\n9.5 Assignment of Trademark Rights……………………. 20<\/p>\nARTICLE X. CLOSING CONDITIONS OF THE SHAREHOLDERS AND GBT……. 20<\/p>\n
ARTICLE XI. FURTHER ASSURANCES……………………………. 20<\/p>\n
ARTICLE XII. INDEMNIFICATION……………………………… 21<\/p>\n
12.1 Indemnification by the Shareholder………………… 21
\n12.2 Indemnification by the Company and XOOM……………. 21
\n12.3 Notification of Claims…………………………… 21
\n12.4 Resolution of Claims…………………………….. 22
\n12.5 Arbitration…………………………………….. 22
\n12.6 Indemnification Threshold………………………… 23<\/p>\n
ARTICLE XIII. RESTRICTIONS ON XOOM COMMON SHARES……………. 23<\/p>\n
13.1 Right of First Refusal\/Transfer Restrictions……….. 23
\n13.2 Lock-Up Agreement……………………………….. 25<\/p>\n
ARTICLE XIV. MISCELLANEOUS……………………………….. 26<\/p>\n
14.1 Expenses……………………………………….. 26
\n14.2 Setoff…………………………………………. 26
\n14.3 Entire Agreement………………………………… 26
\n14.4 Press Releases and Public Announcements……………. 26
\n14.5 Counterparts……………………………………. 26
\n14.6 Descriptive Headings…………………………….. 27
\n14.7 Notices………………………………………… 27
\n14.8 Choice of Law…………………………………… 27
\n14.9 Binding Effect; Benefits…………………………. 27
\n14.10 Assignability…………………………………… 27
\n14.11 Waiver and Amendment…………………………….. 28
\n14.12 Attorneys’ Fees…………………………………. 28<\/p>\n
<\/c><\/s><\/c><\/caption>\n<\/table>\n
iii<\/p>\n
AGREEMENT AND PLAN OF MERGER
\n —————————-<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of June 11,
\n1998 is entered into by and among XOOM, Inc., a Delaware corporation (“XOOM”),
\nXOOM GBT Merger Corp., a California corporation (the “Company”), Global Bridges
\nTechnologies, Inc., a California corporation (“GBT”), and Robert Kohler, the
\nsole shareholder of GBT (the “Shareholder).<\/p>\n
RECITALS<\/p>\n
A. The respective Boards of Directors of each of the Company, XOOM and
\nGBT believe it is in the best interests of their respective companies and
\nshareholders that the Company and GBT combine into a single company through the
\nstatutory merger of GBT with and into the Company, with the Company as the
\nsurviving corporation (the “Merger”), and, in furtherance thereof, have approved
\nthe Merger.<\/p>\n
B. Pursuant to the Merger, among other things, the outstanding shares of
\ncommon stock of GBT shall be exchanged for the Merger Consideration (as defined
\nin Section 2.3).<\/p>\n
C. The parties to the Agreement intend that the Merger qualify as a
\n“reorganization,” within the meaning of Section 368(a) of the Internal Revenue
\nCode of 1986, as amended (the “Code”), and that GBT, the Company and XOOM will
\neach be a “party to a reorganization,” within the meaning of Section 368(b) of
\nthe Code, with respect to the Merger.<\/p>\n
AGREEMENT<\/p>\n
In consideration of the agreements, provisions and covenants set forth
\nbelow, GBT and the Shareholder, and the Company and XOOM hereby agree as
\nfollows:<\/p>\n
ARTICLE I.<\/p>\n
THE MERGER<\/p>\n
1.1 THE MERGER.<\/p>\n
Subject to the terms and conditions of this Agreement, on the Effective
\nDate (as defined below), GBT shall be merged with and into the Company, and the
\nCompany shall be the surviving corporation (the “Surviving Corporation”) in such
\nmerger, and the separate existence of GBT shall thereupon cease. The Merger
\nshall have the effects set forth in the General Corporation Law of the State of
\nCalifornia. Without limiting the generality of the foregoing, on the Effective
\nDate, all of the property, rights, privileges, powers and franchises of the
\nCompany and GBT, including, but not limited to, GBT’s exclusive license to the
\nweb-based e-mail software system known as Sitemail (“Sitemail”) and any license
\nagreements relating to Sitemail, shall vest in the Surviving Corporation.<\/p>\n
1.2 THE EFFECTIVE DATE.<\/p>\n
The Merger shall become effective when a properly executed Agreement of
\nMerger and such other documents as may be required are duly filed with the
\nSecretary of State of the State of California, which filings shall be made as
\nsoon as practicable after the Closing, or at such other time as the parties may
\nagree and may provide in the Agreement of Merger and such other documents (the
\n“Effective Date”).<\/p>\n
1.3 THE SURVIVING CORPORATION.<\/p>\n
The Articles of Incorporation and Bylaws of the Company shall be the
\nArticles of Incorporation and Bylaws of the Surviving Corporation, each until
\nduly amended. The directors and officers of the Company on the Effective Date
\nshall be the directors and officers of the Surviving Corporation and shall hold
\noffice from the Effective Date until their respective successors are duly
\nelected or appointed and qualified or until their earlier death, resignation or
\nremoval in accordance with the Articles of Incorporation and Bylaws of the
\nSurviving Corporation, or as otherwise provided by law.<\/p>\n
1.4 CLOSING.<\/p>\n
The closing of the transactions contemplated by this Agreement (the
\n“Closing”) shall take place at 1:00 p.m. local time, at the offices of Morrison
\n& Foerster llp, 425 Market Street, San Francisco, California 94105-2482, on June
\n11, 1998, or at such other time, date and place as the parties may mutually
\nagree (the “Closing Date”), provided that all of the conditions precedent to
\nclosing set forth herein have been met..<\/p>\n
ARTICLE II.<\/p>\n
CONVERSION OF SHARES<\/p>\n
2.1 CONVERSION OF SHARES.<\/p>\n
By virtue of the Merger and without any action on the part of GBT, the
\nCompany or the Shareholders, on the Effective Date, each common share of GBT
\nthat is issued and outstanding immediately prior to the Effective Date shall be
\nconverted into the right to receive 0.27514 common shares of XOOM and the
\nadditional Merger Consideration described in Section 2.3.<\/p>\n
2.2 TAX WITHHOLDING.<\/p>\n
The right of the Shareholder to receive any cash payment as part of the
\nMerger Consideration, as provided herein, shall be subject to and reduced by the
\namount of any required tax withholding obligation. To the extent that the
\nCompany or XOOM withholds taxes from payments to the Shareholder, it shall
\nprovide the Shareholder with documentary evidence of any amounts so withheld and
\ninformation as to the basis therefor.<\/p>\n
2<\/p>\n
2.3 THE MERGER CONSIDERATION.<\/p>\n
The Shareholder shall be entitled to receive the following consideration
\nfor his shares of GBT (in the aggregate, the “Merger Consideration”):<\/p>\n
(a) Shares. On the Effective Date, provided the Shareholder has delivered
\n ——
\nto XOOM all of the certificates evidencing his shares of GBT, together with a
\nstock power executed in blank, the Shareholder shall receive a certificate
\nevidencing the aggregate number of common shares of XOOM (“XOOM Stock”) rounded
\nto the nearest whole number, to which the Shareholder is entitled pursuant to
\nSection 2.1.<\/p>\n
(b) Cash Payment. The Shareholder shall receive a promissory note in
\n ————
\nsubstantially the form of Exhibit A hereto in the original principal amount of
\n ———
\n$62,500, payable in twenty-five (25) equal and consecutive monthly payments of
\n$2,500 each, with simple interest payable at the per annum rate of five percent
\n(5%).<\/p>\n
(c) Earnout. During the twenty-four months beginning with the first full
\n ——-
\nmonth after the Closing, an amount equal to five percent (5%) of the gross
\nrevenues (less sales commissions, cost of goods, royalties paid to third
\nparties, credits, returns and applicable taxes) (not including taxes based on
\nXOOM’s income)) from electronic commerce, banner advertising and bounty
\ngenerated and actually received from web-based e-mail subscribers ordering
\nservices or merchandise through Best\/Hway Earthlink and\/or Netcom (the “GBT
\n —
\nSitemail Revenues”).
\n—————– <\/p>\n
2.4 PRICE PROTECTION.<\/p>\n
If, from the date of the Closing until the date on which Xoom has (i)
\ncompleted an initial public offering (“IPO”) of its securities (ii) XOOM obtains
\n —
\nadditional equity financing (iii) XOOM enters into an agreement for the sale,
\nlease or other disposition of all or substantially all of the assets of XOOM,
\n(iv) there is a sale by shareholders of XOOM, in a single transaction or a
\nseries of related transactions, of more than fifty percent (50%) of the
\noutstanding voting stock of XOOM (“XOOM Stock”), or (v) XOOM effects a merger
\n ———–
\nwith or into another entity where it is not the survivor (other than a merger
\nsolely for the purpose of changing the state of incorporation or effecting a
\nrecapitalization of XOOM), or a consolidation or other reorganization, and
\nshareholders of XOOM prior to such event own less than 50% of the outstanding
\nvoting securities of the survivor, (any of subsections (i), (ii) (iii), (iv) or
\n(v), a “Transaction”), and the valuation of XOOM for purposes of any such
\n ———–
\nTransaction is less than $25 million, the Shareholder shall be entitled to
\nreceive an additional number of shares of XOOM Stock calculated as (A) (i)
\n$610,804 divided by (ii) the per share valuation of XOOM’s common shares in the
\nTransaction or IPO, minus (B) the aggregate number of shares of XOOM Stock
\n —–
\nissued to the Shareholder under this Agreement other than pursuant to this
\nSection 2.3(d), together with cash for any fractional shares; provided, however,
\n ——– ——-
\nthat Shareholder may elect to receive, instead of additional Xoom Stock, an
\nidentical number of options to purchase such additional XOOM Stock with an
\nexercise price equal to fair market value as of day of the closing of a
\nTransaction. For any Transaction, such additional Xoom Stock (or options) shall
\nbe deemed issued to the Shareholder immediately prior to the closing thereof.
\nXOOM’s obligations under <\/p>\n
3<\/p>\n
this Section 2.3 shall terminate upon the completion of an IPO or a Transaction,
\nother than a Transaction pursuant to subsection (ii).<\/p>\n
2.5 RECORDS REGARDING SITEMAIL REVENUES.<\/p>\n
XOOM shall maintain, until three (3) years after the Effective Date, all
\nsuch books, records and accounts as necessary to permit computation of and
\naccounting for amounts payable under Section 2.3 for the twenty-four month
\nperiod in which Shareholder is entitled to a percentage of GBT Sitemail
\nRevenues. Shareholder, or its agent, shall have the right, during such three
\nyear period, to audit and examine such books, records and accounts during
\nXOOM’s normal business hours no more than once per year upon no less than thirty
\n(30) days’ written notice to verify the accuracy of the reports and payments
\nmade to Shareholder hereunder. If a discrepancy is found in favor of XOOM which
\nexceeds five percent (5%) of the payment actually due to Shareholder under
\nSection 2.3(c), Shareholder shall be reimbursed for its reasonable expenses
\nassociated with the audit.<\/p>\n
2.6 REPAYMENT OF CERTAIN DEBT OBLIGATIONS.<\/p>\n
At the Closing, Shareholder shall receive a check in the amount of $12,500
\nin repayment of debt obligations of GBT owed to Shareholder.<\/p>\n
ARTICLE III.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF GBT<\/p>\n
Except as set forth in the Disclosure Schedule attached hereto provided by
\nGBT (the “GBT Disclosure Schedule”), the parts of which are numbered to
\ncorrespond to the section numbers of this Agreement, GBT hereby represents and
\nwarrants to the Company and XOOM as of the date hereof and as of the Closing
\nDate, as follows:<\/p>\n
3.1 REQUISITE CONSENTS; NONVIOLATION.<\/p>\n
The execution and delivery of this Agreement by GBT and the Shareholder and
\nthe consummation of the transactions contemplated by this Agreement will not (a)
\nto GBT’s knowledge, and except as set forth in this Agreement, require the
\nconsent, approval or authorization of any governmental person or entity (except
\nsuch approvals or filings as may be required to comply with applicable state
\nsecurities laws), (b) violate or conflict with the provisions of the Articles of
\nIncorporation or Bylaws of GBT, or (c) constitute a default under, violate or
\nconflict with any material contract, note, lease or mortgage to which GBT or the
\nShareholder is a party or by which GBT or the Shareholder is bound or to which
\nGBT or any of its properties or the Shareholder or any of his properties is
\nsubject.<\/p>\n
3.2 DUE ORGANIZATION OF GBT; AUTHORIZATIONS.<\/p>\n
GBT (a) has been duly organized and is validly existing and in good
\nstanding as a corporation under the laws of the State of California, (b) is duly
\nqualified to do business in and is <\/p>\n
4<\/p>\n
in good standing under the laws of every jurisdiction where it is required to be
\nso qualified, except where the failure to be so qualified will not adversely
\naffect its business, financial condition or results of operations and (c) has
\nall requisite corporate power and authority to own or lease and to operate its
\nproperties and carry on its business.<\/p>\n
3.3 CAPITALIZATION.<\/p>\n
The authorized capital stock of GBT consists of 20,000,000 shares of stock,
\nof which 10,000,000 are designated as common stock and 10,000,000 are designated
\nas preferred stock. 1,000,000 shares of common stock are issued and outstanding.
\nAll of the issued and outstanding shares of common stock have been duly
\nauthorized and validly issued and are fully paid and nonassessable. Other than
\nthe common stock, GBT does not have outstanding any other voting or equity
\nsecurities or interests. Except as set forth in the GBT Disclosure Schedule,
\nGBT has no outstanding obligations, understandings or commitments regarding the
\nissuance of any additional shares of its stock, voting or equity securities or
\ninterests or other securities, or any options, rights, warrants or securities
\nexercisable for or convertible into such shares, securities or interests. There
\nare no preemptive rights or rights of first refusal in respect of the common
\nshares of GBT.<\/p>\n
3.4 AUTHORITY; BINDING NATURE OF AGREEMENTS.<\/p>\n
GBT has the power and authority to enter into and to perform its
\nobligations under this Agreement, and the execution, delivery and performance by
\nGBT of this Agreement have been duly authorized by all necessary action on the
\npart of GBT and its shareholder, Board of Directors and officers. This
\nAgreement constitutes the legal, valid and binding obligation of GBT enforceable
\nagainst GBT in accordance with its terms, except as rights to indemnity may be
\nlimited by applicable laws and except as enforcement may be limited by
\napplicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
\nother similar laws affecting creditor’s rights, and subject to general equity
\nprinciples and to limitations on availability of equitable relief, including
\nspecific performance.<\/p>\n
3.5 SUBSIDIARIES ETC.<\/p>\n
GBT does not own or control any equity interest in any corporation,
\npartnership, joint venture or other legal entity.<\/p>\n
3.6 FINANCIAL STATEMENTS.<\/p>\n
(a) GBT has delivered to the Company the following financial statements and
\nnotes (collectively, the “Financial Statements”), which are attached to Part
\n3.6(a) of the GBT Disclosure Schedule:<\/p>\n
(i) the unaudited balance sheets of GBT as of December 31, 1996 and
\n December 31, 1997, and the related unaudited statements of operations,
\n changes in shareholder’s equity and cash flows of GBT for the fiscal years
\n ended December 31, 1996 and December 31, 1997, together with the notes
\n thereto; and<\/p>\n
5<\/p>\n
(ii) the unaudited balance sheet of GBT as of April 30, 1998 (the
\n “Unaudited Interim Balance Sheet”), and the related unaudited statements of
\n operations, changes in shareholder’s equity and cash flows of GBT, together
\n with the notes thereto.<\/p>\n
(b) All of the Financial Statements are accurate and complete in all
\nmaterial respects, and the dollar amount of each line item included in the
\nFinancial Statements is accurate in all material respects. The Financial
\nStatements are in accordance with the books and records of GBT and present
\nfairly the financial position of GBT as of the respective dates thereof and the
\nresults of operations, changes in shareholder’s equity and cash flows of GBT for
\nthe periods covered thereby.<\/p>\n
(c) Except as set forth in the GBT Disclosure Schedule, GBT has no
\nliabilities except those reflected or reserved against in the Unaudited Interim
\nBalance Sheet and current liabilities incurred by GBT in the ordinary course of
\nbusiness since the date of the Unaudited Interim Balance Sheet.<\/p>\n
3.7 NO MATERIAL CHANGES.<\/p>\n
Except as otherwise set forth in the GBT Disclosure Schedule, since April
\n30, 1998 there has not been (a) any damage, destruction or loss (whether or not
\ncovered by insurance) materially and adversely affecting the business, financial
\ncondition or results of operations of GBT; (b) any labor dispute materially and
\nadversely affecting the business, financial condition or results of operations
\nof GBT; (c) any disposition of any capital asset of GBT having a net book value
\nin excess of $5,000; (d) any discharge or satisfaction of any obligation or
\nliability of GBT other than in the ordinary course of business; or (e) any
\nmaterial adverse change in the business, financial condition or results of
\noperations of GBT.<\/p>\n
3.8 UNDISCLOSED LIABILITIES.<\/p>\n
GBT has no liabilities or obligations (whether absolute, contingent or
\notherwise) that are material to GBT, except for (a) those reflected, reserved
\nagainst or otherwise disclosed in the Financial Statements and not heretofore
\npaid or discharged, (b) those disclosed in the GBT Disclosure Schedule, or (c)
\nthose incurred in, or as a result of, the ordinary course of business of GBT
\nsince the date of the Unaudited Interim Balance Sheet.<\/p>\n
3.9 GOVERNMENTAL AUTHORIZATIONS; COMPLIANCE WITH LAWS.<\/p>\n
GBT has, to its knowledge, all material governmental licenses, permits,
\napprovals and other governmental authorizations necessary to permit the
\noperation of the business of GBT, as presently conducted. GBT is in compliance
\nwith all applicable laws, regulations, orders, judgments and decrees, except
\nwhere the failure to be in such compliance would not have a material adverse
\neffect on the business, financial condition or results of operations of GBT.<\/p>\n
6<\/p>\n
3.10 LITIGATION.<\/p>\n
Except as set forth in the GBT Disclosure Schedule, there is no pending or,
\nto GBT’s knowledge, threatened action, suit, arbitration proceeding or
\ninvestigation in any court or before any governmental commission or agency
\nagainst GBT which would have a material adverse effect upon the business,
\nfinancial condition or results of operations of GBT. There is no order,
\njudgment or decree of any court or governmental authority or agency which
\nspecifically applies to GBT which would have a material adverse effect on the
\nbusiness, financial condition or results of operations of GBT.<\/p>\n
3.11 EMPLOYEE BENEFIT PLANS.<\/p>\n
As used herein, the term “Employee Benefit Plan” means an “employee pension
\nbenefit plan” as defined in Section 3(2)(A) of the Employee Retirement Income
\nSecurity Act of 1974, as amended (“ERISA”), and an “employee welfare benefit
\nplan” as defined in Section 3(l) of ERISA. GBT, which for purposes hereof shall
\ninclude any of its subsidiaries or any organization which, together with GBT
\nand\/or any such subsidiary, would be treated as a “single employer” within the
\nmeaning of Section 414(b) or (c) of the Code, does not maintain or contribute to
\n(or have any obligation to contribute to) any Employee Benefit Plan.<\/p>\n
3.12 PATENT, TRADEMARK AND RELATED MATTERS.<\/p>\n
All of the material patents, registered trademarks, service marks and trade
\nnames owned by GBT and all material license agreements in which GBT is the
\nlicensee, at the date of this Agreement, are listed in the GBT Disclosure
\nSchedule. Except to the extent, if any, set forth in the GBT Disclosure
\nSchedule, such patents, trademarks, service marks, trade names and licenses
\n(collectively, the “Intellectual Property”) are, to the Company’s knowledge,
\nvalid and in full force and are adequate to permit GBT to conduct its business
\nas presently conducted, except to the extent that such failure to be valid and
\nin full force would not have a material adverse effect on the business,
\nfinancial condition or results of operations of GBT. GBT has received no
\nwritten notice of any event, inquiry or investigation threatening the validity
\nof the Intellectual Property.<\/p>\n
3.13 REAL AND PERSONAL PROPERTY.<\/p>\n
The GBT Disclosure Schedule contains a list of all real and personal
\nproperty owned or leased by GBT as of the date hereof having, in the case of
\nleased property, an annual lease obligation in excess of $5,000 or, in the case
\nof owned property, a book value in excess of $5,000. All such property is owned
\nin fee or held under valid leases. There is not under any of such leases any
\nexisting material default on the part of GBT nor any facts that would, with the
\npassage of time or giving of notice, constitute such a material default.<\/p>\n
3.14 INSURANCE.<\/p>\n
The GBT Disclosure Schedule lists all material insurance policies in force
\nwith respect to GBT, its employees, officers and directors.<\/p>\n
7<\/p>\n
3.15 TAXES.<\/p>\n
(a) Definitions. For purposes of this Agreement, the following definitions
\n ———–
\nshall apply:<\/p>\n
(i) “Tax” or “Taxes” shall mean all taxes, however denominated,
\n including any interest, penalties or other additions to tax that may become
\n payable in respect thereof, imposed by any federal, territorial, state,
\n local or foreign government or any agency or political subdivision of any
\n such government, which taxes shall include, without limiting the generality
\n of the foregoing, all income or profits taxes (including, but not limited
\n to, federal income taxes and state income taxes), payroll and employee
\n withholding taxes, unemployment insurance, social security taxes, sales and
\n use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts
\n taxes, business license taxes, occupation taxes, real and personal property
\n taxes, stamp taxes, environmental taxes, transfer taxes, workers’
\n compensation, Pension Benefit Guaranty Corporation premiums and other
\n governmental charges, and other obligations of the same or of a similar
\n nature to any of the foregoing, which GBT is required to pay, withhold or
\n collect.<\/p>\n
(ii) “Tax Returns” shall mean all reports, estimates, declarations of
\n estimated tax, information statements and returns relating to, or required
\n to be filed in connection with, any Taxes, including information returns or
\n reports with respect to backup withholding and other payments to third
\n parties.<\/p>\n
(b) Tax Returns Filed and Taxes Paid. All Tax Returns required to be filed
\n ——————————–
\nby or on behalf of GBT have been duly filed on a timely basis and such Tax
\nReturns are true, complete and correct. All Taxes shown to be payable on the
\nTax Returns or on subsequent assessments with respect thereto have been paid in
\nfull on a timely basis, and no other Taxes are payable by GBT with respect to
\nitems or periods covered by such Returns (whether or not shown on or reportable
\non such Tax Returns). GBT has withheld and paid over all Taxes required to have
\nbeen withheld and paid over, and complied with all information reporting and
\nbackup withholding requirements, including maintenance of required records with
\nrespect thereto, in connection with amounts paid or owing to any employee,
\ncreditor, independent contractor, or other third party. There are no liens on
\nany of the assets of GBT with respect to Taxes, other than liens for Taxes not
\nyet due and payable or for Taxes that GBT is contesting in good faith through
\nappropriate proceedings and for which appropriate reserves have been
\nestablished.<\/p>\n
(c) Tax Returns Furnished. For all periods ending on and after December 31,
\n ———————
\nbeginning with the year in which GBT was formed, GBT has made available to the
\nCompany true and complete copies of (i) relevant portions of income tax audit
\nreports, statements of deficiencies, and closing or other agreements received by
\nGBT or on behalf of GBT relating to Taxes, and (ii) all separate federal and
\nstate income or franchise tax returns for GBT.<\/p>\n
(d) Tax Reserves. The amount of GBT’s liability for unpaid Taxes for all
\n ————
\nperiods covered by the Financial Statements does not, in the aggregate, exceed
\nthe amount of the current liability accruals for Taxes (excluding reserves for
\ndeferred Taxes) as such accruals are reflected <\/p>\n
8<\/p>\n
in the Financial Statements, and the amount of GBT’s liability for unpaid Taxes
\nfor all periods ending on or before the Closing Date shall not, in the
\naggregate, exceed such accruals.<\/p>\n
(e) Tax Deficiencies; Audits; Statutes of Limitations. To GBT’s knowledge,
\n ————————————————-
\nexcept as set forth in the GBT Disclosure Schedule, no deficiencies have been
\nasserted with respect to Taxes of GBT. GBT is not a party to any action or
\nproceeding for assessment or collection of Taxes, nor has such event been
\nasserted or threatened against GBT or any of its assets. No waiver or extension
\nof any statute of limitations is in effect with respect to Taxes or Tax Returns
\nof GBT. Except as set forth in the GBT Disclosure Schedule, the Tax Returns of
\nGBT have never been audited by a government or taxing authority, nor is any such
\naudit in process, pending or threatened. GBT has disclosed on its federal
\nincome tax returns all positions taken therein that could give rise to a
\nsubstantial understatement penalty within the meaning of Section 6662 of the
\nCode.<\/p>\n
(f) No Consolidated Group. GBT has not been included in any “consolidated,”
\n ———————
\n“unitary” or “combined” group Tax Return provided for under the law of the
\nUnited States, any foreign jurisdiction or any state or locality with respect to
\nTaxes for any taxable period for which the statute of limitations has not
\nexpired.<\/p>\n
(g) No Tax Sharing. There are no tax sharing, allocation, indemnification
\n ————–
\nor similar agreements or arrangements in effect as between GBT or any
\npredecessor or affiliate thereof and any other party (including Shareholder and
\nany predecessor or affiliate thereof) under which the Company or GBT could be
\nliable for any Taxes of any party.<\/p>\n
(h) Tax Elections and Special Tax Status. GBT is not nor has it been a
\n ————————————
\nUnited States real property holding corporation within the meaning of Section
\n897(c)(2) of the Code during the applicable period specified in Section
\n897(c)(1)(A)(ii) of the Code, and XOOM is not required to withhold tax on the
\nacquisition of GBT’s common stock pursuant to Section 1445 of the Code. GBT is
\nnot a “consenting corporation” under Section 341(f) of the Code. GBT has not
\nentered into any compensatory agreements with respect to the performance of
\nservices under which payment would result in a nondeductible expense to the
\ngroup pursuant to Section 280G of the Code or an excise tax to the recipient of
\nsuch payment pursuant to Section 4999 of the Code. GBT has not participated in
\nan international boycott as defined in Code Section 999. GBT has not agreed to,
\nnor is it required to make, any adjustment under Section 481(a) of the Code by
\nreason of a change in accounting method or otherwise. GBT has no permanent
\nestablishment in any foreign country, as defined in any applicable tax treaty or
\nconvention between the United States of America and such foreign country, and
\nGBT is not a party to any joint venture, partnership, or other agreement,
\ncontract, or arrangement (either in writing or verbally, formally or informally)
\nwhich could be treated as a partnership for federal income tax purposes. GBT is
\nnot an “S corporation,” within the meaning of Section 1361(a) of the Code.<\/p>\n
(i) Residency Matters. All of GBT’s shareholders are, and at all times
\n —————–
\nsince GBT’s formation have been, United States persons, within the meaning of
\nSection 7701(a)(30) of the Code (“U.S. Persons”), and GBT does not own nor has
\nit ever owned any interests in any entities that are not U.S. Persons.<\/p>\n
9<\/p>\n
(j) Tax Basis and Tax Attributes. GBT has no net operating losses or other
\n —————————-
\ntax attributes presently subject to limitation under Section 382, 383, or 384 of
\nthe Code.<\/p>\n
3.16 ENVIRONMENTAL MATTERS.<\/p>\n
(a) Definitions. For purposes of this Agreement, the following definitions
\n — ———–
\nshall apply:<\/p>\n
(i) “Hazardous Materials” shall mean any hazardous substance, pollutant,
\n ——————-
\n contaminant, flammable explosives, radioactive materials and hazardous,
\n toxic or dangerous wastes and any other chemicals, materials or substances
\n which are identified, defined or regulated pursuant to any Hazardous
\n Materials Laws, or the release, discharge or exposure to which is
\n prohibited, limited or regulated by any federal, state or local government
\n under Hazardous Materials Laws and any petroleum, waste oil and petroleum
\n by-products, asbestos in any form, urea formaldehyde, and transformers or
\n other equipment that contain levels of polychlorinated biphenyls.<\/p>\n
(ii) “Hazardous Materials Laws” shall mean any federal, state or local
\n ————————
\n statute, law, rule, regulation, ordinance, code, binding policy or rule of
\n common law in effect and in each case as amended as of the Closing Date,
\n and any judicial or administrative interpretation thereof as of the Closing
\n Date, including any judicial or administrative order, consent decree or
\n judgment, relating to the protection of the environment, health or safety
\n from the release or disposal of Hazardous Materials, including without
\n limitation the Comprehensive Environmental Response, Compensation, and
\n Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seq.; the Resource
\n — —-
\n Conservation and Recovery Act, as amended, 42 U.S.C. (S) 9601 et seq.; the
\n — —-
\n Federal Water Pollution Control Act, as amended, 33 U.S.C. (S) 1251 et
\n —
\n seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the
\n —- — —-
\n Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42
\n — —-
\n U.S.C. (S) 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701
\n — —-
\n et seq.; and their state and local counterparts and equivalents.
\n — —- <\/p>\n
(iii) “Environmental Claims” shall mean any and all administrative,
\n ——————–
\n regulatory or judicial actions, suits, demands, demand letters, claims,
\n liens, notice of noncompliance or violation, investigations or proceedings
\n relating to any Hazardous Materials Law or any permit issued under any such
\n Law (hereafter “Claims”), including without limitation (a) any and all
\n Claims by governmental or regulatory authorities for enforcement, cleanup,
\n removal, response, remedial or other actions or damages pursuant to any
\n applicable Hazardous Materials Law, and (b) any and all Claims by any third
\n party seeking damages, contribution, indemnification, cost recovery,
\n compensation or injunctive relief resulting from Hazardous Materials or
\n arising from alleged injury or threat of injury to health, safety or the
\n environment from release or disposal of Hazardous Materials.<\/p>\n
(b) GBT is in compliance in all material respects with all Hazardous
\nMaterial Laws and all environmental permits required for the handling, use,
\nstorage and disposition of <\/p>\n
10<\/p>\n
Hazardous Materials under Hazardous Materials Laws that are applicable to GBT’s
\noperations as presently conducted.<\/p>\n
(c) There are no pending or, to the knowledge of GBT, threatened
\nEnvironmental Claims against GBT or any property of GBT.<\/p>\n
(d) There are no facts, circumstances, conditions or occurrences regarding
\nGBT, its operations or any property of GBT that could reasonably be anticipated
\nto form the basis of an Environmental Claim against GBT.<\/p>\n
3.17 CONTRACTS.<\/p>\n
The GBT Disclosure Schedule contains a complete list of every material
\ncontract of GBT which (i) is made with any officer, director or stockholder of
\nGBT, or with any affiliate or relative of any such officer, director or
\nstockholder, (ii) is a contract of employment, (iii) is made with any labor
\nunion, or other labor organization, (iv) is a bank loan or other credit
\nagreement, (v) other than outstanding purchase orders, requires, individually,
\nannual payments of more than $10,000 or aggregate payments over the life of the
\ncontract of more than $50,000, (vi) is for a remaining term of more than one
\nyear and is not cancelable as to all its provisions upon 60 days’ or less notice
\nwithout payment of any material penalty, or (vii) is entered into other than in
\nthe ordinary course of business. GBT has made or will promptly make available
\nto the Company upon request true copies of each contract so listed. GBT and
\neach of the other parties to the contracts set forth in the GBT Disclosure
\nSchedule have in all material respects performed all material obligations
\nrequired to be performed by them under such contracts, and no event has occurred
\nwhich would give any other party to any such contract the right to terminate or
\notherwise fail to perform its obligations under the contract.<\/p>\n
3.18 ACCOUNTS RECEIVABLE.<\/p>\n
Except to the extent set forth in the GBT Disclosure Schedule, the accounts
\nreceivable of GBT reflected in the Unaudited Interim Balance Sheet represent
\nsales actually made in the ordinary course of business, and have been properly
\nreported, net of any reserves shown on the books of GBT, all in accordance with
\nthe past practices of GBT, consistently applied.<\/p>\n
3.19 CUSTOMERS AND SUPPLIERS.<\/p>\n
Part 3.19(a) of the GBT Disclosure Schedule lists all customers of GBT in
\nthe most recent full fiscal year. Except as disclosed in the GBT Disclosure
\nSchedule, since April 30, 1998, there has been no material adverse change in the
\nbusiness relationship of GBT with any such customer.<\/p>\n
3.20 BANK ACCOUNTS.<\/p>\n
The GBT Disclosure Schedule sets forth the names and locations of all
\nbanks, trust companies, brokerage firms or other financial institutions at which
\nGBT maintains an account and the name of each person authorized to draw thereon
\nor make withdrawals therefrom.<\/p>\n
11<\/p>\n
3.21 TITLE TO PROPERTIES; ENCUMBRANCES.<\/p>\n
Except as set forth in the GBT Disclosure Schedule, GBT has good title to
\nthe material properties and assets (real and personal, tangible and intangible)
\nowned by it (and good leasehold title to the material properties and assets
\nleased by it), including, without limitation, the material properties and assets
\nreflected in the Financial Statements, subject to no encumbrance, lien, charge
\nor other restriction of any kind or character (“Encumbrances”), except for (i)
\nEncumbrances reflected in the Unaudited Interim Balance Sheet, (ii) Encumbrances
\nfor current taxes, assessments or governmental charges or levies on property not
\nyet due and delinquent, (iii) Encumbrances arising by operation of law, (iv)
\neasements, rights-of-way, restrictions and other similar Encumbrances previously
\nincurred in the ordinary course of business which, in respect of properties or
\nassets of GBT, are not material and which, in the case of such Encumbrances on
\nthe assets or properties of GBT, would not reasonably be expected to materially
\ndetract from the value of any such properties or assets or materially interfere
\nwith any present use of such properties or assets, and (v) Encumbrances in
\nexistence on the Closing Date and described in the GBT Disclosure Schedule.<\/p>\n
3.22 COMPENSATION OF EMPLOYEES.<\/p>\n
As of the Closing Date, GBT shall have no employees. GBT has provided the
\nCompany with an accurate and complete list for fiscal year 1997 and the period
\nthereafter prior to the Closing showing (i) the names of all persons employed by
\nGBT and the aggregate amount of cash compensation paid to them during such
\nperiods (including, without limitation, salary, commission and bonus).<\/p>\n
3.23 TAX STATUS OF REORGANIZATION.<\/p>\n
(a) The liabilities of GBT, if any, to be assumed by the Company in the
\nMerger and the liabilities to which the transferred assets of GBT are subject,
\nif any, were or will be incurred by GBT in the ordinary course of business.<\/p>\n
(b) GBT and the Shareholder will each pay their own expenses incurred in
\nconnection with the Merger, provided, further, that all expenses of GBT with
\nrespect to the Merger shall have been paid in full prior to the Closing, or to
\nthe extent not paid, shall have been assumed personally by the Shareholder.<\/p>\n
(c) There is no intercorporate indebtedness existing between the Company and
\nGBT that was issued, was acquired, or will be settled at a discount.<\/p>\n
(d) The fair market value of the assets of GBT to be transferred to the
\nCompany in the Merger will equal or exceed the sum of GBT’s liabilities assumed
\nby the Company plus the amount of GBT’s liabilities, if any, to which the
\ntransferred assets are subject<\/p>\n
(e) GBT is not under the jurisdiction of a court in a “title 11 or similar
\ncase,” within the meaning of Section 368(a)(3)(A) of the Code.<\/p>\n
12<\/p>\n
(f) The Company will acquire at least 90% of the fair market value of the
\nnet assets and at least 70% of the fair market value of the gross assets held by
\nGBT immediately prior to the Merger. For purposes of this representation,
\namounts used by GBT to pay its expenses and any distributions and redemptions in
\nconnection with the merger will be included in the assets of GBT held
\nimmediately prior to the Merger.<\/p>\n
(g) GBT is not an “investment company,” within the meaning of Section
\n368(a)(2)(F)(iii) or 368(a)(2)(F)(iv) of the Code.<\/p>\n
ARTICLE IV.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER<\/p>\n
Except as set forth in the GBT Disclosure Schedule, the Shareholder hereby
\nrepresents and warrants to the Company and XOOM as of the date hereof and as of
\nthe Closing Date as follows:<\/p>\n
4.1 TITLE TO COMMON SHARES.<\/p>\n
The Shareholder represents and warrants to the Company and XOOM that he is
\nthe record and beneficial owner of the common stock being conveyed to the
\nCompany, and the Shareholder holds title to the common stock free and clear of
\nall liens, charges, encumbrances, security interests, restrictive agreements or
\nassessments.<\/p>\n
4.2 CAPACITY.<\/p>\n
Shareholder has the legal capacity to enter into and to perform his
\nobligations under this Agreement, and this Agreement constitutes the legal,
\nvalid and binding obligation of Shareholder, enforceable against Shareholder in
\naccordance with its terms, except as rights to indemnity may be limited by
\napplicable laws and except as enforcement may be limited by applicable
\nbankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
\nlaws affecting creditor’s rights, and subject to general equity principles and
\nto limitations on availability of equitable relief, including specific
\nperformance.<\/p>\n
4.3 CONFIRMATION OF GBT’S REPRESENTATIONS AND WARRANTIES.<\/p>\n
Shareholder represents and warrants that, except as set forth in the GBT
\nDisclosure Schedule, the representations and warranties of GBT in Article III
\nare true and correct as of the date hereof and as of the Closing Date. For
\npurposes of Articles III, IV, and V, a party shall be deemed to have knowledge
\nof a particular fact or other matter if (i) the party is actually aware of such
\nfact or other matter or (ii) a reasonably prudent individual could be expected
\nto discover or otherwise become aware of such fact or other matter in the course
\nof conducting a reasonable investigation concerning the truth or existence of
\nsuch fact or other matter.<\/p>\n
13<\/p>\n
4.4 PURCHASE ENTIRELY FOR OWN ACCOUNT.<\/p>\n
This Agreement is made with Shareholder in reliance upon Shareholder’s
\nrepresentation, which by Shareholder’s execution of this Agreement Shareholder
\nhereby confirms, that the XOOM Stock to be received by Shareholder will be
\nacquired for investment for Shareholder’s own account, not as a nominee or
\nagent, and not with a view to the resale or distribution of any part thereof,
\nand that Shareholder has no present intention of selling, granting any
\nparticipation in, or otherwise distributing the same. By executing this
\nAgreement, Shareholder further represents that he does not have any contract,
\nundertaking, agreement or arrangement with any person to sell, transfer or grant
\nparticipations to such person or to any third person, with respect to any of the
\nXOOM Stock.<\/p>\n
4.5 DISCLOSURE OF INFORMATION.<\/p>\n
Shareholder believes he has received all the information he considers
\nnecessary or appropriate for deciding whether to exchange his shares of GBT for
\nXOOM Stock. Shareholder further represents that he has had an opportunity to
\nask questions and receive answers from XOOM regarding the terms and conditions
\nof the offering of the XOOM Stock and the business, properties, prospects and
\nfinancial conditions of XOOM. Shareholder has arrived at an independent view
\nconcerning the value of XOOM, recognizes that the issuance to him of the XOOM
\nStock in the Merger is occurring in an arm’s length transaction and is not
\nrelying upon any statements by XOOM or the Company as to the value of XOOM other
\nthan as expressly made by XOOM in the representations and warranties herein.<\/p>\n
4.6 RELEASE BY SHAREHOLDER.<\/p>\n
Shareholder hereby releases XOOM, the Company, and Revolutionary Software,
\nInc. from any and all claims of any nature, including but not limited to, claims
\nfor commissions and finder’s or broker’s fees with respect to Shareholder’s and
\nGBT’s activities in connection with Sitemail.<\/p>\n
4.7 RELEASE BY SHAREHOLDER.<\/p>\n
Shareholder has assumed all liabilities related to assets assigned by GBT
\nto Shareholder pursuant to that Assignment dated May 11, 1998 from GBT to
\nShareholder.<\/p>\n
14<\/p>\n
ARTICLE V.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND XOOM<\/p>\n
The Company and XOOM hereby represent and warrant to GBT and the
\nShareholder that as of the date hereof and as of the Closing, except as
\ndisclosed in the Disclosure Schedule provided by XOOM and attached hereto, (the
\n“XOOM Disclosure Schedule):<\/p>\n
5.1 DUE INCORPORATION; REQUISITE POWER AND AUTHORITY.<\/p>\n
The Company is a corporation duly organized, validly existing and in good
\nstanding as a corporation under the laws of California, and XOOM is a
\ncorporation duly organized, validly existing and in good standing as a
\ncorporation under the laws of the State of Delaware. The Company and XOOM have
\nall requisite power and authority to execute and deliver this Agreement and to
\nperform all transactions contemplated by this Agreement. The execution and
\ndelivery of this Agreement by the Company and XOOM and the consummation of the
\ntransactions contemplated by this Agreement have been duly authorized and
\napproved by all necessary corporate and shareholder action, and this Agreement
\nconstitutes the valid and binding obligation of the Company and XOOM enforceable
\nin accordance with its terms.<\/p>\n
5.2 DUE ORGANIZATION OF XOOM AND THE COMPANY.<\/p>\n
XOOM and the Company (a) have been duly organized and are validly existing
\nand in good standing in their respective states of incorporation, (b) are duly
\nqualified to do business in and are in good standing under the laws of every
\njurisdiction where they are required to be so qualified, except where the
\nfailure to be so qualified will not materially adversely affect their business,
\nfinancial condition or results of operations, and (c) have all requisite
\ncorporate power and authority to own or lease and to operate their properties
\nand carry on their business.<\/p>\n
5.3 REQUISITE CONSENTS; NONVIOLATION.<\/p>\n
The execution and delivery of this Agreement by the Company and XOOM do
\nnot, and the performance of this Agreement by the Company and XOOM will not, (a)
\nviolate or conflict with (i) the provisions of the Articles of Incorporation
\n(and with respect to XOOM, its Certificate of Incorporation) or Bylaws of the
\nCompany and XOOM, (ii) any applicable law, rule or regulation or (iii) any
\norder, writ, injunction or decree by which the Company or XOOM is bound; (b)
\nexcept as set forth in this Agreement, require the consent, license, permit,
\napproval, authorization or other action by or with respect to any governmental
\nperson or entity (except such approvals, permits or filings as may be required
\nto comply with applicable state securities laws), or (c) constitute a default
\nunder, violate or conflict with any material contract, note, lease or mortgage
\nto which XOOM or the Company is a party.<\/p>\n
5.4 XOOM STOCK.<\/p>\n
The XOOM Stock to be issued to Shareholder pursuant to the Merger, when
\nissued in connection with this Agreement, will be duly authorized, validly
\nissued, fully paid and <\/p>\n
15<\/p>\n
nonassessable. Based on the truth and accuracy of the Shareholder’s
\nrepresentations set forth in Article IV of this Agreement, such XOOM Stock will
\nbe exempt from the registration requirements of the Securities Act of 1933 and
\nwill have been registered or qualified (or is exempt) under all applicable state
\nsecurities laws.<\/p>\n
5.5 CAPITALIZATION.<\/p>\n
(a) The authorized capital stock of XOOM consists of twenty million
\n(20,000,000) shares of common stock, $.0001 par value per share, of which, as of
\nApril 17, 1998, nine million, nine hundred fifty thousand, four hundred one
\n(9,950,401) shares have been issued and are outstanding, and one million
\n(1,000,000) shares of preferred stock, none of which has been issued or is
\noutstanding. Other than its common stock, XOOM does not have outstanding any
\nother voting or equity securities or interests. Except as set forth in the XOOM
\nDisclosure Schedule, as of April 17, 1998, XOOM has no outstanding obligations,
\nunderstandings or commitments regarding the issuance of any additional shares of
\nits stock, voting or equity securities or interests or other securities, or any
\noptions, rights, warrants or securities exercisable for or convertible into such
\nshares, securities or interests. There are no preemptive rights in respect of
\nthe common shares of XOOM. All issued and outstanding shares of XOOM’s capital
\nstock have been duly authorized and validly issued and are fully paid and
\nnonassessable.<\/p>\n
(b) The authorized capital stock of the Company consists of ten thousand
\n(10,000) shares of common stock, no par value. All issued and outstanding shares
\nof the Company’s capital stock have been duly authorized and validly issued, are
\nfully paid and nonassessable, and are owned by XOOM.<\/p>\n
5.6 FINANCIAL STATEMENTS.<\/p>\n
(a) Attached hereto as Part 5.6(a) of the XOOM Disclosure Schedule are the
\nfollowing financial statements and notes (collectively, the “Financial
\n ———
\nStatements”) pertaining to XOOM:
\n———- <\/p>\n
(i) the unaudited balance sheets of XOOM as of December 31, 1996 and
\n December 31, 1997, and the related unaudited statements of operations,
\n changes in shareholder’s equity and cash flows of XOOM for the fiscal years
\n ended December 31, 1996 and December 31, 1997, together with the notes
\n thereto; and<\/p>\n
(ii) the unaudited balance sheet of XOOM as of April 30, 1998 (the<\/p>\n
“April 30, Balance Sheet”), and the related unaudited statements of
\n ————————
\n operations, changes in shareholder’s equity and cash flows of XOOM,
\n together with the notes thereto.<\/p>\n
(b) All of the Financial Statements are accurate and complete in all
\nmaterial respects, and the dollar amount of each line item included in the
\nFinancial Statements is accurate in all material respects. The financial
\nstatements and notes referred to in Section 5.6(a) are in accordance with the
\nbooks and records of XOOM and present fairly the financial position of XOOM as
\nof the respective dates thereof and the results of operations, changes in
\nshareholders’ equity and cash flows of XOOM for the periods covered thereby.<\/p>\n
16<\/p>\n
(c) Except as set forth in the XOOM Disclosure Schedule, XOOM has no
\nliabilities except those reflected or reserved against in the April 30 Balance
\nSheet and current liabilities incurred by XOOM in the ordinary course of
\nbusiness since the date of the April 30 Balance Sheet.<\/p>\n
5.7 LITIGATION.<\/p>\n
Except as set forth in the XOOM Disclosure Schedule, there is no pending or
\nthreatened action, suit, arbitration proceeding or investigation in any court or
\nbefore any governmental commission or agency against XOOM, which would have a
\nmaterial adverse effect upon the business, financial condition or results of
\noperations of XOOM. There is no order, judgment or decree of any court or
\ngovernmental authority or agency which specifically applies to XOOM which would
\nhave a material adverse effect on the business, financial condition or results
\nof operations of XOOM.<\/p>\n
5.8 GOVERNMENTAL AUTHORIZATIONS; COMPLIANCE WITH LAWS.<\/p>\n
XOOM has, to its knowledge, all material governmental licenses, permits,
\napprovals and other governmental authorizations necessary to permit the
\noperation of the business of XOOM, as presently conducted. XOOM is in
\ncompliance with all applicable laws, regulations, orders, judgments and decrees,
\nexcept where the failure to be in such compliance would not have a material
\nadverse effect on the business, financial condition or results of operations of
\nXOOM.<\/p>\n
5.9 CONTRACTS.<\/p>\n
The XOOM Disclosure Schedule contains a complete list of every material
\ncontract of XOOM made between XOOM and any officer, director or stockholder of
\nXOOM or with any affiliate or relative of any such officer, director or
\nstockholder, other than employment agreements between any of the aforesaid and
\nXOOM.<\/p>\n
ARTICLE VI.<\/p>\n
SURVIVAL OF REPRESENTATIONS AND WARRANTIES<\/p>\n
The representations, warranties and indemnities included or provided for in
\nthis Agreement or in any schedule or certificate or other document delivered
\npursuant to this Agreement will survive the Closing Date for a period of twenty-
\nfour months. No claim may be made by any party hereto under this article unless
\nwritten notice of the claim is given within that twenty-four month period;<\/p>\n
provided, however, that the foregoing limitation period will not apply to any
\n——–
\nbreach of any representation, warranty or covenant which, on or before the
\nClosing Date, is known to be false by the party against whom the breach is
\nalleged.<\/p>\n
17<\/p>\n
ARTICLE VII.<\/p>\n
COVENANTS OF GBT AND SHAREHOLDER<\/p>\n
7.1 ACCESS AND INVESTIGATION.<\/p>\n
GBT shall ensure that, at all times after the date hereof and prior to the
\nClosing (the “Pre-Closing Period”), GBT shall provide XOOM and its
\nrepresentatives with free and complete access to GBT’s representatives,
\npersonnel, premises and assets and to all existing books, records, Tax Returns,
\nwork papers and other documents and information relating to GBT.<\/p>\n
7.2 OPERATION OF BUSINESS.<\/p>\n
GBT shall ensure that, during the Preclosing Period, solely with respect to
\nSitemail, (a) GBT conducts its operations exclusively in the ordinary course of
\nbusiness and in the same manner as such operations have been conducted prior to
\nthe date of this Agreement; (b) GBT preserves intact its current business
\norganization, keeps available the services of its current officers and employees
\nand maintains its relations and goodwill with all suppliers, customers,
\nlandlords, creditors, licensors, licensees, employees and other persons having
\nbusiness relationships with GBT.<\/p>\n
7.3 FINAL TAX RETURNS.<\/p>\n
The Shareholder shall cause GBT’s accountants to prepare and GBT to timely
\nfile and pay amounts owed with respect to all Tax Returns of GBT not already
\nfiled for GBT for all tax periods ended or ending on or before the Closing Date
\nand shall cause its accountants to prepare on a pro forma basis all other Tax
\nReturns for GBT for the interim period from December 31, 1997 until the Closing
\n(“Final Returns”). The Shareholder shall send a copy of all Final Returns as to
\nwhich he is responsible to the Company for its review and comment and, if
\nrequired, appropriate execution, at least three (3) days prior to the filing
\nthereof.<\/p>\n
7.4 FEDERAL INCOME TAX REPORTING.<\/p>\n
GBT and the Shareholder agree to report the Merger as a “reorganization,”
\nwithin the meaning of Section 368(a) of the Code.<\/p>\n
7.5 NO NEGOTIATION.<\/p>\n
GBT shall ensure that, during the Pre-Closing Period, neither GBT nor any
\nof its representatives directly or indirectly solicits or encourages the
\ninitiation of any inquiry, proposal or offer from any person relating to any
\nacquisition of GBT or any of its assets or conducts any negotiations relating to
\nsuch acquisition.<\/p>\n
18<\/p>\n
ARTICLE VIII.<\/p>\n
COVENANTS OF XOOM<\/p>\n
8.1 TAX FREE REORGANIZATION.<\/p>\n
(a) XOOM agrees to report the Merger as a reorganization within the meaning
\nof Section 368(a) of the Code, unless, in the opinion of counsel selected by the
\nShareholder and satisfactory to XOOM, the Merger may not be so reported.
\nWithout limiting the foregoing, XOOM agrees to use its reasonable efforts to
\nqualify the Merger as a reorganization, within the meaning of Section 368(a) of
\nthe Code.<\/p>\n
(b) Prior to the Merger, XOOM will be in “control” of the Company within the
\nmeaning of Section 368(c) of the Code.<\/p>\n
(c) XOOM has no present plan or intention following the Merger to liquidate
\nthe Company, merge the Company with and into another corporation, sell or
\notherwise dispose of the capital stock of the Company or to cause the Company to
\nsell or otherwise dispose of any of GBT’s assets acquired in the Merger, except
\nfor transfers made in the ordinary course of business or transfers described in
\nSection 368(a)(2)(C) of the Code.<\/p>\n
(d) XOOM shall not cause the Company (or a transferee of the Company’s stock
\nor business to which the stock or assets of the Company are transferred in a
\ntransaction described in Section 368(a)(2)(C) of the Code or other transferee
\ndescribed in Treasury Regulation Section 1.368-1(d)(4)) to either discontinue
\nGBT’s business, as conducted by GBT as of the Closing Date, or fail to use a
\nsignificant portion of GBT’s assets, as held by GBT as of the Closing Date, in a
\nbusiness.<\/p>\n
(e) Following the Merger, XOOM and GBT will comply with the record-keeping
\nand information filing requirements of Section 1.368-3 of the Treasury
\nRegulations.<\/p>\n
ARTICLE IX.<\/p>\n
CLOSING CONDITIONS OF XOOM AND THE COMPANY<\/p>\n
XOOM and the Company’s obligations to effect the Closing and consummate the
\nMerger are subject to the satisfaction of each of the following conditions:<\/p>\n
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES.<\/p>\n
The representations and warranties of the Shareholder and GBT in this
\nAgreement shall have been materially true and correct as of the date of this
\nAgreement and shall be materially true and correct on and as of the Closing, and
\nthe Shareholder and GBT shall have performed all obligations in this Agreement
\nrequired to be performed or observed by them on or prior to the Closing, except
\nto the extent such nonperformance would not have a material adverse effect on
\nGBT’s assets or operations.<\/p>\n
19<\/p>\n
9.2 CONSULTING AGREEMENT.<\/p>\n
Shareholder shall have executed and delivered a Consulting Agreement in
\nsubstantially the form of Exhibit B hereto, pursuant to which Shareholder is to
\n ———
\nbe hired by XOOM as a consultant under the terms set forth therein.<\/p>\n
9.3 TECHNICAL INSPECTION.<\/p>\n
XOOM’s CTO shall have undertaken an on-site technical inspection and review
\nof GBT’s operations and shall have delivered to GBT a notice in writing stating
\nthat he is satisfied as to the viability of Sitemail.<\/p>\n
9.4 AGREEMENT WITH RSI.<\/p>\n
XOOM shall have entered into an Asset Purchase Agreement (the “Purchase
\nAgreement”) with Revolutionary Software, Inc. (“RSI”), a California corporation,
\nproviding for XOOM’s acquisition of all right, title and interest in and to
\nSitemail owned by RSI at a closing to occur concurrently with the Closing
\nhereunder, and no impediment to the closing of the Purchase Agreement shall
\nexist and no event shall have occurred that, with notice or passage of time,
\nwould prevent or impede closing of the transactions described in the Purchase
\nAgreement.<\/p>\n
9.5 ASSIGNMENT OF TRADEMARK RIGHTS.<\/p>\n
Shareholder shall have assigned to GBT all of his rights in that trademark
\napplication pending with the U.S. Patent and Trademark Office with respect to
\nthe name and mark “Sitemail.”<\/p>\n
ARTICLE X.<\/p>\n
CLOSING CONDITIONS OF THE SHAREHOLDERS AND GBT<\/p>\n
The Shareholder’s and GBT’s obligations to effect the Closing and
\nconsummate the Merger are subject to (i) the representations and warranties of
\nthe Company and XOOM in this Agreement being true and correct as of the Closing,
\n(ii) each of the Company and XOOM having performed all obligations in this
\nAgreement required to be performed or observed by it on or prior to the Closing,
\nand (iii) a closing shall have occurred under the Purchase Agreement before or
\nconcurrently with the Closing.<\/p>\n
ARTICLE XI.<\/p>\n
FURTHER ASSURANCES<\/p>\n
Each of the parties hereto agrees that it will, from time to time after the
\ndate of the Agreement, execute and deliver such other certificates, documents
\nand instruments and take such other action as may be reasonably requested by the
\nother party to carry out the actions and <\/p>\n
20<\/p>\n
transactions contemplated by this Agreement, including the closing conditions
\ndescribed in Articles IX and X.<\/p>\n
ARTICLE XII.<\/p>\n
INDEMNIFICATION<\/p>\n
12.1 INDEMNIFICATION BY THE SHAREHOLDER<\/p>\n
In the event Shareholder (i) breaches or is deemed to have breached any of
\nthe representations and warranties contained in Article IV herein, including the
\nincorporation by reference pursuant to Section 4.3 of the representations and
\nwarranties of GBT in Article III or (ii) fails to perform or comply with any of
\nthe covenants and agreements set forth in this Agreement, Shareholder shall hold
\nharmless, indemnify and defend the Company and XOOM, and each of their
\ndirectors, officers, shareholders, attorneys, representatives and agents, from
\nand against any Losses incurred or paid by the Company or XOOM to the extent
\nsuch Losses arise or result from a breach by GBT or the Shareholder of any such
\nrepresentations or warranties or a violation of any covenant in this Agreement.
\n“Losses” shall mean all damages, awards, judgments, payments, diminutions in
\nvalue, all interest thereon, costs and expenses of investigating claims,
\nlawsuits or arbitration and any appeal from the foregoing and reasonable
\nattorneys’ fees incurred in connection therewith. Notwithstanding anything to
\nthe contrary in this Agreement, in no event shall Shareholder’s liability under
\nthis Agreement for indemnification or any other cause of action exceed the fair
\nmarket value of the Merger Consideration as of the Closing Date, regardless of
\nthe form of action, whether in contract or tort, including negligence, except to
\nthe extent of Losses directly attributable to a breach of any representation or
\nwarranty of which the Shareholder had actual knowledge prior to the Closing, and
\nXOOM’s remedies against Shareholder under this Agreement shall be limited to a
\nclaims for monetary damages arising from a breach of this Agreement, including
\nwithout limitation, Losses resulting from any breach by GBT or the Shareholder
\nof the representations, warranties and covenants in this Agreement.<\/p>\n
12.2 INDEMNIFICATION BY THE COMPANY AND XOOM<\/p>\n
In the event the Company or XOOM (i) breaches or is deemed to have breached
\nany of the representations and warranties contained in Article V herein or (ii)
\nfails to perform or comply with any of the covenants and agreements set forth in
\nthis Agreement, then the Company and XOOM shall hold harmless, indemnify and
\ndefend the Shareholder from and against any Losses incurred or paid by the
\nShareholder to the extent such Losses arise or result from a breach by the
\nCompany or XOOM of any such representations and warranties or a violation of any
\ncovenant in this Agreement.<\/p>\n
12.3 NOTIFICATION OF CLAIMS<\/p>\n
If any party (the “Indemnified Party”) reasonably believes that it is
\nentitled to indemnification hereunder, or otherwise receives notice of the
\nassertion or commencement of any third-party claim, action, or proceeding (a
\n“Third-Party Claim”), with respect to which such other <\/p>\n
21<\/p>\n
party or parties (the “Indemnifying Party”) is obligated to provide
\nindemnification pursuant to Section 12.1 or 12.2 above, the Indemnified Party
\nshall promptly give the Indemnifying Party written notice of such claim for
\nIndemnification (an “Indemnity Claim”). Any claim for indemnification under this
\nArticle XII must be brought prior to the expiration of the survival period for
\nthe representation and warranty as set forth in Article VI. The delivery of such
\nnotice of Indemnity Claim (“Claim Notice”) shall be a condition precedent to any
\nliability of the Indemnifying Party for indemnification hereunder. The
\nIndemnifying Party shall have twenty (20) days from the receipt of a Claim
\nNotice (the “Notice Period”) to notify the Indemnified Party of whether or not
\nthe Indemnifying Party disputes its liability to the Indemnified Party with
\nrespect to such Indemnity Claim.<\/p>\n
12.4 RESOLUTION OF CLAIMS<\/p>\n
(a) With respect to any Indemnity Claim involving a Third-Party Claim,
\nfollowing prompt notification of the Indemnifying Party, the Indemnifying Party
\nshall have the option of proceeding with the defense of the Third Party Claim
\nprovided (i) the Indemnifying Party has either not disputed its liability for
\nthe Indemnity Claim pursuant to Section 12.4(c) or the liability of the
\nIndemnifying Party for the Indemnity Claim has been determined pursuant to
\nSection 12.4(b), (ii) the Indemnifying Party has appointed counsel acceptable to
\nthe Indemnified Party (whose approval shall not be unreasonably withheld) and
\n(iii) the Indemnifying Party shall have assumed and agreed to bear all
\nreasonable costs related to the Indemnity Claim and reimbursed the Indemnified
\nParty for reasonable costs incurred, if any, by the Indemnifying Party prior to
\nassuming the defense. During such defense proceedings, the Indemnifying Party
\nshall keep the Indemnified Party informed of all material developments and
\nevents relating to the proceedings. The Indemnified Party shall have a right to
\nbe present at the negotiation, defense and settlement of such Third-Party Claim.
\nThe Indemnifying Party shall not agree to any settlement of the Third-Party
\nClaim without the consent of the Indemnified Party, which consent shall not be
\nunreasonably withheld.<\/p>\n
(b) With respect to any Indemnity Claim not involving a Third-Party Claim,
\nif the Indemnifying Party disputes its liability within the Notice Period, the
\nliability of the Indemnifying Party shall be resolved in accordance with Section
\n12.5.<\/p>\n
(c) In the event that an Indemnified Party makes an Indemnity Claim in
\naccordance with Section 12.3 and the Indemnifying Party does not dispute its
\nliability within the Notice Period, the amount of such Indemnity Claim shall be
\nconclusively deemed a liability of the Indemnifying Party, and any dispute as to
\nthe liability of the Indemnifying Party shall be determined pursuant to Section
\n12.5<\/p>\n
12.5 ARBITRATION.<\/p>\n
All disputes under this Article XII 12 shall be settled by arbitration in
\nSan Francisco, California before a single arbitrator pursuant to the commercial
\nlaw rules of the American Arbitration Association. Arbitration may be commenced
\nat any time by any party hereto giving written notice to each other party to a
\ndispute that such dispute has been referred to arbitration under this Section
\n12.5. The arbitrator shall be selected by the joint agreement of the<\/p>\n
22<\/p>\n
Indemnifying Party and Indemnified Party, but if they do not so agree within 20
\ndays after the date of the notice referred to above, the selection shall be made
\npursuant to the rules from the panels of arbitrators maintained by such
\nAssociation. Any award rendered by the arbitrator shall be conclusive and
\nbinding upon the parties hereto; provided, however, that any such award shall be
\n ——– ——-
\naccompanied by a written opinion of the arbitrator giving the reasons for the
\naward. This provision for arbitration shall be specifically enforceable by the
\nparties, and the decision of the arbitrator in accordance herewith shall be
\nfinal and binding without right of appeal. Each party shall pay its own
\nexpenses of arbitration, and the expenses of the arbitrator shall be equally
\nshared; provided, however, that if in the opinion of the arbitrator any claim
\n ——– ——-
\nfor indemnification or any defense or objection thereto was unreasonable, the
\narbitrator may assess, as part of his award, all or any part of the arbitration
\nexpenses of the other party (including reasonable attorneys’ fees) and of the
\narbitrator against the party raising such unreasonable claim, defense or
\nobjection. To the extent that arbitration may not be legally permitted
\nhereunder and the parties to any dispute hereunder may not at the time of such
\ndispute mutually agree to submit such dispute to arbitration, any party may
\ncommence a civil action in a court of appropriate jurisdiction to solve disputes
\nhereunder. Nothing contained in this Section 12.5 shall prevent the parties
\nfrom settling any dispute by mutual agreement at any time.<\/p>\n
12.6 INDEMNIFICATION THRESHOLD<\/p>\n
Notwithstanding anything to the contrary herein, in no event shall any
\nIndemnifying Party be liable to any Indemnified Party under any warranty,
\nrepresentation, indemnity or covenant made in this Agreement until the aggregate
\namount of liability of all claims thereunder against the Indemnifying Party
\nexceeds ten thousand dollars ($10,000) (the “Threshold”), at which point such
\nparty shall be liable for the full amount of liability for such claims below and
\nabove the threshold.<\/p>\n
ARTICLE XIII.<\/p>\n
RESTRICTIONS ON XOOM COMMON SHARES<\/p>\n
The XOOM Stock issued to Shareholder pursuant to the Merger shall be
\nsubject to the following restrictions:<\/p>\n
13.1 RIGHT OF FIRST REFUSAL\/TRANSFER RESTRICTIONS.<\/p>\n
(a) Restrictions on Transfer. Shareholder may not sell or engage in any
\n — ————————
\ntransaction that will result in a change in the beneficial or record ownership
\nof any XOOM Stock issued to or held by Shareholder, including without limitation
\na voluntary or involuntary sale, assignment, transfer, pledge, hypothecation,
\nencumbrance, disposal, loan, gift, attachment or levy (a “Transfer”), except as
\nprovided in this Article XIII, and any such Transfer of XOOM Stock or attempted
\nTransfer of XOOM Stock in contravention of this Agreement shall be void and
\nineffective for any purpose and shall not confer on any transferee or purported
\ntransferee any rights whatsoever.<\/p>\n
(b) Right of First Refusal.
\n ———————-
\n 23<\/p>\n
(i) If, prior to an initial public offering of XOOM’s securities or a
\n merger or sale of XOOM, Shareholder proposes (or is required by operation
\n of law or other involuntary transfer) to Transfer any or all of the XOOM
\n Stock standing in Shareholder’s name or owned by him, Shareholder shall
\n first offer such XOOM Stock to the Company in accordance with the following
\n provisions:<\/p>\n
(A) Shareholder shall deliver a written notice (a “Notice”) to
\n XOOM stating (1) Shareholder’s bona fide intention to Transfer such
\n XOOM Stock, (2) the name and address of the proposed transferee, (3)
\n the number of shares of XOOM Stock to be transferred, and (4) the
\n purchase price per share and terms of payment for which Shareholder
\n proposes to Transfer such XOOM Stock.<\/p>\n
(B) Within 60 days after receipt of the Notice, XOOM or its
\n designee shall have the first right to purchase or obtain such shares,
\n upon the price and terms of payment designated in the Notice. If the
\n Notice provides for the payment of non-cash consideration, XOOM at its
\n option may pay the consideration in cash equal to XOOM’s good faith
\n estimate of the present fair market value of the non-cash
\n consideration offered.<\/p>\n
(C) If XOOM or its designee elects not to purchase or obtain all
\n of the XOOM Stock designated in the Shareholder’s Notice, then
\n Shareholder may Transfer the shares referred to in the Notice to the
\n proposed transferee, providing such Transfer (1) is completed within
\n 30 days after the expiration of XOOM’s right to purchase or obtain
\n such shares, (2) is made at the price and terms designated in the
\n Notice, and (3) the proposed transferee agrees to be bound by the
\n terms and provisions of this Article XIII and to become a party to an
\n agreement containing such provisions immediately upon receipt of such
\n shares. If such shares are not so transferred, the Shareholder must
\n give notice in accordance with this paragraph prior to any other or
\n subsequent Transfer of such shares.<\/p>\n
(ii) Notwithstanding Section 13.1(a), Shareholder may Transfer Xoom
\n Stock: (A) to Shareholder’s spouse, child, grandchild, parent, brother, or
\n sister (“Immediate Family”), or to a trust established for the benefit of a
\n member or members of Shareholder’s Immediate Family, (B) to an Affiliate
\n (as hereinafter defined) or equity holder of the Shareholder, (C) to a
\n person who is a constituent partner of Shareholder on the date hereof, or
\n (D) to the estate of any of the foregoing by gift, will or intestate
\n succession; provided that Shareholder or his representative notifies XOOM
\n of such Transfer not less than 10 nor more than 90 days prior to the
\n Transfer and that the proposed transferee agrees to be bound by the terms
\n and provisions of this Agreement and to become a party to this Agreement
\n immediately upon the receipt of such shares. “Affiliate” means, with
\n respect to any person or entity, any person or entity which controls, is
\n controlled by, or is under common control with, such person or entity, or
\n any stockholder or other equity owner in a control relationship with any of
\n the foregoing. For this purpose the term “control” shall mean the direct
\n or indirect beneficial ownership of at <\/p>\n
24<\/p>\n
least fifty percent (50%) of the voting stock or interest in the income of
\n such person or entity, or such other relationship as, in fact, constitutes
\n actual control.<\/p>\n
(c) No Transfer to Competitors. Shareholder may not Transfer any XOOM Stock
\n ————————–
\nto a competitor of the Company, or to any stockholder, partner or other
\nbeneficial holder of an equity ownership interest in a competitor, other than
\npursuant to a merger, combination, or other transaction approved by the Board of
\nDirectors of the Company.<\/p>\n
(d) Legends on Stock Certificates. Each certificate representing shares
\n —————————–
\nowned of record or beneficially by a party to this Agreement shall be endorsed
\nwith the following legends:<\/p>\n
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT BETWEEN
\n XOOM, INC. (THE “COMPANY”) AND THE HOLDER, PROVIDING FOR, AMONG OTHER
\n MATTERS, THE COMPANY’S RIGHT OF FIRST REFUSAL TO PURCHASE THE SECURITIES
\n REPRESENTED BY THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
\n PRINCIPAL BUSINESS OFFICE OF THE COMPANY.<\/p>\n
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
\n THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD,
\n TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
\n REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS
\n MADE IN ACCORDANCE WITH RULE 144 OR ITS SUCCESSOR RULE UNDER THE ACT, OR THE
\n COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
\n EXEMPTIONS FROM SUCH REGISTRATION AND FROM THE PROVISIONS OF ANY APPLICABLE
\n STATE “BLUE SKY” LAWS ARE AVAILABLE.<\/p>\n
Under no circumstances shall any Transfer of any XOOM Stock subject hereto
\nbe valid until the proposed transferee thereof shall have executed and become a
\nparty to the agreement described in Section 13.1(b)(i)(C) and thereby shall have
\nbecome subject to all of the provisions of this Article XIII; and
\nnotwithstanding any other provisions of this Agreement, no such Transfer of any
\nkind shall in any event result in the non-applicability of the provisions hereof
\nat any time to any of the XOOM Stock subject hereto. Shareholder understands
\nand acknowledges that the Company need not register a transfer of XOOM Stock,
\nand may instruct its transfer agent not to register a transfer of XOOM Stock,
\nunless the conditions specified in the foregoing last legend are satisfied.<\/p>\n
(e) Acknowledgments. Shareholder acknowledges that other stockholders of
\n —————
\nthe Company may have restrictions on their stockholdings different from the
\nterms contained herein.<\/p>\n
13.2 LOCK-UP AGREEMENT.<\/p>\n
Shareholder, if requested by an underwriter of XOOM Stock or other
\nsecurities of XOOM, shall not sell or otherwise transfer or dispose of any
\nShares held by Shareholder during the 180-day period following the effective
\ndate of a registration statement of XOOM filed under the Act or such shorter
\nperiod of time as the underwriter shall require, provided that all officers and
\ndirectors of XOOM who hold common stock (or other securities) of XOOM enter into<\/p>\n
25<\/p>\n
similar agreements. If requested by the underwriter, Shareholder will reaffirm
\nthe agreement set forth in this Section 13.2 in a separate writing in a form
\nsatisfactory to such underwriter. XOOM may impose stop-transfer instructions
\nwith respect to such XOOM Stock subject to the foregoing restriction until the
\nend of said period.<\/p>\n
ARTICLE XIV.<\/p>\n
MISCELLANEOUS<\/p>\n
14.1 EXPENSES.<\/p>\n
The Company, GBT and Shareholder shall each bear their own expenses
\nincurred in connection with the negotiation and consummation of the transactions
\ncontemplated by this Agreement; provided, however, that all expenses of GBT
\n ——–
\nrelating to the Merger shall either have been paid prior to the Closing or shall
\nhave been assumed by Shareholder.<\/p>\n
14.2 SETOFF.<\/p>\n
XOOM and the Company may set off any amount that may be owed to them by GBT
\nor Shareholder under this Agreement against any amount otherwise payable to
\nShareholder by XOOM, but any such setoff shall in no manner limit Shareholder’s
\nliability, if any, to XOOM or the Company.<\/p>\n
14.3 ENTIRE AGREEMENT.<\/p>\n
This Agreement contains the entire agreement of the parties hereto, and
\nsupersedes any prior written or oral agreements between them concerning the
\nsubject matter contained herein. There are no representations, agreements,
\narrangements or understandings, oral or written, between the parties to this
\nAgreement, relating to the subject matter contained herein, which are not fully
\nexpressed herein. The schedules and each exhibit attached to this Agreement or
\ndelivered pursuant to this Agreement are incorporated herein by this reference
\nand constitute a part of this Agreement.<\/p>\n
14.4 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS.<\/p>\n
Prior to the Closing Date, none of XOOM, the Company, Shareholder or GBT
\nshall issue any press release or make any public announcement concerning the
\nmatters set forth in this Agreement (other than as required by applicable
\ndisclosure rules or regulations) without the consent of the other parties.
\nXOOM, the Company and GBT will cooperate to jointly prepare and issue any press
\nrelease that may be issued to announce the closing of the transactions
\ncontemplated by this Agreement.<\/p>\n
14.5 COUNTERPARTS<\/p>\n
This Agreement may be executed in any number of counterparts, each of which
\nshall be deemed an original but all of which shall constitute one and the same
\ninstrument.<\/p>\n
26<\/p>\n
14.6 DESCRIPTIVE HEADINGS.<\/p>\n
The article and section headings in this Agreement are for convenience only
\nand shall not affect the meaning or construction of any provision of this
\nAgreement.<\/p>\n
14.7 NOTICES.<\/p>\n
Any notices required or permitted to be given under this Agreement shall be
\nin writing and shall be deemed sufficiently given on the date delivered
\npersonally, on the following business day if transmitted via facsimile with
\ncall-back confirmation or five (5) days after posting by registered or certified
\nmail, postage prepaid, addressed as follows:<\/p>\n
If to the Company or XOOM: XOOM, Inc.
\n 433 California Street, Suite 910
\n San Francisco, CA 94104
\n Attention: Laurent Massa, President
\n Fax: (415) 445-2526<\/p>\n
With a copy to: Morrison & Foerster LLP
\n 425 Market Street
\n San Francisco, CA 94105
\n Attention: Bruce Mann, Esq.
\n Fax: (415) 268-7522<\/p>\n
And if to Shareholder, to the address of Shareholder set forth on the
\nsignature page of this Agreement, or to such other address or addresses as a
\nparty shall have previously designated by notice to the sender given in
\naccordance with this section.<\/p>\n
14.8 CHOICE OF LAW<\/p>\n
This Agreement shall be construed in accordance with and governed by the
\nlaws of the State of California without regard to conflicts of law principles.<\/p>\n
14.9 BINDING EFFECT; BENEFITS<\/p>\n
This Agreement shall inure to the benefit of and be binding upon the
\nparties and their respective successors and permitted assigns. Nothing in this
\nAgreement, express or implied, is intended to confer on any person other than
\nthe parties or their respective successors and permitted assigns any rights,
\nremedies, obligations or liabilities under or by reason of this Agreement.<\/p>\n
14.10 ASSIGNABILITY<\/p>\n
Neither this Agreement nor any of the parties’ rights hereunder shall be
\nassignable by any party without the prior written consent of the other parties
\nand any attempted assignment without such consent shall be void.<\/p>\n
27<\/p>\n
14.11 WAIVER AND AMENDMENT<\/p>\n
Any term or provision of this Agreement may be waived at any time by the
\nparty that is entitled to the benefits thereof. The waiver by any party of a
\nbreach of any provision of this Agreement shall not operate or be construed as a
\nwaiver of any subsequent breach. The parties may, by mutual agreement in
\nwriting, amend this Agreement in any respect.<\/p>\n
14.12 ATTORNEYS’ FEES.<\/p>\n
In the event of any action or proceeding to enforce the terms and
\nconditions of this Agreement, the prevailing party shall be entitled to an award
\nof reasonable attorneys’ and experts’ fees and costs, in addition to such other
\nrelief as may be granted.<\/p>\n
28<\/p>\n
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
\nas of the day and year first above written.<\/p>\n
THE COMPANY:<\/p>\n
XOOM GBT Merger Corp.<\/p>\n
By: \/s\/ LAURENT MASSA
\n —————–
\n Name: Laurent Massa
\n Title: CEO<\/p>\n
XOOM:<\/p>\n
XOOM, Inc.<\/p>\n
By: \/s\/ LAURENT MASSA
\n —————–
\n Name: Laurent Massa
\n Title: CEO<\/p>\n
GBT:<\/p>\n
Global Bridges Technologies, Inc.<\/p>\n
By: \/s\/ ROBERT KOHLER
\n ——————
\n Robert Kohler, President<\/p>\n
THE SHAREHOLDER:<\/p>\n
\/s\/ ROBERT KOHLER
\n —————–
\n Address: 655 Redwood Highway
\n Suite 133
\n Mill Valley, CA 94941<\/p>\n
29<\/p>\n
EXHIBIT A<\/p>\n
PROMISSORY NOTE
\n —————<\/p>\n
$62,500 June 11, 1998<\/p>\n
San Francisco, California<\/p>\n
FOR VALUE RECEIVED, the undersigned XOOM, Inc. (“Debtor”) promises to pay
\nto the order of Robert Kohler at 655 Redwood Highway, Suite 301, Mill Valley,
\nCalifornia or such other place as the holder hereof may designate in writing,
\nthe principal sum of Sixty-two Thousand Five Hundred Dollars, ($62,500), in
\ntwenty-five successive, monthly installments of Two Thousand Five Hundred
\nDollars ($2,500) each, beginning on July 5, 1998 and continuing on the same day
\nof each succeeding calendar month through and including July` 5, 2000, at which
\ntime all amounts hereunder shall be due and payable. Principal outstanding
\nhereunder shall bear simple interest, in arrears, at the annual rate of five
\npercent (5%).<\/p>\n
This Note is being delivered pursuant to an Agreement and Plan of Merger
\nbetween Debtor, Robert Kohler, and others of even date herewith.<\/p>\n
At the option of Debtor, all or any portion of any unpaid sum hereunder may
\nbe prepaid without premium or penalty at any time or from time to time after the
\ndate hereof.<\/p>\n
Upon a default by Debtor in making any payment of an installment when due
\nhereunder, and the continuation thereof for (10) days after written notice by
\nthe holder hereof, all of the unpaid indebtedness evidenced by this Note shall
\nbecome immediately due and payable at the option of the holder, and the holder
\nmay proceed to exercise any rights or remedies that it may have hereunder or
\nunder applicable law.<\/p>\n
Debtor agrees that if any legal action is necessary to enforce or collect
\nthis Note, the prevailing party shall be entitled to reasonable attorneys’ fees
\nin addition to any other relief to which that party may be entitled.<\/p>\n
Debtor hereby waives demand, notice, and protest hereunder.<\/p>\n
This Note shall be interpreted and enforced in all respects in accordance
\nwith the internal laws of the State of California.<\/p>\n
30<\/p>\n
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by
\nits officers duly authorized to do so.<\/p>\n
XOOM, INC.<\/p>\n
By:_______________________
\n Laurent Massa<\/p>\n
31<\/p>\n
EXHIBIT B<\/p>\n
CONSULTING AGREEMENT<\/p>\n
32<\/p>\n
EXHIBIT B TO EXHIBIT 10.11<\/p>\n
CONSULTING AGREEMENT<\/p>\n
This Consulting Agreement (the “Agreement”) is entered into as of this 11th
\nday of June, 1998, by and between XOOM, Inc., a Delaware corporation (the
\n“Company”), and Robert Kohler (“Consultant”).<\/p>\n
RECITALS
\n ——–<\/p>\n
A. The Company desires to obtain the services of Consultant, on its own
\nbehalf and on behalf of all existing and future Affiliated Companies (defined as
\nany corporation or other business entity or entities that directly or indirectly
\ncontrols, is controlled by, or is under common control with the Company), upon
\nthe terms and conditions set forth below.<\/p>\n
B. The Company has spent significant time, effort and money to develop or
\notherwise acquire certain Proprietary Information (as defined below), which the
\nCompany considers vital to its business and goodwill.<\/p>\n
C. The Proprietary Information will necessarily be communicated to or
\nacquired by Consultant in the course of providing consulting services to the
\nCompany, and the Company desires to obtain the services of Consultant, only if,
\nin doing so, it can protect its Proprietary Information and goodwill.<\/p>\n
Accordingly, the parties agree as follows:<\/p>\n
AGREEMENT
\n ———<\/p>\n
1. Consulting Period.
\n —————– <\/p>\n
The Company hereby retains the Consultant and Consultant agrees to
\nrender to the Company those services described in Section 2 of this Agreement
\nfor the period (the “Consulting Period”) commencing on the date of this
\nAgreement and ending upon the end of the twelfth full month after the date
\nhereof (the “Term Date”).<\/p>\n
2. Duties; Responsibilities; Authority.
\n ———————————– <\/p>\n
(a) The Consultant hereby accepts engagement with the Company to assist
\nin the integration of the operations of the Company with Global Bridges
\nTechnologies, Inc., as more fully described on Exhibit A attached hereto, or
\nsuch other services as shall be agreed in good faith between Consultant and the
\nPresident of the Company so as to utilize Consultant’s capabilities.<\/p>\n
(b) Consultant shall have no authority to enter into contracts which
\nbind the Company or create obligations on the part of the Company without the
\nexpress prior authorization of the Company. Consultant shall have no authority
\nto hire other persons, either as consultants, independent contractors or
\nemployees, without the express prior written authorization of the Company’s
\nPresident.<\/p>\n
33<\/p>\n
3. Compensation; Benefits; Expenses.
\n ——————————– <\/p>\n
(a) Compensation. In consideration of the services to be rendered
\n ————
\nhereunder, including, without limitation, services to any Affiliated Company,
\nConsultant shall be entitled to the following compensation:<\/p>\n
(i) A professional fee of $3,000 per month, payable no later than
\nthe __ day of each month following the month in which Consultant provides such
\nservices. There shall be no withholdings from this payment, and Consultant shall
\nbe solely responsible for all social security, tax, disability and other state
\nand federal assessments.<\/p>\n
(ii) 51,912 shares of the Company’s common stock “Incentive
\nShares” pursuant to a Restricted Stock Purchase Agreement to be executed by
\nConsultant and the Company providing for cliff vesting of all of Incentive
\nShares if Consultant closes transactions that generate , in the aggregate, in
\nexcess of one million (1,000,000) new Members for the Company, provided,
\n ——–
\nhowever, that at least 500,000 new Members shall have subscribed to the
\nCompany’s services no later than December 31, 1998, and (ii) (A) the Company has
\ncompleted an initial public offering (“IPO”) of its securities (B) the Company
\n —
\nhas entered into and closed an agreement for the sale, lease or other
\ndisposition of all or substantially all of the assets of the Company (C) there
\nis a sale by shareholders of the Company, in a single transaction or a series of
\nrelated transactions, of more than fifty percent (50%) of the outstanding voting
\nstock of the Company or (D) the Company effects a merger with or into another
\nentity where it is not the survivor (other than a merger solely for the purpose
\nof changing the state of incorporation or effecting a recapitalization of the
\nCompany), or a consolidation or other reorganization, and shareholders of the
\nCompany prior to such event own less than 50% of the outstanding voting
\nsecurities of the survivor. If Consultant closes transactions bringing in
\n500,000 new Members no later than December 31, 1998, Consultant shall be
\nentitled to Incentive Shares for every increment of 100,000 new Members from
\ntransactions closed by Consultant up to and including 1,000,000.<\/p>\n
(iii) For purposes of Section 3(a)(ii), a “Member” is a person who
\nhas subscribed to the Company’s website by selecting a subscriber name,
\nproviding an active e-mail address and a zip code or country and given
\npermission for the Company to include such person in its e-mail distributions,
\nand Consultant shall be deemed to have “closed” a transaction bringing in new
\nMembers if (A) the transaction identified by Consultant is closed and (B)
\nConsultant has made himself reasonably available to assist the Company, if so
\nrequested, to close such transaction.<\/p>\n
(iv) The number of shares issuable to Consultant pursuant to
\nSection 3(a)(ii) shall be subject to adjustment pursuant to the formula set
\nforth in Section 2.4 of that Agreement and Plan of Merger of even date herewith
\nbetween Consultant, the Company and others.<\/p>\n
(b) Benefits. Other than the compensation specified in the above
\n ——–
\nSection 3(a), Consultant shall not be entitled to any direct or indirect
\ncompensation or fringe benefits for<\/p>\n
34<\/p>\n
services performed hereunder, nor shall Consultant be eligible to participate in
\nany employee benefit plans provided by the Company or any Affiliated Company to
\nits employees.<\/p>\n
(c) Expenses. The Company shall reimburse Consultant for reasonable
\n ——–
\ntravel and other business expenses (i) incurred by Consultant in the performance
\nof duties hereunder, and (ii) approved by the Company in writing in advance. The
\nConsultant shall bill the Company for expenses as incurred incident to services
\nperformed, referencing all travel and expenses incurred with appropriate
\npurchase orders and receipts. Such reimbursement shall be within 30 days of
\nConsultant’s submitting adequate documentation.<\/p>\n
4. Termination of Consulting Relationship.
\n ————————————– <\/p>\n
(a) By Death. The Consulting Period shall terminate automatically upon
\n ——–
\nthe death of Consultant, and the Company shall pay to Consultant’s beneficiaries
\nor estate, as appropriate, the compensation to which Consultant is entitled
\npursuant to Section 3(a). Thereafter, the Company’s obligations hereunder shall
\nterminate.<\/p>\n
(b) By Disability. If, in the reasonable opinion of the President of
\n ————-
\nthe Company, Consultant shall be prevented from properly performing hereunder by
\nreason of any physical or mental incapacity for a period of more than thirty
\n(30) days in the aggregate or twenty (20) consecutive days in any three-month
\nperiod, then, to the extent permitted by law, the Consulting Period shall
\nterminate and the compensation to which Consultant is entitled pursuant to
\nSection 3(a) shall be paid up through the day on which the Consulting Period is
\nterminated, and thereafter the Company’s obligations hereunder shall terminate.<\/p>\n
(c) By Company For Cause. The Company may terminate, without liability,
\n ——————–
\nthe Consulting Period for Cause (as defined below) at any time and without
\nnotice and the Company shall have no further obligation to Consultant hereunder,
\nprovided the Company pays Consultant the compensation described in Section 3(a)
\nfor any periods prior to such termination. Compensation for any partial month in
\nwhich Consultant provides services prior to such termination shall be calculated
\npro rata to the number of days in such month. Termination shall be for Cause if
\ndue to: (1) any act of fraud, dishonesty, or gross negligence (including any
\nfailure to act) made, engaged in, or conducted by Consultant in the course of
\nproviding the services contemplated under this Agreement; (2) willful and wanton
\nmisrepresentation to the Company which is materially injurious to the Company;
\nor (3) willful failure without reasonable justification to comply with a
\nmaterial, reasonable and lawful instruction by the Company<\/p>\n
(d) At Will. At any time, either the Company or Consultant may
\n ——-
\nterminate, without liability, the Consulting Period for any reason, with or
\nwithout cause, by giving thirty (30) days’ advance written notice to the other
\nparty. If Consultant terminates his consulting relationship with the Company
\npursuant to this Section 4(d), the Company shall have the option, in its
\ncomplete discretion, to terminate Consultant immediately without the running of
\nthe notice period. Following a termination by Consultant, the Company shall pay
\nConsultant the compensation to which he is entitled pursuant to Section 3(a) for
\nservices rendered through the date of termination, and thereafter all
\nobligations of the Company shall terminate. Consultant hereby agrees that the
\nCompany may dismiss him or her under this Section 4(d) without regard (i) to any
\ngeneral or specific policies (whether written or oral) of the Company relating
\nto <\/p>\n
35<\/p>\n
the employment, retention or termination of its employees or consultants, or
\n(ii) to any oral statements made to Consultant pertaining to Consultant’s
\nrelationship with the Company; provided, however, that if the Company terminates
\n ——–
\nConsultant without cause prior to the Term Date (except if Consultant has first
\nnotified the Company of his intention to terminate), the Company shall continue
\npaying Consultant his monthly compensation through the Term Date and the
\nIncentive Shares shall vest and be issued to Consultant regardless of the number
\nof new Members.<\/p>\n
(e) By Consultant upon Company’s Default. Where Company breaches any
\n ————————————
\npayment obligation to Consultant under this Agreement and fails to cure the same
\nwithin fifteen (15) days after receiving written notice from Consultant,
\nConsultant may terminate this Agreement without liability or further obligation
\nto Company, and all compensation payable under Section 3(a) above shall
\nimmediately become due and payable to Consultant.<\/p>\n
5. Termination Obligations.
\n ———————– <\/p>\n
(a) Consultant hereby acknowledges and agrees that all personal
\nproperty, including, without limitation, all books, manuals, records, reports,
\nnotes, contracts, lists, blueprints, and other documents, or materials, or
\ncopies thereof, Proprietary Information (as defined below), and equipment
\nfurnished to or prepared by Consultant in the course of or directly related to
\nrendering of services to the Company, including, without limitation, records and
\nany other materials pertaining to Invention Ideas (as defined below), belong to
\nthe Company and shall be promptly returned to the Company upon termination of
\nthe Consulting Period. Following termination, the Consultant will not retain any
\nwritten or other tangible material containing any Proprietary Information.<\/p>\n
(b) The representations and warranties contained herein and Consultant’s
\nobligations under Sections 5, 6, and 7 shall survive termination of the
\nConsulting Period and the expiration of this Agreement and continue thereafter
\nfor a period of two (2) years, provided that the expiration of such period shall
\nin no way diminish the rights of the Company under the California Uniform Trade
\nSecrets Act.<\/p>\n
6. Proprietary Information.
\n ———————– <\/p>\n
(a) Defined. “Proprietary Information” is all information and any idea
\n ——-
\nin whatever form, tangible or intangible, pertaining in any manner to the
\nbusiness of the Company or any Affiliated Company, or to its clients,
\nconsultants, or business associates, unless: (i) the information is or becomes
\npublicly known through lawful means; (ii) the information was rightfully in
\nConsultant’s possession or part of Consultant’s general knowledge prior to the
\nConsulting Period; (iii) the information is disclosed to Consultant without
\nconfidential or proprietary restrictions by a third party who rightfully
\npossesses the information (without confidential or proprietary restriction) and
\ndid not learn of it, directly or indirectly, from the Company; or (iv) the
\ninformation is independently developed by Consultant without use of information
\nobtained by Consultant from the Company. Notwithstanding the foregoing, Company
\nrecognizes that Consultant has a significant body of knowledge, contacts and
\ninformation which it has acquired prior to the Consulting Period, and that
\nConsultant will continue to acquire the same during and after the Consulting
\nPeriod. Such information shall not <\/p>\n
36<\/p>\n
be deemed Proprietary Information except to the extent that it pertains directly
\nto the business of the Company or any Affiliated Company, or its clients,
\nconsultants, or business associates.<\/p>\n
(b) General Restrictions on Use. Consultant agrees to hold all
\n —————————
\nProprietary Information in strict confidence and trust for the sole benefit of
\nthe Company and not to, directly or indirectly, disclose, use, copy, publish,
\nsummarize, or remove from the Company’s premises any Proprietary Information (or
\nremove from the premises any other property of the Company), except (i) during
\nthe Consulting Period to the extent necessary to carry out Consultant’s
\nresponsibilities under this Agreement, and (ii) after termination of the
\nConsulting Period as specifically authorized in writing by the Company’s Board
\nof Directors.<\/p>\n
(c) Interference with Business; Competitive Activities. Consultant
\n ————————–
\nacknowledges that the pursuit of the activities forbidden by this Section 6(c)
\nwould necessarily involve the use or disclosure of Proprietary Information in
\nbreach of Section 6(b), but that proof of such breach would be extremely
\ndifficult. To forestall such disclosure, use, and breach, and in consideration
\nof retaining Consultant under this Agreement, Consultant agrees that during the
\nConsulting Period and for a period of one (1) year after termination of the
\nConsulting Period, Consultant shall not, for himself or any third party,
\ndirectly or indirectly (i) divert or attempt to divert from the Company (or any
\nAffiliated Company) any business of any kind in which it is engaged, including,
\nwithout limitation, the solicitation of or interference with any of its
\nsuppliers or customers; or (ii) employ, solicit for employment, or recommend for
\nemployment any person employed by the Company, or by any Affiliated Company.<\/p>\n
(d) Remedies. Nothing in this Section 6 is intended to limit any remedy
\n ——–
\nof the Company under the California Uniform Trade Secrets Act (California Civil
\nCode Section 3426), or otherwise available under law.<\/p>\n
7. Consultant’s Inventions and Ideas.
\n ——————————— <\/p>\n
(a) Defined. The term “Invention Ideas” means any and all processes,
\n ——-
\ntrademarks, service marks, inventions, technology, computer programs, original
\nworks of authorship, designs, formulas, discoveries, patents, copyrights, and
\nall improvements, rights, and claims related to the foregoing that are
\ndeveloped, or reduced to practice by the Consultant alone or with others in the
\ncourse of directly providing consulting services to the Company.<\/p>\n
(b) Disclosure. Consultant agrees to maintain adequate and current
\n ———-
\nwritten records on the development of all Invention Ideas and to disclose
\npromptly to the Company all Invention Ideas and relevant records, which records
\nwill remain the sole property of the Company.<\/p>\n
(c) Assignment. Consultant agrees to assign to the Company, without
\n ———-
\nfurther consideration, his entire right, title, and interest (throughout the
\nUnited States and in all foreign countries), free and clear of all liens and
\nencumbrances, in and to each Invention Idea, which shall be the sole property of
\nthe Company, whether or not patentable. In the event any Invention Idea shall be
\ndeemed by the Company to be patentable or otherwise registrable, Consultant
\nshall assist the Company (at the Company’s expense) in obtaining letters patent
\nor other applicable registrations thereon and shall execute all documents and do
\nall other things (including testifying<\/p>\n
37<\/p>\n
at the Company’s expense) necessary or proper to obtain letters patent or other
\napplicable registrations thereon and to vest the Company, or any Affiliated
\nCompany specified by the Company, with full title thereto. Should the Company be
\nunable to secure Consultant’s signature on any document necessary to apply for,
\nprosecute, obtain, or enforce any patent, copyright, or other right or
\nprotection relating to any Invention Idea, whether due to Consultant’s mental or
\nphysical incapacity or any other cause, Consultant hereby irrevocably designates
\nand appoints Company and each of its duly authorized officers and agents as
\nConsultant’s agent and attorney in fact, to act for and in Consultant’s behalf
\nand stead and to execute and file any such document, and to do all other
\nlawfully permitted acts to further the prosecution, issuance, and enforcement of
\npatents, copyrights, or other rights or protections with the same force and
\neffect as if executed and delivered by Consultant.<\/p>\n
(d) Exclusions. Consultant acknowledges that there are no ideas,
\n ———-
\nprocesses, trademarks, service marks, technology, computer programs, original
\nworks of authorship, designs, formulas, inventions, discoveries, patents,
\ncopyrights, or improvements to the foregoing that he desires to exclude from the
\noperation of this Agreement. To the best of Consultant’s knowledge, there is no
\nexisting contract in conflict with this Agreement or any other contract to
\nassign ideas, processes, trademarks, service marks, inventions, technology,
\ncomputer programs, original works of authorship, designs, formulas, discoveries,
\npatents, or copyrights that is now in existence between Consultant and any other
\nperson or entity. Notwithstanding the foregoing, Company recognizes that
\nConsultant has a significant body of knowledge, contacts and information which
\nit has acquired prior to the Consulting Period, and that Consultant will
\ncontinue to acquire the same during and after the Consulting Period. Such
\ninformation shall not be deemed an Invention Idea.<\/p>\n
(e) Post-Termination Period. Because of the difficulty of establishing
\n ———————–
\nwhen any process, invention, etc., is first conceived or developed by
\nConsultant, or whether it results from access to Proprietary Information or the
\nCompany’s equipment, facilities, and data, Consultant agrees that any process,
\ntrademark, service mark, technology, computer program, original work of
\nauthorship, design, formula, invention, discovery, patent, copyright, or any
\nimprovement, rights, or claims that are directly related to the Company’s
\noperations and prospects, and to the extent such knowledge and information is
\nProprietary Information, shall be presumed to be an Invention Idea if it is
\nconceived, developed, used, sold, exploited, or reduced to practice by
\nConsultant or with the aid of Consultant within six (6) months after termination
\nof the Consulting Period. Consultant can rebut the above presumption if he
\nproves that the invention, idea, process, etc., (i) was first conceived or
\ndeveloped after termination of the Consulting Period, (ii) was conceived or
\ndeveloped entirely on Consultant’s own time without using the Company’s
\nequipment, supplies, facilities, or Proprietary Information, and (iii) did not
\nresult from any work performed by Consultant for the Company.<\/p>\n
8. Independent Contractor Relationship.
\n ———————————– <\/p>\n
(a) Nature of Relationship. In performing services to the Company
\n ———————-
\npursuant to this Agreement, Consultant’s relationship with the Company will be
\nthat of an independent contractor and nothing in this Agreement should be
\nconstrued to create a partnership, joint venture, or employer-employee
\nrelationship. Consultant acknowledges and agrees that neither Consultant nor any
\nperson associated with Consultant shall be entitled to receive or otherwise<\/p>\n
38<\/p>\n
participate in any employee benefits of any nature which the Company provides or
\nmakes available to any of its employees.<\/p>\n
(b) Taxes and Records. Consultant agrees that it will be solely
\n —————–
\nresponsible for, and will file and pay on a timely basis, all withholding
\nrequired by federal, state or local law with respect to Consultant’s performance
\nof the services.<\/p>\n
9. No Conflict of Interest.
\n ———————– <\/p>\n
Consultant agrees during the term of this Agreement not to accept work
\nor enter into a contract or accept an obligation, inconsistent or incompatible
\nwith Consultant’s obligations under this Agreement or the scope of services
\nrendered for Company. The Company expressly agrees that during the Consulting
\nPeriod Consultant may continue to maintain his law practice and participate in
\nother non-competing business ventures. Consultant warrants that to the best of
\nConsultant’s knowledge, there is no other contract or duty now in existence
\ninconsistent with this Agreement. Consultant further agrees not to disclose to
\nthe Company, or bring onto the Company’s premises, or induce the Company to use
\nany confidential information that belongs to anyone other than the Company or
\nConsultant. Consultant agrees to indemnify the Company from any and all loss or
\nliability incurred by reason of a breach alleged by a third party of
\nConsultant’s obligations under any confidentiality or services agreement with
\nsuch third party. Consultant’s liability under this Section 9 shall not exceed
\nthe total consideration payable to Consultant hereunder.<\/p>\n
10. Assignment; Successors and Assigns.
\n ———————————- <\/p>\n
Consultant shall not assign, sell, transfer, delegate or otherwise
\ndispose of, whether voluntarily or involuntarily, or by operation of law, any
\nrights or obligations under this Agreement. Any purported assignment, transfer,
\nor delegation shall be null and void. Nothing in this Agreement shall prevent
\nthe consolidation of the Company with, or its merger into, any other
\ncorporation, or the sale by the Company of all or substantially all of its
\nproperties or assets, or the assignment by the Company of this Agreement and the
\nperformance of its obligations hereunder to any successor in interest or any
\nAffiliated Company. Subject to the foregoing, this Agreement shall be binding
\nupon and shall inure to the benefit of the parties and their respective heirs,
\nlegal representatives, successors, and permitted assigns, and shall not benefit
\nany person or entity other than those enumerated above.<\/p>\n
11. Notices.
\n ——- <\/p>\n
All notices or other communications required or permitted hereunder
\nshall be made in writing and shall be deemed to have been duly given if
\ndelivered by hand or mailed, postage prepaid, by certified or registered mail,
\nreturn receipt requested, and addressed to the Company at:<\/p>\n
XOOM, INC.
\n 433 California Street
\n San Francisco, CA 94104
\n Attention: Laurent Massa, President
\n Fax (415) 445-2526<\/p>\n
39<\/p>\n
and to the Consultant at:<\/p>\n
Robert Kohler
\n 655 Redwood Highway
\n Suite 133
\n Mill Valley, CA 94941
\n Fax (415) 383-6700<\/p>\n
Notice of change of address shall be effective only when done in accordance with
\nthis section.<\/p>\n
12. Entire Agreement.
\n —————- <\/p>\n
The terms of this Agreement are intended by the parties to be the full
\nand final expression of their agreement with respect to the retention of
\nConsultant by the Company and may not be contradicted by evidence of any prior
\nor contemporaneous agreement. The parties further intend that this Agreement
\nshall constitute the complete and exclusive statement of its terms and that no
\nextrinsic evidence whatsoever may be introduced in any judicial, administrative,
\nor other legal proceeding involving this Agreement. This Agreement fully
\nsupersedes any prior oral or written consulting or other agreements between the
\nConsultant and the Company.<\/p>\n
13. Amendments.
\n ———- <\/p>\n
This Agreement may not be modified or amended, except by an instrument
\nin writing, signed by the Consultant and by a duly authorized representative of
\nthe Company.<\/p>\n
14. Severability; Enforcement.
\n ————————- <\/p>\n
If any provision of this Agreement shall be held to be invalid,
\nunenforceable, or void, the remainder of this Agreement shall remain in full
\nforce and effect. It is the intention of the parties that the covenants
\ncontained in Section 6 and 7 shall be enforced to the greatest extent (but to no
\ngreater extent) in time, area, and degree of participation as is permitted by
\nthe law of that jurisdiction whose law is found to be applicable to any acts
\nallegedly in breach of these covenants.<\/p>\n
15. Governing Law.
\n ————- <\/p>\n
This Agreement shall be governed by and construed in accordance with
\nthe laws of the State of California, without regard to conflicts of law
\nprinciples.<\/p>\n
16. Consultant Acknowledgment.
\n ————————- <\/p>\n
Consultant acknowledges (i) that he has consulted with or has had the
\nopportunity to consult with independent counsel of his own choice concerning
\nthis Agreement and has been advised to do so by the Company, and (ii) that he
\nhas read and understands the Agreement, is fully aware of its legal effect, and
\nhas entered into it freely based on his own judgment and not in <\/p>\n
40<\/p>\n
reliance upon any representation or promises made by the Company other than
\nthose contained in writing herein.<\/p>\n
17. Remedies.
\n ——– <\/p>\n
(a) Injunctive Relief. The parties agree that in the event of any
\n —————–
\nbreach or threatened breach of any of the covenants in Sections 6 or 7, the
\ndamage or imminent damage to the value and the goodwill of the Company’s
\nbusiness will be irreparable and extremely difficult to estimate, making any
\nremedy at law or in damages inadequate. Accordingly, the parties agree that the
\nCompany shall be entitled to injunctive relief without bond against Consultant
\nin the event of any breach or threatened breach of any such provisions by
\nConsultant, in addition to any other relief (including damages) available to the
\nCompany under this Agreement or under law.<\/p>\n
(b) Enforcement. In the event of any legal action required to enforce
\n ———–
\nor defend this Agreement, the prevailing party shall be entitled to an award of
\nattorneys’ fees and legal costs, in addition to other relief.<\/p>\n
The parties have duly executed this Agreement as of the date first written
\nabove.<\/p>\n
XOOM, INC. CONSULTANT<\/p>\n
By:\/s\/ LAURENT MASSA \/s\/ ROBERT KOHLER
\n —————– —————–
\n Laurent Massa, President Robert Kohler<\/p>\n
41<\/p>\n
EXHIBIT A
\n ———<\/p>\n
Detailed Description of Duties
\n ——————————<\/p>\n
Consultant shall:<\/p>\n
1. devote efforts to identifying and closing transactions that will increase
\n the Company’s subscriber base and seek to develop other aspects of the
\n business of the Company.<\/p>\n
2. work a minimum of one (1) full business day a week from the Company’s San
\n Francisco office except in instances where Consultant is performing duties
\n on behalf of the Company that require him to be offsite (the number of days
\n worked by Consultant at the Company’s offices is subject to increase as may
\n be mutually agreed between Consultant and the Company.<\/p>\n
3. be reasonably available for meetings and travel on behalf of the Company at
\n times that are reasonably convenient for Consultant and the Company.<\/p>\n
4. continue to utilize Consultant’s diverse network of contacts and personal
\n and business relationships to attract unique opportunities to the Company.<\/p>\n
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