Exhibit 2
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CONTRIBUTION AGREEMENT
BY AND BETWEEN
X-STREAM MEDIA INC.
and
INTERACTIVE DESKTOP VIDEO LLC
DATED AS OF DECEMBER 21, 1998
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TABLE OF CONTENTS
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ARTICLE I
TRANSFER AND ISSUANCE
Section 1.1 Transfer and Issuance; Assumption of Liabilities ............. 1
Section 1.2 Consideration ................................................ 2
Section 1.3 Closing ...................................................... 3
Section 1.4 Deliveries by the Parties .................................... 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF INTERACTIVE
Section 2.1 Organization ................................................. 3
Section 2.2 Authorization ................................................ 4
Section 2.3 Consents and Approvals; No Violations ........................ 4
Section 2.4 Financial Information ........................................ 4
Section 2.5 Absence of Undisclosed Liabilities ........................... 5
Section 2.6 Title, Ownership and Related Matters ......................... 5
Section 2.7 Fort ▇▇▇ Lease ............................................... 5
Section 2.8 Intellectual Property ........................................ 5
Section 2.9 Taxes ........................................................ 7
Section 2.10 Litigation ................................................... 7
Section 2.11 Compliance with Applicable Law; Permits ...................... 7
Section 2.12 Certain Contracts and Arrangements ........................... 7
Section 2.13 Labor Agreements ............................................. 8
Section 2.14 Investment Intent ............................................ 8
Section 2.15 No Registration .............................................. 8
Section 2.16 Restricted Securities ........................................ 9
Section 2.18 Evaluation of Risk ........................................... 9
Section 2.19 Due Diligence ................................................ 9
Section 2.20 Brokers' Fees ................................................ 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF X-STREAM
Section 3.1 Organization and Authority of X-Stream ........................ 10
Section 3.2 Capitalization ................................................ 10
Section 3.3 Agreements .................................................... 11
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Section 3.4 Consents and Approvals; No Violations ........................ 11
Section 3.5 Litigation ................................................... 11
Section 3.6 Securities Laws .............................................. 11
Section 3.7 No Underwriting .............................................. 11
Section 3.8 Brokers' Fees ................................................ 12
ARTICLE IV
COVENANTS
Section 4.1 Conduct of the Business by Interactive ....................... 12
Section 4.2 Conduct of X-Stream's Business ............................... 13
Section 4.3 Access to Information; Confidentiality ....................... 13
Section 4.4 Consents; Assignments ........................................ 14
Section 4.5 Compaq Contract .............................................. 14
Section 4.6 Reasonable Commercial Efforts ................................ 14
Section 4.7 Non-competition .............................................. 15
Section 4.8 Press Releases ............................................... 16
Section 4.9 Employees .................................................... 16
Section 4.10 Supplemental Disclosure ...................................... 16
Section 4.11 Further Equity Rights in X-Stream ............................ 16
Section 4.12 Other Equipment Located at Fort ▇▇▇ .......................... 17
Section 4.13 No Rights .................................................... 17
ARTICLE V
RESTRICTIONS ON TRANSFER
Section 5.1 Restrictions on Transferability .............................. 18
Section 5.2 Restrictive Legend ........................................... 18
Section 5.3 Notice of Proposed Transfers ................................. 19
ARTICLE VI
CERTAIN TAX MATTERS
Section 6.1 Allocation of Consideration .................................. 20
Section 6.2 Transfer Taxes ............................................... 20
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ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 7.1 Conditions to Each Party's Obligation ......................... 20
Section 7.2 Conditions to Obligations of Interactive ...................... 21
Section 7.3 Conditions to Obligations of X-Stream ......................... 21
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination ................................................... 22
Section 8.2 Procedure and Effect of Termination ........................... 23
Section 8.3 Amendment, Modification and Waiver ............................ 23
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 9.1 Survival ...................................................... 23
Section 9.2 Interactive's Agreement to Indemnify .......................... 23
Section 9.3 X-Stream's Agreement to Indemnify ............................. 24
Section 9.4 Notice and Opportunity to Defend .............................. 24
ARTICLE X
DEFINITIONS
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices ....................................................... 35
Section 11.2 Severability .................................................. 35
Section 11.3 Binding Effect; Assignment .................................... 36
Section 11.4 No Third Party Beneficiaries .................................. 36
Section 11.5 Headings ...................................................... 36
Section 11.6 Jurisdiction and Consent to Service ........................... 36
Section 11.7 Entire Agreement .............................................. 36
Section 11.8 Governing Law ................................................. 37
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Section 11.9 Specific Performance ......................................... 37
Section 11.10 Counterparts ................................................. 37
Section 11.11 Bulk Sales Laws .............................................. 37
Section 11.12 Limitation on Liability ...................................... 37
Section 11.13 Expenses ..................................................... 38
EXHIBIT A -- Master Professional Services Agreement
EXHIBIT B -- Master Hosting and Network Services Agreement
EXHIBIT C -- Form of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP Opinion Letter
EXHIBIT D -- ▇▇▇▇ of Sale and Assignment Agreement
EXHIBIT E -- Fort ▇▇▇ Lease
EXHIBIT F -- Instrument of Assumption
EXHIBIT G -- Sublease Term Sheet
SCHEDULE A -- New Assets
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CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT (this "Agreement"), dated as of December 21,
1998, by and between X-Stream Media Inc., a Delaware corporation ("X-Stream"),
and Interactive Desktop Video LLC, a Delaware limited liability company
("Interactive").
WHEREAS, pursuant to the terms and conditions of this Agreement,
Interactive desires to contribute certain assets to X-Stream in exchange for 950
shares, subject to adjustment as provided herein, of common stock, par value
$0.01 per share, in X-Stream, on the terms and subject to the conditions set
forth herein; and
WHEREAS, the Board of Directors of X-Stream and the management of
Interactive have approved, and each deem it advisable and in the best interests
of each company's respective stockholders or interestholders, as the case may
be, to consummate the acquisition of the Assets and the New Assets by X-Stream,
subject to those liabilities expressly assumed by X-Stream and payment of the
New Assets Purchase Price.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
TRANSFER AND ISSUANCE
Section 1.1 Transfer and Issuance; Assumption of Liabilities.
(a) Subject to the terms and conditions of this Agreement, at the
Closing, (i) Interactive will convey, assign, transfer and deliver or cause to
be conveyed, assigned, transferred and delivered to X-Stream, and X-Stream will
acquire and accept from Interactive, all of Interactive's rights, title and
interests in and to the Assets and the New Assets, free and clear of all Liens,
except as set forth in Section 1.1(a) of the X-Stream Disclosure Schedule (the
"Asset Contribution"); and (ii) X-Stream will assume from Interactive and agrees
to pay and perform the Assumed Liabilities and the New Assets Purchase Price.
(b) Such sale, assignment, transfer and delivery with respect to the
Asset Contribution will be effected by delivery by Interactive to X-Stream of
(i) the ▇▇▇▇ of Sale and Assignment Agreement, (ii) the Instrument of Assumption
and (iii) all other documents, instruments and writings required to be delivered
by either party at or prior to the Closing pursuant to this Agreement or
otherwise required in connection herewith.
Section 1.2 Consideration.
(a) Subject to the terms and conditions of this Agreement, in
consideration for the Asset Contribution, X-Stream shall issue to Interactive
950 shares of Common Stock (the "Interactive Shares"). During the six months
following the Closing, X-Stream shall use its commercially reasonable efforts to
issue additional Equity Securities in exchange for net consideration of at least
$5.5 million. In the event that, following one or more issuances of Equity
Securities pursuant to the Initial Financing and any subsequent financing up to
an aggregate amount of $5.5 million, Interactive owns less than 15% of the
equity capital of X-Stream on a fully-diluted basis (including, without
limitation, calculating the dilution of preferred stock, warrants, options and
convertible debt on an as-converted basis), then X-Stream shall promptly issue
and grant to Interactive, without any consideration other than execution and
delivery of this Agreement, such number of additional shares of equity capital,
of the same class or series as are then owned by Interactive, as required to
provide Interactive with the ownership of 15% of the equity capital of X-Stream
on a fully-diluted basis (including, without limitation, calculating the
dilution of preferred stock, warrants, options and convertible debt on an
as-converted basis); provided, however, that in the event that X-Stream receives
aggregate net proceeds of $5.9 million or more in the Initial Financing,
Interactive shall receive anti-dilution protection as described in this Section
1.2(a) for 15% of the fully-diluted equity capital of X-Stream up to the
issuance of equity capital or convertible debt of X-Stream for aggregate net
consideration of $5.9 million.
(b) In the event that X-Stream issues any class or series of equity
capital or convertible debt other than Common Stock to any of the Founders in
the Initial Financing, then Interactive shall have the right to exchange the
Common Stock acquired hereunder for such class or series of equity capital or
convertible debt, at an exchange ratio determined in accordance with the
conversion ratio of such equity capital or convertible debt into Common Stock.
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(c) The issuance of the Interactive Shares will be effected by
delivery by X-Stream to Interactive of a stock certificate (the "Certificate")
representing the Common Stock bearing the legend set forth in Section 5.2
hereof:
Section 1.3 Closing. The Closing shall be effective as of 12:01 a.m.
on January 15, 1999 provided, that Interactive shall have the unilateral right
but not the obligation, to move up the Closing to any date on or after January
3, 1999 upon five days prior written notice to X-Stream. The Closing shall take
place at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, 919 Third
Avenue, New York, New York, during 1998 or at such other place and time as the
parties may agree.
Section 1.4 Deliveries by the Parties. At the Closing, in connection
with the Asset Contribution (i) Interactive will deliver or cause to be
delivered to X-Stream the following: (A) a duly executed ▇▇▇▇ of Sale and
Assignment Agreement, (B) a duly executed Instrument of Assumption, (C) a duly
executed counterpart of each of the Related Agreements, (D) a copy of all the
Books and Records used exclusively in the Roadshow Business, (E) the Compaq
Equipment Sublease and (F) all other documents, instruments and writings
required to be delivered by Interactive at or prior to the Closing pursuant to
this Agreement or otherwise required in connection herewith (all such documents,
instruments and writings to be delivered by Interactive at the Closing shall be
in form and substance reasonably satisfactory to X-Stream); and (ii) X-Stream
will deliver or cause to be delivered to the Company the following: (A) the
Certificate, (B) a duly executed Instrument of Assumption, and (C) a check in
the amount of the New Assets Purchase Price, (D) a duly executed counterpart of
each of the Related Agreements and (E) all other documents, instruments and
writings required to be delivered by X-Stream at or prior to the Closing
pursuant to this Agreement or otherwise required in connection herewith (all
such documents, instruments and writings to be delivered by X-Stream at the
Closing shall be in form and substance reasonably satisfactory to Interactive).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF INTERACTIVE
Interactive represents and warrants to X-Stream:
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Section 2.1 Organization. Interactive is a limited liability company
duly formed, validly existing and in good standing under the laws of the State
of Delaware. Interactive has all necessary power and authority to own its
properties and assets and to carry on the Business as currently conducted and is
in good standing to conduct the Business in each jurisdiction in which the
property owned, leased or operated by it relating to the Business or the nature
of the Business makes such qualification necessary other than jurisdictions
where the failure to be in good standing results in no material and adverse
consequences other than the payment of non-material amounts to come into good
standing.
Section 2.2 Authorization. Interactive has all necessary power and
authority to execute, deliver, and perform this Agreement and any Related
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. This Agreement and each of the Related
Agreements have been duly executed and delivered by Interactive and constitute,
and when executed and delivered, each of the Related Agreements to be executed
and delivered by Interactive pursuant hereto will constitute, a valid and
binding obligation of Interactive, enforceable against Interactive in accordance
with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
the effect of general principles of equity.
Section 2.3 Consents and Approvals; No Violations. The execution,
delivery, and performance of this Agreement and the Related Agreements by
Interactive, the performance of the transactions contemplated hereby and thereby
and the consummation of the transactions contemplated hereby and thereby will
not, except as set forth on Section 2.3(a) of the Interactive Disclosure
Schedule, (i) result in the imposition of any Encumbrance against any Asset or
any asset licensed to X-Stream hereunder (other than Permitted Liens) or (ii)
violate or conflict with or constitute a breach or default, or an event creating
rights of acceleration or termination (in each case, whether upon lapse of time
or the occurrence of any act or event or otherwise) under (a) the Limited
Liability Company Agreement of Interactive or (b) any contract identified on
Section 2.3(b) of the Interactive Disclosure Schedule, except in any case as
would not have or would not reasonably be expected to have a Material Adverse
Effect on Interactive. Except for other matters identified in Section 2.3(c) of
the Interactive Disclosure Schedule, the execution and delivery of this
Agreement, and the Related Agreements, the performance by Interactive of its
obligations hereunder and thereunder and the consummation by Interactive of the
transactions contemplated hereby and thereby will not require any Approval
including the issuance or modification of any Permit or any transfer of any
Permit except
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for such of the foregoing which are (a) required by reason of the legal or
regulatory status of X-Stream or facts pertaining specifically to it, or (b)
would not have or would not reasonably be expected to have a Material Adverse
Effect on Interactive.
Section 2.4 Financial Information. The revenue information, as
provided to KPMG Peat Marwick and as set forth in Section 2.4 of the Interactive
Disclosure Schedule, is true and accurate.
Section 2.5 Absence of Undisclosed Liabilities. Except for
liabilities and obligations (a) incurred in the ordinary course of business, (b)
specified in the Material Contracts or (c) disclosed in Section 2.5 of the
Interactive Disclosure Schedule, the Roadshow Business has no liabilities or
obligations of any kind whatsoever (whether direct, indirect, accrued or
contingent) and there is no existing condition or situation which would
reasonably be expected to result in any such liabilities or obligations.
Section 2.6 Title, Ownership and Related Matters. As of the Closing,
Interactive will have and will deliver to X-Stream, good and marketable title to
all of the Assets set forth in Section 2.6 of the Interactive Disclosure
Schedule, in each case free and clear of all Liens, except for Permitted Liens.
Each of the Assets is in good operating condition, ordinary wear and tear
excepted.
Section 2.7 Fort ▇▇▇ Lease. Except as set forth in Section 2.7(a) of
the Interactive Disclosure Schedule, Interactive has a valid leasehold interest
in the Fort ▇▇▇ Lease free and clear of all Liens, other than Permitted Liens.
The consent of the landlord for the Fort ▇▇▇ Lease is required to consummate the
transactions contemplated hereby. Interactive is not in default beyond any
applicable notice or grace period and has not received written notice of default
still outstanding on the date hereof under the Fort ▇▇▇ Lease, and to the best
of Interactive's Knowledge, there exists no uncured material default thereunder
by any third party.
Section 2.8 Intellectual Property.
(a) Section 2.8(a) of the Interactive Disclosure Schedule sets forth
a complete and accurate list of all Internet domain registrations (the "Domain
Registrations") to be transferred to X-Stream hereunder.
(b) Section 2.8(b) of the Interactive Disclosure Schedule lists all
Software, as defined hereinafter, which is owned by Interactive ("Proprietary
Software"), and is to be transferred to X-Stream hereunder.
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(c) Except as set forth in Section 2.8(c) of the Disclosure
Schedule, to the Knowledge of Interactive, Trellis Software does not have any
rights to any Proprietary Software with respect to the Roadshow Business.
(d) Except as would not have a Material Adverse Effect:
(i) Interactive owns or has the right to use all Domain
Registrations and all Proprietary Software, as defined hereinafter, free
and clear of all Liens (other than Permitted Liens);
(ii) any Domain Registration, to the Knowledge of Interactive,
is valid and subsisting in full force and effect and has not been
cancelled, expired or abandoned;
(iii) Interactive has not received written notice from any
third party regarding any actual or potential infringement by Interactive
of any Domain Registration or Proprietary Software and Interactive has no
Knowledge of any basis for such a claim;
(iv) Interactive has not licensed or sublicensed its rights in
any Domain Registration or Proprietary Software, or received or been
granted any such rights, other than pursuant to this Agreement;
(v) to the Knowledge of Interactive, no third party is
misappropriating, infringing, diluting or violating any Domain
Registration or Proprietary Software owned by Interactive;
(vi) Interactive takes reasonable measures to protect the
confidentiality of trade secrets including requiring its employees to
execute the GE Integrity Policy and requiring other parties having access
thereto to execute written non-disclosure agreements. No trade secret has
been authorized to be disclosed to any third party other than pursuant to
a non-disclosure agreement that protects Interactive's proprietary
interests in and to such trade secrets;
(vii) the consummation of the transactions contemplated hereby
will not result in the loss or impairment of Interactive rights to own or
use any of the Proprietary Software or Domain Registration, nor will
require the consent of any third party, including
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for the avoidance of doubt any governmental authority, in respect of any
Proprietary Software or Domain Registration; and
(viii) all Proprietary Software set forth in Section 2.9(b) of
the Interactive Disclosure Schedule, was either developed (a) by employees
of Interactive within the scope of their employment; or (b) by independent
contractors who have assigned their rights to Interactive pursuant to
written agreements.
Section 2.9 Taxes. Interactive has paid, or has had paid on its
behalf or where payment is not yet due has established an adequate accrual for
the payment of, all material Taxes due with respect to any period ending prior
to or as of the date of Closing.
Section 2.10 Litigation. Except as set forth in Section 2.10 of the
Interactive Disclosure Schedule, there is no Action pending or threatened, to
Interactive's Knowledge, against Interactive with respect to the Roadshow
Business by or before any court, governmental or regulatory authority.
Section 2.11 Compliance with Applicable Law; Permits.
(a) Interactive is not in violation of, nor has been threatened to
be charged with or given notice of any violation of, or to the best of
Interactive's Knowledge, are under investigation with respect to, any Laws
relating to the Roadshow Business, except as would not have or would not
reasonably be expected to have a Material Adverse Effect on Interactive.
(b) Interactive holds all Permits that are required by any
Governmental Entity or Law to permit it to conduct the Business as now
conducted, and all such Permits are valid and in full force and effect. No
challenge, revocation, suspension, cancellation or termination of any of such
Permits is, to Interactive's Knowledge, threatened. Interactive is in compliance
with its obligations under such Permits.
Section 2.12 Certain Contracts and Arrangements.
(a) Section 2.12 of the Disclosure Schedule hereto contains an
accurate and complete list of Contracts relating exclusively to the Business,
including, without limitation, the Microsoft Contract, MCI Contract and the
Compaq Contract to which Interactive is a parry or any of the Assets is subject
and that (i) obligates Interactive to pay an amount in the aggregate of $5,000
or more (other than
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purchase orders in the ordinary course); (ii) all oral or written agreements
which obligate Interactive to perform services after December 31, 1998; (iii) is
a Contract with any of Interactive's ten largest customers or suppliers; (iv)
contains a covenant that limits or restricts the ability of Interactive to
compete or otherwise to conduct Business in any manner or place; (v) contains a
right of first refusal with respect to any assets used exclusively in the
Business with a fair market value in excess of $25,000; or (vi) provides for the
payment or receipt of any licensing fee, royalty payment or the like
(collectively, the "Material Contracts"). True, correct, and complete copies of
the Material Contracts appearing in Section 2.12 of the Interactive Disclosure
Schedule, including all amendments and supplements, have been provided to
X-Stream (except as listed therein). Except as set forth in Section 2.12 of the
Interactive Disclosure Schedule, each Material Contract is valid and binding and
in full force and effect with respect to Interactive, and to Interactive's
Knowledge, the other parties thereto. Other than as a result of the execution of
this Agreement, the Related Agreements and the consummation of the transactions
hereby and thereby, there has not occurred under any of the Material Contracts
any alleged or actual material breach or default by Interactive, or event which
would (with the passage of time, notice or both) constitute a breach or default
by Interactive or would result in the termination of or acceleration of any
performance under, or the right to terminate or accelerate performance (with the
passage of time, notice or both) by Interactive, or to Interactive's Knowledge,
by any other party to any Material Contract which remains unremedied.
Section 2.13 Labor Agreements. Except as set forth on Section 2.13
of the Interactive Disclosure Schedule: (i) to Interactive's Knowledge, no union
claims to represent the employees of Interactive and, in each case working
exclusively in the Business; or (ii) Interactive is not a party to or bound by
any collective bargaining or similar agreement with any labor organization, or
rules or practices agreed to with any labor organization or employee
association.
Section 2.14 Investment Intent. The Interactive Shares to be
acquired by Interactive hereunder are being acquired for Interactive's own
account with the present intention of holding such interests for purposes of
investment, and Interactive has no intention of selling such interests in a
public distribution in violation of the federal securities laws or any
applicable state securities laws.
Section 2.15 No Registration. Interactive understands that the
Interactive Shares have not been, and, other than in accordance with Section
4.11 hereof, will not be, registered under the Securities Act or the securities
laws of any state by reason of a specific exemption from the registration or
qualification provi-
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sions of the Securities Act or said securities laws, the availability of which
depends upon, among other things, the bona fide nature of Interactive's
investment intent and upon the accuracy of Interactive's representations
expressed herein. Interactive understands and acknowledges that X-Stream will be
relying upon the representations and agreements contained in Sections 2.14
through and including 2.19 in offering and selling the Interactive Shares and
for the purpose of determining whether this transaction meets the requirements
for such exemptions. Interactive further represents that the offering of the
Interactive Shares was made only through direct, personal communication between
Interactive or a representative thereof and a representative of X-Stream.
Section 2.16 Restricted Securities. Interactive understands that the
Interactive Shares issued hereunder constitutes "restricted securities" under
the applicable federal securities laws and that the Securities Act and the rules
of the Securities and Exchange Commission provide in substance that it may
dispose of the Interactive Shares only pursuant to an effective registration
statement under the Securities Act or an exemption therefrom, and Interactive
understands that other than pursuant to Section 4.11 hereof, X-Stream has no
obligation or present intention to register the Common Stock. Interactive
further acknowledges that the Interactive Shares must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from such registration is available. Interactive also understands that no public
market now exists for any of the securities issued by X-Stream and that X-Stream
has made no assurances that a public market will ever exist for securities of
X-Stream.
Section 2.17 Accredited Investor. Interactive is an "accredited
investor" as that term is defined in Rule 501(a) under the Securities Act.
Interactive is financially able to bear the economic risk of an investment in
the Common StocK including the total loss thereof.
Section 2.18 Evaluation of Risk. Interactive further represents that
it has such knowledge, experience and skill in evaluating and investing in
issues of equity securities, including securities of new and speculative
companies, such that it is capable of evaluating the merits and risks of an
investment in the Interactive Shares, and has such knowledge, experience and
skill in financial and business matters that it is capable of evaluating the
merits and risks of the prospective investment in X-Stream and the suitability
of the Interactive Shares as an investment.
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Section 2.19 Due Diligence. Interactive further represents that it
has had an opportunity to discuss the business, management and financial affairs
of X-Stream and the terms and conditions of an investment in the Interactive
Shares with, and has had access to, the management of X-Stream and it has had
the opportunity to review the information regarding X-Stream set forth and
referred to in this Agreement.
Section 2.20 Brokers' Fees. Interactive has no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement or any of the Related
Agreements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF X-STREAM
X-Stream represents and warrants to Interactive:
Section 3.1 Organization and Authority of X-Stream.
(a) X-Stream is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware. X-Stream has heretofore
delivered to Interactive complete and correct copies of its respective
certificate of incorporation and by-laws as currently in effect.
(b) X-Stream has the corporate power and corporate authority to
execute and deliver this Agreement and any Related Agreements to which it is a
party and consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by the Board of Directors of X-Stream and no other
corporate proceedings on the part of X-Stream are necessary to authorize the
execution, delivery and performance of this Agreement and the Related Agreements
or the consummation of the transactions contemplated hereby or thereby. This
Agreement has been duly executed and delivered by X-Stream and constitutes a
valid and binding obligation of X-Stream, enforceable against X-Stream in
accordance with its terms.
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Section 3.2 Capitalization.
(a) As of the date of this Agreement, the authorized capital of
X-Stream consists of 10,000 shares of its Common Stock. The issued and
outstanding shares of capital stock of X-Stream consists of 4,000 shares of
Common Stock, and the holders of such shares of Common Stock are as follows:
Name Number of Shares Held
---- ---------------------
▇. ▇▇▇▇▇▇▇ Green 1000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1000
▇▇▇▇▇▇ ▇▇▇▇ 1000
(b) All the outstanding shares of capital stock of X-Stream have
been duly and validly issued and are fully paid and non-assessable. Upon
issuance, sale and delivery as contemplated by this Agreement, the shares of
Common Stock issued hereunder will be duly authorized, validly issued, fully
paid and non-assessable.
Section 3.3 Agreements. As of the date of this Agreement, other than
this Agreement and the Related Agreements, X-Stream has not entered into any
agreements, contracts or understandings, other than those listed in Section 3.3
of the X-Stream Disclosure Schedule (a copy of each such agreement, contract or
understanding has heretofore been provided to Interactive).
Section 3.4 Consents and Approvals: No Violations. Neither the
execution and delivery of this Agreement or the Related Agreements nor the
consummation by X-Stream of the transactions contemplated hereby and thereby (a)
conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of X-Stream; (b) require any filing with, or the
obtaining of any permit, license, action, waiver, authorization, consent,
filing, registration or approval of, any governmental or regulatory authority;
or (c) violate or conflict with any order, injunction, decree, statute, rule or
regulation applicable to X-Stream, excluding from the foregoing clauses (b) and
(c) such requirements, defaults, rights or violations which (X) become
applicable as a result of any acts or omissions by, or any facts specifically
relating to Interactive or (Y) would not have a Material Adverse Effect on
X-Stream.
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Section 3.5 Litigation. There is no claim, action or proceeding
pending or threatened, to X-Stream's Knowledge, against X-Stream by or before
any court, governmental or regulatory authority.
Section 3.6 Securities Laws. Subject to and based in part upon the
truth and accuracy of the representations and warranties of Interactive in
Sections 2.14 through and including 2.19 hereof, the offering, sale and purchase
of the Interactive Shares contemplated hereby are exempt from registration under
the Securities Act and are exempt from registration under any applicable state
securities or "blue-sky" laws. The issuance of all other shares of capital stock
of X-Stream on or before the date hereof has been made in compliance with the
Securities Act and all applicable state securities and "blue-sky" laws.
Section 3.7 No Underwriting. (a) X-Stream agrees that neither it nor
anyone acting on its behalf will offer the Interactive Shares so as to bring the
issuance and sale of the Interactive Shares within the provisions of Section 5
of the Securities Act nor offer any other securities for issuance or sale to, or
solicit any offer to acquire any of the same from, or otherwise approach or
negotiate with respect thereto with, anyone if the sale of the Interactive
Shares and any other securities would be integrated as a single offering for the
purposes of the Securities Act, including, without limitation, Regulation D
thereunder, and as a consequence bring the issuance and sale of the Interactive
Shares within the provisions of Section 5 of the Securities Act. Each of the
Interactive Shares shall have a legend setting forth the restrictions on
transferability and sale as described in Section 5.
(b) In the case of each offer or sale of the Interactive Shares no
form of general solicitation or general advertising was used by X-Stream or its
representatives, including but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
were invited by any general solicitation or general advertising. Interactive is
the sole purchaser of the Interactive Shares.
(c) X-Stream represents that the offering of the Interactive Shares
was made only through direct, personal communication between X-Stream or a
representative thereof and a representative of Interactive and not through a
public solicitation or advertising.
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Section 3.8 Brokers' Fees. X-Stream has no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement or any of the Related
Agreements.
ARTICLE IV
COVENANTS
Section 4.1 Conduct of the Business by Interactive. Except as
specifically provided by this Agreement, from the date hereof and until the
Closing, Interactive will not, without the prior written consent of X-Stream:
(a) conduct the Business in any manner except in the ordinary
course consistent with past practice and use its reasonable commercial
efforts to preserve intact the Business in all material respects;
(b) except as required by its terms, amend, terminate, or
renegotiate any Material Contract, or waive any material rights or claims
thereunder;
(c) sell, transfer, mortgage, encumber or create any
Encumbrance on, lease or otherwise dispose of the Assets;
(d) change, amend or restate the articles of formation,
certificate of formation or limited liability company operating agreement
of Interactive in a manner that would materially and adversely affect the
transactions contemplated hereby;
(e) make, revoke or amend any Tax election that relates to the
Assets or settle or compromise any Tax liability that relates to the
Assets without first obtaining the prior written consent of X-Stream which
consent shall not be unreasonably withheld;
(f) except for agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and Chase
Manhattan Bank, enter into any new Material Contract with any third party;
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(g) take any other action which causes any of the
representations and warranties made by Interactive in this Agreement not
to be true and correct in all material respects on and as of the Closing;
or
(h) agree to or make any commitment to take any action that is
or would be prohibited by this Section 4.1.
Section 4.2 Conduct of X-Stream's Business. Except as specifically
provided by this Agreement, from the date hereof and until the Closing, X-Stream
will not, without the prior consent of Interactive, conduct its business in any
manner except in the ordinary course consistent with past practice.
Section 4.3 Access to Information; Confidentiality.
(a) Between the date of this Agreement and the Closing, Interactive
shall (i) give to X-Stream and its authorized representatives access to the
Books and Records, offices and other facilities and properties of Interactive
relating to the Business; (ii) permit X-Stream to make such inspections thereof
as X-Stream may reasonably request; and (iii) cause the officers of Interactive
to furnish X-Stream with such financial and operating data and other information
with respect to the Business as X-Stream may from time to time reasonably
request.
(b) Interactive agrees that so long as any Books and Records remain
in existence and available and have not otherwise been delivered to X-Stream,
X-Stream shall have the right to inspect and to make copies of the same at any
time during normal business hours for any proper purpose.
Section 4.4 Consents; Assignments. Interactive and X-Stream will use
their respective reasonable commercial efforts to obtain any consent, approval
or amendment required to novate and/or assign all agreements, leases, licenses
and other rights of any nature whatsoever relating to the Assets, including,
without limitation, the Microsoft Contract, the MCI Contract and Compaq
Contract. In the event and to the extent that X-Stream and Interactive are
unable to obtain any such required consent, approval or amendment, or if any
attempted assignment would be ineffective or would adversely affect the rights
of Interactive with respect to any Asset so that X-Stream would not in fact
receive all the rights with respect to such Asset, Interactive and X-Stream will
cooperate (to the extent permitted by law or the terms of any applicable
agreement) in a mutually agreeable arrangement under which X-Stream would, to
the extent possible, obtain the benefits and assume the obligations with respect
to such Asset, in accordance with this Agreement, including sub-
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contracting, sub-licensing, or sub-leasing to X-Stream, or under which
Interactive would enforce for the benefit of X-Stream, with X-Stream assuming
Interactive's obligations, any and all rights of Interactive against a third
party thereto and indemnifying Interactive of any and all liability thereunder,
except with respect to the Fort ▇▇▇ Lease or any assignment or sublease thereof.
Interactive shall, without further consideration therefor, pay and remit to
X-Stream promptly all monies, rights and other considerations received in
respect of X-Stream's performance of such obligations. If and when any such
consent shall be obtained or such agreement, lease, license or other right shall
otherwise become assignable or able to be novated, Interactive shall promptly
assign and novate all its rights and obligations thereunder to X-Stream without
payment of further consideration and X-Stream shall, without the payment of any
further consideration therefor, assume such rights and obligations and
Interactive shall be relieved of any and all liability hereunder.
Section 4.5 Compaq Contract. Following the assignment of the Compaq
Contract by Interactive to X-Stream with Compaq's consent, Interactive agrees to
maintain the Compaq's logo on the CNBC/ Dow ▇▇▇▇▇ Business Video website at
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ required under the terms, and subject to the conditions of,
the Compaq Contract until the earlier of (a) Interactive ceases to generally
maintain and update such website, (b) expiration of the current term, or any
termination of, the Compaq Contract or (c) X-Stream no longer hosts such website
pursuant to the terms of the Master Hosting and Network Services Agreement.
Section 4.6 Reasonable Commercial Efforts. Upon the terms and
subject to the conditions herein provided, each of the parties hereto agrees to
use its commercially reasonable efforts to take or cause to be taken all action,
to do or cause to be done, and to assist and cooperate with the other party
hereto in doing, all things necessary, proper or advisable under applicable laws
and regulations, to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement and the
Related Agreements. Interactive shall use commercially reasonable efforts to
assist X-Stream with the transition of the Business for a period of three months
following the Closing. Interactive shall use its commercially reasonable efforts
to retain its current President and CEO as an employee of Interactive at the
sole expense of Interactive to assist with such three-month transition for the
purpose of introducing X-Stream to business relationships and contacts of the
Business.
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Section 4.7 Non-competition.
(a) Interactive agrees that from the Closing until the second
anniversary of the Closing, except with respect to the continuing interest of
Interactive in X-Stream, Interactive shall not: (i) engage, either directly or
indirectly, as a principal, stockholder, member, partner or the like (other than
through the ownership of not more than 10% of the outstanding voting securities
of any publicly-traded entity), in the Roadshow Business in the United States of
America and Canada; or (ii) affirmatively solicit, other than through a general
solicitation, the employment of any customer or supplier of X-Stream with
respect to the Roadshow Business or any employee of X-Stream, as of the Closing.
X-Stream agrees that for a period from the date hereof until two full years from
the Closing, it shall not sell or issue any Equity Securities or any securities
in any subsidiary of X-Stream to Time Warner Inc., Bloomberg, or any of their
respective Affiliates, nor enter into any agreement pursuant to which Time
Warner Inc., Bloomberg or any of their respective Affiliates shall receive a
revenue share (or any variation thereof) with respect to X-Stream or any of its
subsidiaries.
(b) If any provisions contained in this Section 4.7 shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section 4.7, but this Section 4.7 shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained herein. It is the
intention of the parties that if any of the restrictions or covenants contained
herein is held to cover a geographic area or to be for a length of time which is
not permitted by applicable law, or in any way construed to be too broad or to
any extent invalid, such provision shall not be construed to be null, void and
of no effect, but to the extent such provision would be valid or enforceable
under applicable law, a court of competent jurisdiction shall construe and
interpret or reform this Section 4.7 to provide for a covenant having the
maximum enforceable geographic area, time period and other provisions (not
greater than those contained herein) as shall be valid and enforceable under
such applicable law. Each party acknowledges that the other party would be
irreparably harmed by any breach of this Section 4.7 and that there would be no
adequate remedy at law or in damages to compensate the other party for any such
breach. Each party agrees that the other party shall be entitled to injunctive
relief requiring specific performance by such other party of this Section 4.7.
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Section 4.8 Press Releases. Neither Interactive nor X-Stream shall
make any press release or public announcement in connection with the
transactions contemplated hereby without the prior written consent of the other
or, if required by law, without prior consultation wit the other.
Section 4.9 Employees. As of the Closing, X-Stream shall offer to
continue the employment, effective the day after the Closing Date, of those
persons identified on Section 4.9 of the X-Stream Disclosure Schedule, who are
active employees of Interactive on the Closing, at a comparable level of
compensation to such employee's current level, taken as a whole. X-Stream will
not adopt or assume, at and as of the Closing, any of the Plans maintained nor
any trust, insurance contract, annuity contract, or other funding arrangement
established with respect thereto. X-Stream will not ensure that the Plans treat
employment with the Business prior to the Closing the same as employment from
and after the Closing for purposes of eligibility, vesting, and benefit accrual.
X-Stream shall have no obligations whatsoever pursuant to the terms of this
Agreement or any agreement of Interactive including, without limitation, for
severance, with respect to employees of Interactive to whom no offer of
employment is made or to those whom employment is offered but not accepted
within a reasonable period of time.
Section 4.10 Supplemental Disclosure. Each party will promptly
inform the other party in writing of any fact or circumstance known to such
party that would constitute a breach of any representations or warranties
contained herein or would cause any of the conditions to such party's
obligations to consummate the transactions contemplated under this Agreement not
to be fulfilled.
Section 4.11 Further Equity Rights in X-Stream. X-Stream shall
provide Interactive rights with respect to the registration of Common Stock at
least as extensive as those provided to any investor in the Initial Financing
which at a minimum shall include unlimited piggyback and S-3 registration rights
for all equity capital of X-Stream issued in accordance with this Agreement,
customary financial information concerning X-Stream and observation rights for
all meetings of the Board of Directors of X-Stream. In the event that X-Stream
does not consummate its Initial Financing within three months of the Closing,
then Interactive shall have the right to require X-Stream to enter into a
Registration Rights and Stockholders Agreement, to be negotiated in good faith
between X-Stream and Interactive, providing for such registration rights,
financial information and observation rights.
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Section 4.12 Other Equipment Located at Fort ▇▇▇. (a) Interactive
hereby grants to X-Stream an exclusive, non-transferable, royalty-free license
to use any and all personal property (other than the Assets) found on the
premises subleased to X-Stream under the Sublease Agreement except those items
set forth on Section 4.12(a) of the Interactive Disclosure Schedule, as well as
all field equipment (e.g., cameras, microphones, etc.), in each case used
exclusively in the Business, for a term commencing on the date of the Closing
and ending on December 31, 1999; provided, however, that (i) commencing December
15, 1999, Interactive may remove any and all personal property not purchased by
X-Stream in accordance with Section 4.12(b) below and (ii) this license shall
not apply to any truck, satellite dish or satellite uplink equipment.
(b) Except as set forth in Section 4.12(b) of the Interactive
Disclosure Schedule, X-Stream shall have the right to purchase any and all
personal property licensed to X-Stream pursuant to Section 4.12(a) above at fair
market value determined as of December 31, 1999 by providing written notice to
Interactive, specifying the items of personal property to be purchased, no later
than November 30, 1999. Interactive and X-Stream shall negotiate in good faith
during the month of December 1999 to determine the fair market value of such
personal property and, to consummate such purchase and sale, X-Stream shall
provide Interactive with a check for the purchase price of such property no
later than December 31, 1999.
Section 4.13 No Rights. Notwithstanding anything to the contrary
contained herein, X-Stream shall have no right or license to use or reproduce
the "CNBC" or "Dow ▇▇▇▇▇" name, logo or trademark in any manner or form or to
use or reproduce the "CNBC" television service or any "Dow ▇▇▇▇▇" or "Wall
Street Journal" content, whether in whole or in part.
Section 4.14 Sublease. Interactive and X-Stream shall each use their
reasonable commercial efforts to effect and obtain the landlord's consent for
the Sublease Agreement. If such consent is not obtained by January 15, 1999 the
parties shall negotiate in good faith to determine a mutually acceptable
alternative solution (the "Real Estate Matter").
Section 4.15 Offsite Equipment. In the event that either party
discovers an Asset that prior to the date hereof was used all or substantially
all in the Roadshow Business, and is located outside of the Fort ▇▇▇ Facility,
the parties hereby agree to negotiate in good faith with intention of
transferring such Asset to X-Stream, except with respect to automotive vehicles,
satellite dishes and uplink equipment.
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Section 4.16 First Look. From the date hereof until the second
anniversary of the Closing, in the event that X-Stream determines to sell,
license, transfer or otherwise dispose of any video and or audio content created
or developed by X-Stream, other than for the Interactive Delivery thereof, it
shall first offer such content to CNBC, Inc. and shall negotiate a price for
such content in good faith for a period of 15 days. If following such 15 day
period, no agreement is reached, X-Stream shall be free to provide such content
to any third party provided that the price of such content shall not be less
than that offered by CNBC, Inc.
ARTICLE V
RESTRICTIONS ON TRANSFER
Section 5.1 Restrictions on Transferability.
The Interactive Shares shall not be sold, assigned, transferred or
pledged except upon satisfaction of the conditions specified in this Section 5,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. Interactive will cause any proposed purchaser, assignee,
transferee, or pledgee of the Interactive Shares held by Interactive to agree to
take and hold such securities subject to the provisions and conditions of this
Section 5.
Section 5.2 Restrictive Legend.
Each Certificate representing the Interactive Shares and any other
securities issued in respect of Interactive Shares upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event shall (unless
otherwise permitted by the provisions of Section 5.3 below) be stamped or
otherwise imprinted with a legend in substantially the following form (in
addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY APPLICABLE STATE SECURITIES LAWS. THE TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
CONDITIONS SPECIFIED IN A CONTRIBUTION AGREEMENT DATED AS OF
DECEMBER 21, 1998. A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY
THE
19
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE. THESE SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED, UNLESS AND UNTIL SUCH CONDITIONS ARE COMPLIED
WITH AND UNLESS SUCH SHARES ARE REGISTERED UNDER SUCH ACT, OR SUCH
STATE LAW, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.
Interactive and any subsequent transferee of the Interactive Shares
consent to X-Stream making a notation on its records and giving instructions to
any transfer agent in order to implement the restrictions on transfer set forth
in this Article V.
Section 5.3 Notice of Proposed Transfers
The holder of each Certificate representing the Interactive Shares,
by acceptance thereof, agrees to comply in all respects with the provisions of
this Section 5.3. Prior to any proposed sale, assignment, transfer or pledge of
any such securities (other than transfers not involving a change in beneficial
ownership), unless there is in effect a registration statement under the
Securities Act covering the proposed transfer, the holder thereof shall give
written notice to X-Stream of such holder's intention to effect such transfer,
sale, assignment or pledge. Each such notice shall describe the manner and
circumstances of the proposed transfer, sale, assignment or pledge in sufficient
detail, and shall be accompanied, at such holder's expense by either (a) an
opinion of legal counsel reasonably satisfactory to X-Stream addressed to
X-Stream, to the effect that the proposed transfer of the securities may be
effected without registration under the Securities Act, or (b) a "no action"
letter from the Commission to the effect that the transfer of such securities
without registration will not result in recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the holder of
such securities shall be entitled to transfer such securities in accordance with
the terms of the notice delivered by the holder to X-Stream, provided, however,
that such notice need not be accompanied by such an opinion of counsel or no
action letter if such a transfer is to an Affiliate of the transferor. Each
certificate evidencing the securities transferred as above provided shall bear,
except if such transfer is made pursuant to Rule 144 (or an effective
registration statement) the restrictive legend set forth in Section 5.2 above,
except that such certificate shall not bear such restrictive legend, if in the
opinion of
20
counsel for such holder and of counsel to X-Stream, such legend is not required
in order to establish compliance with any provision of the Securities Act.
ARTICLE VI
CERTAIN TAX MATTERS
Section 6.1 Allocation of Consideration. X-Stream and Interactive
shall each report the transactions contemplated under this Agreement for all
federal, state and local income Tax and all other purposes (including, without
limitation, for purposes of Section 1060 of the Code) consistent with the
allocation set forth on Section 6.1 of the Interactive Disclosure Schedule.
X-Stream and Interactive shall each timely file a Form 8594 (and any similar
forms required under state or local Tax law) in accordance with the requirements
of Section 1060 of the Code (or state or local Tax law, as the case may be) and
this Section 6.1.
Section 6.2 Transfer Taxes. Interactive and X-Stream shall each be
responsible for one-half of all Transfer Taxes arising out of and in connection
with or attributable to the sale and purchase of the Assets and the New Assets
described in Article I of this Agreement.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 7.1 Conditions to Each Party's Obligation. The respective
obligations of each party to consummate the transactions contemplated herein is
subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) No statute, rule or regulation shall have been enacted, entered,
promulgated or enforced by any court or governmental authority and there
shall not be in effect any judgment, order, injunction or decree of any
court of competent jurisdiction which prohibits or restricts the
consummation of the transactions contemplated hereby or which would
restrain, prohibit or otherwise interfere with the effective operation or
enjoyment by X-Stream of all or any portion of the Assets, and no
proceeding by any Person which is reasonably likely to have any of the
foregoing effects shall be pending.
21
(b) In accordance with the provisions of Section 4.14, the Real
Estate Matter shall have been resolved to the reasonable satisfaction of
both parties hereto.
Section 7.2 Conditions to Obligations of Interactive. The
obligations of Interactive to consummate the transactions contemplated herein
are further subject to the satisfaction (or waiver) at or prior to the Closing
of the following conditions:
(a) The representations and warranties of X-Stream set forth in
Article III hereof shall be true and correct in all material respects as
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing as though made on and as of the Closing; provided, however, that
for purposes of determining the satisfaction of the condition contained in
this clause (a), no effect shall be given to any exception in such
representations and warranties relating to materiality or a Material
Adverse Effect, and provided, further, however, for purposes of this
clause (a), such representations and warranties shall be deemed to be true
and correct in all material respects unless the failure or failures of
such representations and warranties to be so true and correct,
individually or in the aggregate, would have a Material Adverse Effect on
the Business of Interactive.
(b) X-Stream shall have performed in all material respects its
respective obligations under this Agreement required to be performed by it
at or prior to the Closing pursuant to the terms hereof.
(c) Interactive has received a certificate of the Secretary of
X-Stream certifying as to the Certificate of Incorporation and By-laws of
X-Stream, and all requisite corporate actions taken by X-Stream to
authorize its execution and delivery of this Agreement and the Related
Agreements and its consummation of the transactions contemplated hereby
and thereby, attaching copies of such corporate actions, and such other
documents and other papers as Interactive may reasonably request.
(d) Interactive shall have received an opinion dated as of the
Closing Date of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to
X-Stream, substantially in the form of Exhibit C hereto.
22
Section 7.3 Conditions to Obligations of X-Stream. The obligations
of X-Stream to consummate the transactions contemplated hereby are further
subject to the satisfaction (or waiver) at or prior to the Closing of the
following conditions:
(a) The representations and warranties of Interactive set forth in
Article II hereof shall be true and correct in all material respects as of
the date of this Agreement and (except to the extent such representations
and warranties speak as of an earlier date) as of the Closing as though
made on and as of the Closing; provided, however, that for purposes of
determining the satisfaction of the condition contained in this clause
(a), no effect shall be given to any exception in such representations and
warranties relating to materiality or a Material Adverse Effect, and
provided, further, however, for purposes of this clause (a), such
representations and warranties shall be deemed to be true and correct in
all material respects unless the failure or failures of such
representations and warranties to be so true and correct, individually or
in the aggregate, would have a Material Adverse Effect on X-Stream or its
ability to consummate the transactions contemplated in this Agreement or
the Related Agreements;
(b) Interactive shall have performed in all material respects each
of its obligations under this Agreement required to be performed by it at
or prior to the Closing pursuant to the terms hereof.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
(a) at any time, by mutual written consent of the parties hereto;
(b) by either X-Stream or Interactive if, the transactions
contemplated hereby have not closed by February 28, 1999, provided, that
none of the parties hereto shall be entitled to terminate this agreement
pursuant this Section 7.1(b) if such party's failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date; or
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(c) by either X-Stream and Interactive if consummation of the
transactions contemplated hereby would violate any nonappealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction.
Section 8.2 Procedure and Effect of Termination. In the event of the
termination of this Agreement and the abandonment of the transactions
contemplated hereby pursuant to Section 7.1 hereof, written notice thereof shall
forthwith be given by the party so terminating to the other party and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action. If this Agreement is terminated pursuant to
Section 7.1 hereof, there shall be no liability or obligation hereunder on the
part of Interactive or X-Stream or any of their respective directors, officers,
employees, Affiliates, controlling persons, agents or representatives, unless
such Interactive or X-Stream, as the case may be, has (i) willfully failed to
have performed its obligations hereunder or (ii) knowingly made a
misrepresentation of any matter set forth herein.
Section 8.3 Amendment, Modification and Waiver. This Agreement may
be amended, modified or supplemented at any time only by written agreement of
Interactive and X-Stream. Any failure of any of Interactive or X-Stream to
comply with any term or provision of this Agreement may be waived by an
instrument in writing signed by or on behalf of the appropriate party, but such
waiver or failure to insist upon strict compliance with such term or provision
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure to comply.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 9.1 Survival. The parties hereto agree that except with
respect to Sections 4.7 and 4.16 hereof, the covenants and agreements and the
representations and warranties contained in this Agreement shall survive for one
year following the Closing.
Section 9.2 Interactive's Agreement to Indemnify.
(a) Subject to the terms and conditions set forth herein, from and
after the Closing, Interactive shall indemnify and hold harmless, X-Stream and
the X-Stream Indemnitees from and against all Damages.
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(b) Interactive's obligation to indemnify the X-Stream Indemnitees
for Damages pursuant to Section 8.2(a) hereof is subject to the following
limitations: (i) no indemnification shall be made by Interactive for Damages
arising solely from clause (i) or (ii) of the definition of Damages set forth in
Article IX hereof unless the aggregate amount of such Damages exceeds $50,000
and then only to the extent of any additional Damages; and (ii) in Interactive's
aggregate obligation to indemnify the X-Stream Indemnitees shall not exceed
$800,000; provided, however, that following the receipt by X-Stream of aggregate
net proceeds of $5.5 million in the Initial Financing such aggregate obligation
to indemnify the X-Stream Indemnitees shall not exceed $3,000,000.
Section 9.3 X-Stream's Agreement to Indemnify.
(a) Subject to the terms and conditions set forth herein, from and
after the Closing, X-Stream shall indemnify and hold harmless, Interactive and
the Interactive Indemnitees from and against all Damages.
(b) X-Stream's obligation to indemnify the Interactive Indemnitees
for Damages pursuant to Section 8.3(a) hereof is subject to the following
limitations: (i) no indemnification shall be made by X-Stream for Damages
arising solely from clause (i) or (ii) of the definition of Damages set forth in
Article IX hereof unless the aggregate amount of such Damages exceeds $50,000
and then only to the extent of any additional Damages; and (ii) in no event
shall X-Stream's aggregate obligation to indemnify the Interactive Indemnities
shall not exceed $800,000 provided, however, that following the receipt by
X-Stream of aggregate net proceeds of $5.5 million in the Initial Financing such
aggregate obligation to indemnify the Interactive Indemnitees shall not exceed
$3,000,000.
Section 9.4 Notice and Opportunity to Defend. If an event occurs
that entitles either an X-Stream Indemnitee or an Interactive Indemnitee, as the
case may be, or that such Indemnitee believes entitles it, to indemnification
pursuant to this Article VIII, any such Indemnitee shall promptly notify
X-Stream or Interactive, as the case may be (the "Indemnifying Party"). If the
claim for indemnification arises out of a claim by a third party, such notice
shall occur within 15 days of such Indemnitee's receipt of written notice of
such claim; provided, however, that the failure to so notify the Indemnifying
Party of its obligations hereunder, except to the extent that the Indemnifying
Party is actually prejudiced by such failure. The Indemnifying Party shall have
the right to undertake, conduct and control the defense thereof by so notifying
such Indemnitee in writing, provided that the Indemnifying Party (i) states that
the settlement or defense of the claim will be conducted at all
25
times in good faith and in a reasonable manner (and so conducts it), (ii)
acknowledges in writing the obligation to indemnify such Indemnitee in
accordance with the terms contained in this Agreement, and (iii) promptly
reimburses such Indemnitee for all out-of-pocket expenses incurred as a result
of the assumption by the Indemnifying Party of control of such settlement or
defense. If the Indemnifying Party provides written notice to the Indemnitee
that it elects to defend such claim, the Indemnifying Party shall be obligated
to defend such claim, at its own expense and by counsel chosen by it and
reasonably satisfactory to the Indemnitee. In the event that the Indemnifying
Party elects to provide the defense of such claim pursuant to this Section 8.4,
such Indemnitee shall cooperate fully with the Indemnifying Party and its
counsel in the defense of such claim and shall be entitled to full access to
information with respect thereto and to participate in the defense thereof at
its own cost and expense. Any compromise, settlement or offer of settlement of
such claim by the Indemnifying Party shall require the prior written consent of
the Indemnitee, which consent shall not be unreasonably withheld and unless such
consent is obtained, the Indemnifying Party shall continue the defense of such
claim; provided, however, that if the Indemnitee refuses its consent to a bona
fide offer of settlement that the Indemnifying Party wish to accept and that
involves no payment by the Indemnitee not paid by the Indemnifying Party and
further involves no limitation on the future conduct of the Business as
presently conducted, the Indemnifying Party may reassign the defense of such
claim to the Indemnitee, who may then continue to pursue the defense of such
matter, free of any participation by the Indemnifying Party the sole cost and
expense of the Indemnitee. In such event, the obligation of the Indemnifying
Party with respect thereto shall not exceed the amount of the offer of
settlement that the Indemnitee refused to accept plus the costs and expenses of
the Indemnitee prior to the date the Indemnifying Party notified the Indemnitee
of the offer of settlement. If the Indemnifying Party does not elect to defend
any such claim, it shall nevertheless have the right of full access to
information with respect thereto and to participate in such defense at its sole
cost and expense and shall remain liable for any indemnification obligations
pursuant to this Agreement.
ARTICLE X
DEFINITIONS
For the purposes of this Agreement, the following terms shall have
the following respective meanings:
26
"Action" means any action, claim, complaint investigation, petition,
action, suit or other proceeding whether civil or criminal, in law or in equity,
or by or before any Governmental Entity.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
"Agreement" means this agreement, dated as of December 21, 1998,
together with any amendments thereto, by and between Interactive and X-Stream.
"Approval" means any approval, authorization, consent,
qualification, or registration, or any waiver of any of the foregoing, required
to be obtained from any Governmental Entity.
"Assets" means all of the following properties, contracts and other
assets (of every kind, nature, character and description, whether real, personal
or mixed, whether tangible or intangible, whether accrued, contingent or
otherwise and wherever situated), all as of the Closing, including without
limitation:
(i) the items listed in Section 2.6 of the Interactive Disclosure
Schedule;
(ii) Material Contracts;
(iii) all Proprietary Software developed for the exclusive use of
the Roadshow Business, including, without limitation, the PPT3 Software,
but specifically excluding any software relating to membership services;
(iv) all prepaid expenses relating exclusively to the Business,
except with respect to prepaid expenses under the Microsoft Contract;
(v) all customer lists used exclusively for the Roadshow Business;
(vi) all other files, indices, market research studies, surveys,
reports, analyses and similar information used exclusively for the
Roadshow Business;
27
(vii) all deposits from customers for goods and services to be
provided in 1999 and that are related exclusively to the Roadshow
Business; and
(viii) all rights, claims, credits, causes of action or rights of
set-off against third parties in each case related exclusively to the
Roadshow Business.
"Asset Contribution" shall have the meaning as set forth in Section
1.1(a)(i) hereof.
"Assumed Liabilities" means (a) all obligations and liabilities of
Interactive under any Permit or Material Contract, including, without
limitation, the Microsoft Contract, the MCI Contract and the Compaq Contract,
(b) all obligations and liabilities relating to or arising from the Business or
the Assets that accrue on or after the Closing or that relate to events that
transpire on or after the Closing and (c) all other liabilities and obligations
of Interactive set forth in the Interactive Disclosure Schedule. Other than
pursuant to this Agreement or any of the Related Agreements, X-Stream will
assume no other liabilities or obligations. It is expressly understood and
agreed by the parties hereto that the Assumed Liabilities shall not include any
other liabilities or obligations of Interactive, including without limitation,
(a) any liability of Interactive with respect to Taxes for any Tax period ending
on or prior to the Closing, (b) except as otherwise set forth in this Agreement,
any liability of Interactive for any Taxes arising in connection with the
consummation of the transactions contemplated hereby (including any Taxes
arising in connection with Interactive's transfer of Assets), (c) any liability
of Interactive for the unpaid Taxes of any Person other than Interactive under
any provision of Tax law or by contract or otherwise, (d) any obligation of
Interactive to indemnify any Person by reason of the fact that such Person was a
director, officer, employee, or agent of Interactive or was serving at the
request of Interactive as a partner, trustee, director, officer, employee, or
agent of another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise), (e) any liability of Interactive for
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, (f) any obligation of Interactive under this
Agreement or (g) any liability attributable to or incurred in connection with
the Plans for the benefit of any current or former employee of Interactive.
28
"▇▇▇▇ of Sale and Assignment Agreement" means the duly executed ▇▇▇▇
of sale, substantially in the form attached hereto as Exhibit D, which
Interactive will deliver to X-Stream effecting the sale, assignment, transfer
and delivery of the Assets.
"Books and Records" shall mean all books and records, whether on any
computer software program or otherwise, pertaining to the Assets, clients, or
suppliers of the Roadshow Business, and other Persons with whom Interactive has
contractual or other business relationships with respect to the Roadshow
Business, including all work sheets, client files and other information.
"Business" means (i) the Roadshow Business and (ii) the multimedia
editing of CNBC core content for the purpose of the Interactive Delivery
thereof.
"Certificate" shall have the meaning set forth in Section 1.2(b)
hereof.
"Closing" means the closing of the transactions contemplated by this
Agreement.
"CNBC" means the television service known as "CNBC: a service of NBC
and Dow ▇▇▇▇▇."
"Code" means the Internal Revenue Code of 1986, as amended (or any
successor law thereto).
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of X-Stream par value $0.01
per share.
"Compaq" shall mean the Compaq Computer Corporation, a Delaware
corporation.
"Compaq Contract," dated as of November 11, 1997, as amended,
November 23, 1998, by and between Compaq and Microsoft Corporation.
"Compaq Equipment Sublease" shall mean the sublease of the equipment
pursuant to the Compaq Contract, as negotiated in good faith by the parties as
soon as practicable following the date hereof which shall provide X-Stream with
the economic rights and obligations under the Compaq Contract and shall
29
terminate upon Company's consent to assignment and novation of the Compaq
Contract to X-Stream.
"Contract" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, purchase order or license
whether or not in writing.
"Damages" means all liability, demands, claims, actions or causes of
actions, assessments, losses, disbursements, injuries, deficiencies, penalties,
diminutions in value (including in relation to Interactive), settlements,
obligations of any kind or nature, damages (excluding, without limitation, any
punitive or exemplary damages payable to third parties and any consequential
damages), costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) asserted against or incurred by any indemnitee as
a result of or arising out of (i) a breach of any representation or warranty
contained in this Agreement as of the applicable date provided for therein, (ii)
the breach of any covenant or agreement contained herein, (iii) with respect to
an X-Stream Indemnitee any liabilities and obligations that are not Assumed
Liabilities; and (iv) with respect to an Interactive Indemnity, an Assumed
Liability.
"Domain Registration" shall have the meaning set forth in Section
2.9(a).
"Encumbrance" means any claim, charge, lease, covenant, easement,
encumbrance, security interest, lien, option, pledge, right of others, mortgage,
hypothecation, conditional sale, or restriction (whether on voting, sale,
transfer, disposition, or otherwise), whether imposed by agreement,
understanding, law, equity, or otherwise, except for any restrictions on
transfer generally arising under any applicable federal or state securities law.
"Equity Securities" means any shares of Common Stock, warrants to
acquire Common Stock or debt, options other than employee stock options not
granted to the Founders or securities convertible into Common Stock.
"Fort ▇▇▇ Facility" shall mean the facility subject to the terms of
the Fort ▇▇▇ Lease.
"Fort ▇▇▇ Lease" shall mean the lease to Interactive for the
property at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in Fort ▇▇▇, New Jersey, and attached hereto as
Exhibit E.
30
"Founders" shall mean ▇. ▇▇▇▇▇▇▇ Green, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ and the immediate family (as defined in Rule 16a-1(e) of
the Securities and Exchange Act of 1934, as amended) of any of the
aforementioned persons.
"Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, political subdivision, tribunal, or other
instrumentality of any government (including any regulatory or administrative
agency), whether federal, state, or local, domestic or foreign.
"Indemnifying Party" shall have the meaning set forth in Section
9.4.
"Initial Financing" shall mean any public or private offering of
Equity Securities from the period beginning on the date hereof and ending six
months following the Closing resulting in gross proceeds to X-Stream of not less
than $5.5 million.
"Instrument of Assumption" means the duly executed undertaking,
substantially in the form attached hereto as Exhibit F, whereby X-Stream will
assume and agree to pay and discharge the Assumed Liabilities.
"Interactive" shall have the meaning set forth in the introduction
hereof.
"Interactive Delivery" means the delivery of content for use by an
end user to a monitor or viewing screen, whereby such delivery occurs by means
of telephone lines, cable television systems, optical fiber connections,
cellular phones, satellites, wireless broadcast or other means of transmission
now known or hereafter devised, provided that the end user has the ability to
selectively manipulate the presentation to effect substantive content changes
during its use. For purposes of clarity, it is understood that Interactive
Delivery will not include transmission of any kind, now or hereafter devised,
which makes programs and other audio and/or visual recordings of any length,
available for viewing in a linear predetermined presentation (e.g., broadcast
television, cable television, pay-per-view, video-on-demand) with selective
manipulation available to the viewer, for example, time delay viewing of a
program, color adjustment, volume control, choice of camera feeds, or textual
and/or visual and/or audio material which enhances or provides additional
information supplementary to and related to the subject matter of the linear
predetermined presentation or presentations, such as (i) a separate stream of
material with no return path, (ii) a separate stream of material with a return
path that is not integrated or
31
connected with the device delivering the linear presentation, or (iii) a
separate stream of material with a return path that permits responses (e.g.,
polling) that do not effect sufficient content change to or manipulation of the
linear presentation so as to constitute Interactive Delivery (as an example of
an insufficient change, acknowledging poll results); provided, however, that if,
by virtue of a display device, a viewer can view linear programming and
interactive programming simultaneously, the linear programming and interactive
programming will be treated independently for purposes of this Agreement. In
addition, Interactive Delivery shall not include the delivery of content to the
end user which occurs by transporting a physical object incorporating the
content, such as magnetic disks or optical disks (for example, CD-ROM).
"Interactive Disclosure Schedule" means the disclosure schedule
document being delivered to X-Stream by Interactive in connection herewith.
"Interactive Indemnitees" means Interactive and its respective
directors, officers, employees, affiliates, controlling persons, agents and
representatives and their successors and assigns.
"Interactive Shares" shall have the meaning set forth in Section
1.2(a).
"Knowledge" shall mean facts or other matters which a Person is
actually aware.
"Law" means any constitutional provision, statute or other law,
rule, ordinance or regulation and any order of any federal, state, local or
foreign Governmental Entity.
"License Agreement" means the license agreement with respect to the
PPT3 Software to be entered into between Interactive and X-Stream.
"Liens" means all mortgages, pledges, security interests, liens,
charges, options, easements, rights-of-way or other Encumbrances of any nature
whatsoever, excluding licenses or rights to third parties.
"Master Hosting and Network Services Agreement" means the Master
Hosting and Network Services Agreement attached as Exhibit B hereto.
"Master Professional Services Agreement" means the Master
Professional Services Agreement attached as Exhibit A hereto.
32
"Material Adverse Effect" means any change in or effect on the
business, assets, or properties of (a) with respect to Interactive, that would
be materially adverse to the Business or the income, operations, assets or the
financial condition of the Business taken as a whole or (b) with respect to
X-Stream, that would be materially adverse to the business, income, operations,
assets or financial condition of X-Stream or its ability to consummate the
transactions contemplated by this Agreement or the Related Agreements.
"Material Contract" shall have the meaning set forth in Section 2.12
hereof.
"MCI Contract" means the agreement dated as of July 1, 1998 by and
between MCI Telecommunication Corporation and Interactive.
"Microsoft Contract" shall mean the Network Credits Program Services
Agreement dated as of June 30, 1998 between Microsoft Corporation and
Interactive.
"New Assets" shall mean the assets recently purchased by Interactive
and listed in Schedule A hereto.
"New Assets Purchase Price" means $179,235.06.
"Permit" means any approval, filing, registration, consent,
concession, license, permit, franchise, certificate of authority, or order, or
any waiver of the foregoing, required to be issued by any Governmental Entity.
"Permitted Liens" means (i) mechanics', carriers', workers',
repairers', materialmens', warehousemens' and other similar Liens arising or
incurred in the ordinary course of business which are Liens for work in progress
which are not past due and (ii) recorded easements, covenants and other
restrictions which do not materially impair the current use, occupancy, value,
or the marketability of title.
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Plans" shall mean, any deferred compensation bonus or other
incentive compensation, stock purchase, stock option and other equity
compensation plan; severance or termination pay, medical, surgical,
hospitalization, life insurance
33
and other "welfare" plan (within the meaning of section 3(a) of ERISA);
profit-sharing, stock bonus or other "pension" plan (within the meaning of
section 3(2) of ERISA); employment, termination or severance agreement or any
plan that is subject to section 302 or Title IV of ERISA or section 412 of the
Code.
"PPT3 Software" shall mean custom software designed by Cerberus
Corp. and built by Trellis Software that automates the production publishing and
distribution of media rich web pages, as currently used by Interactive to create
the multimedia pages that are the basis of the ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ web site.
"Proprietary Software" shall have the meaning set forth in Section
2.8(b).
"Related Agreements" means (i) the Master Professional Services
Agreement dated as of the Closing, by and between Interactive and X-Stream, (ii)
the Master Hosting and Network Services Agreement dated as of the Closing, by
and between Interactive and X-Stream, (iii) the Sublease Agreement, (iv) the
License Agreement and (v) those other agreements and instruments required to be
executed pursuant to this Agreement.
"Roadshow Business" means the Interactive Delivery of "virtual road
shows" for equity and debt offerings, analyst and investor conferences and other
production-on-demand, in each case requested by, and produced for, an investment
bank or other business; provided, however, that the Business shall not include
the Interactive Delivery of any category or type of news (including, without
limitation, general local, national or international news and news relating to
business, finance, personal finance or money management), any other category or
type of explanatory material or other information or any category or type of
entertainment (including, without limitation, talk shows, interviews,
biographies and news magazines) appearing on, or produced for, CNBC, CNBC
Europe, CNBC Asia, NBC Television, MSNBC, the NBC News Channel or any other
television service, of any kind whether now known or hereinafter devised, of
National Broadcasting Company, Inc. or any of its Affiliates.
"Securities Act" means the Securities Act of 1933, as amended.
"Software" means any and all (i) proprietary computer programs,
including any and all software implementation of algorithms, models and
methodologies whether in source code or object code, (ii) proprietary databases
and computations, including any and all data and collections of data and (iii)
all proprietary
34
documentation, including user manuals and training materials, relating to any of
the foregoing in each case used exclusively in the Roadshow Business.
"Sublease Agreement" shall mean the agreement to be entered into
with respect to the Fort ▇▇▇ Facility between Interactive and X-Stream pursuant
to the terms of the term sheet attached hereto as Exhibit G.
"Tax" means all federal, state, local and foreign taxes, and other
assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties (including
any penalties assessed for the failure to properly file a Tax Return) applicable
thereto.
"Tax Return" means all Federal, state, local and foreign tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amendments thereto.
"Transfer Taxes" means any real property transfer or gains, sales,
use, transfer, value-added, stock transfer or stamp Tax, transfer, recording,
registration or other fee and any similar Tax.
"X-Stream" shall have the meaning set forth in the introduction
hereof.
"X-Stream Disclosure Schedule" means the disclosure schedule
document being delivered to Interactive by X-Stream in connection herewith.
"X-Stream Indemnitees" means X-Stream and its respective directors,
officers, employees, affiliates, controlling persons, agents and representatives
and their successors and assigns.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service.
Notices shall be sent to
35
the appropriate party at its address or facsimile number given below (or at such
other address or facsimile number for such party as shall be specified by notice
given hereunder):
If to X-Stream, to:
X-Stream Media Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, III, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Interactive, to:
Interactive Desktop Video LLC
d/b/a CNBC Dow ▇▇▇▇▇ Business Video
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President, Interactive Desktop
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
National Broadcasting Company, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President, Corporate & Transaction Group, Law
Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests, demands, waivers and communications shall be deemed
received upon (i) actual receipt thereof by the addressee, (ii) actual delivery
thereof
36
to the appropriate address, or (iii) in the case of a facsimile transmission,
upon transmission thereof by the sender and issuance by the transmitting machine
of a confirmation slip that the number of pages constituting the notice have
been transmitted without error. In the case of notices sent by facsimile
transmission, the sender shall contemporaneously mail a copy of the notice to
the addressee at the address provided for above. However, such mailing shall in
no way alter the time at which the facsimile notice is deemed received.
Section 11.2 Severability. Should any provision of this Agreement
for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any of the other provisions of this
Agreement, which remaining provisions shall remain in full force and effect and
the application of such invalid or unenforceable provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall be valid and enforced to the fullest extent permitted by law.
Section 11.3 Binding Effect; Assignment. This Agreement and all of
the provisions hereof shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, directly or indirectly, including, without limitation, by
operation of law, by any party hereto without the prior written consent of the
other parties hereto.
Section 11.4 No Third Party Beneficiaries. This Agreement is solely
for the benefit of Interactive and its successors and permitted assigns, with
respect to the obligations of X-Stream under this Agreement, and for the benefit
of X-Stream, and its respective successors and permitted assigns, with respect
to the obligations of Interactive, under this Agreement, and this Agreement
shall not be deemed to confer upon or give to any other third party any remedy,
claim, liability, reimbursement, cause of action or other right.
Section 11.5 Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 11.6 Jurisdiction and Consent to Service. In accordance with
Section 5.1401 of the General Obligations Law of the State of New York, and
without limiting the jurisdiction or venue of any other court, Interactive and
X-Stream (a) agree that any suit, action or proceeding arising out of or
relating to this
37
Agreement will be brought solely in the state or federal courts sitting in the
County of New York; (b) consent to the exclusive jurisdiction of each such court
in any suit, action or proceeding relating to or arising out of this Agreement;
(c) waive any objection which it may have to the laying of venue in any such
suit, action or proceeding in any such court, and (d) agree that service of any
court paper may be made in any manner as may be provided under applicable laws
or court rules governing service of process in such court.
Section 11.7 Entire Agreement. This Agreement, the Interactive
Disclosure Schedule, the X-Stream Disclosure Schedule, the Exhibits, the Related
Agreements, the Reciprocal Non-Disclosure and Confidentiality Agreement between
XS Networks and NBC Multimedia, Inc. dated as of October 16, 1998 and other
documents referred to herein or delivered pursuant hereto which form a part
hereof constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties or any of them with
respect to the subject matter hereof.
Section 11.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof) as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.
Section 11.9 Specific Performance. The parties acknowledge and agree
that any breach of the terms of this Agreement would give rise to irreparable
harm for which money damages would not be an adequate remedy and accordingly the
parties agree that, in addition to any other remedies, each shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy.
Section 11.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 11.11 Bulk Sales Laws. X-Stream and Interactive each hereby
waive compliance by Interactive with the provisions of the "bulk sales", "bulk
transfer" or similar laws of any state.
38
Section 11.12 Limitation on Liability. NO PARTY HERETO SHALL BE
LIABLE TO THE OTHER PARTY OR THEIR AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, SUCCESSORS AND ASSIGNS FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
PUNITIVE DAMAGES OR LOST PROFITS ARISING OUT OF THIS AGREEMENT OR THE RELATED
AGREEMENTS OR ANY TERMINATION OF THIS AGREEMENT OR THE RELATED AGREEMENTS,
WHETHER FOR BREACH OF WARRANTY OR ANY OBLIGATION ARISING THEREFROM OR OTHERWISE,
WHETHER LIABILITY IS ASSERTED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE OR
STRICT PRODUCT LIABILITY) AND IRRESPECTIVE OF WHETHER IT HAS ADVISED OR BEEN
ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.
Section 11.13 Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
39
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of Interactive and X-Stream of the
date first above written.
X-STREAM MEDIA INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
INTERACTIVE DESKTOP VIDEO LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name:
Title: