AT&T Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
April 7, 1999
▇▇▇ Communications, Inc.
Cox @Home, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
At Home Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: At Home Corporation Master Distribution Agreement Term
Sheet dated May 15, 1997 (the "MDA")
Gentlemen:
1. Capitalized terms used but not defined herein shall have the meanings set
forth in the MDA.
2. In consideration of the agreement of AT&T Corp. ("AT&T") and Tele-
Communications, Inc. ("TCI" and together with AT&T, the "AT&T Parties") in
paragraph 3 below, and subject to approval of a Fifth Amended and Restated
Certificate of Incorporation (the "Fifth Certificate") of At Home Corporation
("@Home") in the form attached hereto as Exhibit A, each of ▇▇▇ Communications,
Inc. ("▇▇▇") and ▇▇▇ @Home, Inc. ("Cox @Home," and collectively with Cox, the
"Cox Parties") agrees that it will not, and it will not permit any other member
of the Cox Stockholder Group or any of their respective Affiliates to, exercise
directly or indirectly any right to terminate any of the Cable Parent
Exclusivity Provisions pursuant to Section 8 of the MDA as a result of any
Performance Default on the First Determination Date or any right to deliver any
notice with respect thereto or take or propose to take any action in furtherance
of, or with the effect of, the foregoing. For the avoidance of doubt, nothing
herein shall be deemed to preclude any Cox Party from exercising any right it
may have to terminate the Cable Parent Exclusivity Provisions in the event that
there is a Performance Default on any Subsequent Determination Date.
3. Subject to paragraph 4, in the event that on May 31, 2000, the aggregate
number of Residential Subscribers of the AT&T Parties and their respective
Affiliates (the "AT&T Subs") is fewer than 277,000, AT&T will deliver to Cox a
number of shares of Series A Common Stock, $.01 par value, of @Home ("Series A
Common Stock") equal to the product of (a) 10 and (b) the excess, if any, of
277,000 over the aggregate number of AT&T Subs determined as of such date. Such
requirement to deliver shares of Series A Common Stock shall be appropriately
adjusted for any stock splits or combinations, stock dividends,
recapitalizations or business combinations occurring after the date hereof. On
or prior to June 30, 2000, AT&T shall deliver to each of @Home and
Cox a certificate setting forth the aggregate number of AT&T Subs as of May 31,
2000, accompanied by a description in reasonable detail of the basis for such
calculation. Within 10 business days after delivery of such certificate, @Home
shall confirm such number of AT&T Subs as of May 31, 2000. In the event that any
shares are required to be delivered to Cox pursuant to this paragraph, AT&T
shall deliver such shares within 15 business days following @Home's confirmation
of the aggregate number of AT&T Subs as of May 31, 2000. In the event of any
disagreement with respect to such number of AT&T Subs, AT&T shall deliver to Cox
such number of shares, if any, as to which there is no dispute, and within 15
business days @Home, in consultation with AT&T and Cox, shall resolve the
disagreement as to the number of AT&T Subs as of May 31, 2000. In the absence of
manifest error, @Home's resolution shall be final and binding on the parties
and, within 10 business days thereafter, AT&T shall deliver to Cox any
additional shares that may be deliverable hereunder based on the final
determination of the number of AT&T Subs as of May 31, 2000. All shares
delivered hereunder shall be delivered free and clear of any liens and
encumbrances, except as may arise by virtue of the Cox Parties being parties to
the Stockholders Agreement, as amended, or under federal or state securities
laws.
4. Notwithstanding paragraph 3, AT&T shall not be required to deliver any
shares of Series A Common Stock to Cox to the extent that the failure of the
aggregate number of AT&T Subs to equal at least 277,000 on May 31, 2000 results
from (a) any problems or failures in, or damages to, the network or other
infrastructure of @Home and its Affiliates (other than AT&T and its non-@Home
Affiliates), (b) interruptions in service or any other problems or failures
relating to the delivery of the @Home Services to the Point of Demarcation or
attributable to software provided by @Home, or (c) @Home's failure to meet its
current performance metrics.
5. In the event the Fifth Certificate shall not
have been approved by the board and stockholders of @Home and become effective
on or before July 21, 1999, either AT&T or Cox may terminate this Agreement
(unless the Fifth Certificate shall have become effective prior to such
termination), in which case this Agreement will be of no further force and
effect and the MDA will remain in effect as it existed prior to the date of this
Agreement, as if this Agreement had never been executed. For the avoidance of
doubt, in the event of such termination, the Cox Parties will be entitled to
exercise such rights as they may have pursuant to Section 8 of the MDA, within
the time periods set forth therein, as a result of any Performance Default on
the First Determination Date. In addition, in the event of such termination, the
Fifth Certificate will be abandoned and will not be filed with the Delaware
Secretary of State or become effective.
6. Each party hereto hereby makes the following representations, warranties and
covenants to each of the other parties hereto: (a) Such party has the legal
right and requisite power and authority to make and enter into this Agreement
and to perform its obligations hereunder and to comply with the provisions
-2-
hereof. The execution, delivery and performance of this Agreement by
such party has been duly authorized by all necessary action on its part. This
Agreement has been duly executed and delivered by such party and constitutes the
valid and binding obligation of such party enforceable against it in accordance
with its terms.
(b) The execution, delivery and performance of this Agreement by such party, and
the compliance by such party with the provisions hereof, do not and will not
(with or without notice or lapse of time, or both) conflict with, or result in
any violation of, or default under, or give rise to any right of termination,
cancellation or acceleration of any obligation or the lessening of a material
benefit under, any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to such party or any of its properties or assets (excluding in the case of the
AT&T Parties and the Cox Parties, the properties or assets of @Home and its
Subsidiaries), other than any such conflicts, violations, defaults, or other
effects which, individually or in the aggregate, do not and will not prevent,
restrict or impede such party's performance of its obligations under and
compliance with the provisions of this Agreement. If such party is an entity or
association, the execution, delivery and performance of this Agreement by such
party does not and will not contravene the charter, bylaws or other
organizational documents of such party.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental or regulatory authority or any
other Person (other than any of the foregoing which have been obtained and, at
the date in question, are then in effect) is required under existing laws as a
condition to the execution, delivery or performance of this Agreement by such
party. (d) Each member of such party's Stockholder Group and each Ultimate
Parent and any Controlled Affiliate thereof, in each case which owns securities
of the Company, is a signatory hereto.
7. Each party hereto agrees not to issue any press releases or otherwise make
any public statements with respect to the matters contemplated hereby without
the prior consent of the other party, provided however that any party may make
any such disclosure if required by law, provided further however that if any
such disclosure makes direct or indirect reference to any other party hereto or
any of its Affiliates, the disclosing party shall, if practicable, consult with
such other party prior to making such disclosure.
8. Except as otherwise expressly provided herein, neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto other than by operation of law in connection with a merger or
similar business combination involving such party and except that each of the
Cox Parties and the AT&T Parties may assign their rights hereunder to their
respective Affiliates; provided that no such assignment shall relieve any party
of its obligations hereunder. Subject to the foregoing, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
-3-
9. Nothing in this Agreement, whether express or implied, shall be construed to
give any Person, other than the parties hereto, any legal or equitable right,
remedy or claim under or in respect of this Agreement.
10. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to the conflicts of law rules of
such State.
11. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.
12. If one or more provisions of this Agreement are held to be unenforceable
under applicable law, portions of such provisions, or such provisions in their
entirety, to the extent necessary, shall be severed from this Agreement, and the
balance of this Agreement shall be enforceable in accordance with its terms.
13. Any waiver, permit, consent or approval of any kind or character on the part
of any party of any breach or default under this Agreement, or any waiver on the
part of any party of any provisions or conditions of this Agreement, must be
made in writing and shall be effective only to the extent specifically set forth
in such writing. All remedies, either under this Agreement or otherwise afforded
to any party, shall be cumulative and not alternative.
14. Except as otherwise provided in this Agreement, this Agreement contains the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings among the parties with
respect to the subject matter hereof.
15. Without intending to limit the remedies available to any of the parties
hereto, each of the parties hereto acknowledges and agrees that a breach by such
party of any provision of this Agreement will cause the other parties hereto
irreparable injury for which an adequate remedy at law is not available.
Therefore, the parties hereto agree that in the event of any such breach each
such party shall be entitled to an injunction, restraining order or other form
of equitable relief from any court of competent jurisdiction restraining any
other party hereto from committing any breach or threatened breach of, or
otherwise specifically to enforce, any such provision of this Agreement, in
addition to any other remedies that such parties may have at law or in equity.
16. Any amendment to this Agreement must be in writing and must be signed by
each of the parties hereto; provided however any amendment to paragraph 3 or
paragraph 4 hereof will be effective if a written amendment thereto is executed
and delivered by each of Cox and AT&T.
-4-
17. If the foregoing correctly sets forth your understanding, please so
indicate by signing below. Upon execution and delivery by all of the
undersigned, this Agreement shall become a legal and binding agreement
among the parties hereto.
AT&T Corp.
By: ___________________
Tele-Communications, Inc.
By:____________________
Agreed and Accepted as of the date hereof:
▇▇▇ Communications, Inc.
By: ___________________
Cox @Home, Inc.
By: ___________________
At Home Corporation
By: ___________________
-4-
