjustment pursuant to Section
481(a) of the Code or any similar applicable provision by reason of a voluntary
change in accounting method initiated by Xoom, Xenon 2 or any of their
respective Subsidiaries, and neither the Internal Revenue Service nor any taxing
authority has proposed in writing any such adjustment or change in accounting
method. None of Xoom, Xenon 2 or any of their respective Subsidiaries has
received a tax ruling or entered into a closing agreement with any taxing
authority that would have a continuing Material Adverse Effect upon Xoom, Xenon
2 or any of their respective Subsidiaries.
(iv) None of Xoom, Xenon 2 or any of their respective
Subsidiaries has made any payments, is obligated to make any payments, or is a
party to any agreement that could obligate it to make any payments that would
not be deductible pursuant to Section 280G of the Code.
(v) None of Xoom, Xenon 2 or any of their respective
Subsidiaries has a "permanent establishment," as defined in any applicable Tax
treaty or convention of the United States of America, or fixed place of business
in any foreign country. Xoom, Xenon 2 and their respective Affiliates are in
compliance with the terms and conditions of any applicable tax exemptions,
agreements or orders of any foreign government to which it may be subject or
which it may have claimed, and the transactions contemplated by this Agreement
will not have any adverse effect on such compliance.
(vi) Neither Xoom nor any Subsidiary is a party to any safe
harbor lease within the meaning of Section 168(f)(8) of the Code, as in effect
prior to amendment by the Tax Equity and Fiscal Responsibility Act of 1982. Xoom
and its Subsidiaries are not a party to any joint venture, partnership, or other
agreement, contract, or arrangement (either in writing or verbally, formally or
informally) which could be treated as partnership for federal income tax
purposes.
(vii) Neither Xoom nor any of its Subsidiaries is or has been
bound by any tax sharing or tax allocation agreement, and it has no contractual
obligation to indemnify any other person with respect to Taxes.
(t) SECTION 203. The Boards of Directors of Xoom, Xenon 2 and
each of their respective Subsidiaries has taken appropriate action so that the
provisions of Section 203 of the DGCL restricting "business combinations" with
"interested stockholders" (each as defined in such Section 203) will not, prior
to the termination of this Agreement pursuant to ARTICLE IX hereof, apply to NBC
or NMC or any of their Affiliates with respect to this Agreement, the Xenon 2
Merger Agreement, the Option Agreement, the Voting Agreement, any of the
Implementing Agreements or any of the transactions contemplated hereby or
thereby.
(u) YEAR 2000 COMPLIANCE. Except as set forth on SCHEDULE
4.3(V), Xoom, Xenon 2 and each of their respective Subsidiaries has adopted and
implemented a commercially reasonable plan to provide (x) that the change of the
year from 1999 to the year 2000 will not have a Material Adverse Effect and (y)
that the impacts of such change on the venders and
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40
customers of Xoom, Xenon 2 and each of their respective Subsidiaries will not
have a Material Adverse Effect. In the reasonable best estimate of Xoom, Xenon 2
and each of their respective Subsidiaries, no expenditures materially in excess
of currently budgeted items previously disclosed to Xenon 2 will be required in
order to cause the information and business systems of Xoom, Xenon 2 and each of
their respective Subsidiaries to operate properly following the change of the
year 1999 to the year 2000. Xoom, Xenon 2 and each of their respective
Subsidiaries reasonably expects any material issues related to such change of
the year will be resolved in accordance with the timetable set forth in such
plan (and in any event on a timely basis in order to be resolved before the year
2000). Between May 9, 1999 and the Effective Time, Xoom, Xenon 2 and each of
their respective Subsidiaries shall continue to use commercially reasonable
efforts to implement such plan.
(v) NO BUSINESS ACTIVITIES. Neither Xenon 2 nor Xenon 3 has
conducted any activities other than in connection with their organization, the
negotiation and execution of this Agreement and the NMC Merger Agreement and the
consummation of the transactions contemplated hereby and thereby.
4.4 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO GE INVESTMENTS SUB.
GE Investments Sub represents and warrants to Xoom and Xenon 2 as follows:
(a) DUE ORGANIZATION, POWER AND GOOD STANDING. GE Investments Sub is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the requisite power and authority to own,
lease and operate its properties and to conduct its business as now conducted by
it. GE Investments Sub has all requisite power and authority to enter into this
Agreement and to perform its obligations hereunder and thereunder. GE
Investments Sub is qualified to do business and is in good standing in all
jurisdictions in which it conducts its business, except where the failure to do
so would not, individually or in the aggregate, taken as a whole, have a
Material Adverse Effect.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution, delivery
and performance by GE Investments Sub of this Agreement and the consummation by
GE Investments Sub of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of GE Investments
Sub. This Agreement has been duly executed and delivered by GE Investments Sub
and constitutes a valid and legally binding obligation of GE Investments Sub,
enforceable against GE Investments Sub in accordance with its terms.
(c) GOVERNMENTAL APPROVALS; CONSENTS. Except as described in SCHEDULE
4.1(C), the execution, delivery and performance of this Agreement and the
consummation by GE Investments Sub of the transactions contemplated hereby will
not (i) conflict with or result in a breach of any provision of the certificate
of incorporation or bylaws or other governing documents of GE Investments Sub;
(ii) require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Authority; (iii) require the consent or
approval of any Person (other than a Governmental Authority) or violate or
conflict with, or result in a breach of any provision of, constitute a default
(or an event which with notice or lapse of time or
<PAGE>
41
both would become a default) or give to any third party any right of
termination, cancellation, amendment or acceleration under, or result in the
creation of a Lien on any of the assets of GE Investments Sub under, any of the
terms, conditions or provisions of any contract or license to which GE
Investments Sub is a party or by which it or its assets or property are bound;
or (iv) violate or conflict with any order, writ, injunction, decree, statute,
rule or regulation applicable to GE Investments Sub; other than any consents,
approvals, authorizations and permits the failure of which to obtain and any
violations, conflicts, breaches defaults and other matters set forth pursuant to
clauses (ii), (iii) and (iv) above which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
IV.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties given by the parties in ARTICLE IV and in the
certificates delivered pursuant to ARTICLE VII shall survive the Closing other
than the representations and warranties set forth in SECTION 4.1(C)(III) and
SECTION 4.1(V).
IV.6 NO OTHER REPRESENTATION OR AND WARRANTIES. Except for the
representations and warranties set forth in this ARTICLE IV, the parties hereto
make no other representations or warranties, express or implied.
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME
V.1 CONDUCT OF THE BUSINESS OF XOOM PENDING THE CLOSING. Xoom agrees
that except with the prior written consent of NBC and except as may be expressly
permitted by this Agreement or as set forth on SCHEDULE 5.1, prior to the
Closing, it shall, and shall cause, its Subsidiaries to operate their businesses
only in the usual, regular and ordinary manner, on a basis consistent with past
practice and, to the extent consistent with such operation, use its reasonable
efforts to preserve its present business organization intact, keep available the
services of its present employees, preserve its present business relationships
(consistent with past practice) and maintain all rights, privileges and
franchises in the normal conduct of Xoom's businesses. Without limitation of the
foregoing, from May 9, 1999 until the Effective Time, except as expressly
permitted by this Agreement or as set forth on SCHEDULE 5.1, Xoom shall not:
(a) amend its certificate of incorporation or bylaws;
(b) issue, purchase or redeem, or authorize or propose the
issuance, purchase or redemption of, or declare or pay any dividend with respect
to, any shares of capital stock of Xoom or any class of securities convertible
into, or rights, warrants or options to acquire, any such shares of other
convertible securities other than (i) issuances of Xoom Stock pursuant to Xoom
Options outstanding on May 9, 1999, the Option Agreement or the obligations to
issue Xoom Stock set forth on SCHEDULE 4.3(H) and (ii) (x) Xoom Options with an
exercise price of not less than the fair market value on the date of grant and
vesting over not less than 2 years to be
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42
issued to employees currently holding Xoom Plan Options exercisable in the
aggregate for not more than that number of shares of Xoom Plan Stock that equals
15% of the shares of Xoom stock for which Xoom Plan Options will remain unvested
and nonexercisable after giving effect to the acceleration of vesting described
in SECTION 6.8; and (y) Xoom Options with an exercise price of not less than 85%
of the fair market value on the date of grant, and vesting over not less than 3
years, to be issued to employees currently holding Xoom Non-Plan Options
exercisable in the aggregate for not more than the lesser of (i) that number of
shares of Xoom that equals two times the number of shares of Xoom for which Xoom
Non-Plan Options will remain unvested and nonexercisable and terminate after
giving effect to the acceleration of vesting described in SECTION 6.8 or (ii)
150,000 shares of Xoom.
(c) adopt any stockholders rights plan or take any other
action which would restrict or impede the ability of NBC or its Subsidiaries to
acquire any shares of Xoom Stock to the extent permitted by the terms hereof;
(d) acquire any business or any assets (other than inventory
and any other assets acquired solely for use in an existing business in the
ordinary course consistent with past practice of such business) or acquire any
minority investment in any Person, except for any acquisitions for consideration
not in excess of $10,000,000 individually or $25,000,000 in the aggregate taken
together with all such acquisitions.
(e) dispose of any business or any assets (other than
inventory and any other assets acquired solely for use in an existing business
in the ordinary course consistent with past practice of such business) or
dispose of any minority investment in any Person, except for any dispositions
having a fair market value not in excess of $10,000,000 individually or
$25,000,000 in the aggregate taken together with all such dispositions;
(f) except as otherwise permitted by this SECTION 5.1, make
any expenditures other than in the ordinary course of business and in any event
not in excess of the aggregate budgeted expenditures provided in the Xoom
Budget;
(g) except as otherwise permitted by SECTION 5.1(D),enter into
any transaction involving a cash expenditure other than in the ordinary course
of business consistent with past practice;
(h) except as otherwise permitted by this SECTION 5.1, enter
into any transaction involving the incurrence of indebtedness other than in the
ordinary course of business consistent with past practice;
(i) enter into any transaction involving the merger,
consolidation or sale of all or substantially all of the assets of Xoom;
(j) file any voluntary petition for bankruptcy or receivership
of Xoom or fail to oppose any other person's petition for bankruptcy or action
to appoint a receiver of Xoom;
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43
(k) except as required by applicable law, as contemplated in
this Agreement or the Xenon 2 Merger Agreement or to the extent required under
existing employee benefit plans, agreements or arrangements as in effect on May
9, 1999, (A) increase the compensation or fringe benefits of any present or
former director, officer or employee of Xoom or its Subsidiaries, except for
increases, in the ordinary course of business, in salary or wages of employees
who are not officers, (B) except in the ordinary course of business grant any
severance or termination pay to any present or former director, officer or
employee of Xoom or its Subsidiaries or (C) enter into or amend or terminate any
collective bargaining, bonus, profit sharing, thrift, compensation, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
present or former director, officer or employee of Xoom or its Subsidiaries;
(l) allow any payables or other obligations to become
delinquent, except where the amount or validity of such payables or obligations
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been recorded, or
change or modify the usual, regular and ordinary manner of collecting
receivables from past practice;
(m) except with respect to transactions permitted by SECTION
5.1(D) and SECTION 5.1(E), enter into any contract, agreement, joint venture or
other commitment that is not terminable in Xoom's sole discretion on or prior to
one year from May 9, 1999 without payment of any termination fee or penalty;
(n) settle any claim, action or proceeding involving money
damages in excess of $50,000 in the aggregate or that could result in any
injunction or prohibition on any part of the business of Xoom;
(o) amend, supplement or otherwise modify the Xenon 2 Merger
Agreement or terminate the Xenon 2 Merger Agreement other than in accordance
with Section 9.1(f) thereof; or
(p) authorize any of, or commit or agree to take any of, the
foregoing actions.
V.2 CONDUCT OF THE BUSINESS OF SNAP PENDING THE CLOSING. NBC agrees
that except with the prior written consent of Xoom, and except as may be
expressly permitted or contemplated by this Agreement or as set forth on
SCHEDULE 5.2, prior to the Closing Date, NBC shall use reasonable efforts to
cause each of SNAP and its Subsidiary to be operated only in the usual, regular
and ordinary manner, on a basis consistent with past practice and, to the extent
consistent with such operation, use its reasonable efforts to preserve its
present business organization intact, keep available the services of its present
employees, preserve its present business relationships and maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of SNAP's
businesses. Without limiting the generality of the foregoing, from May 9, 1999
until the Closing, except as expressly permitted or contemplated by this
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44
Agreement or as set forth on SCHEDULE 5.2, NBC shall use reasonable efforts not
to permit SNAP to:
(a) amend the SNAP LLC Agreement;
(b) issue, purchase or redeem, or authorize or propose the
issuance, purchase or redemption of, or make any distribution with respect to,
any equity interests of SNAP or any class of securities convertible into, or
rights, warrants or options to acquire, any such equity interests or other
convertible securities other than (i) pursuant to employee options outstanding
on May 9, 1999 or (ii) SNAP Options with an exercise price of not less than the
fair market value on the date of grant to be issued to employees exercisable in
the aggregate for not more than 195,132 units of SNAP;
(c) acquire any business or any assets (other than inventory
and any other assets acquired solely for use in an existing business in the
ordinary course consistent with past practice of such business) or acquire any
minority investment in any Person, except for any acquisitions for consideration
not in excess of $10,000,000 individually or $25,000,000 in the aggregate taken
together with all such acquisitions;
(d) dispose of any business or any assets (other than
inventory and any other assets acquired solely for use in an existing business
in the ordinary course consistent with past practice of such business) or
dispose of any minority investment in any Person, except for any dispositions
having a fair market value not in excess of $10,000,000 individually or
$25,000,000 in the aggregate taken together with all such dispositions;
(e) except as otherwise permitted by this SECTION 5.2, make
any expenditures other than in the ordinary course of business and in any event
not in excess of the aggregate budgeted expenditures provided in the SNAP
Budget;
(f) except as otherwise permitted by SECTION 5.2(C), enter
into any transaction involving a cash expenditure by SNAP other than in the
ordinary course of business consistent with past practice;
(g) except as otherwise permitted by this SECTION 5.2, enter
into any transaction involving the incurrence of indebtedness by SNAP other than
in the ordinary course of business consistent with past practice;
(h) file any voluntary petition for bankruptcy or receivership
of SNAP or fail to oppose any other person's petition for bankruptcy or action
to appoint a receiver of SNAP;
(i) except with respect to transactions permitted by SECTION
5.2 (C) and SECTION 5.2(D), enter into any contract, agreement, joint venture or
other commitment that is not terminable in SNAP's sole discretion on or prior to
one year from May 9, 1999 without payment of any termination fee or penalty;
<PAGE>
45
(j) except as required by applicable law, as contemplated in
this Agreement or the Xenon 2 Merger Agreement or to the extent required under
existing employee benefit plans, agreements or arrangements as in effect on May
9, 1999, (A) increase the compensation or fringe benefits of any employee of
SNAP, except for increases, in the ordinary course of business, in salary or
wages of employees who are not officers, (B) except in the ordinary course of
business grant any severance or termination pay to any employee of SNAP, (C)
hire, except in the ordinary course of business, any new employees or
consultants, or (D) enter into or amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any employee of SNAP;
(k) allow any payables or other obligations to become
delinquent, except where the amount or validity of such payables or obligations
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been recorded, or
change or modify the usual, regular and ordinary manner of collecting
receivables from past practice;
(l) except as otherwise permitted by SECTION 5.2(D), dispose
of or abandon outside the ordinary course of business any assets of SNAP that
are material, individually or in the aggregate, to SNAP and not transfer any
rights of material value of SNAP;
(m) permit or allow any of the material assets of SNAP to
become subject to any Liens, except for Permitted Liens or waive any material
claims or rights of SNAP;
(n) except as otherwise permitted by SECTION 5.2(C), acquire
or agree to acquire outside the ordinary course of business any assets that are
material, individually or in the aggregate, to SNAP;
(o) enter into any transaction involving the merger,
consolidation or sale of all or substantially all of the assets of SNAP;
(p) settle any claim, action or proceeding involving money
damages in excess of $50,000 in the aggregate or that could result in any
injunction or prohibition on any part of the business of SNAP; or
(q) authorize any of, or commit or agree to take any of, the
foregoing actions.
V.3 CONDUCT OF THE NBC MULTIMEDIA BUSINESSES PENDING THE CLOSING. NBC
agrees that except with the prior written consent of Xoom and except as may be
expressly permitted or contemplated by this Agreement or as set forth on
SCHEDULE 5.2, prior to the Closing Date, it shall, and shall cause its
Subsidiaries to, operate the NBC Multimedia Businesses only in the usual,
regular and ordinary manner, on a basis consistent with past practice and, to
the extent consistent with such operation, use its reasonable efforts to
preserve the NBC Multimedia
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46
Businesses' present business organization intact, keep available the services of
the NBC Multimedia Businesses' present employees, preserve their present
business relationships and maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of the NBC Multimedia Businesses.
NBC shall not cause or permit NMC to conduct any business or take other actions
other than for the purposes of effectuating the transactions contemplated
hereby. Without limiting the generality of the foregoing, from May 9, 1999 until
the Closing, except as expressly permitted or contemplated by this Agreement or
as set forth on SCHEDULE 5.2, NBC shall not:
(a) except as required by applicable law or to the extent
required under existing employee benefit plans, agreements or arrangements as in
effect on May 9, 1999 or as contemplated by this Agreement, (A) increase the
compensation or fringe benefits of any Transferred Employee (including, for all
purposes in this section, persons eligible to become Transferred Employees upon
occurrence of future events such as the acceptance of offers of employment),
except for increases, in the ordinary course of business, in salary or wages of
employees who are not officers, (B) except in the ordinary course of business
grant any severance or termination pay to any Transferred Employee or (C) enter
into or amend or terminate any collective bargaining, bonus, profit sharing,
thrift, compensation, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any Transferred Employee;
(b) transfer, dispose of or abandon any of the material NBC
Multimedia Assets or Videoseeker Assets, other than in the ordinary course of
business, consistent with past practice;
(c) permit or allow any of the NBC Multimedia Assets or
Videoseeker Assets to become subject to any Liens, except for Permitted Liens or
waive any material claims or rights relating to the NBC Multimedia Assets or the
Videoseeker Assets;
(d) transfer any rights of material value included in the NBC
Multimedia Assets or Videoseeker Assets;
(e) authorize any of, or commit or agree to take any of, the
foregoing actions.
V.4 ACCESS TO INFORMATION. From May 9, 1999 to the Closing Date, each
of Xoom and NBC and their respective Subsidiaries shall afford the officers,
employees, auditors and other agents of NBC and Xoom reasonable access during
normal business hours to the officers, employees, properties, offices, plants
and other facilities of (i) SNAP and the NBC Multimedia Businesses, in the case
of NBC and (ii) Xoom and its Subsidiaries, in the case of Xoom and Xenon 2, and
to the contracts, commitments, books, records and Tax Returns relating thereto,
and shall furnish such Persons all such documents and such financial, operating
and other data and information regarding such businesses and Persons that are in
the possession of such Person as NBC or Xoom, as applicable, through their
respective officers, employees or agents may from time to time reasonably
request. All such information, as well as any information provided prior
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47
to the date hereof, shall be used only for the purposes of the transactions
contemplated hereby and, unless required by subpoena or otherwise required by
law, the parties agree not to disclose to any third party (other than their
respective professional advisors) any portion of the information so provided
which constitutes confidential information (i.e., information that is not
otherwise publicly available). The confidential information shall not, without
the other parties' prior written consent, be disclosed to third parties. The
parties will disclose the information internally only to persons who require
knowledge thereof for the purposes of the transactions contemplated hereby.
V.5 NO SOLICITATION. (a) From and after May 9, 1999 until the earlier
of the Effective Time or the termination of this Agreement in accordance with
its terms, Xoom shall not, nor shall it permit any of its Subsidiaries to, nor
shall it authorize or permit any officer, director or employee of, or any
investment banker, attorney or other advisor or representative of, Xoom or any
of its Subsidiaries to, directly or indirectly, (i) take any action to solicit,
initiate, encourage or knowingly facilitate any Material Transaction Proposal
(as defined below) or the submission of a Material Transaction Proposal or (ii)
enter into or participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, a Material Transaction
Proposal; PROVIDED that, prior to obtaining the affirmative vote of the holders
of a majority of the outstanding shares of common stock of Xoom to adopt the
Xenon 2 Merger Agreement (the "XOOM STOCKHOLDER APPROVAL" and, together with the
Xenon 2 Stockholder Approval, the "STOCKHOLDER APPROVALS"), in response to an
unsolicited BONA FIDE Takeover Proposal, Xoom may, to the extent that the Board
of Directors of Xoom determines in good faith based on the advice of outside
legal counsel that such action is required to comply with their fiduciary duties
under applicable law, (A) furnish information with respect to Xoom and its
Subsidiaries to the person making such Takeover Proposal and its representatives
and discuss such information with such person and its representatives and (B)
participate in negotiations regarding such Takeover Proposal. Xoom will promptly
notify NBC of receipt of any request for information or any Material Transaction
Proposal, the material terms and conditions of such request or Material
Transaction Proposal and the identity of the person making any such request or
Material Transaction Proposal, and will keep NBC fully informed on a current
basis of the status and details of any such request or Material Transaction
Proposal, PROVIDED that, prior to providing any information to any Person or
participating in negotiations with any Person, Xoom shall have received an
executed confidentiality agreement. Xoom will immediately cease and cause to be
terminated any existing activities, discussions and negotiations conducted
heretofore with respect to any Material Transaction Proposal.
(b) From and after May 9, 1999 until the earlier of the
Effective Time or the termination of this Agreement in accordance with its
terms, the Board of Directors of Xoom shall not (i) approve or recommend or
propose publicly to approve or recommend any Material Transaction Proposal, (ii)
cause or agree to cause Xoom or any of its Subsidiaries to enter into any
agreement (including, without limitation, any letter of intent or agreement in
principle) related to a Material Transaction Proposal or (iii) prior to the Xoom
Stockholder Approval, withdraw or modify, in a manner adverse to NBC, the
approval or recommendation of the Board of Directors of Xoom for the adoption of
the Xenon 2 Merger Agreement or vote in favor of
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48
Xoom, as sole stockholder of Xenon 2, adopting the NMC Merger Agreement at the
Xenon 2 Stockholder Meeting. Notwithstanding the foregoing, if the Board of
Directors of Xoom receives a Takeover Proposal without having violated SECTION
5.5(A) hereof, the Board of Directors of Xoom may, prior to obtaining the Xoom
Stockholder Approval, to the extent it determines in good faith based on the
advice of outside legal counsel that such action is required to comply with
their fiduciary duties under applicable law, take any action specified in
clauses (i), (ii) or (iii) above with respect to such Takeover Proposal, but in
each case only (x) at a time that is at least five (5) business days after
receipt by NBC of written notice from Xoom advising NBC that the Board of
Directors of Xoom has resolved to take such action and (y) if Xoom
simultaneously therewith terminates this Agreement pursuant to SECTION 9.1(G)
hereof. Nothing contained in this Agreement shall prohibit Xoom or its board of
directors from complying with Rules 14D-9 and 14e-2 under the Exchange Act with
respect to any Takeover Proposal.
(c) As used herein, "MATERIAL TRANSACTION PROPOSAL" means any
inquiry, proposal or offer from any Person relating to (i) the direct or
indirect acquisition or purchase of 20% or more of the assets (based on the fair
market value thereof) of Xoom and its Subsidiaries, taken as a whole, or of 20%
or more of any class of equity securities of Xoom or any of its Subsidiaries or
any tender offer or exchange offer (including by Xoom or its Subsidiaries) that
if consummated would result in any person beneficially owning 20% or more of any
class of equity securities of Xoom or any of its Subsidiaries, or (ii) any
merger, consolidation, business combination, sale of all or substantially all
assets, recapitalization, liquidation, dissolution or similar transaction
involving Xoom or any of its Subsidiaries other than the Transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that in no event shall any
merger, consolidation, sale or similar transaction involving only Xoom and one
or more of its wholly-owned subsidiaries or involving only any two or more of
such wholly-owned subsidiaries be deemed to be a Material Transaction Proposal
if such transaction is not entered into in violation of the terms of this
Agreement.. As used herein, "TAKEOVER PROPOSAL" means any inquiry, proposal or
offer from any Person relating to (A) any of the matters set forth in clause (i)
of the definition of Material Transaction Proposal but replacing "20%" with
"50%" each place "20%" is used in such definition, (B) a sale of all or
substantially all of the assets of Xoom and its Subsidiaries or (C) a merger or
consolidation of Xoom as a result of which the stockholders of Xoom immediately
prior to such transaction would not beneficially own immediately after such
transaction 50% or more of the resulting or surviving entity (or the parent
thereof).
(d) The parties acknowledge that there may be no adequate
remedy at law for a breach of SECTION 5.5 and that money damages may not be an
adequate remedy for breach of such Section. Therefore, the parties agree that
NBC and Xoom each shall have the right, in addition to any other rights it may
have, to injunctive relief and specific performance in the event of any breach
of this SECTION 5.5. The remedy set forth in the preceding two sentences is
cumulative and shall in no way limit any other remedy any party hereto has at
law, in equity or pursuant hereto.
V.6 NON-SOLICITATION OF EMPLOYEES. The parties hereto agree that
beginning on May 9, 1999 and continuing until one year after the Effective Time,
no party shall, directly or
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49
indirectly, solicit for employment any person who is now employed by any of the
other parties in an executive position, technical position or is otherwise
considered a key employee; PROVIDED, HOWEVER, that a party shall not be
precluded from hiring any such employee who (i) initiates discussions regarding
such employment without any direct or indirect solicitation by such party, (ii)
responds to any general public advertisement placed by such party or (iii) has
been terminated by the other party prior to commencement of employment
discussions between such party and the employee.
V.7 AMENDMENTS TO SCHEDULES. If no later than five business days prior
to the Closing Date, Xoom, Xenon 2, NBC, SNAP or GE Investments Sub becomes
aware of any fact or circumstance (whether or not it existed prior to May 9,
1999) which would make any representation, warranty, covenant or agreement of
such party untrue, then such party shall be permitted to amend any Schedule to
this Agreement so as to identify such fact or circumstance to the extent
necessary to make such representation, warranty, covenant or agreement true and
correct; PROVIDED that if any such amendment, individually or in the aggregate
with all such other amendments, discloses facts and circumstances that
constitute a Material Adverse Effect, then notwithstanding anything to the
contrary in this Agreement, the other party (which shall be Xoom in the case of
amendments by NBC, SNAP or GE Investments Sub and shall be NBC in the case of
amendments by Xoom or Xenon 2) shall have the right to terminate this Agreement.
Notwithstanding the foregoing, any change to a Schedule that refers solely to an
item previously disclosed in the SEC Documents shall not be deemed to have a
Material Adverse Effect on Xenon if such reference is to a specific section of a
specific SEC Document.
ARTICLE VI
OTHER AGREEMENTS
VI.1 REGISTRATION STATEMENT; PREPARATION OF PROXY STATEMENT. (a) As
soon as practicable after the execution of this Agreement, Xoom shall prepare
and cause to be filed with the SEC preliminary proxy materials (the "PROXY
STATEMENT") for the solicitation of approval by the stockholders of Xoom of the
Xenon 2 Merger Agreement and of Xoom, in its capacity as sole stockholder of
Xenon 2, approving this Agreement, the Merger and the other transactions
contemplated hereby and the other Implementing Agreements as may reasonably
require approval of Xenon 2's stockholders. Xoom shall cause Xenon 2 to include
the Proxy Statement as part of the prospectus to be included in the registration
statement on Form S-4 (the "FORM S-4") that Xenon 2 is preparing and filing with
respect to the shares of Class A Common Stock issuable pursuant to the
transactions contemplated by the Xenon 2 Merger Agreement. Each of Xenon 2 and
Xoom shall cause the Form S-4 and the Proxy Statement related thereto to comply
with applicable law and the rules and regulations promulgated by the SEC, to
respond promptly to any comments of the SEC or its staff and to have such
registration statement declared effective under the Securities Act as promptly
as practicable after it is filed with the SEC and Xoom shall use its best
efforts to cause the proxy statement to be mailed to Xoom's stockholders as
promptly as practicable after the registration statement is declared effective
under the Securities Act. Each
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50
of the parties hereto shall promptly furnish to the other party all information
concerning itself, its stockholders and its Affiliates that may be required or
reasonably requested in connection with any action contemplated by this SECTION
6.1. If any event relating to any party occurs, or if any party becomes aware of
any information, that should be disclosed in an amendment or supplement to the
Form S-4 or the Proxy Statement, then such party shall inform the other thereof
and shall cooperate with each other in filing such amendment or supplement with
the SEC and, if appropriate, in mailing such amendment or supplement to the
stockholders of Xoom. The Proxy Statement shall include the recommendation of
the Board of Directors of Xoom in favor of the adoption of this Agreement and
the Xenon 2 Merger Agreement and the approval of the transactions contemplated
hereby and thereby.
(b) Prior to the Effective Time, Xoom shall cause Xenon 2 to
use reasonable efforts to obtain all regulatory approvals needed to ensure that
the Class A Common Stock to be issued in connection with the transactions
contemplated the Xenon 2 Merger Agreement (i) will be registered or qualified
under the "blue sky" laws of every jurisdiction of the United States in which
any registered holder of the outstanding Xoom common stock who is receiving
registered shares of Class A Common Stock has an address of record or be exempt
from such registration; and (ii) will be approved for quotation at the Effective
Time on Nasdaq.
(c) Each of Xoom, Xenon 2 and NBC agrees with respect to the
information to be supplied by such party that: (i) none of the information to be
supplied by such party or its Affiliates for inclusion in the Form S-4 will, at
the time the Form S-4 becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading; (ii) none
of the information to be supplied by such party or its Affiliates for inclusion
in the Proxy Statement will, at the time the Proxy Statement is mailed to the
stockholders of Xoom or as of the Effective Time, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (iii) as to
matters respecting such party, the Proxy Statement and the Form S-4 will comply
as to form in all material respects with the provisions of the Securities Act
and the Exchange Act, as applicable, and the rules and regulations promulgated
by the SEC thereunder.
VI.2 STOCKHOLDER MEETING. Xoom shall promptly after May 9, 1999
take all action necessary in accordance with applicable law and its certificate
of incorporation and bylaws to duly call, hold and convene a meeting of Xoom's
stockholders (the "XOOM STOCKHOLDER MEETING") and a meeting of Xoom 2's
stockholder (the "XENON 2 STOCKHOLDER MEETING). Except as required by the SEC or
applicable court order, Xoom shall not postpone or adjourn (other than for the
absence of a quorum) the Xoom Stockholder Meeting or the Xenon 2 Stockholder
Meeting without the consent of NBC. Notwithstanding anything in this Agreement
to the contrary, Xenon 2 shall, and Xoom shall cause Xenon 2, to duly call, hold
and convene the Xenon 2 Stockholder Meeting immediately after Xoom Stockholders
Meeting, and Xoom, in its capacity as sole stockholder of Xenon 2, shall vote
with respect to the adoption of this
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51
Agreement at the Xenon 2 Stockholder Meeting as instructed by the votes of at
least a majority of the Xoom Stockholders at the Xoom Stockholder Meeting. Each
of Xenon 2 and Xoom shall not authorize or permit (i) the Xenon 2 Stockholder
Meeting to occur at or after the effectiveness of the merger contemplated by the
Xenon 2 Merger Agreement or (ii) the adoption of this Agreement by the
stockholder of Xenon 2 to be effected by a written consent to action without a
meeting. Neither NBC, Xenon 2 nor Xoom shall in any way challenge the validity,
enforceability or effectiveness of the voting agreements or proxies entered into
by certain stockholders of Xoom in connection with this Agreement or the Xenon 2
Merger Agreement and the transactions contemplated hereby and thereby. Xoom
shall take all other action necessary or advisable to secure the Stockholder
Approvals subject to the fiduciary duty set forth in SECTION 5.5. Without
limiting the generality of the foregoing but subject to its rights to terminate
the Agreement pursuant to SECTION 9.1(G), Xoom agrees that its obligations
pursuant to this SECTION 6.2 shall not be affected by the commencement, public
proposal, public disclosure or communication to Xoom of any Material Transaction
Proposal.
VI.3 PUBLIC STATEMENTS. Before any party or any Affiliate of such party
shall release any information concerning this Agreement or the matters
contemplated hereby which is intended for or may result in public dissemination
thereof, such party shall cooperate with the other parties, shall furnish drafts
of all documents or proposed oral statements to the other parties, provide the
other parties the opportunity to review and comment upon any such documents or
statements and shall not release or permit release of any such information
without the consent of the other parties, except to the extent required by
applicable law or the rules of any securities exchange or automated quotation
system on which its securities or those of its Affiliate are traded.
VI.4 REASONABLE COMMERCIAL EFFORTS. (a) Subject to the terms and
conditions provided in this Agreement, each party shall use reasonable
commercial efforts to take promptly, or cause to be taken, all actions, and to
do promptly, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated hereby, to obtain all necessary waivers, consents and
approvals and to effect all necessary registrations and filings, including,
without limitation, an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions contemplated hereby,
and the filings and consents set forth on SCHEDULE 6.4 hereto (the "REQUIRED
CONSENTS") and to remove any injunctions or other impediments or delays, legal
or otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
the benefits contemplated by this Agreement; PROVIDED that notwithstanding
anything to the contrary in this Agreement, no party nor any of their Affiliates
shall be required to make any disposition, including, without limitation, any
disposition of, or any agreement to hold separate, any Subsidiary, asset or
business, and no party hereto nor any of their Affiliates shall be required to
make any payment of money nor shall any party or its Affiliates be required to
comply with any condition or undertaking or take any action which, individually
or in the aggregate, would materially adversely affect the economic benefits to
such party of the transactions contemplated hereby and
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52
the Implementing Agreements, taken as a whole or adversely affect any other
business of such party or its Affiliates.
(b) Each of the parties hereto shall execute and cause its
Subsidiaries to execute on or prior to the Closing Date each Implementing
Agreement to which it or they are a party on the terms set forth in the relevant
Exhibits hereto.
(c) Each of the parties hereto agrees, from time to time, to
execute and deliver, or use reasonable commercial efforts to cause to be
executed and delivered, such additional instruments, certificates or documents
(including bills of sale and assignment and assumption agreements), and take all
such actions, reasonably necessary to implement or effectuate the transactions
contemplated by this Agreement.
VI.5 NOTIFICATION OF CERTAIN MATTERS. Each party to this Agreement
shall give prompt notice to each other party of (i) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which is likely
to cause any representation or warranty of any party contained in this Agreement
to be untrue or inaccurate at or prior to the Effective Time and (ii) any
failure of any party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER,
that the delivery of any notice pursuant to this SECTION 6.5 shall not limit or
otherwise affect any remedies available to the parties receiving such notice. No
disclosure by any party pursuant to this SECTION 6.5, however, shall be deemed
to amend or supplement the disclosures set forth on the Schedules to ARTICLE IV
or prevent or cure any misrepresentations, breach of warranty or breach of
covenant.
VI.6 XENON 2 DIRECTORS. (a) NBC shall have the right to select six
persons to serve as members of the Board of Directors of Xenon 2 to be elected
by the holders of the Class B Common Stock, voting separately as a class (such
persons, or any replacement persons, the "NOMINEES"), and Xoom and Xenon 2 shall
cause the Nominees to be appointed to the Board of Directors of Xenon 2 (to the
extent the Nominees so consent) as of the Effective Time.
(b) Xoom and Xenon 2 shall also cause to be appointed to the
Board of Directors of Xenon 2 (to the extent they so consent) as of the
Effective Time the current Chairman of the Board of Xoom, the four current
outside directors of Xoom and an additional person designated by Xoom.
(c) Xoom and Xenon 2 shall also cause to be appointed to the
Board of Directors of Xenon 2 as of the Effective Time one additional person
mutually agreed upon by NBC and Xoom who shall not be affiliated with either
party.
(d) Xenon 2 will cause the Surviving Corporation to indemnify
each person who is now, or has been at any time prior to May 9, 1999, or who
becomes prior to the Effective Time, a director or officer of NMC from and after
the Effective Time (individually an "INDEMNIFIED PARTY" and collectively the
"INDEMNIFIED PARTIES"), with respect to acts or omissions occurring prior to the
Effective Time to the full extent provided as of May 9, 1999
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53
under the certificate of incorporation, bylaws, other similar organizational
documents of NMC or applicable law. The rights under this SECTION 6.6(D) are
contingent upon the occurrence of, and will survive consummation of, the
transactions contemplated hereby and are expressly intended to benefit each
Indemnified Party each of whom shall have third party beneficiary rights
hereunder.
VI.7 EMPLOYEE MATTERS.
(a) EMPLOYEES AND OFFERS OF EMPLOYMENT. Between May 9, 1999
and the Closing Date, Xenon 2 shall offer employment as of the Closing Date to
each individual who is listed on SCHEDULE 6.7(A) and who, on the Closing Date,
is employed by NBC or its Affiliates or who is absent from work by reason of
vacation, sick leave, short-term disability or due to authorized leave of
absence or military service; PROVIDED that for any such employee who, as of the
Closing Date, is absent from work due to sick leave, short-term disability or
due to authorized leave of absence or military service, such offer of employment
shall be effective as of the date such employee is able to commence active
employment with Xenon 2. Each offer of employment shall include salary, title
and level of responsibility which are no less favorable in the aggregate than
those in effect for such employee on May 9, 1999; PROVIDED that nothing shall
prohibit Xenon 2 from terminating the employment of any Transferred Employee at
any time. Such employees who accept and commence employment with Xenon 2 are
herein collectively referred to as "TRANSFERRED EMPLOYEES".
(b) EMPLOYEE BENEFIT PLANS
(i) As of the Closing Date, except as otherwise expressly
provided under the applicable employee benefit plan of NBC or its Affiliates
(the "NBC PLANS") the Transferred Employees shall cease to accrue further
benefits under NBC Plans and shall immediately commence participation in the
Xenon 2 plans (which, except as otherwise provided in this Agreement, shall
initially be the Xoom Plans) on a basis no less favorable than similarly
situated employees of Xenon 2 or Xoom. Xenon 2 or Xoom shall cause each Xenon 2
Plan to treat the prior service of each Transferred Employee with NBC or its
affiliates as service rendered to Xenon 2 or Xoom for purposes of eligibility,
vesting and benefit accrual (but not for purposes of benefit accruals) under any
defined benefit plan to the same extent such service was taken into
consideration under comparable NBC Plans.
(ii) NBC shall retain responsibility for and continue to pay
all medical, life insurance, disability and other welfare plan expenses and
benefits for each Transferred Employee with respect to claims incurred by such
Employees or their covered dependents prior to the Closing Date. Expenses and
benefits with respect to claims incurred by Transferred Employees or their
covered dependents on or after the Closing Date shall be the responsibility of
Xenon 2. For purposes of this paragraph, a claim is deemed incurred when the
services that are the subject of the claim are performed; in the case of life
insurance, when the death occurs, in the case of long-term disability benefits,
when the disability occurs and, in the case of a hospital stay, when the
employee first enters the hospital.
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54
(iii) With respect to any welfare benefit plans (as defined in
section 3(1) of ERISA) maintained by Xenon 2 or its Subsidiaries for the benefit
of Transferred Employees and SNAP Employees on and after the Closing Date, Xenon
2 or its Subsidiaries shall use best efforts to (A) cause there to be waived any
pre-existing condition limitations and (B) give effect, in determining any
deductible and maximum out-of-pocket limitations, to claims incurred and amounts
paid by, and amounts reimbursed to, such employees with respect to similar plans
maintained by NBC for their benefit immediately prior to the Closing Date.
(iv) NBC shall retain all assets and liabilities and
obligations under NBC Plans with respect to the Transferred Employees.
Notwithstanding the foregoing, Xenon 2 shall be responsible, with respect to
Transferred Employees, for all accrued bonuses for the year of Closing.
(v) With respect to any accrued but unused vacation time to
which any Transferred Employee is entitled pursuant to the vacation policy
applicable to such Transferred Employee immediately prior to the Closing Date
(the "VACATION POLICY"), Xenon 2 shall allow such Transferred Employee to use
such accrued vacation; PROVIDED, HOWEVER, that if Xenon 2 deems it necessary to
disallow such Transferred Employee from taking such accrued vacation, Xenon 2
shall be liable for and pay in cash to each such Transferred Employee an amount
equal to such vacation time in accordance with terms of the Vacation Policy.
VI.8 XENON 2 OPTIONS. (a) Prior to the Effective Time, with respect to
each option to purchase shares of Xenon 2 into which options to purchase shares
of Xoom (a "XOOM OPTION"), which were granted pursuant to the Xoom 1998 Stock
Incentive Plan (the "XOOM OPTION PLAN") prior to May 9, 1999, were converted
(the "CONVERTED XOOM PLAN OPTIONS"), Xenon 2 shall cause the Administrator (as
defined in the Xoom Option Plan) to exercise its discretion to provide, and
shall take any other necessary action to provide, that each Converted Xoom Plan
Option shall vest and become exercisable with respect to all shares as to which
such options would otherwise have vested within 12 months following the
Effective Time. With respect to each option to purchase shares of Xenon 2 into
which Xoom Options, which were not granted pursuant to the Xoom Option Plan
prior to May 9, 1999, were converted (the "CONVERTED XOOM NON-PLAN OPTIONS"),
Xenon 2 shall take any necessary action to provide that such Converted Xoom
Non-Plan Options shall to the extent provided in the award agreement evidencing
such option vest and become exercisable with respect to 75% of the then unvested
portion of such Converted Xoom Non-Plan Option and any portion of a Converted
Xoom Non-Plan Option which remains unexercised upon the occurrence of the
Effective Time shall terminate upon the occurrence of the Effective Time. In
addition, with respect to each option to purchase shares of Xenon 2 into which
Xoom Options, which were granted after May 9, 1999, were converted (the
"CONVERTED NEW XOOM OPTIONS"), Xenon 2 shall cause the Administrator to exercise
its discretion to provide, and shall take any other necessary action to provide,
that each option Converted New Xoom Option shall not immediately vest (but
rather, shall vest in accordance with its stated vesting schedule) with respect
to any of the shares subject thereto. Xenon 2 and Xoom acknowledge that the
transaction contemplated hereby shall constitute a "Corporate
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55
Transaction" for purposes of both the Xoom Option Plan and the Converted Xoom
Non-Plan Options and the Administrator, the Board of Directors of Xoom and the
Board of Directors of Xenon 2 shall take all necessary action to effect the
foregoing.
(b) In the event that any Xoom employee incurs an excise tax
under Section 4999 of the Code as a result of the accelerated vesting of the
Xoom Options pursuant to SECTION 6.8(A), Xenon 2 shall make available to such
employee a loan (the "TAX LOAN") in an amount sufficient to pay such excise tax.
The determination of whether any such excise tax will be payable and the amount
of such excise tax will be made by Xoom 2's independent auditors. The Tax Loan
will (i) have a term of two years, and (ii) bear interest at the lowest
permissible rate without imputation of income, compounded annually and (iii) to
the extent not previously forgiven become immediately due and payable upon the
termination of such employee's employment with Xenon 2 and its Affiliates for
cause or due to such employee's voluntary resignation. The Tax Loan, will be
forgiven with respect to 1/24 of the initial principal amount of the Tax Loan
(together with accrued interest thereon) on the last day of each 1 month
anniversary of the Effective Time if the employee has remained continually
employed with Xenon 2 and its Affiliates through such date or if such employee's
employment with Xenon 2 and its Affiliates is terminated without cause or due to
the employee's death or disability.
VI.9 SNAP INDEBTEDNESS. Immediately following Closing, Xenon 2 will
repay and terminate the commitments with respect to the indebtedness for money
borrowed (including all interest, fees and other amounts payable in respect
thereof) set forth on SCHEDULE 6.9 and Xenon 2 shall use its best efforts to
cause the guarantee of such indebtedness by General Electric Company to be fully
released. Neither SNAP nor NBC or any of its Subsidiaries shall be required to
repay prior to Closing any indebtedness of SNAP, including any incurred from and
after May 9, 1999 in accordance with the terms of this Agreement.
VI.10 ORGANIZATION OF CNBC.COM. NBC shall organize an entity and
contribute the assets, properties and other rights set forth on SCHEDULE 6.10 to
such entity on or before the Closing Date.
VI.11 TAX COOPERATION AND CONSISTENT REPORTING.
(a) Xenon 2 and NBC agree to furnish or cause to be furnished
to each other, upon request, as promptly as practicable, such information and
assistance relating to the Contributed Assets as is reasonably necessary for the
filing of all Tax Returns, and making of any election related to Taxes, the
preparation for any audit by any Tax Authority, and the prosecution or defense
of any claim, suit or proceeding relating to any Tax Return. Xenon 2 and NBC
will cooperate with each other in the conduct of any audit or other proceeding
related to Taxes and all other Tax matters relating to the Contributed Assets,
and each will execute and deliver such powers of attorney and other documents as
are necessary to carry out the intent of this SECTION 6.11.
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56
(b) Unless there has been a Final Determination to the
contrary, NBC, Xenon 2 and Xoom covenant and agree, for all Tax purposes
including all Tax Returns and any Tax controversies to (and to cause any
Affiliate or successor to their assets or business to) take each of the
positions set forth below (and not to take any positions inconsistent
therewith):
(i) The transfer of the Contributed Assets pursuant to the
Agreement will qualify under Section 351(a) of the Code.
(ii) None of the consideration received for the Contributed
Assets pursuant to the Agreement will be treated as Other Property or Money.
(iii) None of the Class A Common Stock or Class B Common Stock
issued to NBC or CNET pursuant to the terms of the Agreement will be paid or
issued for services.
(iv) The tax basis of each Contributed Asset to be received by
Xenon 2 will be the same as the tax basis of such asset in the hands of the
transferor increased by the amount of any gain recognized by the transferor on
the transfer of such asset.
(v) The holding period of each Contributed Asset will include
the period during which such asset was held by the transferor.
(vi) Neither Xenon 2, Xoom, any affiliate thereof, nor any
successor to their assets or businesses will be entitled to claim any deduction
in respect of any assumed Liability to the extent previously deducted by the
transferor.
(c) Xenon 2 represents, covenants and agrees that (A) it has
no plan or intention to (i) issue additional shares of stock after the Merger,
or take any other action, that would result in NBC, NBC Multimedia, CNBC, CNET
and the Xoom shareholders losing control of Xenon 2, (ii) liquidate or merge
Xenon 2; (iii) sell or otherwise dispose of any of its assets (or of any of the
assets acquired from NBC Multimedia), except for dispositions made in the
ordinary course of business, transfers permitted under Section 368(a)(2)(C) of
the Code, or transfers prescribed by Section 1.368-1(d) that will not affect
Xoom 2's satisfaction of the "continuity of business enterprise" requirement
under Section 368 of the Code for purposes of qualifying the Merger as a
"reorganization" under said section, and (iv) reacquire any of the shares of its
stock issued pursuant to this Agreement, and (B) the historic business of NBC
Multimedia will be continued or a significant portion of NBC Multimedia's
historic business assets will be used in a business.
(d) (i) NBC and Xenon 2 agree to report to the other any
communication from or with the Internal Revenue Service which relates in any way
to the characterization of the transactions contemplated by the Agreement.
Notwithstanding any such communication, Xenon 2 and Xoom covenant and agree to
(and to cause any Affiliate or successor to their assets or business to)
continue to take each of the positions specified in SECTION 6.11(B) for all Tax
purposes (unless there has been a Final Determination contrary to such
position).
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(ii) Without limiting the generality of SECTION 6.11(D)(I),
(A) NBC will file with its federal income tax return for the taxable year in
which the Agreement is consummated (which tax return shall be timely filed) the
information required by Treas. Reg ss. 1.351-3(a), and will deliver a copy of
that statement to Xenon 2 within ten days thereafter, and (B) Xenon 2 will file
with its federal income tax return for the taxable year in which the Agreement
is consummated (which tax return shall be timely filed) the information required
by Treas. Reg ss. 1.351-3(b), and will deliver a copy of that statement to NBC
within ten days thereafter. Within ninety days after the Closing Date, NBC will
deliver to Xenon 2 all of the cost and other basis information relating to the
Contributed Assets and assumed Liabilities for federal income tax purposes
reasonably required for Xenon 2 to prepare the statement required by Treas. Reg.
ss. 1.351-3(b)(2). Such information will be delivered in the form normally
maintained by NBC and will include reasonably complete data relating to the tax
basis, year of acquisition, depreciable life, and amount and method of
depreciation of tangible and intangible property. NBC and Xenon 2 also will
maintain such records as are required by Treas. Reg. ss. 1.351-3(c).
(iii) Without limiting the generality of SECTION 6.11(D)(I),
(A) Xenon 2 and NBC Multimedia will comply with the record-keeping and
information filing requirements of Section 1.368-3 of the Treasury Regulations
with respect to the Merger, and (B) Xenon 2 will file with its federal income
tax return for the taxable year in which the Agreement is consummated (which tax
return shall be timely filed) the information required by Treasury Regulations
Section 1.351-3(b) and maintain such records as are required by Treasury
Regulations Section 1.351-3(c) with respect to the Merger.
VI.12 TAX BENEFIT PAYMENTS.
(a) If a Final Determination is made contrary to any of the
positions described in 6.11(b)(i), (ii), or (iii), then (in addition to any
other remedies which may be available to NBC but without duplication thereof)
Xenon 2 will pay to NBC for each Post-Closing Tax Period an amount equal to the
excess of (A) the liability for federal, state and local Taxes to which Xenon 2,
Xoom or any other Affiliates or any successor to their assets or businesses
(collectively, the "TAXPAYER") would have been subject for all Post-Closing Tax
Periods in each relevant jurisdiction had the positions described in SECTION
6.11(B)(I), SECTION 6.11(B)(II) and SECTION 6.11(B)(III) been sustained (and had
Xenon 2 not been required to make any payments pursuant to this SECTION 6.12),
over (B) the Taxpayer's actual liability for such Taxes for such periods. Such
payment will be due (subject to a ten business-day grace period) when, as, and
to the extent the Taxpayer derives an actual benefit (in the form of any refund,
reduction in Tax liability, or otherwise) as the result of such excess. If any
payment required under this SECTION 6.12(A) for any Post-Closing Tax Period is
not made on or before the due date (without extensions) of the return of such
period, then such payment will be made together with interest at the rate per
annum determined from time to time under Section 6621(a)(2) of the Code
compounded daily for the period from such due date to the date on which the
payment is actually made.
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(b) In addition, Xenon 2 will pay to NBC, no later than ten
business days after each date on which the Taxpayer receives a refund of
federal, state or local Taxes for a Pre-Closing Tax Period, the excess of such
refunds over such refunds to which the Taxpayer would have been entitled had the
positions described in SECTION 6.11(B) been sustained (and had Xenon 2 not been
required to make any payments under this SECTION 6.12). If any payment required
under this SECTION 6.12(B) is not made on or before the date such payment is
due, then such payment will be made together with interest at the rate per annum
determined from time to time under Section 6621(a)(2) of the Code compounded
daily for the period from the date such payment was due to the date on which
such payment is actually made.
(c) In the event of any adjustment to the Taxpayer's liability
for federal, state or local Taxes or entitlement to a refund, as a result of
audit, carryover, or otherwise, the amounts previously payable under this
SECTION 6.12 will be appropriately adjusted and Xenon 2 or NBC, as the case may
be, will pay to the other the amount, required as a result of such adjustment,
together with interest at the rate per annum determined from time to time under
Section 6621(a)(2) of the Code compounded daily for the period from the original
payment date affected by the adjustment to the date on which the payment is
made. At the time of any payment under this SECTION 6.12 (or at the request of
NBC if Xenon 2 has determined that no payment is due), Xenon 2 will submit a
schedule showing in reasonable detail its calculation of the payment to be made
(or the basis for its determination that no payment is due). Any dispute
concerning the calculation of payments due under this SECTION 6.12 will be
resolved by the Independent Accountants.
(d) Any payment to NBC under this SECTION 6.12 will be
allocated between principal and interest for purposes of Section 483, Section
1273, and any other relevant provision of the Code by using as a discount rate
the rate per annum determined from time to time under Section 6621(a)(2) of the
Code compounded daily for the period from the date of Closing to the date on
which the payment is made. The portion of any such payment created as principal
will be treated as additional exchange consideration. Any payment to Xenon 2
under this SECTION 6.12 (other than interest) will be treated as a reduction of
the exchange consideration.
(e) NBC will pay (i) any fees or other amounts due to the
Independent Accountants in respect of the resolution of any dispute pursuant to
SECTION 6.12(C), and (ii) all reasonable costs (including the reasonable
internal costs of Xenon 2 or any Affiliate or successor thereto) incurred by
Xenon 2 (or by such Affiliate or successor) to comply with the provisions of
this SECTION 6.12.
VI.13 XOOM CASH. As long as the Effective Time occurs on or prior to
September 30, 1999, Xoom covenants and agrees immediately prior to the Effective
Time that it will have cash, net of outstanding indebtedness of Xoom, in an
amount at least equal to the sum of $230 million less any cash used in
connection with acquisitions made in accordance with the terms of SECTION 5.1;
PROVIDED that if the Effective Time occurs after that date, the foregoing amount
shall also be less $7.5 million for each month after September 30, 1999 and
prior to the Effective Time.
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VI.14 TRANSITION SERVICES. Promptly after May 9, 1999, NBC, Xoom and
Xenon 2 shall use their good faith efforts to negotiate a transition services
agreement pursuant to which NBC shall provide certain administrative and support
services and facilities relating to the NBC Multimedia Businesses to Xenon 2 for
a transition period after the Effective Time on terms mutually acceptable to the
parties.
VI.15 CONVERSION OF NBC'S CLASS A COMMON STOCK. On the Closing Date,
any Class A Common Stock purchased pursuant to the Stock Purchase Agreement,
dated as of June 11, 1999, between Xoom and NBC held by NBC or its Affiliates
will be automatically converted into Class B Common Stock pursuant to the
certificate of incorporation attached hereto as Exhibit 3.5. As soon as
reasonably practicable after the Effective Time, NBC or its Affiliates, as the
case may be, shall deliver any certificates representing such Class A Common
Stock to Xenon 2 and NBC or its Affiliates, as the case may be, shall be
entitled to receive in exchange a certificate representing the same number of
shares of Class B Common Stock, which certificate shall, until such time as the
same is no longer required hereunder or under the applicable requirements of the
Securities Act or applicable state securities laws, bear the legend set forth in
Section 3.8(d).
ARTICLE VII
CONDITIONS TO CLOSING
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each party to this Agreement to consummate this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction or waiver
by the appropriate party of each of the following conditions on or prior to the
Closing Date:
(a) NO INJUNCTIONS OR RESTRAINTS. At the Closing Date, there
shall be (i) no injunction, restraining order or other decree of any nature of
any court of competent jurisdiction or other Governmental Authority that is in
effect that restrains or prohibits the consummation of any of the transactions
contemplated hereby, and (ii) no action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated hereby, which makes the consummation of this Agreement and the
transactions herein illegal; PROVIDED, HOWEVER, that the parties hereto shall
use their reasonable commercial efforts to have such injunction, order, decree,
claim, action, suit, statute, rule or regulation vacated or declared
inapplicable as expeditiously as practicable.
(b) REGULATORY AUTHORIZATIONS. All orders, consents and
approvals of any Governmental Authorities legally required for the consummation
of the transactions contemplated by this Agreement, including the Required
Consents, shall have been obtained, and all waiting periods applicable under the
HSR Act and other applicable antitrust, merger control or competition laws or
regulations shall have expired or been terminated, except those for which
failure to obtain such consents and approvals would not, individually and in the
aggregate, have a Material Adverse Effect.
<PAGE>
60
(c) STOCKHOLDER APPROVALS. The Stockholder Approvals shall
have been obtained.
(d) XENON 2 MERGER AGREEMENT. The transactions contemplated by
the Xenon 2 Merger Agreement to occur at the closing thereunder shall have been
consummated as set forth therein.
7.2 CONDITIONS PRECEDENT TO OBLIGATION OF NBC. The obligation of NBC to
consummate this Agreement and the transactions contemplated hereby shall be
subject to the satisfaction of each of the following conditions, or by the
waiver of such condition by NBC, on or prior to the Closing Date:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF XOOM AND
XENON 2. The representations and warranties of Xoom contained in this Agreement
shall be true and correct in all material respects, in each case on and as of
May 9, 1999 and on and as of the Closing Date as though made on and as of such
time, except to the extent such representations and warranties by their terms
speak as of a specified date, in which case they shall be true and correct in
all material respects as of such date; and NBC shall have received from Xoom a
certificate to such effect dated as of the Closing Date signed by an officer
thereof.
(b) COVENANTS OF XOOM. Xoom shall have complied in all
material respects with all covenants contained in this Agreement to be performed
by it on or prior to the Closing; and NBC shall have received from Xoom a
certificate to such effect dated as of the Closing Date signed by an officer
thereof.
(c) IMPLEMENTING AND OTHER AGREEMENTS. Each of CNET, Xenon 2
and Xoom shall have entered into, or shall have caused their respective
Subsidiaries to have entered into, each of the Implementing Agreements to which
such Person is a party.
(d) DIRECTORS AND OFFICERS OF XENON 2. The officers and
directors of Xenon 2 shall, as of the Effective Time, consist of the Persons set
forth on SCHEDULE 3.7, who shall have been elected or appointed in accordance
with SECTION 6.6 hereof.
VII.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF XENON 2. The obligation of
Xenon 2 to consummate this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction of each of the following conditions, or the
waiver of such condition by NBC, on or prior to the Closing Date:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF NBC. The
representations and warranties of NBC contained in this Agreement shall be true
and correct in all material respects, in each case on and as of May 9, 1999 and
on and as of the Closing Date as though made on and as of such time, except to
the extent such representations and warranties by their terms speak as of a
specified date, in which case they shall be true and correct in all material
<PAGE>
61
respects as of such date; and Xenon 2 shall have received from NBC a certificate
to such effect with respect to such party dated as of the Closing Date signed by
an officer thereof.
(b) COVENANTS OF NBC. NBC and its Subsidiaries shall have
complied in all material respects with all covenants contained in this Agreement
to be performed on or prior to the Closing; and Xenon 2 shall have received from
NBC a certificate to such effect dated as of the Closing Date signed by an
officer thereof.
(c) IMPLEMENTING AND OTHER AGREEMENTS. NBC shall have entered
into, or shall have caused its Subsidiaries to have entered into, each of the
Implementing Agreements to which such Person is a party.
ARTICLE VIII
INDEMNIFICATION
VIII.1 INDEMNIFICATION BY XENON 2. From and after the Closing, Xenon 2
shall indemnify and hold harmless NBC and its Affiliates and each of its
directors, officers, employees, agents, heirs, executors, successors and assigns
from and against any and all Losses and Expenses suffered or incurred by any
such indemnified Person arising from, relating to or otherwise in respect of any
breach of the covenant of Xoom contained in SECTION 6.13 of this Agreement.
VIII.2 INDEMNIFICATION BY NBC. From and after the Closing Date, NBC
shall indemnify and hold harmless Xenon 2 and its Affiliates and each of the
foregoing's respective directors, officers, employees and agents, heirs,
executors, successors and assigns of any of the foregoing from and against any
and all Losses and Expenses suffered or incurred by any such indemnified Person
arising from, relating to or otherwise in respect of any breach of the
representations and warranties set forth in SECTION 4.1(C)(III) and SECTION
4.1(V) of this Agreement.
VIII.3 CLAIMS PROCEDURE. (a) If a claim by a third party is made
against an indemnified Person hereunder, and if such indemnified Person intends
to seek indemnity with respect thereto under this Article, such indemnified
Person shall promptly notify the indemnifying Person in writing of such claims
setting forth such claims in reasonable detail (the "CLAIM NOTICE"), PROVIDED
that failure of such indemnified Person to give prompt notice as provided herein
shall not relieve the indemnifying Person of any of its obligations hereunder,
except to the extent that the indemnifying Person is materially prejudiced by
such failure. The indemnifying Person shall have twenty (20) days after receipt
of such notice (the "NOTICE PERIOD") to undertake, through counsel of its own
choosing, subject to the reasonable approval of such indemnified Person, and at
its own expense, the settlement or defense thereof, and the indemnified Person
shall cooperate with it in connection therewith; PROVIDED, HOWEVER, that the
indemnified Person may participate in such settlement or defense through counsel
chosen by such indemnified Person, PROVIDED that the fees and expenses of such
counsel shall be borne by such indemnified Person. If the
<PAGE>
62
indemnifying Person shall assume the defense of a claim, it shall not settle
such claim without the prior written consent of the indemnified Person, unless
(i) such settlement includes as an unconditional term thereof the giving by the
claimant of a release of the indemnified Person from all Liability with respect
to such claim or (ii) such settlement does not involve the imposition of
equitable remedies or the imposition of any material obligations on such
indemnified Person other than financial obligations for which such indemnified
party will be indemnified hereunder. If the indemnifying Person shall assume the
defense of a claim, the fees of any separate counsel retained by the indemnified
Person shall be borne by such indemnified Person unless there exists a material
conflict between them as to their respective legal defenses (other than one that
is of a monetary nature), in which case the indemnified Person shall be entitled
to retain one law firm (plus any necessary local counsel) as its separate
counsel, the reasonable fees and expenses of which shall be reimbursed by the
indemnifying Person. If the indemnifying Person does not notify the indemnified
Person within twenty (20) days after the receipt of the indemnified Person's
notice of a claim of indemnity hereunder that it elects to undertake the defense
thereof, the indemnified Person shall have the right to contest, settle or
compromise the claim but shall not thereby waive any right to indemnity therefor
pursuant to this Agree ment.
(b) OTHER CLAIMS. In the event the indemnified party should
have a claim against the indemnifying party hereunder which does not involve a
claim or demand being asserted against or sought to be collected from it by a
third party, the indemnified party shall promptly send a Claim Notice with
respect to such claim to the indemnifying party. If the indemnifying party does
not notify the indemnified party within the Notice Period that they dispute such
claim, the amount of such claim shall be conclusively deemed a liability of the
indemnifying party hereunder.
VIII.4 EXCLUSIVE REMEDY. From and after the Closing, the
indemnification obligations under this ARTICLE VIII and the obligations of NBC
in SECTION 9.2 constitute the sole and exclusive remedy of each party for any
breach of, or inaccuracy in, any representation or warranty of another party
contained in this Agreement or in any certificate delivered pursuant hereto or
any breach of any covenant in this Agreement in each case to the extent they
survive the Closing.
ARTICLE IX
TERMINATION
IX.1 TERMINATION EVENTS. Without prejudice to other remedies which may
be available to the parties by law or this Agreement, this Agreement may be
terminated and the transactions contemplated herein may be abandoned at any time
prior to the Effective Time:
(a) by mutual written consent of NBC and Xenon 2;
<PAGE>
63
(b) by either NBC or Xenon 2 by written notice to the other
parties if the transactions contemplated by this Agreement have not been
consummated by December 31, 1999, unless extended by written agreement of the
parties hereto, PROVIDED that the party terminating this Agreement shall not be
in material default or breach hereunder and PROVIDED, FURTHER, that the right to
terminate this Agreement under this clause (b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure to consummate the transactions
contemplated by this Agreement on or before such date;
(c) by either NBC or Xenon 2 if (i) any Governmental
Authority, the consent or approval of which is required for the consummation of
the transactions contemplated hereby, shall have determined not to grant its
consent or approval and all appeals of such determination shall have been taken
and have been unsuccessful or (ii) any court of competent jurisdiction in the
United States shall have issued a final and unappealable permanent injunction,
order, judgment or other decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby, PROVIDED that the party seeking to terminate
this Agreement under this clause (c) is not then in material breach of this
Agreement and PROVIDED, FURTHER, that the right to terminate this Agreement
under this clause (c) shall not be available to any party who shall not have
used reasonable commercial efforts to avoid the issuance of such order, decree
or ruling;
(d) by either NBC or Xenon 2 if upon a vote at a duly held
Xoom Stockholders Meeting or any adjournment thereof, the Xoom Stockholder
Approval shall not have been obtained or by NBC if upon a vote at a duly held
Xenon 2 Stockholders Meeting or any adjournment thereof, the Xenon 2 Stockholder
Approval shall not have been obtained;
(e) by NBC if the Board of Directors of Xoom or Xenon 2 or any
committee thereof shall have withdrawn or modified in a manner adverse to NBC
its approval or recommendation of this Agreement, the Xenon 2 Merger Agreement
or any of the transactions contemplated hereby or thereby;
(f) by NBC if the Board of Directors of Xoom shall have
accepted or recommended a Takeover Proposal or shall have resolved to do so;
(g) by Xoom or Xenon 2, prior to the receipt of the Xoom
Stockholder Approval, on five business days written notice, if, Xoom receives,
without violating its obligations under SECTION 5.5 hereof, a bona fide Takeover
Proposal from a third party on terms which the Board of Directors of Xoom (i)
determines in good faith and after consultation with a financial advisor of
nationally recognized reputation to be more favorable to the Xoom stockholders
than the transactions contemplated by this Agreement and (ii) concludes in good
faith based on the advice of outside legal counsel that termination of this
Agreement is required to comply with its fiduciary duties under applicable law;
or
<PAGE>
64
(h) by either NBC or Xenon 2 in the event there has been a
material default or breach by (x) NBC, where Xenon 2 is terminating this
Agreement, or (y) Xoom or Xenon 2, where NBC is terminating this Agreement, in
each case which default or breach is not curable, or if curable, is not cured
within 30 days after written notice of such breach is given by the non-breaching
party.
(i) automatically and without any action by the parties upon
the termination of the Xenon 2 Merger Agreement.
IX.2 EFFECT OF TERMINATION. In the event of any termination of the
Agreement as provided in SECTION 9.1 hereto, this Agreement shall forthwith
become wholly void and of no further force and effect (except SECTION 5.6,
SECTION 6.3, SECTION 9.2 and ARTICLE X hereof) and there shall be no liability
on the part of any parties hereto or their respective officers or directors,
except as provided in such sections and article. Notwithstanding the foregoing,
no party hereto shall be relieved from liability for any willful breach of this
Agreement; PROVIDED, HOWEVER, that if NBC wilfully fails to close the
transactions contemplated by this Agreement after all of the conditions to
closing set forth in SECTION 7.1 and SECTION 7.2 have been satisfied, within 2
business days of the termination of this Agreement by Xenon 2, NBC shall pay to
Xenon 2 $475 million, which amount shall constitute the sole and exclusive
remedy of Xoom and Xenon 2 for such breach by NBC.
ARTICLE X
MISCELLANEOUS AGREEMENTS OF THE PARTIES
X.1 NOTICES. Any notice in connection with this Agreement shall be in
writing and shall be delivered by air courier or by facsimile at the addresses
or facsimile numbers given below. If notice is given by: (a) air courier, notice
shall be deemed given when recorded on the records of the air courier as
received by the receiving party; or (b) facsimile, notice shall be deemed given
upon transmission, if on a business day and during business hours in the country
of receipt; otherwise, notice shall be deemed to have been given at 9:00 A.M. on
the next Business Day in the country of receipt.
If to NBC, NMC or GE Investments Sub:
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, New York 10012
Attn.: Tom Rogers
Facsimile: (212) 664-3914
with a copy to:
<PAGE>
65
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn.: Richard Capelouto
Facsimile: (212) 455-2502
If to Xoom or Xenon 2:
Xenon 2, Inc.
300 Montgomery Street
Suite 300
San Francisco, California 94104
Attn.: Chris Kitze
Facsimile: (415) 288-2580
with a copy to:
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105
Attn.: Bruce Alan Mann
Facsimile: (415) 268-7522
with a copy to:
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Attn.: Allen L. Weingarten
Facsimile: (212) 468-7900
or to such other address as any such party shall designate by written notice to
the other parties hereto.
X.2 INTEGRATION; AMENDMENTS. This Agreement (including the Schedules
and Exhibits hereto) contains the entire agreement and understanding of the
parties with regard to the matters contained herein and supercedes any prior
written or oral agreement with respect to the subject matter hereto. This
Agreement may not be amended or modified except in a writing signed by all
parties hereto.
X.3. WAIVER. No waiver by any of the parties hereto of any of the
provisions hereof shall be effective unless explicitly set forth in writing and
executed by the party so waiving. Except as provided in the preceding sentence,
no action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to
<PAGE>
66
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants, or agreements contained herein, and in
any documents delivered or to be delivered pursuant to this Agreement and in
connection with the Closing hereunder. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
X.4. NO ASSIGNMENT; SUCCESSORS AND ASSIGNS. The parties' respective
rights and obligations hereunder may not be assigned, transferred, pledged, or
encumbered, in any manner, direct or indirect, contingent or otherwise, in whole
or in part, voluntarily or by operation of law, without the prior written
consent of the other parties, PROVIDED that NBC may assign, in whole or in part,
any of its rights and obligations hereunder and under the Implementing
Agreements to one or more of its Affiliates without the consent of the other
parties hereto, but NBC will remain liable for its obligations hereunder and
under each of the Implementing Agreements to which it is a party. Subject to the
preceding sentence, this Agreement shall be binding on the parties hereto and
their respective successors and permitted assigns.
X.5. EXPENSES. Except as set forth in this Agreement, if the
transactions contemplated by this Agreement are consummated, all legal and other
costs and expenses (including fees and expenses of any financial advisors,
accountants or other professional advisors) incurred by Xoom, SNAP or NBC in
connection with this Agreement and the transactions contemplated hereby shall be
paid or reimbursed by Xenon 2. If the transactions contemplated by this
Agreement are not consummated, all legal and other costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs.
X.6. SEVERABILITY. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect, and the parties hereto shall negotiate in
good faith to replace such illegal, void or unenforceable provision with a
provision that corresponds as closely as possible to the intentions of the
parties as expressed by such illegal, void or unenforceable provision.
X.7 SECTION HEADINGS; TABLE OF CONTENTS. The section headings
contained in this Agreement and the table of contents to this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
X.8. THIRD PARTIES. This Agreement does not create any rights, claims
or benefits inuring to any person that is not a party hereto nor create or
establish any third party beneficiary hereto, except as set forth in SECTION
6.6(D).
X.9 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED WITHIN SUCH STATE (EXCEPT TO THE
EXTENT THAT THE DGCL APPLIES TO THE MERGER), AND EACH PARTY HEREBY SUBMITS TO
THE EXCLUSIVE
<PAGE>
67
JURISDICTION OF ANY STATE OR U.S. FEDERAL COURT SITTING WITHIN THE
COUNTY OF NEW YORK. EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN 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.
X.10 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in
addition to any other remedy to which they are entitled at law or in equity.
X.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
X.12 AMENDMENT AND RESTATEMENT. (a) This Agreement amends certain
provisions of the Existing Merger Agreement and restates the terms of the
Existing Merger Agreement in their entirety so as to reflect and give effect to
such amendments. Except as provided in SECTION 10.12(B), all amendments to the
Existing Merger Agreement effected by this Agreement, and all other covenants,
agreements, terms and provisions of this Agreement, shall have effect from the
date of the Existing Merger Agreement.
(b) Each of the representations and warranties made in
SECTIONS 4.1, 4.2 and 4.3 shall be deemed (i) to be made on the date of the
Existing Merger Agreement (other than the representations and warranties in
respect of this Agreement that are contained in SECTIONS 4.1(B) and 4.3(B) which
are made as of the date hereof) and as of the Closing Date and (ii) not made on
the date hereof (except as set forth in the parenthetical in clause (i) of this
SECTION 10.12(B)).
<PAGE>
68
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
NATIONAL BROADCASTING COMPANY,
INC.
By:
------------------------------
Name:
Title:
GE INVESTMENTS SUBSIDIARY, INC.
By:
------------------------------
Name:
Title:
NEON MEDIA CORPORATION
By:
------------------------------
Name:
Title:
XENON 2, INC.
By:
------------------------------
Name:
Title:
XOOM.COM, INC.
By:
------------------------------
Name:
Title:
<PAGE>
Exhibit 3
EXECUTION COPY
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT AND PLAN
OF CONTRIBUTION, INVESTMENT AND MERGER
This First Amendment to Second Amended and Restated Agreement and Plan of
Contribution, Investment and Merger, dated as of October 20, 1999 (hereinafter,
"Amendment No. 1"), among National Broadcasting Company, Inc., a Delaware
corporation ("NBC"), GE Investments Subsidiary, Inc., a Delaware corporation,
Neon Media Corporation, a Delaware Corporation, NBC Internet, Inc., a Delaware
corporation ("NBCi," referred to as "Xenon 2" in the Original Contribution
Agreement hereinafter identified), and XOOM.com, Inc., a Delaware corporation
("Xoom")
W I T N E S S E T H:
WHEREAS, the parties hereto have previously entered into that certain
Second Amended and Restated Agreement and Plan of Contribution, Investment and
Merger dated as of July 8, 1999 (the "Original Contribution Agreement"); and
WHEREAS, the parties now wish to amend the Original Contribution Agreement
as provided below;
NOW THEREFORE, the Original Contribution Agreement is amended in the
following respects:
1. Section 5.2(b) of the Original Contribution Agreement is amended in
its entirety to provide as follows:
"(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 issued in accordance herewith, (ii) SNAP
Options issued pursuant to commitments to issue SNAP Options that were
included in job offers outstanding as of May 9, 1999, as identified on
SCHEDULE 4.1(t) as amended and (iii) additional options that, when added to
SNAP Options previously outstanding, do not exceed options for units equal
in number to 17% of the units of SNAP."
2. SCHEDULE 3.7 to the Original Contribution Agreement is amended by
replacing the reference to "Thomas Rogers" under the item "NBC Directors" with a
reference to "Scott M. Sassa".
3. SCHEDULE 4.2(t) to the Original Contribution Agreement is amended by
the addition thereto of the items listed on SCHEDULE 4.2(t)-2 hereto.
<PAGE>
4. SCHEDULE 6.9 to the Original Contribution Agreement is amended by
deleting the reference to "August 25, 1998" and replacing it with "September 14,
1999," and the parties acknowledge and agree that NBCi shall, accordingly, be
obligated pursuant to Section 6.9 of the Contribution Agreement to repay and
terminate the indebtedness represented by that certain Credit Agreement dated
September 14, 1999 between SNAP and Bank of America National Trust and Savings
Association, and use its best efforts to cause the guarantee of such
indebtedness by General Electric Company to be fully released immediately
following the Closing.
5. EXHIBIT A to the Original Contribution Agreement is amended by
increasing the value of the Spots to be provided by NBC to Xenon 2 to $405
million and by establishing that the aggregate value of the Spots to be provided
in the fourth quarter of 1999 shall be no less than $45 million.
6. In all other respects, the Original Contribution Agreement is
unchanged and shall remain in full force and effect.
7. GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE TO BE PERFORMED WITHIN SUCH STATE.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
<PAGE>
8. Article X of the Original Merger Agreement shall apply MUTATIS MUTANDIS
to this Amendment No. 1.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed as of the date first above written.
NATIONAL BROADCASTING COMPANY, INC.
BY: /s/ Martin Yudkovitz
--------------------
Name: Martin Yudkovitz
Title: President, NBC Interactive
GE INVESTMENTS SUBSIDIARY, INC.
BY: /s/ Robert E. Healing
---------------------
Name: Robert E. Healing
Title: Vice President
NEON MEDIA CORPORATION
BY: /s/ Martin Yudkovitz
--------------------
Name: Martin Yudkovitz
Title: President, NBC Interactive
NBC INTERNET, INC. (formerly, Xenon 2, Inc.)
BY: /s/ John Harbottle
------------------
Name: John Harbottle
Title: Chief Financial Officer and
Executive Vice President
XOOM.COM, INC.
BY: /s/ John Harbottle
------------------
Name: John Harbottle
Title: Chief Financial Officer and
Executive Vice President
<PAGE>
Exhibit 4
NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF
THIS NOTE MAY BE MADE EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) IF MAKER HAS BEEN FURNISHED
WITH AN OPINION REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO MAKER OF
COUNSEL REASONABLY SATISFACTORY TO MAKER THAT SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS THEREUNDER.
ISSUE PRICE: $759.918 PER $1,000 OF PRINCIPAL AMOUNT
TOTAL ISSUE PRICE: $30,000,000
ORIGINAL ISSUE DISCOUNT: $240.082 PER $1,000 OF PRINCIPAL AMOUNT
TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT: $9,477,953
YIELD TO MATURITY: 4.0% per annum
ISSUE DATE: NOVEMBER 30, 1999
SUBORDINATED ZERO COUPON
CONVERTIBLE DEBENTURE due 2006
representing up to
$39,477,953
No. 1. November 30, 1999
1. PAYMENT OF PRINCIPAL AND ORIGINAL ISSUE DISCOUNT.
FOR VALUE RECEIVED, the undersigned, NBC Internet, Inc., a Delaware
corporation ("Maker"), hereby promises to pay NBC Multimedia, Inc. (or an
affiliate thereof) or the subsequent registered owner of this Note
("Payee"), in the manner hereinafter provided, the principal amount of
Thirty Nine Million Four Hundred Seventy Seven Thousand Nine Hundred
Fifty-Three Dollars ($39,477,953) on November 30, 2006 (the "Stated
Maturity Date").
The principal of this Note shall not bear interest except in the case
of a default in the payment of principal upon acceleration, upon redemption
or at the Stated Maturity Date and in such case the amount payable hereon,
in lieu of the principal amount due at the Stated Maturity Date hereof
shall be the amount (the "Amortized Face Amount") equal to (a) the Issue
Price (as defined below) plus (b) that portion of the difference between
the Issue Price and the principal amount that has accrued at the Yield to
Maturity (as defined below) (calculated on an annual bond equivalent basis
from November 30, 1999) at the date as of which the Amortized Face Amount
is calculated, which shall accrue from the date of such default in payment
to the date payment on such principal has been made or duly provided for.
Interest on any overdue principal shall be payable on demand. Any such
interest on any overdue principal that is not so paid on demand shall bear
interest at the Yield to Maturity, which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand. As
used herein, the term "Issue Price"
<PAGE> 2
means the principal amount of this Note less the Original Issue Discount
stated on the face hereof, and the term "Yield to Maturity" means the
Yield to Maturity stated on the face hereof for the period from the
Original Issue Date stated on the face hereof to the Stated Maturity Date.
This Note is issued pursuant to the Second Amended and Restated
Agreement and Plan of Contribution, Investment and Merger, dated as of July
8, 1999 (the "Merger Agreement"), among National Broadcasting Company,
Inc., Payee, Neon Media Corporation, Maker and Xoom.com, Inc. Subject to
the right of Payee to convert this Note pursuant to Section 2, this Note
may be redeemed in whole at any time after November 30, 2004 at the option
of Maker without penalty or premium, at a redemption price equal to the
Amortized Face Amount, upon at least thirty (30) days prior written notice
thereof to Payee. Maker may pay the redemption price in cash, Common Stock
(as defined below) or both, PROVIDED that in any event the issuance of
568,118 shares of Common Stock shall be deemed to be full satisfaction of
the redemption price. Any Common Stock issued to pay the redemption price
shall be valued based on the average closing price for the 30-day period
ending the day prior to the date of redemption. All payments to be made
hereunder shall be made to Payee at 30 Rockefeller Plaza, New York, New
York 10012 (Attention: Chief Financial Officer).
2. CONVERSION RIGHT.
(a) CONVERSION. Payee has the right, at its option, at any time
after November 30, 2000 [the first anniversary of the Closing], to convert
all (but not less than all) of the principal of this Note into an aggregate
of 471,031 fully paid and nonassessable shares (as adjusted pursuant to
Section 2(b), the "Conversion Shares") of Class B common stock, par value
$.0001 per share, of Maker ("Common Stock") upon surrender of this Note at
the office of Maker. Upon the receipt of this Note, duly endorsed, and a
signed notice from Payee that Payee is irrevocably exercising its
conversion right pursuant to this Section 2(a), Maker shall promptly
deliver the Conversion Shares registered in the name of Payee.
(b) ADJUSTMENTS. The conversion rights set forth are subject to
adjustment as provided below.
(i) STOCK SPLITS, STOCK DIVIDENDS AND COMBINATIONS. If Maker shall
at any time subdivide the outstanding shares of Common Stock or shall
issue a stock dividend with respect to the Common Stock, then the
number of shares of Common Stock for which this Note is convertible
immediately prior to that subdivision shall be proportionately
increased, and if Maker shall at any time combine the outstanding
shares of Common Stock, then the number of shares of Common Stock for
which this Note is exercisable immediately prior to that combination
shall be proportionately reduced. Any adjustment under this Section
<PAGE>
3
2(b)(i) shall become effective at the close of business on the date
the subdivision, stock dividend or combination becomes effective.
(ii) RECLASSIFICATION, EXCHANGE, SUBSTITUTION AND IN-KIND
DISTRIBUTION. If the Common Stock issuable on conversion of this Note
shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification, or otherwise (other than a subdivision or
combination of shares provided for above) or upon the payment of a
dividend in cash, securities or property other than Common Stock, then
Payee shall, upon conversion of this Note, be entitled to receive, in
lieu of the Common Stock that Payee would have become entitled to
receive but for such change, that number of shares of such other class
or classes of stock that is equivalent to the number of shares of
Common Stock that Payee would have received had Payee converted this
Note immediately prior to that change. Following any
reclassification, exchange, substitution or in-kind distribution,
Maker shall promptly issue to Payee a new Note for such new securities
or other property. The new Note shall provide for adjustments which
shall be nearly equivalent as may be reasonably practicable to the
adjustments provided for in this Section 2(b) including, without
limitation, adjustments to the number of securities or property
issuable upon conversion of the new Note. The provisions of this
Section 2(b)(ii) shall similarly apply to successive
reclassifications, exchanges, substitutions or other events and
successive dividends.
(iii) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALE OF ASSETS. In
case of any merger of Maker with or into another company (other than a
merger with another company in which Maker is a continuing company and
which does not result in any reclassification or change of outstanding
securities issuable upon conversion of this Note), consolidation or in
case of any sale of all or substantially all of the assets of Maker,
Maker shall, as condition precedent to such transaction, execute a new
Note or cause such successor or purchasing company, as the case may
be, to execute a new Note, providing that Payee shall have the right
to convert such new Note and upon such conversion to receive, in lieu
of each share of Common Stock theretofore issuable upon conversion of
this Note, the kind and amount of shares of stock, other securities,
money and property issuable or payable, as the case may be, upon such
merger, consolidation, sale of assets or other change to a holder of
one share of Common Stock. Such new Note shall provide for
adjustments that shall be as nearly equivalent as may be reasonably
practicable to the adjustments provided for in this Section 2(b). The
provisions of this Section 2(b)(iii) shall similarly apply to
successive mergers, consolidations, sale of assets and other changes
and transfers.
(iv) NOTICE OF ADJUSTMENTS. Maker shall promptly give written notice
of each adjustment or readjustment of the number of shares of Common
Stock or other securities issuable upon conversion of this Note, by
first class mail, postage
<PAGE>
4
prepaid, to the Payee at the Payee's address for notices in the
Merger Agreement. This notice shall state the adjustment or
readjustment and show in reasonable detail the facts on which that
adjustment or readjustment is based. Maker further agrees
to notify Payee in writing of a reorganization, merger or sale in
accordance with Section 2(b)(iii) at least thirty (30) days prior to
the effective date thereof.
(v) NO CHANGE NECESSARY. The form of this Note need not be changed
because of any adjustment in the number of shares of Common Stock
issuable upon its conversion. A Note issued after any adjustment on
conversion or upon replacement may continue to express the same number
of shares of Common Stock as are stated on this Note as initially
issued, and such number of shares shall be considered to have been so
changed as of the close of business on the date of adjustment.
(vi) RESERVATION OF STOCK. Maker covenants that it will at all times
reserve and keep available, for issuance upon conversion of this Note,
such shares of its Common Stock from time to time issuable upon
conversion of this Note, and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect
the conversion of this Note, Maker will take such corporate action as
may, in the opinion of its counsel, be reasonably necessary to
increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose. Issuance of
this Note shall constitute full authority to Maker's officers who are
charged with the duty of executing stock certificates to execute and
issue the necessary certificates for shares of Common Stock issuable
upon the conversion of this Note.
(vii) NOTICES OF RECORD DATE. In the event Maker intends to declare a
record date for the holders of Common Stock for the purpose of
determining the holders thereof who are entitled to receive any
dividend or other distribution, Maker shall mail to Payee of this Note
at least ten days prior to the proposed record date specified therein,
a notice specifying the date on which any such record is to be taken
for the purpose of such dividend or distribution.
(viii) NO IMPAIRMENT. Maker shall not, by amendment of its
Certificate of Incorporation or through a reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed under this Note by Maker, but shall at all time in good
faith assist in carrying out of all the provisions of this Section
2(b) and in taking all such action as may be reasonably necessary or
appropriate to protect Payee's rights under this Section 2(b) against
impairment.
(c) GOVERNANCE RIGHTS. Upon conversion of this Note pursuant to
Section 2(a), and conversion of the Zero Coupon Convertible Debenture due
2006 representing up to
<PAGE>
5
$447,416,805 issued by Maker to GE Investments Subsidiary, Inc., Payee
shall have the right to elect one additional director to the Board
of Directors of Maker pursuant to the Certificate of Incorporation
of Maker.
3. REPRESENTATIONS AND WARRANTIES OF MAKER. Maker hereby represents
and warrants to Payee that: (a) Maker is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, has the full
power and authority, and the legal right, to make, deliver and perform this Note
and its obligations hereunder on the terms and conditions hereof and has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Note and to authorize the borrowing hereunder, and this Note
has been duly executed and delivered on behalf of Maker; (b) this Note
constitutes a legal, valid and binding obligation of Maker enforceable against
it in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law); (c) the execution, delivery and performance of this Note, the borrowing
hereunder and the use of the proceeds thereof will not violate any material
requirement of law, any material contractual obligation of Maker or its
subsidiaries or any of their applicable charters, bylaws or similar documents;
and (d) no Event of Default (as defined below) has occurred and is continuing.
4. REPRESENTATIONS AND WARRANTIES OF PAYEE. Payee hereby represents
and warrants to Maker that: (a) Payee is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, has the full
power and authority, and the legal right, to make the loan to Maker evidenced by
this Note and has taken all necessary corporate action to authorize the making
of such loan, and this Note has been duly executed and delivered on behalf of
Payee; (b) Payee is an "accredited investor" within the meaning of Regulation D
of the Securities Act of 1933, as amended (the "Securities Act") and is being
issued this Note for its own account and not with a view to the distribution
thereof in violation of the Securities Act; (c) Payee understands and
acknowledges that this Note has not been registered under the Securities Act and
may be offered and resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such exemption is required by
law, and that Maker is not required to register this Note; and (d) Payee has had
access to such financial and other information concerning Maker as it deemed
necessary in connection with the issuance of this Note.
5. EVENTS OF DEFAULT. An Event of Default occurs if: (1) Maker
pursuant to or within the meaning of Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors (a "Bankruptcy Law"): (a)
commences a voluntary case, (b) consents to the entry of an order for relief
against it in an involuntary case, (c) consents to the appointment of a
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law (a "Custodian") or (d) makes a general assignment for the benefit
of its creditors; or (2) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (a) is for relief against Maker as debtor
in an involuntary case, (b) appoints a Custodian of Maker, or (c) orders the
liquidation of Maker, and the order or decree remains unstayed and in effect for
90 days; or
<PAGE>
6
(3) a Change of Control (as defined below) occurs, or (4) Maker fails to pay
the principal amount due at the Stated Maturity Date. Upon the occurrence of
an Event of Default, Payee shall have the option to receive either (i) the
number of Conversion Shares Payee would have received if Payee had exercised
its rights under Section 2 immediately prior to such Event of Default or (ii)
either (A) in the event of a default pursuant to (1), (2) or (3) above, the
Amortized Face Amount or (B) in the event of a default pursuant to (4) above,
the principal amount due at the Stated Maturity Date plus accrued interest
thereon from the Stated Maturity Date at the Yield to Maturity. In the case
of either (i) or (ii), the obligations of Payee shall immediately become due
and payable. As used herein the term "Change of Control" means any of the
following: (i) a merger, consolidation or other business combination or
transaction to which a Maker is a party if the shareholders of Maker
immediately prior to the effective date of such merger, consolidation or
other business combination or transaction, do not have beneficial ownership
of voting securities representing 50% or more of the total voting power of
the surviving corporation or its parent immediately following such merger,
consolidation or other business combination or transaction; (ii) any person
or entity shall have beneficial ownership of 20% or more of the outstanding
shares of Class A Stock (as such term is defined in Maker's Certificate of
Incorporation) at a time when the holders of Common Stock do not elect a
majority of the Board of Directors of Maker; (iii) a sale of all or
substantially all of the consolidated assets of Maker to another person or
entity or (iv) a liquidation or dissolution of Maker.
6. SUBORDINATION. Payee agrees that payment of the principal of and
interest on this Note shall be subordinated in right of payment to the prior
payment in full of all Senior Debt at any time outstanding. Notwithstanding the
immediately preceding sentence, such subordination shall not limit the payment
of principal of and interest on this Note in accordance with its terms unless,
at the time of such payment, there is a default in the payment of principal of
or interest on such Senior Debt, there exists any event which, with the giving
of notice or the passage of time, is reasonably likely to give rise to a default
under such Senior Debt, or in the event that a default under this Note has
caused a default under such Senior Debt. The limitation on payments under this
Note shall continue until such time as the default on such Senior Debt has been
cured or waived. The provisions of this paragraph are intended solely for the
purpose of defining the relative rights of the Payee of this Note, on the one
hand, and the holder of Senior Debt, on the other hand. "Senior Debt" shall
mean (a) any and all liabilities of Maker recorded on the Maker's balance sheet
or in the footnotes thereto in accordance with GAAP (as defined below); (b) the
principal of, premium (if any), interest on, and other moneys due which arise
out of any indebtedness of Maker (or any refinancing thereof): (1) for borrowed
funds; (2) due to sellers or lessors of any real or personal property to Maker;
or (3) for reimbursement obligations with respect to letters of credit, except
in each case referred to in subclauses (1), (2) and (3) above, to the extent the
holder of such indebtedness otherwise agrees in writing; (c) any other
indebtedness of Maker, except to the extent that the holder of such indebtedness
otherwise agrees in writing; and (d) any debentures, notes or other evidence of
indebtedness issued in exchange for any of the foregoing indebtedness, or any
indebtedness arising from the satisfaction of such indebtedness by a guarantor.
"GAAP" means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of
<PAGE>
7
the Financial Accounting Standards Board (or agencies with similar functions
of comparable stature and authority within the U.S. accounting profession).
The provisions of this Section 6 shall not apply to conversions pursuant to
Section 2.
7. BUSINESS DAY. If any payment or conversion shall be required by
the terms hereof to be made on a day that is not a Business Day (as defined
below), such payment or conversion shall be made on the immediately succeeding
Business Day. For purposes hereof, "Business Day" shall mean a day other than a
Saturday, Sunday, holiday or other day on which commercial banks in the State of
New York are authorized or required by law to close.
8. NO WAIVER. No action or omission by Payee shall constitute a
waiver of any rights or remedies of Payee hereunder. Such rights and remedies
are cumulative and not exclusive of any rights or remedies provided by law.
9. AMENDMENT; ASSIGNMENT . The terms of this Note may be amended,
supplemented or modified only with the written consent of Maker and Payee. This
Note shall be binding upon and inure to the benefit of Maker, Payee and their
respective successors and assigns, except that neither Payee nor Maker may
assign or transfer any of its rights or obligations under this Note without the
prior written consent of the other party. In the event of any assignment or
transfer by Payee with the prior written consent of Maker, Maker shall, upon the
request of the transferee and receipt of this Note from transferee, reissue this
Note in the name of the transferee.
10. GOVERNING LAW; JURISDICTION. This Note is made and delivered in
New York, New York, and, pursuant to Section 5-1401 of the General Obligations
Law of the State of New York, shall be governed by and construed and interpreted
in accordance with the laws of the State of New York applicable to contracts
fully performed in New York. All judicial actions, suits or proceedings brought
against Maker or Payee with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Note or for
recognition or enforcement of any judgment rendered in any such proceedings
shall be brought exclusively in any state or federal court located in the County
of New York.
11. MUTILATED, DESTROYED OR MISSING NOTES. If this Note is
mutilated and surrendered to Maker or Maker receives evidence to its
satisfaction of the destruction, loss or theft of this Note, Maker shall issue a
replacement Note. If required by Maker, an indemnity bond must be supplied by
Payee that is sufficient in the judgment of Maker to protect Maker from any loss
it may suffer if this Note is replaced. Maker may charge for any expenses of
replacing this Note
IN WITNESS WHEREOF, Maker has caused this Note to be duly issued as of
the date first above written.
NBC INTERNET, INC.
<PAGE>
8
By: /s/ Chris Kitze
----------------------------------
Name: Chris Kitze
Title: Chief Executive Officer
ACKNOWLEDGED AND AGREED:
NBC MULTIMEDIA, INC.
By: /s/ Martin J. Yudkovitz
--------------------------
Name: Martin J. Yudkovitz
Title: President
<PAGE>
Exhibit 5
NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF
THIS NOTE MAY BE MADE EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) IF MAKER HAS BEEN FURNISHED
WITH AN OPINION REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO MAKER OF
COUNSEL REASONABLY SATISFACTORY TO MAKER THAT SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS THEREUNDER.
ISSUE PRICE: $759.918 PER $1,000 OF PRINCIPAL AMOUNT
TOTAL ISSUE PRICE: $340,000,000
ORIGINAL ISSUE DISCOUNT: $240.082 PER $1,000 OF PRINCIPAL AMOUNT
TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT: $107,416,805
YIELD TO MATURITY: 4.0% per annum
ISSUE DATE: NOVEMBER 30, 1999
SUBORDINATED ZERO COUPON
CONVERTIBLE DEBENTURE due 2006
representing up to
$447,416,805
No. 2. November 30, 1999
1. PAYMENT OF PRINCIPAL AND ORIGINAL ISSUE DISCOUNT.
FOR VALUE RECEIVED, the undersigned, NBC Internet, Inc., a Delaware
corporation ("Maker"), hereby promises to pay GE Investments Subsidiary, Inc.
(or an affiliate thereof) or the subsequent registered owner of this Note
("Payee"), in the manner hereinafter provided, the principal amount of Four
Hundred Forty Seven Million Four Hundred Sixteen Thousand Eight Hundred
Five Dollars ($447,416,805) on November 30, 2006 (the "Stated Maturity
Date").
The principal of this Note shall not bear interest except in the case
of a default in the payment of principal upon acceleration, upon redemption
or at the Stated Maturity Date and in such case the amount payable hereon, in
lieu of the principal amount due at the Stated Maturity Date hereof shall be
the amount (the "Amortized Face Amount") equal to (a) the Issue Price (as
defined below) plus (b) that portion of the difference between the Issue
Price and the principal amount that has accrued at the Yield to Maturity (as
defined below) (calculated on an annual bond equivalent basis from November
30, 1999) at the date as of which the Amortized Face Amount is calculated,
which shall accrue from the date of such default in payment to the date
payment on such principal has been made or duly provided for. Interest on
any overdue principal shall be payable on demand. Any such interest on any
overdue principal that is not so paid on demand shall bear interest at the
Yield to Maturity, which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided
for, and such interest shall also be payable on demand. As used herein, the
term "Issue Price" means the principal amount of this Note less the Original
Issue Discount stated on the face
<PAGE>
2
hereof, and the term "Yield to Maturity" means the Yield to Maturity stated
on the face hereof for the period from the Original Issue Date stated on the
face hereof to the Stated Maturity Date.
This Note is issued pursuant to the Second Amended and Restated
Agreement and Plan of Contribution, Investment and Merger, dated as of July
8, 1999 (the "Merger Agreement"), among National Broadcasting Company, Inc.,
Payee, Neon Media Corporation, Maker and Xoom.com, Inc. Subject to the right
of Payee to convert this Note pursuant to Section 2, this Note may be
redeemed in whole at any time after November 30, 2004 at the option of Maker
without penalty or premium, at a redemption price equal to the Amortized Face
Amount, upon at least thirty (30) days prior written notice thereof to Payee.
Maker may pay the redemption price in cash, Common Stock (as defined below)
or both, PROVIDED that in any event the issuance of 6,533,352 shares of
Common Stock shall be deemed to be full satisfaction of the redemption price.
Any Common Stock issued to pay the redemption price shall be valued based on
the average closing price for the 30-day period ending the day prior to the
date of redemption. All payments to be made hereunder shall be made to Payee
at 30 Rockefeller Plaza, New York, New York 10012 (Attention: Chief
Financial Officer).
2. CONVERSION RIGHT.
(a) CONVERSION. Payee has the right, at its option, at any time after
November 30, 2000 to convert all (but not less than all) of the principal
of this Note into an aggregate of 5,338,357 fully paid and nonassessable
shares (as adjusted pursuant to Section 2(b), the "Conversion Shares") of
Class B common stock, par value $.0001 per share, of Maker ("Common Stock")
upon surrender of this Note at the office of Maker. Upon the receipt of
this Note, duly endorsed, and a signed notice from Payee that Payee is
irrevocably exercising its conversion right pursuant to this Section 2(a),
Maker shall promptly deliver the Conversion Shares registered in the name
of Payee.
(b) ADJUSTMENTS. The conversion rights set forth are subject to
adjustment as provided below.
(i) STOCK SPLITS, STOCK DIVIDENDS AND COMBINATIONS. If Maker shall
at any time subdivide the outstanding shares of Common Stock or shall
issue a stock dividend with respect to the Common Stock, then the
number of shares of Common Stock for which this Note is convertible
immediately prior to that subdivision shall be proportionately
increased, and if Maker shall at any time combine the outstanding
shares of Common Stock, then the number of shares of Common Stock for
which this Note is exercisable immediately prior to that combination
shall be proportionately reduced. Any adjustment under this Section
2(b)(i) shall become effective at the close of business on the date
the subdivision, stock dividend or combination becomes effective.
<PAGE>
3
(ii) RECLASSIFICATION, EXCHANGE, SUBSTITUTION AND IN-KIND
DISTRIBUTION. If the Common Stock issuable on conversion of this Note
shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification, or otherwise (other than a subdivision or
combination of shares provided for above) or upon the payment of a
dividend in cash, securities or property other than Common Stock, then
Payee shall, upon conversion of this Note, be entitled to receive, in
lieu of the Common Stock that Payee would have become entitled to
receive but for such change, that number of shares of such other class
or classes of stock that is equivalent to the number of shares of
Common Stock that Payee would have received had Payee converted this
Note immediately prior to that change. Following any
reclassification, exchange, substitution or in-kind distribution,
Maker shall promptly issue to Payee a new Note for such new securities
or other property. The new Note shall provide for adjustments which
shall be nearly equivalent as may be reasonably practicable to the
adjustments provided for in this Section 2(b) including, without
limitation, adjustments to the number of securities or property
issuable upon conversion of the new Note. The provisions of this
Section 2(b)(ii) shall similarly apply to successive
reclassifications, exchanges, substitutions or other events and
successive dividends.
(iii) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALE OF ASSETS. In
case of any merger of Maker with or into another company (other than a
merger with another company in which Maker is a continuing company and
which does not result in any reclassification or change of outstanding
securities issuable upon conversion of this Note), consolidation or in
case of any sale of all or substantially all of the assets of Maker,
Maker shall, as condition precedent to such transaction, execute a new
Note or cause such successor or purchasing company, as the case may
be, to execute a new Note, providing that Payee shall have the right
to convert such new Note and upon such conversion to receive, in lieu
of each share of Common Stock theretofore issuable upon conversion of
this Note, the kind and amount of shares of stock, other securities,
money and property issuable or payable, as the case may be, upon such
merger, consolidation, sale of assets or other change to a holder of
one share of Common Stock. Such new Note shall provide for
adjustments that shall be as nearly equivalent as may be reasonably
practicable to the adjustments provided for in this Section 2(b). The
provisions of this Section 2(b)(iii) shall similarly apply to
successive mergers, consolidations, sale of assets and other changes
and transfers.
(iv) NOTICE OF ADJUSTMENTS. Maker shall promptly give written notice
of each adjustment or readjustment of the number of shares of Common
Stock or other securities issuable upon conversion of this Note, by
first class mail, postage prepaid, to the Payee at the Payee's address
for notices in the Merger Agreement. This notice shall state that
adjustment or readjustment and show in reasonable detail the facts on
which the adjustment or readjustment is based. Maker further
<PAGE>
5
agrees to notify Payee in writing of a reorganization, merger or sale
in accordance with Section 2(b)(iii) at least thirty (30) days prior
to the effective date thereof.
(v) NO CHANGE NECESSARY. The form of this Note need not be changed
because of any adjustment in the number of shares of Common Stock
issuable upon its conversion. A Note issued after any adjustment on
conversion or upon replacement may continue to express the same number
of shares of Common Stock as are stated on this Note as initially
issued, and such number of shares shall be considered to have been so
changed as of the close of business on the date of adjustment.
(vi) RESERVATION OF STOCK. Maker covenants that it will at all times
reserve and keep available, for issuance upon conversion of this Note,
such shares of its Common Stock from time to time issuable upon
conversion of this Note, and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect
the conversion of this Note, Maker will take such corporate action as
may, in the opinion of its counsel, be reasonably necessary to
increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose. Issuance of
this Note shall constitute full authority to Maker's officers who are
charged with the duty of executing stock certificates to execute and
issue the necessary certificates for shares of Common Stock issuable
upon the conversion of this Note.
(vii) NOTICES OF RECORD DATE. In the event Maker intends to declare a
record date for the holders of Common Stock for the purpose of
determining the holders thereof who are entitled to receive any
dividend or other distribution, Maker shall mail to Payee of this Note
at least ten days prior to the proposed record date specified therein,
a notice specifying the date on which any such record is to be taken
for the purpose of such dividend or distribution.
(viii) NO IMPAIRMENT. Maker shall not, by amendment of its
Certificate of Incorporation or through a reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed under this Note by Maker, but shall at all time in good
faith assist in carrying out of all the provisions of this Section
2(b) and in taking all such action as may be reasonably necessary or
appropriate to protect Payee's rights under this Section 2(b) against
impairment.
(c) GOVERNANCE RIGHTS. Upon conversion of this Note pursuant to
Section 2(a), and conversion of the Zero Coupon Convertible Debenture due
2006 representing up to $39,477,953 issued by Maker to NBC Multimedia,
Inc., Payee shall have the right to elect one additional director to the
Board of Directors of Maker pursuant to the Certificate of Incorporation of
Maker.
<PAGE>
5
3. REPRESENTATIONS AND WARRANTIES OF MAKER. Maker hereby represents
and warrants to Payee that: (a) Maker is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, has the full
power and authority, and the legal right, to make, deliver and perform this Note
and its obligations hereunder on the terms and conditions hereof and has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Note and to authorize the borrowing hereunder, and this Note
has been duly executed and delivered on behalf of Maker; (b) this Note
constitutes a legal, valid and binding obligation of Maker enforceable against
it in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law); (c) the execution, delivery and performance of this Note, the borrowing
hereunder and the use of the proceeds thereof will not violate any material
requirement of law, any material contractual obligation of Maker or its
subsidiaries or any of their applicable charters, bylaws or similar documents;
and (d) no Event of Default (as defined below) has occurred and is continuing.
4. REPRESENTATIONS AND WARRANTIES OF PAYEE. Payee hereby represents
and warrants to Maker that: (a) Payee is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, has the full
power and authority, and the legal right, to make the loan to Maker evidenced by
this Note and has taken all necessary corporate action to authorize the making
of such loan, and this Note has been duly executed and delivered on behalf of
Payee; (b) Payee is an "accredited investor" within the meaning of Regulation D
of the Securities Act of 1933, as amended (the "Securities Act") and is being
issued this Note for its own account and not with a view to the distribution
thereof in violation of the Securities Act; (c) Payee understands and
acknowledges that this Note has not been registered under the Securities Act and
may be offered and resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such exemption is required by
law, and that Maker is not required to register this Note; and (d) Payee has had
access to such financial and other information concerning Maker as it deemed
necessary in connection with the issuance of this Note.
5. EVENTS OF DEFAULT. An Event of Default occurs if: (1) Maker
pursuant to or within the meaning of Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors (a "Bankruptcy Law"): (a)
commences a voluntary case, (b) consents to the entry of an order for relief
against it in an involuntary case, (c) consents to the appointment of a
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law (a "Custodian") or (d) makes a general assignment for the benefit
of its creditors; or (2) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (a) is for relief against Maker as debtor
in an involuntary case, (b) appoints a Custodian of Maker, or (c) orders the
liquidation of Maker, and the order or decree remains unstayed and in effect for
90 days; or (3) a Change of Control (as defined below) occurs, or (4) Maker
fails to pay the principal amount due at the Stated Maturity Date. Upon the
occurrence of an Event of Default, Payee shall have the option to receive either
(i) the number of Conversion Shares Payee would have received if
<PAGE>
6
Payee had exercised its rights under Section 2 immediately prior to such
Event of Default or (ii) either (A) in the event of a default pursuant to
(1), (2) or (3) above, the Amortized Face Amount or (B) in the event of a
default pursuant to (4) above, the principal amount due at the Stated
Maturity Date plus accrued interest thereon from the Stated Maturity Date at
the Yield to Maturity. In the case of either (i) or (ii), the obligations of
Payee shall immediately become due and payable. As used herein the term
"Change of Control" means any of the following: (i) a merger, consolidation
or other business combination or transaction to which a Maker is a party if
the shareholders of Maker immediately prior to the effective date of such
merger, consolidation or other business combination or transaction, do not
have beneficial ownership of voting securities representing 50% or more of
the total voting power of the surviving corporation or its parent immediately
following such merger, consolidation or other business combination or
transaction; (ii) any person or entity shall have beneficial ownership of 20%
or more of the outstanding shares of Class A Stock (as such term is defined
in Maker's Certificate of Incorporation) at a time when the holders of Common
Stock do not elect a majority of the Board of Directors of Maker; (iii) a
sale of all or substantially all of the consolidated assets of Maker to
another person or entity or (iv) a liquidation or dissolution of Maker.
6. SUBORDINATION. Payee agrees that payment of the principal of and
interest on this Note shall be subordinated in right of payment to the prior
payment in full of all Senior Debt at any time outstanding. Notwithstanding the
immediately preceding sentence, such subordination shall not limit the payment
of principal of and interest on this Note in accordance with its terms unless,
at the time of such payment, there is a default in the payment of principal of
or interest on such Senior Debt, there exists any event which, with the giving
of notice or the passage of time, is reasonably likely to give rise to a default
under such Senior Debt, or in the event that a default under this Note has
caused a default under such Senior Debt. The limitation on payments under this
Note shall continue until such time as the default on such Senior Debt has been
cured or waived. The provisions of this paragraph are intended solely for the
purpose of defining the relative rights of the Payee of this Note, on the one
hand, and the holder of Senior Debt, on the other hand. "Senior Debt" shall
mean (a) any and all liabilities of Maker recorded on the Maker's balance sheet
or in the footnotes thereto in accordance with GAAP (as defined below); (b) the
principal of, premium (if any), interest on, and other moneys due which arise
out of any indebtedness of Maker (or any refinancing thereof): (1) for borrowed
funds; (2) due to sellers or lessors of any real or personal property to Maker;
or (3) for reimbursement obligations with respect to letters of credit, except
in each case referred to in subclauses (1), (2) and (3) above, to the extent the
holder of such indebtedness otherwise agrees in writing; (c) any other
indebtedness of Maker, except to the extent that the holder of such indebtedness
otherwise agrees in writing; and (d) any debentures, notes or other evidence of
indebtedness issued in exchange for any of the foregoing indebtedness, or any
indebtedness arising from the satisfaction of such indebtedness by a guarantor.
"GAAP" means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession). The provisions of this Section 6 shall not apply to conversions
pursuant to Section 2.
<PAGE>
7
7. BUSINESS DAY. If any payment or conversion shall be required by
the terms hereof to be made on a day that is not a Business Day (as defined
below), such payment or conversion shall be made on the immediately succeeding
Business Day. For purposes hereof, "Business Day" shall mean a day other than a
Saturday, Sunday, holiday or other day on which commercial banks in the State of
New York are authorized or required by law to close.
8.NO WAIVER. No action or omission by Payee shall constitute a waiver
of any rights or remedies of Payee hereunder. Such rights and remedies are
cumulative and not exclusive of any rights or remedies provided by law.
9. AMENDMENT; ASSIGNMENT . The terms of this Note may be amended,
supplemented or modified only with the written consent of Maker and Payee. This
Note shall be binding upon and inure to the benefit of Maker, Payee and their
respective successors and assigns, except that neither Payee nor Maker may
assign or transfer any of its rights or obligations under this Note without the
prior written consent of the other party. In the event of any assignment or
transfer by Payee with the prior written consent of Maker, Maker shall, upon the
request of the transferee and receipt of this Note from transferee, reissue this
Note in the name of the transferee.
10. GOVERNING LAW; JURISDICTION. This Note is made and delivered in
New York, New York, and, pursuant to Section 5-1401 of the General Obligations
Law of the State of New York, shall be governed by and construed and interpreted
in accordance with the laws of the State of New York applicable to contracts
fully performed in New York. All judicial actions, suits or proceedings brought
against Maker or Payee with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Note or for
recognition or enforcement of any judgment rendered in any such proceedings
shall be brought exclusively in any state or federal court located in the County
of New York.
11. MUTILATED, DESTROYED OR MISSING NOTES. If this Note is
mutilated and surrendered to Maker or Maker receives evidence to its
satisfaction of the destruction, loss or theft of this Note, Maker shall issue a
replacement Note. If required by Maker, an indemnity bond must be supplied by
Payee that is sufficient in the judgment of Maker to protect Maker from any loss
it may suffer if this Note is replaced. Maker may charge for any expenses of
replacing this Note.
IN WITNESS WHEREOF, Maker has caused this Note to be duly issued as of
the date first above written.
NBC INTERNET, INC.
By: /s/ Chris Kitze
-----------------------------------
Name: Chris Kitze
Title: Chief Executive Officer
<PAGE>
8
ACKNOWLEDGED AND AGREED:
GE INVESTMENTS SUBSIDIARY, INC.
By: /s/ Robert E. Healing
-----------------------------------
Name: Robert E. Healing
Title: Vice President
<PAGE>
Exhibit 6
---------------------------
XENON 2, INC.*
GOVERNANCE AND INVESTOR RIGHTS AGREEMENT
between
XENON 2, INC.
and
NATIONAL BROADCASTING COMPANY, INC.
---------------------------
Dated as of November 30, 1999
* Changed its name to NBC Internet, Inc. on July 8, 1999
- --------------------------------------------------------------------------------
<PAGE>
GOVERNANCE AND INVESTOR RIGHTS AGREEMENT
THIS GOVERNANCE AND INVESTOR RIGHTS AGREEMENT (this "Agreement"), dated
as of November 30, 1999, is made and entered into by and between Xenon 2,
Inc., a Delaware corporation (the "Company"), and National Broadcasting
Company, Inc., a Delaware corporation ("NBC").
W I T N E S S E T H:
WHEREAS, the Company and NBC have entered into that certain Agreement
and Plan of Contribution, Investment and Merger (the "Merger Agreement"), dated
May 9, 1999, and into certain other agreements referred to in, or transactions
contemplated by, the Merger Agreement (the "Transactions");
WHEREAS, the Company and NBC desire, in connection with the
Transactions, to make certain covenants and agreements with one another pursuant
to this Agreement;
WHEREAS, it is a condition to the consummation of the Transactions that
the parties enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
"Affiliate" shall mean (i) with respect to the Company, the Company's
Subsidiaries, (ii) with respect to NBC, except as provided in Section 2.2 below,
NBC's Subsidiaries and the holder of the Company Convertible Note and (iii) with
respect to NBC Parent, NBC Parent's Subsidiaries other than NBC and its
Affiliates; PROVIDED, HOWEVER, that for purposes of this Agreement, the Company
and its Affiliates on the one hand, and either NBC and its Affiliates or NBC
Parent and its Affiliates on the other hand, shall not be deemed to be
"Affiliates" of one another.
"Beneficially Own" or "Beneficial Ownership" shall have the meaning set
forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange
Act. Without limiting the foregoing, the holder of the Company Convertible Note
will be deemed to Beneficially Own the shares of Common Stock issuable upon
conversion thereof; PROVIDED that for all purposes under this Agreement, NBC and
its Affiliates shall not be deemed to beneficially own any Voting Securities
beneficially owned by NBC Parent or
<PAGE>
its Affiliates and NBC Parent and its Affiliates shall not be deemed to
beneficially own any Voting Securities beneficially owned by NBC and its
Affiliates, in each such case unless and until NBC Parent or its Affiliates
shall have become Restricted Parties.
"Board of Directors" shall mean the Board of Directors of the Company
as from time to time hereafter constituted.
"Certificate of Incorporation" shall mean the Amended and Restated
Certificate of Incorporation of the Company as in effect on the date hereof,
substantially in the form of Exhibit A hereto, and as hereafter from time to
time amended, modified, supplemented or restated in accordance with the terms
hereof and pursuant to applicable law.
"Change in Control of the Company" shall mean any of the following: (i)
a merger, consolidation or other business combination or transaction to which
the Company is a party if the stockholders of the Company immediately prior to
the effective date of such merger, consolidation or other business combination
or transaction, as a result of such merger, consolidation or other business
combination or transaction, do not have Beneficial Ownership of Voting
Securities representing 50% or more of the Total Current Voting Power of the
surviving corporation (or its parent) following such merger, consolidation or
other business combination or transaction; (ii) any Person or 13D Group, shall
have Beneficial Ownership of 20% or more of the outstanding shares of Class A
Common Stock at a time when the holders of the Class B Common Stock do not elect
a majority of the Board of Directors; (iii) a sale of all or substantially all
the consolidated assets of the Company to any Person or Persons (other than a
Restricted Party or any 13D Group to which any Restricted Party is a member); or
(iv) a liquidation or dissolution of the Company.
"Class A Directors" shall have the meaning set forth in the Company's
Certificate of Incorporation.
"Class A Common Stock" shall have the meaning set forth in the
Company's Certificate of Incorporation.
"Class B Directors" shall have the meaning set forth in the Company's
Certificate of Incorporation.
"Class B Common Stock" shall have the meaning set forth in the
Company's Certificate of Incorporation.
"Commission" shall mean the Securities and Exchange Commission and any
successor commission or agency having similar powers.
"Company Competitor" shall have the meaning ascribed to the term "Newco
Competitor" in that certain License Agreement (as defined in the Merger
Agreement).
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<PAGE>
"Common Stock" shall mean the Company's Class A Common Stock and the
Class B Common Stock.
"Eligible Purchaser" shall mean any Person (other than the Company or
any Person that is or becomes a Restricted Party) that is not a Company
Competitor.
"Effective Time" shall have the meaning set forth in the Merger
Agreement.
"Exchange Act" shall mean, as of any date, the Securities Exchange Act
of 1934, as amended, or any similar federal statute then in effect and
superseding such act, and any reference to a particular section thereof shall
include a reference to the comparable section, if any, of such similar federal
statute, and the rules and regulations thereunder.
"NBC Parent" shall mean the ultimate parent corporation of NBC (if
any), which as of today is General Electric Company, a New York corporation.
"NBC Tender Offer" shall mean a bona fide public tender offer subject
to the provisions of Regulation 14d under the Exchange Act by a Restricted Party
(or any 13D Group that includes a Restricted Party) to purchase or exchange for
cash or other consideration any Voting Securities.
"Newco Convertible Note" shall have the meaning set forth in the Merger
Agreement.
"Note Conversion Time" shall mean any time following the Effective Time
at which there shall be any conversion into shares of Class B Common Stock
pursuant to the Newco Convertible Note, which shares of Class B Common Stock are
Beneficially Owned by a Restricted Party.
"Person" shall mean an individual or a corporation, association,
partnership, limited liability company, joint venture, organization, business,
trust or any other entity or organization, including a government or any
subdivision or agency thereof.
"Restricted Parties" shall mean (i) NBC, (ii) NBC's Affiliates and
(iii) from and after the time NBC Parent or any of its Affiliates shall convert
any shares of Class A Common Stock into shares of Class B Common Stock pursuant
to Section 2.2 of this Agreement, NBC Parent and its Affiliates.
"Securities Act" shall mean, as of any date, the Securities Act of
1933, as amended, or any similar federal statute then in effect and superseding
such act, and any reference to a particular section thereof shall include a
reference to the comparable section, if any, of any such similar federal
statute, and the rules and regulations thereunder.
"Shares" shall mean any shares of Voting Securities that are
Beneficially Owned by any Restricted Party or any 13D Group of which any
Restricted Party is a member.
3
<PAGE>
"Standstill Limit" shall mean the percentage of the Total Current
Voting Power of the Company that would be held by NBC and its Affiliates on June
11, 1999 if the transactions contemplated by the Merger Agreement had been
consummated on such date, assuming that the Company Convertible Note had been
converted at such time into shares of Class B Common Stock.
"Standstill Period" shall mean the period beginning on the Closing Date
(as defined in the Merger Agreement) and ending on the occurrence of a
Standstill Termination Event; PROVIDED that the Standstill Period shall
recommence immediately upon the occurrence of a Standstill Reinstatement Event .
"Standstill Reinstatement Event" shall mean that the Standstill Period
has terminated pursuant to clause (iii) of the definition of "Standstill
Termination Event" and such Third Party Tender Offer is withdrawn or terminated
(without having been consummated). Notwithstanding the foregoing, a Standstill
Reinstatement Event will not occur if prior to the occurrence of the event
specified in the preceding sentence that would otherwise result in a Standstill
Reinstatement Event, another Standstill Termination Event occurs for which there
has not been a related Standstill Reinstatement Event.
"Standstill Revised Limit" shall mean the percentage of the Total
Current Voting Power represented by all shares of Voting Securities Beneficially
Owned by the Restricted Parties as of the occurrence of a Standstill
Reinstatement Event.
"Standstill Termination Event" shall mean the earliest to occur of (i)
the third anniversary of the date of this Agreement, (ii) the first anniversary
of the date on which the Restricted Parties or any 13D Group of which they are a
member no longer Beneficially Own any shares of Class B Common Stock (including
as a result of their automatic conversion to Class A Common Stock in accordance
with the Company's Certificate of Incorporation), (iii) a Third Party Tender
Offer, (iv) the date the Company enters into an agreement relating to a
transaction that if consummated will result in a Change in Control of the
Company or (v) any Change in Control of the Company occurs; PROVIDED, that the
Standstill Period will be immediately reinstated upon the occurrence of a
Standstill Reinstatement Event; PROVIDED FURTHER that, upon a Standstill
Reinstatement Event, if the Standstill Revised Limit is greater than the
Standstill Limit, then the Standstill Revised Limit and not the Standstill Limit
shall thereafter be deemed the Standstill Limit for all purposes hereunder.
"Subsidiary" shall mean, as to any Person, another Person of which
outstanding securities having the power to elect a majority of the members of
the board of directors (or comparable body or authority performing similar
functions) of such other Person are at the time owned, directly or indirectly
through one or more intermediaries, or both, by such first Person.
"Takeover Transaction" means (i) the direct or indirect acquisition or
purchase of 50% or more of the assets (based on the fair market value thereof)
of the Company and
4
<PAGE>
its Affiliates, taken as a whole, or of 50% or more of any class of equity
securities of the Company or any of its Affiliates or any tender offer or
exchange offer (including by the Company or its Affiliates) that if consummated
would result in any person Beneficially Owning 50% or more of any class of
equity securities of the Company or any of its Affiliates, (ii) a sale of all or
substantially all of the assets of the Company and its Affiliates or (iii) a
merger or consolidation of the Company as a result of which the stockholders of
the Company 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).
"Third Party Tender Offer" shall mean a bona fide public tender offer
subject to the provisions of Regulation 14D under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), when first commenced within the meaning
of Rule 14d-2 of the rules and regulations under the Exchange Act by a Person or
13D Group (which is not made by and does not include any of the Company or any
Affiliate or a Restricted Party or any 13D Group that includes the Company or an
Affiliate or a Restricted Party) to purchase or exchange for cash or other
consideration any Voting Securities and which consists of an offer to acquire
20% or more of the then Total Current Voting Power of the Company.
"Total Current Voting Power" shall mean, with respect to any
corporation, the total number of votes which may be cast in the election of
members of the Board of Directors of such corporation if all securities entitled
to vote in the election of such directors are present and voted; PROVIDED that,
for purposes of this definition, the Class A Common Stock and the Class B Common
Stock shall be considered as a single class.
"Voting Securities" shall mean shares of Common Stock and any other
securities of the Company entitled to vote generally in the election of members
of the Board of Directors or any other securities (including, without
limitation, rights and options) convertible into, exchangeable for or
exercisable for, any of the foregoing (whether or not presently convertible,
exchangeable or exercisable).
"13D Group" shall mean any group of persons formed for the purpose of
acquiring, holding, voting or disposing of Voting Securities of a corporation
which would be required under Section 13(d) of the Exchange Act, and the rules
and regulations promulgated thereunder, to file a statement on Schedule 13D
pursuant to Rule 13d-1(a) or Schedule 13G pursuant to rule 13d-1(c) with the
Commission as a "person" within the meaning of Section 13(d)(3) of the Exchange
Act if such group Beneficially Owned Voting Securities representing more than 5%
of any class of Voting Securities then outstanding; PROVIDED, HOWEVER, that for
all purposes under this Agreement, NBC and its Affiliates shall not be deemed to
have formed, joined, participated in or be a member of any 13D Group which
includes NBC Parent and its Affiliates unless and until NBC Parent or its
Affiliates shall have become Restricted Parties.
5
<PAGE>
ARTICLE II
STANDSTILL PROVISIONS
Section 2.1 RESTRICTIONS ON NBC'S ACTIVITIES REGARDING THE COMPANY AND
ITS STOCK. NBC agrees that during the Standstill Period, without first obtaining
the prior approval of the Class A Directors of the Company, specifically
expressed in a resolution adopted by a majority of the Class A Directors of the
Company, NBC will not, and NBC will cause each Restricted Party, each 13D Group
of which a Restricted Party is a member, and shall use its best efforts to cause
each of their respective agents, representatives, employees, directors, and
officers (in such capacity) not to, directly or indirectly (nor to solicit,
initiate, assist or encourage NBC Parent or its Affiliates to, directly or
indirectly):
(a) acquire, offer or propose to acquire, or agree to acquire, directly
or indirectly, whether by purchase, tender or exchange offer, through the
acquisition of control of another Person, by joining a partnership, limited
partnership, syndicate or other "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) or otherwise, any Voting Securities, if after giving effect
to such acquisition the Total Current Voting Power represented by the Voting
Securities Beneficially Owned by the Restricted Parties exceeds the Standstill
Limit; PROVIDED, HOWEVER, that if at any time during the Standstill Period, (x)
any Person other than any Restricted Party or any 13D Group of which a
Restricted Party is a member has made any written proposal or offer relating to
a Takeover Transaction or Change in Control of the Company which has not been
rejected within 10 business days by the Board of Directors, (y) the Board of
Directors has determined to pursue a Takeover Transaction or Change in Control
of the Company and the Board of Directors has not resolved to stop pursuing such
Takeover Transaction or Change in Control of the Company, or (z) the Board of
Directors or the Company has engaged in any discussions or negotiations with, or
provided any information to, any Person other than any Restricted Party, or any
13D Group of which any Restricted Party is a member, with respect to a Takeover
Transaction or Change in Control of the Company and the Board of Directors has
not resolved to terminate all such discussions, negotiations and provision of
information, then, for so long as such condition continues to apply, the
limitation on the actions described above in this clause (a) shall not be
applicable to any Restricted Party;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" (as such term is used in the proxy rules of the Commission as in
effect on the date hereof) of proxies or consents in connection with an
amendment to the Certificate of Incorporation that requires a separate class
vote of the Class A Common Stock pursuant to the Certificate of Incorporation or
the election of Class A Directors, in each case at a time when any Restricted
Party is the Beneficial Owner of Class B Common Stock; PROVIDED, HOWEVER, that
the limitation contained in this clause (b) shall not apply to any Takeover
Transaction to be voted on by the Company's shareholders that is not instituted
or proposed by any Restricted Party or any 13D Group of which any Restricted
Party is a member; or
6
<PAGE>
(c) act, whether alone or in concert with others, to seek to propose to
the holders of the Class A Common Stock any merger, business combination or
similar transaction with any Restricted Party or any 13D Group of which any
Restricted Party is a member; PROVIDED, HOWEVER, that if at any time during the
Standstill Period, (x) any Person other than any Restricted Party or any 13D
Group of which a Restricted Party is a member has made any written proposal or
offer relating to a Takeover Transaction or Change in Control of the Company
which has not been rejected within 10 business days by the Board of Directors,
(y) the Board of Directors has determined to pursue a Takeover Transaction or
Change in Control of the Company and the Board of Directors has not resolved to
stop pursuing such Takeover Transaction or Change in Control of the Company, or
(z) the Board of Directors or the Company has engaged in any discussions or
negotiations with, or provided any information to, any Person other than any
Restricted Party, or any 13D Group of which any Restricted Party is a member,
with respect to a Takeover Transaction or Change in Control of the Company and
the Board of Directors has not resolved to terminate all such discussions,
negotiations and provision of information, then, for so long as such condition
continues to apply, the limitation on the actions described above in this clause
(c) shall not be applicable to any Restricted Party;
Section 2.2 PURCHASES BY NBC PARENT. So long as the Beneficial
Ownership of the Restricted Parties would not thereafter exceed the Standstill
Limit, if such purchaser or any of its Subsidiaries shall purchase any of the
Class A Common Stock, the Company shall permit NBC Parent and its Affiliates,
upon request, to convert any or all of their shares of Class A Common Stock into
shares of Class B Common Stock, subject to such purchaser's agreeing to be bound
by the terms and conditions of this Agreement to the same extent and as if it
were NBC.
Section 2.3 DISAPPLICATION OF STANDSTILL LIMIT.
Notwithstanding anything in this Agreement to the contrary,
(a) this Article II shall not prohibit or restrict any of the
following: (i) any action specifically permitted or required to be taken by any
Restricted Party pursuant to the Certificate of Incorporation, (ii) actions
taken by any Class B Director or, after there is no longer any Class B Director,
any member of the Board of Directors or any officer of the Company, in each case
who was nominated or designated by any Restricted Party acting in such capacity
and (iii) the exercise by the Restricted Parties of their voting rights with
respect to any shares of Voting Securities they Beneficially Own.
(b) no Restricted Party shall be deemed to have violated any provision
of this Article II by virtue of any increase in the aggregate percentage of the
Total Current Voting Power of the Company represented by Shares if such increase
is the result of a recapitalization of the Company, a repurchase of securities
by the Company or other actions taken by the Company or any of its Affiliates
that have the effect of reducing the Total Current Voting Power.
(c) nothing in this Agreement shall prohibit (i) the acquisition or
holding of securities or rights in the ordinary course of business by any
employee benefit plan whose
7
<PAGE>
trustees, investment managers or similar advisors are not Restricted Parties,
(ii) the consummation of any transaction expressly provided for in the Merger
Agreement or the Implementing Agreements, (iii) directors, officers and
employees of the Restricted Parties from communicating with directors, officers
and employees of the Company or its Affiliates on matters related to or governed
by the Merger Agreement, the Implementing Agreements or other operational
matters, (iv) the Restricted Parties from communicating with any member of the
Board of Directors or any officer of the Company who was nominated or designated
by any Restricted Party or (v) the Restricted Parties from communicating with
the other members of the Board of Directors, the Chairman of the Board of
Directors or the Chief Executive Officer of the Company, so long as such
communication is conveyed in confidence and does not require public disclosure
by the Restricted Parties or, in the reasonable belief of the Restricted Party
making such communication, by the Company.
ARTICLE III
TRANSFERS BY NBC
Section 3.1 RESTRICTIONS ON TRANSFER. Unless NBC and its Affiliates
Beneficially Own in the aggregate less than 5% of the Total Current Voting Power
of the Company, or until the Restricted Parties Beneficially Own in the
aggregate at least 90% of the Total Current Voting Power, NBC agrees that from
the date of this Agreement until the earlier of (x) the fifth anniversary of the
date of this Agreement, or (y) the occurrence of a Standstill Termination Event
specified in clause (iv) or (v) of the definition thereof, without first
obtaining the prior approval of the Class A Directors of the Company,
specifically expressed in a resolution adopted by a majority of the Class A
Directors of the Company, NBC will not, and NBC will cause each Person that is
or becomes a Restricted Party and each 13D Group of which any Restricted Party
is a member not to, directly or indirectly, sell, transfer, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise dispose of (or
make any exchange, gift, assignment or pledge of) (collectively, a "transfer")
any of its Shares, except as and to the extent permitted under the Securities
Act and other applicable securities laws to: (i) the Company, (ii) another
Person that is or becomes a Restricted Party so long as such transferee shall
execute an agreement in form and substance reasonably satisfactory to the
Company providing that such transferee shall be bound by and shall fully comply
with the terms of this Agreement in the same manner and to the same extent as
applicable to NBC, and agrees to transfer such Shares to another Restricted
Party if it ceases to be a Restricted Party, (iii) pursuant to a Third Party
Tender Offer, (iv) pursuant to a merger, consolidation or reorganization to
which the Company is a party, (v) in a BONA FIDE public distribution or bona
fide underwritten public offering, (vi) pursuant to Rule 144 of the Securities
Act to any one or more Persons that, to the best knowledge of the Restricted
Parties after due and careful inquiry, are not Company Competitors or (vii) to
an Eligible Purchaser in a private sale or pursuant to Rule 144A of the
Securities Act; PROVIDED, HOWEVER, that, in the case of any transfer pursuant to
clause (vii), such transfer does not result in, to the best knowledge of the
Restricted Parties after due and careful inquiry, any Person other than an
Eligible Purchaser acquiring, after giving effect to such transfer,
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Beneficial Ownership, individually or in the aggregate with any of its
Affiliates or any 13D Group of which the Eligible Purchaser or any of its
Affiliates is a member, 19.9% or more of the Total Current Voting Power of the
Company. For as long as the transfer restrictions in the immediately preceding
sentence remain in effect, of the 29,833,788 shares of Common Stock Beneficially
Owned by the Restricted Parties on the date hereof (the "Restricted Shares"),
the Restricted Parties will not transfer pursuant to clauses (v), (vi) and (vii)
more than an aggregate of (1) 2,500,000 Restricted Shares on or prior to the one
year anniversary of the date hereof, (2) 5,000,000 Restricted Shares on or prior
to the two year anniversary of the date hereof, or (3) 7,200,000 Restricted
Shares on or prior to the three year anniversary of the date hereof (it being
understood that the restrictions contained in this sentence will not apply to
any shares of Common Stock first acquired by the Restricted Parties after the
date hereof). Any transfer or attempted transfer which is not in compliance with
this Agreement shall be null and void AB INITIO and neither the Company nor any
transfer agent of such securities shall give any effect thereto in its stock
records.
Section 3.2 ENDORSEMENT OF CERTIFICATES. Upon the execution of this
Agreement, in addition to any other legend that is required pursuant to the
Merger Agreement and the transactions contemplated thereby or that the Company
may deem advisable under the Securities Act and certain state securities laws,
all certificates representing Shares shall be endorsed at all times as follows:
"SUCH SHARES MAY ONLY BE TRANSFERRED PURSUANT TO THE
PROVISIONS OF THE GOVERNANCE AND INVESTOR RIGHTS
AGREEMENT DATED AS OF NOVEMBER 30, 1999 BETWEEN
NATIONAL BROADCASTING COMPANY, INC. AND THE COMPANY,
COPIES OF WHICH AGREEMENT ARE ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY."
Section 3.3 STOCK PURCHASE RIGHTS.
(a) NEW ISSUANCES. If at any time after the date hereof the Company
shall issue any New Securities (as defined below in this subsection (a)), at the
time of any such issuance, for so long as there shall be outstanding shares of
Class B Common Stock of the Company, NBC shall have the option (the "Option") to
purchase that number of New Securities (the "Option Securities") in an amount
sufficient for NBC and its Affiliates to maintain in the aggregate their then
Proportionate Percentage (as defined below in this subsection (a)) at that time.
The Option may be exercised by NBC or, at NBC's discretion, may be transferred
to or exercised by any Person that is or becomes a Restricted Party, so long as
such transferee or such Person exercising shall execute an agreement in form and
substance reasonably satisfactory to the Company providing that such transferee
or such Person exercising shall be bound by and shall fully comply with the
terms of this Agreement in the same manner and to the same extent as applicable
to NBC, and agrees to transfer the rights hereunder to another Restricted Party
if it ceases to be a Restricted Party, but the Option may not be transferred to
or exercised by any other Person. If the New Securities are additional shares of
Class A Common Stock, then the Option Securities shall be additional shares of
Class B Common Stock. The purchase
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<PAGE>
price for the Option Securities shall be paid in immediately available United
States funds and shall be equal to (i) the per share price at which the Company
is selling the New Securities, if the consideration for such sale is cash, or
(ii) the Fair Market Value of the New Securities, if the consideration for such
sale is not cash.
For purposes of this Agreement, the terms set forth below shall have
the following meanings:
"Fair Market Value" shall mean, with respect to the Class A Common
Stock or other New Securities, the following: where there exists a public market
for the Class A Common Stock or other New Securities, the Fair Market Value
shall be (A) the closing price for a share of Class A Common Stock or other New
Securities, as the case may be, for the last market trading day prior to the
time of the determination (or, if no closing price was reported on that date, on
the last trading date on which a closing price was reported) on the stock
exchange determined by the Board of Directors to be the primary market for the
Class A Common Stock or other New Securities, as the case may be, or the Nasdaq
National Market, whichever is applicable, or (B) if the Class A Common Stock or
other New Securities, as the case may be, is not traded on any such exchange or
national market system, the average of the closing bid and asked prices of a
share of Class A Common Stock or other New Securities, as the case may be, on
the Nasdaq Small Cap Market for the day prior to the time of the issuance (or,
if no such prices were reported on that date, on the last date on which such
prices were reported), in each case, as reported in THE WALL STREET JOURNAL or
such other source as the Board of Directors deems reliable. In the absence of an
established market of the type described in the preceding sentence for the Class
A Common Stock or in the absence of an established market of similar type for
any other New Securities, the Fair Market Value thereof shall be determined in
good faith by the Board of Directors. For purposes of this Section 3.3, the Fair
Market Value of Class B Common Stock shall be equivalent to the Fair Market
Value of Class A Common Stock.
"New Securities" shall mean any authorized but unissued shares and any
treasury shares of Common Stock, any new class of common stock or preferred
stock (if and only if such preferred stock either votes generally with the
common stock for the election of directors or does not have dividends that are
limited to a specific dividend vote) and all rights, options, or warrants to
purchase Common Stock or any new class of common stock or such preferred stock
and securities of any type whatsoever that are, or may become, exercisable for
or convertible into Common Stock or any new class of common stock or such
preferred stock; PROVIDED, HOWEVER, that the term "New Securities" does not
include: (i) the grant or issue now or hereafter of any options to purchase
shares of Common Stock or securities convertible into shares of Common Stock
pursuant to any employee option plan or other employee benefit but does include
any shares of Common Stock or securities convertible into shares of Common Stock
issued upon exercise of any such options; (ii) securities outstanding as of the
date hereof; or (iii) shares of Common Stock issued pursuant to any
reclassification, stock split or stock dividend.
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<PAGE>
"Proportionate Percentage" shall mean a percentage equal to a fraction,
the numerator of which is the aggregate number of shares of Common Stock
Beneficially Owned by NBC and its Affiliates and the denominator of which is the
total number of outstanding shares of Common Stock of the Company immediately
prior to the issuance of New Securities.
(b) FRACTIONAL SHARES. No fractional shares of Option Securities shall
be issued upon exercise of the Option. In lieu of fractional shares, the Company
shall round the number of Option Securities to be purchased to the nearest whole
number and adjust the purchase price for the Option Securities accordingly.
(c) EXERCISE OF OPTION. The Company shall use reasonable effort to give
notice (the "Option Notice") to NBC as soon as reasonably practicable either
before or after the issuance of the New Securities, specifying the amount and
type of securities to be issued and the price per share and all other material
terms of the issuance; PROVIDED, HOWEVER, that any Option Notice given by the
Company, with respect to securities issued pursuant to the exercise of options
to purchase shares of Common Stock or securities convertible into shares of
Common Stock, shall be given only on an annual basis within 90 days after the
end of the fiscal year in which such securities were issued and as to the
aggregate number of securities issued during such period in respect of such
options. If NBC desires to exercise the Option, then it shall give written
notice (the "Exercise Notice") to the Company within 30 days after delivery of
the Option Notice by the Company specifying the amount of securities that it
desires and is entitled to purchase. The closing for the purchase and sale of
the Option Securities shall occur at a place and on a date mutually agreed upon
by the Company and NBC, which date shall be within fifteen days following the
date of delivery of the Exercise Notice. If NBC does not deliver the Exercise
Notice in accordance with the 30 day period specified in this subsection (c) of
Section 3.3, then the rights of NBC to exercise the Option with respect to that
issuance of New Securities shall terminate.
ARTICLE IV
OTHER COVENANTS
Section 4.1 FCC MATTERS. The Company agrees that, except with the prior
written consent of NBC, the Company and its Affiliates shall not, directly or
indirectly, take any action that would cause any ownership interest in any of
the following to be attributable to NBC or its Affiliates for purposes of FCC
regulations: (i) a U.S. broadcast radio or television station, (ii) a U.S. cable
television system, (iii) a U.S. "daily newspaper" (as such term is defined in
Section 73.3555 of the rules and regulations of the Federal Communications
Commission, as the same may be amended from time to time), (iv) any U.S.
communications facility operated pursuant to a license granted by the Federal
Communications Commission ("FCC") and subject to the provisions of Section
310(b) of the Communications Act of 1934, as amended, or (v) any other business
which is subject to FCC regulations under which the ownership of a Person may be
subject to limitation or restriction as a result of the interest in such
business being attributed to such Person.
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Section 4.2 CORPORATE INTEGRITY POLICY. The Company shall adopt the
Corporate Integrity Policy of NBC.
Section 4.3 LISTING ON NASDAQ OR SECURITIES EXCHANGE. The Company shall
list any shares of Class A Common Stock issuable upon conversion of the Class B
Common Stock or the Company Convertible Note on Nasdaq or on such other national
securities exchange on which shares of Common Stock are then listed. The Company
will at its expense cause all shares of Class A Common Stock issued upon
conversion of the Class B Common Stock or the Company Convertible Note to be
listed at the time of such issuance on Nasdaq and/or such other securities
exchange shares of Class A Common Stock are then listed on and shall maintain
such listing.
ARTICLE V
BOARD ACTION
Section 5.1 BOARD REPRESENTATION RIGHTS. If all of the Class B Common
Stock has been converted into Class A Common Stock, so long as NBC or its
Affiliates Beneficially Own in the aggregate at least 5% of the Total Current
Voting Power of the Company, NBC shall have the right to designate as nominees
for election to the Board of Directors, commencing with the first meeting of
stockholders following the conversion of the shares of Class B Common Stock of
the Company into shares of Class A Common Stock of the Company pursuant to the
Certificate of Incorporation, that number of persons equal to the greater of (i)
one, or (ii) that number determined by multiplying the then current number of
directors of the Company by the percentage of Total Current Voting Power then
owned by NBC and its Affiliates, but which number shall at all times be less
than a majority of the total number of members of the Board of Directors of the
Company unless NBC and its Affiliates Beneficially Own a majority of the Total
Current Voting Power of the Company. If the calculation set forth in clause (ii)
of the preceding sentence results in other than a whole number, NBC shall be
permitted to designate the nearest whole number of person(s) as designee(s). The
Company shall, subject to the fiduciary duties of the directors of the Company,
include in the slate of nominees recommended by the Company's management to
stockholders for election as directors of the Company such designee(s) of NBC.
The Company shall use its best efforts to cause its directors and management to
vote pursuant to this Section 5.2 hereof all shares for which the Company's
directors and management hold proxies or are otherwise entitled to vote in favor
of the election of such designee(s) of NBC. The Company shall give the same
scope and degree of support and use the same efforts to encourage the
stockholders to vote in favor of such designee(s) of NBC as it gives and uses
with respect to the designees of management.
ARTICLE VI
MISCELLANEOUS
Section 6.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the respective
successors and assigns of the parties hereto. Except as set forth herein, NBC
may not assign any of its
12
<PAGE>
rights hereunder to any Person other than by operation of law, in which case the
assignee shall be subject to all of the provisions of this Agreement. The
Company may not assign any of its rights hereunder to any other Person, other
than by operation of law, in which case the assignee shall be subject to all of
the provisions of this Agreement.
Section 6.2 AMENDMENT; WAIVER OF COMPLIANCES; CONFLICTS.
(a) This Agreement may be amended only by a written instrument duly
executed by NBC and the Company, having first obtained the prior approval of the
Class A Directors of the Company, specifically expressed in a resolution adopted
by a majority of the Class A Directors of the Company.
(b) Except as otherwise provided in this Agreement, any failure of any
of the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
(c) In the event of any conflict between the provisions of this
Agreement and the provisions of any other agreement, the provisions of this
Agreement shall govern and prevail.
Section 6.3 NOTICES. All notices and other communications provided for
hereunder shall be in writing and delivered by hand or sent by first class mail
or sent by telecopy (with such telecopy to be confirmed promptly in writing sent
by first class mail), sent as follows:
(i) If to NBC, addressed to:
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, New York 10012
Attention: Thomas Rogers
Telecopy: (212) 664-3915
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: Richard Capelouto, Esq.
Telecopy: (212) 455-2502
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<PAGE>
(ii) If to the Company, addressed to:
Xenon 2, Inc.
300 Montgomery Street, Suite 300
San Francisco, California 94104
Attention: Chris Kitze
Telecopy: (415) 288-2578
with a copy to:
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105-2482
Attention: Bruce Alan Mann, Esq.
Telecopy: (415) 268-7522
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Allen L. Weingarten, Esq.
Telecopy: (212) 468-7900
or to such other address or addresses or telecopy number or numbers as any of
the parties hereto may most recently have designated in writing to the other
parties hereto by such notice. All such communications shall be deemed to have
been given or made when so delivered by hand or sent by telecopy, or three
business days after being so mailed.
Section 6.4 ENTIRE AGREEMENT: GOVERNING LAW.
(a) This Agreement and the other writings referred to herein or
delivered pursuant hereto which form a part hereof contain the entire agreement
among the parties hereto with respect to the subject transactions contemplated
hereby and supersede all prior oral and written agreements and memoranda and
undertakings among the parties hereto with regard to this subject matter.
(b) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO THE CHOICE OF
LAW PRINCIPLES THEREOF).
Section 6.5 INJUNCTIVE RELIEF. The parties acknowledge that a violation
of any of the terms of this Agreement will cause the other irreparable injury
for which an adequate remedy at law is not available. Therefore, the parties
agree that each party shall be entitled to an injunction, restraining order or
other equitable relief from any court of competent jurisdiction, restraining the
other from committing any violations of the provisions of this Agreement.
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<PAGE>
Section 6.6 EXPENSES. The Company and NBC shall bear their own expenses
incurred with respect to this Agreement and the transactions contemplated
hereby.
Section 6.7 HEADINGS. The Section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 6.8 SEVERABILITY. In the event that any of the provisions of
this Agreement are held to be unenforceable or invalid by any court of competent
jurisdiction, the validity and enforceability of the remaining provisions will
not be affected thereby.
Section 6.9 RECAPITALIZATIONS, EXCHANGES, ETC. AFFECTING THE SHARES.
The provisions of this Agreement shall apply, to the full extent set forth
herein with respect to the Shares and to any and all securities of the Company
or any successor or assignee of the Company (whether by merger, consolidation,
sale of assets, or otherwise) which may be issued in respect of, in exchange
for, or in substitution of, such securities and shall be appropriately adjusted
for any stock dividends, splits, reverse splits, combinations,
reclassifications, recapitalizations, reorganizations and the like occurring
after the date hereof.
Section 6.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
XENON 2, INC.
By: /s/ Chris Kitze
---------------------------------
Name: Chris Kitze
Title: Chief Executive Officer
NATIONAL BROADCASTING COMPANY, INC.
By: /s/ Mark W. Begor
---------------------------------
Name: Mark W. Begor
Title: Executive Vice President
16
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION HEADING PAGE
<S> <C>
ARTICLE I CERTAIN DEFINITIONS.....................................................................1
ARTICLE II STANDSTILL PROVISIONS..................................................................6
Section 2.1 Restrictions on NBC's Activities Regarding the Company and its Stock............6
Section 2.2 Purchases by NBC Parent.........................................................7
Section 2.3 Disapplication of Standstill Limit..............................................7
ARTICLE III TRANSFERS BY NBC......................................................................8
Section 3.1 Restrictions on Transfer........................................................8
Section 3.2 Endorsement of Certificates.....................................................9
Section 3.3 Stock Purchase Rights...........................................................9
ARTICLE IV OTHER COVENANTS.......................................................................11
Section 4.1 FCC Matters....................................................................11
Section 4.2 Corporate Integrity Policy.....................................................12
Section 4.3 Listing on Nasdaq or Securities Exchange.......................................12
ARTICLE V BOARD ACTION...........................................................................12
Section 5.1 Board Representation Rights....................................................12
ARTICLE VI MISCELLANEOUS.........................................................................12
Section 6.1 Successors and Assigns.........................................................12
Section 6.2 Amendment; Waiver of Compliances; Conflicts....................................13
Section 6.3 Notices........................................................................13
Section 6.4 Entire Agreement: Governing Law................................................14
Section 6.5 Injunctive Relief..............................................................14
Section 6.6 Expenses.......................................................................15
Section 6.7 Headings.......................................................................15
Section 6.8 Severability...................................................................15
Section 6.9 Recapitalizations, Exchanges, Etc. Affecting the Shares........................15
Section 6.10 Counterparts...................................................................15
</TABLE>
<PAGE>
Exhibit 7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of November 30, 1999, by and among NBC Internet, Inc., a
Delaware corporation (formerly known as Xenon 2, Inc., and together with is
successors and assigns, "NBCI"), National Broadcasting Company, Inc., a
Delaware corporation (together with its successors and assigns, "NBC"), GE
Investments Subsidiary, Inc., a Delaware corporation ("GE SUB"), CNET, Inc.
(together with its successors and assigns, "CNET"), Flying Disc Investments
Limited Partnership, a Nevada limited partnership ("DISC"), Mr. Chris Kitze
("KITZE") and each other person who becomes a holder hereunder (collectively,
with NBC, GE Sub, CNET, Disc and Kitze, the "HOLDERS").
RECITALS
WHEREAS, Xoom.com, Inc., a Delaware corporation ("XOOM"), NBCi, Xenon
3, Inc., a Delaware corporation ("XENON 3"), Snap! LLC, a Delaware limited
liability company ("SNAP"), and CNET, are parties to an Agreement and Plan of
Contribution and Merger, dated as of May 9, 1999, as amended (the "MERGER
AGREEMENT"), pursuant to which, among other things, the parties thereto have
agreed that (i) Xenon 3 will merge with and into Xoom, with Xoom as the
surviving corporation, and each outstanding share of common stock, par value
$0.0001 per share, of Xoom (the "COMMON STOCK") will be converted into the right
to receive one share of Class A common stock, par value $0.0001 per share, of
NBCi (the "CLASS A COMMON STOCK") and (ii) CNET will contribute its ownership
interest in Snap to NBCi in exchange for 7,147,584 shares of Class A Common
Stock;
WHEREAS, Xoom, NBCi, NBC, Neon Media Corporation, a Delaware
corporation ("NMC"), and GE Sub, are parties to a Second Amended and Restated
Agreement and Plan of Contribution, Investment and Merger, dated as of July 8,
1999, as amended (the "CONTRIBUTION AGREEMENT" and together with the Merger
Agreement, the "MERGER AGREEMENTS"), pursuant to which, among other things, the
parties thereto have agreed that (i) NMC will merge with and into NBCi, with
NBCi as the surviving corporation and each share of NMC common stock will be
converted into one share of Class B Common Stock of NBCi (the "CLASS B COMMON
STOCK") which will result in the issuance of 12,173,111 shares of Class B Common
Stock to NBC Multimedia Inc., a wholly owned subsidiary of NBC, (ii) a
subsidiary of NBC will transfer its ownership interest in Snap and certain other
assets to NBCi in exchange for 11,417,569 shares of Class B Common Stock and a
convertible note from NBCi which will be convertible into 471,031 shares of
Class B Common Stock and (iii) an affiliate of NBC will purchase a convertible
note from NBCi, which will be convertible into 5,338,357 shares of Class B
Common Stock, in exchange for the assignment to NBCi of a note issued by NBC;
and
WHEREAS, the execution and delivery of this Agreement by the parties
hereto is a condition to the closing of the transactions contemplated by the
Merger Agreements.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein and in the Merger Agreements, and other valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
<PAGE>
Section 1. DEFINITIONS. For purposes of this Agreement, the following
capitalized terms have the following meanings:
"INITIAL CNET DEMAND": A Demand Notice delivered by CNET pursuant to
Section 3(a)(iv) or 3(a)(v).
"INITIAL HOLDERS": NBC, GE Sub, CNET, Disc and Kitze.
"PROSPECTUS": The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"REGISTRABLE SECURITIES": All shares of Class A Common Stock (i) held
by the Initial Holders from time to time, (ii) held by transferees of the
Initial Holders, but only with respect to securities transferred in accordance
with Section 11(e); (iii) issuable by NBCi or (iv) issued or issuable upon the
conversion of Class B Common Stock, including shares of Class B Common Stock
issuable to NBC or its affiliates upon conversion of the convertible notes held
on the date hereof, into Class A Common Stock, excluding in each case shares of
Class A Common Stock that have been disposed of pursuant to a Registration
Statement relating to the sale thereof that has become effective under the
Securities Act or pursuant to Rule 144 or Rule 145 under the Securities Act.
Registrable Securities shall also include any shares of Class A Common Stock or
other securities (or shares of Class A Common Stock underlying such other
securities) that may be received by the Holders (x) as a result of a stock
dividend on or stock split of Registrable Securities or Class B Common Stock or
(y) on account of Registrable Securities or Class B Common Stock in a
recapitalization of or other transaction involving NBCi.
"REGISTRATION STATEMENT": Any registration statement of NBCi under
the Securities Act that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the related Prospectus, any preliminary
prospectus, all amendments and supplements to such registration statement
(including post-effective amendments), all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"SEC": The Securities and Exchange Commission.
"SECURITIES ACT": The Securities Act of 1933, as amended.
"UNDERWRITTEN OFFERING": A distribution, registered pursuant to the
Securities Act, in which securities of NBCi are sold to the public through one
or more underwriters.
<PAGE>
"VOTING AGREEMENT": means the Voting Agreement dated as of May 9,
1999, among Xoom, certain holders of the capital stock of NBCi, NBC and CNET, as
the same may be amended, supplemented or otherwise modified from time to time.
Section 2. SHELF REGISTRATION OF RESALES.
(a) SHELF REGISTRATION STATEMENT. Within 45 days of receipt by NBCi
of a written notice as described in Section 3(a) which is requested to be
effected as a shelf registration pursuant to Rule 415 under the Securities Act
(such Demand Registration, a "SHELF REGISTRATION") (which request shall not be
made at any time prior to the later of the twelve month anniversary of the date
hereof or the date on which NBCi first becomes eligible to file a registration
statement on Form S-3), NBCi shall file with the SEC a registration statement
for an offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act (a "SHELF REGISTRATION STATEMENT") covering all of the
Registrable Securities of the requesting Holder included in the Demand Notice
and any additional Registrable Securities requested to be included by the other
Holders pursuant to the terms of Sections 3(c) and 4(b) (collectively, in such
capacity, the "REGISTERING HOLDERS"). The Shelf Registration Statement shall be
on the appropriate form and shall comply as to form in all material respects
with the requirements of the Securities Act and the sales and regulations
promulgated thereunder, permitting registration of such Registrable Securities
for resale by the Registering Holders in the manner designated by them
(including, without limitation, one or more Underwritten Offerings). NBCi shall
use all commercially reasonable efforts to cause the Shelf Registration
Statement to be declared effective by the SEC as promptly as practicable. NBCi
will notify the Registering Holders in writing when such Shelf Registration
Statement becomes effective.
(b) MAINTENANCE OF EFFECTIVENESS. NBCi agrees to use commercially
reasonable efforts to keep the Shelf Registration Statement (including the
preparation and filing of any amendments and supplements necessary for that
purpose) continuously effective until the earlier of (a) the date on which the
Registering Holders (or distributees or transferees of such Registering Holders)
no longer hold any Registrable Securities or (b) the date on which all the
Registrable Securities of the Registering Holders are eligible for sale pursuant
to Rule 144(k) (or any successor provision) or in one day without registration
pursuant to Rule 144(e) (or any successor provision) under the Securities Act
(such period, the "EFFECTIVE PERIOD"). Each Registering Holder seeking to offer
and sell Registrable Securities upon exercise of the rights hereunder agrees to
provide information to NBCi in a timely manner regarding the proposed
distribution by such Registering Holder of the Registrable Securities and such
other information reasonably requested by NBCi in connection with the
preparation of the Shelf Registration Statement. If the Shelf Registration
Statement ceases to be effective for any reason or at any time during the
Effective Period (other than because of the sale of all the securities
registered thereunder), NBCi shall use commercially reasonable efforts to obtain
the prompt withdrawal of any order suspending the effectiveness thereof. Upon
written request from a Registering Holder during the Effective Period, NBCi
shall, subject to the other provisions of this Agreement, promptly supplement
the Shelf Registration Statement to reflect resales of Class A Common Stock by
any distributees or other transferees of any Holder who received their Class A
Common Stock in accordance with this Agreement and who have been identified in
writing to NBCi.
3
<PAGE>
(c) OFFERINGS AND SALES. At any time during the Effective Period, any
Registering Holder may exercise its Shelf Registration rights hereunder with
respect to the Registrable Securities. If any Registering Holder desires to
offer and sell Registrable Securities under the Shelf Registration Statement
pursuant to an underwritten public offering, such Registering Holder shall
deliver a written notice (the "REGISTRATION NOTICE") to NBCi at least 20 days
prior to the date on which such Registering Holder desires to consummate the
sale of Registrable Securities. Any Registration Notice shall be subject to
revocation by the Registering Holder initiating the request by delivery of a
subsequent written notice to NBCi no later than the fifth business day prior to
the contemplated offering commencement date.
Upon receipt of a Registration Notice, NBCi shall, within 30 days of
receipt thereof, give written notice to the other Registering Holders of NBCi's
receipt thereof. Within 15 days of receipt of such a notice from NBCi, any
other Registering Holder desiring to offer and sell any Registrable Securities
in the subject offering shall give written notice to NBCi, the Registering
Holder who delivered the Registration Notice to NBCi, and the lead managing
underwriter, if any, which notice shall specify the number of shares of
Registrable Securities such Registering Holder desires to offer for sale. NBCi
shall not be permitted to participate in such an offering without the written
consent of the Registering Holder initiating the offering (which consent shall
not be unreasonably withheld). In the event the Registrable Securities
requested to be included by the Registering Holders in the aggregate exceeds the
number of Registrable Securities to be included in the Underwritten Offering,
priority will be determined in accordance with Section 3(c).
(d) POSTPONEMENT OF SHELF REGISTRATION. NBCi will be entitled to
postpone the obligation to file any Shelf Registration Statement for a
reasonable period not in excess of 90 calendar days if NBCi's Board of Directors
determines, in the good faith exercise of its business judgment, that such
registration and offering would materially interfere with BONA FIDE financing
plans or strategic acquisition, disposition or alliance of NBCi that would
require disclosure of information, the premature disclosure of which could
materially and adversely affect NBCi. Notwithstanding the foregoing, in no
event shall the aggregate number of days during any period of 12 consecutive
months during which the Registering Holders are subject to (i) postponement
pursuant to this Section 2(d), (ii) postponement pursuant to Section 3(d) and
(iii) Black-Out pursuant to Section 7 exceed 90 days. If NBCi postpones the
filing of a Shelf Registration Statement, it will promptly notify the Holders in
writing (i) when the events or circumstances permitting such postponement have
ended and (ii) that the decision to postpone was made by the Board of Directors
of NBCi in accordance with this Section 2(d).
Section 3. DEMAND REGISTRATION.
(a) REQUESTS FOR REGISTRATION BY HOLDERS. At any time and from time
to time during which there is no Shelf Registration Statement that is effective
under the Securities Act so as to permit the offer and sale of all Registrable
Securities thereunder, subject to the conditions set forth in this Agreement one
or more Holders will have the right, by written notice delivered to NBCi (a
"DEMAND NOTICE"), to require NBCi to register Registrable Securities under and
in
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accordance with the provisions of the Securities Act (a "DEMAND
REGISTRATION"), PROVIDED that effective on the date of this Agreement and
subject to the conditions set forth herein (i) NBC, on behalf of NBC or GE
Sub, may not make more than four (4) Demand Registrations in total, one of
which can be made on Form S-1 and one of which can be for a Shelf
Registration, and CNET and Kitze, on behalf of Kitze or Disc (for Registrable
Securities held by Disc on the date hereof), may not make more than three (3)
Demand Registrations each, of which, in the case of each of CNET and Kitze,
one of which can be for a Shelf Registration and of which two (2) can be made
on Form S-1 in the case of CNET and its transferees, and one (1) can be made
on Form S-1 in the case of Kitze, Disc and their respective transferees, (ii)
no Demand Notice may be given prior to six (6) months after the effective
date of the immediately preceding Demand Registration, (iii) no such Demand
Registration may be required unless the Holders requesting such Demand
Registration provide to NBCi a certificate (the "AUTHORIZING CERTIFICATE"),
seeking to include Registrable Securities in such Demand Registration with a
market value of at least $25,000,000 (or $50,000,000 in the case of a Demand
Notice for a Shelf Registration) (calculated based on the average closing
sale price of such securities on the principal securities exchange or
quotation system where such securities are listed on the five business days
immediately preceding the date of the Demand Notice) as of the date the
Demand Notice is given, (iv) if a Demand Notice is delivered to NBCi during
the 60 day period commencing on the closing date of the Contribution
Agreement by CNET, such Demand Notice will be given priority over any Demand
Registrations or Shelf Registrations of Registrable Securities until such
registration for CNET is effected, (v) if a Demand Notice is delivered to
NBCi during the 60 day period commencing on the closing date of the
Contribution Agreement from a Holder other than CNET, NBCi will provide CNET
with the opportunity to deliver a Demand Notice, which Demand Notice by CNET
will be given priority over the previously delivered Demand Notice and any
other Demand Notice until such registration for CNET is effected, (vi) if a
Demand Notice is delivered to NBCi during the 12 month period commencing on
the closing date of the Contribution Agreement, such Demand Registration
shall be an Underwritten Offering in accordance with Section 10, and (vii) in
any Underwritten Offering, shares may be excluded by the underwriters based
on market conditions and marketing factors. The Authorizing Certificate
shall set forth (A) the name of each Holder signing such Authorizing
Certificate, (B) the number of Registrable Securities held by each such
Holder, and, if different, the number of Registrable Securities such Holder
has elected to have registered, and (C) the intended methods of disposition
of the Registrable Securities. Notwithstanding the foregoing, a good faith
decision by a Holder to withdraw Registrable Securities from registration
will not affect NBCi's obligations under this Section 3(a) unless the amount
remaining to be registered has a market value of less than $25,000,000 (or
$50,000,000 in the case of a Shelf Registration) (calculated as aforesaid).
(b) FILING AND EFFECTIVENESS. NBCi will file a Registration
Statement relating to any Demand Registration as soon as practicable but in no
event later than 45 days following the date on which the Demand Notice is given,
or 90 days in the case of the first Demand Registration, and will use its best
efforts to cause the same to be declared effective by the SEC as soon as
practicable thereafter. If any Demand Registration is requested to be effected
as a Shelf Registration by the Holders demanding such Demand Registration, NBCi
will keep the Registration Statement filed in respect thereof effective for the
Effective Period.
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Within ten (10) business days after receipt of such Demand Notice,
NBCi will serve written notice thereof (the "NOTICE") to all other Holders and
will, subject to the provisions of Section 3(c), include in such registration
all Registrable Securities with respect to which NBCi receives written requests
for inclusion therein ("REQUEST FOR INCLUSION") within ten (10) business days
after receipt of the Notice by the applicable Holder. In the event that any
other Holder has the right to request a Demand Registration pursuant to the
provisions of Section 3(a), and PROVIDED that more than 60 days have elapsed
since the closing date of the Contribution Agreement, if such Request for
Inclusion includes a Demand Notice on behalf of such Holder, such Holder will be
treated as an initiating Holder for purposes of the Demand Registration. Any
Holder will be permitted to withdraw in good faith all or part of the
Registrable Securities from a Demand Registration at any time prior to the
effective date of such Demand Registration, in which event NBCi will promptly
amend or, if applicable, withdraw the related Registration Statement. In the
event the withdrawing Holder is the sole initiating Holder of such Demand
Registration pursuant to Section 3(a), such demand will count as a Demand
Registration of such Holder unless the withdrawing Holder pays all registration
expenses in connection with such withdrawn registration as described in Section
8; PROVIDED that in the event there has been a Material Adverse Change in the
business or financial condition of NBCi between the date of the Demand Notice
relating to such Demand Registration and the date of the withdrawal, NBCi shall
pay all registration expenses and such registration shall not be counted as a
Demand Registration to which such Holder is entitled pursuant to Section 3(a)
hereof. In the event all of the initiating Holders withdraw, such demand will
count as a Demand Registration of each such Holder unless, in the case of each
such Holder, such Holder pays its pro rata portion of all registration expenses
in connection with such withdrawn registration as described in Section 8;
PROVIDED that in the event there has been a Material Adverse Change in the
business or financial condition of NBCi between the date of the Demand Notice
relating to such Demand Registration and the date of the withdrawal, NBCi shall
pay all registration expenses and such registration shall not be counted as a
Demand Registration to which such Holders are entitled pursuant to Section 3(a)
hereof. For the purpose of this Section 3(b), "Material Adverse Change" shall
mean any change that, individually or in the aggregate with all other changes,
is materially adverse to the business, financial condition or results of
operation of NBCi and its subsidiaries taken as a whole other than any change or
circumstance arising from a decrease of less than 25% of the closing price of
NBCi on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or the National Market System of Nasdaq from the date of the
Demand Notice or the Request for Inclusion, as the case may be.
(c) PRIORITY ON DEMAND REGISTRATION. Subject to the provisions set
forth in Sections 3(a)(iv) and (v) and Section 3(b) regarding CNET's priority,
if Registrable Securities are to be registered pursuant to a Demand
Registration, NBCi shall provide written notice to the other Holders and will
permit all such Holders who request to be included in the Demand Registration to
include any or all Registrable Securities held by such Holders in such Demand
Registration. In connection with any Demand Registration, NBCi may include
securities for its own account and/or for the account of other holders of NBCi's
securities in such registration to the extent agreed to by the underwriters. If
the managing underwriter or underwriters of an Underwritten Offering to which
such Demand Registration relates advises the Holders that the total amount of
Registrable Securities that such Holders intend to include in such Demand
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Registration is in the aggregate such as to materially and adversely affect the
success of such offering, then the number of Registrable Securities to be
included in such Demand Registration will, if necessary, be reduced and there
will be included in such Underwritten Offering the number of Registrable
Securities that, in the opinion of such managing underwriter or underwriters,
can be sold without materially and adversely affecting the success of such
Underwritten Offering, the Registrable Securities of the Holder or Holders
initiating the Demand Registration and NBCi shall receive priority in such
Underwritten Offering to the full extent of the Registrable Securities such
Holder or Holders (including NBCi) desire to sell, PROVIDED that, in the event
the Registrable Securities requested to be included by the initiating Holders
and NBCi in the aggregate exceeds the number of Registrable Securities to be
included in the Underwritten Offering, then:
(i) Registrable Securities requested to be included by CNET in
the Initial CNET Demand will comprise the lesser of (A) at least 50%
of the Registrable Securities included in such offering or (B) all of
the Registrable Securities requested to be included by CNET, with the
remainder of the Registrable Securities in such offering being
allocated to NBCi and Kitze as a direct holder or as the beneficial
owner of Registrable Securities held by Disc as determined in good
faith by the mutual agreement of NBCi and Kitze, it being understood
that the current intention of such parties is that Kitze's allocation
will be in the range of 10% - 15% of the Underwritten Offering;
(ii) if any Registration Statement is proposed to be filed by
NBCi whether or not for sale for NBCi's own account during the six
month period after the Effective Date of the Initial CNET Demand,
Registrable Securities requested to be included by CNET will comprise
the lesser of (A) at least 25% of the Registrable Securities included
in such offering or (B) all of the Registrable Securities requested to
be included by CNET; PROVIDED that in no event will CNET be entitled
to include more than 1,000,000 Registrable Securities in such
offering; PROVIDED FURTHER that, (A) if the number of shares included
by CNET is 500,000 or less, then such inclusion shall be in addition
to the rights contained in this Section 3 and shall not be deemed the
exercise by CNET of one of its Demand Registrations and (B) if the
number of shares included by CNET is more than 500,000, then such
inclusion shall be deemed the exercise by CNET of one of its Demand
Registrations pursuant to this Section 3; and
(iii) except as provided in 3(c)(ii) above, following the Initial
CNET Demand, or, if no such demand is made, following the 60 day
period commencing on the closing date of the Contribution Agreement,
(A) Registrable Securities requested to be included by NBCi will
comprise the lesser of (1) at least 50% of the Registrable Securities
included in such offering or (2) all of the Registrable Securities
requested to be included by NBCi and (B) of the remaining securities
to be included in such Underwriting Offering, Registrable Securities
of each initiating Holder will be included PRO RATA on the basis of
the amount of Registrable Securities requested to be included therein
by each such Holder. Any
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remaining allocation available for sale shall be allocated PRO RATA
among the other Holders on the basis of the amount of Registrable
Securities requested to be included therein by each such Holder.
(d) POSTPONEMENT OF DEMAND REGISTRATION. NBCi will be entitled to
postpone the obligation to file any Demand Registration for a reasonable period
of time not exceeding 90 calendar days (other than the Demand Registration for
the Initial CNET Demand [which may be postponed for a reasonable period of time
not exceeding 60 calendar days]) if NBCi's Board of Directors determines, in the
good faith exercise of its business judgment, that such registration and
offering would materially interfere with BONA FIDE financing plans or strategic
acquisition, disposition or alliance of NBCi that would require disclosure of
information, the premature disclosure of which could materially and adversely
affect NBCi. Notwithstanding the foregoing, in no event shall the aggregate
number of days during any period of 12 consecutive months during which the
Registering Holders are subject to (i) postponement pursuant to this Section
3(d), (ii) postponement pursuant to Section 2(d) and (iii) Black-Out pursuant to
Section 7 exceed 90 days [; PROVIDED, HOWEVER, that any postponement with
respect to an Initial CNET Demand shall be disregarded in determining the
aggregate number of days during any 12-month period]. If NBCi postpones the
filing of a Registration Statement, it will promptly notify the Holders in
writing (i) when the events or circumstances permitting such postponement have
ended and (ii) that the decision to postpone was made by the Board of Directors
of NBCi in accordance with this Section 3(d).
Section 4. PIGGYBACK REGISTRATION.
(a) RIGHT TO PIGGYBACK. If at any time NBCi proposes to file a
Registration Statement whether or not for sale for NBCi's own account, on a form
and in a manner that would also permit registration of Registrable Securities,
including, without limitation, pursuant to Sections 2 and 3 hereof, NBCi shall
give to Holders holding Registrable Securities, written notice of such proposed
filing at least thirty (30) days before the anticipated filing. The notice
referred to in the preceding sentence shall offer Holders the opportunity to
register such amount of Registrable Securities as each Holder may request (a
"PIGGYBACK REGISTRATION"). Subject to Section 4(b), NBCi will include in each
such Piggyback Registration all Registrable Securities with respect to which
NBCi has received written requests for inclusion therein. The Holders will be
permitted to withdraw all or part of the Registrable Securities from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration.
NBCi will not be obligated to effect any registration of
Registrable Securities under this Section 4 as a result of the registration
of any of its securities in connection with mergers, acquisitions, exchange
offers, dividend reinvestment, transfers of assets, reclassifications and
share purchase plans offered solely to current holders of Class A Common
Stock, rights offerings or option or other employee benefit plans.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. NBCi will cause the
managing underwriter or underwriters of a proposed Underwritten Offering on
behalf of NBCi to permit Holders to include therein all such Registrable
Securities requested to be so included on the same
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terms and conditions as any securities of NBCi included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters of
such Underwritten Offering delivers an opinion to the Holders to the effect
that (i) the total amount of securities that such Holders and NBCi propose to
include in such Underwritten Offering or (ii) the effect of the potential
withdrawal of any Registrable Securities by any Holder (except any Holder who
has theretofore waived such Holder's right to withdraw all or part of its
Registrable Securities pursuant to Section 4(a)) prior to the effective date
of the Registration Statement relating to such Underwritten Offering, is such
as to materially and adversely affect the success of such offering, then the
amount of securities to be included therein for the account of Holders will,
if necessary, be reduced and there will be included in such Underwritten
Offering the number of Registrable Securities that, in the opinion of such
managing underwriter or underwriters, can be sold without materially and
adversely affecting the success of such Underwritten Offering. The securities
of any Holder or Holders of securities initiating the registration and NBCi
shall receive priority in such Underwritten Offering to the full extent of
the Registrable Securities such Holder or Holders and NBCi desire to sell and
the remaining allocation available for sale, if any, shall be allocated PRO
RATA among the other Holders on the basis of the amount of Registrable
Securities requested to be included therein by each such Holder; PROVIDED,
HOWEVER, if any Registration Statement is proposed to be filed by NBCi
whether or not for sale for NBCi's own account during the six month period
after the Effective Date of the Initial CNET Demand, Registrable Securities
requested to be included by CNET will comprise the lesser of (A) at least 25%
of the Registrable Securities included in such offering or (B) all of the
Registrable Securities requested to be included by CNET; PROVIDED that in no
event will CNET be entitled to include more than 1,000,000 Registrable
Securities in such offering; PROVIDED FURTHER that, (A) if the number of
shares included by CNET is 500,000 or less, then such inclusion shall be in
addition to the rights contained in this Section 3 and shall not be deemed
the exercise by CNET of one of its Demand Registrations and (B) if the number
of shares included by CNET is more than 500,000, then such inclusion shall be
deemed the exercise by CNET of one of its Demand Registrations pursuant to
this Section 3. The managing underwriter or underwriters, applying the same
standard, may also exclude entirely from such offering all Registrable
Securities proposed to be included in such offering to the extent the
Registrable Securities are not of the same class as securities of NBCi
included in such offering.
Section 5. REGISTRATION PROCEDURES. In connection with NBCi's
registration obligations pursuant to Sections 2, 3 and 4, NBCi will effect such
registrations to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
NBCi will as soon as practicable, but in no event later than 45 days after
delivery of the Demand Notice, or 90 days in the case of the initial Demand
Registration, and in each case to the extent applicable:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof, and use
its best efforts to cause each such Registration Statement to become effective
and remain effective as provided herein; PROVIDED, HOWEVER, that before filing a
Registration Statement or Prospectus or any amendments or supplements thereto
(including documents that would be incorporated or deemed to be incorporated
therein by reference) NBCi
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will furnish to the Holders copies of all such documents proposed to be filed
(but excluding schedules, documents to be incorporated or deemed incorporated
therein by reference and exhibits, unless requested in writing by such
Holders or their counsel), which documents will be subject to the review of
such Holders and any underwriters, and NBCi will not file any such
Registration Statement or amendment thereto or any Prospectus or any
supplement thereto (including such documents that, upon filing, will be
incorporated or deemed to be incorporated by reference therein) to which any
Holder of the Registrable Securities covered by such Registration Statement
or the managing underwriter, if any, shall reasonably object on a timely
basis;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective as provided herein; cause the related
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or in such Prospectus as so supplemented;
(c) notify the selling Holders and the managing underwriters, if
any, promptly, and (if requested by any such person) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus
or for additional information, (iii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if at any time the representations and
warranties of NBCi contained in any agreement contemplated by Section 5(n)
(including any underwriting agreement) cease to be true and correct in any
material respect, (v) of the receipt by NBCi of any notification with respect
to the suspension of the qualification or exemption from qualification of any
of the Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose and (vi) of the occurrence
of any event that makes any statement made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the
making of any changes in a Registration Statement, Prospectus or any such
document so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and, in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(d) use every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification
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(or exemption from qualification) of any of the Registrable Securities for
sale in any jurisdiction, at the earliest possible moment;
(e) if requested by the managing underwriters, if any, or any Holder
of the Registrable Securities being registered, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and such Holders agree should be included therein
as may be required by applicable law and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable
after NBCi have received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; PROVIDED, HOWEVER, that NBCi
will not be required to take any actions under this Section 5(e) that are not,
in the opinion of counsel for NBCi, in compliance with applicable law;
(f) furnish to each selling Holder and each managing underwriter, if
any, without charge, at least one conformed copy of the Registration Statement
and any post-effective amendment thereto, including financial statements (but
excluding schedules, all documents incorporated or deemed incorporated therein
by reference and all exhibits, unless requested in writing by such Holder, such
Holder's counsel or such underwriter);
(g) deliver to each selling Holder and the underwriters, if any,
without charge as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such persons may reasonably request; and NBCi hereby
consents to the use of such Prospectus or each amendment or supplement thereto
by each of the selling Holders and the underwriters, if any, in connection with
the offering and sale of the Registrable Securities covered by such Prospectus
or any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders, the underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions within the United States as any seller or underwriter
reasonably requests in writing; use all reasonable efforts to keep such
registration or qualification (or exemption therefrom) effective during the
period the applicable Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in each such jurisdiction of the Registrable Securities covered by
the applicable Registration Statement; PROVIDED, HOWEVER, that NBCi will not be
required to (i) qualify to do business in any jurisdiction where it is not then
so qualified or (ii) take any action that would subject it to service of process
in any such jurisdiction where it is not then so subject;
(i) cooperate with the selling Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, shall request at least two business days prior to
any sale of Registrable Securities to the underwriters;
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(j) use all reasonable efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities within the United
States except as may be required solely as a consequence of the nature of any
selling Holder's business, in which case NBCi will cooperate in all reasonable
respects with the filing of such Registration Statement and the granting of such
approvals as may be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(k) upon the occurrence of any event contemplated by Section
5(c)(vi), prepare a supplement or post-effective amendment to each Registration
Statement or a supplement to the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(l) use its best efforts to cause all Registrable Securities covered
by such Registration Statement to be either (i) listed on each securities
exchange, if any, on which similar securities issued by NBCi are then listed or,
if no similar securities issued by NBCi are then so listed, on the New York
Stock Exchange or another national securities exchange if the securities qualify
to be so listed or (ii) authorized to be quoted on Nasdaq or the National Market
System of Nasdaq, if the securities qualify to be so quoted;
(m) as needed, (i) engage an appropriate transfer agent and provide
the transfer agent with printed certificates for the Registrable Securities in a
form eligible for deposit with The Depository Trust Company and (ii) provide a
CUSIP number for the Registrable Securities;
(n) enter into such customary agreements (including, in the event of
an Underwritten Offering, an underwriting agreement in form, scope and substance
as is customary in underwritten offerings) and take all such other commercially
reasonable and customary actions in connection therewith (including, without
limitation, entering into and causing its officers, directors and affiliates to
enter into customary lock-up agreements and taking other actions reasonably
requested by the initiating Holder or, if none, the Holders holding a majority
of the Registrable Securities being sold or, in the event of an Underwritten
Offering, those reasonably requested by the managing underwriters) in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (i) make such
representations and warranties to the selling Holders holding such Registrable
Securities and the underwriters, if any, with respect to the businesses of NBCi
and its subsidiaries, the Registration Statement, Prospectus and documents
incorporated by reference or deemed incorporated by reference therein, if any,
in each case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to NBCi and updates thereof, which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the initiating Holder or,
if none, the Holders holding a majority of the Registrable Securities
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being sold, addressed to such selling Holder and each of the underwriters, if
any, covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested
by such Holders and underwriters; (iii) use reasonable efforts to obtain
"comfort" letters and updates thereof from the independent certified public
accountants of NBCi (and, if necessary, any other certified public
accountants of any subsidiary of NBCi or of any business acquired by NBCi for
which financial statements and financial data is, or is required to be,
included in the Registration Statement), addressed to each selling Holder and
each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "comfort" letters in
connection with underwritten offerings; and (iv) deliver such documents and
certificates as may be reasonably requested by the initiating Holder or, if
none, the Holders holding a majority of the Registrable Securities being
sold, and the managing underwriters, if any, to evidence the continued
validity of the representations and warranties of NBCi and its subsidiaries
made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or similar
agreement entered into by NBCi. The foregoing actions will be taken in
connection with each closing under such underwriting or similar agreement as
and to the extent required thereunder;
(o) make available for reasonable inspection during normal business
hours by a representative of the Holders holding Registrable Securities being
sold, any underwriter participating in any disposition of Registrable
Securities, and any attorney or accountant retained by such selling Holders or
underwriter, all financial and other records, pertinent corporate documents and
properties of NBCi and its subsidiaries, and cause the officers, directors and
employees of NBCi and its subsidiaries to supply all information reasonably
requested by any such representative, underwriter, attorney or accountant in
connection with such Registration Statement; PROVIDED, HOWEVER, that any
records, information or documents that are designated by NBCi in writing as
confidential at the time of delivery of such records, information or documents
will be kept confidential by such persons unless (i) such records, information
or documents are in the public domain or otherwise publicly available, (ii)
disclosure of such records, information or documents is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities, or (iii) disclosure of such records, information or documents, upon
advice of counsel to such person, is otherwise required by law (including,
without limitation, pursuant to the requirements of the Securities Act);
PROVIDED FURTHER however that in the case of (ii) or (iii) NBCi shall only be
required to disclose that portion which counsel advises NBCi is legally required
and the Holders shall use their commercially reasonable efforts (at NBCi's
expense) to preserve the confidentiality of such documents including, without
limitation, by cooperating with NBCi to obtain an appropriate protective order
or other reliable assurance that confidentiality will be accorded and maintained
to the maximum extent possible;
(p) comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
calendar days after the end of any 12-month period (or 90 calendar days after
the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts Underwritten Offering, or (ii)
if not sold to
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<PAGE>
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of NBCi, after the effective date of a Registration Statement,
which statements shall cover said 12-month period;
(q) take any and all actions necessary to become eligible, and use
all reasonable efforts to remain eligible to file registration statements on
Form S-3 and do any and all other acts or things necessary or advisable to
comply with applicable rules and regulations regarding Form S-3, including, but
not limited to, making all filings required by the SEC and complying with any
and all time limits in connection therewith;
(r) use all reasonable efforts to file the reports required to be
filed by it under the Securities Act and the Exchange Act in a timely manner
and, if at any time NBCi is not required to file such reports, it will, upon the
request of any of the Holders of the Registrable Securities, make publicly
available other information so long as necessary to permit sales of Registrable
Securities pursuant to Rule 144 and 144A; will take such further action as any
Holder of the Registrable Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A; and upon the request of any Holder
shall deliver to the such Holder a written statement as to whether it has
complied with this paragraph (r); and
(s) in connection with any Underwritten Offering, cause appropriate
members of management, including, without limitation, NBCi's Chief Executive
Officer, to cooperate and participate on a reasonable basis in the underwriters'
"road show" conferences related to such offering.
Section 6. INFORMATION. NBCi may require each selling Holder of
Registrable Securities as to which any registration is being effected pursuant
to Section 2, 3 or 4 to furnish to NBCi such information regarding the
distribution of such Registrable Securities as NBCi may, from time to time,
reasonably request in writing and NBCi may exclude from such registration the
Registrable Securities of any selling Holder who unreasonably fails to furnish
such information within a reasonable time after receiving such request. Each
such selling Holder promptly will notify NBCi of the occurrence of any event
that makes any of such information untrue in any material respect or that
requires making a change in such information so that it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated or necessary to make the statement therein, in light of the
circumstances under which they were made, not misleading.
Section 7. SUSPENSION. Each Holder will be deemed to have agreed by
virtue of its acquisition of Registrable Securities that, in connection with any
registrations of Registrable Securities effected pursuant to Section 2, 3 or 4,
upon receipt of any notice from NBCi of the occurrence of any event of the kind
described in Section 5(c)(ii), 5(c)(iii), 5(c)(v) or 5(c)(vi) ("SUSPENSION
NOTICE"), NBCi's obligation to cause any Registration Statement to become
effective or to amend or supplement such Registration Statement shall be
suspended and such Holder will forthwith discontinue disposition of such
Registrable Securities covered by such
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<PAGE>
Registration Statement or Prospectus (a "BLACK-OUT") until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated
by Section 5(k), or until it is advised in writing (the "ADVICE") by NBCi
that the use of the applicable Prospectus may be resumed, and such Holder has
received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus.
Except as expressly provided herein, there shall be no limitation with regard
to the number of Suspension Notices that NBCi is entitled to give hereunder;
PROVIDED, HOWEVER, that in no event shall the aggregate number of days during
any period of 12 consecutive months during which the Holders are subject to
(i) postponement pursuant to Section 2(d), (ii) postponement pursuant to
Section 3(d) and (iii) Black-Out pursuant to this Section 7 exceed 90 days;
PROVIDED, FURTHER, that any postponement with respect to an Initial CNET
Demand shall be disregarded in determining the aggregate number of days
during any 12-month period]. In the event NBCi shall give a Suspension
Notice, the time period prescribed in Section 2 or Section 3 will be extended
by the number of days during the time period from and including the date of
the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement shall have
received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) or (y) the Advice.
Section 8. REGISTRATION EXPENSES. Except as described in Section 3(b),
all fees and expenses incident to the performance of or compliance with this
Agreement by NBCi will be borne by NBCi whether or not any of the Registration
Statements become effective. Such fees and expenses will include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses for compliance with securities or "blue sky" laws), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company and of printing a reasonable number of prospectuses if
the printing of such prospectuses is requested by any Holder of Registrable
Securities included in any Registration Statement), (iii) messenger, telephone
and delivery expenses incurred by NBCi, (iv) fees and disbursements of counsel
for NBCi incurred by NBCi, (v) fees and disbursements of all independent
certified public accountants referred to in Section 5(n)(iii) (including the
expenses of any special audit and "comfort" letter required by or incident to
such performance) incurred by NBCi, (vi) Securities Act liability insurance, if
any, if customarily incurred and (vii) reasonable fees and expenses of one
counsel retained by the Holders in connection with the registration and sale of
their Registrable Securities (which counsel will be selected by the Holders of a
majority of the Registrable Securities being sold). In addition, NBCi will pay
internal expenses (including without limitation all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with the listing
of the securities to be registered on any securities exchange or quotation
system on which similar securities issued by NBCi are then listed and the fees
and expenses of any person, including special experts, retained by NBCi. In no
event, however, will NBCi be responsible for any underwriting discount or
selling commission with respect to any sale of Registrable Securities pursuant
to this Agreement.
Section 9. INDEMNIFICATION.
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<PAGE>
(a) INDEMNIFICATION BY NBCi. NBCi will, without limitation as to
time, indemnify and hold harmless, to the fullest extent permitted by law, each
Holder holding Registrable Securities registered pursuant to this Agreement, the
officers, directors and agents and employees of each of them, each person who
controls such a Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of any such controlling person, from and against all losses, claims,
damages, liabilities, costs (including without limitation the costs of
investigation and attorneys' fees) and expenses (collectively, "LOSSES"), as
incurred, arising out of or based upon any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, Prospectus or form of
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are based upon
information furnished in writing to NBCi by such Holder expressly for use
therein.
(b) INDEMNIFICATION BY HOLDERS. In connection with any Registration
Statement in which a Holder is participating, such Holder will furnish to NBCi
in writing such information as NBCi reasonably requests for use in connection
with any Registration Statement, Prospectus or preliminary prospectus and will
indemnify, to the fullest extent permitted by law, NBCi, its directors and
officers, agents and employees, each person who controls NBCi (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling persons,
from and against all Losses, as incurred, arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or form of Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by such Holder
to NBCi expressly for use in such Registration Statement, Prospectus or
preliminary prospectus and was used by NBCi in the preparation of such
Registration Statement, Prospectus or preliminary prospectus. In no event will
the liability of any selling Holder hereunder be greater in amount than the
dollar amount of the proceeds (net of payment of all expenses) received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any person shall
become entitled to indemnity hereunder (an "INDEMNIFIED PARTY"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "INDEMNIFYING PARTY") of any claim or of the
commencement of any action or proceeding with respect to which such indemnified
party seeks indemnification or contribution pursuant hereto; PROVIDED, HOWEVER,
that the failure to so notify the indemnifying party will not relieve the
indemnifying party from any obligation or liability except to the extent that
the indemnifying party has been prejudiced materially by such failure. The
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER,
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<PAGE>
that an indemnified party (together with all other indemnified parties which
may be represented without conflict by one counsel) shall have the right to
retain one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interest between such indemnified party and any
other party represented by such counsel in such proceeding. All fees and
expenses (including any fees and expenses incurred in connection with
investigating or preparing to defend such action or proceeding) will be paid
to the indemnified party, as incurred, within five calendar days of written
notice thereof to the indemnifying party (regardless of whether it is
ultimately determined that an indemnified party is not entitled to
indemnification hereunder). The indemnifying party will not consent to entry
of any judgment or enter into any settlement or otherwise seek to terminate
any action or proceeding in which any indemnified party is or could be a
party and as to which indemnification or contribution could be sought by such
indemnified party under this Section 9, unless such judgment, settlement or
other termination includes as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release, in form and
substance satisfactory to the indemnified party, from all liability in
respect of such claim or litigation for which such indemnified party would be
entitled to indemnification hereunder.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 9 is unavailable to an indemnified party under Section 9(a) or 9(b) in
respect of any Losses or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, will, severally but not jointly, contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party or indemnifying parties, on the
one hand, and such indemnified party, on the other hand, will be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or related to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses will be deemed to include any legal
or other fees or expenses incurred by such party in connection with any action
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 9(d), an
indemnifying party that is a selling Holder will not be required to
contribute any amount in excess of the amount by which the net proceeds which
the Registrable Securities sold by such indemnifying party and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of
17
<PAGE>
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of
NBCi hereunder will be in addition to any liability NBCi may otherwise have
hereunder or otherwise. The provisions of this Section 9 will survive so long
as Registrable Securities remain outstanding, notwithstanding any permitted
transfer of the Registrable Securities by any Holder thereof or any termination
of this Agreement.
Section 10. UNDERWRITTEN REGISTRATIONS.
(a) INITIAL CNET DEMAND. For the Demand Registration effecting
the Initial CNET Demand, CNET shall have the right to appoint the investment
banker or manager to act as lead underwriter for the Underwritten Offering,
PROVIDED that (i) such underwriter is a first-class, nationally recognized
underwriter who is prepared to underwrite the offering and (ii) NBCi has
given its prior written consent to the appointment, which consent shall not
be unreasonably withheld; PROVIDED that an underwriter's lack of commitment
to provide customary market-making and research support services to NBCi
following the offering would constitute a reasonable ground for NBCi to
withhold its consent. For the Demand Registration effecting the Initial CNET
Demand, NBCi shall have the right to appoint the investment banker or manager
to act as co-lead underwriter for the Underwritten Offering, PROVIDED that
such underwriter is a first-class, nationally recognized underwriter who is
prepared to underwrite the offering. The co-lead underwriters for the Demand
Registration effecting the Initial CNET Demand shall be treated equally in
terms of percentage of the gross underwriting spread. Further, CNET and NBCi
may each appoint one investment banker to act as co-manager for the
Underwritten Offering PROVIDED that (i) such manager is a first-class,
nationally recognized manager who is prepared to manage the offering and (ii)
NBCi has given its prior written consent to the appointment of the co-manager
by CNET, which consent shall not be unreasonably withheld; PROVIDED that a
co-manager's lack of commitment to provide customary market-making and
research support services to NBCi following the offering would constitute a
reasonable ground for NBCi to withhold its consent.
(b) OTHER DEMAND REGISTRATIONS. If any of the Registrable Securities
included in any Demand Registration other than the Initial CNET Demand are to be
sold in an Underwritten Offering, the Holders holding a majority of the
Registrable Securities included in the Demand Notice may select an investment
banker or investment bankers and manager or managers to manage the Underwritten
Offering. If any Piggyback Registration is an Underwritten Offering, NBCi will
have the exclusive right to select the investment banker or investment bankers
and managers to administer the offering. Each party hereto agrees that, in
connection with any Underwritten Offering hereunder, it shall undertake to offer
customary indemnification to the participating underwriters. No Holder of
Registrable Securities shall be entitled to participate in an Underwritten
Offering unless such Holder enters into, and performs its obligations under, one
or more underwriting agreements and any related agreements and documents in the
form that such Holder shall agree to with the lead managing underwriter of the
transaction. If any Holder disapproves of the terms of any underwriting, it may
elect, prior to the execution of any
18
<PAGE>
underwriting agreement, to withdraw therefrom by written notice to NBCi and
the lead managing underwriter.
Section 11. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by any party of its
obligations under this Agreement, each party, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Each party
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any provision of this Agreement and
hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it will waive the defense that a remedy at law would
be adequate.
(b) AMENDMENTS AND WAIVERS. The provisions of Section 2 of this
Agreement may only be amended, modified or supplemented with the prior written
consent of each of NBCi, NBC, CNET and Kitze, and each of their respective
transferees permitted under this Agreement, so long as such Holder holds
Registrable Securities with a market value of at least $50,000,000. The
provisions of Section 3 of this Agreement may only be amended, modified or
supplemented with the prior written consent of each of NBCi, NBC, CNET and
Kitze, and each of their respective transferees permitted under this Agreement,
so long as such Holder holds Registrable Securities with a market value of at
least $25,000,000. The provisions of Sections 1 and 4 through 11 of this
Agreement may only be amended, modified or supplemented with the prior written
consent of each of NBCi, NBC, CNET and Kitze, and each of their respective
transferees, so long as such Holder holds Registrable Securities with a market
value of at least $5,000,000. Upon the effectuation of each such amendment or
waiver, NBCi shall as soon as reasonably practicable give written notice thereof
to the Holders who have not previously consented thereto in writing.
(c) NOTICES. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid or courier or overnight delivery service to NBCi and each Holder,
respectively, at the following addresses (or at such other address for any party
as shall be specified by like notice, PROVIDED that notices of a change of
address shall be effective only upon receipt thereof):
If to NBCi:
NBC Internet, Inc.
300 Montgomery Street
Suite 300
San Francisco, California 94104
Attn.: General Counsel
Telecopy: (415) 288-2578
With copies to: Morrison & Foerster LLP
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<PAGE>
425 Market Street
San Francisco, California 94105
Attn.: Bruce Alan Mann
Telecopy: (415) 268-7522
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Attn.: Allen L. Weingarten
Telecopy: (212) 468-7900
If to CNET: CNET, Inc.
150 Chestnut Street
San Francisco, California 94111
Attn.: Douglas N. Woodrum, Chief Financial Officer
Telecopy: (415) 395-9330
With a copies to: CNET, Inc.
150 Chestnut Street
San Francisco, California 94111
Attn.: Sharon Le Duy, General Counsel
Telecopy: (415) 395-9330
Hughes & Luce, L.L.P.
1717 Main Street, Suite 2800
Dallas, Texas 75201
Attn.: R. Clayton Mulford
Telecopy: (214) 939-5849
If to Disc or Kitze:
Chris Kitze
300 Montgomery Street
Suite 300
San Francisco, California 94104
Telecopy: (415) 288-2580
If to NBC or GE Sub: National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, NY 10022
Attn.: Marty Yudkovitz
Telecopy: (212) 664-5561
With a copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
20
<PAGE>
New York, New York 10017
Attn.: Richard Capelouto, Esq.
Telecopy: (212) 455-2502
(d) MERGER OR CONSOLIDATION OF NBCI. If NBCi is a party to any
merger or consolidation pursuant to which the Registrable Securities are
converted into or exchanged for securities or the right to receive securities of
any other person ("CONVERSION SECURITIES"), the issuer of such Conversion
Securities shall assume (in a writing delivered to all Holders) all obligations
of NBCi hereunder. NBCi will not effect any merger or consolidation described
in the immediately preceding sentence unless the issuer of the Conversion
Securities complies with this Section 11(d).
(e) SUCCESSORS AND ASSIGNS. Any Holder may assign, in whole or in
part, any of its rights and obligations hereunder to any person who acquires
from such Holder at least $5 million worth of such Holder's Registrable
Securities (calculated based on the average closing price of such securities on
the principal securities exchange or quotation system where such securities are
listed on the five business days immediately preceding the date of such
assignment); PROVIDED, HOWEVER, that any rights pursuant to Section 2 of this
Agreement can only be assigned to (i) a person who acquires at least $50 million
of such Holder's Registrable Securities (calculated as aforesaid), (ii) a
person, in whole and not in part, and (iii) a person who is not a Newco
Competitor, as such term is defined in the Brand Integration and License
Agreement, dated as of May 8, 1999, between NBC Multimedia, Inc. and NBC or,
with respect to an assignment by CNET, a person (including a Newco Competitor)
who has acquired all or substantially all of the stock or assets of CNET through
merger, stock purchase, asset sale or otherwise; PROVIDED that in the event of
such an assignment by CNET, (i) such assignee shall not have the right to cause
an Initial CNET Demand, and (ii) the number of days for which a Shelf
Registration that registers only such assignee's shares (and/or shares issuable
by NBCi) may be postponed or Blacked-Out shall be increased from 90 days to 180
days. Any transferee of all or a portion of the Registrable Securities shall
assume all of the rights and obligations of a Holder hereunder to the extent it
agrees in writing, to be bound by all of the provisions applicable hereunder to
the transferring Holder (such acknowledgment being evidenced by execution of a
Counterpart and Acknowledgment substantially in the form of EXHIBIT A). Subject
to the requirements of this Section 11(e), this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed will be deemed to be an original and all of which taken
together will constitute one and the same instrument.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and will not limit or otherwise affect the meaning.
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<PAGE>
(h) GOVERNING LAW. This agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
executed and performed within such State.
(i) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein will remain in full force and effect and will in
no way be affected, impaired or invalidated, and the parties hereto will use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
(j) TERMINATION. This Agreement shall terminate with respect to each
Holder and transferee permitted under this Agreement, including, without
limitation, any rights of such Holder or transferee pursuant to Section 11(b),
on the date upon which such Holder or transferee shall be able to dispose of all
of their remaining Registrable Securities in one day without registration
pursuant to Rules 144 or 145 of the Securities Act.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
[SIGNATURE PAGE FOLLOWS]
22
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NBC Internet, Inc.
By: /s/ Chris Kitze
-----------------------------------
Name: Chris Kitze
Title: Chief Executive Officer
National Broadcasting Company, Inc.
By: /s/ Mark W. Begor
-----------------------------------
Name: Mark W. Begor
Title: Executive Vice President
GE Investments Subsidiary, Inc.
By: /s/ Robert E. Healing
-----------------------------------
Name: Robert E. Healing
Title: Vice President
CNET, Inc.
By: /s/ Douglas N. Woodrum
-----------------------------------
Name: Douglas N. Woodrum
Title: Executive Vice President and
Chief Financial Officer
23
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Flying Disc Investments Limited Partnership
By: /s/ Chris Kitze
----------------------------------------
Name: Chris Kitze
Title: Authorized Signatory
/s/ Chris Kitze
- -------------------------------------------
Chris Kitze
24
<PAGE>
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
COUNTERPART AND ACKNOWLEDGMENT
TO: NBC Internet, Inc.
RE: The Registration Rights Agreement (the "Agreement") dated as
of November 30, 1999, by and among NBCi and the Holders
(as defined in the Agreement)
The undersigned hereby agrees to be bound by the terms of the
Agreement as a party to the Agreement, and shall be entitled to all benefits of
the Holders (as defined in the Agreement) and shall be subject to all
obligations and restrictions of the Holders pursuant to the Agreement, as fully
and effectively as though the undersigned had executed a counterpart of the
Agreement together with the other parties to the Agreement. The undersigned
hereby acknowledges having received and reviewed a copy of the Agreement.
DATED this _____ day of ____________, _____
________________________________________________
By:_____________________________________________
Title:__________________________________________
Number of
Shares of
Registrable Securities:____________________
25
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Registration Rights Agreement
among
National Broadcasting Company, Inc.
GE Investments Subsidiary, Inc.
CNET, Inc.
Flying Disc Investments Limited Partnership
Mr. Chris Kitze
and
NBC Internet, Inc.
(formerly known as "Xenon 2, Inc.")
Dated: November 30, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
PAGE
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TABLE OF CONTENTS
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<S> <C>
Section 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 2. SHELF REGISTRATION OF RESALES. . . . . . . . . . . . . . . . . . . . . .3
(a) SHELF REGISTRATION STATEMENT.. . . . . . . . . . . . . . . . . . . . . .3
(b) MAINTENANCE OF EFFECTIVENESS.. . . . . . . . . . . . . . . . . . . . . .3
(c) OFFERINGS AND SALES. . . . . . . . . . . . . . . . . . . . . . . . . . .4
(d) POSTPONEMENT OF SHELF REGISTRATION . . . . . . . . . . . . . . . . . . .4
Section 3. DEMAND REGISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . .4
(a) REQUESTS FOR REGISTRATION BY HOLDERS . . . . . . . . . . . . . . . . . .4
(b) FILING AND EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . .5
(c) PRIORITY ON DEMAND REGISTRATION. . . . . . . . . . . . . . . . . . . . .6
(d) POSTPONEMENT OF DEMAND REGISTRATION. . . . . . . . . . . . . . . . . . .8
Section 4. PIGGYBACK REGISTRATION.. . . . . . . . . . . . . . . . . . . . . . . . .8
(a) RIGHT TO PIGGYBACK . . . . . . . . . . . . . . . . . . . . . . . . . . .8
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. . . . . . . . . . . . . . . . . . .8
Section 5. REGISTRATION PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . .9
Section 6. INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7. SUSPENSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8. REGISTRATION EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) INDEMNIFICATION BY NBCi. . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
(b) INDEMNIFICATION BY HOLDERS . . . . . . . . . . . . . . . . . . . . . . 16
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS . . . . . . . . . . . . . . . . 16
(d) CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 10. UNDERWRITTEN REGISTRATIONS.. . . . . . . . . . . . . . . . . . . . . . 17
(a) INITIAL CNET DEMAND. . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) OTHER DEMAND REGISTRATIONS . . . . . . . . . . . . . . . . . . . . . . 18
Section 11. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(e) SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(g) HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(h) GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(i) SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(k) ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
<PAGE>
EXHIBIT 8
VOTING AND RIGHT OF FIRST OFFER AGREEMENT
VOTING AND RIGHT OF FIRST OFFER AGREEMENT, dated as of November 30,
1999 (the "AGREEMENT"), between National Broadcasting Company, a Delaware
corporation ("NBC"), and CNET, Inc., a Delaware corporation (together with its
successors and permitted assigns, "CNET").
WHEREAS, CNET, Xoom.com, Inc., a Delaware corporation ("XOOM"), Xenon
2, Inc., a Delaware corporation ("XENON 2"), and Xenon 3, Inc., a Delaware
corporation, have entered into an Agreement and Plan of Contribution, Investment
and Merger, dated as of the date hereof (the "XENON 2 MERGER AGREEMENT",
capitalized terms not otherwise defined herein shall have the meaning given to
them in the Xenon 2 Merger Agreement; and pursuant to which CNET will become a
holder of shares of the Class A common stock, $.0001 par value, of Xenon 2 (the
"COMPANY COMMON STOCK");
WHEREAS, NBC, Neon Media Corporation, a Delaware corporation
("NMC"), Xenon 2 and Xoom have entered into an Agreement and Plan of
Contribution, Investment and Merger, dated as of the date hereof (the "NMC
MERGER AGREEMENT"), pursuant to which NMC will merge with and into Xenon 2;
and
WHEREAS, it is a condition to the closing of the transactions
contemplated by the Xenon 2 Merger Agreement and the NMC Merger Agreement that
NBC and CNET enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein and intending to be legally bound hereby, the parties
agree as follows:
AGREEMENT
1. REPRESENTATIONS AND WARRANTIES OF CNET. CNET represents and
warrants to NBC as follows:
(a) OWNERSHIP OF SECURITIES. Upon consummation of the transactions
contemplated by the Xenon 2 Merger Agreement and the NMC Merger Agreement at the
Effective Time, CNET will be the record and beneficial owner of, and have good
and marketable title to, the number of shares of Company Common Stock (the
"CLOSING DATE SECURITIES") (together with any shares of Company Common Stock
hereafter acquired by CNET (including through the exercise of options or similar
instruments), the "SUBJECT SECURITIES") set forth on the signature page to this
Agreement. CNET does not own of record or beneficially any shares of capital
stock of the Company on the date hereof other than the Closing Date Securities.
CNET has sole voting power and sole power to issue instructions with respect to
the voting of the Closing Date Securities and sole power of disposition of the
Closing Date Securities.
(b) POWER; BINDING AGREEMENT. CNET has full power and authority to
enter into and perform all of its obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by CNET and
constitutes a valid and binding agreement of
<PAGE>
2
CNET, enforceable against CNET in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
(c) NO CONFLICTS. No filing with, and no permit, authorization,
consent or approval of, any state or federal governmental body or authority or
any other person or entity is necessary for the execution of this Agreement by
CNET and the consummation by CNET of the transactions contemplated hereby, other
than pursuant to the HSR Act or any filing, permit, authorization, consent or
approval, the failure of which to obtain would not reasonably be expected to
prevent CNET from performing its obligations under this Agreement, and neither
the execution and delivery of this Agreement by CNET nor the consummation by
CNET of the transactions contemplated hereby nor compliance by CNET with any of
the provisions hereof will conflict with or result in any breach of any
applicable organizational documents or instruments applicable to CNET, result in
a violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third-party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which CNET is a party or by which the Subject
Securities may be bound or violate any order, writ, injunction, decree,
judgment, statute, rule or regulation applicable to CNET as of the date hereof,
other than such violations, breaches or defaults that would not reasonably be
expected to prevent CNET from performing its obligations under this Agreement.
2. AGREEMENT TO VOTE SHARES. At every meeting of the stockholders of
the Company called with respect to any Takeover Proposal, Material Transaction
Proposal or transaction or occurrence which if publicly proposed and offered to
the Company and its stockholders (or any of them) would be the subject of a
Takeover Proposal or Material Transaction Proposal (collectively, a "SUBJECT
PROPOSAL"), and at every adjournment of any such meeting, and on every action or
approval by written consent of the stockholders of the Company with respect to
any Subject Proposal, CNET irrevocably agrees that it shall vote (or cause to be
voted) all the Subject Securities that it beneficially owns on the record date
of any such vote or action to ratify, approve and adopt any and all actions
adopted or approved by NBC, and against any and all actions voted against by
NBC. CNET shall not commit or agree to take any action inconsistent with the
foregoing. 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 5% or more of the assets (based on the fair market
value thereof) of Xenon 2 and its Subsidiaries, taken as a whole, or of 5% or
more of any class of equity securities of Xenon 2 or any of its Subsidiaries or
any tender offer or exchange offer (including by Xenon 2 or its Subsidiaries)
that if consummated would result in any person beneficially owning 5% or more of
any class of equity securities of Xenon 2 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 Xenon 2 or any of its Subsidiaries. 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
<PAGE>
3
but replacing "5%" with "50%" each place "5%" is used in such definition, (B)
a sale of all or substantially all of the assets of Xenon 2 and its
Subsidiaries or (C) a merger or consolidation of Xenon 2 as a result of which
the stockholders of Xenon 2 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)
3. IRREVOCABLE PROXY. CNET hereby grants to, and appoints NBC and
the President and Treasurer of NBC and the Secretary of NBC, in their
respective capacities as officers of NBC, and any individual who shall
hereafter succeed to any such office of NBC, and any other designee of NBC,
each of them individually, CNET's proxy and attorney-in-fact (with full power
of substitution) to vote or act by written consent with respect to the
Subject Securities in accordance with Section 2 hereof. This proxy is
coupled with an interest and shall be irrevocable, and CNET will take such
further action or execute such other instruments as may be necessary to
effectuate the intent of this proxy and hereby revokes any proxy previously
granted by it with respect to the Subject Securities; provided that this
proxy shall be automatically revoked without any further action on the part
of NBC and CNET upon the termination of this Agreement pursuant to Section 14
hereof.
4. REPRESENTATIONS AND WARRANTIES OF NBC. NBC represents and
warrants, to CNET as follows:
(a) POWER; BINDING AGREEMENT. NBC has full power and authority to
enter into and perform all of its obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by NBC and
constitutes a valid and binding agreement of NBC, enforceable against NBC in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws relating to
or affecting creditors generally, by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
or by an implied covenant of good faith and fair dealing.
(b) NO CONFLICTS. No filing with, and no permit, authorization,
consent or approval of, any state or federal governmental body or authority or
any other person or entity is necessary for the execution of this Agreement by
NBC and the consummation by NBC of the transactions contemplated hereby, other
than pursuant to the HSR Act or any filing, permit, authorization, consent or
approval, the failure of which to obtain would not reasonably be expected to
prevent NBC from performing its obligations under this Agreement, and neither
the execution and delivery of this Agreement by NBC nor the consummation by NBC
of the transactions contemplated hereby nor compliance by NBC with any of the
provisions hereof will conflict with or result in any breach of any
organizational documents or instruments applicable to NBC, result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third-party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which NBC is a party or by which NBC's respective
properties or assets may be bound or violate any order, writ, injunction,
decree, judgment, statute, rule or regulation applicable to NBC as of the date
hereof, other than such
<PAGE>
4
violations, breaches or defaults that would not reasonably be expected to
prevent NBC from performing its respective obligations under this Agreement.
5. COVENANTS OF CNET. CNET hereby agrees and covenants that:
(a) NO SOLICITATION. CNET shall not, and shall not authorize its
affiliates, partners, investment bankers, attorneys, agents or other advisors or
representatives to, directly or indirectly, solicit, knowingly encourage
(including by way of providing confidential information or data) or have any
discussion or negotiate with any person or entity (other than NBC or any
affiliate of NBC) concerning any proposal by such person or entity with respect
to the Company that constitutes or could reasonably be expected to lead to a
Subject Proposal. CNET will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore by or on its behalf with respect to any of the foregoing.
(b) RESTRICTION ON TRANSFER, PROXIES AND NONINTERFERENCE. CNET
shall not, and shall not authorize any of its affiliates, partners, investment
bankers, attorneys, agents or other advisors or representatives to, directly or
indirectly: (i) offer for sale, sell, transfer, tender, pledge, encumber, assign
or otherwise dispose of (including by gift), or enter into any contract, option
or other arrangement or understanding with respect to or consent to the offer
for sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of the Subject Securities (or any interest therein),
other than in accordance with the provisions of this Agreement and the
Standstill Agreement, dated as of the date hereof, between CNET and Xenon 2;
(ii) except as contemplated hereby, grant any proxies or powers of attorney,
deposit any such Subject Securities into a voting trust or enter into a voting
agreement with respect to any of the Subject Securities; (iii) take any action
that would have the effect of preventing or disabling CNET from performing its
obligations under this Agreement; or (iv) commit or agree to take any of the
foregoing actions. CNET will not sell, transfer or otherwise dispose of any of
the Subject Securities to any affiliate of CNET unless such agrees to be bound
by the terms of this Agreement with respect to such Subject Securities as if it
were CNET and delivers a written agreement to NBC to such effect.
(c) FURTHER ASSURANCES. CNET will, from time to time, execute and
deliver, or cause to be executed and delivered, without further consideration,
such additional or further consents, documents and other instruments and take
all such further actions as NBC may reasonably request for the purpose of
effectuating the matters covered by this Agreement in the most expeditious
manner practicable.
6. RIGHTS OF FIRST OFFER AND REOFFER.
(a) If CNET at any time intends to transfer, sell, assign,
exchange, mortgage, pledge, hypothecate or otherwise dispose of any Company
Common Stock or any interest therein (other than pursuant to a merger,
consolidation or reorganization to which the Company is a party or a tender
offer approved by the Board of Directors of the Company) ("TRANSFER") to any
Person other than NBC and its affiliates (a "THIRD PARTY"), CNET shall first
give written notice (a "SELLER'S NOTICE") to NBC, stating CNET's intention to
make such Transfer, the name of the proposed Third Party transferee (if the
Transfer is to occur in a privately negotiated transaction),
<PAGE>
5
the number of shares of Company Common Stock to be transferred (the "OFFERED
SHARES"), the price or other consideration per share which CNET proposes to
be paid for the Offered Shares by the Third Party (the "FIRST OFFER PRICE")
and the other material terms upon which such Transfer is proposed. It being
expressly understood that, with respect to proposed open market sales and
sales pursuant to bona fide underwritten public offerings, CNET may indicate
as the price in the Seller's Notice as the "then current market price" and
such indication shall be sufficient for such notice. If the Seller's notice
specifies the "then current market price" or that the sale will be made for
non-cash consideration, then the First Offer Price will be the closing price
for shares of Company Common Stock on the NASDAQ Stock Market on the day
immediately preceding NBC's acceptance of CNET's offer. CNET will not include
in any Seller's Notice more shares of Company Common Stock than the number of
shares it anticipates it will sell during the next 60 days.
(b) Upon receipt of the Seller's Notice (the "FIRST OFFER"), NBC
shall have an irrevocable, non-transferable (other than to Affiliates) option to
purchase all or any number of the Offered Shares at the First Offer Price. The
option of NBC under this Section 6(b) shall be exercisable by written notice to
CNET given within 7 days from receipt of the Seller's Notice. NBC may assign its
rights under this Section 6 in whole or in part to the Company.
(c) If NBC determines not to exercise its option to purchase the
Offered Shares at the First Offer Price or determines to exercise its option to
purchase less than all the Offered Shares, then CNET shall be free, for a period
of 60 days from the earlier of (i) the expiration of the option period with
respect to such First Offer pursuant to Section 6(b) and (ii) the date CNET
shall have received written notice from NBC stating that NBC intends not to
exercise the option granted to it under the foregoing provisions of this Section
6 with respect to all the Offered Shares, to sell the Offered Shares as to which
such options are not exercised to the Third Party transferee at a price equal to
or greater than the First Offer Price and on substantially similar material
terms as were contained in the First Offer, PROVIDED that the Transfer complies
with the provisions of Section 5(b).
(d) In the event the proposed purchase price of a Third Party
transferee for the Offered Shares is less than the First Offer Price (other than
a reduction in the purchase price due to decreases in the market value of the
Company Common Stock if the Offered Shares are proposed to be sold in the open
market or pursuant to an underwritten offering) or is otherwise on terms that
are different in any material respect from those set forth in the Seller's
Notice, CNET shall not sell or otherwise transfer any of the Offered Shares
unless CNET shall first reoffer the Offered Shares at such lesser price to NBC
(the "REOFFER") by giving written notice (the "REOFFER NOTICE") to NBC, stating
the items required to be included in the Seller's Notice, including CNET's
intention to make such transfer at such lower price or on such different terms
(the "REOFFER PRICE"). NBC shall then have an irrevocable, non-transferable
(other than to Affiliates) option to purchase all or part of the Offered Shares
at the Reoffer Price, exercisable in the same manner as provided in Section
6(b). In the event that NBC does not then elect to purchase all the remaining
Offered Shares, or NBC elects to purchase less than all the remaining Offered
Shares, the Offered Shares not so purchased may be sold by CNET within 60 days
following the earlier of (i) the expiration of the option period with respect to
the Reoffer pursuant to Section 6(b) or (ii) the date on which CNET shall have
received written notice from NBC
<PAGE>
6
stating that NBC intends not to exercise the option granted to it in this
Section 6(d) with respect to all of the remaining Offered Shares, at a price
equal to or greater than the Reoffer Price, PROVIDED that the Transfer
complies with the provisions of Section 5(b).
(e) In the event that NBC does not exercise its option to purchase
any or all of the Offered Shares at the First Offer Price or at the Reoffer
Price, and CNET shall not have sold the remaining Offered Shares to a Third
Party transferee for any reason before the expiration of the 30-day period
described in Section 6(d) in the event of a Reoffer, or, if no Reoffer Notice is
given, the 60-day period described in Section 6(c), then all of the provisions
of this Section 6 shall again become applicable to any sales or transfers of
Company Common Stock by CNET.
(f) If NBC exercises its rights of first offer or reoffer
hereunder, the closing of the purchase of the Offered Shares with respect to
which such right has been exercised shall take place on the tenth day after the
later of (i) the date NBC gives notice of such exercise and (ii) the expiration
of such time as NBC may reasonably require in order to comply with applicable
United States federal and state laws and regulations, which in no event shall be
more than 30 days after the date specified in clause (i). Upon exercise by NBC
of its rights of first offer and reoffer under this Section 6, NBC and CNET
shall be legally obligated to consummate the purchase contemplated thereby and
shall use their best efforts to secure any approvals required, and to comply as
soon as practicable with all applicable United States federal and state laws and
regulations in connection therewith.
(g) Notwithstanding anything herein to the contrary, (i) nothing
herein shall prohibit or restrict CNET in any way from (A) pledging or
hypothecating any Subject Securities to a financial institution in a bona fide
financing transaction so long as CNET controls the voting of such Subject
Securities prior to the occurrence of a default or (B) entering into hedging
strategies or transactions such as, for example, the purchase and sale of puts,
calls, options, straddles and other hedging mechanisms with respect to Subject
Securities so long as the aggregate hedging transaction at any time outstanding
with any Person and its affiliates do not relate to an aggregate number of
shares of Common Stock in excess of 5% of the outstanding shares of Common Stock
and Class B Common Stock of the Company at the time such transactions were
entered into (or an equivalent position) and (ii) the transactions described in
clause (i) shall not be a Transfer and shall not be subject to the Right of
First Offer set forth in this Section 6.
7. ENTIRE AGREEMENT; ASSIGNMENT; BENEFITS. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supercedes all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof. Except as provided in the last sentence of Section
5(b), this Agreement may not be assigned by any party hereto without the
prior written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, each of NBC and CNET and their
respective successors and permitted assigns.
<PAGE>
7
8. NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly
given or made if and when delivered personally or by overnight courier or
sent by electronic transmission, with confirmation received, to the telecopy
numbers specified below:
If to NBC:
National Broadcasting Company
30 Rockefeller Plaza
New York, New York 10012
Attention: Marty Yudkovitz
Telecopy: (212) 661-5561
With copies to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Richard Capelouto
Telecopy: (212) 455-2502
If to CNET:
CNET, Inc.
150 Chestnut Street
San Francisco, California 94111
Attention: Douglas N. Woodrum
Telecopy: (415) 395-9205
with copies to:
Hughes & Luce, L.L.P.
1717 Main Street, Suite 2800
Dallas, Texas 75201
Attention: R. Clayton Mulford
Telecopy: (214) 939-5849
or to such other address or telecopy number as any party may have furnished to
the other parties in writing in accordance herewith.
<PAGE>
8
9. NOTICE OF LITIGATION. CNET shall promptly notify NBC of any
pending or, to its knowledge, threatened action or proceeding challenging the
validity or enforceability of this Agreement or the ability of CNET to
perform its obligations hereunder.
10. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
harm would occur in the event that any of the provisions of this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
It is accordingly agreed 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 hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
11. AMENDMENT. This Agreement may not be amended or modified, except
by an instrument in writing signed by or on behalf of each of the parties
hereto. This Agreement may not be waived by any party hereto, except by an
instrument in writing signed by or on behalf of the party granting such waiver.
12. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
the principles of conflicts of law.
13. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
14. TERMINATION. This Agreement shall terminate upon the date on
which CNET and its affiliates do not beneficially own (as determined pursuant to
Rule 13d-3 under the Exchange Act) in the aggregate at least 5% of the Company
Common Stock outstanding. Upon any termination of this Agreement, this
Agreement shall thereupon become void and of no further force and effect, and
there shall be no liability in respect of this Agreement or of any transactions
contemplated hereby on the part of any party hereto or any of its directors,
officers, partners, stockholders, employees, agents, advisors, representatives
or affiliates; PROVIDED, HOWEVER, that nothing herein shall relieve any party
from any liability for such party's wilful breach of any of its material
agreements contained in this Agreement; and PROVIDED FURTHER that nothing herein
shall limit, restrict, impair, amend or otherwise modify the rights, remedies,
obligations or liabilities of any person under any other contract or agreement.
15. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability and shall not
render invalid or unenforceable the remaining terms and provisions of this
Agreement or affect the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
<PAGE>
9
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf
of each of the parties hereto, all as of the date first above written.
NATIONAL BROADCASTING COMPANY
By: /s/ Mark W. Begor
-----------------------------------
Name: Mark W. Begor
Title: Executive Vice President
CNET, INC.
By: /s/ Douglas N. Woodrum
-----------------------------------
Name: Douglas N. Woodrum
Title: Executive Vice President
and Chief Financial Officer
