\n9.2 Asset Purchase Agreement………………………………. 20
\n9.3 Release Agreement…………………………………….. 20
\n9.4 License Agreement…………………………………….. 20
\n9.5 Software Agreement Amendment…………………………… 20<\/p>\n ARTICLE X. CLOSING CONDITIONS OF THE SHAREHOLDERS AND MERGERCO…. 20<\/p>\n
10.1 Employment Agreement………………………………….. 20
\n10.2 Voting Agreement……………………………………… 21
\n10.3 Agreement regarding use of Webpage.com Domain Name……….. 21
\n10.4 Representations and Warranties…………………………. 21<\/p>\n
ARTICLE XI. FURTHER ASSURANCES………………………………… 21<\/p>\n
ARTICLE XII. INDEMNIFICATION………………………………….. 21<\/p>\n
12.1 Indemnification by the Shareholders…………………….. 21
\n12.2 Indemnification by the Company and XOOM…………………. 22
\n12.3 Notification of Claims………………………………… 22
\n12.4 Resolution of Claims………………………………….. 22
\n12.5 Arbitration………………………………………….. 23
\n12.6 Indemnification Threshold……………………………… 23
\n12.7 Limitation of Liability; Exclusive Remedy……………….. 23<\/p>\n
ARTICLE XIII. RESTRICTIONS ON XOOM COMMON SHARES………………… 24<\/p>\n
13.1 Right of First Refusal\/Transfer Restrictions…………….. 24
\n13.2 Lock-Up Agreement…………………………………….. 25<\/p>\n
ARTICLE XIV. MISCELLANEOUS……………………………………. 26<\/p>\n
14.1 Expenses…………………………………………….. 26
\n14.2 Entire Agreement……………………………………… 26
\n14.3 Press Releases and Public Announcements…………………. 26
\n14.4 Counterparts…………………………………………. 26
\n14.5 Descriptive Headings………………………………….. 26
\n14.6 Notices……………………………………………… 26
\n14.7 Choice of Law………………………………………… 27
\n14.8 Binding Effect; Benefits………………………………. 27
\n14.9 Assignability………………………………………… 27
\n14.10 Waiver and Amendment………………………………….. 27
\n14.11 Attorneys’ Fees………………………………………. 27<\/p>\n
<\/c><\/c><\/s><\/table>\n
iii<\/p>\n
AGREEMENT AND PLAN OF MERGER
\n —————————-<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (the “Agreement”) dated as of March 10,
\n1998 is entered into by and among XOOM Chat Inc., a California corporation (the
\n“Company”), XOOM, Inc., a Delaware corporation (“XOOM”), Paralogic Corporation,
\na California corporation (“MergerCo”), and the shareholders of MergerCo whose
\nnames are listed on Exhibit A hereto (each such person hereinafter referred to
\n ———
\nas a “Shareholder,” and collectively, the “Shareholders”).<\/p>\n
RECITALS<\/p>\n
A. The respective Boards of Directors of each of the Company, XOOM and
\nMergerCo believe it is in the best interests of their respective companies and
\nshareholders that the Company and MergerCo combine into a single company through
\nthe statutory merger of MergerCo with and into the Company with the Company as
\nthe surviving corporation (the “Merger”) and, in furtherance thereof, have
\napproved the Merger.<\/p>\n
B. Pursuant to the Merger, among other things, the outstanding shares of
\ncommon stock of MergerCo shall be exchanged for the Merger Consideration
\nconsisting of common shares of XOOM and the right to receive certain cash
\ndistributions (as more fully defined below).<\/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 MergerCo, the Company and XOOM
\nwill each be a “party to a reorganization,” within the meaning of Section 368(b)
\nof the Code, with respect to the Merger.<\/p>\n
AGREEMENT<\/p>\n
In consideration of the agreements, provisions and covenants set forth
\nbelow, MergerCo and the Shareholders, 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), MergerCo shall be merged with and into the Company and
\nthe Company shall be the surviving corporation (the “Surviving Corporation”) in
\nsuch Merger and the separate existence of MergerCo shall thereupon cease. The
\nMerger shall have the effects set forth in the General Corporation Law of the
\nState of California. Without limiting the generality of the foregoing, on the
\nEffective Date, all of the property, rights, privileges, powers and franchises
\nof the Company and MergerCo 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 as soon as
\npracticable after the Closing, or at such other time as the parties may agree
\nand may provide in the Agreement of Merger and such other documents (the
\n“Effective Date”).<\/p>\n
2<\/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 10:00 a.m. local time, at the offices of Morrison
\n& Foerster LLP, 425 Market Street, San Francisco, California 94105-2482 on March
\n13, 1998, or at such other time, date and place as the parties may mutually
\nagree (the “Closing Date”).<\/p>\n
ARTICLE II.<\/p>\n
CONVERSION OF SHARES<\/p>\n
2.1 EFFECT ON COMMON STOCK.<\/p>\n
By virtue of the Merger and without any action on the part of MergerCo, the
\nCompany or the Shareholders, on the Effective Date, each share of MergerCo’s
\ncommon stock issued and outstanding immediately prior to the Effective Date will
\nbe canceled and extinguished and be converted automatically into the right to
\nreceive a portion of the Merger Consideration (as defined below).<\/p>\n
2.2 TAX WITHHOLDING.<\/p>\n
The right of any 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 Shareholders, it shall provide
\neach such Shareholder with documentary evidence of any amounts so withheld and
\ninformation as to the basis therefor.<\/p>\n
2.3 CONVERSION OF SHARES.<\/p>\n
On the Effective Date, by virtue of the Merger and without any action on
\nthe part of the holders thereof, each common share of MergerCo that is issued
\nand outstanding immediately prior to the Effective Date shall be converted into
\nthe right to receive such number of common shares of XOOM as set forth in
\nSchedule 2.3 to be provided at the Closing, such that the Shareholders shall
\nreceive in the aggregate 9.85% of the sum of, as of the Closing, (i) all of the
\nissued and outstanding shares of capital stock of XOOM, and (ii) all of the
\nvested and unexercised options to purchase shares of XOOM common stock.<\/p>\n
3<\/p>\n
2.4 THE MERGER CONSIDERATION.<\/p>\n
The Shareholders shall be entitled to receive the following consideration
\nfor their shares of MergerCo (in the aggregate, the “Merger Consideration”):<\/p>\n
(a) On the Effective Date, provided the Shareholders have delivered to
\nXOOM all of the certificates evidencing their shares of MergerCo, together with
\nduly executed stock powers executed in blank, each Shareholder shall receive a
\ncertificate evidencing the number of common shares, rounded down to the nearest
\nwhole number, of XOOM to which each Shareholder is entitled pursuant to Section
\n2.3; and<\/p>\n
(b) The Shareholders shall receive in the aggregate an amount, to be
\ndistributed pro rata to the number of shares issued to such Shareholder in
\nthe Merger, pursuant to Section 2.3, equal to:<\/p>\n
(i) at the Closing, $30,000;<\/p>\n
(ii) an amount payable monthly as set forth herein equal to 25% of
\nthe sum of (A) XOOM’s advertising (advertising sales less agency discounts and
\nthird-party sales commissions) revenues generated from the Paralogic Parachat
\nPersonal Network, and (B) the fair market value less applicable taxes of in-kind
\ncompensation in connection with the sale or other provision of Paralogic
\nParachat Personal Network advertisements other than such revenues from
\n ———-
\n(1) house advertisements for XOOM products or services, (2) non-cash advertising
\nexchanges or (3) an aggregate dollar amount received by XOOM or the Company from
\nthird party sellers of on-line advertisements in connection with advertising
\nexchanges, net any amounts paid by XOOM or the Company to such sellers for on-
\nline advertisements (collectively, “Net PPN Advertising Revenues”) only to the
\nextent invoiced and actually collected (or with respect to in-kind services
\nother than described in (b)(ii)(1)(2) or (3), actually received) during the
\neighteen consecutive full months after the Closing; provided, however, that the
\n ——–
\namount of the monthly payment pursuant to this Section 2.3(b)(ii) shall
\nnot be less than $30,000 (including, for purposes of the first such payment, the
\n$30,000 payment pursuant to Section 2.4(b)(i)), regardless of XOOM’s Net
\nAdvertising Revenues in such months. Payments pursuant to this Section
\n2.4(b)(ii) shall commence on or before the fifteenth business day of the second
\nfull month after the Closing Date and shall be made on or before the fifteenth
\nbusiness day of each consecutive month thereafter, with a final payment on or
\nbefore the fifteenth day of the nineteenth full month after the Closing Date;
\nprovided, however, that the aggregate of payments pursuant to Sections
\n——–
\n2.4(b)(i) and (ii) shall not, in any event, exceed $1.4 million.<\/p>\n
2.5 RECORDS REGARDING NET PPN ADVERTISING REVENUES.<\/p>\n
XOOM shall maintain, until two (2) years after expiration of this
\nAgreement, all such books, records and accounts as necessary to permit
\ncomputation of and accounting for amounts payable under this Section 2.4 for the
\nthen-current year and the preceding two (2) years. XOOM grants to Shareholders
\nthe right to audit, have audited, examine, and have examined such books, records
\nand accounts during XOOM’s normal business hours no more than once per year upon
\nno less than thirty (30) days written notice to verify the accuracy of the
\nreports and payments made to Shareholders hereunder. In the event it is
\ndetermined that XOOM underpaid amounts due under this Agreement by more than ten
\npercent (10%), XOOM shall reimburse Shareholders for all costs incurred in
\nconnection with the audit.
\n 4<\/p>\n
ARTICLE III.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF MERGERCO<\/p>\n
Except as set forth in the Disclosure Schedule attached hereto provided by
\nMergerCo (the “MergerCo Disclosure Schedule”), the parts of which are numbered
\nto correspond to the section numbers of this Agreement, MergerCo hereby
\nrepresents and warrants to the Company and XOOM as of the Date hereof and as of
\nthe Closing Date, as follows:<\/p>\n
3.1 REQUISITE CONSENTS; NONVIOLATION.<\/p>\n
The execution and delivery of this Agreement by MergerCo and the
\nShareholders and the consummation of the transactions contemplated by this
\nAgreement will not (a) 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 MergerCo, or (c) constitute a default under, violate
\nor conflict with any material contract, note, lease or mortgage to which
\nMergerCo or any Shareholder is a party or by which MergerCo or any Shareholder
\nis bound or to which MergerCo or any of its properties or any Shareholder or any
\nof his or her properties is subject.<\/p>\n
3.2 DUE ORGANIZATION OF MERGERCO; AUTHORIZATIONS.<\/p>\n
MergerCo (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 in good standing under the laws of every
\njurisdiction where it is required to be so qualified, except where the failure
\nto be so qualified will not materially adversely affect its business, financial
\ncondition or results of operations, and (c) has all requisite corporate power
\nand authority to own or lease and to operate its properties and carry on its
\nbusiness.<\/p>\n
3.3 CAPITALIZATION.<\/p>\n
The authorized capital stock of MergerCo consists of 1,000,000 shares of
\ncommon stock, of which 5,250 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, MergerCo does not have outstanding any other voting or equity
\nsecurities or interests. Except as set forth in the MergerCo Disclosure
\nSchedule, MergerCo has no outstanding obligations, understandings or commitments
\nregarding the issuance of any additional shares of its stock, voting or equity
\nsecurities or interests or other securities, or any options, rights, warrants or
\nsecurities exercisable for or convertible into such shares, securities or
\ninterests. There are no preemptive rights in respect of the common shares of
\nMergerCo.<\/p>\n
3.4 AUTHORITY; BINDING NATURE OF AGREEMENTS.<\/p>\n
MergerCo has the power and authority to enter into and to perform its
\nobligations under this Agreement, and the execution, delivery and performance by
\nMergerCo of this Agreement has been duly authorized by all necessary action on
\nthe part of MergerCo and its shareholders, board of directors and officers.
\nThis Agreement constitutes the legal, valid and binding obligation of MergerCo
\nenforceable against MergerCo in accordance with its terms.<\/p>\n
5<\/p>\n
3.5 SUBSIDIARIES ETC.<\/p>\n
MergerCo 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) MergerCo has delivered to the Company the following financial
\nstatements and notes (collectively, the “Financial Statements”), which are
\nattached to Part 3.6(a) of the MergerCo Disclosure Schedule: <\/p>\n
(i) the unaudited balance sheets of MergerCo as of December 31, 1996
\nand December 31, 1997, and the related unaudited statements of operations,
\nchanges in shareholder’s equity and cash flows of MergerCo for the fiscal years
\nended December 31, 1996 and December 31, 1997 together with the notes thereto;
\nand<\/p>\n
(ii) the unaudited balance sheet of MergerCo as of January 31, 1998
\n(the “Unaudited Interim Balance Sheet”), and the related unaudited statements of
\noperations, changes in shareholder’s equity and cash flows of MergerCo, together
\nwith 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 3.6(a) are in accordance with the
\nbooks and records of MergerCo and present fairly the financial position of
\nMergerCo as of the respective dates thereof and the results of operations,
\nchanges in shareholders’ equity and cash flows of MergerCo for the periods
\ncovered thereby.<\/p>\n
(c) Except as set forth in the MergerCo Disclosure Schedule, MergerCo
\nhas no liabilities except those reflected or reserved against in the Unaudited
\nInterim Balance Sheet and current liabilities incurred by MergerCo in the
\nordinary course of business since the date of the Unaudited Interim Balance
\nSheet<\/p>\n
3.7 NO MATERIAL CHANGES.<\/p>\n
Except as otherwise set forth in the MergerCo Disclosure Schedule, since
\nJanuary 31, 1998 there has not been (a) any damage, destruction or loss (whether
\nor not covered by insurance) materially and adversely affecting the business,
\nfinancial condition or results of operations of MergerCo; (b) any labor dispute
\nmaterially and adversely affecting the business, financial condition or results
\nof operations of MergerCo; (c) any disposition of any capital asset of MergerCo
\nhaving a net book value in excess of $15,000; (d) any discharge or satisfaction
\nof any obligation or liability of MergerCo other than in the ordinary course of
\nbusiness; or (e) any material adverse change in the business, financial
\ncondition or results of operations of MergerCo.<\/p>\n
3.8 UNDISCLOSED LIABILITIES.<\/p>\n
MergerCo has no liabilities or obligations (whether absolute, contingent or
\notherwise) which are material to MergerCo, except for (a) those reflected,
\nreserved against or otherwise disclosed in the Financial Statements or the notes
\nthereto and not heretofore paid or discharged, (b) those disclosed in the
\nDisclosure Schedule, or (c) those incurred in, or as a result of, the ordinary
\ncourse of business of MergerCo since the date of the Unaudited Interim Balance
\nSheet.
\n 6<\/p>\n
3.9 GOVERNMENTAL AUTHORIZATIONS; COMPLIANCE WITH LAWS.<\/p>\n
MergerCo has all material governmental licenses, permits, approvals and
\nother governmental authorizations necessary to permit the operation of the
\nbusiness of MergerCo, as presently conducted. MergerCo is in compliance with
\nall applicable laws, regulations, orders, judgments and decrees, except where
\nthe failure to be in such compliance would not have a material adverse effect on
\nthe business, financial condition or results of operations of MergerCo.<\/p>\n
3.10 LITIGATION.<\/p>\n
Except as set forth in the MergerCo Disclosure Schedule, there is no
\npending or threatened action, suit, arbitration proceeding or investigation in
\nany court or before any governmental commission or agency against MergerCo which
\nwould have a material adverse effect upon the business, financial condition or
\nresults of operations of MergerCo. There is no order, judgment or decree of any
\ncourt or governmental authority or agency which specifically applies to MergerCo
\nwhich would have a material adverse effect on the business, financial condition
\nor results of operations of MergerCo.<\/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. The term “Qualified Plan” means a
\npension, profit sharing or stock bonus plan described in Section 401 of the
\nCode. MergerCo, which, for purposes hereof shall include any of its
\nsubsidiaries or any organization which, together with MergerCo and\/or any such
\nsubsidiary, would be treated as a “single employer” within the meaning of
\nSection 414(b) or (c) of the Code, maintains or contributes to (or has any
\nobligation to contribute to) no Employee Benefit Plan other than those listed in
\nthe MergerCo Disclosure Schedule (the “Listed Plans”).<\/p>\n
(a) Each Listed Plan is, and at all times while maintained by MergerCo has
\nbeen, operated in compliance, in all material respects, with all applicable law,
\nincluding provisions of ERISA (including the regulations thereunder), which are
\napplicable to Listed Plan;<\/p>\n
(b) Each Listed Plan which is a Qualified Plan complies in form and is,
\nand at all times while maintained by MergerCo has been, operated in compliance
\nin all material respects with the provisions of the Internal Revenue Code
\n(including the regulations thereunder) which are applicable to such Listed Plan;<\/p>\n
(c) No Listed Plan which is subject to the minimum funding standards of
\nSection 412 of the Code or Section 302 of ERISA has an “accumulated funding
\ndeficiency” as described in such sections, or has obtained a waiver of any
\nminimum funding standard or an extension of any amortization period under
\nSection 412 of the Code or Section 303 or 304 of ERISA;<\/p>\n
(d) MergerCo has received no communication from the United States
\nDepartment of Labor stating that any Listed Plan is in violation of ERISA or the
\nregulations thereunder, and neither MergerCo nor any other “disqualified person”
\nor “party in interest” (as defined in Section 4975(e)(2) of the Code and Section
\n3(14) of ERISA, respectively) has engaged in any transactions in connection with
\nany Listed Plan that could reasonably be expected to result in the imposition of
\na penalty pursuant to Section 502 of ERISA, damages pursuant to Section 409 of
\nERISA or a tax pursuant to Section 4975 of the Code;<\/p>\n
7<\/p>\n
(e) Each Listed Plan which is a Qualified Plan has received a favorable
\ndetermination letter from the Internal Revenue Service, and MergerCo has
\nreceived no communication from the Internal Revenue Service indicating that any
\nListed Plan which is intended to be a Qualified Plan is no longer a Qualified
\nPlan;<\/p>\n
(f) There is no litigation, claim or action pending or asserted by or
\nagainst any Listed Plan, or threatened with respect to any Listed Plan (other
\nthan routine claims for benefits payable in the ordinary course, and appeals of
\ndenied claims);<\/p>\n
(g) No Listed Plan is covered by Title IV of ERISA; and<\/p>\n
(h) No Listed Plan provides for post-employment or retiree welfare
\nbenefits, except (i) benefit coverage mandated by applicable law, including
\n(without limitation) coverage provided pursuant to Section 4980B of the Code, or
\n(ii) benefits (including life insurance policies), the full cost of which are
\nborne by current or former employees of MergerCo (or the employees’
\nbeneficiaries).<\/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 MergerCo and all material license agreements in which MergerCo is
\nthe licensee, at the date of this Agreement are listed in the MergerCo
\nDisclosure Schedule. Except to the extent, if any, set forth in the MergerCo
\nDisclosure Schedule, such patents, trademarks, service marks, trade names and
\nlicenses (collectively, the “Intellectual Property”) are, to the Company’s
\nKnowledge, valid and in full force and are adequate to permit MergerCo to
\nconduct its business as presently conducted, except to the extent that such
\nfailure to be valid and in full force would not have a material adverse effect
\non the business, financial condition or results of operations of MergerCo.
\nMergerCo has received no written notice of any event, inquiry or investigation
\nthreatening the validity of the Intellectual Property.<\/p>\n
3.13 REAL AND PERSONAL PROPERTY.<\/p>\n
The MergerCo Disclosure Schedule contains a list of all real and personal
\nproperty owned or leased by MergerCo as of the date hereof having, in the case
\nof leased property, an annual lease obligation in excess of $10,000 or, in the
\ncase of owned property, a book value in excess of $15,000. All such property is
\nowned in fee or held under valid leases. There is not under any of such leases
\nany existing material default on the part of MergerCo nor any facts that would,
\nwith the passage of time, constitute such a material default.<\/p>\n
3.14 INSURANCE.<\/p>\n
The MergerCo Disclosure Schedule lists all material insurance policies in
\nforce with respect to MergerCo, its employees and its directors.<\/p>\n
3.15 TAXES.<\/p>\n
(a) Definitions. For purposes of this Agreement, the following
\n ———–
\ndefinitions shall apply:<\/p>\n
(i) “Tax” or “Taxes” shall mean all taxes, however denominated,
\nincluding any interest, penalties or other additions to tax that may become
\npayable in respect thereof, imposed by any federal, territorial, state, local or
\nforeign government or any agency or political subdivision of any such
\ngovernment, which taxes shall include, without limiting the generality of the
\nforegoing, all income or profits taxes (including, but not limited to, federal
\nincome taxes and state income taxes), payroll and employee withholding taxes,<\/p>\n
8<\/p>\n
unemployment insurance, social security taxes, sales and use taxes, ad valorem
\ntaxes, excise taxes, franchise taxes, gross receipts taxes, business license
\ntaxes, occupation taxes, real and personal property taxes, stamp taxes,
\nenvironmental taxes, transfer taxes, workers’ compensation, Pension Benefit
\nGuaranty Corporation premiums and other governmental charges, and other
\nobligations of the same or of a similar nature to any of the foregoing, which
\nMergerCo is required to pay, withhold or collect.<\/p>\n
(ii) “Tax Returns” shall mean all reports, estimates, declarations of
\nestimated tax, information statements and returns relating to, or required to be
\nfiled in connection with, any Taxes, including information returns or reports
\nwith respect to backup withholding and other payments to third parties.<\/p>\n
(b) Tax Returns Filed and Taxes Paid. All Tax Returns required to be filed
\n ——————————–
\nby or on behalf of MergerCo have been duly filed on a timely basis and such Tax
\nReturns are true, complete and correct. MergerCo has set aside adequate reserves
\nfor the payment of all Taxes due for fiscal 1997. All Taxes shown to be payable
\non the Tax Returns or on subsequent assessments with respect thereto have been
\npaid in full on a timely basis, and no other Taxes are payable by MergerCo with
\nrespect to items or periods covered by such Returns (whether or not shown on or
\nreportable on such Tax Returns). MergerCo has withheld and paid over all Taxes
\nrequired to have been withheld and paid over, and complied with all information
\nreporting and backup withholding requirements, including maintenance of required
\nrecords with respect thereto, in connection with amounts paid or owing to any
\nemployee, creditor, independent contractor, or other third party. There are no
\nliens on any of the assets of MergerCo with respect to Taxes, other than liens
\nfor Taxes not yet due and payable or for Taxes that MergerCo is contesting in
\ngood faith through appropriate proceedings and for which appropriate reserves
\nhave been established.<\/p>\n
(c) Tax Returns Furnished. For all periods ending on and after December 31,
\n ———————
\nbeginning with the year in which MergerCo was formed, MergerCo has made
\navailable to the Company true and complete copies of (i) relevant portions of
\nincome tax audit reports, statements of deficiencies, closing or other
\nagreements received by MergerCo or on behalf of MergerCo relating to Taxes, and
\n(ii) all separate federal and state income or franchise tax returns for
\nMergerCo.<\/p>\n
(d) Tax Reserves. The amount of MergerCo’s liability for unpaid Taxes for
\n ————
\nall periods covered by the Financial Statements does not, in the aggregate,
\nexceed the amount of the current liability accruals for Taxes (excluding
\nreserves for deferred Taxes) as such accruals are reflected in the Financial
\nStatements, and the amount of MergerCo’s liability for unpaid Taxes for all
\nperiods ending on or before the Closing Date shall not, in the aggregate, exceed
\nsuch accruals.<\/p>\n
(e) Tax Deficiencies; Audits; Statutes of Limitations. Except as set forth
\n ————————————————-
\nin the MergerCo Disclosure Schedule, no deficiencies have been asserted with
\nrespect to Taxes of MergerCo. MergerCo is neither a party to any action or
\nproceeding for assessment or collection of Taxes, nor has such event been
\nasserted or threatened against MergerCo or any of its assets. No waiver or
\nextension of any statute of limitations is in effect with respect to Taxes or
\nTax Returns of MergerCo. Except as set forth in the MergerCo Disclosure
\nSchedule, the Tax Returns of MergerCo have never been audited by a government or
\ntaxing authority, nor is any such audit in process, pending or threatened.
\nMergerCo has disclosed on its federal income tax returns all positions taken
\ntherein that could give rise to a substantial understatement penalty within the
\nmeaning of Section 6662 of the Code.<\/p>\n
(f) No Consolidated Group. Except as disclosed in the MergerCo Disclosure
\n ———————
\nSchedule, MergerCo has not been included in any “consolidated,” “unitary”
\nor “combined group Tax Return provided for under the <\/p>\n
9<\/p>\n
law of the United States, any foreign jurisdiction or any state or locality with
\nrespect to Taxes for any taxable period for which the statute of limitations has
\nnot expired.<\/p>\n
(g) No Tax Sharing. There are no tax sharing, allocation, indemnification
\n ————–
\nor similar agreements or arrangements in effect as between MergerCo or any
\npredecessor or affiliate thereof and any other party (including Shareholders and
\nany predecessor or affiliate thereof) under which the Company or MergerCo could
\nbe liable for any Taxes of any party.<\/p>\n
(h) Tax Elections and Special Tax Status. MergerCo 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 MergerCo’s common stock pursuant to Section 1445 of the Code.
\nMergerCo is not a “consenting corporation” under Section 341(f) of the Code.
\nMergerCo has not entered into any compensatory agreements with respect to the
\nperformance of services which payment thereunder would result in a nondeductible
\nexpense to the group pursuant to Section 280G of the Code or an excise tax to
\nthe recipient of such payment pursuant to Section 4999 of the Code. MergerCo has
\nnot participated in an international boycott as defined in Code Section 999.
\nMergerCo has not agreed, nor is it required to make, any adjustment under
\nSection 481(a) of the Code by reason of a change in accounting method or
\notherwise. MergerCo has no permanent establishment in any foreign country, as
\ndefined in any applicable tax treaty or convention between the United States of
\nAmerica and such foreign country, and MergerCo is not a party to any joint
\nventure, partnership, or other agreement, contract, or arrangement (either in
\nwriting or verbally, formally or informally) which could be treated as a
\npartnership for federal income tax purposes. MergerCo is not an “S corporation,”
\nwithin the meaning of Section 1361(a) of the Code.<\/p>\n
(i) Section 6038A Compliance. MergerCo has filed all reports and has created
\n ————————
\nand\/or retained all records required under Section 6038A of the Code with
\nrespect to its ownership by and transactions with related parties. Each related
\nforeign person required to maintain records under Section 6038A with respect to
\ntransactions between MergerCo and the related foreign person has maintained such
\nrecords. All documents that are required to be created and\/or preserved by the
\nrelated foreign person with respect to transactions with MergerCo are either
\nmaintained in the United States, or MergerCo is exempt from the record
\nmaintenance requirements of Section 6038A with respect to such transactions
\nunder Section 1.6038A-1 of the Treasury Regulations. MergerCo is not a party to
\nany record maintenance agreement with the Internal Revenue Service with respect
\nto Section 6038A of the Code. Each related foreign person that has engaged in
\ntransactions with MergerCo has authorized MergerCo to act as its limited agent
\nsolely for purposes of Sections 7602, 7603, and 7604 of the Code with respect to
\nany request by the Internal Revenue Service to examine records or produce
\ntestimony related to any transaction with MergerCo, and each such authorization
\nremains in full force and effect.<\/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 ——————-
\ncontaminant, flammable explosives, radioactive materials and hazardous, toxic or
\ndangerous wastes and any other chemicals, materials or substances which are
\nidentified, defined or regulated pursuant to any Hazardous Materials Laws, or
\nthe release, discharge or exposure to which is prohibited, limited to or
\nregulated by any federal, state or local government under Hazardous Materials
\nLaws and any petroleum, waste oil and petroleum by-products, asbestos <\/p>\n
10<\/p>\n
in any form, urea formaldehyde, and transformers or other equipment that contain
\nlevels of polychlorinated biphenyls.<\/p>\n
(ii) “Hazardous Materials Laws” shall mean any federal, state or local
\n ————————
\nstatute, law, rule, regulation, ordinance, code, binding policy or rule of
\ncommon law in effect and in each case as amended as of the Closing Date, and any
\njudicial or administrative interpretation thereof as of the Closing Date,
\nincluding any judicial or administrative order, consent decree or judgment,
\nrelating to the protection of the environment, health, safety from the release
\nor disposal of Hazardous Materials, including without limitation the
\nComprehensive Environmental Response, Compensation, and Liability Act of 1980,
\nas amended, 42 U.S.C. (S) 9601 et seq.; the Resource Conservation and Recovery
\n — —-
\nAct, as amended, 42 U.S.C. (S) 9601 et seq.; the Federal Water Pollution Control
\n — —-
\nAct, as amended, 33 U.S.C. (S) 1251 et seq.; the Toxic Substances Control Act,
\n — —-
\n15 U.S.C. (S) 2601 et seq.; the Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the
\n — —- — —-
\nSafe Drinking Water Act, 42 U.S.C. (S) 300f et seq.; the Oil Pollution Act of
\n — —-
\n1990, 33 U.S.C. (S) 2701 et seq.; and their state and local counterparts and
\n — —-
\nequivalents.<\/p>\n
(iii) “Environmental Claims” shall mean any and all administrative,
\n ——————–
\nregulatory or judicial actions, suits, demands, demand letters, claims, liens,
\nnotice of noncompliance or violation, investigations or proceedings relating to
\nany Hazardous Materials Law or any permit issued under any such Law (hereafter
\n“Claims”), including without limitation (a) any and all Claims by governmental
\nor regulatory authorities for enforcement, cleanup, removal, response, remedial
\nor other actions or damages pursuant to any applicable Hazardous Materials Law,
\nand (b) any and all Claims by any third party seeking damages, contribution,
\nindemnification, cost recovery, compensation or injunctive relief resulting from
\nHazardous Materials or arising from alleged injury or threat of injury to
\nhealth, safety or other environment from release or disposal of Hazardous
\nMaterials.<\/p>\n
(b) MergerCo is in compliance in all material respects with all Hazardous
\nMaterial Laws and the requirements of all environmental permits required
\nfor the handling, use, storage and disposition of Hazardous Materials under
\nHazardous Materials Laws that are applicable to MergerCo’s operations as
\npresently conducted.<\/p>\n
(c) There are no pending, or to the Knowledge of MergerCo, threatened
\nEnvironmental Claims against MergerCo or any property of MergerCo.<\/p>\n
(d) There are no facts, circumstances, conditions or occurrences regarding
\nMergerCo, its operations or any property of MergerCo that could reasonably
\nbe anticipated to form the basis of an Environmental Claim against
\nMergerCo.<\/p>\n
3.17 CONTRACTS.<\/p>\n
The MergerCo Disclosure Schedule contains a complete list of every material
\ncontract of MergerCo which (i) is made with any officer, director or stockholder
\nof MergerCo, 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. MergerCo has made or will promptly make
\navailable to the Company upon request true copies of each contract so listed.
\nMergerCo and each of the other parties to the contracts set forth in the
\nMergerCo Disclosure Schedule have in all material respects performed all
\nmaterial obligations
\n 11<\/p>\n
required 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 contracts.<\/p>\n
3.18 ACCOUNTS RECEIVABLE.<\/p>\n
Except to the extent set forth in the MergerCo Disclosure Schedule, the
\naccounts receivable of MergerCo reflected in the Unaudited Interim Balance Sheet
\nrepresent sales actually made in the ordinary course of business, and have been
\nproperly reported, net of any reserves shown on the books of MergerCo, all in
\naccordance with the past practices of MergerCo, consistently applied.<\/p>\n
3.19 CUSTOMERS AND SUPPLIERS.<\/p>\n
(a) Part 3.19(a) of the MergerCo Disclosure Schedule lists the five
\nlargest customers of MergerCo in the most recent full fiscal year. Except as
\ndisclosed in the MergerCo Disclosure Schedule, since January 31, 1998, there has
\nbeen no material adverse change in the business relationship of MergerCo with
\nany such customer.<\/p>\n
(b) Part 3.19(b) of the MergerCo Disclosure Schedule contains exemplars
\nof each of the forms of contracts executed by MergerCo’s subscribers. Except as
\nset forth in the MergerCo Disclosure Schedule, all contracts with MergerCo’s
\nsubscribers have been made using such exemplars.<\/p>\n
3.20 BANK ACCOUNTS.<\/p>\n
The MergerCo Disclosure Schedule sets forth the names and locations of all
\nbanks, trust companies, brokerage firms or other financial institutions at which
\nMergerCo maintains an account and the name of each person authorized to draw
\nthereon or make withdrawals therefrom.<\/p>\n
3.21 TITLE TO PROPERTIES; ENCUMBRANCES.<\/p>\n
Except as set forth in the MergerCo Disclosure Schedule, MergerCo has good
\ntitle to its material properties and assets (real and personal, tangible and
\nintangible) owned by it (and good leasehold title to the material properties and
\nassets leased by it), including, without limitation, the material properties and
\nassets reflected in the Financials, subject to no encumbrance, lien, charge or
\nother 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 MergerCo are not material and which, in the case of such Encumbrances
\non the assets or properties of MergerCo, would not reasonably be expected to
\nmaterially detract from the value of any such properties or assets or materially
\ninterfere with any present use of such properties or assets, and (v)
\nEncumbrances in existence on the Closing Date and described in the MergerCo
\nDisclosure Schedule.<\/p>\n
3.22 COMPENSATION OF EMPLOYEES.<\/p>\n
MergerCo has provided the Company with an accurate and complete list for
\nfiscal year 1997 showing (i) the names of all persons employed by MergerCo who
\nreceived more than $40,000 in 1997 cash compensation (including, without
\nlimitation, salary, commission and bonus) and who are employed by MergerCo as of
\nthe date hereof, and (ii) the present salary or hourly wage (including, without
\nlimitation, salary,
\n 12<\/p>\n
commission and bonus) and fringe benefits (excluding Listed Plans set forth in
\nthe MergerCo Disclosure Schedule), of each such person.<\/p>\n
3.23 TAX STATUS OF REORGANIZATION.<\/p>\n
(a) The liabilities of MergerCo, if any, to be assumed by the Company in
\nthe Merger and the liabilities to which the transferred assets of MergerCo are
\nsubject, if any, were incurred by MergerCo in the ordinary course of business.<\/p>\n
(b) MergerCo and each of the Shareholders will pay any of its own
\nexpenses incurred in connection with the Merger.<\/p>\n
(c) There is no intercorporate indebtedness existing between the Company
\nand MergerCo that was issued, was acquired, or will be settled at a discount.<\/p>\n
(d) The fair market value of the assets of MergerCo to be transferred to
\nthe Company in the Merger will equal or exceed the sum of MergerCo’s liabilities
\nassumed by the Company plus the amount of MergerCo’s liabilities, if any, to
\nwhich the transferred assets are subject.<\/p>\n
(e) MergerCo is not under the jurisdiction of a court in a “title 11 or
\nsimilar case,” within the meaning of Section 368(a)(3)(A) of the Code.<\/p>\n
ARTICLE IV.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS<\/p>\n
Except as set forth in the MergerCo Disclosure Schedule, the Shareholders
\nhereby represent and warrant to the Company and XOOM as of the date hereof and
\nas of the Closing Date as follows:<\/p>\n
4.1 TITLE TO COMMON SHARES.<\/p>\n
Each Shareholder individually represents and warrants to the Company and
\nXOOM that he or she is the record and beneficial owner of the common stock being
\nconveyed by such Shareholder to the Company listed opposite the Shareholder’s
\nname in the capitalization schedule attached hereto as Exhibit A, and
\n ———
\nShareholder holds title to the common stock free and clear of all liens,
\ncharges, encumbrances, security interests, restrictive agreements or
\nassessments.<\/p>\n
4.2 CAPACITY.<\/p>\n
Each Shareholder has the legal capacity to enter into and to perform his or
\nher obligations under this Agreement, and this Agreement constitutes the legal,
\nvalid and binding obligation of each Shareholder, enforceable against each
\nShareholder in accordance with its terms.<\/p>\n
4.3 CONFIRMATION OF MERGERCO’S REPRESENTATIONS AND WARRANTIES.<\/p>\n
The Shareholders represent and warrant, severally, but not jointly, that to
\ntheir Knowledge, except as set forth in the MergerCo Disclosure Schedule, the
\nrepresentations and warranties of MergerCo in Article III are true and correct
\nas of the date hereof and as of the Closing Date. For purposes of this Article
\nIV, a Shareholder shall be deemed to have “Knowledge” of a particular fact or
\nother matter if (i) the Shareholder is actually aware <\/p>\n
13<\/p>\n
of such fact or other matter or (ii) had reason to know of such fact or matter.
\nMergerCo or Shareholder Vijay Vaidyanathan shall be deemed to have Knowledge of
\na particular fact or matter if any Shareholder has Knowledge of such fact or
\nmatter.<\/p>\n
4.4 PURCHASE ENTIRELY FOR OWN ACCOUNT.<\/p>\n
This Agreement is made with each Shareholder in reliance upon each
\nShareholder’s representation, which by each Shareholder’s execution of this
\nAgreement Shareholder hereby confirms, that the XOOM Stock to be received by
\nShareholder will be acquired for investment for Shareholder’s own account, not
\nas a nominee or agent, and not with a view to the resale or distribution of any
\npart thereof, and that Shareholder has no present intention of selling, granting
\nany participation in, or otherwise distributing the same. By executing this
\nAgreement, Shareholder further represents that he or she does not have any
\ncontract, undertaking, agreement or arrangement with any person to sell,
\ntransfer or grant participations to such person or to any third person, with
\nrespect to any of the XOOM Stock.<\/p>\n
4.5 DISCLOSURE OF INFORMATION.<\/p>\n
Each Shareholder believes he has received all the information he or she
\nconsiders necessary or appropriate for deciding whether to acquire the XOOM
\nStock. Shareholder further represents that he or she 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 purchase and sale of the XOOM
\nStock is occurring in an arms’ length transaction and is not relying upon any
\nstatements by XOOM or the Company as to the value of XOOM.<\/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 MergerCo and the
\nShareholders that to their Knowledge as of the date hereof and as of the
\nClosing, except as disclosed in the Disclosure Schedule provided by XOOM and
\nattached hereto, (the “XOOM Disclosure Schedule) (For the purposes of this
\nArticle V, the Company and XOOM shall be deemed to have Knowledge of a
\nparticular fact or matter if Russell Hyzen, Chris Kitze or Laurent Massa are
\nactually aware of such fact or matter or had reason to know of such fact or
\nmatter):<\/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.
\n 14<\/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 the holders of MergerCo’s common stock
\npursuant to the Merger, when issued in connection with this Agreement, will be
\nduly authorized, validly issued, fully paid and nonassessable. Based on the
\ntruth and accuracy of the Shareholders’ representations set forth in Article IV
\nof this Agreement, such XOOM Stock will be exempt from the registration
\nrequirements of the Securities Act of 1933 and will have been registered or
\nqualified (or are exempt) under all applicable state securities laws.<\/p>\n
5.5 CAPITALIZATION.<\/p>\n
(a) Prior to the two-for-one reverse common stock split planned by XOOM
\nbefore the Closing, the authorized capital stock of XOOM consists of twenty
\nmillion (20,000,000) shares of common stock, $.0001 par value per share, of
\nwhich, as of March 10, 1998, seventeen million, eight hundred thirty-four
\nthousand, eighty-three (17,834,083) shares have been issued and are outstanding,
\nand 1,000,000 shares of preferred stock, none of which has been issued or is
\noutstanding. Other than the common stock, XOOM does not have outstanding any
\nother voting or equity securities or interests. Except as set forth in the XOOM
\nDisclosure Schedule, XOOM has no outstanding obligations, understandings or
\ncommitments regarding the issuance of any additional shares of its stock, voting
\nor equity securities or interests or other securities, or any options, rights,
\nwarrants or securities exercisable for or convertible into such shares,
\nsecurities or interests. There are no preemptive rights in respect of the common
\nshares of XOOM. All issued and outstanding shares of XOOM’s capital stock have
\nbeen duly authorized and validly issued, are fully paid and nonassessable .<\/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
15<\/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
\nStatements”) pertaining to XOOM:<\/p>\n
(i) the unaudited balance sheets of XOOM as of December 31, 1996 and
\nDecember 31, 1997, and the related unaudited statements of operations, changes
\nin shareholder’s equity and cash flows of XOOM for the fiscal years ended
\nDecember 31, 1996 and December 31, 1997 together with the notes thereto; and<\/p>\n
(ii) the unaudited balance sheet of XOOM as of December 31, 1997 (the
\n“12\/31\/97 Balance Sheet”), and the related unaudited statements of operations,
\nchanges in shareholder’s equity and cash flows of XOOM, together with the notes
\nthereto.<\/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
(c) Except as set forth in the XOOM Disclosure Schedule, XOOM has no
\nliabilities except those reflected or reserved against in the 12\/31\/97 Balance
\nSheet and current liabilities incurred by XOOM in the ordinary course of
\nbusiness since the date of the 12\/31\/97 Balance Sheet<\/p>\n
5.7 NO MATERIAL CHANGES.<\/p>\n
Except as otherwise set forth in the XOOM Disclosure Schedule, since
\nJanuary 31, 1998 there has not been (a) any damage, destruction or loss (whether
\nor not covered by insurance) materially and adversely affecting the business,
\nfinancial condition or results of operations of XOOM; (b) any labor dispute
\nmaterially and adversely affecting the business, financial condition or results
\nof operations of XOOM; (c) any disposition of any capital asset of XOOM having a
\nnet book value in excess of $15,000; (d) any discharge or satisfaction of any
\nobligation or liability of XOOM other than in the ordinary course of business;
\nor (e) any material adverse change in the business, financial condition or
\nresults of operations of XOOM.<\/p>\n
5.8 UNDISCLOSED LIABILITIES.<\/p>\n
XOOM has no liabilities or obligations (whether absolute, contingent or
\notherwise) which are material to XOOM, except for (a) those reflected, reserved
\nagainst or otherwise disclosed in the Financial Statements or the notes thereto
\nand not heretofore paid or discharged, (b) those disclosed in the XOOM
\nDisclosure Schedule, or (c) those incurred in, or as a result of, the ordinary
\ncourse of business of XOOM since the date of the 12\/31\/97 Balance Sheet.<\/p>\n
5.9 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<\/p>\n
16<\/p>\n
which specifically applies to XOOM which would have a material adverse effect on
\nthe business, financial condition or results of operations of XOOM.<\/p>\n
5.10 PATENT, TRADEMARK AND RELATED MATTERS.<\/p>\n
All of the material patents, registered trademarks, service marks and trade
\nnames owned by XOOM and all material license agreements in which XOOM is the
\nlicensee, at the date of this Agreement are listed in the XOOM Disclosure
\nSchedule. Except to the extent, if any, set forth in the XOOM Disclosure
\nSchedule, such patents, trademarks, service marks, trade names and licenses
\n(collectively, the “Intellectual Property”) are, to XOOM’s Knowledge, valid and
\nin full force and are adequate to permit XOOM to conduct its business as
\npresently conducted, except to the extent that such failure to be valid and in
\nfull force would not have a material adverse effect on the business, financial
\ncondition or results of operations of XOOM, and XOOM has received no written
\nnotice of any event, inquiry or investigation threatening the validity of the
\nIntellectual Property.<\/p>\n
5.11 CONTRACTS.<\/p>\n
The XOOM Disclosure Schedule contains a complete list of every material
\ncontract of XOOM which (i) is made with any officer, director or stockholder of
\nXOOM, 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. XOOM Disclosure Schedule has made or will
\npromptly make available to the Company upon request true copies of each contract
\nso listed. XOOM and each of the other parties to the contracts set forth in the
\nXOOM Disclosure Schedule have in all material respects performed all material
\nobligations required to be performed by them under such contracts and no event
\nhas occurred which would give any other party to any such contract the right to
\nterminate or otherwise fail to perform its obligations under the contracts.<\/p>\n
5.12 REGISTRATION RIGHTS.<\/p>\n
XOOM is not under any contractual obligation to Register any of its
\nsecurities. The term “Register” refers to a registration effected by preparing
\nand filing a registration statement in compliance with the Securities Act of
\n1933, and the declaration or ordering of the effectiveness of such registration
\nstatement.<\/p>\n
5.13 RELATED-PARTY TRANSACTIONS.<\/p>\n
No employee, officer, or director of XOOM or member of his or her immediate
\nfamily is indebted to XOOM, nor is XOOM indebted (or committed to make loans or
\nextend or guarantee credit) to any of them. To the best of XOOM’s knowledge,
\nnone of such persons has any direct or indirect ownership interest in any firm
\nor corporation with which XOOM is affiliated or with which XOOM has a business
\nrelationship, or any firm or corporation that competes with XOOM, except that
\nemployees, officers, or directors of XOOM and members of their immediate
\nfamilies may own stock in publicly traded companies that may compete with XOOM.
\nNo member of the immediate family of any officer or director of XOOM is directly
\nor indirectly interested in any material contract with XOOM.<\/p>\n
17<\/p>\n
5.14 VOTING AGREEMENTS.<\/p>\n
Except for the Voting Agreement set forth in Section 10.2, in which XOOM’s
\nshareholders will agree to vote their shares in favor of the election of Vijay
\nVaidyanathan and Robert Ellis, among other things, none of the shareholders of
\nXOOM are parties to any voting agreement or any other agreement which would
\nrequire them to vote their shares in accordance with such agreement.<\/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
\neighteen months. No claim may be made by any party hereto under this article
\nunless written notice of the claim is given within that eighteen month period;
\nprovided, however, that the foregoing limitation period will not apply to any
\n——–
\nfraudulent breach, representation or warranty actually known to any party before
\nthe Closing Date.<\/p>\n
ARTICLE VII.<\/p>\n
COVENANTS OF MERGERCO AND SHAREHOLDERS<\/p>\n
7.1 ACCESS AND INVESTIGATION.<\/p>\n
MergerCo shall ensure that, at all times after the date hereof and prior to
\nthe Closing (the “Pre-Closing Period”) MergerCo shall provide XOOM and its
\nrepresentatives with free and complete access to MergerCo’s representatives,
\npersonnel, premises and assets and to all existing books, records, Tax Returns,
\nwork papers and other documents and information relating to MergerCo.<\/p>\n
7.2 OPERATION OF BUSINESS.<\/p>\n
MergerCo shall ensure that, during the Preclosing Period (a) MergerCo
\nconducts its operations exclusively in the ordinary course of business and in
\nthe same manner as such operations have been conducted prior to the date of this
\nAgreement; (b) MergerCo preserves intact its current business organization,
\nkeeps available the services of its current officers and employees and maintains
\nits relations and goodwill with all suppliers, customers, landlords, creditors,
\nlicensors, licensees, employees and other persons having business relationships
\nwith MergerCo.<\/p>\n
7.3 FINAL TAX RETURNS.<\/p>\n
The Shareholders shall cause MergerCo’s accountants to prepare and MergerCo
\nto timely file and pay amounts owed with respect to all Income Tax Returns not
\nalready filed for MergerCo for all tax periods ended or ending on or before the
\nClosing Date and shall cause their accountants to prepare on a pro forma basis
\nall tax returns for MergerCo for the interim period from December 31, 1997 until
\nthe Closing (“Final Returns”). The Shareholders shall send a copy of all Final
\nReturns as to which they are responsible to the Company for its review and
\ncomment and, if required, appropriate execution, at least three (3) days prior
\nto the filing thereof. Unless it determines in good faith that it is required
\nto do so by applicable tax laws, the Company shall not (without the prior
\nwritten consent of MergerCo, which consent shall not be unreasonably withheld),
\ncause the Company to amend any of the Final Returns or other Tax Returns for
\nwhich the Shareholders are responsible.<\/p>\n
18<\/p>\n
7.4 TAXES ON PSC Share Dividends.<\/p>\n
The Stockholders shall pay and be fully liable for any taxes incurred by
\nMergerCo due to the dividend of Paralogic Software Corporation, a California
\ncorporation (“PSC”), stock to the Shareholders prior to the Merger.<\/p>\n
7.5 FEDERAL INCOME TAX REPORTING.<\/p>\n
MergerCo and the Shareholders agree to report the Merger as a
\n“reorganization,” within the meaning of Section 368(a) of the Code, but the
\nShareholders shall not be liable for any adverse consequences suffered by XOOM
\nor the Company if the Merger fails to qualify as a reorganization.<\/p>\n
7.6 NO NEGOTIATION.<\/p>\n
MergerCo shall ensure that, during the Pre-Closing Period, neither MergerCo
\nnor any of its representatives directly or indirectly (i) solicits or encourages
\nthe initiation of any inquiry, proposal or offer from any person relating to any
\nto acquisition of MergerCo or any of its assets or (ii) conducts any
\nnegotiations relating to such acquisition.<\/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.<\/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 plan or intention to cause MergerCo to issue additional
\nshares of stock after the Merger, or take any other action, that would result in
\nXOOM losing Control of MergerCo.<\/p>\n
(d) XOOM has no plan or intention to liquidate MergerCo; to merge MergerCo
\nwith or into another corporation including XOOM affiliates; to sell, distribute
\nor otherwise dispose of the capital stock of MergerCo; or to cause MergerCo to
\nsell or otherwise dispose of any of its assets or of any of the assets acquired
\nfrom the Company except for dispositions made in the ordinary course of business
\nor payment of expenses incurred by MergerCo pursuant to the Merger.<\/p>\n
(e) Following the Merger, the historic business of MergerCo will be continued
\nor a significant portion of MergerCo’s historic business assets will be used in
\na business.<\/p>\n
(f) Following the Merger, XOOM and MergerCo will comply with the record-
\nkeeping and information filing requirements of Section 1.368-3 of the Treasury
\nRegulations.<\/p>\n
19<\/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 Shareholders and MergerCo in this
\nAgreement shall have been true and correct as of the date of this Agreement and
\nshall be true and correct on and as of the Closing and each of the Shareholders
\nand MergerCo shall have performed all obligations in this Agreement required to
\nbe performed or observed by them on or prior to the Closing.<\/p>\n
9.2 ASSET PURCHASE AGREEMENT.<\/p>\n
MergerCo shall have entered into an Asset Purchase Agreement with PSC in
\nsubstantially the form of Exhibit B hereto and the closing of the transactions
\n ———
\ndescribed therein shall have occurred.<\/p>\n
9.3 RELEASE AGREEMENT.<\/p>\n
XOOM shall have received an executed Release Agreement from Dipendra Nigam
\nin substantially the form of Exhibit C hereto, effective as of the Closing,
\n ———
\nreleasing MergerCo, PSC, the Company and XOOM from any liability or claims
\ndescribed therein.<\/p>\n
9.4 LICENSE AGREEMENT.<\/p>\n
XOOM shall have received an executed License Agreement from PSC in
\nsubstantially the form of Exhibit D hereto pursuant to which XOOM obtains
\n ———
\ncertain nonexclusive rights to use of the name “Paralogic” and related service
\nand trademarks.<\/p>\n
9.5 SOFTWARE AGREEMENT AMENDMENT.<\/p>\n
XOOM share have received an executed Amendment to the Software License
\nAgreement between MergerCo and XOOM in the form of Exhibit E to this Agreement.
\n ——— <\/p>\n
ARTICLE X.<\/p>\n
CLOSING CONDITIONS OF THE SHAREHOLDERS AND MERGERCO<\/p>\n
The Shareholders’ and MergerCo’s obligations to effect the Closing and
\nconsummate the Merger are subject to the satisfaction of each of the following
\nconditions:<\/p>\n
10.1 EMPLOYMENT AGREEMENT.<\/p>\n
The Company shall have entered into an employment agreement, effective as
\nof the Closing, with Vijay Vaidyanathan on substantially the terms set forth in
\nExhibit F hereto.
\n——— <\/p>\n
20<\/p>\n
10.2 VOTING AGREEMENT.<\/p>\n
The shareholders of XOOM shall have entered into a Voting Agreement
\nsubstantially in the form of Exhibit G hereto requiring among other things, that
\n ———
\nXOOM’s shareholders vote their common shares in such manner as to elect to
\nXOOM’s Board of Directors one director designated by Vijay Vaidyanathan until
\nXOOM has completed either (i) a sale of all or substantially all of the assets
\nof XOOM, (ii) a merger of XOOM with or into another entity at the close of which
\nthe shareholders of XOOM immediately prior to such merger own less than 50% of
\nthe voting securities of the surviving entity, or (iii) an initial public
\noffering.<\/p>\n
10.3 AGREEMENT REGARDING USE OF WEBPAGE.COM DOMAIN NAME.<\/p>\n
The Company shall have entered into an agreement in the form of Exhibit H
\n ———
\nhereto giving PSC the nonexclusive right to use the domain name Webpage.com for
\na period of 18 months following the Closing.<\/p>\n
10.4 REPRESENTATIONS AND WARRANTIES.<\/p>\n
The representations and warranties of the Company and XOOM in this
\nAgreement shall have been true and correct as of the Closing and each of the
\nCompany and XOOM shall have performed all obligations in this Agreement required
\nto be performed or observed by them on or prior to 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 transactions contemplated by this
\nAgreement, including the closing conditions described in Articles IX and X.<\/p>\n
ARTICLE XII.<\/p>\n
INDEMNIFICATION<\/p>\n
12.1 INDEMNIFICATION BY THE SHAREHOLDERS<\/p>\n
In the event any of the Shareholders (i) breaches or is deemed to have
\nbreached any of their representations and warranties contained in Article IV
\nherein or (ii) fails to perform or comply with any of the covenants and
\nagreements set forth in this Agreement, provided that the Company or XOOM makes
\na written claim for indemnification against any of the Shareholders pursuant to
\nSection 12.4 below, then such Shareholder agrees to indemnify the Company and
\nXOOM, and each of their directors, officers, shareholders, attorneys,
\nrepresentatives and agents (except for such persons who are also Shareholders),
\nfrom and against any Losses incurred or paid by the Company or XOOM to the
\nextent such Losses arise or result from a breach by such Shareholder of any
\nrepresentation and warranty contained in Article IV or a violation of any
\ncovenant in this Agreement. “Losses” shall mean all damages, awards, judgments,
\npayments, diminutions in value, all interest thereon, costs and expenses of
\ninvestigating claims, lawsuits or arbitration and any appeal from any of the
\nforegoing and reasonable attorneys fees incurred in connection therewith.<\/p>\n
21<\/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 its 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, provided that any of the Shareholders makes a written claim for
\nindemnification against the Company or XOOM pursuant to Section 12.4 below, then
\nthe Company and XOOM agree to indemnify the Shareholders from and against any
\nLosses incurred or paid by the Shareholders to the extent such Losses arise or
\nresult from a breach by the Company or XOOM of any representation and warranty
\ncontained in Article V 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 any of the foregoing and reasonable
\nattorneys fees incurred in connection therewith.<\/p>\n
12.3 NOTIFICATION OF CLAIMS<\/p>\n
If any party or parties (the “Indemnified Party”) reasonably believes that
\nit is entitled 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 party or parties (the
\n“Indemnifying Party”) is obligated to provide indemnification pursuant to
\nSection 12.1 or 12.2 above, the Indemnified Party shall promptly give the
\nIndemnifying Party written notice of such claim for Indemnification (an
\n“Indemnity Claim”). Any claim for indemnification under this Section 12 must be
\nbrought prior to the expiration of the survival period for the representation
\nand warranty as set forth in Article VI. The delivery of such notice of
\nIndemnity Claim (“Claim Notice”) shall be a condition precedent to any liability
\nof the Indemnifying Party for indemnification hereunder. The Indemnifying Party
\nshall have twenty (20) days from the receipt of a Claim Notice (the “Notice
\nPeriod”) to notify the Indemnified Party of whether or not the Indemnifying
\nParty disputes its liability to the Indemnified Party with respect to such
\nIndemnity 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 Indemnified Party
\nshall proceed with the defense of such Third-Party Claim. During such defense
\nproceedings, the Indemnified Party shall keep the Indemnifying Party informed of
\nall material developments and events relating to the proceedings. The
\nIndemnifying Party shall have a right to be present at the negotiation, defense
\nand settlement of such Third-Party Claim. The Indemnified Party shall not agree
\nto any settlement of the Third-Party Claim without the consent of the
\nIndemnifying Party, which shall not be unreasonably withheld. Following entry of
\njudgment or settlement with respect to the Third-Party Claim, the liability of
\nthe Indemnifying Party with respect to the Indemnity Claim shall be resolved as
\nprovided in Section 12.5.<\/p>\n
(b) with respect to any Indemnity Claim not involving a Third-Party
\nClaim, if the Indemnifying Party disputes its liability within the Notice
\nPeriod, the liability of the Indemnifying Party shall be resolved in accordance
\nwith Section 12.5.<\/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.<\/p>\n
22<\/p>\n
12.5 ARBITRATION.<\/p>\n
All disputes under this Section 12 shall be settled by arbitration in San
\nFrancisco, California before a single arbitrator pursuant to the rules of the
\nAmerican Arbitration Association. Arbitration may be commenced at any time by
\nany party hereto giving written notice to each other party to a dispute that
\nsuch dispute has been referred to arbitration under this Section 12.5. The
\narbitrator shall be selected by the joint agreement of the Indemnifying Party
\nand Indemnified Party, but if they do not so agree within 20 days after the date
\nof the notice referred to above, the selection shall be made pursuant to the
\nrules from the panels of arbitrators maintained by such Association. Any award
\nrendered by the arbitrator shall be conclusive and binding upon the parties
\nhereto; provided, however, that any such award shall be accompanied by a written
\n ——– ——-
\nopinion of the arbitrator giving the reasons for the award. This provision for
\narbitration shall be specifically enforceable by the parties and the decision of
\nthe arbitrator in accordance herewith shall be final and binding and there shall
\nbe no right to appeal therefrom. Each party shall pay its own expenses of
\narbitration and the expenses of the arbitrator shall be equally shared;
\nprovided, however, that if in the opinion of the arbitrator any claim for
\n——– ——-
\nindemnification 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
\nShareholder, the Company or XOOM be liable to the other party under any
\nwarranty, representation, indemnity or covenant made by such party in this
\nAgreement until the aggregate amount of liability of all claims thereunder
\nagainst such party exceeds fifty thousand ($50,000) (the “Threshold”), at which
\npoint such party shall be liable for the full amount of liability for such
\nclaims.<\/p>\n
12.7 LIMITATION OF LIABILITY; EXCLUSIVE REMEDY<\/p>\n
(a) Notwithstanding anything to the contrary herein, in no event shall
\nany Shareholder’s obligation to indemnify the Company and\/or XOOM exceed the
\nlesser of (A) the amount equal to such Shareholder’s pro rata allocation of
\n$1,977,500, or (B) the sum of the fair market value of the XOOM common shares
\nreceived by such Shareholder together with such Shareholder’s pro rata share of
\nany unpaid cash consideration set forth in Section 2.4. Any disputes regarding
\nthe fair market value of the XOOM common shares shall be resolved in accordance
\nwith Section 12.5.<\/p>\n
(b) Notwithstanding anything to the contrary herein, in no event shall
\nthe obligation of XOOM or the Company to indemnify the Shareholders exceed
\n$1.977,500 together with such Shareholder’s pro rata share of any unpaid cash
\nconsideration set forth in Section 2.4.<\/p>\n
(c) The parties hereto acknowledge and agree that the foregoing
\nindemnification provisions in this Section 12 shall be the exclusive remedy of
\nthe Company, XOOM, MergerCo and the Shareholders with respect to MergerCo, its
\nsubsidiaries, and the transactions contemplated by this Agreement.<\/p>\n
23<\/p>\n
ARTICLE XIII.
\n RESTRICTIONS ON XOOM COMMON SHARES<\/p>\n
13.1 RIGHT OF FIRST REFUSAL\/TRANSFER RESTRICTIONS.<\/p>\n
(a) Restrictions on Transfer. A Shareholder may not sell or engage in any
\n ————————
\ntransaction which will result in a change in the beneficial or record ownership
\nof any XOOM common shares (“Shares”) issued to or held by Shareholder, including
\nwithout limitation a voluntary or involuntary sale, assignment, transfer,
\npledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy (a
\n“Transfer”), except as provided in this Agreement, and any such Transfer of XOOM
\ncommon shares or attempted Transfer of XOOM common shares in contravention of
\nthis Agreement shall be void and ineffective for any purpose and shall not
\nconfer on any transferee or purported transferee any rights whatsoever.<\/p>\n
(b) Right of First Refusal.
\n ———————- <\/p>\n
(i) If, prior to an initial public offering of XOOM’s securities or a
\nmerger or sale of XOOM, a Shareholder proposes to Transfer (or is required by
\noperation of law or other involuntary transfer) any or all of the XOOM common
\nshares standing in Shareholder’s name or owned by him, Shareholder shall first
\noffer such Shares to XOOM in accordance with the following provisions:<\/p>\n
(A) Shareholder shall deliver a written notice (a “Notice”) to XOOM
\nstating (A) Shareholder’s bona fide intention to Transfer such Shares, (B) the
\nname and address of the proposed transferee, (C) the number of Shares to be
\ntransferred, and (D) the purchase price per Share and terms of payment for which
\nShareholder proposes to Transfer such Shares.<\/p>\n
(B) Within 60 days after receipt of the Notice, XOOM or its designee
\nshall have the first right to purchase or obtain such Shares, upon the price and
\nterms of payment designated in the Notice. If the Notice provides for the
\npayment of non-cash consideration, XOOM at its option may pay the consideration
\nin cash equal to XOOM’s good faith estimate of the present fair market value of
\nthe non-cash consideration offered.<\/p>\n
(C) If XOOM or its designee elects not to purchase or obtain all of the
\nShares designated in the selling Shareholder’s Notice, then the Shareholder may
\nTransfer the Shares referred to in the Notice to the proposed transferee,
\nproviding such Transfer (i) is completed within 30 days after the expiration of
\nXOOM’s right to purchase or obtain such Shares, (ii) is made at the price and
\nterms designated in the Notice, and (iii) the proposed transferee agrees to be
\nbound by the terms and provisions of this Article XIII and to become a party to
\nan agreement containing such provisions immediately upon receipt of such Shares.
\nIf such Shares are not so transferred, the selling Shareholder must give notice
\nin accordance with this paragraph prior to any other or subsequent Transfer of
\nsuch Shares.<\/p>\n
(ii) Notwithstanding Section 13.1(a), Shareholder may Transfer Shares: (A) to
\nthe Shareholder’s spouse, child, grandchild, parent, brother, or sister
\n(“Immediate Family”), or to a trust established for the benefit of a member or
\nmembers of the Shareholder’s Immediate Family, (B) to an Affiliate (as
\nhereinafter defined) or equity holder of the Shareholder, (C) to a person who is
\na constituent partner of the Shareholder on the date hereof, or (D) to the
\nestate of any of the foregoing by gift, will or intestate succession; provided
\nthat the Shareholder or his representative notifies XOOM of such Transfer not
\nless than 10 nor more than 90 days prior to the Transfer and that the proposed
\ntransferee agrees to be bound by the terms and provisions of this Agreement and
\nto become a party to this Agreement immediately upon the receipt of such <\/p>\n
24<\/p>\n
Shares. “Affiliate” means, with respect to any person or entity, any person or
\nentity which controls, is controlled by, or is under common control with, such
\nperson or entity, or any stockholder or other equity owner in a control
\nrelationship with any of the foregoing. For this purpose the term “control”
\nshall mean the direct or indirect beneficial ownership of at least fifty percent
\n(50%) of the voting stock or interest in the income of such person or entity, or
\nsuch other relationship as, in fact, constitutes actual control.<\/p>\n
(c) No Transfer to Competitors. Shareholder may not Transfer any Shares
\n ————————–
\nto a competitor of XOOM, or to any stockholder, partner or other beneficial
\nholder of an equity ownership interest in a competitor, other than pursuant to a
\nmerger, combination, or other transaction approved by the Board of Directors of
\nXOOM.<\/p>\n
(d) Legend 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
\n BETWEEN XOOM, INC. (THE “COMPANY”) AND THE HOLDER, PROVIDING FOR, AMONG
\n OTHER MATTERS, THE COMPANY’S RIGHT OF FIRST REFUSAL TO PURCHASE THE
\n SECURITIES REPRESENTED BY THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON
\n FILE AT THE PRINCIPAL BUSINESS OFFICE OF THE COMPANY.<\/p>\n
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
\n UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE
\n SOLD, 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
\n THE 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 Shares subject hereto be
\nvalid 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 Shares subject hereto. The Shareholder understands
\nand acknowledges that the Company need not register a transfer of Shares, and
\nmay instruct its transfer agent not to register a transfer of Shares, unless the
\nconditions 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 than the
\nterms contained herein.<\/p>\n
13.2 LOCK-UP AGREEMENT.<\/p>\n
Shareholder, if requested by an underwriter of XOOM common shares or other
\nsecurities of XOOM, shall not sell or otherwise transfer or dispose of any XOOM
\ncommon shares held by the Shareholder during the 180-day period following the
\neffective date of a registration statement of XOOM filed under the Act or such
\nshorter period of time as the underwriter shall require, provided that all
\nofficers and directors of XOOM who hold common stock (or other securities) of
\nXOOM enter into similar agreements. If requested by the underwriter,
\nShareholder will reaffirm the agreement set forth in this Section 13.2 in a
\nseparate writing in a form satisfactory to such underwriter. XOOM may impose
\nstop-transfer instructions with respect to such XOOM common shares subject to
\nthe foregoing restriction until the end of said period.<\/p>\n
25<\/p>\n
ARTICLE XIV.<\/p>\n
MISCELLANEOUS<\/p>\n
14.1 EXPENSES.<\/p>\n
The Company, MergerCo, and each Shareholder shall bear his, her or its own
\nexpenses incurred in connection with the negotiation and consummation of the
\ntransactions contemplated by this Agreement.<\/p>\n
14.2 ENTIRE AGREEMENT.<\/p>\n
This Agreement and the agreements referred to in Articles IX and X contain
\nthe entire agreement of the parties hereto, and supersede any prior written or
\noral agreements between them concerning the subject matter contained herein, or
\ntherein. There are no representations, agreements, arrangements or
\nunderstandings, oral or written, between the parties to this Agreement, relating
\nto the subject matter contained in this Agreement and the agreements referred to
\nin Articles IX and X, which are not fully expressed herein or therein. The
\nschedules and each exhibit attached to this Agreement or delivered pursuant to
\nthis Agreement are incorporated herein by this reference and constitute a part
\nof this Agreement.<\/p>\n
14.3 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS.<\/p>\n
Prior to the Closing Date, none of the Company, Shareholders nor MergerCo
\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 party. The
\nCompany, Shareholders and MergerCo will cooperate to jointly prepare and issue
\nany press release which may be issued to announce the closing of the transaction
\ncontemplated by this Agreement.<\/p>\n
14.4 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
14.5 DESCRIPTIVE HEADINGS.<\/p>\n
The Article and Section headings in this Agreement are for convenience only
\nand shall not affect the meanings or construction of any provision of this
\nAgreement.<\/p>\n
14.6 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, or five (5) days after posting by registered or certified mail,
\npostage 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<\/p>\n
26<\/p>\n
With a copy to: Morrison & Foerster LLP
\n 425 Market Street
\n San Francisco, CA 94105
\n Attention: Bruce Mann, Esq.<\/p>\n
And if to Shareholders, to the address of each Shareholder set forth on the
\nsignature page of this Agreement:<\/p>\n
With a copy to: Wilson Sonsini Goodrich & Rosati
\n 650 Page Mill Road
\n Palo Alto, CA 94304
\n Attention: Raj Aji, Esq.<\/p>\n
or to such other address or addresses as a party shall have previously
\ndesignated by notice to the sender given in accordance with this section.<\/p>\n
14.7 CHOICE OF LAW<\/p>\n
This Agreement shall be construed in accordance with and governed by the
\nlaws of the State of California.<\/p>\n
14.8 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
14.9 ASSIGNABILITY<\/p>\n
Neither this Agreement nor any of the parties’ rights hereunder shall be
\nassignable by either party without the prior written consent of the other party
\nand any attempted assignment without such consent shall be void.<\/p>\n
14.10 WAIVER AND AMENDMENT<\/p>\n
Any term or provision of this Agreement may be waived at any time by the
\nparty which 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
14.11 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
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
\nas of the day and year first above written.<\/p>\n
27<\/p>\n
THE COMPANY:<\/p>\n
XOOM Chat, Inc.<\/p>\n
By: \/s\/ CHRIS KITZE
\n —————
\n Name: Chris Kitze
\n Title: President<\/p>\n
XOOM:<\/p>\n
XOOM, Inc.<\/p>\n
By: \/s\/ CHRIS KITZE
\n —————
\n Name: Chris Kitze
\n Title: Chairman of the Board<\/p>\n
MERGERCO:<\/p>\n
Paralogic Corporation<\/p>\n
By: \/s\/ VIJAY VAIDYANATHAN
\n ———————-
\n Vijay Vaidyanathan
\n President<\/p>\n
THE SHAREHOLDERS:<\/p>\n
\/s\/ VIJAY VAIDYANATHAN
\n ———————-
\n Vijay Vaidyanathan
\n Address: 4242 Nerissa Circle
\n Fremont, CA 94555<\/p>\n
\/s\/ Helmut Hissen
\n —————–
\n Helmut Hissen
\n Address: 848 La Para
\n Palo Alto, CA 94306<\/p>\n
28<\/p>\n
Exhibit A<\/p>\n
PARALOGIC CAPITALIZATION SCHEDULE<\/p>\n
1. Vijay Vaidyanathan: 5,000 common shares<\/p>\n
2. Helmut Hissen: 250 common shares<\/p>\n
29<\/p>\n
EXHIBIT B<\/p>\n
ASSET PURCHASE AGREEMENT<\/p>\n
30<\/p>\n
PARALOGIC SOFTWARE CORPORATION<\/p>\n
PARALOGIC CORPORATION<\/p>\n
COMMON STOCK PURCHASE AGREEMENT<\/p>\n
Dated as of February 23, 1998<\/p>\n
Paralogic Software Corporation
\n Paralogic Corporation
\n Common Stock Purchase Agreement<\/p>\n
This Common Stock Purchase Agreement (the “Agreement”) is made as of this
\n23rd day of February, 1998 (the “Effective Date”) by and between Paralogic
\nSoftware Corporation, a California corporation, with offices at 2140 Peralta
\nBlvd., Suite 109, Fremont, CA 94536 (“Company”) and Paralogic Corporation, a
\nCalifornia corporation, with offices at 2140 Peralta. Blvd., Suite 109, Fremont,
\nCA 94536 (“Paralogic”).<\/p>\n
BACKGROUND<\/p>\n
In connection with the spin-off of Company from Paralogic, Paralogic
\ndesires to transfer certain computer software and other assets to Company in
\nexchange for stock pursuant to the terms and conditions of this Agreement. It is
\nthe understanding and intent of the parties for this transfer and exchange to
\nqualify as a transfer under Section 351 of the Internal Revenue Code.<\/p>\n
AGREEMENT<\/p>\n
1. Sale of Common Stock<\/p>\n
1.1 Sale of Common Stock. Company hereby issues and sells to Paralogic an
\n ——————–
\naggregate of twenty million (20,000,000) shares of the Company’s Common Stock.
\nCompany shall deliver to Paralogic a certificate registered in Paralogic’s name
\nrepresenting such number of shares within five (5) days of the Effective Date.<\/p>\n
1.2 Restrictions on Transfer. In addition to any other limitation on
\n ————————
\ntransfer created by applicable securities laws, Paralogic shall not sell,
\ntransfer, pledge, hypothecate, assign, encumber or dispose of any interest in
\nthe Shares except in compliance with the provisions of this Section 1.2. Company
\nneed not register a transfer of any Shares and may also instruct its transfer
\nagent to not register the transfer of Shares if the requirements specified in
\nthis Section 1.2 are not satisfied.<\/p>\n
(a) Standoff Agreement. Paralogic agrees, and shall require any and
\n ——————
\nall transferees of any or all of its Shares to also agree, in connection with
\nthe Company’s initial public offering of its equity securities, to not sell,
\nmake any short sale of, loan, grant any option for the purchase of or otherwise
\ndispose of any Shares (other than those included in the registration, if any)
\nwithout the prior written consent of the Company or its underwriters, as the
\ncase may be, for such period of time (not to exceed one hundred eighty (180)
\ndays) from the effective date of such registration as may be requested by the
\nCompany or such underwriters.<\/p>\n
(b) Investment Representations. Paralogic shall require any and all
\n ————————–
\ntransferees of any or all of its Shares to deliver to Company the completed
\nInvestment Representation Statement attached hereto as Exhibit E.
\n ———-<\/p>\n
1.3 Stock Certificate Legends. All certificates representing any of the
\n ————————-
\nShares subject to the provisions of this Agreement may have endorsed thereon the
\nfollowing legends:<\/p>\n
1<\/p>\n
(a) “The shares represented by this certificate are subject to certain
\nrestrictions upon transfer as set forth in an agreement between the corporation
\nand the registered holder, a copy of which is on file at the principal office of
\nthe corporation.”<\/p>\n
(b) “These securities have not been registered under the Securities
\nAct of 1933, as amended. they may not be sold, offered for sale, pledged or
\nhypothecated in the absence of any effective registration statement as to the
\nsecurities under said act or an opinion of counsel satisfactory to the
\ncorporation that such registration is not required.”<\/p>\n
(c) Any legend deemed advisable in light of any applicable state
\nsecurities laws.<\/p>\n
2. Sale of Assets<\/p>\n
2.1 Transfer. In consideration of the sale of stock above, Paralogic
\n ——–
\nhereby irrevocably sells, conveys, transfers, assigns, sets over and delivers to
\nCompany all of Paralogic’s right, title and interest in and to the assets and
\nproperties of Paralogic set forth below (collectively the “Assets’), free and
\nclear of all liens, pledges, charges, claims, security interests or other
\nencumbrances of any sort:<\/p>\n
(a) the computer software set forth in Exhibit A attached hereto
\n ———-
\n(“Software”) and all technical, design, development, installation, operation and
\nmaintenance information concerning the Software, including without limitation
\nsource code, source documentation, source listings and annotations, engineering
\nnotebooks, test data and test results (“Documentation’); and<\/p>\n
(b) all trade secrets, information, technology and know-how in the
\npossession of or known by Paralogic relating to the design, programming, and
\nmaintenance of Internet “chat” products (“Know-How”); and<\/p>\n
(c) all current and future worldwide patents and other patent rights,
\ncopyrights, trade secrets, and other intellectual property rights, whether
\nregistered or unregistered, including without limitation all applications,
\nsubstitutions, divisions, continuations, continuation-in-parts, renewals,
\nextensions and registrations with respect thereto (“Intellectual Property
\nRights”) in and to the Software, Documentation and Know-How; and<\/p>\n
(d) all causes of action against any parties relating to any right,
\nincluding any Intellectual Property Right, with respect to or relating to the
\nSoftware, Documentation or Know-How, whether arising before or after the
\nEffective Date, including the right to bring suit for past infringement or
\nmisappropriation of any Intellectual Property Right;<\/p>\n
(e) the tradenames trade marks and service marks set forth in Exhibit
\n ——-
\nB attached hereto, including all goodwill associated therewith, and all
\n—
\nintellectual property rights therein or related thereto, whether registered or
\nunregistered, including all trade mark rights and common law rights; and
\n ——- <\/p>\n
(f) certain accounts receivable as set forth in Exhibit F attached
\n ———-
\nhereto.<\/p>\n
2.2 Delivery of Assets; Bill of Sale. On the Effective Date, or such
\n ——————————–
\nother date as Paralogic and Company may agree, Paralogic shall deliver to
\nCompany (i) all of the Assets which are in tangible form, including without
\nlimitation Source Code copies of all Software, (ii) a duly executed bill of sale
\nfor the Assets, in the form attached hereto as Exhibit C, and (iii) a duly
\n ———
\nexecuted assignment of accounts receivables, in the form attached hereto as
\nExhibit F, all at the address for Company set forth above. As
\n——— <\/p>\n
2<\/p>\n
used herein, “Source Code” shall mean software in human-readable form, including
\nprogrammers’ comments, data files and structures, header and include files,
\nmacros, object libraries, programming tools not commercially available,
\ntechnical specifications, flowcharts and logic diagrams, schematics, annotations
\nand documentation reasonably required or necessary to enable an independent
\nthird party programmer with reasonable programming skills to create, operate,
\nmaintain, modify and improve the software without the help of any other person.
\nData files containing Source Code must be in standard ASCII format and be
\nreadable by a text editor.<\/p>\n
2.3 No Assumption of Liabilities. Except as otherwise expressly set forth
\n —————————-
\nherein, this Agreement does not transfer and Company does not assume and
\nexpressly disclaims any and all costs, debts, claims, liabilities and
\nobligations of or relating to the ownership of the Assets or the operations of
\nParalogic, whether prior to or after the Effective Date, and whether accrued,
\nabsolute, contingent, matured, unmatured or otherwise. Without limiting the
\nforegoing, it is expressly agreed that Company shall not assume any liabilities
\nfor employment, income, sales, property or other taxes incurred or accrued by
\nParalogic, and it is further expressly agreed that Company shall not assume any
\nliabilities for third party claims of infringement of Intellectual Property
\nRights with respect to any use or other exploitation of the Assets by Paralogic
\nor Paralogic’s customers. Paralogic shall indemnify, defend and hold the Company
\nharmless from and against the entirety of any and all actions, suits,
\nproceedings, hearings, investigations, charges, complaints, claims, demands,
\ninjunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
\nfines, costs, reasonable amounts paid in settlement, liabilities, obligations,
\ntaxes, liens, losses, expenses, and fees, including court costs and reasonable
\nattorneys’ fees and expenses incurred or suffered by Company or any of its
\naffiliates related to or arising out of any liabilities or obligations of
\nParalogic.<\/p>\n
2.4 Further Assurances. Paralogic hereby agrees that it will, at any time
\n ——————
\nand from time to time after the date hereof, upon the request of Company, its
\nsuccessors or assigns, execute, acknowledge and deliver, or cause to be
\nexecuted, acknowledged and delivered, all such further acts, assignments,
\nconveyances and other assurances, documents and instruments of transfer as
\nCompany or its successors or assigns may request for the assignment,
\ntransferring, granting, conveying and confirming to Company or its successors or
\nassigns of the Assets, or for reducing to the possession of Company or its
\nsuccessors or assigns all right, title and interest of Paralogic in or to any
\nand all of the Assets, including without limitation providing to Company such
\nsupport and cooperation as may be necessary to complete the transfer of the
\nAssets.<\/p>\n
3. Assignment of Licenses<\/p>\n
In consideration of the sale of stock above, Paralogic hereby assigns and
\ndelegates to Company all of Paralogic’s rights and obligations in and to all
\nagreements relating to the Software, Documentation or Know-How attached hereto
\nas Exhibit D to the extent permitted in such agreements, and Company thereby
\n ———-
\nassumes and agrees to perform all obligations of Paralogic under such
\nagreements.<\/p>\n
4. Confidentiality<\/p>\n
Each of the parties hereto and their respective representatives will hold
\nin confidence any data and information obtained with respect to any other party,
\nor the business of any other party, from any representative, officer, director
\nor employee of such party, or from any books or records of such party in
\nconnection with this Agreement or the transactions contemplated by this
\nAgreement, and shall not use such data and information or disclose the same to
\nothers, except if such data or information is published <\/p>\n
3<\/p>\n
or is a matter of public knowledge or is required by any applicable law or
\nregulation to be disclosed. Following the Effective Date, to the maximum extent
\npermitted by applicable law, the confidential information relating to the Assets
\nshall at all times be and remain the sole and exclusive property of Company, and
\nParalogic agrees to observe confidentiality with regard to same and to insure
\nthat its employees and shareholders do the same. It is understood and agreed
\nthat any party’s remedies at law for a breach by another party of its
\nobligations under this Article 8 will be inadequate and that the non-breaching
\nparty shall, in the event of any such breach, be entitled to equitable relief
\n(including without limitation, injunctive relief and specific performance) in
\naddition to all other remedies provided under this Agreement or available to the
\nnon-breaching party at law. The obligations and rights of the parties under this
\nSection shall survive any expiration or termination of this Agreement for any
\nreason whatsoever. If this Agreement is terminated for any reason, all written
\ndata and information obtained by any of the parties hereto from any other party
\nin this matter shall be returned to the relevant party and each party agrees to
\nuse all reasonable efforts to keep confidential any information obtained by it
\nin this matter unless and until such information is ascertainable from public or
\npublished information or trade sources or is otherwise a matter of public
\nknowledge.<\/p>\n
5. Miscellaneous<\/p>\n
5.1 Governing Law; Venue. This Agreement shall be governed by and
\n ——————–
\nconstrued in accordance with the substantive laws of the State of California
\napplicable to contracts between California residents entered into and to be
\nperformed entirely within the State of California. Any action or proceeding
\nbrought by either party against the other arising out of or related to this
\nAgreement shall be brought only in a state or federal court of competent
\njurisdiction located in Los Angeles, California, and the parties hereby consent
\nto the in personam jurisdiction of said courts.<\/p>\n
5.2 Delays or Omissions. No delay or omission to exercise any right,
\n ——————-
\npower or remedy accruing to any party upon any breach or default of any other
\nparty under this Agreement shall impair any such right, power or remedy of that
\nparty nor shall it be construed to be a waiver of any such breach or default, or
\nan acquiescence therein, or of or in any similar breach or default thereunder
\noccurring; nor shall any waiver of any single breach or default be deemed a
\nwaiver of any other breach or default theretofore or thereafter occurring. Any
\nwaiver, permit, consent or approval of any kind or character on the part of a
\nparty of any breach or default under this Agreement, or any waiver on the part
\nof any holder of any provisions or conditions of this Agreement, must be in
\nwriting and shall be effective only to the extent specifically set forth in such
\nwriting. All remedies, either under this Agreement or by law or otherwise,
\nafforded to the parties hereunder shall be cumulative and not alternative.<\/p>\n
5.3 Notices, Etc. All notices and other communications required or
\n ————
\npermitted hereunder shall be in writing and shall be effective upon hand
\ndelivery by messenger or upon receipt by facsimile with a confirming copy sent
\nby first-class mail, postage prepaid, or five (5) days after deposit in the U.S.
\npostal system by certified or registered mail, return receipt requested, postage
\nprepaid:<\/p>\n
If to Company:<\/p>\n
Sheena Vaidyanathan
\n 2140 Peralta Blvd., Suite 109
\n Fremont, CA 94536<\/p>\n
With a copy to:<\/p>\n
4<\/p>\n
Raj Aji
\n Wilson Sonsini Goodrich & Rosati
\n 650 Page Mill Road
\n Palo Alto, California 94304<\/p>\n
If to Paralogic:<\/p>\n
Vijay Vaidyanathan
\n 2140 Peralta Blvd., Suite 109
\n Fremont, CA 94536<\/p>\n
or at such other address as the relevant party shall furnish to the other
\nparties in writing.<\/p>\n
5.4 Severability. In case any provision of this Agreement shall be
\n ————
\ninvalid, illegal or unenforceable, the validity, legality and enforceability of
\nthe remaining provisions shall not in any way be affected or impaired thereby.<\/p>\n
5.5 Assignment. Paralogic shall not assign this Agreement without the
\n ———-
\nprior written consent of Company. Such consent may be withheld in Company’s sole
\ndiscretion.<\/p>\n
5.6 Successors and Assigns. Except as otherwise provided herein, the
\n ———————-
\nprovisions hereof shall inure to the benefit of, and be binding upon, the
\naffiliates, subsidiaries, successors and assigns of the parties hereto.<\/p>\n
5.7 Term of Agreement. This Agreement shall be perpetual and of unlimited
\n —————–
\nterm.<\/p>\n
5.8 Counterparts. This Agreement may be executed in any number of
\n ————
\ncounterparts, each of which shall be enforceable and all of which together shall
\nconstitute one instrument.<\/p>\n
5.9 Entire Agreement Amendment. This Agreement, along with all Exhibits,
\n ————————–
\nand the other documents delivered pursuant hereto constitute the full and entire
\nunderstanding and agreement between the parties with regard to the subjects
\nhereof and thereof and supersedes and revokes all other previous discussions,
\nunderstandings and agreements, whether oral or written, between the parties with
\nregard to the subject matter hereto. Any term of this Agreement may be amended
\nand the observance of any term of this Agreement may be waived (either generally
\nor in a particular instance and either retroactively or prospectively), with the
\nwritten consent of Paralogic and Company.<\/p>\n
In Witness Whereof, the parties below have executed this Agreement as of
\nthe date first above written<\/p>\n
Paralogic Software Corporation<\/p>\n
By: \/s\/ VIJAY VAIDYANATHAN
\n ——————
\nName: Vijay Vaidyanathan<\/p>\n
Title:<\/p>\n
Paralogic Corporation<\/p>\n
5<\/p>\n
By: \/s\/ VIJAY VAIDYANATHAN
\n ———————-
\nName: Vijay Vaidyanathan<\/p>\n
Title: President<\/p>\n
[Signature Page to Common Stock Purchase Agreement]<\/p>\n
6<\/p>\n
Exhibit A
\n Software ASSETS<\/p>\n
Parachat
\n——–<\/p>\n
Web-based 100% Java chat server and client software including incomplete
\nfeatures such as Message Boards and ParAde (advertisement delivery system for
\nParaChat).<\/p>\n
MuxSock
\n——-<\/p>\n
Optimization module for ParaChat utilizing socket multiplexing to improve
\nscalability and performance.<\/p>\n
EXHIBIT C<\/p>\n
RELEASE AGREEMENT<\/p>\n
(This exhibit has not been filed as it has been deemed immaterial to an
\n investment decision pursuant to the provisions of Item 601(b)(2) of Regulation
\nS-K. The Registrant agrees to furnish a copy of this exhibit to the Commission
\n upon request.)<\/p>\n
EXHIBIT D<\/p>\n
LICENSE AGREEMENT<\/p>\n
(“PARALOGIC”)<\/p>\n
(This exhibit has not been filed as it has been deemed immaterial to an
\n investment decision pursuant to the provisions of Item 601(b)(2) of Regulation
\nS-K. The Registrant agrees to furnish a copy of this exhibit to the Commission
\n upon request.)<\/p>\n
EXHIBIT E<\/p>\n
AMENDMENT OF SOFTWARE LICENSE AGREEMENT<\/p>\n
(This exhibit has not been filed as it has been deemed immaterial to an
\n investment decision pursuant to the provisions of Item 601(b)(2) of Regulation
\nS-K. The Registrant agrees to furnish a copy of this exhibit to the Commission
\n upon request.)<\/p>\n
EXHIBIT F<\/p>\n
EMPLOYMENT AGREEMENT<\/p>\n
(SEE EXHIBIT 10.7 TO REGISTRANT’S S-1)<\/p>\n
EXHIBIT G<\/p>\n
VOTING AGREEMENT<\/p>\n
(This exhibit has not been filed as it has been deemed immaterial to an
\n investment decision pursuant to the provisions of Item 601(b)(2) of Regulation
\nS-K. The Registrant agrees to furnish a copy of this exhibit to the Commission
\n upon request.)<\/p>\n
EXHIBIT H<\/p>\n
DOMAIN NAME LICENSE AGREEMENT<\/p>\n
(This exhibit has not been filed as it has been deemed immaterial to an
\n investment decision pursuant to the provisions of Item 601(b)(2) of Regulation
\nS-K. The Registrant agrees to furnish a copy of this exhibit to the Commission
\n upon request.)<\/p>\n
MERGERCO DISCLOSURE SCHEDULE<\/p>\n
(This exhibit has not been filed as it has been deemed immaterial to an
\n investment decision pursuant to the provisions of Item 601(b)(2) of Regulation
\nS-K. The Registrant agrees to furnish a copy of this exhibit to the Commission
\n upon request.)<\/p>\n
XOOM DISCLOSURE SCHEDULE<\/p>\n
(This exhibit has not been filed as it has been deemed immaterial to an
\n investment decision pursuant to the provisions of Item 601(b)(2) of Regulation
\nS-K. The Registrant agrees to furnish a copy of this exhibit to the Commission
\n upon request.)<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9374],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9622,9626],"class_list":["post-43159","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-xoom-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43159"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43159"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43159"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}