EXHIBIT 9
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AGREEMENT OF MERGER
AND PLAN OF LIQUIDATION AND DISSOLUTION
Dated as of April 8, ▇▇▇▇
▇▇▇▇▇
▇▇▇ Internet, Inc.,
National Broadcasting Company, Inc.
And
Rainwater Acquisition Corp.
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TABLE OF CONTENTS
Page
ARTICLE I CERTAIN DEFINITIONS ....................................... 2
SECTION 1.1. Definitions ......................................... 2
SECTION 1.2. Cross References .................................... 4
ARTICLE II THE MERGER ................................................ 6
SECTION 2.1. The Merger .......................................... 6
SECTION 2.2. Effective Time ...................................... 6
SECTION 2.3. Effect of the Merger ................................ 6
SECTION 2.4. Certificate of Incorporation; By-laws ............... 7
SECTION 2.5. Directors and Officers .............................. 7
SECTION 2.6. Effect on Securities ................................ 7
SECTION 2.7. Dissenting Shares ................................... 8
SECTION 2.8. Treatment of Options and Employee Stock Purchase
Plan ................................................ 8
SECTION 2.9. Treatment of Warrants ............................... 9
SECTION 2.10. Surrender of Shares of Common Stock ................. 9
SECTION 2.11. Lost, Stolen or Destroyed Certificates .............. 11
SECTION 2.12. Further Action ...................................... 11
SECTION 2.13. Conversion of Promissory Note ....................... 11
SECTION 2.14. Plan of Liquidation and Dissolution ................. 12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY............. 12
SECTION 3.1. Organization and Qualification; Subsidiaries......... 13
SECTION 3.2. Certificate of Incorporation and By-laws............. 13
SECTION 3.3. Capitalization....................................... 13
SECTION 3.4. Authority Relative to this Agreement................. 14
SECTION 3.5. No Conflict; Required Filings and Consents........... 15
SECTION 3.6. Compliance; Permits.................................. 16
SECTION 3.7. SEC Filings; Financial Statements.................... 16
SECTION 3.8. Absence of Certain Changes or Events................. 16
SECTION 3.9. No Undisclosed Liabilities........................... 17
SECTION 3.10. Absence of Litigation................................ 17
SECTION 3.11. Employee Benefit Plans; Employment Agreements........ 18
SECTION 3.12. Labor Matters........................................ 19
SECTION 3.13. Proxy Statement, Schedule 13E........................ 20
SECTION 3.14. Restrictions on Business Activities.................. 20
SECTION 3.15. Material Contracts................................... 20
SECTION 3.16. Taxes................................................ 21
SECTION 3.17. Brokers.............................................. 22
SECTION 3.18. Intellectual Property................................ 22
SECTION 3.19. Privacy Rights ...................................... 23
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SECTION 3.20. Insurance............................................ 23
SECTION 3.21. No Rights Plan....................................... 23
SECTION 3.22. Opinion of Financial Advisor......................... 23
SECTION 3.23. Board Approvals...................................... 24
SECTION 3.24. Votes Required....................................... 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NBC..................... 24
SECTION 4.1. Organization and Good Standing....................... 24
SECTION 4.2. Capitalization....................................... 24
SECTION 4.3. Authority Relative to this Agreement................. 25
SECTION 4.4. No Conflict; Required Filings and Consents........... 25
SECTION 4.5. Absence of Litigation................................ 26
SECTION 4.6. Proxy Statement; Schedule 13E-3...................... 26
SECTION 4.7. Brokers.............................................. 26
SECTION 4.8. No Prior Activities of Merger Sub.................... 26
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER..................... 26
SECTION 5.1. Conduct of Business by the Company Pending the Merger 27
SECTION 5.2. Additional Agreements with Respect to Conduct of
Business by the Company.............................. 29
SECTION 5.3. Additional Agreements with Respect to Employees...... 30
SECTION 5.4. No Solicitation...................................... 30
ARTICLE VI ADDITIONAL AGREEMENTS....................................... 32
SECTION 6.1. Proxy Statement and Schedule 13E-3.................... 32
SECTION 6.2. Company Stockholders Meeting; Voting Agreement Of
NBC ................................................. 32
SECTION 6.3. Access to Information; Confidentiality................ 33
SECTION 6.4. Consents; Approvals................................... 33
SECTION 6.5. Indemnification and Insurance......................... 34
SECTION 6.6. Notification of Certain Matters....................... 35
SECTION 6.7. Further Action....................................... 35
SECTION 6.8. Public Announcements.................................. 36
SECTION 6.9. Conveyance Taxes...................................... 36
SECTION 6.10. Employee Plans and Benefits........................... 36
SECTION 6.11. Disposition of Litigation............................. 36
ARTICLE VII CONDITIONS TO THE MERGER................................... 36
SECTION 7.1. Conditions to Obligation of Each of the Parties to
Effect the Transactions .............................. 36
SECTION 7.2. Additional Conditions to Obligations of NBC........... 37
SECTION 7.3. Additional Conditions to Obligation of the Company.... 37
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ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.......................... 38
SECTION 8.1. Termination........................................... 38
SECTION 8.2. Effect of Termination................................. 39
SECTION 8.3. Expenses; Termination Fee............................. 39
SECTION 8.4. Amendment............................................. 40
SECTION 8.5. Waiver................................................ 40
ARTICLE IX GENERAL PROVISIONS.......................................... 40
SECTION 9.1. Effectiveness of Representations, Warranties and
Agreements............................................ 40
SECTION 9.2. Notices............................................... 41
SECTION 9.3. Headings; Construction................................ 41
SECTION 9.4. Severability.......................................... 42
SECTION 9.5. Entire Agreement...................................... 42
SECTION 9.6. Assignment............................................ 42
SECTION 9.7. Parties in Interest................................... 42
SECTION 9.8. Failure or Indulgence Not Waiver; Remedies Cumulative. 42
SECTION 9.9. Governing Law; Jurisdiction; Service of Process....... 43
SECTION 9.10. Counterparts.......................................... 43
SECTION 9.11. Waiver of Jury Trial.................................. 43
SECTION 9.12. Obligations of Merger Sub............................. 43
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AGREEMENT OF MERGER
AND PLAN OF LIQUIDATION AND DISSOLUTION
AGREEMENT OF MERGER AND PLAN OF LIQUIDATION AND DISSOLUTION, dated as of
April 8, 2001 (this "Agreement"), among NBC Internet, Inc., a Delaware
corporation (the "Company"), National Broadcasting Company, Inc., a
Delaware corporation ("NBC") and Rainwater Acquisition Corp., a Delaware
corporation and a subsidiary of NBC ("Merger Sub").
W I T N E S S E T H:
WHEREAS, NBC seeks to enter into this Agreement, which provides, among
other things, for Merger Sub to merge with and into the Company (the
"Merger");
WHEREAS, the members of the Board of Directors of the Company elected by
the holders of the Company's Class A Common Stock, par value $.0001 per
share ("Class A Common Stock"), voting separately as a class (the "Class
A Directors"), and NBC have negotiated the terms of the Merger;
WHEREAS, each of (i) the Class A Directors and (ii) the members of the
Board of Directors of the Company elected by the holders of the Company's
Class B Common Stock, par value $.0001 per share ("Class B Common Stock"
and collectively with the Class A Common Stock, "Common Stock"), voting
separately as a class (the "Class B Directors"), voting as separate
classes, have determined that the Merger and the Consideration (as
defined below) to be paid in the Merger to holders of the Class A Common
Stock are fair to and in the best interests of the holders of the Class A
Common Stock and have approved this Agreement;
WHEREAS, the Boards of Directors of the Company and Merger Sub have
approved the Merger upon the terms and subject to the conditions set
forth herein and in accordance with the applicable provisions of the
General Corporation Law of the State of Delaware (the "DGCL") and
Certificate of Incorporation of the Company;
WHEREAS, at the Effective Time (as defined below) of the Merger, each
share of Class A Common Stock shall be converted into the right to
receive the Consideration (as defined below) from the Surviving Company
(as defined below) as successor to the Company upon the Merger;
WHEREAS, immediately following the Effective Time, the Surviving Company
shall distribute its remaining assets and liabilities to NBC in
cancellation of all of the outstanding shares of Class B Common Stock;
and
WHEREAS, this Agreement shall constitute a plan of liquidation and
dissolution and, pursuant thereto, payment of the Consideration shall
constitute an initial liquidating distribution, and the distribution by
the Surviving Company of its remaining assets and liabilities to NBC
shall constitute a final liquidating distribution.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1. Definitions. As used in this Agreement, each of the
following terms shall have the following meaning:
"Affiliate" means a Person that directly or indirectly, through one or
more intermediaries, Controls, is controlled by, or is under common
control with, the first mentioned Person. For purposes of this
Agreement, the Company shall not be considered an Affiliate of NBC and
NBC shall not be considered an Affiliate of the Company.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a day on which banks in New York,
New York or San Francisco, California are required or authorized to be
closed.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Material Adverse Effect" means any materially adverse effect on
(i) the assets or Liabilities of the Company and its Subsidiaries taken
as a whole or (ii) the ability of the Company to timely consummate any of
the Transactions; provided, however, that in no event shall any effect
that results from (A) any change in general economic conditions; (B) any
change affecting the internet or media industry generally; (C) any
failure by the Company to meet revenue and earnings estimates; or (D) the
announcement of this Agreement (including the announcement of the
liquidation and dissolution of the Company contemplated by this
Agreement); or (E) except for purposes of Sections 3.3, 3.4, 3.5,
3.11(g), 3.14, 3.17, 3.21, 3.22, 3.23 and 3.24 hereof, any effect that
results from compliance by the Company or any Subsidiary of the Company
with the provisions of Sections 5.2 and 5.3 hereof, constitute or be
considered in determining the existence of a Company Material Adverse
Effect. As used in Section 3.18 hereof, "Company Material Adverse
Effect" shall also include any materially adverse effect on the business
of the Company and its subsidiaries, taken as a whole, subject to the
foregoing provisos set forth in clauses (A) through (E).
"Control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of stock, as
trustee or executor, by contract or credit arrangement or otherwise.
"Dollars" or "$" means United States dollars.
"Equity Interest" means with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such Person's capital
stock or other equity interests (including, without limitation,
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partnership or membership interests in a partnership or limited liability
company or any other interest or participation that confers on a Person
the right to receive a share of the profits and loss, or distributions of
assets, of the issuing Person) whether outstanding on the date hereof or
issued after the date hereof, and any and all warrants, options or other
rights to acquire (including without limitation, any securities
convertible into or exchangeable for) any such Equity Interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the SEC rules and regulations promulgated thereunder.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Intellectual Property" means all United States, state and foreign
intellectual property, whether registered or unregistered, including,
without limitation, all (i)(a) patents, inventions, discoveries,
processes, designs, techniques, developments, technology and related
improvements and know-how; (b) copyrights and works of authorship in any
media, including computer programs, hardware, firmware, software,
analyses, source and object code, applications, files, systems,
databases, documentation and related items, Internet site content
(including graphics, text, user interface and all other elements),
advertising and promotional materials, and the materials or media
embodying the foregoing; (c) trademarks, service marks, trade names,
brand names, corporate names, domain names, URLs, logos, trade dress, the
goodwill of any business symbolized thereby and all common-law rights
relating thereto; (d) trade secrets, rights in advertiser, customer,
user, subscriber and vendor data, or other confidential or proprietary
documents, files, analyses, lists, ways of doing business and/or
information; and (ii) any and all registrations, applications, licenses
and recordings related thereto.
"Investments Sub" means GE Investments Subsidiary, Inc., a Delaware
corporation.
"Knowledge" means the actual knowledge of any of the executive officers
of the Company or NBC, as the case may be.
"Liabilities" means, as to any Person, all debts, liabilities and
obligations, direct, indirect, absolute or contingent of such Person,
whether accrued, vested or otherwise, whether known or unknown and
whether or not actually reflected, or required by GAAP to be reflected,
in such Person's balance sheet or other books and records.
"Minority Investment" of the Company or any other Person means any
corporation, limited liability company, partnership, joint venture or
other entity of which the Company or such other Person, as the case may
be (either alone or through or together with any other Subsidiary), owns,
directly or indirectly, more than 5% of the Equity Interests but which is
not a Subsidiary of the Company or such other Person.
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"NBC Material Adverse Effect" means any materially adverse effect on the
ability of NBC and Merger Sub to timely consummate the Transactions.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other
entity or group (as defined in Section 13(d)(3) of the Exchange Act).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
SEC rules and regulations promulgated thereunder.
"Subsidiary" of the Company or any other Person means any corporation,
limited liability company, partnership, joint venture or other entity of
which the Company or such other Person, as the case may be (either alone
or through or together with any other Subsidiaries), (a) owns, directly
or indirectly, 50% or more of the stock or other interests the holders of
which are generally entitled to vote for the election of the board of
directors or other governing body of such Person or (b) serves as a
general partner or managing member.
"Tax Return" means any return, declaration, report or similar statement
required to be filed with any Governmental Authority with respect to any
Taxes (including any attached schedules), including any information
return, claim for refund, amended return and declaration of estimated
Tax.
"Taxes" means all United States federal, state, local or foreign income,
profits, estimated gross receipts, windfall profits, environmental
(including taxes under Section 59A of the Code), severance, property,
intangible property, occupation, production, sales, use, license, excise,
emergency excise, franchise, capital gains, capital stock, employment,
withholding, social security (or similar), disability, transfer,
registration, stamp, payroll, goods and services, value added,
alternative or add-on minimum tax, estimated, or any other tax, custom,
duty or governmental fee, or other like assessment or charge of any kind
whatsoever, together with any interest, penalties, fines, related
liabilities or additions to tax they may become payable in respect
therefore imposed by any Governmental Authority, whether disputed or not.
"Third Party" means a Person (or group of Persons) other than NBC and its
Affiliates.
"Transactions" means the Merger and the Distribution.
SECTION 1.2. Cross References. As used in this Agreement, each
of the following capitalized terms shall have the meaning ascribed to
them in the Section set forth opposite such term:
Term Section
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2000 Balance Sheet 3.9
401(k) Plan 6.10
Acquisition Agreement 5.4(d)
Acquisition Proposal 5.4(a)
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Term Section
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Action 6.5(a)
Alternative Transaction 5.4(c)
Assumption 2.14(a)
Cap Ex Budget 3.15(a)(i)
Certificate of Merger 2.2
Class A Common Stock Recitals
Class A Directors Recitals
Class B Common Stock Recitals
Class B Directors Recitals
Closing 2.2
Closing Date 2.2
Common Stock Recitals
Company Charter Documents 3.2
Company Disclosure Schedule 3
Company Employee Plan 3.11(a)
Company ESPP 2.8(b)
Company IP 3.18(a)
Company Option 2.8(a)
Company-Owned IP 3.18(b)
Company Permits 3.6(b)
Company SEC Reports 3.7(a)
Company Stockholders Meeting 3.13
Company Warrant 2.9(a)
Confidentiality Letter 6.3
Consideration 2.6(b)
Contracts 3.15(a)
D&O Insurance 6.5(b)
DGCL Recitals
Dissenting Shares 2.7
Distribution 2.14(a)
Effective Time 2.2
ERISA Affiliate 3.11(a)
GAAP 3.7(b)
Governmental Authority 3.5(b)
Indemnification Agreements 6.5(a)
Indemnified Party 6.5(a)
Insurance Policies 3.20
Interim Period 5.1
IP Contract 3.20
Laws 3.5(a)
Liens 3.3(b)
Material Contracts 3.15(a)
Merger Recitals
Merger Sub Common Stock 2.6(a)
Minority Investment Documents 3.2
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Term Section
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Option Consideration 2.8(a)
Option Notice 2.8(a)
Paying Agent 2.10(a)
Preferred Stock 3.3(a)
Privacy Rights 3.19
Proxy Statement 3.13
Reduction Plan 5.2
Requisite Stockholder Approvals 7.1(a)
Schedule 13 E-3 3.13
Section 203 3.4
Subsidiary Documents 3.2
Superior Proposal 5.4(b)
Surviving Company 2.1
Termination Fee 8.3(a)
Underwater Warrants 2.9(a)
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. At the Effective Time, and subject to
and upon the terms and conditions of this Agreement and the DGCL, Merger
Sub shall be merged with and into the Company, the separate corporate
existence of Merger Sub shall cease, and the Company shall continue as
the Surviving Company (hereinafter sometimes referred to as the
"Surviving Company") under the name "NBC Internet, Inc."
SECTION 2.2. Effective Time. Unless this Agreement shall have
been terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 8.1, as promptly as practicable (and in any
event within two Business Days) after the satisfaction or waiver of the
conditions set forth in Article VII, the parties hereto shall cause the
Merger to be consummated by filing a certificate of merger as
contemplated by the DGCL (the "Certificate of Merger"), together with any
required related certificates, with the Secretary of State of the State
of Delaware, in such form as required by, and executed in accordance with
the relevant provisions of, the DGCL. The Merger shall become effective
at the time of such filing or at such later time agreed to by NBC and the
Company and specified in the Certificate of Merger (the "Effective
Time"). Prior to such filing, a closing (the "Closing") shall be held at
such time as may be agreed upon by NBC and the Company, at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
unless another place is agreed to in writing by the parties hereto, for
the purpose of confirming the satisfaction or waiver, as the case may be,
of the conditions set forth in Article VII. The date of such closing is
referred to herein as the "Closing Date".
SECTION 2.3. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in this Agreement, the Certificate
of Merger and the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time (i)
the Surviving Company shall possess all rights, privileges, powers and
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franchises, both public and private, and all of the property, real, personal,
and mixed of each of the Company and Merger Sub and all obligations belonging
to or due to Merger Sub or the Company, all of which shall be vested in the
Surviving Company without any further act or deed; and (ii) the Surviving
Company shall be liable for all the obligations of Merger Sub and the Company.
SECTION 2.4. Certificate of Incorporation; By-laws (a)
Certificate of Incorporation. Unless otherwise determined by NBC prior
to the Effective Time, at the Effective Time the Certificate of
Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be amended and restated so as to read in its
entirety in the form set forth in Exhibit A and shall be the Certificate
of Incorporation of the Surviving Company until thereafter amended as
provided by the DGCL and such Certificate of Incorporation.
(b) By-laws. The By-laws of Merger Sub, as in effect immediately prior
to the Effective Time, shall be the By-laws of the Surviving Company
until thereafter amended as provided in its Certificate of Incorporation
and by the DGCL.
SECTION 2.5. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of
the Surviving Company, each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving Company, and
the officers of Merger Sub immediately prior to the Effective Time shall
be the initial officers of the Surviving Company, in each case until
their respective successors are duly elected or until their earlier
resignation, removal from office or death.
SECTION 2.6. Effect on Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of NBC, Merger
Sub, the Company or the holders of any securities of the Company:
(a) Conversion of Common Stock of Merger Sub. Each share of common
stock of Merger Sub, par value $0.01 per share ("Merger Sub Common
Stock"), issued and outstanding immediately prior to the Effective Time,
shall be converted into the right to receive the amount of the cash
capital contributed by the holder of such Merger Sub Common Stock upon
issuance thereof by Merger Sub.
(b) Conversion of Class A Common Stock of the Company. Each share of
Class A Common Stock issued and outstanding immediately prior to the
Effective Time (other than Dissenting Shares and such shares held by the
Company or any Subsidiary of the Company), shall be converted into the
right to receive $2.19 in cash (the "Consideration") from the Surviving
Company.
(c) Conversion of Class B Common Stock of the Company. Each share of
Class B Common Stock, issued and outstanding immediately prior to the
Effective Time (other than such shares held by the Company or any of its
Subsidiaries), shall remain outstanding as of the Effective Time as
validly issued, fully paid and nonassessable shares of Class B common
stock, par value $.0001 per share, of the Surviving Company, having all
the same rights, privileges and preferences as the Class B Common Stock.
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(d) Cancellation. Each share of Class A Common Stock or Class B common
stock held in the treasury of the Company or by any of its Subsidiaries
immediately prior to the Effective Time shall cease to be outstanding and
shall be cancelled and retired without payment of any consideration
therefor, and cease to exist.
SECTION 2.7. Dissenting Shares. (a) Notwithstanding any
provision of this Agreement to the contrary, any shares of Class A Common
Stock issued and outstanding immediately prior to the Effective Time, and
held by a holder who has the right to demand payment for and any
appraisal of such shares in accordance with Section 262 of the DGCL (or
any successor provision), who perfects his demand for the appraisal of
the fair value of his shares of Class A Common Stock in accordance with
the DGCL and, as of the Effective Time, has neither effectively withdrawn
nor lost his right to make such demand (such shares of Class A Common
Stock, the "Dissenting Shares"), shall not be converted into or represent
a right to receive the Consideration pursuant to Section 2.6(b), but the
holder thereof shall be entitled to only such rights as are granted by
the DGCL.
(b) Notwithstanding the provisions of Section 2.7(a), if any holder
of Dissenting Shares effectively withdraws or loses (through failure to
perfect or otherwise) his right to make such demand, then as of the
Effective Time or the occurrence of such event, whichever occurs later,
such dissenting holder's shares of Class A Common Stock shall
automatically be converted into and represent only the right to receive
the Consideration as provided in Section 2.6(b) without interest thereon,
upon surrender of the certificate or certificates representing such
shares.
(c) The Company shall give NBC (i) prompt notice of any written
demands for appraisal of the fair value of any shares of Common Stock,
withdrawals of such demands and any other instruments served pursuant to
the DGCL received by the Company after the date hereof and (ii) the
opportunity to participate in and, after the Effective Time, direct all
negotiations and proceedings with respect to demands for appraisal or the
payment of the fair cash value of any such shares under the DGCL. The
Company shall not voluntarily make any payment with respect to any
demands for appraisal or the payment of the fair cash value of any shares
and shall not, except with the prior written consent of NBC, settle or
offer to settle any such demands.
SECTION 2.8. Treatment of Options and Employee Stock Purchase
Plan. (a) Not later than fifteen days (15) prior to the Effective Time,
the Company shall send a notice (the "Option Notice") to all holders of
options to purchase shares of Common Stock (each, a "Company Option"):
(i) specifying that such options shall not be assumed in connection with
the Merger, (ii) specifying that the vesting restrictions applicable to
all Company Options outstanding at the time of such notice shall be
eliminated such that no vesting restrictions remain thereon, and (iii)
specifying that any Company Options outstanding as of the Effective Time
shall terminate and be cancelled at such time and represent only the
right to receive the Option Consideration as described in this Section
2.8(a). The Company shall permit each holder of a Company Option who
desires to exercise all or any portion of such Company Option following
receipt of the Option Notice to exercise any portion of such Company
Option. All Company Options outstanding as of the Effective Time shall
by virtue of the Merger, and without any action on the part of the holder
thereof, be terminated and cancelled as of the Effective Time.
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The holder of each Company Option so cancelled shall be entitled to receive
from the Company at the Effective Time or as soon as practicable
thereafter from the Company in consideration for such cancellation an
amount in cash equal to the product of (x) the number of shares subject
to such Company Option and (y) the excess of the Consideration over the
exercise price per share issuable upon exercise of such Company Option,
adjusted for applicable withholding taxes (the "Option Consideration").
NBC and the Company agree to take all corporate or other action as shall
be necessary to effectuate the foregoing.
(b) Prior to the Effective Time, all rights to purchase shares of
Common Stock outstanding under the Company's 1999 Employee Stock Purchase
Plan (the "Company ESPP") immediately prior to such date shall be
exercised and each share of Common Stock purchased pursuant to such
exercise shall by virtue of the Merger, and without any action on the
part of the holder thereof, be converted into the right to receive the
Consideration payable in respect thereof, without the issuance of
certificates representing issued and outstanding shares of Common Stock.
Any Common Stock issued pursuant to the Company ESPP shall be deemed
issued and outstanding at the Effective Time. The Company ESPP shall be
terminated immediately following such exercises. NBC and the Company
agree to take all corporate or other action as shall be necessary to
effectuate the foregoing.
SECTION 2.9. Treatment of Warrants. (a) Each warrant to
purchase shares of Common Stock (each, a "Company Warrant") which has an
exercise price per share that is equal to or greater than the
Consideration (the "Underwater Warrants") shall be cancelled as of the
Effective Time without consideration. Each Company Warrant (other than
an Underwater Warrant) shall (A) become fully vested and exercisable as
of the Effective Time, to the extent that it was not fully vested prior
thereto, and (B) be cancelled by the Company and the holder thereof shall
receive at the Effective Time or as soon as practicable thereafter from
the Company in consideration for such cancellation an amount in cash
equal to the product of (a) the number of shares subject to such Company
Warrant and (b) the excess of the Consideration over the exercise price
per share issuable upon exercise of such Company Warrant, adjusted for
applicable withholding taxes. NBC and the Company agree to take all
corporate or other action as shall be necessary to effectuate the
foregoing, and the Company shall use its commercially reasonable efforts
to obtain, if required, prior to the Closing Date, such consent of each
holder of a Company Warrant as shall be necessary to effectuate the
foregoing.
(b) As soon as practicable following the date hereof, the Company shall
provide to the record holders of Company Warrants appropriate notice of
such holders' rights thereunder.
SECTION 2.10. Surrender of Shares of Common Stock. (a) Prior to the
Effective Time, the Company shall appoint a bank or trust company that is
reasonably satisfactory to the Company and NBC to act as agent (the
"Paying Agent") for the payment of the Consideration.
(b) The Surviving Company shall, at the Effective Time, provide the
Paying Agent with the full amount of the Consideration, in immediately
available funds. The Paying Agent shall invest the Consideration as
directed by the NBC or the Surviving Company, as the
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case may be, on a daily basis. Any interest and other income resulting from
such investments shall be paid to the Surviving Company.
(c) Promptly following the Effective Time, the Surviving Company shall
instruct the Paying Agent to mail, no later than two Business Days after
the Effective Time, to each holder of record of a certificate
representing shares of Class A Common Stock converted upon the Merger
pursuant to Section 2.6(b), (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to
the certificates shall pass, only upon delivery of the certificates to
the Paying Agent and shall be in such form and have such other provisions
as NBC or the Surviving Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the certificates. The
Paying Agent shall accept such certificates upon compliance with such
reasonable terms and conditions as the Paying Agent may impose to effect
an orderly exchange thereof in accordance with normal exchange practices.
Each holder of a certificate or certificates representing shares of Class
A Common Stock converted upon the Merger pursuant to Section 2.6(b) may
thereafter surrender such certificate or certificates to the Paying
Agent, as agent for such holder, to effect the surrender of such
certificate or certificates on such holder's behalf for a period ending
six months after the Effective Time. Upon the due surrender of
certificates representing shares of Class A Common Stock that have been
converted into the right to receive the Consideration, the Surviving
Company shall cause the Paying Agent to pay the holder of such
certificates in exchange therefor the applicable Consideration multiplied
by the number of shares of Class A Common Stock represented by such
certificate that have been so converted. Until so surrendered, each such
certificate shall represent solely the right to receive the applicable
Consideration relating thereto.
(d) If payment of the Consideration in respect of converted shares of
Class A Common Stock is to be made to a Person other than the Person in
whose name a surrendered certificate is registered, it shall be a
condition to such payment that the certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form for transfer and
that the Person requesting such payment shall have paid any transfer and
other taxes required by reason of such payment in a name other than that
of the registered holder of the certificate or instrument surrendered or
shall have established to the satisfaction of the Surviving Company or
the Paying Agent that such tax either has been paid or is not payable.
(e) At and after the Effective Time, no further transfer of shares of
Class A Common Stock which have been converted pursuant to this Agreement
into Consideration shall be made, other than transfers of shares of Class
A Common Stock that have occurred prior to the Effective Time. In the
event that, after the Effective Time, certificates representing shares of
Class A Common Stock that have been converted pursuant to this Agreement
into Consideration are presented to the Surviving Company, they shall be
cancelled and exchanged for the Consideration provided in Section 2.6.
(f) The Consideration paid in the Merger shall be net to the holder of
shares of Class A Common Stock without interest thereon, and shall be
subject to reduction only for any applicable United States federal or
other back-up withholding or stock transfer taxes payable by such holder.
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(g) Promptly following the date which is six months after the Effective
Time, the Paying Agent shall deliver to the Surviving Company all cash,
certificates and other documents in its possession relating to the
Transactions, and the Paying Agent's duties shall terminate. Thereafter,
each holder of a certificate representing shares of Class A Common Stock
may surrender such certificate to the Surviving Company and (subject to
any applicable abandoned property, escheat or similar law) receive in
consideration therefor the aggregate Consideration relating thereto,
without any interest thereon.
(h) None of Merger Sub, the Surviving Company or the Paying Agent shall
be liable to any holder of shares of Class A Common Stock for any cash or
securities delivered to a public official pursuant to any abandoned
property, escheat or similar Law.
(i) In the event the Surviving Company does not have adequate funds to
provide the full Consideration to the Paying Agent at the Effective Time
pursuant to Section 2.10(b) hereof, NBC agrees that immediately prior to
the Effective Time it shall prepay all or such portion of the promissory
note, dated November 30, 1999, in the original principal amount of
$340,000,000 issued by NBC and held by Issuer, as is necessary to provide
adequate additional funds to enable the Company to provide such
Consideration in accordance with Section 2.10(b) hereof (after paying all
fees and expenses of the Company incurred in connection with this
Agreement). For the avoidance of doubt, NBC will also continue to make
all regularly scheduled payments of principal and interest on such
promissory note until the Effective Time. Any and all Equity Interests in
the Surviving Company outstanding after the Effective Time, other than
the Class B Common Stock held by NBC, shall be cancelled.
SECTION 2.11. Lost, Stolen or Destroyed Certificates. In the event any
certificates representing shares of Class A Common Stock shall have been
lost, stolen or destroyed, the Paying Agent shall deliver the
Consideration pursuant to Section 2.6, in exchange for such lost, stolen
or destroyed certificates upon the making of an affidavit of that fact by
the holder thereof; provided, however, that the Surviving Company may, in
its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificates to
deliver an indemnity against any claim that may be made against the
Surviving Company or the Paying Agent with respect to the certificates
alleged to have been lost, stolen or destroyed.
SECTION 2.12. Further Action. If, at any time after the Effective
Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to put the Surviving Company in possession
of all assets and property of every description and every interest,
wherever located, and the rights, privileges, immunities, powers,
franchises and authority, of a public as well as of a private nature, of
the Company and Merger Sub, the Persons who were officers and directors
of the Company and Merger Sub immediately prior to the Effective Time are
fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary action.
SECTION 2.13. Conversion of Promissory Note. (a) After satisfaction
of the conditions to closing set forth in Article VII hereof and
immediately prior to the Effective Time, (i) NBC will convert the Subordinated
Zero Coupon Convertible Debenture of the Company dated November 30, 1999
in the principal amount of $39,477,953 held by NBC into shares of
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Class B Common Stock and (ii) Investments Sub will convert the
Subordinated Zero Coupon Convertible Debenture of the Company dated
November 30, 1999 in the principal amount of $477,416,845 held by
Investments Sub into shares of Class B Common Stock, in each case
pursuant to the optional conversion provisions contained in Section 2(a)
of each such debenture. Investments Sub will then transfer all Class B
Common Stock held by it to NBC.
(b) Each of Investments Sub and NBC hereby agrees that Company's
execution and delivery of this Agreement and the consummation of the
Transactions and the other transactions contemplated by this Agreement
shall not constitute an Event of Default or otherwise be considered a
breach of any provisions of the Subordinated Zero Coupon Convertible
Debenture held by it.
SECTION 2.14. Plan of Liquidation and Dissolution. (a) Immediately
after the Effective Time, the Surviving Company shall make a final
liquidating distribution to NBC, as sole stockholder of the Surviving
Company, in exchange for all Class B Common Stock by transferring,
assigning and delivering to NBC all of the Surviving Company's right,
title and interest in and to all properties, assets and other rights
owned or leased by, or licensed to Surviving Company, but excluding the
full amount of the Consideration required to be provided by it to the
Paying Agent pursuant to Section 2.10(b) hereof (the "Distribution"). In
consideration for the Distribution, all Class B Common Stock shall be
cancelled and NBC shall simultaneously assume and agree to pay, perform
and discharge when due, any and all Liabilities (including Taxes) of the
Surviving Company, but excluding the obligation to provide the
Consideration to the Paying Agent pursuant to Section 2.10(b) hereof (the
"Assumption").
(b) On the Closing Date, after the Effective Time, the Distribution
and the Assumption, the Surviving Company shall dissolve by filing a
certificate of dissolution as contemplated by the DGCL with respect to
the Surviving Company, together with any required related certificates,
with the Secretary of State of the State of Delaware, in such form as
required by, and executed in accordance with the relevant provisions of,
the DGCL.
(c) For all tax purposes, the Agreement shall constitute a plan of
liquidation pursuant to Section 331 of the Code and payment of the
Consideration shall constitute the initial liquidating distribution and
the Distribution shall constitute the final liquidating distribution of
the Surviving Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth (a) in the written disclosure schedule dated as of
the date of this Agreement and previously delivered by the Company to NBC
(the "Company Disclosure Schedule") (it being understood that the Company
Disclosure Schedule shall be arranged in sections corresponding to the
sections contained in this Agreement, and the disclosures in any section
of the Company Disclosure Schedule shall qualify all of the representations
in the corresponding section of this Article III and, in addition, all other
sections in this Article III to the extent it is reasonably clear from a
reading of the disclosure that such disclosure is applicable to such other
sections), (b) in the Company SEC Reports (as defined in Section 3.7(a))
filed prior
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to the date hereof to the extent it is reasonably clear from a reading of the
disclosure in such Company SEC Reports that such disclosure is applicable to
the relevant representation and warranty contained herein or (c) in Contracts
between the Company and any of its Subsidiaries, on the one hand, and NBC and
any of its Subsidiaries, on the other hand, the Company hereby represents and
warrants to NBC and Merger Sub as follows:
SECTION 3.1. Organization and Qualification; Subsidiaries. Each
of the Company and its Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or formation and has the requisite corporate or other power
and authority necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted. Each of the Company
and its Subsidiaries is duly qualified or licensed as a foreign
corporation or entity to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, leased or
operated by it or the nature of its activities makes such qualification
or licensing necessary, except where the failure to be so duly qualified
or licensed and in good standing would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect. Section 3.1 of the Company Disclosure Schedule sets forth a list
of all Subsidiaries of the Company together with the jurisdiction of
incorporation or formation of each such Subsidiary and the percentage of
each class or type of each such Subsidiary's outstanding Equity Interests
owned by the Company or another Subsidiary of the Company.
SECTION 3.2. Certificate of Incorporation and By-laws. The
Company has heretofore made available to NBC a complete and correct copy
of (a) its Certificate of Incorporation and By-laws as amended through
the date hereof (the "Company Charter Documents"), (b) the Certificates
of Incorporation and By-laws (or equivalent organizational documents) of,
and any investor rights, voting, co-sale or other similar agreements
applicable to, each of its Subsidiaries (the "Subsidiary Documents") and
(c) the Certificates of Incorporation and By-laws (or equivalent
organizational documents) and any investor rights, voting, co-sale or
other agreements applicable to the Company or its Subsidiaries with
respect to each of its Minority Investments (the "Minority Investment
Documents"). Such Company Charter Documents and Subsidiary Documents,
and, to the Company's knowledge, the Minority Investment Documents, are
in full force and effect and no other charter or organizational documents
or investor rights, voting, co-sale or other similar agreements are
applicable to or binding on the Company or its Subsidiaries or Minority
Investments. Neither the Company, any of its Subsidiaries nor, to the
Company's knowledge, any Minority Investment is in violation of any
provision of its Articles of Incorporation or By-laws or equivalent
organizational documents.
SECTION 3.3. Capitalization. (a) The authorized capital stock
of the Company consists of 100,000,000 shares of Class A Common Stock,
100,000,000 shares of Class B Common Stock and 10,000,000 shares of
Preferred Stock, $.0001 par value ("Preferred Stock"). As of March 31,
2001, (i) 39,019,243 shares of Class A Common Stock were issued and
outstanding, all of which are validly issued, fully paid and
nonassessable and were issued free of preemptive or similar rights, (ii)
no shares of Common Stock were held by Subsidiaries of the Company, (iii)
10,286,317 shares of Class A Common Stock were issuable upon the exercise
of Company Options then outstanding, (iv) 8,682,582 shares of unissued
Common Stock were reserved for issuance under Company Employee Plans, (v)
244,004 shares of Class A Common Stock were issuable upon the exercise of
Company Warrants then outstanding, (vi) 24,550,708
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shares of Class B Common Stock were issued and outstanding, all of which are
validly issued, fully paid and nonassessable and were issued free of
preemptive or similar rights and (vii) no shares of Preferred Stock were
issued and outstanding. Between March 31, 2001 and the date of this
Agreement, the Company has not issued or reserved for issuance any
Class A Common Stock, Company Options or other Equity Interests of the
Company, except the issuance of Class A Common Stock as a result of the
exercise of Company Options outstanding at March 31, 2001. Between
December 31, 2000 and the date of this Agreement, neither the Company nor
any of its Subsidiaries has declared or paid any dividend or distribution
in respect of any of its Equity Interests and neither the Company nor any
of its Subsidiaries has repurchased, redeemed or otherwise acquired any
Equity Interests of the Company or any of its Subsidiaries, and the Board
of Directors has not resolved to do any of the foregoing.
(b) Neither the Company nor any of its Subsidiaries owns any Minority
Investments in any Person that is not a Subsidiary. All of the
outstanding Equity Interests of the Company's Subsidiaries and all of the
Equity Interests of the Minority Investments owned by the Company or its
Subsidiaries are duly authorized, validly issued, fully-paid and
nonassessable, and all such shares are owned by the Company or another
Subsidiary of the Company, free and clear of all security interests,
liens, claims, pledges, charges or other encumbrances of any nature
whatsoever ("Liens") or any other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of such
Equity Interests) and were issued in compliance with all applicable
federal and state securities Laws.
(c) Section 3.3(c) of the Company Disclosure Schedule sets forth the
total outstanding Company Options and Company Warrants as of March 31,
2001 (other than all Underwater Warrants and all Company Options that
have an exercise price per share that is equal to or greater than the
Consideration), together with the aggregate exercise price therefor and
the total number of shares of Company Common Stock subject thereto.
Except as set forth in Section 3.1 or 3.11 or this Section 3.3, as of the
date of this Agreement, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character binding on the
Company or any of its Subsidiaries relating to the issued or unissued
Equity Interests of the Company or any of its Subsidiaries or obligating
the Company or any of its Subsidiaries to issue, sell, repurchase, redeem
or otherwise acquire any Equity Interests of the Company or any of its
Subsidiaries.
(d) As of the date hereof, the only outstanding indebtedness for
borrowed money of the Company and its Subsidiaries is set forth in
Section 3.3(d) of the Company Disclosure Schedule.
SECTION 3.4. Authority Relative to this Agreement. The Company
has all necessary corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and to consummate
the Merger. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the Transactions have been duly and validly
authorized by all necessary corporate action of the Company other than the
adoption of this Agreement by the Company's stockholders in accordance with
the DGCL and the Company Charter Documents, and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the Merger (other than the adoption of this Agreement by the
Company's stockholders in accordance with the DGCL,
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including, to the extent applicable, Section 203 of the DGCL ("Section 203")
and the Company Charter Documents and the filing and recordation of the
appropriate documents with respect to the Merger in accordance with the DGCL).
This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery hereof
by NBC and Merger Sub, constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent limited by bankruptcy, insolvency, moratorium,
fraudulent conveyance, or other Laws affecting the rights of creditors
generally, and to the extent that the availability of equitable remedies
may be limited by equitable principles.
SECTION 3.5. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by the Company does not, and
the performance of this Agreement by the Company and the consummation of
the Transactions will not, (i) conflict with or violate the Company
Charter Documents, the Subsidiary Documents or the Minority Investment
Documents, (ii) assuming that all consents, approvals and authorizations
contemplated by clauses (i) and (iii) of subsection (b) of this Section
3.5 have been obtained and all filings described in such clauses have
been made, conflict with or violate any law, statute, ordinance, rule,
regulation, order, judgment or decree (collectively, "Laws") applicable
to the Company or any of its Subsidiaries or, to the knowledge of the
Company, any of its Minority Investments or by which any of their
respective properties is bound or affected, or (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or alteration of
rights under or require the consent or approval of any Person under, or
result in the creation of a Lien on any of the properties or assets of
the Company or any of its Subsidiaries or, to the knowledge of the
Company, Minority Investments pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, joint
venture, limited liability or partnership agreement or other instrument
to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries or any of their respective
material properties is bound or affected, except, in the case of clauses
(ii) and (iii) of this Section 3.5(a), for any conflict, violation,
breach, default, impairment, right or lack of consent or approval that
would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company and the
consummation of the Transactions will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
federal, state or local court or governmental or regulatory authority or
agency, domestic or foreign (each, a "Governmental Authority"), except
(i) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, or (ii) consents, approvals,
authorizations, permits, filings or notifications which have heretofore
been obtained or made, as the case may be, by the Company and are in full
force and effect. The consummation of the Transactions will not result
in the lapse or termination of any Company Permits (as defined below) or
the breach of or default under any Company Permit, except for such
lapses, terminations, breach or defaults that would not, individually or
in the aggregate, reasonably be expected to have a Company Material
Adverse Effect.
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SECTION 3.6. Compliance; Permits. (a) Neither the Company nor
any of its Subsidiaries has failed to comply with, or has been in breach
of or is in conflict with, or in default or violation of (i) any material
Law applicable to the Company or any of its Subsidiaries or by which any
of their respective material properties is bound or (ii) any Material
Contract except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(b) The Company and its Subsidiaries have, and are in compliance with,
all domestic and foreign permits, licenses, easements, variances,
exemptions, consents, certificates, orders and approvals from
Governmental Authorities which are material to the operation of the
business of the Company and its Subsidiaries taken as a whole as it is
now being conducted (collectively, the "Company Permits"), except where
the failure to hold such Company Permits would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
SECTION 3.7. SEC Filings; Financial Statements. (a) The Company
and its predecessors have filed on a timely basis all forms, reports and
documents required to be filed with the SEC since July 12, 1999 (all
forms, reports and documents filed by the Company and its predecessors
with the SEC since July 12, 1999 are referred to herein as the "Company
SEC Reports"). No Subsidiary of the Company is required to file any
form, report, statement, schedule, registration statement or other
document with the SEC. The Company SEC Reports (i) complied as to form
in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations
thereunder, each as in effect on the date so filed or amended, and (ii)
did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Each of the audited and unaudited consolidated financial statements
(including, in each case, any related notes thereto) contained in the
Company SEC Reports were prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes thereto or in the Company SEC Reports), and each fairly presents
the consolidated financial position of the Company and its Subsidiaries
at the respective dates thereof and the consolidated results of their
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments and do not contain all of the footnote disclosures
required by GAAP.
SECTION 3.8. Absence of Certain Changes or Events. Since December 31,
2000, the Company and its Subsidiaries have conducted business in the ordinary
course and there has not occurred: (i) any material adverse change in the
assets or Liabilities of the Company and its Subsidiaries taken as a whole or
any events, developments or circumstances that would, individually or in the
aggregate, reasonably be expected to result in such a material adverse change,
in each case other than any changes arising after the date hereof as a result
of any actions taken pursuant to Section 5.2 or 5.3 hereof, any change in
general economic conditions, any change affecting the internet or media
industry generally, any failure by the Company to meet
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revenue and earnings estimates or the announcement of this Agreement
(including the announcement of the liquidation and dissolution of the Company
contemplated by this Agreement); (ii) any amendment or change in the
Company Charter Documents; (iii) any damage to, destruction or loss of
any asset of the Company or any of its Subsidiaries (whether or not
covered by insurance) that would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect; (iv)
any material change by the Company in its accounting methods, principles
or practices (other than changes required by GAAP); (v) other than in the
ordinary course of business, any purchase, acquisition, sale or other
disposition of a material amount of assets of the Company or any of its
Subsidiaries; (vi) any granting of any increase in severance or
termination pay, except as was required under any employment, severance
or termination agreements in effect as of December 31, 2000 that have
been delivered to NBC; (vii) any granting of any increase in compensation
payable or to become payable to any officer or key employee of the
Company or any of its Subsidiaries; or (viii) any material tax election,
any material change in method of accounting with respect to Taxes or any
compromise or settlement of any proceeding with respect to any material
Tax liability.
SECTION 3.9. No Undisclosed Liabilities. As of December 31,
2000, neither the Company nor any of its Subsidiaries had any
liabilities, contingent or otherwise, except liabilities (a) adequately
provided for in the Company's audited balance sheet (including any
related notes thereto) as of December 31, 2000 included in the Company's
Annual Report of Form 10-K for the year ended December 31, 2000 (the
"2000 Balance Sheet"), or (b) that, had they been known to the Company at
the time of the preparation of the 2000 Balance Sheet, would not have
been required under GAAP to be reflected on the 2000 Balance Sheet or
disclosed in the notes thereto. Since December 31, 2000, the Company and
its Subsidiaries have only incurred liabilities (x) as set forth in the
Company SEC Reports filed prior to the date hereof, (y) in the ordinary
course of business consistent with past practice, or (z) after the date
hereof pursuant to Section 5.2 and 5.3 hereof and which, in the case of
clause (y) of this Section 3.9, would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.
SECTION 3.10. Absence of Litigation. There are no suits, claims,
actions, proceedings or investigations pending or, to the Knowledge of
the Company, threatened against the Company or any of its Subsidiaries,
or against or involving any properties or rights of the Company or any of
its Subsidiaries, which would, individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse Effect.
Section 2.10 of the Company Disclosure Schedule sets forth as of the date
of this Agreement the suits, claims, actions, proceedings and
investigations pending, or to the Knowledge of the Company, threatened
against the Company or any of its Subsidiaries which if adversely
determined would result in a liability to the Company in excess of
$100,000. To the Knowledge of the Company, neither the Company nor any
of its Subsidiaries nor any of their respective properties is or are
subject to any order, writ, judgment, injunction, decree, determination
or award having, or which would reasonably be expected to have a Company
Material Adverse Effect. To the Knowledge of the Company, as of the date
of this Agreement no officer of the Company or any Class A Director, and no
officer or director of the Company's Subsidiaries, has been served with or
otherwise has written notice of a written complaint naming such officer or
director as a defendant in any litigation commenced by stockholders of the
Company or any of its Subsidiaries with respect to the performance of his or
her duties as an officer and/or director of the Company or any of its
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Subsidiaries under any federal or state Law (including litigation under
federal and state securities Laws).
SECTION 3.11. Employee Benefit Plans; Employment Agreements. (a) The
Company has made available to NBC copies of each of its written Company
Employee Plans and a written summary of any unwritten Company Employee
Plans. "Company Employee Plan" shall mean any "employee benefit plan" as
defined in Section 3(3) of ERISA and any other plan, policy, program,
practice, agreement, perquisite, understanding or arrangement providing
benefits to any current or former director, officer, employee or
consultant (or to any spouse, dependent or beneficiary thereof) of the
Company or any ERISA Affiliate, which are now, or were within the past
six years, maintained by the Company or any ERISA Affiliate, or under
which the Company or any ERISA Affiliate has any obligation or liability,
including all employment, severance, retirement, incentive, bonus,
deferred compensation, vacation, holiday, cafeteria, medical, disability,
fringe benefit, or stock-based compensation plans, policies, programs,
practices, agreements, perquisites, understandings or arrangements.
"ERISA Affiliate" shall mean any entity (whether or not incorporated)
other than the Company that, together with the Company, is or was a
member of (i) a controlled group of corporations within the meaning of
Section 414(b) of the Code; (ii) a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code; or (iii)
an affiliated service group within the meaning of Section 414(m) of the
Code. Each of the severance agreements between the Company or any of its
Subsidiaries and any of their respective employees is substantially in
the form of the form of severance agreement previously provided to NBC by
the Company.
(b) With respect to each Company Employee Plan, the Company has made
available to NBC, prior to the date hereof, true and complete copies of
(i) plan instruments and amendments, summary plan descriptions, and
summaries of material modifications (and written summaries of any
unwritten Company Employee Plans or modifications to Company Employee
Plans), (ii) to the extent annual reports on Form 5500 are required with
respect to any Company Employee Plan, the most recent annual report and
attached schedules for each Company Employee Plan as to which such report
is required to be filed, and (iii) where applicable, the most recent
notification or determination letter and actuarial reports.
(c) Neither the Company nor any ERISA Affiliate during the past six (6)
years has maintained, contributed to or had an obligation to contribute
to or maintain a Company Employee Plan subject to Title IV of ERISA
(including, without limitation, any "multiemployer plan" as defined in
Section 3(37) of ERISA) or to Section 412 of the Code. No Company
Employee Plan is a "multiple employer plan" as described in Section 3(40)
of ERISA or Section 413(c) of the Code. Neither the Company nor any
ERISA Affiliate has incurred any withdrawal liability under Title IV of
ERISA that remains unsatisfied.
(d) Each Company Employee Plan is and has been operated in all material
respects in compliance with its terms and all applicable Laws. The
Company has made all contributions required to be made by it up to and
including the date hereof with respect to each Company Employee Plan,
except where failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.
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(e) (i) Each Company Employee Plan which is intended to be qualified
within the meaning of Code Section 401(a) has received a favorable
determination letter as to its qualification or has remaining a period of
time under applicable Treasury regulations or IRS pronouncements in which
to apply for such a letter and make any amendments necessary to obtain a
favorable determination as to the qualified status of each such Company
Employee Plan, and to the Knowledge of the Company nothing has occurred,
whether by action or failure to act, that could reasonably be expected to
cause the loss of such qualification; (ii) to the Knowledge of the
Company, no event has occurred and no condition exists that would subject
the Company or any of its Subsidiaries, either directly or by reason of
their affiliation with an ERISA Affiliate to any tax, fine, lien, penalty
or other liability imposed by ERISA, the Code or other applicable Laws;
(iii) to the Company's Knowledge, no "prohibited transaction" (as such
term is defined in ERISA section 406 and Code Section 4975) and not
otherwise exempt under Section 4975 of the Code or Sections 408 of ERISA
or "accumulated funding deficiency" (as such term is defined in ERISA
Section 302 and Code Section 412 (whether or not waived)) has occurred
with respect to any Company Employee Plan; and (iv) no Company Employee
Plan provides retiree welfare benefits and neither the Company nor any of
its Subsidiaries has any obligation to provide any retiree welfare
benefits other than as required by Section 4980B of the Code; and neither
the Company nor any ERISA Affiliate has engaged in, or is a successor or
parent corporation to any entity that has engaged in, a transaction
described in Section 4069 or 4212(c) of ERISA that would, in the case of
each of clauses (ii) or (iv), individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(f) With respect to any Company Employee Plan, no actions, suits or
claims (other than routine claims for benefits in the ordinary course)
are pending that would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect or, to the Knowledge
of the Company, threatened, and to the Knowledge of the Company, no facts
or circumstances exist that could reasonably be expected to give rise to
any such actions, suits or claims.
(g) Except as set forth in Section 2.8 of this Agreement, no Company
Employee Plan exists that could result in the payment to any present or
former director, officer, employee or consultant of the Company or any of
its Subsidiaries of any money or other property or accelerate or provide
any other rights or benefits to any present or former employee of the
Company or any of its Subsidiaries as a result of the consummation of the
Transactions or as a result of the termination of employment of any such
employee within a specified period of time after such consummation.
SECTION 3.12. Labor Matters. There are no strikes, slowdowns, work
stoppages or lockouts pending or, to the Knowledge of the Company,
threatened, between the Company or any of its Subsidiaries and any of
their respective employees. Neither the Company nor any of its
Subsidiaries is a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor
union or labor organization. To the Knowledge of the Company, the
Company and each of its Subsidiaries is in compliance with all applicable
Laws, agreements, contracts, and policies relating to employment,
employment practices, wages, hours, and terms and conditions of
employment except for failures so to comply, if any, that, would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
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SECTION 3.13. Proxy Statement, Schedule 13E-3. The proxy statement to
be sent to the stockholders of the Company in connection with the meeting
of the stockholders of the Company to consider the adoption of this
Agreement and approval of the Transactions (the "Company Stockholders
Meeting") (such proxy statement as amended or supplemented is referred to
herein as the "Proxy Statement") will not, on the date the Proxy
Statement (or any amendment thereof or supplement thereto) is first
mailed to stockholders or at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading or omit to state any material fact
necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Company Stockholders
Meeting which has become untrue or misleading. The Statement on Schedule
13E-3 (such Statement, as amended or supplemented, is referred to herein
as the "Schedule 13E-3") to be filed by the Company concurrently with the
filing of the Proxy Statement, will not, at the time it is first filed
with the SEC, and at any time it is amended or supplemented and at the
time of the Company Stockholders Meeting, contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The Proxy Statement and the Schedule 13E-3 shall comply as to form in all
material respects with the requirements of the Exchange Act.
Notwithstanding the foregoing, the Company makes no representation or
warranty with respect to any information supplied by or on behalf of NBC
or Merger Sub in writing specifically for inclusion in the Proxy
Statement or the Schedule 13E-3.
SECTION 3.14. Restrictions on Business Activities. There is no
agreement, judgment, injunction, order or decree binding upon the Company
or any of its Subsidiaries which has or would reasonably be expected to
have the effect of prohibiting or impairing the conduct of any business
after the Effective Time by the Surviving Company or any of its
Subsidiaries or the NBC or any of its Affiliates, including, without
limitation, any agreements that expressly limit the ability after the
Effective Time of the Surviving Company or any of its Subsidiaries or the
NBC or any of its Affiliates, to compete in or conduct any line of
business or compete with any Person in any geographic area or during any
period of time.
SECTION 3.15. Material Contracts. (a) Section 3.15(a) of the Company
Disclosure Schedule accurately lists the following legally binding
contracts, agreements, commitments, arrangements, leases, licenses,
policies and instruments, whether written or oral ("Contracts")
undertaken by or for the Company or any of its Subsidiaries and to which
the Company or any of its Subsidiaries is a party or by which it or any
of its Subsidiaries is bound (collectively, "Material Contracts"):
(i) any Contract involving commitments to others to make capital
expenditures involving $25,000 or more in any one case, except Contracts
for which the obligations of the Company and its Subsidiaries are fully
reflected in the capital expenditure budget of the Company for the fiscal
quarter ending June 30, 2001 previously provided to NBC (the "Cap Ex
Budget");
(ii) (A) any Contract relating to any direct or indirect indebtedness for
borrowed money (including but not limited to loan agreements, lease-purchase
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arrangements, guarantees, agreements to purchase goods or services or to
supply funds or other undertakings on which others rely in extending credit),
or (B) any conditional sales contracts, chattel mortgages, equipment lease
agreements, and other security arrangements with respect to personal property
with a value in excess of $25,000 in each instance used or owned by the
Company or any of its Subsidiaries;
(iii) any lease for real property;
(iv) any Contract containing covenants limiting the ability of the
Company or any of its Subsidiaries to compete in any line of business
with any person or in any area or territory;
(v) any material license agreement either as licensor or licensee, or
any other agreement of any type relating to any of the material
Intellectual Property owned or used by the Company or any of its
Subsidiaries;
(vi) (A) any Contract for advertising, promotion, distribution, content
or anchor tenancy providing for payments by or to the Company or any of
its Subsidiaries, whether in cash or Equity Interests, in excess of
$25,000 and (B) any material content Contract;
(vii) any Contract with any consultant providing for the payments by
the Company or any of its Subsidiaries, whether in cash or Equity
Interests, in excess of $100,000; and
(viii) any Contract not covered by any of the other items of this
Section 3.15 that provides for payments by the Company, whether in cash
or Equity Interests, or performance of other obligations, in excess of
$50,000, except Contracts that may be terminated without liability,
obligation or penalty by the Company or its Subsidiary on not more than
30 days' notice.
(b) As of the date of this Agreement, neither the Company nor any of
its Subsidiaries is, and to the Company's knowledge no other party is, in
default or breach of any Material Contract, except for those defaults
which would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, and as of the date of this
Agreement there has not occurred any event that with the lapse of time or
the giving of notice or both would constitute such a default, except for
those defaults which would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. The
Company is not a party to any Material Contract that is required to be
disclosed as an exhibit to the SEC Documents in accordance with the rules
and regulations of the SEC that has not been so disclosed. All
advertising agreements referred to in Section 3.15(a)(vi) are
substantially in the form of the form of advertising agreement previously
provided to NBC by the Company.
SECTION 3.16. Taxes. The reserves for Taxes as shown on the 2000
Balance Sheet are sufficient for the payment of all accrued but unpaid
Taxes of the Company and each of its Subsidiaries, for all periods ending
on or prior to December 31, 2000. All Tax Returns required to be filed
by the Company and its Subsidiaries have been filed when due in accordance
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with all applicable Laws. To the Knowledge of the Company,
all such Tax Returns were correct and complete as filed in all material
respects in accordance with all applicable Laws. All Taxes shown to be
due on such Tax Returns have been timely paid, withheld or remitted to
the appropriate taxing authority, the Company has made adequate provision
in accordance with GAAP for all Taxes not yet due and payable and, to the
Knowledge of the Company, there is no audit, dispute, claim, action,
proceeding or investigation pending or threatened with respect to any
such Tax Returns or any Taxes shown thereon. Neither the Company nor any
of its Subsidiaries has received any written notice of any deficiency
with respect to the payment of any Taxes. Neither the Company nor its
Subsidiaries are party to, bound by or have any obligation under, any tax
sharing agreement or similar contract or arrangement or any agreement
that obligates it to make any payment computed by reference to the Taxes,
taxable income or taxable losses of any other person. There are no
Liens with respect to Taxes on any of the assets or properties of the
Company or any of its Subsidiaries other than with respect to Taxes not
yet due and payable. The Company and its Subsidiaries (i) are not, and
have not been, a member of an affiliated group filing a consolidated
federal income Tax Return other than a group the common parent of which
is the Company, and (ii) have no liability for the Taxes of any Person
under Treasury Regulation 1.1502-6 (or any similar provision of state,
local or foreign Law), or as a transferee or successor, by contract or
otherwise.
SECTION 3.17. Brokers. None of the Company, its Subsidiaries or their
respective officers or directors has employed any broker, finder or
financial advisor or otherwise incurred any liability for any brokerage
fees, commissions or financial advisors' or finders' fees in connection
with the Transactions, other than Dresdner Kleinwort ▇▇▇▇▇▇▇▇▇▇▇, Inc.,
the fees and expenses of which shall be borne by the Company. The
Company has heretofore furnished to NBC complete and correct copies of
all agreements between the Company and its Subsidiaries and its financial
advisors pursuant to which such firms would be entitled to any payment
relating to the Transactions or this Agreement.
SECTION 3.18. Intellectual Property. (a) The Company and its
Subsidiaries own, are licensed or otherwise have the right to use all
Intellectual Property necessary to conduct the business of the Company
and its Subsidiaries (the "Company IP"), in the fashion such Intellectual
Property has been used in the business of Company and its Subsidiaries
prior to the Closing, except where the failure to own or be licensed or
otherwise have such rights in any such Company IP, would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect;
(b) to Company's Knowledge, the Company IP that is owned in whole or in
substantial part by Company and/or its Subsidiaries ("Company-Owned IP")
is enforceable and unexpired, has not been abandoned and is free of all
liens, except to the extent such unenforceablity, expiration or
abandonment would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect;
(c) neither the Company nor any of its Subsidiaries has received any
written notice with respect to any alleged infringement or unlawful use
by the Company or its Subsidiaries of any Intellectual Property right
owned or alleged to be owned by any Third Party that would, individually
or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect, and to the Company's Knowledge, the use of the Company IP
in the business of
-22-
Company and its Subsidiaries prior to Closing has not infringed or
misappropriated the Intellectual Property right of any Third
Party in a fashion that would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect;
(d) to the Company's Knowledge, the Company-Owned IP is not being
infringed by any Third Party in any fashion that has had or would,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect prior to the Closing;
(e) the Company has taken reasonable steps to protect and maintain the
rights in the Company-Owned IP; and
(f) no government action is outstanding or pending, or to the Company's
Knowledge, threatened, that seeks to limit or challenge the validity,
enforceability, ownership or use of any Company IP, in either case in a
fashion that would reasonably be expected to have a Company Material
Adverse Effect.
For purposes of this Section 3.18, "Company IP" will exclude any and all
Intellectual Property licensed or otherwise provided to Company or its
Subsidiaries by NBC or its Affiliates (other than Company and its
Subsidiaries), including without limitation any Intellectual Property
provided or licensed under that certain Brand Integration and License
Agreement between Company and NBC dated May 8, 1999.
SECTION 3.19. Privacy Rights. The Company (i) takes all necessary and
advisable actions to prevent any Person from unauthorized or improper use
of or access to its systems or services or the information of any other
Person contained therein; and (ii) complies with all governing industry
standards and sound and reputable business practice regarding rights of
any Person concerning confidential information or personal privacy,
including all rights provided under international, foreign, U.S. and
state laws, treaties, compacts or directives respecting invasion of
privacy or the obtaining, storing, using or transmitting of personal
information of any type; except in each case as would not, individually
or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect.
SECTION 3.20. Insurance. The Company has made available to NBC all
material fire and casualty, general liability, business interruption and
other insurance policies (collectively, "Insurance Policies") maintained
by the Company or any of its Subsidiaries. Such policies are in full
force and effect as of the date of this Agreement and with respect to all
policies neither the Company nor any of its Subsidiary is delinquent in
the payment of any premiums thereon, and no notice of cancellation or
termination has been received with respect to any such policy.
SECTION 3.21. No Rights Plan. Neither the Company nor any of its
Subsidiaries has any rights plan or similar preferred stock purchase plan
or similar arrangement.
SECTION 3.22. Opinion of Financial Advisor. The Board of Directors has
received the opinion of Dresdner Kleinwort ▇▇▇▇▇▇▇▇▇▇▇, Inc., financial
advisor to the Board of Directors, to the effect that, as of the date of
this Agreement, the Consideration to be received in the Merger by the
holders of shares of Class A Common Stock (other than NBC and its
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Affiliates) is fair to such holders from a financial point of view. A
true and complete copy of such written opinion has been, or as soon as
practicable will be, delivered to NBC.
SECTION 3.23. Board Approvals. (a) The Class A Directors and the
Class B Directors, voting as separate classes, have unanimously
determined that the Merger and the Consideration to be paid to the
holders of Class A Common Stock in the Merger are fair to and in the best
interests of the holders of Class A Common Stock and have unanimously
approved this Agreement. The Board of Directors of the Company, at a
meeting duly called and held on April 8, 2001, has unanimously (i)
determined that this Agreement and the Merger and the Consideration to be
paid to the holders of Class A Common Stock are fair to and in the best
interests of the holders of Class A Common Stock and (ii) resolved to
recommend that the holders of the shares of Common Stock adopt this
Agreement and approve the Merger and the other Transactions.
(b) By unanimous written consents, the Boards of Directors of the
Company and Merger Sub (in accordance with Sections 141(f) and 203 of the
DGCL) have (i) approved this Agreement and the Transactions and (ii)
declared the advisability thereof.
SECTION 3.24. Votes Required. Under the DGCL (including, without
limitation, Section 203), the Company's Charter Documents and any other
applicable Law or stock exchange rules, the only vote required of the
holders of any class or series of the Company's Equity Interests
necessary to adopt this Agreement and to approve the Transactions is the
approval, assuming a quorum is present, of (i) a majority of the shares
of Class A Common Stock and Class B Common Stock voting together as a
single class, (ii) a majority of the shares of Class A Common Stock
voting as a single class and (iii) a majority of the shares of Class B
Common Stock voting as a single class.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NBC
NBC hereby represents and warrants to the Company as follows:
SECTION 4.1. Organization and Good Standing. Each of NBC and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or to
have such power, authority and governmental approvals would not,
individually or in the aggregate, reasonably be expected to have a NBC
Material Adverse Effect.
SECTION 4.2. Capitalization. The authorized capital stock of the
Merger Sub consists solely of 100 shares of Merger Sub Common Stock, all
of which shares of Merger Sub Common Stock are owned by NBC and are
validly issued and outstanding, fully paid and nonassessable and free of
preemptive or similar rights. No shares of Merger Sub Common Stock are
issuable upon the exercise or conversion of options, warrants or
convertible securities of any kind.
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SECTION 4.3. Authority Relative to this Agreement. Each of NBC
and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the Transactions. The
execution and delivery of this Agreement by Merger Sub, and the
consummation by NBC and Merger Sub of the Transactions, have been duly
and validly authorized by all necessary corporate action of NBC and
Merger Sub, and no other corporate proceedings on the part of Merger Sub
are necessary to authorize this Agreement or to consummate the
Transactions. This Agreement has been duly and validly executed and
delivered by each of NBC and Merger Sub and, assuming the due
authorization, execution and delivery hereof by the Parties, constitutes
the legal, valid and binding obligation of each of NBC and Merger Sub,
enforceable against NBC and Merger Sub in accordance with its terms,
except to the extent limited by bankruptcy, insolvency, moratorium,
fraudulent conveyance or other laws affecting the rights of creditors
generally and to the extent that the availability of equitable remedies
may be limited by equitable principles.
SECTION 4.4. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by each of NBC and Merger
Sub do not, and the performance of this Agreement by NBC and Merger Sub
and the consummation of the Transactions will not, (i) conflict with or
violate the Certificate of Incorporation or By-laws of NBC or Merger Sub,
as the case may be, (ii) assuming that all consents, approvals and
authorizations contemplated by clauses (i) and (iii) of Section 4.4(b)
have been obtained and all filings described in such clauses have been
made, conflict with or violate any Law applicable to NBC or Merger Sub or
by which NBC or Merger Sub or any of their respective properties is bound
or affected, or (iii) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on
any of the properties or assets of NBC or Merger Sub pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument to which NBC or Merger Sub is a
party or by which NBC or Merger Sub or any of their respective material
properties is bound or affected, except, in the case of clauses (ii) and
(iii) of this Section 4.4(a), for any conflict, violation, breach,
default, impairment or right that would not, individually or in the
aggregate, reasonably be expected to have a NBC Material Adverse Effect.
(b) The execution and delivery of this Agreement by NBC and Merger Sub
do not, and the performance of this Agreement by NBC and Merger Sub will
not, require any consent, approval, authorization or permit of, or filing
with any Governmental Authority, except (i) for (A) applicable
requirements, if any, of the Exchange Act, state securities Laws, the
pre-merger notification requirements of the HSR Act and filings and
consents under any similar non-competition Laws, (C) filings and consents
as may be required under any environmental, health or safety Law
pertaining to any notification, disclosure or required approval triggered
by the Transactions, and (D) the filing and recordation of the
appropriate documents with respect to the Transactions in accordance with
the DGCL, (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, reasonably be expected to
have a NBC Material Adverse Effect, or (iii) consents, approvals,
authorizations, permits, filings or notifications which have heretofore
been obtained or made, as the case may be, by NBC or Merger Sub and is in
full force and effect.
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SECTION 4.5. Absence of Litigation. As of the date hereof, there
are no claims, actions, suits, proceedings or investigations pending or,
to the Knowledge of NBC, threatened against NBC or Merger Sub before any
court, arbitrator or administrative, governmental or regulatory authority
or body, domestic or foreign, which seeks to enjoin or otherwise
challenges the consummation of the Transactions or would reasonably be
expected to have a NBC Material Adverse Effect.
SECTION 4.6. Proxy Statement; Schedule 13E-3. The information
supplied or to be supplied in writing by or on behalf of NBC or Merger
Sub specifically for inclusion (i) in the Proxy Statement will not, on
the date the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to stockholders or at the time of the Company
Stockholders Meeting, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Stockholders Meeting which has become untrue or misleading or (ii) the
Schedule 13E-3, to be filed by the Company concurrently with the filing
of the Proxy Statement, will not at the time it is first filed with the
SEC, and at any time it is amended or supplemented and at the time of the
Company Stockholders Meeting, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. No Contracts
undertaken by or for NBC or any of its Subsidiaries and to which NBC or
any of its Subsidiaries is a party, or by which it or any of its
Subsidiaries is bound, exist between NBC or any of its Subsidiaries, on
the one hand, and any Class A Director or officer of the Company, on the
other hand, other than those referenced in the Company SEC Reports.
Notwithstanding the foregoing, NBC makes no representation or warranty
with respect to any information supplied by the Company that is contained
or incorporated by reference in, or furnished in connection with the
preparation of, the Proxy Statement or the Schedule 13E-3.
SECTION 4.7. Brokers. None of NBC or Merger Sub or its officers
or directors has employed any broker, finder or financial advisor or
otherwise incurred any liability for any brokerage fees, commissions or
financial advisors' or finders' fees in connection with the Transactions.
SECTION 4.8. No Prior Activities of Merger Sub. Merger Sub was
incorporated on April 6, 2001. Except in connection with its
incorporation or the negotiation and consummation of this Agreement and
the Transactions, Merger Sub has no material properties or assets or
incurred any obligation or liability and has not engaged in any business
or activity of any type or kind whatsoever or entered into any agreement
or arrangement with any Person. Merger Sub has no Subsidiaries.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
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SECTION 5.1. Conduct of Business by the Company Pending the
Merger. The Company covenants and agrees that, during the period from
the date of this Agreement and continuing until the earlier of the
termination of this Agreement and the Effective Time (the "Interim
Period"), except as set forth in Section 5.1 of the Company Disclosure
Schedule or Section 5.2 or 5.3 of this Agreement or with the prior
written consent of NBC, the Company shall conduct its business and shall
cause the businesses of its Subsidiaries (including with respect to the
collection of accounts receivable and the payment of accounts payable) to
be conducted only in, and the Company and its Subsidiaries shall not take
any action except in, the ordinary course of business. By way of
amplification and not limitation, except as provided in this Agreement,
neither the Company nor any of its Subsidiaries shall, during the Interim
Period, except as set forth in Section 5.1 of the Company Disclosure
Schedule or in Section 2.8, 5.2 or 5.3 of this Agreement, directly or
indirectly do, or propose or agree to do, any of the following without
the prior written consent of NBC, provided that solely in the case of
actions set forth in clause (c), (i), (j), (k), (l) or (t) below if such
consent is not denied within three (3) business days after receipt of
written notice by NBC in accordance with the provisions hereof, such
consent shall be deemed granted:
(a) amend or otherwise change the Company Charter Documents or any of
the Subsidiary Documents or agree to any change in the Minority
Investment Documents;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any Equity
Interests of the Company or any of its Subsidiaries (except for the
issuance of shares of Class A Common Stock issuable upon the exercise of
Company Options and Company Warrants outstanding on the date hereof);
(c) sell, pledge, dispose of, mortgage, otherwise encumber or subject
to any Lien any assets of the Company or any of its Subsidiaries (except
for sales of immaterial assets on an arms-length basis having a fair
market value not in excess of $10,000 in any individual transaction or
$20,000 in the aggregate);
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its Equity Interests, (ii) split, combine
or reclassify any of its Equity Interests or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or
in substitution for its Equity Interests, (iii) amend the terms or change
the period of exercisability of, purchase, repurchase, redeem or
otherwise acquire any of the Company's or its Subsidiary's securities,
including shares of Class A Common Stock, or any option, warrant or
right, directly or indirectly, to acquire any such securities, or (iv)
settle, pay or discharge any claim, suit or other action brought or
threatened against the Company with respect to or arising out of an
Equity Interests in the Company;
(e) (i) (A) incur any indebtedness for borrowed money, (B) issue or
sell any debt securities or warrants or other rights to acquire any
debt securities of the Company or any of its Subsidiaries, (C) make any
loans, advances (other than to employees of and consultants to the Company
for travel and other reasonable and customary expenses incurred in the
ordinary course of business consistent with past practice) or capital
contributions to, or investments in, any other Person, other than to the
Company or any direct or indirect wholly-owned Subsidiary of the
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Company or (D) assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any Person, or (ii)
enter into or materially amend any contract, agreement, commitment or
arrangement to effect any of the transactions prohibited by this
Section 5.1(e);
(f) (i) grant any new or modified severance or termination arrangement
or increase or accelerate any benefits payable under the severance or
termination pay policies in effect on the date hereof except as required
by any existing policies or agreements, (ii) enter into any employment
agreements or increase any compensation or benefits (whether payable in
cash, stock or otherwise) payable or to become payable to any of its
employees except as required by any existing agreements, or (iii)
establish, adopt, enter into or amend any collective bargaining
agreement, Company Employee Plan, trust, fund, program, practice,
understanding, perquisite, contract, policy or arrangement for the
benefit of any current or former director, officer, employee or
consultant or any of their spouses, dependents or beneficiaries, except,
in each case, as may be required by law;
(g) take any action to change any of the accounting policies or
procedures used by it (including procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts
receivable), except as required by GAAP;
(h) make any material tax election or settle or compromise any United
States federal, state, local or non-United States material tax liability,
make or change any method of accounting with respect to any Tax, file any
amended Tax Return with respect to any material Tax or settle or
compromise any material federal, state, local or foreign Tax liability;
(i) pay, discharge or satisfy any claim, liability or obligation,
including without limitation any litigation, investigation, arbitration
or other proceeding, in excess of $25,000 in any individual case or
$250,000 in the aggregate;
(j) acquire or agree to acquire any assets, other than (i) supplies in
the ordinary course of business consistent with past practice or (ii)
furniture, fixtures and equipment on order, in each case not exceeding
$10,000 in any individual transaction or $20,000 in the aggregate;
(k) make any capital expenditures other than as set forth in the cash
forecasts previously provided to NBC and in any event not exceeding
$5,000 for any individual transaction or $20,000 in the aggregate, in
each case other than pursuant to any currently existing Contracts
included in the Cap Ex Budget;
(l) pay, discharge or satisfy any material claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), except for the payment, discharge
or satisfaction of (x) liabilities or obligations in accordance with their
terms as in effect on the date hereof, or (y) claims settled or compromised
to the extent permitted by Section 5.1(i), or waive, release,
grant, or transfer any rights of material value or modify or change in
any material respect any existing material license, lease, contract or
other document, other than in the ordinary course of business consistent
with past practice;
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(m) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than the
Transactions);
(n) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the stock or assets of, or by any
other manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof;
(o) make any investment in any other entity or business, whether by
means of a purchase of Equity Interests or assets, or by any other
manner;
(p) amend or modify in any material respect or terminate any material
existing IP Contract, execute any new IP Contract that would be material
to the business of the Company and its Subsidiaries taken as a whole,
sell, license or otherwise dispose of, in whole or in part, any material
Company IP, and/or subject any material Company IP to any material Lien
other than license for any generally commercially available software;
(q) enter into any agreement prohibiting or impairing the conduct of
any business after the Effective Time by the Surviving Company or any of
its Subsidiaries or NBC or any of its Affiliates, including, without
limitation, any agreements that expressly limit the ability of after the
Effective Time of the Surviving Company or any of its Subsidiaries or NBC
or any of its Affiliates to compete in or conduct any line of business or
compete with any Person in any geographic area or during any period of
time;
(r) engage in any transaction with, or enter into any agreement,
arrangement, or understanding with, directly or indirectly, any of the
Company's Affiliates, directors or officers or any holder, beneficially
or of record, of more than five percent (5%) of any class of the
Company's capital stock;
(s) commence any litigation, or commence any other proceeding before
any Governmental Authority;
(t) enter into any other agreement or commitment (i) that would be a
Material Contract or (ii) (A) requiring total payments by or to the
Company in excess of an aggregate of $10,000 (whether in cash, Equity
Interests or other barter) and (B) not terminable by the Company without
penalty or payment upon no more than thirty (30) days prior notice; or
(u) authorize any of, or commit or agree to take any of, the foregoing
actions.
SECTION 5.2. Additional Agreements with Respect to Conduct of
Business by the Company. The Company covenants and agrees that it will
consult with NBC as to the reduction of the Company's operations during
the Interim Period. NBC will jointly participate with the Company's
personnel in determining the scope of such reduction and the actions to
be taken to effect it. The Company and NBC agree that within one (1) week
of the date hereof, they will mutually agree upon an initial reduction
plan (the "Reduction Plan") identifying specific contractual arrangements
and liabilities of the Company and its Subsidiaries to be terminated,
paid, discharged or satisfied during the Interim Period. The Company
agrees to use reasonable
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commercial efforts to terminate and pay, discharge or satisfy during the
Interim Period the arrangements and liabilities set forth in the reduction
plan, and any other arrangements and liabilities of the Company and its
Subsidiaries reasonably required by NBC. Notwithstanding the foregoing,
no provision of this Section 5.2 shall require the Company to take any
action that the Class A Directors determine in good faith by majority vote
would have a material adverse effect on the Company in the event the
Agreement were terminated prior to the Effective Time. The Company agrees
to obtain NBC's written consent prior to making any material commitments or
incurring any material liability or other obligation in connection with such
reduction other than as set forth in any reduction plan mutually agreed upon by
the Company and NBC. In particular, the Company agrees it shall obtain the
prior written consent of NBC to any termination, discharge or
satisfaction involving payment by the Company exceeding $25,000 for any
individual obligation. In addition, the Company agrees to continue to
purchase and broadcast advertising pursuant to the advertising agreement
between the Company and NBC dated as of November 30, 1999, consistent
with the level of such purchases provided in the Company budget as of the
date hereof.
SECTION 5.3. Additional Agreements with Respect to Employees.
The Company agrees that during the Interim Period, it will terminate its
employment of the numbers of employees set forth in Section 5.3 of the
Company Disclosure Schedule by the corresponding dates set forth therein.
NBC and the Company agree to review such termination schedule in good
faith on an ongoing basis during the Interim Period, and may modify such
schedule as necessary to enable the Company to comply with Section 5.2
and the other provisions hereof. Notwithstanding the foregoing, no
provision of this Section 5.3 shall require the Company to take any
action that the Class A Directors determine in good faith by majority
vote would, as a result of developments after the date of this Agreement,
have a material adverse effect on the Company in the event the Agreement
were terminated prior to the Effective Time. NBC acknowledges that in
performing its obligations under this Section 5.3 in accordance herewith,
the Company may not be able to comply with the notice requirements of the
Worker Adjustment and Retraining Notification Act of 1988 and the Company
may be required to provide compensation in lieu thereof to certain
terminated employees.
SECTION 5.4. No Solicitation. (a) The Company shall not,
directly or indirectly, through any officer, director, employee,
representative, advisor, Subsidiary or agent of the Company or any of its
Subsidiaries, (i) solicit or initiate any inquiries, proposals or offers
(whether or not in writing) from any Third Party regarding an Alternative
Transaction (any of the foregoing inquiries, proposals or offers being
referred to herein as an "Acquisition Proposal") or provide any
non-public information in respect of any Acquisition Proposal or any of
the foregoing, or (ii) enter into or participate in any discussions or
negotiations regarding any of the foregoing. Nothing contained in this
Agreement shall prevent the Board of Directors of the Company from (A)
furnishing information to a Third Party which has made an Acquisition
Proposal not solicited in violation of this Agreement that the Board of
Directors or a majority of the Class A Directors has concluded
constitutes or could result in a Superior Proposal, or (B) subject to
compliance with the other terms of this Section 5.4, entering into
or participating in discussions or negotiations concerning an Acquisition
Proposal not solicited in violation of this Agreement that the Board of
Directors or a majority of the Class A Directors has concluded
constitutes or could result in a Superior Proposal.
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(b) For purposes of this Agreement, a "Superior Proposal" means any of
the transactions described in the definition of Alternative Transaction
(with all of the percentages included in the definition of such term
raised to 50% for purposes of this definition) with respect to which the
Board of Directors of the Company shall have concluded in good faith,
after consultation with its outside legal counsel and its financial
advisor(s), (i) is reasonably capable of being completed and (ii)
represents a superior transaction for the holders of Class A Common Stock
to the Transactions.
(c) For purposes of this Agreement, an "Alternative Transaction" means
any of (i) a transaction pursuant to which a Third Party acquires or
would acquire more than fifteen percent (15%) of the outstanding shares
of any class of Equity Interests of the Company or any of its
Subsidiaries, whether from the Company or pursuant to a tender offer or
exchange offer or otherwise, (ii) a merger, consolidation, business
combination, sale of substantially all assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or
any of its Subsidiaries, (iii) any transaction pursuant to which any
Third Party acquires or would acquire control of assets (including for
this purpose the outstanding Equity Interests of Subsidiaries of the
Company and securities of the entity surviving any merger or business
combination involving any of the Company's Subsidiaries) of the Company,
or any of its Subsidiaries having a fair market value (as determined by
the Board of Directors of the Company in good faith) equal to more than
fifteen percent (15%) of the fair market value of, on a consolidated
basis, the assets of the Company and its Subsidiaries immediately prior
to such transaction, or (iv) any other transaction the consummation of
which would or could reasonably be expected to impede, interfere with,
prevent or materially delay either of the Transactions or which would or
could reasonably be expected to materially dilute the benefits to NBC of
the Transactions.
(d) Except as expressly permitted by this Section 5.4, neither the
Board of Directors of the Company nor any committee thereof nor the Class
A Directors shall withdraw or modify in any manner adverse to NBC, the
recommendation by the Board of Directors of the adoption of this
Agreement by the stockholders of the Company. Notwithstanding the
foregoing, (x) the Board of Directors or the Class A Directors may
withdraw or modify in any manner adverse to NBC their recommendation of
the adoption of this Agreement by the stockholders of the Company if they
determine in good faith, based on the advice of their outside legal
advisors, that such action is required to comply with their fiduciary
duties under the DGCL, and (y) in the event that the Board of Directors
receives an Acquisition Proposal and the Class A Directors or the Board
of Directors determine in good faith, after consultation with their financial
and legal advisors, that failure to do so is reasonably likely to be
inconsistent with their fiduciary duties under the DGCL, the Class A Directors
and the Board of Directors may (i) withdraw or modify in any manner adverse to
NBC their recommendation of the adoption of this Agreement by the stockholders
of the Company and (ii) subject to this Section 5.4(e) and Section 8.1(f),
terminate this Agreement pursuant to Section 8.1(f) (and concurrently with or
after such termination, if it so chooses, the Board of Directors may cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (an "Acquisition Agreement")), but only
after the third Business Day following NBC's receipt of written notice advising
NBC that the Board of Directors or the Class A Directors are prepared to accept
a Superior Proposal, and attaching the most current version of any such
Superior Proposal or any draft of an Acquisition Agreement.
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(e) Nothing contained in this Section 5.4 shall prohibit the Company
from taking and disclosing to its stockholders a position, and making
related filings with the SEC, as required by Rule 14e-2(a) promulgated
under the Exchange Act or from making any disclosure to its stockholders
if, in the good faith judgment of the Board of Directors, after
consultation with outside counsel, failure to do so is reasonably likely
to cause the Board of Directors to be in breach of its obligations under
any applicable law, rule or regulation.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement and Schedule 13E-3. As promptly as
practicable after the execution of this Agreement, the parties shall
cooperate and promptly prepare, and the Company shall file with the SEC
as soon as practicable the Proxy Statement and NBC and the Company shall
file with the SEC as soon as practicable the Schedule 13E-3. Each of the
Company and NBC shall cooperate with each other in connection with the
preparation of the Proxy Statement and the Schedule 13E-3 including, but
not limited to, furnishing information required to be disclosed in the
Proxy Statement and the Schedule 13E-3. The information provided and to
be provided by NBC and the Company, respectively, for use in (i) the
Proxy Statement will, at the time the Proxy Statement is filed with the
SEC and on the date of the Company Stockholders Meeting, not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, and the Company and NBC each agree to
correct any information provided by it for use in the Proxy Statement
which shall have become untrue or misleading in any material respect and
(ii) the Schedule 13E-3 to be filed with the SEC by the Company
concurrently with the filing of the Proxy Statement will, at the time it
is first filed with the SEC, and at any time it is amended or
supplemented and at the time of the Company Stockholders Meeting, not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
are made, not misleading. The Company will promptly notify NBC of the
receipt of any comments from the SEC, of any request by the SEC for any
amendment to the Proxy Statement or the Schedule 13E-3 or for additional
information, and will supply NBC with copies of all correspondence
between the Company or any of its representatives and the SEC, with
respect to the Proxy Statement or the Schedule 13E-3. The Company will
permit NBC to review and comment upon all filings with the SEC, including
the Proxy Statement and the Schedule 13E-3 and any amendment thereto.
All mailings to the Company's stockholders in connection with the Merger,
including the Proxy Statement, shall be subject to the prior review and
comment by NBC. The Company agrees to use its commercially reasonable
best efforts, after consultation with NBC, to respond as promptly as
reasonably practicable to any comments made by the SEC with respect to
the Proxy Statement, any preliminary version thereof filed by it and to
cause the Proxy Statement to be mailed to the Company's stockholders at
the earliest practicable time. The Company and NBC agree to cooperate to
respond as promptly as reasonably practicable to any comments made by the
SEC with respect to the Schedule 13E-3.
SECTION 6.2. Company Stockholders Meeting; Voting Agreement of
NBC. (a) The Company shall call the Company Stockholders Meeting as
promptly as reasonably
practicable for the purpose of voting upon the adoption of this Agreement
and the approval of the Transactions and the Company shall use its reasonable
best efforts to hold the Company Stockholders Meeting as soon as reasonably
practicable. Subject to Section 5.4(d), the Company, through its Board of
Directors, will, as promptly as reasonably practicable following the date of
this Agreement, recommend to its stockholders the adoption of this Agreement
and the approval of the Transactions as set forth in Section 3.23(a) and shall
solicit from its stockholders proxies in favor of the adoption of this
Agreement and the Transactions and shall take such other reasonable
actions that are necessary or advisable to secure the vote or consent of
stockholders in favor of such adoption and approval. Subject to Section
5.4(d) hereof, any such recommendation, together with a copy of the
opinion referred to in Section 3.22 shall be included in the Proxy
Statement.
(b) NBC hereby agrees to vote or consent (or cause to be voted or
consented), in person or by proxy, at the Company Stockholders Meeting,
all Class B Stock and any other voting securities of the Company (whether
acquired heretofore or hereafter) that are beneficially owned or held of
record by NBC or as to which NBC has, directly or indirectly, the right
to vote or direct the voting as of the relevant record date, in favor of
the adoption of this Agreement and the approval of the Transactions.
SECTION 6.3. Access to Information; Confidentiality. Upon
reasonable notice and subject to restrictions contained in
confidentiality agreements to which the Company is subject (from which it
shall use commercially reasonable efforts to be released), the Company
shall (and shall cause its Subsidiaries to) (i) during the period after
the execution and delivery of this Agreement and prior to the Effective
Time, afford to the officers, employees, accountants, counsel and other
representatives of NBC reasonable access to its properties, books,
contracts, commitments and records, and (ii) during such period, furnish
promptly to NBC all information concerning its business, properties and
personnel as NBC may reasonably request, and shall make available to NBC
for reasonable periods of time the appropriate individuals (including
attorneys, accountants and other professionals) for discussion of the
Company's business, properties and personnel as NBC may reasonably
request. NBC shall keep such information confidential in accordance
with, and agrees to be bound by, the terms of the confidentiality letter,
dated March 26, 2001 (the "Confidentiality Letter") between NBC and the
Company. No investigation pursuant to this Section 6.3 shall affect any
representations or warranties of the parties herein or the conditions to
the obligations of the parties hereto.
SECTION 6.4. Consents; Approvals. Each of the Company and NBC
shall use its commercially reasonable efforts to obtain all consents,
waivers, approvals, authorizations or orders (including all consents,
waivers, approvals, authorizations and orders from all Governmental
Authorities or other Third Parties); provided that without the prior
written consent of NBC, which consent shall not be unreasonably withheld
or delayed, neither the Company nor any of its Subsidiaries shall pay any
cash or other consideration, make any commitments or incur any liability or
other obligation to obtain any such consent. The Company and NBC shall make
all filings (including all filings with any Governmental Authority) required
in connection with the authorization, execution and delivery of this Agreement
by the Company and NBC and the consummation by them of the Transactions. The
Company and NBC shall furnish all information required to be included in the
Proxy Statement, the Schedule 13E-3 or for any application or other filing
to be made pursuant to the rules and regulations of any Governmental
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Authority in connection with the Transactions. Each of the Company and NBC
shall make an appropriate filing of a notification and report form pursuant to
the HSR Act with respect to the Transactions within ten days after the date
hereof and shall promptly supply any additional information that may be
requested pursuant to the HSR Act. The Company and NBC shall each use
reasonable commercial efforts to obtain early termination of the waiting
period under the HSR Act. In addition, the Company and NBC shall each
promptly make any other filing that may be required under any other antitrust
law or by any antitrust authority or any takeover laws of jurisdictions
outside of the United States. Notwithstanding anything to the contrary
contained herein, no party hereto nor any of their Affiliates shall be
required to make any disposition or any agreement to hold separate, any
Subsidiary, asset or business, and the Company shall not agree to do so.
SECTION 6.5. Indemnification and Insurance. (a) NBC and the
Surviving Company, jointly and severally, agree, to the fullest extent
permitted under applicable law or under the Surviving Company's
Certificate of Incorporation or By-laws, indemnify and hold harmless,
each present and former (x) director, (y) officer or (z) solely to the
extent a party to an Indemnification Agreement, employee, of the Company
or any of its Subsidiaries, and their respective estates, heirs, personal
representatives successors and assigns (each, an "Indemnified Party", and
collectively, the "Indemnified Parties") against any costs or expenses
(including reasonable fees and expenses of counsel) as incurred,
judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
(collectively, an "Action") (x) arising out of or pertaining to the
Transactions, or (y) otherwise with respect to any acts or omissions
occurring at or prior to the Effective Time, in each case to the same
extent as provided in the Company's amended and restated Certificates of
Incorporation, By-laws or indemnification contracts with any such
Indemnified Parties (to the extent such contracts have been disclosed to
NBC and are identified in Section 6.5 of the Company Disclosure Schedule)
(collectively, the "Indemnification Agreements"), as in effect on the
date hereof, in each case for a period of six years after the date
hereof, provided that any such indemnification of an employee hereunder
pursuant to clause (z) of this Section 6.5(a) shall be limited to that
provided in the Indemnification Agreement to which such employee is a
party. In the event of any such Action, (whether arising before or after
the Effective Time) and subject to the specific terms of any
indemnification contract, (i) any counsel retained by the Indemnified
Parties for any period after the Effective Time shall be reasonably
satisfactory to NBC, (ii) after the Effective Time, NBC shall pay the
reasonable fees and expenses of such counsel, promptly after statements
therefor are received, and (iii) the Surviving Company and NBC will cooperate
in the defense of any such Action; provided, however, that in the event any
claim or claims for indemnification are made within such six year period, all
rights to indemnification in respect of any such claim or claims shall
continue until the disposition of any and all such claims; provided, further,
that: (A) promptly after receipt by an Indemnified Party of notice of any
such Action, the Indemnified Party shall, if a claim in respect thereof is
to be made against the Surviving Company notify the Surviving Company in
writing of this claim or the commencement of that Action (although the
failure to provide such notice will not adversely affect the rights of the
Indemnified Party hereunder except to the extent NBC is prejudiced by such
failure); (B) the Surviving Company shall be entitled to participate in the
defense of any such Action, and, to the extent it wishes, assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party or
Indemnified Parties, as the case may be; (C) the Surviving Company shall not,
in connection
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with any one such Action or separate but substantially similar or related
Actions in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for all such Indemnified Parties;
(D) no Indemnified Party may settle any such Action, without the prior written
consent of the Surviving Company; and (E) the Surviving Company shall not
settle any such Action, unless the Indemnified Party that is subject of such
action is fully released as a result thereof.
(b) In addition, the Surviving Company shall maintain in effect for six
years from the Effective Time policies of directors' and officers'
liability insurance containing terms and conditions which are not less
advantageous than any such policies maintained by the Company prior to
the Effective Time (the "D&O Insurance"), with respect to matters
occurring up to and including the Effective Time and having the maximum
available coverage under any such D&O Insurance policies; provided that
(i) the Surviving Company following the Merger shall not be required to
spend in excess of 200% of the annual aggregate premiums currently paid
by the Company for such insurance; provided, further, that if the
Surviving Company following the Merger would be required to spend in
excess of such amount per year to obtain insurance having the maximum
available coverage under the D&O Insurance policies, the Surviving
Company will be required to spend up to such amount to maintain or
procure the maximum amount of such (or similar) coverage that is
available at that cost and (ii) such policies may in the sole discretion
of the Surviving Company be one or more "tail" policies for all or any
portion of the full six year period.
(c) Nothing in this Agreement is intended to, shall be construed to or
shall release, waive or impair any rights to directors' and officers'
insurance claims under any policy that is or has been in existence with
respect to the Company or any of its officers, directors or employees, it
being understood and agreed that the indemnification provided for in this
Section 6.5 is not prior to or in substitution for any such claims under
such policies.
(d) This Section 6.5 shall survive the consummation of the
Transactions, is intended to benefit the Indemnified Parties and the
officers and directors of the Company, shall be binding on all successors
and assigns of NBC and the Surviving Company and shall be enforceable by
the Indemnified Parties.
SECTION 6.6. Notification of Certain Matters. The Company shall
give prompt notice to NBC, and NBC shall give prompt notice to the
Company, of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which could reasonably be expected to cause the failure to
satisfy the conditions precedent set forth in Section 7.2 or 7.3, respectively,
and (ii) any notice or other communication from any Third Party or Governmental
Authority alleging that the consent of such Third Party or Governmental
Authority is or may be required in connection with the Transactions; provided,
however, that the delivery of any notice pursuant to this Section 6.6 shall not
limit or otherwise affect the remedies available hereunder to the party giving
or receiving such notice unless the failure to give such notice results in
prejudice to the other party.
SECTION 6.7. Further Action. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto shall use their
respective reasonable best efforts to
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take, or cause to be taken, all actions and to do, or cause to be done,
all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the Transactions, to obtain in a timely
manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings, and otherwise to satisfy or cause to be
satisfied all conditions precedent to its obligations under this Agreement.
SECTION 6.8. Public Announcements. NBC and the Company shall
consult with each other before issuing any press release or making any
written public statement with respect to either the Transactions or this
Agreement and shall not issue any such press release or make any such
public statement without the prior consent of the other parties, which
shall not be unreasonably withheld or delayed, except as may be required
by applicable law, court process or by obligations pursuant to any
listing agreement with the Nasdaq National Market or the New York Stock
Exchange.
SECTION 6.9. Conveyance Taxes. NBC and the Company shall
cooperate with each other in the preparation, execution and filing of all
returns, questionnaires, applications or other documents regarding any
real property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other
fees and any similar taxes which become payable in connection with the
Transactions that are required or permitted to be filed on or before the
Effective Time.
SECTION 6.10. Employee Plans and Benefits. The Company agrees to
terminate the NBC Internet, Inc. 401(k) Profit Sharing Plan (the "401(k)
Plan") prior to the occurrence of the Transactions, including the Merger,
and distribute the assets of the 401(k) Plan in accordance with the
provisions of the 401(k) Plan, the Code and ERISA.
SECTION 6.11. Disposition of Litigation. Subject to Section 5.4, the
Company will consult with NBC with respect to any Action by any Third
Party to restrain or prohibit or otherwise oppose the Transactions, and
will resist any such effort to restrain or prohibit or otherwise oppose
the Transactions. NBC may participate in (but not control) the defense
of any stockholder litigation against the Company and its directors
relating to the Transactions at NBC's sole cost and expense. In
addition, neither the Company nor NBC will voluntarily cooperate with any
Third Party that has sought or may hereafter seek to restrain or prohibit
or otherwise oppose the Transactions, and NBC and the Company will
cooperate to resist any such effort to restrain or prohibit or otherwise
oppose the Transactions.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1. Conditions to Obligation of Each of the Parties to
Effect the Transactions. The respective obligations of each party to
effect the Merger shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions:
(a) Stockholder Adoption of Merger Agreement. This Agreement
shall have been adopted and the Merger and the other Transactions shall
have been approved by (i) the holders of a majority of the shares of
Class A Common Stock outstanding as of the record date of
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the Company Stockholders Meeting, voting together as a single class, other
than any such Class A Common Stock with respect to which NBC has the power to
vote or direct the vote in the Company Stockholder Meeting, (ii) the holders
of a majority of the shares of Class B Common Stock outstanding as of the
record date of the Company Stockholders Meeting, voting together as a
single class, and (iii) the holders of a majority of the shares of Class
A Common Stock and Class B Common Stock outstanding as of the record date
of the Company Stockholders Meeting, voting together as a single class
(collectively, the "Requisite Stockholder Approvals").
(b) Antitrust. All waiting periods applicable to the consummation of
the Merger under the HSR Act shall have expired or been terminated, and
all material clearances and approvals required to be obtained in respect
of the Merger prior to the Effective Time under any other similar
applicable Law shall have been obtained; and
(c) Injunction. There shall not be in effect any Law or other action
of any Governmental Authority or court of competent jurisdiction, or any
other legal restraint or prohibition that restrains, enjoins, prohibits
or makes illegal the consummation of the Transactions, provided, however,
that the parties hereto shall use their reasonable commercial efforts to
have any such judgment, decree or order or other legal restraint vacated.
SECTION 7.2. Additional Conditions to Obligations of NBC. The
obligations of NBC and Merger Sub to effect the Merger are also subject
to the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement (i) that are qualified as to
Company Material Adverse Effect shall be true and correct and (ii) that
are not so qualified shall be true and correct, as of the date of this
Agreement and as of the Effective Time, with the same force and effect
as if made on and as of the Effective Time, except for those representations
and warranties which address matters only as of a particular date (which
shall have been true and correct as of such date), except where the failure
of such representations and warranties (other than the representation
contained in Section 3.3, 3.14, 3.21, 3.22, 3.23 and 3.24, which shall be
true and correct in all material respects) to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect; and NBC shall have received a certificate of the
Company to such effect signed on behalf of the Company by its Chief Executive
Officer or Chief Financial Officer; and
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time, and NBC shall have received a certificate to
such effect signed on behalf of the Company by its Chief Executive
Officer or Chief Financial Officer.
SECTION 7.3. Additional Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger is also subject to the
following conditions:
(a) Representations and Warranties. The representations and warranties
of NBC contained in this Agreement (i) that are qualified as to Company
Material Adverse Effect shall be true and correct and (ii) that are not
so qualified shall be true and correct, as of the date
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of this Agreement and as of the Effective Time, with the same force and
effect as if made on and as of the Effective Time, except for those
representations and warranties which address matters only as of a particular
date (which shall have been true and correct as of such date), except where
the failure of such representations and warranties to be true and correct
would not, individually or in the aggregate, reasonably be expected to
have a NBC Material Adverse Effect; and the Company shall have received
certificates to such effect signed on behalf of NBC by an authorized
officer of NBC; and
(b) Agreements and Covenants. NBC shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the
Effective Time, and the Company shall have received certificates to such
effect signed on behalf of NBC by an authorized officer of NBC.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and
the Merger may be abandoned, in each case, at any time prior to the
Effective Time, notwithstanding adoption thereof by the stockholders of
the Company:
(a) by mutual written consent of NBC and the Company, in each case duly
authorized by the Boards of Directors or a duly authorized committee
thereof;
(b) by either NBC or the Company if the Merger has not been consummated
by September 30, 2001; provided that if on such date, all conditions in
Article VII shall have been satisfied other than the failure to obtain
applicable governmental or regulatory consents or approval, then such
date shall be extended for an additional sixty (60) days; and provided,
further, that the right to terminate this Agreement under this Section
8.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in,
the failure of the Merger to be consummated on or prior to such date;
(c) by either NBC or the Company if a court of competent jurisdiction
or Governmental Authority shall have issued a nonappealable final order,
decree or ruling or taken any other nonappealable final action having the
effect of permanently restraining, enjoining or otherwise prohibiting
the Transactions;
(d) by either NBC or the Company if the Requisite Stockholder Approvals
shall not have been obtained at the Company Stockholders Meeting;
(e) by NBC, if, whether or not permitted to do so by this Agreement,
the Board of Directors of the Company, the Class A Directors or the
Company shall (x) (i) withdraw, modify or change its approval or
recommendation of this Agreement or the Transactions in a manner adverse
to NBC, (ii) approve or recommend to the stockholders of the Company an
Alternative Transaction (other than by NBC or its Affiliates) or (iii)
approve or recommend that the stockholders of the Company tender their
shares in any tender or exchange offer that is an Alternative Transaction
(other than by NBC and other Affiliates of NBC) or not recommend
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