SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this "Agreement"), dated as of August
28, 2000, is by and between AT&T Corp., a New York corporation ("AT&T"), and At
Home Corporation, a Delaware corporation ("Excite@Home"). Capitalized terms used
herein and not otherwise defined have the meanings specified in the letter
agreement among the parties hereto, Comcast Corporation ("Comcast") and Xxx
Communications, Inc. ("Cox") dated March 28, 2000 (including the term sheets
attached thereto, the "Letter Agreement").
RECITALS:
A. The Letter Agreement provides for Excite@Home to exchange certain
shares of Excite@Home Series A common stock, par value $.01 per share ("Series A
Common Stock"), beneficially owned by AT&T for shares of Excite@Home Series B
common stock, par value $.01 per share ("Series B Common Stock"), on the terms
and conditions set forth therein. In addition, the Letter Agreement contemplated
the delivery of definitive agreements and instruments incorporating and
expanding upon such terms and conditions. This Agreement is a part of such
definitive documentation, and replaces the rights and obligations set forth in
Part 2(k) of Annex B to the Letter Agreement.
B. The consummation of the Share Exchange (as defined below) shall
be subject to (a) effectiveness of the Charter Amendment, (b) receipt of any
required approval of the Nasdaq Stock Market, Inc. or an alternative national
securities exchange, including with respect to the extra voting power attached
to shares of Series B Common Stock to be issued pursuant to Annex B of the
Letter Agreement (including pursuant to the warrants contemplated by such Annex
B) (the "Nasdaq Condition"), and (c) receipt of any other consents, approvals
and waivers as may be necessary to consummate the transactions contemplated by
the Term Sheets in a manner that results in the economic effects contemplated
thereby, in each case on or prior to September 30, 2000 (collectively, the
"Share Exchange Conditions").
In consideration of the premises and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
I. THE SHARE EXCHANGE
1.1 Exchange of Series A Common Stock for Series B Common Stock.
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Subject to the terms and conditions of this Agreement, Excite@Home agrees to
issue to Purchaser (as defined below), and Purchaser agrees to acquire from
Excite@Home (the "Share Exchange"), at the Closing, a number of shares of Series
B Common Stock (the "Series B Shares") equal to the Warrant Number (as defined
below) in consideration of and in exchange for an equal number of shares of
Series A Common Stock beneficially owned by AT&T (the "Exchanged Shares"). The
"Warrant Number" is 55,795,578, which was determined as the result of two
multiplied by
the total number of homes passed by AT&T's cable systems,
including cable systems under contract to be acquired by AT&T but excluding
homes passed by cable systems under contract to be divested by AT&T, as of the
date of the Letter Agreement. "Purchaser" shall mean TCI Internet Holdings, Inc.
1.2 Closing. (a) The closing of the Share Exchange (the "Closing")
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shall take place at the offices of Wachtell, Lipton, Xxxxx & Xxxx at 00 Xxxx
00xx Xxxxxx in New York, New York, or such other place as Excite@Home and AT&T
shall mutually agree, at 10:00 a.m., local time, on a mutually agreed date
occurring no later than the second business day following the satisfaction or
waiver of the conditions to Closing set forth in Sections 5 and 6 hereof (other
than any such conditions which are capable of being satisfied only at the
Closing). The date on which the Closing occurs is referred to herein as the
"Closing Date."
(b) At the Closing, Excite@Home shall deliver to Purchaser a
certificate or certificates registered in the name of Purchaser representing in
the aggregate a number of shares of Series B Common Stock equal to the Warrant
Number; and AT&T shall surrender or cause to be surrendered to Excite@Home the
certificate or certificates of shares of Series A Common Stock beneficially
owned by AT&T in a number of shares equal to the Warrant Number.
(c) If AT&T surrenders or causes to be surrendered a number of
shares of Series A Common Stock in excess of the Warrant Number at the Closing,
Excite@Home shall promptly deliver to AT&T a certificate or certificates
registered in the name of Purchaser representing in the aggregate a number of
shares of Series A Common Stock equal to the excess of the number of shares of
Series A Common Stock surrendered or caused to be surrendered by AT&T at the
Closing over the Warrant Number.
II. REPRESENTATIONS AND WARRANTIES OF EXCITE@HOME
Excite@Home hereby represents and warrants to, and covenants with,
AT&T as follows:
2.1 Organization, Good Standing and Qualification. Excite@Home is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate power and authority to
carry on its businesses as currently conducted.
2.2 Authorization. Excite@Home has full power and authority to
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execute, deliver and perform its obligations under this Agreement. All corporate
action on the part of Excite@Home necessary for the authorization, execution and
delivery of this Agreement and the performance of all obligations of Excite@Home
hereunder has been taken or will be taken prior to Closing. This Agreement, when
executed and delivered by Excite@Home, assuming the due execution and delivery
thereof by AT&T, shall constitute a valid and legally binding obligation of
Excite@Home, enforceable against it in accordance with its terms, subject to:
(a) judicial
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principles limiting the availability of specific performance,
injunctive relief and other equitable remedies, (b) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
generally relating to or affecting creditors' rights, and (c) limitations on the
enforceability of the indemnification and contribution provisions imposed by law
or public policy.
2.3 Consents and Approvals; No Conflict. The execution, delivery and
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performance of this Agreement and the consummation of each of the transactions
contemplated hereby do not and will not (a) conflict with or result in a breach
of the terms, conditions or provisions of, (b) constitute a default under, (c)
result in the creation of any lien, security interest, charge or encumbrance
upon Excite@Home's capital stock or assets pursuant to, (d) give any third party
the right to accelerate any obligation under, (e) result in a violation of, or
(f) require any order, qualification, waiver, permit, authorization, consent,
approval, exemption or other action by or from, or any registration, notice,
declaration, application or filing to or with, any court or administrative or
governmental body pursuant to (i) the Restated Certificate or the Restated
Bylaws of Excite@Home, or (ii) any law, statute, rule or regulation to which
Excite@Home is subject; PROVIDED, HOWEVER, that with respect to clause (f) of
this Section 2.5, no representation or warranty is made as to any such
requirements applicable to Excite@Home as a result of any facts that
specifically relate to AT&T, any business in which AT&T has engaged or proposes
to engage; PROVIDED FURTHER, that no representation or warranty is made as to
compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the
rules and regulations thereunder.
2.4 Valid Issuance of Exchanged Shares. The Series B Shares, when
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issued, sold and delivered in accordance with the terms of this Agreement will
be duly authorized, validly issued, fully paid and nonassessable, free of any
liens, claims, charges, security interests, pledges or encumbrances of any kind
(other than any of the foregoing created herein or by AT&T) and will possess all
of the rights, privileges and preferences provided therefor in the Restated
Certificate.
2.5 No Registration Required. Based in part on the representations
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made by the Purchaser in Section 3 hereof, the issuance of the Series B Shares
(assuming no change in applicable law and no unlawful distribution of the Series
B Shares by AT&T) will be exempt from registration under the Securities Act of
1933, as amended (the "Securities Act"), and the registration and qualification
requirements of applicable state securities laws.
2.6 Nasdaq Approval. The Nasdaq Condition has been satisfied.
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III. REPRESENTATIONS AND WARRANTIES OF AT&T
AT&T, on behalf of itself and Purchaser, hereby represents and
warrants to, and covenants with, Excite@Home as follows:
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3.1 Investment. Purchaser is acquiring the Series B Shares solely
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for the purpose of investment for Purchaser's own account, not as a nominee or
agent, and not with a view to, or for offer or sale in connection with, any
distribution thereof in any transaction which would be in violation of the
securities laws of the United States of America or any state thereof. Purchaser
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to any third person with respect
to any of the Series B Shares. Purchaser understands that the Series B Shares
have not been registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein.
3.2 Accredited Purchaser Status. Purchaser is an "accredited
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investor" within the meaning of Regulation D promulgated under the 1933
Act.
3.3 Restricted Securities. Purchaser understands that the Series B
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Shares may not be sold, transferred or otherwise disposed of without
registration under the Securities Act or the availability of an exemption
therefrom, and that in the absence of an effective registration statement
covering such stock or an available exemption from registration, such shares
must be held indefinitely. Purchaser shall not sell, transfer or otherwise
dispose of any Series B Shares except in a manner fully consistent with its
representations contained in this Section 3.3 and otherwise in full compliance
with the terms and conditions of this Agreement, the Stockholders Agreement and
the provisions of applicable law. Purchaser understands that no public market
now exists for any of the Series B Common Stock and that Excite@Home is under no
obligation to register any of the securities sold hereunder except as provided
herein.
3.4 Authorization. Purchaser is a corporation duly organized,
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validly existing and in good standing under the laws of its jurisdiction of
organization and has full power and authority to execute, deliver and perform
its obligations under each of this Agreement. Purchaser has taken all corporate
action necessary to authorize the execution, delivery and performance of its
obligations under this Agreement, and this Agreement, when executed and
delivered by Purchaser, assuming the due execution and delivery thereof by
Excite@Home, shall constitute a valid and legally binding obligation of
Purchaser, enforceable against it in accordance with its terms, subject to: (i)
judicial principles respecting election of remedies or limiting the availability
of specific performance, injunctive relief, and other equitable remedies; and
(ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect generally relating to or affecting creditors' rights.
3.5 Consents and Approvals; No Conflict. The execution, delivery and
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performance of this Agreement and the consummation of each of the transactions
contemplated hereby do not and will not (a) conflict with or result in a breach
of the terms, conditions or provisions of, (b) constitute a default under, (c)
result in the creation of any lien, security interest, charge or encumbrance
upon any material properties or assets pursuant to, (d) give any third party the
right to accelerate any obligation under, (e) result in a violation of, or (f)
require any order, qualification, waiver, permit, authorization, consent,
approval, exemption or other action
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by or from, or any registration, notice, declaration, application or filing to
or with, any court or administrative or governmental body pursuant to (i) the
certificate of incorporation and bylaws or other similar constituent documents
of Purchaser, or (ii) any law, statute, rule or regulation to which such
Purchaser is subject; PROVIDED, HOWEVER, that with respect to clause (f) of this
Section 3.5, no representation or warranty is made as to any such requirements
applicable to Purchaser as a result of the specific legal or regulatory status
of Excite@Home, any business in which Excite@Home has engaged or proposes to
engage.
3.6 Disclosure of Information. Purchaser has received or has had
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full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the Series B Shares and
Exchanged Shares to be exchanged under this Agreement.
IV. ADDITIONAL AGREEMENTS
4.1. Legends; Notations. The certificates evidencing the Series B
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Shares shall be endorsed with the legends currently applicable to the
Exchanged Shares.
4.2 Reasonable Efforts. Each of AT&T and Excite@Home agrees to use
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its reasonable best efforts to cause each condition to the Closing set forth in
Section 5 hereof, insofar as satisfaction of such condition requires any action
by or otherwise is in the control of AT&T or Excite@Home, as the case may be, to
be satisfied as soon as reasonably practicable and, in general, to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
reasonably practicable the Share Exchange in accordance with the terms of this
Agreement.
V. CONDITIONS TO AT&T'S OBLIGATIONS
The obligation of AT&T and Purchaser to consummate the Share
Exchange at the Closing is subject to the satisfaction or waiver of each of the
following conditions:
5.1 Share Exchange Conditions. The Share Exchange Conditions shall
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have been satisfied.
5.2 No Violation. There shall not be in effect any preliminary or
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permanent injunction or other order issued by any state or federal court or
other legal prohibition against the consummation of the Share Exchange.
5.3 Issuance of Shares. Excite@Home shall have delivered to
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Purchaser the stock certificate or certificates representing the Series B Shares
specified in Section 1.1.
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VI. CONDITIONS TO EXCITE@HOME'S OBLIGATIONS
The obligations of Excite@Home to consummate the Share Exchange is
subject to the satisfaction or waiver of each of the following conditions:
6.1 Share Exchange Conditions. The Share Exchange Conditions
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shall have been satisfied.
6.2 No Violation. There shall not be in effect any preliminary or
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permanent injunction or other order issued by any state or federal court or
other legal prohibition against the consummation of the Share Exchange.
6.3 Exchanged Shares. AT&T shall have surrendered or caused to be
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surrendered the stock certificate or certificates representing the Exchanged
Shares described in Section 1.1.
VII. MISCELLANEOUS
7.1 Governing Law. This Agreement shall be governed by, and
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construed in accordance with, in all respects the laws of the State of Delaware,
without regard to the conflicts of law rules of such State.
7.2 Successors and Assigns. Other than as and to the extent
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contemplated by the definition of "Purchaser" contained in Section 1.1 hereof,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of each of the other parties
hereto. Any assignment or delegation in contravention of this Agreement shall be
void and shall not relieve the assigning or delegating party of any obligation
hereunder. Subject to the foregoing provisions of this Section 7.2, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
7.3 Entire Agreement; Amendment. This Agreement supersedes the
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provisions of Part 2(k) of Annex B to the Letter Agreement. This Agreement, the
Stockholders Agreement, the Letter Agreement and any other agreements or
documentation delivered in connection with the Letter Agreement constitute the
full and entire understanding and agreement among the parties with regard to the
subjects hereof and thereof and supersede all prior agreements and
understandings, both written and oral, among the parties with regard to the
subject matter hereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
7.4 Notices. All notices and other communications required or
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permitted to be given by any provision of this Agreement shall be in writing and
mailed (certified or registered
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mail, postage prepaid, return receipt requested) or sent by hand or overnight
courier, or by facsimile transmission (with acknowledgment received), charges
prepaid and addressed to the intended recipient as follows, or to such other
address or number as may be specified from time to time by like notice to the
parties:
(a) If to AT&T Corp and/or Purchaser:
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AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy:
Attn: Xxxxxxx X. Xxxxxx, Esq.
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
(e) If to Excite@Home:
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Excite@Home
000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxx Xxxx, Esq.
with copies to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Any party may from time to time specify a different address for notices by like
notice to the other party. All notices and other communications given in
accordance with the provisions of this Agreement shall be deemed to have been
given and received (i) four (4) business days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii)
when delivered by hand or transmitted by facsimile (with acknowledgment received
and, in the case of a facsimile only, a copy of such notice is sent no later
than the next business day by a reliable overnight courier service, with
acknowledgment of receipt) or (iii) one (1) business day after the same are sent
by a reliable overnight courier service, with acknowledgment of receipt.
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7.8 Expenses. Each of Excite@Home and AT&T shall bear its own
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expenses and legal fees incurred on its behalf in connection with this Agreement
and the transactions contemplated hereby.
7.9 Counterparts. This Agreement may be executed in any number of
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counterparts with the same effect as if all parties hereto had signed the same
document. Each counterpart shall be enforceable against the parties actually
executing such counterpart, and all counterparts shall be construed together and
shall constitute one instrument.
7.10 Severability. In the event that any provision of this Agreement
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becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; PROVIDED, that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AT HOME CORPORATION
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Chairman and Chief Executive
Officer
AT&T CORP.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President - Law and Secretary
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