SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
CNET, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
12594S 10 5
(CUSIP Number)
F. Thomas Dunlap
Vice President, General Counsel and Secretary
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95052
Telephone: (408) 765-8080
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 21, 1997
(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 which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1
(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
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 (the "Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act.
(continued on following pages)
Page 1 of 41
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CUSIP No. 12594S 10 5 13D Page 2 of 41
1. NAME OF REPORTING PERSON Intel
Corporation
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE 94-1672743
PERSON
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [ ]
GROUP (b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF 7. SOLE VOTING POWER 801,253
SHARES
BENEFICIALLY 8. SHARED VOTING POWER N/A
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 801,253
REPORTING
PERSON WITH 10. SHARED DISPOSITIVE POWER N/A
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH 801,253
REPORTING PERSON
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 5.9%
(11)
14. TYPE OF REPORTING PERSON CO
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CUSIP No. 12594S 10 5 13D Page 3 of 41
ITEM 1. Security and Issuer.
(a) Name of Principal Executive Offices of Issuer:
CNET, Inc.
150 Chestnut Street
San Francisco, CA 94111
(b) Title of Class of Equity Securities:
Common Stock, $.0001 par value
ITEM 2. Identity and Background.
(a) Name of Person Filing:
Intel Corporation
(b) Address of Principal Business Office:
2200 Mission College Boulevard
Santa Clara, CA 95052-8119
(c) Principal Business:
Manufacturer of microcomputer components,
modules and systems
(d) Criminal Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been
convicted in any criminal proceeding.
(e) Civil Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been party
to any civil proceeding of a judicial or
administrative body of competent jurisdiction
as a result of which such person was or is
subject to any 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.
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CUSIP No. 12594S 10 5 13D Page 4 of 41
(f) Place of Organization:
Delaware
Attached hereto as Appendix A is information required
by this Item 2 with respect to the executive officers
and directors of the Reporting Person. All such
individuals are U.S. citizens.
ITEM 3. Source and Amount of Funds or Other Consideration.
(a) Source of Funds:
Funds for purchases of securities are derived
from the Reporting Person's working capital.
(b) Amount of Funds:
Original Acquisition of Shares on July 8, 1996:
$8,928,000
Acquisition of Shares on July 21, 1997:
$5,300,000
ITEM 4. Purpose of the Transaction.
The Reporting Person acquired 600,000 shares of Common
Stock from the Issuer on July 8, 1996. A copy of that
Stock Purchase Agreement is attached as Exhibit 1 to
this 13D. The purpose of the original investment was
to provide working capital to the Issuer, to enhance
the working relationship between the Reporting Person
and the Issuer pursuant to a separate agreement to
jointly develop Internet technology and content.
On June 4, 1997, the Reporting Person entered into a
Stock Purchase Agreement with the Issuer to acquire an
additional 201,253 shares of Common Stock, subject to
compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended. A copy of the
second Stock Purchase Agreement is attached as Exhibit
2 to this 13D. The Reporting Person acquired the
additional shares on July 21, 1997, for investment
purposes, as described by the Issuer's press release
dated June 4, 1997, attached as Exhibit 3 to this 13D.
The Reporting Person presently holds all of its shares
of Common Stock as an investment. Depending upon the
Reporting Person's evaluation of market conditions,
market price, alternative investment opportunities,
liquidity needs and other factors, the Reporting
Person will from time to time explore opportunities
for liquidating all or a portion of its equity
ownership in the Common Stock, through one or more
sales pursuant to public or private offerings or
otherwise. The Reporting Person may determine to
retain some portion of such securities as an
investment.
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CUSIP No. 12594S 10 5 13D Page 5 of 41
ITEM 5. Interest in Securities of the Issuer.
(a) Number of Shares 801,253
Beneficially Owned:
Right to Acquire: 0 shares
Percent of Class: 5.9% (based on
13,322,048 shares
outstanding as
reported in the
Issuer's Form 10-Q
for the quarter
ended March 31,
1997, and taking
into account the
issuance of
201,253 shares to
the Reporting
Person)
(b) Sole Power to Vote, Direct
the Vote of, Dispose of, or 801,253 shares
Direct the Disposition of
Shares:
(c) Recent Transactions: As described more
fully in Item 4,
on July 21, 1997,
the Reporting
Person acquired
201,253 shares of
the Issuer's
Common Stock for
cash in the amount
of approximately
$26.34 per share.
(d) Rights with Respect to
Dividends or Sales N/A
Proceeds:
(e) Date of Cessation of Five
Percent Beneficial N/A
Ownership:
ITEM 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
Pursuant to the June, 1997 Stock Purchase Agreement,
the Reporting Person has agreed not to transfer
201,253 shares of the Issuer's Common Stock in any way
or to enter into any contract to transfer such shares
for a period of one year ending June 4, 1998.
Also pursuant to the June, 1997 Stock Purchase
Agreement, the Reporting Person has certain demand and
piggyback registration rights with respect to its
shares of the Issuer's Common Stock.
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CUSIP No. 12594S 10 5 13D Page 6 of 41
Pursuant to the July, 1996 Stock Purchase Agreement,
so long as the Reporting Person holds at least 300,000
shares of the Issuer's Common Stock, the Reporting
Person has the right to have one non-voting observer
attend the Issuer's Board of Directors' Meetings, or,
alternatively, to cause the Issuer to use best efforts
to elect to the Issuer's Board of Directors one person
designated by the Reporting Person.
ITEM 7. Material to be Filed as Exhibits.
Exhibit 1 Common Stock Purchase Agreement dated July
1, 1996
Exhibit 2 Common Stock Purchase Agreement dated June
4, 1997
Exhibit 3 Press Release dated June 5, 1997
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CUSIP No. 12594S 10 5 13D Page 7 of 41
SIGNATURE
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.
Dated as of July 28, 1997.
INTEL CORPORATION
By: /s/F. Thomas Dunlap, Jr.
F. Thomas Dunlap, Jr.
Vice President, General
Counsel and Secretary
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CUSIP No. 12594S 10 5 13D Page 8 of 41
APPENDIX A
DIRECTORS
The following is a list of all Directors of Intel Corporation and
certain other information with respect to each Director:
Name: Craig R. Barrett
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal President and Chief Operating Officer of Intel
Occupation: Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: John Browne
Business The British Petroleum Company plc, Britannic
Address: House, 1 Finsbury Circus, London EC2M 7BA
Principal Group Chief Executive
Occupation:
Name, principal The British Petroleum Company plc, an
business and integrated oil company.
address of Britannic House, 1 Finsbury Circus
corporation or London EC2M 7BA
other
organization in
which employment
is conducted:
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CUSIP No. 12594S 10 5 13D Page 9 of 41
Name: Winston H. Chen
Business Paramitas Foundation, 3945 Freedom Circle,
Address: Suite 760, Santa Clara, CA 95054
Principal Chairman of Paramitas Foundation
Occupation:
Name, principal Paramitas Foundation, a charitable foundation.
business and 3945 Freedom Circle, Suite 760
address of Santa Clara, CA 95054
corporation or
other
organization in
which employment
is conducted:
Name: Andrew S. Grove
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman of the Board of Directors and Chief
Occupation: Executive Officer of Intel Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: D. James Guzy
Business 1340 Arbor Road, Menlo Park, CA 94025
Address:
Principal Chairman of The Arbor Company
Occupation:
Name, principal The Arbor Company, a limited partnership
business and engaged in the electronics and computer
address of industry.
corporation or 1340 Arbor Road
other Menlo Park, CA 94025
organization in
which employment
is conducted:
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CUSIP No. 12594S 10 5 13D Page 10 of 41
Name: Gordon E. Moore
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman Emeritus of the Board of Intel
Occupation: Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: Arthur Rock
Business One Maritime Plaza, Suite 1220, San Francisco,
Address: CA 94111
Principal Venture Capitalist
Occupation:
Name, principal Arthur Rock and Company, a venture capital
business and firm.
address of One Maritime Plaza, Suite 1220
corporation or San Francisco, CA 94111
other
organization in
which employment
is conducted:
Name: Jane E. Shaw
Business c/o Intel Corporation, 2200 Mission College
Address: Boulevard, Santa Clara, CA 95052
Principal Founder of The Stable Network, a
Occupation: biopharmaceutical consulting company
Name, principal c/o Intel Corporation
business and 2200 Mission College Boulevard
address of Santa Clara, CA 95052
corporation or
other
organization in
which employment
is conducted:
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CUSIP No. 12594S 10 5 13D Page 11 of 41
Name: Leslie L. Vadasz
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Senior Vice President, Director, Corporate
Occupation: Business Development, Intel Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: David B. Yoffie
Business Harvard Business School, Soldiers Field Park 1-
Address: 411, Boston, MA 92163
Principal Max and Doris Starr Professor of International
Occupation: Business Administration
Name, principal Harvard Business School, an educational
business and institution.
address of Harvard Business School
corporation or Soldiers Field Park 1-411
other Boston, MA 92163
organization in
which employment
is conducted:
Name: Charles E. Young
Business 405 Hilgard Avenue, Los Angeles, CA 90024
Address:
Principal Chancellor
Occupation:
Name, principal University of California at Los Angeles, an
business and educational institution.
address of 405 Hilgard Avenue
corporation or Los Angeles, CA 90024
other
organization in
which employment
is conducted:
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CUSIP No. 12594S 10 5 13D Page 12 of 41
EXECUTIVE OFFICERS
The following is a list of all executive officers of Intel
Corporation excluding executive officers who are also directors.
Unless otherwise indicated, each officer's business address is
2200 Mission College Boulevard, Santa Clara, California 95052-
8119, which address is Intel Corporation's business address.
Name: Frank C. Gill
Title: Executive Vice President, General Manager, Internet
and Communications Group
Address: 5200 N.E. Elam Young Parkway, Hillsboro, OR 97124-
6497
Name: Paul S. Otellini
Title: Executive Vice President, Director, Sales and
Marketing Group
Name: Gerhard H. Parker
Title: Executive Vice President, General Manager, Technology
and Manufacturing Group
Name: Ronald J. Whittier
Title: Senior Vice President, General Manager, Content Group
Name: Albert Y. C. Yu
Title: Senior Vice President, General Manager,
Microprocessor Products Group
Name: Michael A. Aymar
Title: Vice President, General Manager, Desktop Products
Group
Name: Andy D. Bryant
Title: Vice President and Chief Financial Officer
Name: Dennis L. Carter
Title: Vice President, Director, Sales and Marketing Group
Name: F. Thomas Dunlap, Jr.
Title: Vice President, General Counsel and Secretary
Name: Patrick P. Gelsinger
Title: Vice President, General Manager, Desktop Products
Group
Address: 5200 N.E. Elam Young Parkway, Hillsboro, OR 97124-
6497
Name: John H. F. Miner
Title: Vice President, General Manager, Enterprise Server
Group
Address: 5200 N.E. Elam Young Parkway, Hillsboro, OR 97124-
6497
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CUSIP No. 12594S 10 5 13D Page 13 of 41
Name: Stephen P. Nachtsheim
Title: Vice President, General Manager, Mobile/Handheld
Products Group
Name: Ronald J. Smith
Title: Vice President, General Manager, Computing
Enhancement Group
Name: Arvind Sodhani
Title: Vice President, Treasurer
Name: Michael R. Splinter
Title: Vice President, Assistant General Manager, Technology
and Manufacturing
Group
<PAGE>
CUSIP No. 12594S 10 5 13D Page 14 of 41
EXHIBIT 1
AGREEMENT DATED 7/1/96
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement"), effective July
1, 1996, is by and between Intel Corporation, a Delaware
corporation ("Intel"), and CNET, Inc., a Delaware corporation
(the "Company").
WHEREAS, the Company is engaged in an initial public offering
(the "Offering") of its common stock, $.0001 par value per share
(the "Common Stock"), as described in the Company's preliminary
prospectus dated June 17, 1996 relating to the Offering (the
"Preliminary Prospectus"); and
WHEREAS, Intel desires to purchase 600,000 shares of Common Stock
from the Company in a concurrent private offering;
NOW, THEREFORE, in consideration of the covenants contained in
this Agreement, the parties agree as follows;
1. Agreement to Purchase.
(a) Intel shall purchase 600,000 shares of Common
Stock (the "Shares") from the Company at a purchase price equal
to $14.88 per share, which equals 93% of the Price to Public set
forth on the cover page of the final prospectus relating to the
Offering.
(b) Settlement of the purchase of the Shares (the
"Closing") shall be made at the same time and in the same manner
as purchases by the underwriters in the Offering, as set forth in
the Underwriting Agreement, of even date herewith, between the
Company and the representatives of the underwriters of the
Offering (the "Underwriting Agreement").
2. Conditions to Purchase. Intel's agreement to purchase
the Shares, and the Company's obligation to sell the Shares,
shall be conditioned on the closing of the Offering pursuant to
the Underwriting Agreement on or prior to July 12, 1996.
3. Representations and Warranties. The Company agrees
that the representations and warranties of the Company set forth
in the Underwriting Agreement are hereby incorporated herein and
deemed to be made to Intel in connection with the purchase of the
Shares by Intel.
4. Indemnification. The Company agrees to indemnify and
hold harmless Intel and each person who controls Intel within the
meaning of either Section 15 of the Securities Act of 1933, as
amended (the "Securities Act") or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages and liabilities
arising from any action or claim asserted by any third party
(including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating
any such action or claim) based on any untrue statement of a
material fact
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CUSIP No. 12594S 10 5 13D Page 15 of 41
contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments
or supplements thereto), or based on 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. For purposes of this paragraph, the terms
"Registration Statement" and "Prospectus" have the meanings given
to such terms in the Underwriting Agreement. The procedures set
forth in the Underwriting Agreement with respect to the Company's
indemnification of the underwriters shall apply to any
indemnification required under this paragraph. To the extent
that Intel is entitled to indemnification under this paragraph
with respect to matters for which the Company is entitled to
indemnification from the Underwriters, the Company hereby agrees
that Intel may proceed directly against the Underwriters with
respect to such claim for indemnification, and the Company hereby
assigns its rights under the Underwriting Agreement to Intel to
the extent necessary to allow Intel to so proceed against the
Underwriters.
5. Investment Intent. Intel hereby represents and
warrants to the Company as follows: (a) Intel is acquiring the
Shares for its own account for investment purposes and not with a
view to the distribution thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), or
applicable state securities laws; (b) Intel understands that the
Shares constitute "restricted securities" within the meaning of
Rule 144 under the Securities Act and may not be sold, pledged or
otherwise disposed of unless they are subsequently registered
under the Securities Act and applicable state securities laws or
unless an exemption from registration is available; and (c) Intel
is an "accredited investor" within the meaning of Rule 501 under
the Securities Act.
6. Lock-Up Agreement. Intel hereby agrees that, without
the prior written consent of the Company and Morgan Stanley & Co.
Incorporated ("Morgan Stanley"), on behalf of the underwriters of
the Offering, Intel will not, during the period commencing on the
date hereof and ending 180 days after the date hereof: (a)
offer, pledge, sell, 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
transfer or dispose of, directly or indirectly, any of the Shares
or (b) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of the Shares, whether or not any such transaction
described in clause (a) or (b) above is to be settled by delivery
of such Shares, in cash or otherwise. The undersigned agrees and
consents to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of the Shares
except in compliance with the terms and conditions of this
Agreement. Intel understands and agrees that the provisions of
this Section 6 are intended to benefit Morgan Stanley, as
representative of the underwriters, and may be enforced by Morgan
Stanley directly against Intel.
7. Board Representation. For so long as Intel owns at
least 300,000 of the Shares (as adjusted to reflect any stock
split, stock dividend or similar event),
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CUSIP No. 12594S 10 5 13D Page 16 of 41
(a) the Company will provide notice to a person
designated in writing by Intel of all meetings of the Board of
Directors of the Company and will allow such designee to attend
such meetings as a nonvoting observer; and
(b) at Intel's written request, the Company will use
its best efforts to cause a person designated in writing by Intel
to be elected to the Board of Directors of the Company and to
retain such office. If Intel ceases to own at least 300,000 of
the Shares (as adjusted to reflect any stock split, stock
dividend or similar event) at a time when its designee is serving
as a director of the Company, such designee will promptly resign
from the Company's Board of Directors.
8. Registration Rights.
(a) Definitions. For purposes of this Section 8, the
following terms have the meanings indicated:
"Commission" means the Securities and Exchange
Commission.
"Registrable Securities" means the Shares;
provided, that any Shares will cease to be Registrable
Securities when (i) a registration statement covering such
Shares has been declared effective by the Commission and
such Shares have been disposed of pursuant to such effective
registration statement, (ii) such Shares are sold under
circumstances in which all of the applicable conditions of
Rule 144 (or any similar provision then in force) under the
Securities Act are met or (iii) such Shares have been
otherwise transferred and the Company has delivered a new
certificate in substitution for such Shares, which new
certificate does not bear a restrictive legend and which
Shares may be freely resold without subsequent registration
under the Securities Act.
"Underwriter" means a securities dealer that
purchases any Registrable Securities as principal and not as
part of such dealer's market-making activities.
(b) Demand Registration Rights. At any time beginning
180 days after the date hereof, Intel may (i) on a single
occasion, request in writing that the Company effect the
registration of all or any portion of the Registrable Securities
for sale in an underwritten offering by Intel and (ii) at any
time the Company is eligible to use Form S-3 (or any successor to
such form) for registration of secondary sales of Registrable
Securities, request in writing that the Company effect the
registration on such form of all or any portion of the
Registrable Securities. Upon receipt of such a request, the
Company will, as soon as practicable, use its best efforts to
effect the registration of such Registrable Securities, on the
applicable form, as necessary to permit the disposition of such
Registrable Securities in accordance with the intended method of
disposition. The Company will use its best efforts to qualify
and maintain its qualification for eligibility to use Form S-3
for such purposes.
(c) Incidental Registration Rights. If the Company at
any time proposes to file on its behalf or on behalf of any of
any of its stockholders a registration statement under the
Securities Act relating to the Common Stock, the Company will
give written notice to Intel
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CUSIP No. 12594S 10 5 13D Page 17 of 41
setting forth the terms of the proposed offering and offer to
include in such filing any Registrable Securities that Intel may
request; provided that such incidental registration rights will
not apply to any registration statement (i) on Form S-4 or S-8 or
any successor form, (ii) for a transaction covered by Rule 145
under the Securities Act or (iii) covering only securities to be
issued in connection with a dividend reinvestment and stock
purchase plan. If Intel desires to include Registrable
Securities in any such registration, it must advise the Company
in writing within 15 days after receipt of such notice,
indicating the number of Registrable Securities for which
registration is requested. Subject to Section 8(d), the Company
will include in such filing the number of Registrable Securities
for which registration is so requested and will use its best
efforts to effect the registration thereof under the Securities
Act.
(d) Priority. If the lead managing Underwriter of an
underwritten offering governed by this Section 8 notifies the
Company in writing that, in its opinion, the number of shares
requested to be included in such offering is sufficiently large
to materially and adversely affect the success of such offering,
then the number of shares to be sold in such offering will be
reduced to the maximum number that can be sold without any such
material adverse effect, and the Registrable Securities and other
shares proposed to be included in such offering will be included
in the following priority: (i) with respect to an offering
pursuant to Intel's demand registration rights under Section 8(b)
above, Registrable Securities to be offered by Intel will have
priority over shares offered by the Company or any other selling
stockholders; and (ii) with respect to an offering in which Intel
is exercising its incidental registration rights under Section
8(c) above, (A) shares to be offered by the Company will have
priority over shares to be offered by selling stockholders and
(B) Registrable Securities to be offered by Intel and any shares
to be offered by other selling stockholders will be treated
equally, with any reduction being applied to all such selling
stockholders in proportion to the number of shares requested by
such stockholders to be included in such offering.
(e) Limitations. The Company's obligations under this
Section 8 are qualified and limited by the following provisions:
(i) With respect to an offering pursuant to
Intel's demand registration rights under Section 8(b) above,
Intel will have the right to select the managing
Underwriter(s) for such offering, subject to the approval of
the Company, which approval will not be unreasonably
withheld. With respect to an offering in which Intel is
exercising its incidental registration rights under Section
8(c) above, the Company will have the right to select the
managing Underwriter(s) for such offering.
(ii) If, upon receipt of a request for
registration by Intel pursuant to paragraph (b) above, the
Company is diligently pursuing a primary public offering of
Common Stock or the Company notifies Intel within 15 days
that it desires to pursue such a primary offering, then the
Company will be entitled to proceed with its own offering,
in which case (A) Intel will be entitled to incidental
registration rights with respect to the Company's offering
pursuant to paragraph (c) above, and (B) Intel will not be
entitled to request a registration pursuant to paragraph (a)
above until the expiration of 120 days after the effective
date of the Company's offering (or if later, the expiration
of
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CUSIP No. 12594S 10 5 13D Page 18 of 41
any lock-up agreement executed by Intel in connection with
such offering); provided that this limitation will terminate
if the Company ceases to diligently pursue such offering.
(iii) Intel's registration rights under this
Section 8 will terminate three years after the Closing;
provided that (A) such termination date will be extended by
a number of days equal to any delay imposed by the Company
pursuant to Section 8(e)(iv) below and (B) if, prior to such
termination date, Intel has requested a registration
pursuant to Section 8(b) and the registration statement
relating to such request has not been declared effective and
remained effective for at least 30 days, then such
termination date will be extended to the extent necessary
for the requested registration statement to be declared
effective and to remain effective for 30 days.
Notwithstanding the foregoing, Intel's registration rights
under this Section 8 will terminate at the first time at
which Intel is entitled to sell all of the Shares in a
single three month period pursuant to Rule 144 under the
Securities Act.
(iv) The Company will have the right to delay any
registration requested by Intel for one period of up to 45
days if the Company's Board of Directors determines in good
faith that a pending transaction or development would cause
such registration to be injurious to the Company.
(v) During the time that a shelf registration
statement effected on behalf of Intel is effective, Intel
will refrain from selling stock pursuant to such
registration statement, if requested in writing by the
Company, during one or more time periods totaling not more
than 30 days in the aggregate during any calendar year.
(vi) In connection with any underwritten offering
pursuant to these provisions in which Intel desires to
participate, Intel will complete and execute all
questionnaires, custody agreements, powers of attorney,
indemnities, underwriting agreements, lock-up agreements and
other documents reasonably required by the Underwriters in
connection with such offering.
(vii) Intel will furnish to the Company, at
the Company's reasonable request, such information regarding
the Registrable Securities and the intended method of
disposition thereof by Intel as is legally required in
connection with any action required to be taken by the
Company hereunder.
(viii) A registration requested pursuant to
Section 8(b)(i) will not count as Intel's sole request under
such provision until it has become effective, unless Intel
withdraws the Registrable Securities from such offering, in
which case such request will count unless Intel pays or
reimburses the Company for all expenses incurred in
connection with such registration.
(f) Registration Procedures. In connection with any
registration of Registrable Securities under this Section 8, the
Company will:
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CUSIP No. 12594S 10 5 13D Page 19 of 41
(i) prepare and file with the Commission a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such
registration statement to become and remain effective,
including by preparing and filing with the Commission any
necessary amendments and supplements to such registration
statement and the prospectus used in connection therewith,
until the earlier of (A) such time as all Registrable
Securities subject to such registration statement have been
disposed of or (B) the expiration of 90 days after the
effective date of such registration statement; provided that
such 90 day limitation shall not apply to any registration
effected on Form S-3;
(ii) furnish to Intel such number of copies of the
registration statement and prospectus (including any
preliminary prospectus and any amendments or supplements) as
may be reasonably requested by Intel;
(iii) use its best efforts to register or
qualify the Registrable Securities covered by such
registration statement under the securities or blue sky laws
of such jurisdictions within the United States and Puerto
Rico as Intel reasonably requests, and take such other
actions as may be reasonably required of it to enable Intel
to consummate the disposition in such jurisdictions of the
Registrable Securities covered by such registration
statement; provided that the Company will not be required to
(A) qualify to transact business as a foreign corporation in
any jurisdiction in which it would not otherwise be required
to be so qualified; (B) take any action that would subject
it to general service of process in any such jurisdictions
where it is not then so subject, or (C) subject itself to
any type of taxation in any jurisdiction in which it is not
then so subject;
(iv) use its best efforts to cause all such
Registrable Securities to be listed or quoted on each
securities exchange or automated quotation system on which
the Common Stock is then listed or quoted;
(v) if requested by the Underwriters for any
underwritten offering of Registrable Securities, enter into
an underwriting agreement with such Underwriters containing
such representations and warranties by the Company and such
other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary
distributions, including without limitation provisions with
respect to indemnities and contribution as are reasonably
satisfactory to the Company, such Underwriters and Intel;
(vi) during the period when the registration
statement is required to be effective, notify Intel of any
event as a result of which the prospectus included in the
registration statement contains an untrue statement of a
material fact or omits to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading, and prepare a supplement or
amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an 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
<PAGE>
CUSIP No. 12594S 10 5 13D Page 20 of 41
(vii) otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission
with respect to such offering and take all such actions as
may be reasonably requested by Intel to facilitate the sale
by Intel of such Registrable Securities pursuant to such
registration statement.
(g) Expenses. Except as provided in the following
sentence, the Company will bear all expenses arising or incurred
in connection with any registration of Registrable Securities
pursuant to this Section 8, including without limitation (i)
registration fees; (ii) filing fees charged by the National
Association of Securities Dealers, Inc.; (iii) printing expenses;
(iv) the Company's accounting and legal fees and expenses; (v)
expenses of any special audits or comfort letters incident to or
required by such registration or qualification; and (vi) expenses
of complying with the securities or blue sky laws of any
jurisdictions in connection with such registration or
qualification. Intel will bear the expense of all underwriting
fees, discounts or commissions applicable to its sale of
Registrable Securities and the fees and expenses of any separate
legal counsel or accounting firm engaged by Intel.
(h) Indemnification.
(i) The Company agrees to indemnify and hold
harmless Intel and each person who controls Intel within the
meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such
action or claim) arising out of or based upon based on any
untrue statement of a material fact contained in any
registration statement or prospectus relating to the
Registrable Securities or in any amendment or supplement
thereto, or arising out of or based on 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 such losses,
claims, damages or liabilities are caused by (A) any such
untrue statement or omission or alleged untrue statement or
omission based upon information relating to Intel furnished
to the Company in writing by Intel or on Intel's behalf
expressly for use therein or (B) with respect to any
offering that is not underwritten, any failure by Intel to
deliver or cause to be delivered a copy of the final
prospectus relating to such offering (as then amended or
supplemented) to the person asserting such claim if such
final prospectus would have cured the defect giving rise to
such loss, claim, damage or liability.
(ii) Intel agrees to indemnify and hold harmless
the Company and its directors and officers and each person,
if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity
from the Company to Intel, but only with respect to the
matters specified in clauses (A) and (B) of the preceding
paragraph.
(iii) The procedures set forth in the
Underwriting Agreement with respect to the Company's
indemnification of the underwriters of the Offering shall
apply to any indemnification required under this Section
8(h).
<PAGE>
CUSIP No. 12594S 10 5 13D Page 21 of 41
9. Miscellaneous.
(a) The terms and conditions of this Agreement
represent the entire agreement between the parties with respect
to the subject matter hereof and supersede any prior agreements
or understandings, whether written or oral, between the parties
respecting such subject matter. This Agreement may be modified
only in writing and with the consent of both parties.
(b) Neither party may assign this Agreement or any
rights or obligations hereunder without the prior written consent
of the other.
(c) This Agreement shall be construed and enforced in
accordance with the laws of the state of Delaware applicable to
agreements between residents of Delaware wholly executed and
wholly performed therein.
(d) Neither party shall make any press release or
other public disclosure regarding the execution or terms of this
Agreement, except as required by law or agreed upon in writing by
the parties.
IN WITNESSES WHEREOF, the parties have entered into this
Agreement as of the date first set forth above.
INTEL CORPORATION
By: /s/Arvind Sodhani
Name: Arvind Sodhani
Title: Treasurer
CNET, INC.
By: /s/Shelby W. Bonnie
Name: Shelby W. Bonnie
Title: Chief Operating Officer
<PAGE>
CUSIP No. 12594S 10 5 13D Page 22 of 41
EXHIBIT 2
AGREEMENT DATED 6/4/97
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement"), is entered into
as of June 4, 1997 by and between Intel Corporation, a Delaware
corporation ("Intel"), and CNET, Inc., a Delaware corporation
(the "Company"). The Company desires to sell, and Intel desires
to purchase, shares of the Company's common stock, $.0001 par
value per share (the "Common Stock"), for an aggregate purchase
price of $5,300,000. Accordingly, Intel and the Company hereby
agree as follows:
1. Agreement to Purchase. At the Closing (as defined
below), and subject to the terms and conditions set forth in this
Agreement, Intel will purchase from the Company, and the Company
will issue and sell to Intel, 201,253 shares of Common Stock (the
"Shares") for an aggregate purchase price of $5,300,000.
2. Closing. The closing of the purchase and sale of the
Shares (the "Closing") shall take place at the principal offices
of the Company (or such other place as the parties may agree) as
soon as reasonably practicable (but not later than five business
days) after satisfaction of the conditions specified in Section
5.5 and Section 6.4 (the "HSR Conditions"). Upon payment of the
purchase price for the Shares in full in immediately available
funds by Intel to the Company (to an account specified in writing
by the Company to Intel prior to the Closing), the Company will
deliver to Intel a certificate or certificates representing the
Shares, in such denominations and registered in such names as
Intel shall request.
3. Representations and Warranties of the Company. The
Company hereby represents and warrants to Intel that the
statements in this Section are true and correct except as set
forth in the Disclosure Letter from the Company to Intel, dated
as of the date hereof (the "Disclosure Letter").
3.1 Organization, Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has
all corporate power and authority required to (a) carry on its
business as presently conducted and (b) enter into this Agreement
and consummate the transactions contemplated hereby. The Company
is qualified to do business and is in good standing in each
jurisdiction in which the failure to so qualify would have a
Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect" means a material adverse effect on, or a material
adverse change in, or a group of such effects on or changes in,
the business, operations, financial condition, results of
operations, assets or liabilities of the Company.
3 2 Capitalization. As of the date of this Agreement,
the capitalization of the Company is as follows:
<PAGE>
CUSIP No. 12594S 10 5 13D Page 23 of 41
(a) Preferred Stock. A total of 5,000,000
authorized shares of preferred stock, $.01 par value per share
(the "Preferred Stock"), none of which is issued or outstanding.
(b) Common Stock. A total of 25,000,000
authorized shares of Common Stock, of which 13,333,847 shares
were issued and outstanding as of the close of business on June
3, 1997. All of such outstanding shares are validly issued,
fully paid and nonassessable. No such outstanding shares were
issued in violation of any preemptive rights.
(c) Options, Warrants, Reserved Shares. Except
as set forth in the Disclosure Letter, there are not outstanding
any options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock or any securities
convertible into or ultimately exchangeable or exercisable for
any shares of the Company's capital stock. Except for any stock
repurchase rights of the Company under its stock option and
employee stock purchase plans, no shares of the Company's
outstanding capital stock, or stock issuable upon exercise,
conversion or exchange of any outstanding options, warrants or
rights, or other stock issuable by the Company, are subject to
any rights of first refusal or other rights to purchase such
stock (whether in favor of the Company or any other person),
pursuant to any agreement, commitment or other obligation of the
Company.
3.3 Subsidiaries. The Company does not presently own
or control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, association or
other entity.
3.4 Due Authorization. All corporate action on the
part of the Company and its officers, directors and stockholders
necessary for the authorization, execution, delivery of and
performance of all obligations of the Company under this
Agreement, and the authorization, issuance, reservation for
issuance and delivery of all of the Shares being sold under this
Agreement, has been taken or will be taken prior to the Closing,
and this Agreement constitutes a valid and legally binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by (a)
applicable bankruptcy, insolvency, reorganization or other laws
of general application relating to or affecting the enforcement
of creditors' rights generally and (b) the effect of rules of law
governing the availability of equitable remedies.
3.5 Valid Issuance of Stock. The Shares, when issued,
sold and delivered in accordance with the terms of this Agreement
for the consideration provided for herein, will be duly and
validly issued, fully paid and nonassessable.
3.6 Governmental Consents. No consent, approval,
order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or
local governmental authority on the part of the Company is
required in connection with the consummation of the transactions
contemplated by this Agreement, except (a) as required in
connection with the Hart Scott Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), and (b) the filing of any
qualifications or filings under the Securities Act of 1933, as
<PAGE>
CUSIP No. 12594S 10 5 13D Page 24 of 41
amended (the "Securities Act"), and the regulations thereunder
and all applicable state securities laws that may be required in
connection with the transactions contemplated by this Agreement.
All such qualifications and filings will, in the case of
qualifications, be effective on the Closing and will, in the case
of filings, be made within the time prescribed by law.
3.7 Non-Contravention. The execution, delivery and
performance of this Agreement, and the consummation by the
Company of the transactions contemplated hereby, do not and will
not (i) contravene or conflict with the Certificate of
Incorporation or Bylaws of the Company; (ii) constitute a
violation of any provision of any federal, state, local or
foreign law binding upon or applicable to the Company; or (iii)
constitute a default or require any consent under, give rise to
any right of termination, cancellation or acceleration of, or to
a loss of any benefit to which the Company is entitled under, or
result in the creation or imposition of any lien, claim or
encumbrance on any assets of the Company under, any contract to
which the Company is a party or any permit, license or similar
right relating to the Company or by which the Company may be
bound or affected in such a manner as, together with all other
such matters, would have Material Adverse Effect.
3.8 Litigation. There is no action, suit, proceeding,
claim, arbitration or investigation ("Action") pending: (a)
against the Company, its activities, properties or assets or, to
the best of the Company's knowledge, against any officer,
director or employee of the Company in connection with such
officer's, director's or employee's relationship with, or actions
taken on behalf of, the Company or (b) that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this
Agreement. There is no Action pending or, to the best of the
Company's knowledge, threatened or for which any reasonable basis
exists, relating to the current or prior employment of any of the
Company's current or former employees or consultants, their use
in connection with the Company's business of any information,
technology or techniques allegedly proprietary to any of their
former employers, clients or other parties, or their obligations
under any agreements with prior employers, clients or other
parties. The Company is not a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. No Action by
the Company is currently pending nor does the Company intend to
initiate any Action which is reasonably likely to have a Material
Adverse Effect.
3.9 Invention Assignment and Confidentiality
Agreement. To the best knowledge of the Company, each employee
and consultant or independent contractor of the Company whose
duties include the development of products or Intellectual
Property (as defined below), and each former employee and
consultant or independent contractor whose duties included the
development of products or Intellectual Property, has entered
into and executed an invention assignment and confidentiality
agreement in customary form or an employment or consulting
agreement containing substantially similar terms.
3.10 Intellectual Property.
(a) Ownership or Right to Use. The Company has
sole title to and owns, or is licensed or otherwise possesses
legally enforceable rights to use, all patents or patent
<PAGE>
CUSIP No. 12594S 10 5 13D Page 25 of 41
applications, software, know-how, registered or unregistered
trademarks and service marks and any applications therefor,
registered or unregistered copyrights, trade names, and any
applications therefor, trade secrets or other confidential or
proprietary information ("Intellectual Property") necessary to
enable the Company to carry on its business as currently
conducted, except where any deficiency therein would not have a
Material Adverse Effect. The Company represents and warrants
that it will, where the Company, in the exercise of reasonable
judgment deems it appropriate, use reasonable business efforts to
seek copyright and patent registration, and other appropriate
intellectual property protection, for Intellectual Property of
the Company.
(b) Licenses; Other Agreements. The Company is
not currently subject to any exclusive licenses (whether such
exclusivity is temporary or permanent) to any material portion of
the Intellectual Property of the Company. To the best of the
Company's knowledge, there are not outstanding any licenses or
agents of any kind relating to any Intellectual Property of the
Company, except for agreements with customers of the Company
entered into in the ordinary course of the Company's business.
The Company is not obligated to pay any royalties or other
payments to third parties with respect to the marketing, sale,
distribution, manufacture, license or use of any Intellectual
Property, except as the Company may be so obligated in the
ordinary course of its business or as disclosed in the Company's
SEC Documents (as defined below).
(c) No Infringement. The Company has not
violated or infringed and is not currently violating or
infringing, and the Company has not received any communications
alleging that the Company (or any of its employees or
consultants) has violated or infringed, any Intellectual Property
of any other person or entity, to the extent that any such
violation or infringement, either individually or together with
all other such violations and infringements, would have a
Material Adverse Effect.
(d) Employees and Consultants. To the best of
the Company's knowledge, no employee of or consultant to the
Company is in default under any term of any employment contract,
agreement or arrangement relating to Intellectual Property of the
Company or any non-competition arrangement, other contract, or
any restrictive covenant relating to the Intellectual Property of
the Company. The Intellectual Property of the Company (other
than any Intellectual Property duly acquired or licensed from
third parties) was developed entirely by the employees of or
consultants to the Company during the time they were employed or
retained by the Company, and to the best knowledge of the
Company, at no time during conception or reduction to practice of
such Intellectual Property of the Company were any such employees
or consultants operating under any grant from a government entity
or agency or subject to any employment agreement or invention
assignment or non-disclosure agreement or any other obligation
with a third party that would materially and adversely affect the
Company's rights in the Intellectual Property of the Company.
Such Intellectual Property of the Company does not, to the best
knowledge of the Company, include any invention or other
intellectual property of such employees or consultants made prior
to the time such employees or consultants were employed or
retained by the Company nor any intellectual property of any
previous employer of such employees or consultants nor the
intellectual property of any other person or entity.
<PAGE>
CUSIP No. 12594S 10 5 13D Page 26 of 41
3.11 Compliance with Law and Charter Documents. The
Company is not in violation or default of any provisions of its
Certificate of Incorporation or Bylaws, both as amended, except
for any violations that would not, either individually or in the
aggregate, have a Material Adverse Effect. The Company has
complied and is in compliance with all applicable statutes, laws,
and regulations and executive orders of the United States of
America and all states, foreign counties and over governmental
bodies and agencies having jurisdiction over the Company's
business or properties.
3.12 Registration Rights. Except as provided herein,
the Company is not currently subject to any grant or agreement to
grant to any person or entity any rights (including piggyback
registration rights) to have any securities of the Company
registered with the United States Securities and Exchange
Commission ("SEC") or any other governmental authority.
3.13 Title to Property and Assets. The properties and
assets of the Company are owned by the Company free and clear of
all mortgages, deeds of trust liens, charges, encumbrances and
security interests except for statutory liens for the payment of
current taxes that are not yet delinquent and liens, encumbrances
and security interests that arise in the ordinary course of
business and do not affect material properties and assets of the
Company. With respect to the property and assets it leases, the
Company is in compliance with such leases in all material
respects.
3.14 SEC Documents.
(a) The Company has furnished to Intel prior to
the date hereof copies of the prospectus included in the
Company's registration statement on Form SB-2 (Registration No.
333-4752-LA), the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1996 and the Company's Quarterly Report
on Form 10-QSB for the quarter ended March 31, 1997
(collectively, the "SEC Documents"). Each of the SEC Documents,
as of the respective date thereof, did not, and each of the
registration statements, reports and proxy statements filed by
the Company with the SEC after the date hereof and prior to the
Closing will not, as of the date thereof, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light
of the circumstances under which they are made, not misleading.
The Company is not a party to any material contract, agreement or
other arrangement which was required to have been filed as an
exhibit to the SEC Documents that is not so filed.
(b) The SEC Documents include the Company's
audited financial statements (the "Audited Financial Statements")
for the year ended December 31, 1996 and its unaudited financial
statements for the three-month period ended March 31, 1997 (the
"Balance Sheet Date"). Since the Balance Sheet Date, the Company
has duly filed with the SEC all registration statements, reports
and proxy statements required to be filed by it under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the 1933 Act. The audited and unaudited consolidated
financial statements of the Company included in the SEC Documents
filed prior to the date hereof fairly present, in conformity with
generally accepted accounting principles ("GAAP") (except as
permitted by Form 10-Q) applied on a consistent
<PAGE>
CUSIP No. 12594S 10 5 13D Page 27 of 41
basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its
consolidated subsidiaries as at the date thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject to normal year and audit adjustments
in the case of unaudited interim financial statements).
(c) Except as and to the extent reflected or
reserved against in the Company's Audited Financial Statements
(including the notes thereto), the Company has no material
liabilities (whether accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined or
determinable) other than: (i) liabilities incurred in the
ordinary course of business since the Balance Sheet Date, (ii)
liabilities with respect to agreements to which the Company is a
party, and (iii) other liabilities that either individually or in
the aggregate, would not result in a Material Adverse Effect.
3.15 Absence of Certain Changes Since Balance Sheet
Date. Since the Balance Sheet Date, the business and operations
of the Company have been conducted in the ordinary course
consistent with past practice, and there has not been:
(a) any declaration, setting aside or payment of
any dividend or other distribution of the assets of the Company
with respect to any shares of capital stock of the Company, or
any repurchase, redemption or other acquisition by the Company or
any subsidiary of the Company of any outstanding shares of the
Company's capital stock;
(b) any damage, destruction or loss, whether or
not covered by insurance, except for such occurrences that have
not resulted, and are not expected to result, in a Material
Adverse Effect;
(c) any waiver by the Company of a valuable right
or of a material debt owed to it, except for such waivers that
have not resulted, and are not expected to result, in a Material
Adverse Effect;
(d) any material change or amendment to, or any
waiver of any material rights under, a material contract or
arrangement by which the Company or any of its assets or
properties is bound or subject, except for changes, amendments,
or waivers that are expressly provided for or disclosed in this
Agreement or that have not resulted, and are not expected to
result, in a Material Adverse Effect;
(e) any change by the Company in its accounting
principles, methods or practices or in the manner in which it
keeps its accounting books and records, except any such charge
required by a change in GAAP; and
(f) any other event or condition of any
character, except for such events and conditions that have not
resulted, and are not expected to result, either individually or
collectively, in a Material Adverse Effect.
<PAGE>
CUSIP No. 12594S 10 5 13D Page 28 of 41
3.16 Employee Benefits.
(a) As used in this Section 3.16 the following
terms have the following meanings: (l) "Benefit Arrangement"
means any material benefit arrangement that is not an Employee
Benefit Plan, including (i) each material employment or
consulting agreement, (ii) each material arrangement providing
for insurance coverage or workers' compensation benefits, (iii)
each material bonus or deferred bonus arrangement, (iv) each
material arrangement providing any termination allowance,
severance or similar benefits, (v) each equity compensation plan,
(vi) each deferred compensation plan and (vii) each material
compensation policy and practice maintained by the Company
covering the employees, former employees, officers, former
officers, directors and former directors of the Company, and the
beneficiaries of any of them; (2) "Benefit Plan" means an
Employee Benefit Plan or Benefit Arrangement; (3) "COBRA" means
the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, as set forth in Section 4980B of the Internal Revenue
Code of l986, as amended (the "Code"), and Part 6 of Title I of
ERISA; (4) "Employee Benefit Plan" means any employee benefit
plan, as defined in Section 3(3) of ERISA that is sponsored or
contributed to by the Company or any ERISA Affiliate covering
employees or former employees of the Company; (5) "Employee
Pension Benefit Plan" means any employee pension benefit plan, as
defined in Section 3(2) of ERISA, that is regulated under Title
IV of ERISA, other than a Multiemployer Plan; (6) "ERISA" means
the Employee Retirement Income Security Act of 1974, as amended;
(7) "ERISA Affiliate" of the Company means any other person or
entity that, together with the Company as of the relevant
measuring date under ERISA, was or is required to be treated as a
single employer under Section 4.14 of the Code; (8) "Group Health
Plan" means any group health plan, as defined in Section
5000(b)(l) of the Code; (9) "Multiemployer Plan" means a
multiemployer plan, as defined in Section 3(37) and 4001(a)(3) of
ERISA; and (10) "Prohibited Transaction" means a transaction that
is prohibited under Section 4975 of the Code or Section 406 of
ERISA and not exempt under Section 4975 of the Code or Section
408 of ERISA, respectively.
(b) Neither the Company nor any of its ERISA
Affiliates sponsors or has sponsored, maintained, contributed to,
or incurred an obligation to contribute to, any Employee Pension
Benefit Plan (whether or not terminated). Neither the Company
nor any of its ERISA Affiliates sponsors or has sponsored,
maintained, contributed to, or incurred an obligation to
contribute to, any Multiemployer Plan (whether or not
terminated).
(c) No Employee Benefit Plan has participated in,
engaged in or been a party to any Prohibited Transaction, and
neither the Company nor any of its ERISA Affiliates has had
asserted against it any claim for any material tax or material
penalty imposed under ERISA or the Code with respect to any
Employee Benefit Plan nor, to the best of the Company's
knowledge, is there a basis for any such claim. To the best of
the Company's knowledge, no officer, director or employee of the
Company has committed a material breach of any responsibility or
obligation imposed upon fiduciaries by Title I of ERISA with
respect to any Employee Benefit Plan, with respect to which
breach the Company is directly or indirectly liable.
(d) Other than routine claims for benefits, there
is no material claim pending involving any Benefit Plan by any
Person against such plan or the Company or any
<PAGE>
CUSIP No. 12594S 10 5 13D Page 29 of 41
ERISA Affiliate, nor, to the best of the Company's knowledge, is
any such material claim threatened. There is no pending, or to
the best of the Company's knowledge, threatened proceeding
involving any Employee Benefit Plan before the IRS, the United
States Department of Labor or any other governmental authority.
(e) No material violation of any reporting or
disclosure requirement imposed by ERISA or the Code exists with
respect to any Employee Benefit Plan.
(f) Each Benefit Plan has been maintained in all
material respects, by its terms and in operation, in accordance
with ERISA (if applicable), the Code and all other applicable
federal, state, local and foreign laws. The Company and its
ERISA Affiliates have made full and timely payment of all amounts
required to be (i) contributed under the terms of each Benefit
Plan and such laws, or (ii) required to be paid as expenses under
such Benefit Plan. Each Employee Benefit Plan that is intended
to be qualified under Section 401(a) of the Code either has
received a favorable determination letter with respect to such
qualified status from the IRS or has filed a request for such a
determination letter with the IRS within the remedial amendment
period such that such determination of qualified status will
apply from and after the effective date of any such Employee
Benefit Plan.
(g) With respect to any Group Health Plans
maintained by the Company or its ERISA Affiliates, whether or not
for the benefit of the Company's employees, the Company and its
ERISA Affiliates have complied in all material respects with the
provisions of COBRA.
(h) Except pursuant to the provisions of COBRA,
neither the Company nor any ERISA Affiliate maintains any
Employee Benefit Plan that provides benefits described in Section
3(1) of ERISA for any former employees or retirees, or the
beneficiaries of any of them, of the Company or its ERISA
Affiliates.
3.17 Tax Matters.
(a) All deficiencies asserted or assessments made
as a result of any examinations by the Internal Revenue Service
or any state, local or foreign taxing authority have been fully
paid, or are fully reflected as a liability in the Audited
Financial Statements. The Company has filed on a timely basis
all Tax Returns required to have been filed by it and has paid on
a timely basis all Taxes required to be shown thereon as due.
All such Tax Returns are true, complete and correct in all
material respects. The provisions for taxes in the Audited
Financial Statements have been determined in accordance with
GAAP. No liability for Taxes has been incurred by the Company
since the Balance Sheet Date other than in the ordinary course of
its business. No director, officer or employee of the Company
having responsibility for Tax matters has reason to believe that
any Taxing authority has valid grounds to claim or assess any
additional Tax with respect to the Company in excess of the
amounts shown in the Audited Financial Statements for the periods
covered thereby. As used in this Agreement, (l) "Taxes" means
(x) all federal, state, local and other net income, gross income,
gross receipts, sales, use, ad valorem, value added, intangible,
unitary, capital gain, transfer, franchise, profits, license,
lease, service, service use, withholding, backup withholding,
payroll, employment, estimated,
<PAGE>
CUSIP No. 12594S 10 5 13D Page 30 of 41
excise, severance, stamp, occupation, premium, property,
prohibited transactions, windfall or excess profits, customs,
duties or other taxes, fees, assessments or charges of any kind
whatsoever together with any interest and any penalties,
additions to tax or additional amounts with respect thereto, (y)
any liability for payment of amounts described in clause (x)
whether as a result of transferee liability, of being a member of
an affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law and (z) any
liability for the payment of amounts described in clauses (x) or
(y) as a result of any tax sharing, tax indemnity or tax
allocation agreement or any other express or implied agreement to
indemnify any other person for Taxes; and the term "Tax" means
any one of the foregoing Taxes; and (2) "Tax Returns" means all
returns, reports, forms or other information required to be filed
with respect to any Tax.
(b) With respect to all amounts in respect of
Taxes imposed upon the Company or for which the Company is or
could be liable, whether to taxing authorities (as, for example,
under law) or to other persons or entities (as, for example,
under tax allocation agreements), and with respect to all taxable
periods or portions of periods ending on or before the Closing
Date, all applicable Tax laws and agreements have been fully
complied with, and all such amounts required to be paid by the
Company to taxing authorities or others have been paid.
(c) The Company has not received notice that the
Internal Revenue Service or any other taxing authority has
asserted against the Company any deficiency or claim for
additional Taxes in connection with any Tax Return, and no issues
have been raised (and are currently pending) by any taxing
authority in connection with any Tax Return. The Company has not
received notice that it is or may be subject to Tax in a
jurisdiction in which it has not filed or does not currently file
Tax Returns.
3.18 Labor Agreements and Actions.
(a) No collective bargaining agreement exists
that is binding on the Company, and no petition has been filed or
proceedings instituted by an employee or group of employees with
any labor relations board seeking recognition of a bargaining
representative. To the best of the Company's knowledge, no
organizational effort is currently being made or threatened by or
on behalf of any labor union to organize any employees of the
Company.
(b) There is no labor strike, dispute, slow down
or stoppage pending or threatened against or directly affecting
the Company. No grievance or arbitration proceeding arising out
of or under any collective bargaining agreement is pending, and
no claims therefor exist. The Company has not received any
notice, and had no knowledge of any threatened labor or civil
rights dispute, controversy or grievance or any other unfair
labor practice proceeding or breach of contract claim or action
with respect to claims of, or obligations to, any employee or
group of employees of the Company.
(c) All individuals who are performing or have
performed services for the Company and are or were classified by
the Company as "independent contractors" qualify for such
classification under Section 5.30 of the Revenue Act of 1978 or
Section 17.06 of the Tax
<PAGE>
CUSIP No. 12594S 10 5 13D Page 31 of 41
Reform Act of 1986, as applicable, except for such instances
which would not, in the aggregate, have a Material Adverse Effect
3.19 Real Property Holding Corporation Status. Since
its inception the Company has not been a "United States real
property holding corporation", as defined in Section 897(c)(2) of
the U.S. Internal Revenue Code of 1986, as amended, and in
Section 1.897-2(b) of the Treasury Regulations issued thereunder
(the "Regulations"), and the Company has filed with the Internal
Revenue Service all statements, if any, with its United States
income tax returns which are required under Section 1.897-2(h) of
the Regulations.
3.20 Full Disclosure. The representations and
warranties contained in this Agreement, as modified or qualified
by the Disclosure Letter, are true and complete in all material
respects and do not omit to state any materiel fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4. Representations and Warranties of Intel. Intel
represents and warrants, as of the date hereof and as of the
Closing, as follows:
4.1 Investment Intent. Intel is acquiring the Shares
for its own account for investment purposes and not with a view
to the distribution thereof within the meaning of the Securities
Act.
4.2 Restricted Securities. Intel understands that the
Shares constitute "restricted securities" within the meaning of
Rule 144 under the Securities Act and may not be sold, pledged or
otherwise disposed of unless they are subsequently registered
under the Securities Act and applicable state securities laws or
unless an exemption from registration is available.
4.3 Accredited Investor. Intel is an "accredited
investor" within the meaning of Rule 501 under the Securities
Act.
4.4 Due Authorization. All corporate action on the
part of Intel and its officers and directors necessary for the
authorization, execution, delivery of and performance of all
obligations of Intel under this Agreement has been taken or will
be taken prior to the Closing, and this Agreement constitutes a
valid and legally binding obligation of Intel, enforceable
against Intel in accordance with its terms, except as may be
limited by (a) applicable bankruptcy, insolvency, reorganization
or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (b) the effect of
rules of law governing the availability of equitable remedies.
4.5 Governmental Consents. No consent, approval,
order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or
local governmental authority on the part of Intel is required in
connection with the consummation of the transactions contemplated
by this Agreement, except as required in connection with the HSR
Act.
<PAGE>
CUSIP No. 12594S 10 5 13D Page 32 of 41
5. Conditions to Intel's Obligations at Closing. The
obligations of Intel under Sections 1 and 2 of this Agreement are
subject to the fulfillment or waiver, on or before the Closing,
of each of the following conditions:
5.1 Representations and Warranties True. Except as
set forth in the Disclosure Letter, the representations and
warranties of the Company contained in Section 3 will be true and
correct in all material respects on and as of the date hereof and
on and as of the date of the Closing, with the same effect as
though such representations and warranties had been made as of
the Closing, except with respect to representations and
warranties that are made expressly as of a particular date, which
will be true and correct in all material respects on and as of
such date only.
5.2 Performance. The Company will have performed and
complied in all material respects with all agreements,
obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the
Closing and will have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale
described herein.
5.3 Compliance Certificate. The Company will have
delivered to Intel at the Closing a certificate signed on its
behalf by its Chief Executive Officer or Chief Financial Officer
certifying that the conditions specified in Sections 5.1 and 5.2
hereof have been fulfilled.
5.4 Securities Exemptions. The offer and sale of the
Shares to Intel pursuant to this Agreement will be exempt from
the registration requirements of the Securities Act and the
registration or qualification requirements of all applicable
state securities laws.
5.5 HSR Act. The required waiting period under the
HSR Act shall have expired or been terminated without any threat
or commencement of antitrust proceedings with respect to the
transactions contemplated by this Agreement.
5.6 Proceedings and Documents. All corporate and
other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto
will be reasonably satisfactory in form and substance to Intel,
and Intel will have received all such counterpart originals and
certified or other copies of such documents as it may reasonably
request. Such documents shall include (but not be limited to)
the following:
(a) Certified Charter Documents. A copy of (i)
the Certificate of Incorporation of the Company certified as of a
recent date by the Secretary of State of Delaware as a complete
and correct copy thereof, and (ii) the Bylaws of the Company (as
amended through the date of the Closing) certified by the
Secretary of the Company as true and correct copy thereof as of
the Closing.
(b) Board Resolutions. A copy, certified by the
Secretary of the Company, of the resolutions of the Board of
Directors of the Company providing for the approval of this
Agreement and the issuance of the Shares contemplated hereby.
<PAGE>
CUSIP No. 12594S 10 5 13D Page 33 of 41
5.7 Opinion of Company Counsel. Intel will have
received an opinion on behalf of the Company, dated as of the
date of the Closing, from Hughes &: Luce, L.L.P., in form and
substance reasonably satisfactory to Intel.
6. Conditions to the Company's Obligations at Closing.
The obligations of the Company under Sections 1 and 2 of this
Agreement are subject to the fulfillment or waiver, on or before
the Closing, of each of the following conditions:
6.1 Representations and Warranties True. The
representations and warranties of Intel contained in Section 4
will be true and correct in all material respects on and as of
the date hereof and on and as of the date of the Closing, with
the same effect as though such representations and warranties had
been made as of the Closing, except with respect to
representations and warranties that are made expressly as of a
particular date, which will be true and correct in all material
respects on and as of such date only.
6.2 Performance. Intel will have performed and
complied in all material respects with all agreements,
obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the
Closing, including without limitation the payment of the purchase
price as specified in Section 1.
6.3 Securities Exemptions. The offer and sale of the
Shares to Intel pursuant to this Agreement will be exempt from
the registration requirements of the Securities Act and the
registration or qualification requirements of all applicable
state securities laws.
6.4 HSR Act. The required waiting period under the
HSR Act shall have expired or been terminated without any threat
or commencement of antitrust proceedings with respect to the
transactions contemplated by this Agreement.
6.5 Proceedings and Documents. All corporate and
other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto
will be reasonably satisfactory in form and substance to the
Company and to the Company's legal counsel, and the Company will
have received all such counterpart originals and certified or
other copies of such documents as it may reasonably request.
7. Covenants.
7.1 HSR Act. Promptly after the execution hereof, the
Company and Intel shall each complete and file their respective
premerger notification report forms under the HSR Act, and the
Company and Intel will use reasonable efforts to complete and
file such forms as soon as practicable after the date of this
Agreement. After the filing thereof, the Company and Intel shall
use all reasonable efforts to satisfy the HSR Conditions;
provided, however, that neither the Company nor Intel be under
any obligation to comply with any request or requirement imposed
by the Federal Trade Commission (the "FTC"), the Department of
Justice (the "DOJ") or any other governmental authority in
connection with the satisfaction of the HSR Conditions if the
Company or Intel, in the exercise of such entity's reasonable
discretion, elects not to do so. Without limiting the generality
of the foregoing, neither the Company nor Intel
<PAGE>
CUSIP No. 12594S 10 5 13D Page 34 of 41
shall be obligated to comply with any request by, or any
requirement of, the FTC, the DOJ or any other governmental
authority: (i) to disclose confidential information the Company
or Intel, as the case may be, desires to keep confidential; (ii)
to dispose of any assets or operations; or (iii) to comply with
any restriction on the manner in which they conduct their
respective operations.
7.2 Lock-Up Agreement. Intel hereby agrees that,
without the prior written consent of the Company, Intel will not,
during the one year period commencing on the date hereof: (a)
offer, pledge, sell, 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
transfer or dispose of, directly or indirectly, any of the
Shares, or (b) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Shares, whether or not any such
transaction described in clause (a) or (b) above is to be settled
by delivery of such Shares, in cash or otherwise. The
undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the
transfer of the Shares except in compliance with the terms and
conditions of this Agreement.
8. Registration Rights.
8.1 Prior Agreement. The parties agree that the
provisions of this Section 8 will supersede and replace the
provisions of Section 8 of the Stock Purchase Agreement, dated as
of July 1, 1996, between Intel and the Company (the "1996
Agreement").
8.2 Definitions. For purposes of this Section 8, the
following terms have the meanings indicated:
"Commission" means the Securities and Exchange
Commission.
"Registrable Securities" means the Shares and the
600,000 shares of Common Stock purchased by Intel pursuant
to the 1996 Agreement (as adjusted to reflect any stock
dividend or stock split); provided, that any such shares
will cease to be Registrable Securities when (i) a
registration statement covering such shares has been
declared effective by the Commission and such shares have
been disposed of pursuant to such effective registration
statement, (ii) such shares are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the Securities Act
are met or (iii) such shares have been otherwise transferred
and the Company has delivered a new certificate in
substitution for such shares, which new certificate does not
bear a restrictive legend and which shares may be freely
resold without subsequent registration under the Securities
Act.
"Underwriter" means a securities dealer that
purchases any Registrable Securities as principal and not as
part of such dealer's market-making activities.
8.3 Shelf Registration Rights. At any time beginning
six months after the date of the Closing, Intel may request in
writing that the Company effect a shelf registration on Form S-3
(or any successor to such form) of all or any portion of the
Registrable Securities. Upon receipt of such a request, the
Company will use its best efforts to effect, as soon as
practicable,
<PAGE>
CUSIP No. 12594S 10 5 13D Page 35 of 41
the registration of such Registrable Securities on such form (the
"Shelf Registration Statement"). The Company will file in a
timely manner all reports required to be filed by the Company
under the Securities Act and the Exchange Act and will otherwise
use its best efforts to qualify and maintain its qualification
for eligibility to use Form S-3 to register the sale of the
Registrable Securities by Intel. If the Company fails to qualify
or maintain such qualification to use Form S-3, then, at any time
beginning six months after the date of the Closing that the
Company is not eligible to use Form S-3 for such purposes, Intel
may, on a single occasion, request in writing that the Company
effect the registration of all or any portion of the Registrable
Securities for sale in an underwritten offering by Intel, and
upon receipt of such a request, the Company will, as soon as
practicable, use its best efforts to effect the registration of
such Registrable Securities, on the applicable form for which the
Company is eligible, as necessary to permit the disposition of
such Registration Securities in accordance with the intended
method of disposition.
8.4 Incidental Registration Rights. If the Company at
any time proposes to file on its behalf or on behalf of any of
any of its stockholders a registration statement under the
Securities Act relating to the Common Stock, the Company will
give written notice to Intel setting forth the terms of the
proposed offering and offer to include in such filing any
Registrable Securities that Intel may request; provided that such
incidental registration rights will not apply to any registration
statement (i) on Form S-4 or S-8 or any successor form, (ii) for
a transaction covered by Rule 145 under the Securities Act or
(iii) covering only securities to be issued in connection with a
dividend reinvestment and stock purchase plan. If Intel desires
to include Registrable Securities in any such registration, it
must advise the Company in writing within 15 business days after
receipt of such notice, indicating the number of Registrable
Securities for which registration is requested. Subject to
Section 8.5, the Company will include in such filing the number
of Registrable Securities for which registration is so requested
and will use its best efforts to effect the registration thereof
under the Securities Act.
8.5 Priority. If the lead managing Underwriter of an
underwritten offering governed by Section 8.4 notifies the
Company in writing that, in its opinion, the number of shares
requested to be included in such offering is sufficiently large
to materially and adversely affect the success of such offering,
then the number of shares to be sold in such offering will be
reduced to the maximum number that can be sold without any such
material adverse effect, and the Registrable Securities and other
shares proposed to be included in such offering will be included
in the following priority: (i) shares to be offered by the
Company will have priority over shares to be offered by selling
stockholders and (ii) Registrable Securities to be offered by
Intel and any shares to be offered by other selling stockholders
will be treated equally, with any reduction being applied to all
such selling stockholders in proportion to the number of shares
requested by such stockholders to be included in such offering.
8.6 Limitations. The Company's obligations under this
Section 8 are qualified and limited by the following provisions:
(a) With respect to an offering in which Intel is
exercising its incidental registration rights under Section
8.4 above, the Company will have the right to select the
managing Underwriter(s) for such offering.
<PAGE>
CUSIP No. 12594S 10 5 13D Page 36 of 41
(b) If, during the period that a Shelf
Registration Statement is effective, the Company commences
an underwritten offering of Common Stock on its own behalf
or on behalf of selling stockholders, Intel will refrain
from selling Registrable Securities pursuant to such Shelf
Registration Statement for a period of time beginning ten
days before the anticipated effective date of the Company's
offering (as disclosed by the Company to Intel in writing)
and ending 120 days after such effective date (or, if later,
the expiration of any lock-up agreement executed by Intel in
connection with such offering); provided that Intel is given
the opportunity to sell Registrable Securities in such
offering on an equivalent basis with any other selling
stockholders pursuant to Section 8(d) above; and provided
further that this limitation will terminate if the Company
ceases to diligently pursue such offering.
(c) Intel's registration rights under this
Section 8 will terminate at the first time at which Intel is
entitled to sell all of the Registrable Securities in a
single three month period pursuant to Rule 144 under the
Securities Act.
(d) Intel will notify the Company two business
days prior to selling any Registrable Securities pursuant to
a Shelf Registration Statement. During the time that a
Shelf Registration Statement is effective, Intel will
refrain from selling stock pursuant to such Shelf
Registration Statement, if requested in writing by the
Company, during one or more time periods totaling not more
than 30 days in the aggregate during any calendar year.
(e) In connection with any underwritten offering
pursuant to these provisions in which Intel desires to
participate, Intel will complete and execute all
questionnaires, custody agreements, powers of attorney,
indemnities, underwriting agreements, lock-up agreements and
other documents reasonably required by the Underwriters in
connection with such offering.
(f) Intel will furnish to the Company such
information regarding the Registrable Securities and the
intended method of disposition thereof by Intel as is
legally required in connection with any action required to
be taken by the Company hereunder in connection with the
registration of the Registrable Securities.
8.7 Registration Procedures. In connection with any
registration of Registrable Securities under this Section 8, the
Company will:
(a) prepare and file with the Commission a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such
registration statement to become and remain effective,
including by preparing and filing with the Commission any
necessary amendments and supplements to such registration
statement and the prospectus used in connection therewith,
until the earlier of (A) such time as all Registrable
Securities subject to such registration statement have been
disposed of or (B) the expiration of 90 days after the
effective date of such registration statement; provided that
such 90 day limitation shall not apply to any Shelf
Registration Statement;
<PAGE>
CUSIP No. 12594S 10 5 13D Page 37 of 41
(b) furnish to Intel such number of copies of the
registration statement and prospectus (including any
preliminary prospectus and any amendments or supplements) as
may be reasonably requested by Intel;
(c) use its best efforts to register or qualify
the Registrable Securities covered by such registration
statement under the securities or blue sky laws of such
jurisdictions within the United States and Puerto Rico as
Intel reasonably requests, and take such other actions as
may be reasonably required of it to enable Intel to
consummate the disposition in such jurisdictions of the
Registrable Securities covered by such registration
statement; provided that the Company will not be required to
(A) qualify to transact business as a foreign corporation in
any jurisdiction in which it would not otherwise be required
to be so qualified; (B) take any action that would subject
it to general service of process in any such jurisdictions
where it is not then so subject, or (C) subject itself to
any type of taxation in any jurisdiction in which it is not
then so subject;
(d) use its best efforts to cause all such
Registrable Securities to be listed or quoted on each
securities exchange or automated quotation system on which
the Common Stock is then listed or quoted;
(e) if requested by the Underwriters for any
underwritten offering of Registrable Securities, enter into
an underwriting agreement with such Underwriters containing
such representations and warranties by the Company and such
other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary
distributions, including without limitation provisions with
respect to indemnities and contribution as are reasonably
satisfactory to the Company, such Underwriters and Intel;
(f) during the period when the registration
statement is required to be effective, notify Intel of any
event as a result of which the prospectus included in the
registration statement contains an untrue statement of a
material fact or omits to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading, and prepare a supplement or
amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an 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
(g) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission with
respect to such offering and take all such actions as may be
reasonably requested by Intel to facilitate the sale by
Intel of such Registrable Securities pursuant to such
registration statement.
8.8 Expenses. Except as provided in the following
sentence, the Company will bear all expenses arising or incurred
in connection with any registration of Registrable Securities
pursuant to this Section 8, including without limitation (a)
registration fees; (b) filing fees charged by the National
Association of Securities Dealers, Inc., (c) printing expenses;
(d) the
<PAGE>
CUSIP No. 12594S 10 5 13D Page 38 of 41
Company's accounting and legal fees and expenses; (e) expenses of
any special audits or comfort letters incident to or required by
such registration or qualification; and (f) expenses of complying
with the securities or blue sky laws of any jurisdictions in
connection with such registration or qualification. Intel will
bear the expense of all underwriting fees, discounts or
commissions applicable to its sale of Registrable Securities and
the fees and expenses of any separate legal counsel or accounting
firm engaged by Intel.
8.9 Indemnification.
(a) The Company agrees to indemnify and hold
harmless Intel and each person who controls Intel within the
meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all
losses claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such
action or claim) arising out of or based upon based on any
untrue statement of a material fact contained in any
registration statement or prospectus relating to the
Registrable Securities or in any amendment or supplement
thereto, or arising out of or based on 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 such losses,
claims, damages or liabilities are caused by (i) any such
untrue statement or omission or alleged untrue statement or
omission based upon information relating to Intel furnished
to the Company in writing by Intel or on Intel's behalf
expressly for use therein or (ii) with respect to any
offering that is not underwritten, any failure by Intel to
deliver or cause to be delivered a copy of the final
prospectus relating to such offering (as then amended or
supplemented) to the person asserting such claim if such
final prospectus would have cured the defect giving rise to
such loss, claim, damage or liability.
(b) Intel agrees to indemnify and hold harmless
the Company and its directors and officers and each person,
if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity
from the Company to Intel, but only with respect to the
matters specified in clauses (i) and (ii) of the preceding
paragraph.
(c) In case any proceeding (including any
governmental investigation) shall be instituted involving
any person in respect of which indemnity may be sought
pursuant to any of the two preceding paragraphs, such person
(the "Indemnified Party") shall promptly notify the person
against whom such indemnity may be sought (the "Indemnifying
Party") in writing and the Indemnifying Party, upon request
of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the
Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding.
In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified
Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such
<PAGE>
CUSIP No. 12594S 10 5 13D Page 39 of 41
proceeding (including any impleaded parties) include both
the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood that the Indemnifying Party
shall not, in respect of the legal expenses of any
Indemnified Party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in
addition to any local counsel), and that all such fees and
expenses shall be reimbursed as they are incurred. The
Indemnifying Party shall not be liable for any settlement of
any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment
for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
Indemnified Party shall have requested an Indemnifying Party
to reimburse the Indemnified Party for fees and expenses of
counsel as contemplated by this paragraph, the Indemnifying
Party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (A)
such settlement is entered into more than 30 days after
receipt by such Indemnifying Party of the aforesaid request
and (B) such Indemnifying Party shall not have reimbursed
the Indemnified Party in accordance with such request prior
to the date of such settlement. No Indemnifying Party
shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party
from any liability on claims that are the subject matter of
such proceeding.
9. Miscellaneous.
9.1 Entire Agreement. The terms and conditions of
this Agreement represent the entire agreement between the parties
with respect to the subject matter hereof and supersede any prior
agreements or understandings, whether written or oral, between
the parties respecting such subject matter. This Agreement may
be modified only in writing and with the consent of both parties.
9.2 Assignment. Neither party may assign this
Agreement or any rights or obligations hereunder without the
prior written consent of the other.
9.3 Choice of Law. This Agreement shall be construed
and enforced in accordance with the laws of the state of Delaware
applicable to agreements between residents of Delaware wholly
executed and wholly performed therein.
9.4 Confidentiality. Each party shall maintain the
confidentiality of this Agreement and the transactions
contemplated hereby, and neither party shall make any press
release or other public disclosure concerning this Agreement or
the transactions contemplated hereby, except as required by law
or as agreed upon by the parties. In the case of any disclosure
required by law, the disclosing party will provide the other
party a reasonable opportunity to
<PAGE>
CUSIP No. 12594S 10 5 13D Page 40 of 41
review any disclosure and a reasonable opportunity to comment
upon such disclosure or to request confidential treatment.
9.5 Termination. If the Closing has not occurred
within 120 days after the date of this Agreement, then either
party may terminate this Agreement by written notice to the other
party.
IN WITNESSES WHEREOF, the parties have entered into this
Agreement as of the date first set forth above.
INTEL CORPORATION
By: /s/Noel Lazo
Name: Noel Lazo
Title: Assistant Treasurer
CNET, INC.
By: /s/Shelby W. Bonnie
Name: Shelby W. Bonnie
Title: Chief Operating Officer
<PAGE>
CUSIP No. 12594S 10 5 13D Page 41 of 41
EXHIBIT 3
PRESS RELEASE DATED 6/4/97
INTEL INVESTS IN CNET
FINAL
6/4/97
CONTACT: Karen Wood Tom Waldrop
CNET: The Computer Intel Corporation
Network
(415) 395-7800, x1552 (408) 765-8478
[email protected] [email protected]
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CNET ANNOUNCES AGREEMENT WITH INTEL CORPORATION
TO INCREASE ITS INVESTMENT IN CNET, INC.
SAN FRANCISCO, Calif. June 5, 1997--CNET, Inc. (Nasdaq: CNWK)
today announced that Intel Corporation will increase its equity
investment in CNET by purchasing an additional $5.3 million of
CNET common stock from the company. Intel will purchase 201,253
shares at a per share price of $26.34, upon regulatory approval.
With the purchase, Intel will increase its stake in CNET from 4.5
percent to 6 percent.
Halsey Minor, Chairman and CEO of CNET, stated, "We are pleased
that Intel has opted to further its strategic investment in CNET.
We have worked closely on a number of projects since the initial
investment in July of last year, and will continue to pursue
opportunities that are strategic for both companies."
CNET: The Computer Network (Nasdaq: CNWK) is at the leading edge
of media companies, integrating television programming with a
network of sites on the World Wide Web. In both media, CNET
provides authoritative information on computers, the Internet and
digital technologies. CNET's Web sites combine breakthrough
interactive technology with engaging content and design, and are
widely accepted as setting new standards for excellence in the
medium. The company's television programming, which airs on the
USA Network, the Sci-Fi Channel and in national syndication,
reaches an estimated weekly audience of over eight million
viewers.
