TIVO INC.
INVESTMENT AGREEMENT
This Investment Agreement (the "Agreement") is entered into as of June
9, 2000, by and between TiVo Inc., a Delaware corporation (the "Company"), and
America Online, Inc., a Delaware Corporation (the "Purchaser"), relating to,
among other things, the Company's common stock, par value $0.001 per share (the
"Common Stock"), and the Company's Series A Convertible Preferred Stock, par
value $0.001 per share (the "Preferred Stock").
Recitals
Whereas, the Company desires to sell to the Purchaser and the Purchaser
desires to purchase from the Company, Common Stock and, depending on the trading
price of the Common Stock, Preferred Stock (collectively, the "Shares") on the
terms and conditions set forth in this Agreement (the "Share Purchase");
Whereas, in connection with the sale and issuance of the Shares, the
Company desires to issue to the Purchaser the Warrants (as defined herein) to
purchase shares of Common Stock;
Whereas, simultaneously herewith, the Company and the Purchaser are
entering into (i) a Stockholders and Registration Rights Agreement (the
"Stockholders Agreement") which will provide for certain rights and obligations
of the parties related to, among other things, the Purchaser's equity interests
in the Company, and (ii) a Product Integration and Marketing Agreement (the
"Commercial Agreement"), pursuant to which the Company and the Purchaser will
work together to jointly develop a branded interactive television service;
Whereas, simultaneously herewith, certain stockholders of the Company
collectively owning in excess of a majority of the outstanding shares of Common
Stock are entering into a Voting Agreement (the "Voting Agreement") with the
Purchaser, pursuant to which such stockholders agree to vote their shares of
Common Stock in favor of certain of the transactions contemplated hereby and by
the Related Agreements (as defined herein);
Now, Therefore, in consideration of the foregoing recitals and the
mutual promises, representations, warranties and covenants hereinafter set forth
and for other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Agreement To Sell And Purchase.
1.1 Authorization of Shares. Subject to receipt of the Company Stockholder
Approval (as defined below), the Company has authorized (i) the sale and
issuance to the Purchaser of the Shares and the Warrants, (ii) the issuance of
the shares of Common Stock to be issued upon conversion of the Preferred Shares
(the "Conversion Shares") and (iii) the issuance of the Warrant Shares (as
defined herein) to be issued upon exercise of the Warrants. The Shares,
Conversion Shares and Warrant Shares shall have the rights, preferences,
privileges and restrictions set forth in the Amended and Restated Certificate of
Incorporation of the Company in the form attached hereto as Exhibit A (the
"Restated Certificate").
1.2 Sale and Purchase.
(a) Common Stock. Subject to Section 1.2(c) and the other terms and conditions
of this Agreement, the Company agrees to issue and sell to the Purchaser and the
Purchaser agrees to purchase at the Closing (as defined below) that number of
shares of Common Stock, which when multiplied by the Common Stock Price (as
defined below) is as near as possible to two hundred million dollars
($200,000,000) (the "Common Shares"). Subject to Section 1.2(b), the per share
purchase price for the Common Shares shall be equal to the higher of (i) $23.00,
or (ii) the average closing price of the Common Stock on the Nasdaq National
Market System for the 10 consecutive full trading days ending on the
Determination Date (as defined below) (the "Closing Average"), subject to a
maximum per share purchase price of thirty-five dollars ($35) (the "Common Stock
Price"). If the Closing Average is less than ten dollars ($10) per share, the
Purchaser will have the right to terminate this Agreement and the transactions
contemplated hereby, subject to the Company's rights under Section 1.2(b), at
any time during the four Business Day period commencing on the Determination
Date, exercisable by the Purchaser's delivery of written notice to such effect
to the Company during such four Business Day period; provided that such notice
and the Purchaser's termination of this Agreement may be withdrawn at any time
during such four Business Day period. For purposes hereof, "Determination Date"
means the trading day immediately preceding the date on which all the conditions
to Closing (other than conditions that, by their terms, cannot be satisfied
until the Closing) set forth in Section 5 hereof shall have been satisfied or
waived.
(b) Adjustment of Common Stock Price. If the Purchaser exercises its termination
right pursuant to Section 1.2(a), the Company shall have the right, exercisable
during the three Business Day period following the date of the Purchaser's
notice of termination by delivery of written notice to the Purchaser during such
three Business Day period, to adjust the Common Stock Price to be ten dollars
($10) per share. If the Company makes an election to adjust the terms of the
transaction as contemplated by the preceding sentence within such three Business
Day period, (i) no termination of this Agreement shall be deemed to have
occurred pursuant to Section 1.2(a) and (ii) this Agreement shall remain in
effect in accordance with its terms, except that all references in this
Agreement to the Common Stock Price shall be deemed to refer to the Common Stock
Price as adjusted pursuant to this Section 1.2(b).
(c) Restructuring of Share Purchase if Common Stock Price Is Less Than Thirty
Dollars. In the event that the Common Stock Price is less than thirty dollars
($30) per share, the number of shares of Common Stock to be purchased by the
Purchaser shall be reduced and, subject to the terms and conditions of this
Agreement, the Company shall issue to the Purchaser shares of Preferred Stock in
accordance with this Section 1.2(c). For purposes of this Section 1.2(c), the
term "Adjustment Price" shall mean (i) if the Closing Average is equal to or
greater than ten dollars ($10) per share, the Common Stock Price or (ii) if the
Closing Average is less than $10, the Closing Average.
(i) Decrease in Number of Common Shares Purchased. The number of Common Shares
that the Company shall issue to the Purchaser shall be reduced to a number equal
to 6,666,667 shares multiplied by a fraction, the numerator of which is the
Adjustment Price and the denominator of which is thirty dollars ($30).
(ii) Sale of Preferred Stock to the Purchaser. The Company agrees to issue to
the Purchaser and the Purchaser agrees to purchase in accordance with the terms
hereof that number of shares of Preferred Stock having an aggregate initial
liquidation value equal to (x) two hundred million dollars ($200,000,000) less
(y) the aggregate number of Common Shares purchased multiplied by the Adjustment
Price (the "Preferred Shares"). If, as of the Closing Date, the sum of (1) the
aggregate initial liquidation value of the Preferred Shares to be purchased
pursuant to the preceding sentence, (2) the value of the Common Shares to be
purchased (calculated as the product of the number of Common Shares to be
purchased and the Common Stock Price) and (3) the value of the Common Stock
previously owned by the Purchaser (calculated as the product of the number of
such shares and the amount paid therefor), exceeds 25% of the sum of (1) the
aggregate initial liquidation value of Preferred Shares to be purchased, (2) the
value of Common Shares to be purchased (calculated as the product of the number
of Common Shares to be purchased and the Common Stock Price) and (3) the value
of all the shares of Common Stock outstanding on the Closing Date prior to the
transactions contemplated hereby (calculated as the product of the number of
such shares and the Closing Average) (such excess above 25%, the "Excess Equity
Value"), then the number of shares of Preferred Stock to be purchased by the
Purchaser shall be reduced by a number of shares as would have an aggregate
initial liquidation value equal to the Excess Equity Value (the "Excess
Preferred Shares").
1.3 Warrants. Upon the closing of the Share Purchase, in accordance with this
Section 1.3, the Company shall issue to the Purchaser warrants (the "Warrants")
to purchase in the aggregate a number of shares of Common Stock which, when
combined with the number of shares of Common Stock owned by the Purchaser as of
the Closing Date and the number of shares of Common Stock that would be issuable
as of the Closing pursuant to the Preferred Shares to be issued pursuant to
Section 1.2(c)(ii), if any, would constitute (after issuance) 30% of all the
issued and outstanding capital stock of the Company as of the Closing Date,
rounded to the nearest whole share (the "Warrant Shares"). The Warrant Shares
shall be allocated among different forms of warrants as follows:
(i) a warrant to purchase the lesser of (i) 33 1/3% of all the Warrant Shares
and (ii) 2,941,402 Warrant Shares shall be issued in the form of Exhibit B
hereto;
(ii) a warrant to purchase the lesser of (i) 33 1/3% of all the Warrant Shares
and (ii) 2,941,401 Warrant Shares shall be issued in the form of Exhibit C
hereto; and
(iii) (A) if the Closing Average is equal to or greater than thirty dollars
($30), a warrant to purchase the remaining Warrant Shares after the allocation
set forth in clauses (i) and (ii) above (the "Vested Warrant Shares") in the
form of Exhibit D hereto, having a per share exercise price equal to the Common
Stock Price or (B) if the Closing Average is less than thirty dollars ($30), (1)
a warrant to purchase a number of Warrant Shares equal to the number of Vested
Warrant Shares multiplied by a fraction, the numerator of which is the
Adjustment Price and the denominator of which is thirty dollars ($30) in the
form of Exhibit D hereto, having a per share exercise price equal to the Common
Stock Price, and (2) a warrant to purchase the remaining Vested Warrant Shares
after the allocation set forth in the preceding clause (1) in the form of
Exhibit E hereto, having a per share exercise price equal to the lesser of (x)
thirty dollars ($30) and (y) three times the Closing Average; provided that a
portion of any Warrant to be issued pursuant to this Section 1.3(iii)(B)(2)
shall be mandatorily exercisable in accordance with its terms with respect to a
number of Vested Warrant Shares equal to the number of shares of Common Stock,
if any, that would have been issuable upon conversion of the Excess Preferred
Shares (if they were issued) as of the Closing Date, subject to a maximum of all
the Vested Warrant Shares subject to such Warrant.
The Purchaser shall not be obligated to pay any additional consideration for the
issuance of the Warrants and, in addition to the terms set forth above, the
terms of each of the Warrants shall be as set forth in Exhibits B, C, D and, if
applicable, E.
1.4 Use and Escrow of Certain Funds.
(a) The Company and the Purchaser agree that (i) sixty percent (60%) of the
proceeds received by the Company in the Share Purchase and forty percent (40%)
of the proceeds received by the Company upon the exercise of any of the Warrants
shall be retained by the Company without any restriction whatsoever on the use
thereof and (ii) an amount in cash equal to forty percent (40%) of any proceeds
received by the Company in the Share Purchase and sixty percent (60%) of the
proceeds received by the Company upon the exercise of any of the Warrants shall
be deposited into an interest-bearing escrow account (the "Escrow Account") with
an escrow agent to be selected by mutual agreement of the Company and the
Purchaser pursuant to an escrow agreement in the form of Exhibit F hereto, with
such changes and additions as shall be requested by the escrow agent or the L/C
Bank (as defined below) and reasonably acceptable to the Company and the
Purchaser (the "Escrow Agreement"). At any time that this Agreement provides for
the Escrowed Funds to be released from the Escrow Account, both parties agree to
take any action required under the Escrow Agreement to cause the release of the
Escrowed Funds. Such proceeds shall be allocated in such manner until such time
as the aggregate amount of proceeds retained by the Company pursuant to clause
(i) above equals one hundred million dollars ($100,000,000), after which time an
amount in cash equal to all such proceeds shall be deposited into the Escrow
Account until such time as all such deposited funds (but excluding any interest
earned on such funds) equal one hundred million dollars ($100,000,000), after
which time all further proceeds shall be retained by the Company. All amounts
deposited into the Escrow Account, together with all interest earned on amounts
in the Escrow Account (all such funds and interest, the "Escrowed Funds"), shall
be held as a trust fund and shall not be subject to any lien, attachment,
trustee process or any other judicial process of any creditor of any party
hereto, and shall be held and distributed in accordance with the terms, at the
times and to the parties in accordance with the terms hereof and the Escrow
Agreement. Upon release to the Company in accordance with this Section 1.4 and
the terms of the Escrow Agreement, one hundred million dollars ($100,000,000) of
the Escrowed Funds shall be designated as "Earmarked Funds" and used exclusively
in accordance with Section 8.2 of the Commercial Agreement and any additional
Escrowed Funds shall be released to the Company and may be used by the Company
for any purpose whatsoever. If, upon the release of the Escrowed Funds to the
Company in accordance with the terms of the Escrow Agreement, the amount of
Escrowed Funds (excluding any interest earned while in the Escrow Account) is
less than one hundred million dollars ($100,000,000) at such time, then 60% of
the proceeds from the exercise of any of the Warrants (up to the difference
between one hundred million dollars ($100,000,000) and such amount of Escrowed
Funds) shall also be designated as "Earmarked Funds" and used exclusively in
accordance with Section 8.2 of the Commercial Agreement.
(b) If (i) the bona fide commercial release and deployment ("Set Top Box
Launch") of the Integrated Product (as defined in the Commercial Agreement) has
not occurred by December 31, 2001, and (ii) the Purchaser has not committed a
Material Breach (as defined in the Commercial Agreement) of the Commercial
Agreement that has not been cured or waived at such time, then the Purchaser
shall have the option to require the Company, exercisable by written notice to
such effect to the Company (a "Put Notice"), to repurchase that number of
Preferred Shares having an initial liquidation value equal to the amount of
proceeds deposited by the Company into the Escrow Account (the "Put Amount")
and, if all the Preferred Shares have an aggregate initial liquidation value of
less than the Put Amount, then the Purchaser may also require the Company to
repurchase a number of shares of Common Stock having a value (calculated as the
product of the number of shares of Common Stock and the Common Stock Price)
equal to the difference between the aggregate initial liquidation value of the
Preferred Shares and the Put Amount. Subject to Section 1.4(c), the aggregate
purchase price for the repurchase of Shares pursuant to this Section 1.4(b)
shall be deemed paid by the release to the Purchaser of all the Escrowed Funds
(including all interest included therein); provided that amount of the interest
earned on funds deposited into the Escrow Account to be released to the
Purchaser shall be reduced by the amount of dividends actually paid in cash or
Common Stock to the Purchaser on the Preferred Shares, subject to a maximum
equal to the amount of all such interest. The closing of such repurchase shall
occur as soon as practicable following delivery of the Purchaser's notice of
exercise, subject to the receipt of necessary governmental approvals. The
Company agrees to use its best efforts to obtain all such governmental approvals
and take all such other actions as shall be required to consummate such
repurchase. At such closing, the Purchaser shall deliver to the Company
certificates representing the Shares to be repurchased and the Company shall
deliver to the Purchaser and the escrow agent under the Escrow Agreement any
notice of release or other instrument reasonably requested by either of them to
effectuate the release of the Escrowed Funds (including all interest earned
thereon, subject to the proviso in the second sentence of this section) in
accordance with the terms of the Escrow Agreement and this Section 1.4(b).
(c) Within thirty (30) days after the execution and delivery of this Agreement,
the Company and the Purchaser shall establish with a financial institution
selected by the Purchaser (the "L/C Bank") an irrevocable letter of credit in an
amount equal to the amount of Escrowed Funds (as changed from time to time) for
the benefit of the Purchaser in the form mutually agreed to be the parties (the
"Letter of Credit"), which Letter of Credit shall be available for drawing by
the Purchaser pursuant to this Section 1.4(c) and shall be secured by a first
priority security interest in the Escrowed Funds as collateral for the Company's
repayment of any amounts drawn on the Letter of Credit. The terms of the Letter
of Credit shall include, without limitation, (i) a draw down period that shall
expire no earlier than the 180th day after December 31, 2001 and (ii) the right
of the Purchaser to draw upon the Letter of Credit as provided under this
Section 1.4(c) without action or authorization on the part of the Company. In
the event that, for any reason, all or any portion of the Escrowed Funds are not
released to the Purchaser in accordance with Section 1.4(b) and the terms of the
Escrow Agreement within thirty (30) days of the Purchaser's Put Notice, then the
Purchaser shall have the right to draw on the Letter of Credit in an amount
equal to the total amount of Escrowed Funds at the time of Purchaser's Put
Notice less the amounts of any Escrowed Funds actually received by the
Purchaser, and the Purchaser shall receive such funds at the closing
contemplated by Section 1.4(b). The costs of the Letter of Credit shall be
divided equally between the Company and the Purchaser; provided that the Company
shall not be required to pay more than four hundred thousand dollars ($400,000)
of such costs.
(d) If the Set Top Box Launch occurs prior to December 31, 2001, the Company
shall be entitled to receive from the escrow under the Escrow Agreement all
Escrowed Funds. One hundred million dollars ($100,000,000) of the Escrowed Funds
released to the Company shall be designated as Earmarked Funds and used
exclusively in accordance with Section 8.2 of the Commercial Agreement and any
additional Escrowed Funds shall be released to the Company and may be used by
the Company for any purpose whatsoever. If, upon the release of the Escrowed
Funds to the Company in accordance with the foregoing and the terms of the
Escrow Agreement, the amount of Escrowed Funds (excluding any interest earned
thereon) is less than one hundred million dollars ($100,000,000) at such time,
then 60% of the proceeds from the exercise of any of the Warrants (up to the
difference between one hundred million dollars ($100,000,000) and such amount of
Escrowed Funds) shall also be designated as Earmarked Funds and used exclusively
in accordance with Section 8.2 of the Commercial Agreement.
1.5 Adjustments. To the extent not actually adjusted pursuant to the adjustment
provisions for the Preferred Stock in the Restated Certificate or in the terms
of each applicable Warrant, the applicable purchase price, conversion price and
exercise price with respect to the purchase of the Shares, the conversion of the
Preferred Stock and the exercise of the Warrants and the number and nature of
the securities to be received upon the conversion of the Preferred Stock and the
exercise of the Warrants shall be adjusted to reflect any stock splits, cash or
noncash dividends, recapitalizations, mergers, combinations, distributions,
issuances, reclassifications, exchanges, substitutions or other similar events
with respect to the capital stock of the Company, or sales of capital stock
below the applicable purchase price with respect to the Shares, in each case, to
provide the Purchaser with such terms and rights, economic and otherwise, that
the Purchaser would have received if such event occurred after the Closing.
Section 2. Closing, Delivery and Payment.
2.1 Closing. The closing of the sale and purchase of the Shares and Warrants by
the Purchaser under this Agreement (the "Closing") shall take place five (5)
days following the Determination Date, unless the Purchaser shall have delivered
to the Company a notice exercising its termination right pursuant to Section
1.2(a) and the Company shall have exercised its right to adjust the terms of the
transactions contemplated hereby pursuant to Section 1.2(b), in which case the
Closing shall occur ten (10) Business Days following the Determination Date (or,
if any such day is not a Business Day, on the next succeeding Business Day), at
the offices of Xxxxxx Godward LLP, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx
00000 or at such other time or place as the Company and the Purchaser may
mutually agree (the "Closing Date").
2.2 Delivery. At the Closing, subject to the terms and conditions hereof, the
Company shall deliver to the Purchaser (i) certificates registered in the name
of the Purchaser representing the Shares to be purchased by the Purchaser in
accordance with Section 1, free and clear of all liens, claims, encumbrances
(other than those arising pursuant to this Agreement and the Related
Agreements), and (ii) the Warrants in the form of the applicable exhibits
attached hereto, for the Warrants to be issued to the Purchaser in accordance
with Section 1, free and clear of all liens, claims and encumbrances (other than
those arising pursuant to this Agreement and the Related Agreements), in each
case duly executed by an authorized officer of the Company and registered in the
name of the Purchaser. At the Closing, subject to the terms and conditions
hereof, the Purchaser shall deliver to the Company the purchase price for the
Shares by check or wire transfer of immediately available funds.
Section 3. Representations and Warranties of the Company.
Except as expressly set forth on a Schedule of Exceptions delivered by
the Company to the Purchaser simultaneously herewith, the Company hereby
represents and warrants to the Purchaser as of the date of this Agreement and
the Closing Date as follows:
3.1 Organization, Good Standing and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Company has all requisite corporate power and authority
to own and operate its properties and assets, to execute and deliver this
Agreement and the Stockholders Agreement, the Commercial Agreement, the Warrants
and the Escrow Agreement, (collectively, the "Related Agreements"), to give
affect to the Restated Certificate, to issue and sell the Shares, the Warrants,
the Warrant Shares and the Conversion Shares, to carry out the provisions of
this Agreement, the Related Agreements and the Restated Certificate, and to
carry on its business as presently conducted and as presently proposed to be
conducted. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so could not reasonably be expected, individually or in the aggregate, to
have a material adverse effect on the Company or its business, assets, financial
condition, prospects, liabilities or results of operations (a "Material Adverse
Effect"). The Company does not, directly or indirectly, own or control any
interest in any corporation, joint venture, limited partnership or similar
entity. Attached hereto as Exhibit G is a complete and correct copy of the
by-laws of the Company, as amended to the date of this Agreement (the
"By-laws").
3.2 Capitalization; Voting Rights. The authorized capital stock of the Company
as of May 31, 2000 consists of seventy-five million (75,000,000) shares of
Common Stock (par value $.001 per share), of which (i) 37,977,220 shares were
issued and outstanding and (ii) 6,141,409 shares were reserved for future
issuance to employees and non-employee directors pursuant to outstanding stock
options issued pursuant to the Company Option Plans (as defined below) and (iii)
25,000 shares were reserved for future issuance pursuant to the Outstanding
Warrants (as defined below), and two million (2,000,000) shares of Preferred
Stock (par value $.001 per share), of which no shares have been issued. The
Company has not issued any shares of its capital stock between May 31, 2000 and
the date of this Agreement, except pursuant to the exercise of options. All
issued and outstanding shares of the Company's Common Stock: (a) have been duly
authorized and validly issued, (b) are fully paid and nonassessable, (c) were
issued without violation of any preemptive or preferential right, and (d) were
issued in compliance with all applicable state and federal laws concerning the
issuance of securities. The rights, preferences, privileges and restrictions of
the Shares are as stated in the Restated Certificate. The Company will reserve
an adequate number of shares of Common Stock for issuance upon conversion of the
Preferred Shares and exercise of the Warrants. Except as may be granted pursuant
to the Related Agreements, stock awards and options to purchase shares of Common
Stock granted pursuant to the Company's 1997 Equity Incentive Plan, 1999 Equity
Incentive Plan and 1999 Non-Employee Directors' Stock Option Plan (the "Company
Option Plans") issued pursuant to the 1999 Employee Stock Purchase Plan (the
"Purchase Plan") and outstanding warrants to purchase shares of the Company's
Common Stock (the "Outstanding Warrants"), there are no outstanding options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal), proxy or shareholder agreements, or agreements of any kind for the
purchase or acquisition from the Company of any of its securities or the
designation of any board member by any series of Preferred Stock or by holders
of Common Stock. The Company has reserved 12,800,000 shares of Common Stock for
issuance to employees, officers or directors of, or consultants or advisors to
the Company pursuant to the Company Option Plans, of which 3,677,766 remain
available for future grant and has reserved 600,000 shares of Common Stock for
issuance to employees pursuant to the Purchase Plan, of which 516,033 shares
remain available for future issuance. When issued in compliance with the
provisions of this Agreement and the Restated Certificate, the Shares, the
Warrant Shares and the Conversion Shares will be duly authorized, validly
issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Shares and the Conversion Shares may
be subject to restrictions on transfer under state and/or federal securities
laws as set forth herein or as otherwise required by such laws at the time a
transfer is proposed. Except as contained in the Related Agreements and the
Restated Certificate, or as set forth in Section 3.2 of the Schedule of
Exceptions, the Company is not aware of any written agreement or other
understandings relating to the voting of its securities. Except as expressly
provided in this Agreement or the Related Agreements, (x) there are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any securities of the Company and (y) there are no other subscriptions,
options, calls, warrants or other rights (including registration rights, whether
demand or piggyback registration rights), agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
the Company to which the Company or any of its subsidiaries is a party. Except
as set forth in Section 3.2 of the Schedule of Exceptions, the consummation of
the transactions contemplated by this Agreement and the Related Agreements will
not trigger the anti-dilution provisions or other price or conversion adjustment
mechanisms of any outstanding subscriptions, options, calls, warrants,
commitments, contracts, preemptive rights, rights of first refusal, demands,
conversion rights or other agreements or arrangements of any character or nature
whatsoever under which the Company is or may be obligated to issue or acquire
shares of any of its capital stock. The sale of the Shares and the issuance of
the Conversion Shares in accordance with the terms of the Restated Certificate
and the issuance of the Warrant Shares in accordance with the terms of the
Warrants is not and will not be subject to any preemptive rights, rights of
first refusal, subscription or similar rights that have not been properly
waived.
3.3 Authorization; Binding Obligations.
(a) All corporate action on the part of the Company, its officers, directors and
shareholders necessary for the authorization, execution and delivery of this
Agreement and the Related Agreements, the performance of all obligations of the
Company hereunder and thereunder as of the Closing and the authorization, sale,
issuance and delivery of the Shares pursuant hereto and the Conversion Shares
pursuant to the Restated Certificate has been taken, except for the approval by
the stockholders of the Company (i) by a majority of the votes cast of the
issuance of the Shares, the Warrant Shares and the Conversion Shares and (ii) by
the holders of a majority of all the outstanding shares of Common Stock of the
adoption of the Restated Certificate (together, the "Company Stockholder
Approval"). The Company Stockholder Approval is the only vote of the holders of
any class or series of the Company's securities necessary to adopt this
Agreement and any of the Related Agreements and approve the transactions
contemplated hereby and thereby. Each of the Agreement and the Related
Agreements, are valid and binding obligations of the Company enforceable in
accordance with their terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; (b) general principles of equity
that restrict the availability of equitable remedies; and (c) to the extent that
the enforceability of the indemnification provisions in Section 6.4 of the
Stockholders Agreement may be limited by applicable laws. The issuance and sale
of the Shares and the Warrants, the subsequent exercise of the Warrants and the
issuance of shares of Common Stock in connection therewith and the subsequent
conversion of the Preferred Shares into Conversion Shares are not and will not
be subject to any preemptive rights or rights of first refusal.
(b) Other than filings which may be necessary pursuant to the Securities Act of
1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or filings required under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx") or applicable state
securities laws, no notice to, filing with, exemption or review by, or
authorization, consent or approval of, any public body or authority is necessary
for the consummation by the Company of the transactions contemplated by this
Agreement.
3.4 SEC Filings.
(a) The Company has made available to the Purchaser accurate and complete copies
(including exhibits thereto) of (i) its registration statement on Form S-1 (Reg.
No. 333-83515 that was declared effective by the XXX xx Xxxxxxxxx 00, 0000, (xx)
its quarterly report on Form 10-Q for the quarter ended September 30, 1999,
(iii) its annual report on Form 10-K for the fiscal year ended December 31,
1999, as amended by Form 10-K/A filed April 28, 2000 (the "Form 10-K"), (iv) its
quarterly report on Form 10-Q for the quarter ended March 31, 2000 and (v) all
other forms, reports, schedules, statements and other documents required to be
filed by the Company on a form other than Form D or Form S-8 with the SEC prior
to the Closing (collectively, with all exhibits and schedules thereof and
documents incorporated by reference therein, the "Company SEC Documents").
(b) Without limiting the foregoing, there are no contracts or other documents of
the Company which are required to be filed as exhibits to the Company SEC
Document which have not been so filed.
(c) As of the time it was filed with the SEC (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing):
(i) each of the Company SEC Documents complied or will comply in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be) and the rules and regulations promulgated thereunder;
and (ii) none of the Company SEC Documents contained or will contain any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
3.5 Financial Statements. The financial statements contained in the Company SEC
Documents: (i) comply as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with U.S. generally accepted accounting principles applied on a
consistent basis throughout the periods covered, except as may be indicated in
the notes to such financial statements and (in the case of unaudited statements)
as permitted by Form 10-Q of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to normal and recurring
year-end audit adjustments (which will not, individually or in the aggregate, be
material); and (iii) fairly present the consolidated financial position of the
Company as of the respective dates thereof and the consolidated results of
operations and cash flows of the Company for the periods covered thereby.
3.6 Undisclosed Liabilities. Except for liabilities included or reserved for in
the audited balance sheet of the Company for the year ended December 31, 1999,
included in the Form 10-K or the unaudited consolidated balance sheet of the
Company included in its Quarterly Report on Form 10-Q (the "Form 10-Q") for the
quarter ended March 31, 2000 (the "Balance Sheet"), each as filed with the SEC,
at March 31, 2000, the Company did not have, and since such date it has not
incurred, liabilities or any other obligations whatsoever that are material
(individually or in the aggregate) to the Company, except current liabilities
incurred in the ordinary course of business consistent with past practice
subsequent to March 31, 2000.
3.7 Contracts; Action.
(a) Except as set forth in Section 3.7(a) of the Schedule of Exceptions or as
disclosed in the Form 10-K, there are no contracts, agreements, understandings
or proposed transactions between the Company and any of its officers, directors
or affiliates or any family member or affiliate thereof that would be required
to be disclosed pursuant to Item 404 of Regulation S-K of the SEC.
(b) For purposes of this Agreement, the term "Contracts" shall mean (i) all
"material contracts" within the meaning of Item 601 of Regulation S-K of the
SEC, (ii) contracts with distributors or suppliers or for services involving
revenues or expenditures in excess of $800,000 annually, (iii) all contracts
involving revenues or expenditures in excess of $250,000 annually containing
non-competition provisions that purport to bind affiliates of the Company, (iv)
all contracts restricting the payment of dividends upon, or the redemption or
conversion of, the Shares, (v) those contracts identified in Section 3.7(b)(v)
of the Schedule of Exceptions, and (vi) contracts under which the Company or any
subsidiary has granted or received exclusive rights relating to the TiVo Channel
(as defined in the Commercial Agreement). Except as set forth in Section 3.7(b)
of the Schedule of Exceptions, the Company is not, nor to the Company's
knowledge is any other party to any Contract, in material default under, or in
material breach or material violation of, any Contract and, to the knowledge of
the Company, no event has occurred which, with the giving of notice or passage
of time or both would constitute a material default by the Company or any other
party under any Contract. Other than Contracts which have terminated or expired
in accordance with their terms, each of the Contracts is in full force and
effect and (assuming due execution and delivery by the counterparties thereto)
is a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms (subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing).
(c) Section 3.7 of the Schedule of Exceptions contains a list of all Contracts.
3.8 Obligations to Related Parties. Except as set forth in the Form 10-K, there
are no, and since January 1, 1999 there have not been any, (i) obligations to or
transactions with the Company's officers, directors, stockholders or employees
or any family member or affiliate thereof of a type required to be disclosed
pursuant to Item 402 of Regulation S-K of the SEC or (ii) obligations of or
transactions with the Company's officers, directors, stockholders or employees
or any family member or affiliate thereof of a type required to be disclosed
pursuant to Item 404 of Regulation S-K of the SEC.
3.9 Absence of Certain Changes. Since December 31, 1999, (i) no event, change or
circumstance has occurred which would have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, and (ii) the
Company has carried on its business in the ordinary course consistent with past
practices.
3.10 Legal Proceedings. Other than as disclosed in the Company SEC Documents
filed and publicly available prior to the date hereof, there is no Action (as
hereinafter defined), before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting the Company, which is required to be disclosed
in any Company SEC Document or which could have a Material Adverse Effect, or
which might materially and adversely affect the consummation of the transactions
contemplated by this Agreement or the Related Agreements. All summaries or
descriptions of legal or governmental proceedings or contingencies contained in
the Company SEC Documents are current and accurate in all material respects with
respect to such matters.
3.11 Compliance with Laws. The Company is not in violation of any law,
ordinance, governmental rule or regulation or court order, judgement or decree
to which it is subject, other than violations (if any) that individually or in
the aggregate will not have a Material Adverse Effect. Other than as disclosed
in the Company SEC Documents filed and publicly available prior to the date
hereof, the Company possesses such certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies or
bodies the absence of which would have a Material Adverse Effect, and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
3.12 Properties. Except as otherwise stated in the Company SEC Documents filed
and publicly available prior to the date hereof, the Company has good and
marketable title, free and clear of all liens, encumbrances or claims to all of
its material real and personal property, except liens, encumbrances and equities
which are not material in the aggregate and do not materially affect the value
of such property or interfere with the conduct of the business of the Company
and, except as otherwise stated in the Company SEC Documents filed and publicly
available prior to the date hereof, the Company has valid and binding leases to
all of the real and personal property described in the Company SEC Documents as
under lease to it with such exceptions as are not material and do not interfere
with the conduct of the business of the Company.
3.13 Compliance with Other Instruments. The Company is not in violation or
default of (i) any term of its Restated Certificate or Bylaws, or (ii) any
provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ or any statute, rule or regulation applicable to the Company
which in the case of clause (ii) could reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect or which could have a
Material Adverse Effect, or which might materially and adversely affect the
consummation of the transactions contemplated by this Agreement or the Related
Agreements. The execution, delivery, and performance of and compliance with this
Agreement, and the Related Agreements, and the issuance and sale of the Shares
and the Warrants pursuant hereto and of the Conversion Shares pursuant to the
Restated Certificate and the Warrant Shares pursuant to the Warrants, will not
result in any such violation, or be in conflict with or constitute a default
under any such term, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or the
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to the Company, its business or
operations or any of its assets or properties.
3.14 Offering Valid. Assuming the accuracy of the representations and warranties
of the Purchaser contained in Section 4 hereof, the offer, sale and issuance of
the Shares, the Warrants, the Warrant Shares and the Conversion Shares will be
exempt from the registration requirements of the Securities Act and will have
been registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws. Neither the Company nor any agent on its behalf has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Shares to any person or persons or take any
other action so as to bring the sale of such Shares by the Company within the
registration provisions of the Securities Act or any state securities laws.
3.15 Taxes. The Company has filed all necessary material federal, state and
foreign income and franchise tax returns and has paid all material taxes shown
as due thereon, and the Company has no knowledge of any material tax deficiency
which has been or might be asserted against the Company.
3.16 Employee Benefits.
(a) General. The Company is not a party to and does not participate in or have
any liability or contingent liability with respect to any "employee welfare
benefit plan" or "employee pension benefit plan" as those terms are respectively
defined in sections 3(1) and 3(2) of ERISA, or any "multiemployer plan" (as
defined in section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), except for the TeleWorld 401(k) Plan (hereinafter the
"Plan") or as disclosed in Section 3.16 of the Schedule of Exceptions.
(b) Compliance with Laws; Liabilities. As to the Plan:
(i) The Plan complies and has been administered in form and in operation in all
material respects with all requirements of law applicable thereto (including but
not limited to ERISA and the Code), and there has been no notice issued by any
Governmental Authority questioning or challenging such compliance. "Governmental
Authority" shall mean any: (a) nation, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature; (b) federal,
state, local, municipal, foreign or other government; or (c) governmental or
quasi-governmental authority of any nature (including any governmental division,
department, agency, commission, instrumentality, official, organization, unit,
body or entity and any court or other tribunal).
(ii) The Plan complies in form and in operation in all material respects with
all applicable requirements of sections 401(a) and 501(a) of the Code and the
Company has received a favorable determination letter regarding its
qualification; there have been no amendments to such plans except amendments (A)
which are the subject of a determination letter issued with respect thereto by
the Internal Revenue Service or (B) with respect to which the remedial amendment
period (within the meaning of Treasury Regulation ss. 1.401(b)-1) has not
expired; and to the knowledge of the Company no event has occurred which will or
could give rise to disqualification of any such plan under such sections or to a
tax under section 511 of the Code.
(iii) None of the assets of the Plan is invested in employer securities or
employer real property.
(iv) To the knowledge of the Company, there have been no "prohibited
transactions" (as described in section 406 of ERISA or section 4975 of the Code)
with respect to the Plan.
(v) To the knowledge of the Company, there has been no act or omission which has
given rise to or may give rise to fines, penalties, taxes, or related charges
under sections 502(c), 502(i), 502(l) or 4071 of ERISA or Chapters 43, 47, or 68
of the Code for which the Company may be liable.
(vi) There are no actions, suits, or claims (other than routine claims for
benefits) pending or, to the knowledge of the Company, threatened involving the
Plan or the assets thereof, and no facts exist which could give rise to any such
actions, suits, or claims (other than routine claims for benefits).
(vii) The Plan is not subject to Title IV of ERISA.
(viii) There has been no act or omission that would impair the right or ability
of the Company to unilaterally amend or terminate the Plan.
(c) With respect to each employee benefit plan, agreement, program, policy or
other arrangement, whether or not subject to ERISA, maintained by the Company
(including, but not limited to the Plan) (a "Company Plan"), the Company has
delivered to the Purchaser a current, accurate and complete copy thereof and, to
the extent applicable: (i) any related trust agreement or other funding
instrument; (ii) the most recent determination letter, if applicable; (iii) any
summary plan description; and (iv) for the two most recent years (A) the Form
5500 and attached schedules, (B) audited financial statements and (C) actuarial
valuation reports.
(d) No Company Plan exists that could result in the payment to any present or
former employee of the Company of any money or other property or accelerate or
provide any other rights or benefits to any present or former employee of the
Company as a result of the transaction contemplated by this Agreement. There is
no contract, plan or arrangement (written or otherwise) covering any employee or
former employee of the Company that, individually or collectively, could give
rise to the payment of any amount that would not be deductible pursuant to the
terms of Section 280G of the Code.
3.17 Executive Committee of the Board of Directors. The Company represents and
warrants that (a) no officer, director or employee of any of the Company's
corporate partners or corporate investors is a member of the Executive Committee
of the Company's Board of Directors, (b) no current member of the of the
Executive Committee of the Company's Board of Directors has been designated by
any of the Company's corporate partners or corporate investors and (c) that it
does not intend to designate or appoint, nor has it agreed to any contract or
other instrument providing for the designation or appointment of, any officer,
director or employee of any of the Company's corporate partners or corporate
investors to the Executive Committee of the Company's Board of Directors.
3.18 Board Approval; Section 203 of DGCL; California Takeover Law; Rights Plans.
The Board of Directors of the Company has, prior to the execution hereof and
prior to the execution of any of the Related Agreements, approved the execution
and delivery by the Company of this Agreement and each of the Related Agreements
to which it is a party, and the execution and delivery by the parties thereto of
the Voting Agreement and the consummation of the transactions contemplated by
this Agreement and each of the Related Agreements. Such approval is sufficient
to render inapplicable to this Agreement, the Related Agreements and the Voting
Agreement and the transactions contemplated hereby and thereby (collectively,
the "Investment") the provisions of Section 203 of the Delaware General
Corporation Law. No takeover statute or similar statute or regulation of the
State of California is applicable to this Agreement, the Related Agreements or
the Voting Agreement or the Investment. Except as expressly provided in the
Stockholders Agreement and Section 3.18 of the Schedule of Exceptions, no
provision in the certificate of incorporation, bylaws or other governing
instruments of the Company or the terms of any rights plan or preferred stock of
the Company, would directly or indirectly restrict or impair the ability of the
Purchaser to vote, or otherwise to exercise the rights of a stockholder with
respect to, securities of the Company that may be acquired or controlled by the
Purchaser or permit any stockholder to acquire securities of the Company on a
basis not available to the Purchaser.
3.19 Patents and Trademarks. Section 3.19 of the Schedule of Exceptions sets
forth a list of all patents, patent applications, registered copyrights and
trademarks of the Company existing as of the date hereof. The Company owns or
possesses sufficient legal rights to all patents, trademarks, service marks,
trade names, copyrights, trade secrets, information and other proprietary rights
and processes necessary for its business as now conducted and as proposed to be
conducted, and such conduct of its business does not, to the Company's
knowledge, infringe upon the rights of others, except as set forth in Section
3.19 to the Schedule of Exceptions. There are no outstanding options, licenses
or agreements with respect to the patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information and other proprietary
rights and processes of any third party which are necessary to the operation of
the Company's products, other than such licenses or agreements arising from the
purchase of "off the shelf" or standard products. Except as set forth in Section
3.19 of the Schedule of Exceptions, the Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights, trade secrets, confidential information or other
proprietary rights of any other person or entity. The Company is not aware that
any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with their duties to the Company or that would conflict with the
Company's business as proposed to be conducted. Neither the execution nor
delivery of this Agreement or any of the Related Agreements, nor the carrying on
of the Company's business by the employees of the Company, nor the conduct of
the Company's business as proposed, will, to the Company's knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
employee is now obligated. The Company does not believe it is or will be
necessary to utilize any inventions, trade secrets or proprietary information of
any of its employees made prior to their employment by the Company, except for
inventions, trade secrets or proprietary information that have been assigned to
the Company. To the Company's knowledge, none of the Company's officers or
employees have used nor are such officers or employees making use of any
confidential information or trade secrets of others without authorization,
including those of any former employer of such officer or employee. The Company
is not aware of any violation by a third party of any of the Company's patents,
licenses, trademarks, trade names, service marks, copyrights, trade secrets,
confidential information or other proprietary rights.
3.20 Brokers. No broker, investment banker, financial advisor or other person
other than Credit Suisse First Boston Corporation is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement or the Related Agreements
based upon arrangements made by or on behalf of the Company. The fees and
expenses of Credit Suisse First Boston Corporation will be paid by the Company.
3.21 Disclosure. Neither this Agreement (including all Exhibits and Schedules
hereto) nor any of the Related Agreements or any other agreements or instruments
contemplated to be executed and delivered by the Company in connection with this
Agreement, taken together with the Company SEC Documents, contain any untrue
statement of material fact; and none of such documents omits to state any
material fact necessary to make any of the representations, warranties or other
statements or information contained therein not misleading.
Section 4. Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 Requisite Power and Authority. The Purchaser has all necessary corporate
power under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
action on the Purchaser's part required for the lawful execution and delivery of
this Agreement and the Related Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of the Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of Section 6.4
of the Stockholders Agreement may be limited by applicable laws.
4.2 Investment Representations. The Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
The Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon the Purchaser's representations contained in the Agreement. The
Purchaser hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. The Purchaser is capable of evaluating the
merits and risks of its investment in the Company and by reason of its, or of
its management's, business or financial experience, the Purchaser has the
capacity to protect its own interests in connection with the transactions
contemplated in this Agreement, and the Related Agreements. The Purchaser may
bear the economic risk of this investment indefinitely unless the Shares (or the
Conversion Shares) are registered pursuant to the Securities Act, or an
exemption from registration is available. The Purchaser also understands that
there is no assurance that any exemption from registration under the Securities
Act will be available and that, even if available, such exemption may not allow
the Purchaser to transfer all or any portion of the Shares or the Conversion
Shares under the circumstances, in the amounts or at the times the Purchaser
might propose.
(b) Acquisition for Own Account. The Purchaser is acquiring the Shares and the
Conversion Shares for the Purchaser's own account for investment only, and not
with a view towards their distribution.
(c) Accredited Investor. The Purchaser is an accredited investor within the
meaning of Regulation D under the Securities Act.
(d) Company Information. The Purchaser has had an opportunity to discuss the
Company's business, management and financial affairs with directors, officers
and management of the Company. The Purchaser has also had the opportunity to ask
questions of and receive answers from, the Company and its management regarding
the terms and conditions of this investment.
(e) Rule 144. The Purchaser acknowledges and agrees that the Shares, and, if
issued, the Conversion Shares may be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. The Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.
(f) Residence. The office or offices of the Purchaser in which its investment
decision was made is located at 00000 XXX Xxx, Xxxxxx, Xxxxxxxx, 00000-0000.
4.3 Transfer Restrictions. The Purchaser acknowledges and agrees that the Shares
and, if issued, the Conversion Shares are subject to restrictions on transfer as
set forth in the Stockholders Agreement.
Section 5. Conditions to Closing.
5.1 Conditions to Purchaser's Obligations. The Purchaser's obligations to
purchase the Shares at the Closing are subject to the satisfaction, at or prior
to such Closing, of the following conditions, unless otherwise waived:
(a) Representations and Warranties True; Performance of Obligations. The
representations and warranties made by the Company in Section 3 hereof that are
qualified by materiality or Material Adverse Effect shall be true and correct
and those not so qualified shall be true and correct in all material respects in
each case as of the Closing Date with the same force and effect as if they had
been made as of such Closing Date, and the Company shall have performed and
complied with all agreements, obligations and conditions herein required to be
performed or complied with by it on or prior to such Closing.
(b) Legal Investment. On the Closing Date, the sale and issuance of the Shares
and the Warrants and the proposed issuance of the Conversion Shares and the
Warrant Shares shall be legally permitted by all laws and regulations to which
the Purchaser and the Company are subject, and there shall not be in effect any
statute, law, rule, regulation, order, judgment or decree in effect which has
the effect of rendering the consummation of any of the transactions contemplated
by this Agreement or the Related Agreements unlawful
(c) Consents, Permits, and Waivers. The Company shall have obtained any and all
consents, authorizations, approvals, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by the Agreement
and the Related Agreements (except for such as may be properly obtained
subsequent to such Closing).
(d) Filing of Restated Certificate. The Restated Certificate shall have been
accepted for filing by the Secretary of State of the State of Delaware and shall
be in full force and effect as of the Closing Date.
(e) Corporate Documents. The Company shall have delivered to the Purchaser or
its counsel, copies of all corporate documents of the Company as the Purchaser
shall reasonably request.
(f) Compliance Certificate. The Company shall have delivered to the Purchaser a
Compliance Certificate, executed by the President of the Company, dated the date
of such Closing, to the effect that the conditions specified in subsections (a),
(c) and (d) of this Section 5.1 have been satisfied.
(g) Other Agreements. Each of the Commercial Agreement, the Stockholders
Agreement and the Escrow Agreement shall have been executed and delivered by the
parties thereto, shall be in full force and effect, except for failures to be in
full force and effect due to the actions or omissions of the Purchaser, and
shall not have been breached by the Company, and the Purchaser and the Company
shall have agreed on and finalized the Specifications, the Milestone Schedule
and the Acceptance Criteria (as each such term is defined in the Commercial
Agreement) pursuant to Sections 3.1(c) and 3.1(e) of the Commercial Agreement.
(h) Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to the Purchaser and its special counsel, and the Purchaser
and its special counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.
(i) Secretary's Certificate. The Purchaser shall have received from the
Company's Secretary, a certificate having attached thereto (i) the Company's
Restated Certificate, (ii) the Company's Bylaws as in effect at the time of the
Closing, (iii) resolutions approved by the Board of Directors of the Company
authorizing the transactions contemplated hereby, and (iv) good standing
certificates (including tax good standing) with respect to the Company from the
applicable authority(ies) in Delaware and any other jurisdiction in which the
Company is qualified to do business, dated a recent date before the Closing.
(j) HSR Compliance. Any waiting period applicable to the purchase of the Shares
under the HSR Act shall have terminated or expired.
(k) Legal Opinion. The Purchaser shall have received from Xxxxxx Godward LLP,
legal counsel to the Company, an opinion addressed to the Purchaser, dated as of
the Closing Date, in form and substance reasonably satisfactory to counsel for
the Purchaser, and subject to customary exceptions and qualifications (including
without limitation a qualification regarding interpretation in accordance with
California law), to the effect that:
(i) the Company (A) has been duly incorporated and is validly existing in good
standing under the laws of the State of Delaware, (B) to the best knowledge of
such counsel, is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the owning or leasing of properties or the conduct of
business makes such qualification necessary, except where the failure to so
qualify would not have a Material Adverse Effect, and (C) has full corporate
power and authority to carry on its business as described in the Company SEC
Documents and to own and operate its properties. The Company has full corporate
power and authority to enter into and perform this Agreement, the Stockholders
Agreement, the Commercial Agreement and the Warrants, and to issue, sell and
deliver the Shares, the Warrants, the Warrant Shares and the Conversion Shares.
All legally required corporate proceedings in connection with the authorization
and issuance of the Shares, the Warrants, the Warrant Shares and the Conversion
Shares and the sale of the Shares, the Warrants, the Warrant Shares by the
Company in accordance with the terms of this Agreement (including but not
limited to all required Board of Directors and stockholder approvals) have been
taken or have been obtained;
(ii) this Agreement, the Stockholders Agreement and the Warrants have been duly
executed and delivered by the Company and are legal, valid and binding
agreements of the Company enforceable in accordance with their terms, except as
rights to indemnification thereunder may be limited and subject to laws
regarding creditor rights and general equitable principles;
(iii) other than in connection with any securities laws (with respect to which
counsel need express no opinion other than as provided in (vi) below), all
consents, approvals, permits, orders or authorizations of, and all
qualifications, registrations, designations or declarations with, any federal,
Delaware corporate or California state governmental authority required on the
part of the Company in connection with the execution and delivery of this
Agreement, the Stockholders Agreement and the Warrants and consummation of the
transactions occurring at the Closing hereunder and thereunder have been
obtained and are effective, and such counsel is not aware of any proceedings, or
written threat of any proceedings, that question the validity thereof;
(iv) all the outstanding shares of the Company's Common Stock have been, and the
Shares, the Warrant Shares and the Conversion Shares, upon issuance and delivery
and payment therefor in the manner herein described, will be, duly authorized,
validly issued, fully paid and nonassessable. No preemptive rights to subscribe
for or to purchase, and no restriction upon the voting or transfer of, the
Shares, the Warrants Shares or the Conversion Shares exist pursuant to the
Restated Certificate or Bylaws, or, to the best of such counsel's knowledge,
pursuant to any agreement or other instrument to which the Company is a party or
by which it may be bound;
(v) to the best of such counsel's knowledge there are no legal or governmental
proceedings pending or overtly threatened against the Company required to be
disclosed in the Company SEC Documents which are not so disclosed;
(vi) the offer and sale of the Shares, the Warrants, the Warrant Shares and the
Conversion Shares is exempt from the registration requirements of the Securities
Act, subject to the timely filing of a Form D pursuant to Securities Exchange
Commission Regulation D; and
(vii) the execution and delivery of this Agreement, the Related Agreements by
the Company, and the issuance and sale of the Shares, the Warrants, the Warrant
Shares and the Conversion Shares and the consummation of the transactions
contemplated by this Agreement, the Stockholders Agreement and the Warrants by
the Company will not conflict with or constitute a breach of or a default (with
the passage of time or otherwise) under (i) the Restated Certificate or Bylaws
of the Company, (ii) any Delaware corporate or California statute, law or
regulation to which the Company or any of its properties may be subject, or any
judgment, decree or order, known to such counsel, of any court or governmental
agency or authority entered in any proceeding to which the Company was or is now
a party or by which it is bound, except for any conflict, breach or default that
would not have a Material Adverse Effect or (iii) any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to such counsel
to which the Company is a party or by which the Company is bound or to which any
of the property or assets of the Company is subject which has been identified in
a certificate of the Chief Financial Officer of the Company as material to the
Company, except for any conflict, breach or default that would not have a
Material Adverse Effect.
(viii) As of the Closing Date, the Restated Certificate will be in full force
and effect.
(l) Board Representative. A representative of the Purchaser shall have been
appointed, at the option of the Purchaser, as either a member of or an observer
to the board of directors of the Company in accordance with Section 2.1 of the
Stockholders Agreement.
5.2 Conditions to Obligations of the Company. The Company's obligation to issue
and sell the Shares at the Closing is subject to the satisfaction, on or prior
to such Closing, of the following conditions, unless otherwise waived:
(a) Representations and Warranties True. The representations and warranties made
by the Purchaser in Section 4 hereof shall be true and correct in all material
respects at the date of such Closing, with the same force and effect as if they
had been made on and as of said date.
(b) Performance of Obligations. The Purchaser shall have performed and complied
with all agreements and conditions herein required to be performed or complied
with by the Purchaser on or before such Closing. (c) Filing of Restated
Certificate. The Restated Certificate shall have been accepted for filing with
the Secretary of State of the State of Delaware and shall be in full force and
effect as of such Closing Date.
(d) Other Agreements. Each of the Commercial Agreement, the Stockholders
Agreement and the Escrow Agreement shall have been executed and delivered by the
parties thereto, shall be in full force and effect, except for failures to be in
full force and effect due to the actions or omissions of the Company, and shall
not have been breached by the Purchaser.
(e) HSR Compliance. Any waiting period applicable to the purchase of the Shares
under the HSR Act shall have terminated or expired.
5.3 Conditions to Obligations of both the Company and the Purchaser.
(a) Stockholder Approval. The Company Stockholder Approval shall have been
obtained.
Section 6. Additional Covenants.
6.1 HSR Compliance; Other Approvals.
(a) The Company and the Purchaser shall, promptly after the date of this
Agreement, prepare and file the notifications required under the HSR Act for the
issuance and sale of the Shares, the Warrants, the Warrant Shares and the
Conversion Shares. The Company and the Purchaser shall respond as promptly as
practicable to (i) any inquiries or requests received from the Federal Trade
Commission or the Department of Justice for additional information or
documentation and (ii) any inquiries or requests received from any state
attorney general or other governmental body in connection with antitrust or
related matters. Each of the Company and the Purchaser shall promptly inform the
other party of any communication to or from the Federal Trade Commission, the
Department of Justice or any other governmental body. The Company and the
Purchaser will consult and cooperate with one another, and will consider in good
faith the views of one another, in connection with any analysis, appearance,
presentation, memorandum, brief, argument, opinion or proposal made or submitted
in connection with any legal proceeding under or relating to the HSR Act or any
other federal or state antitrust or fair trade law.
(b) Each of the parties hereto shall use their commercially reasonable efforts
to give such notices and obtain all other authorizations, consents, orders and
approvals of all governmental authorities and other third parties that may be or
become necessary or desirable for its execution and delivery of, and the
performance of its obligations pursuant to, this Agreement and the Related
Agreements and will cooperate fully with the other party hereto in promptly
seeking to obtain all such authorizations, consents, orders and approvals.
6.2 Competing Proposals.
(a) Notification Regarding Competing Strategic Relationships. Prior to receipt
of the Company Stockholder Approval, the Company will notify the Purchaser in
writing within five Business Days of:
(i) the Company's receipt of a bona fide proposal from a third party for a
strategic relationship that would be preclusive of any of the transactions
contemplated by this Agreement (a "Competing Strategic Relationship");
(ii) the determination by the Company's Board of Directors to solicit any
Competing Strategic Relationship; or
(iii) the determination by the Company's Board of Directors to provide
confidential information to, or enter into discussions or negotiations with, any
third party concerning any Competing Strategic Relationship.
Such notice shall disclose the identity of the party making or involved in such
proposal for a Competing Strategic Relationship and the material terms of any
such proposed Competing Strategic Relationship.
(b) Acquisition and Competing Strategic Relationship Proposals. Prior to the
Closing, the Company shall, and shall cause its nonstockholder affiliates and
the officers, directors and employees of the Company and its subsidiaries to,
and shall instruct its stockholder affiliates and the representatives and agents
of the Company and its subsidiaries (including, without limitation, any
investment banker, attorney or accountant retained by the Company or any of its
subsidiaries) to, immediately cease and terminate any existing activities,
discussions or negotiations, if any, with any parties conducted heretofore with
respect to any (i) Competing Strategic Relationship or (ii) acquisition or
exchange of all or any material portion of the assets of, or more than 15% of
the equity interest in, the Company (by direct purchase from the Company, tender
or exchange offer or otherwise) or any business combination, merger or similar
transaction (including an exchange of stock or assets) with or involving the
Company (an "Acquisition Transaction"), other than the transactions contemplated
hereby. Except as set forth in this Section 6.2(b), prior to the Closing, the
Company shall not, and shall cause its nonstockholder affiliates and the
officers, directors and employees of the Company and its subsidiaries not to,
and shall instruct its stockholder affiliates and the representatives and agents
of the Company and its subsidiaries (including, without limitation, any
investment banker, attorney or accountant retained by the Company or any of its
subsidiaries) not to, directly or indirectly, knowingly encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information or data (other than the Company's standard public information
package) to, any corporation, partnership, person or other entity or group
(other than Purchaser, any affiliate or associate of Purchaser or any designees
of Purchaser) with respect to any inquiries or the making of any offer or
proposal (including, without limitation, any offer or proposal to the
stockholders of the Company) concerning an Acquisition Transaction (an
"Acquisition Proposal") or a Competing Strategic Relationship (a "Competing
Strategic Relationship Proposal") or otherwise knowingly facilitate any effort
or attempt to make or implement an Acquisition Proposal or a Competing Strategic
Relationship Proposal; provided, however, that (x) prior to the receipt of the
Company Stockholder Approval, the Company may furnish information and access,
but only in response to a request for information or access, to any person or
entity making a bona fide written Acquisition Proposal to the board of directors
of the Company after the date hereof which was not knowingly encouraged,
solicited or initiated by the Company or any of its affiliates or any director,
employee, representative or agent of the Company or any of its subsidiaries
(including, without limitation, any investment banker, attorney or accountant
retained by the Company or any of its subsidiaries) on or after the date hereof
and may participate in discussions and negotiate with such person or entity
concerning any such Acquisition Proposal and (y) after the Company Stockholders
Meeting, the Board of Directors of the Company may authorize the Company, to
enter into a binding written agreement concerning a Superior Proposal (as
defined below), if and only if, in any such case under clause (x) or (y) above,
(i) the board of directors of the Company determines in good faith, (A) taking
into account the written, reasoned advice of outside counsel to the Company to
the effect that failing to provide such information or access or to participate
in such discussions or negotiations or so to authorize, as the case may be, is
reasonably likely to constitute a breach of such board's fiduciary duties under
applicable law, (B) taking into account the written advice of financial advisors
to the Company to such effect, that such Acquisition Proposal, if accepted, is
reasonably likely to be consummated, taking into account all legal, financial
and regulatory aspects of the proposal and the person or entity making the
proposal and would, if consummated, result in a transaction more favorable to
the Company's stockholders from a financial point of view than the transaction
contemplated by this Agreement (any such more favorable Acquisition Proposal as
to which both of the determinations referred to in subclauses (A) and (B) of
this clause (i) have been made being referred to in this Agreement as a
"Superior Proposal"), and (ii) the board of directors of the Company receives
from the person or entity making such bona fide written Acquisition Proposal an
executed confidentiality agreement the terms of which are (without regard to the
terms of such Acquisition Proposal) (A) no less favorable to the Company, and
(B) no less restrictive to the person or entity making such bona fide written
Acquisition Proposal than those contained in the Stockholders Agreement. Nothing
in this Agreement shall prohibit the Board of Directors of the Company from, to
the extent applicable, complying with Rule 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal.
6.3 Stockholder Approval. As promptly as practicable following the date hereof,
the Company shall take all action necessary to obtain the Company Stockholder
Approval, including, without limitation, preparing, filing with the SEC and
mailing to its stockholders a proxy statement or statements with respect
thereto, and duly calling, giving notice of, convening and holding a meeting or
meetings of its stockholders for such purpose (the "Company Stockholders
Meeting"). Notwithstanding that any of the other conditions to the Closing may
not be satisfied, the Company will use its best efforts to cause the Company
Stockholders Meeting to occur as soon as reasonably possible after the date
hereof. The Board shall recommend that its stockholders provide the Company
Stockholder Approval, and may not withdraw or modify such recommendation prior
to the taking of the votes to be taken at the Company Stockholders Meeting.
6.4 Ordinary Course of Business.
(a) Except as otherwise contemplated by the terms of this Agreement, during the
period from the date of this Agreement to the Closing Date (the "Pre-Closing
Period"), each of the Company and its subsidiaries shall use commercially
reasonable efforts to preserve intact its current business organizations, keep
available the services of its officers and employees and preserve its
relationships with customers, suppliers, licensors, licensees, advertisers,
distributors and others having business dealings with it to the end that its
goodwill and ongoing businesses shall be unimpaired.
(b) Without limiting the generality of the foregoing, during the Pre-Closing
Period, each of the Company and its subsidiaries shall not, without the prior
consent of Purchaser:
(i) (A) remove the chief executive officer or president (or, if there are no
officers with such titles, the officers whose responsibility is executive
oversight of the Company's and its subsidiaries' operations) or any executive
vice president, or appoint any person to fill a vacancy in any such office, or
(B) approve any new, or modify any existing material executive officer and
director compensation plans or agreements;
(ii) change the number of directors or the composition or structure of the
Company's Board of Directors;
(iii) except as contemplated by the Restated Certificate, increase or decrease
the total number of authorized or issued shares of Preferred Stock;
(iv) take any action which would require the approval of the holders of the
Preferred Stock pursuant to Article III, Section D.2(b) of the Restated
Certificate, if the Preferred Stock were issued;
(v) redeem, acquire or otherwise purchase any shares of Common Stock or
preferred stock of the Company, except pursuant to Company Plans or agreements
entered into in the ordinary course with employees of the Company;
(vi) sell a subsidiary's securities to any third party (other than the Company
or any other wholly owned subsidiary of the Company);
(vii) sell or transfer any of the Company's or its subsidiaries' technology or
other Intellectual Property, to any other person, other than in the ordinary
course of business; or
(viii) enter into any arrangement or contract to do any of the foregoing.
6.5 Efforts. Each party hereto agrees to use commercially reasonable efforts to
take any and all actions required in order to consummate the transactions
contemplated in this Agreement and the Related Agreements.
6.6 Notification of Certain Matters. During the Pre-Closing Period, the Company
shall give prompt notice to the Purchaser of the occurrence or non-occurrence of
any event known to the Company the occurrence or non-occurrence of which would
reasonably be expected to cause any representation or warranty contained in
Section 3 to be untrue in any material respect, the failure of the Company to
comply with or satisfy any covenant or agreement under this Agreement, or the
failure to be satisfied of any of the conditions set forth in Section 5.
6.7 Reservation of Shares. From and after the Closing, the Company shall at all
times reserve and keep available for issuance such number of its authorized but
unissued shares of Common Stock as shall be sufficient to permit the exercise in
full of all the Warrants and the conversion in full of all the Preferred Stock.
6.8 Restated Certificate. Upon receipt of the Company Stockholder Approval, the
Company shall take all such action to file the Restated Certificate with the
Secretary of State of the State of Delaware and all such other action to cause
the Restated Certificate to be accepted for filing and effective.
Section 7. Miscellaneous.
7.1 Termination. This Agreement may be terminated by (i) mutual agreement of the
parties hereto, (ii) by the Purchaser pursuant to Section 1.2(a), subject to the
Company's rights under Section 1.2(b), (iii) by the Purchaser or the Company in
the event the Closing has not occurred by February 28, 2001; provided, that the
termination right pursuant to this clause (iii) may not be exercised by a party
whose nonperformance has delayed the Closing or (iv) by either party in the
event the Commercial Agreement is terminated prior to the Closing. Upon
termination of this Agreement pursuant to this Section 7.1 (and subject to
Section 1.2(b)), this Agreement (except for Section 7.9) shall be void and of no
further force and effect and no party shall have any liability to any other
party under this Agreement, except that nothing herein shall relieve any party
from any liability for the breach of any of the representations, warranties,
covenants and agreements set forth in this Agreement.
7.2 Definitions. For purposes of this Agreement:
"affiliate" means any person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;
"Business Day" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by law to be closed in
The City of New York;
"knowledge" of any person means knowledge of a particular fact
or matter of which such person (or if such person is not an individual, any of
its directors or officers) is actually aware or of which a prudent person (or if
such person is not an individual, its directors or officers acting prudently)
would be aware after reasonable inquiry; and
"person" means any individual, corporation, partnership,
association, trust, unincorporated organization, limited liability company, or
other entity or a group (as defined in Section 13(d)(3) of the Exchange Act of
1934 ,as amended) of the foregoing.
7.3 Governing Law. This Agreement shall be governed in all respects by the laws
of the State of New York as such laws are applied to agreements to be performed
entirely in New York.
7.4 Survival. The representations, warranties, covenants and agreements made
herein shall survive any investigation made by the Purchaser and each closing of
the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
7.5 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Shares or the Warrants from time to time.
7.6 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the
Related Agreements and the other documents delivered pursuant hereto and thereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
7.7 Severability. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
7.8 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the written consent of
the Company and the Purchaser.
(b) The obligations of the Company and the rights of the holders of the Shares,
the Warrants, the Warrant Shares and the Conversion Shares under this Agreement
may be waived only with the written consent of the Purchaser.
7.9 Delays or Omissions. It is agreed that no delay or omission to exercise any
right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement, the Related Agreements or
the Restated Certificate, shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on the Purchaser'
part of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Restated Certificate or any waiver on such party's part
of any provisions or conditions of this Agreement, the Related Agreements, or
the Restated Certificate must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this
Agreement, the Related Agreements, the Restated Certificate, by law, or
otherwise afforded to any party, shall be cumulative and not alternative.
7.10 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party
to be notified; (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next Business Day;
(c) five (5) Business Days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (d) one (1) Business Day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent in each case to the respective address specified below:
(a) If to the Purchaser, to:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000-0000
Attn: General Counsel
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
(b) If to the Company, to
TiVo Inc.
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Chief Financial Officer
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxxx, Esq.
or at such other address as the Company or the Purchaser may designate by ten
(10) days advance written notice to the other parties hereto.
7.11 Expenses. Each Party shall pay its own costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of this
Agreement.
7.12 Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
7.13 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
7.14 Broker's Fees. Each party hereto represents and warrants that no agent,
broker, investment banker, person or firm acting on behalf of or under the
authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 7.13 being untrue.
7.15 Pronouns. All pronouns contained herein, and any variations thereof, shall
be deemed to refer to the masculine, feminine or neutral, singular or plural, as
to the identity of the parties hereto may require.
7.16 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH
QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS
UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION BEING
AVAILABLE.
In Witness Whereof, the parties hereto have executed this Investment
Agreement as of the date set forth in the first paragraph hereof.
Company:
Tivo Inc.
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
In Witness Whereof, the parties hereto have executed this Investment
Agreement as of the date set forth in the first paragraph hereof.
Purchaser:
America Online, Inc.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President, Business Affairs
INDEX OF EXHIBITS
Amended and Restated Certificate
of Incorporation Exhibit A
Form of Warrant Exhibit B
Form of Warrant Exhibit C
Form of Warrant Exhibit D
Form of Warrant Exhibit E
Form of Escrow Agreement Exhibit F
By-laws of the Company Exhibit G
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
EXHIBIT B
FORM OF WARRANT
EXHIBIT C
FORM OF WARRANT
EXHIBIT D
FORM OF WARRANT
EXHIBIT E
FORM OF WARRANT
EXHIBIT F
FORM OF ESCROW AGREEMENT
EXHIBIT G
BY-LAWS OF THE COMPANY
Table Of Contents
Page
Section 1. Agreement To Sell And Purchase...............................1
1.1 Authorization of Shares......................................1
1.2 Sale and Purchase............................................2
1.3 Warrants.....................................................3
1.5 Adjustments..................................................6
Section 2. Closing, Delivery and Payment................................6
2.1 Closing......................................................6
2.2 Delivery.....................................................6
Section 3. Representations and Warranties of the Company................7
3.1 Organization, Good Standing and Qualification................7
3.2 Capitalization; Voting Rights................................7
3.3 Authorization; Binding Obligations...........................8
3.4 SEC Filings..................................................9
3.5 Financial Statements........................................10
3.6 Undisclosed Liabilities.....................................10
3.7 Contracts; Action...........................................10
3.8 Obligations to Related Parties..............................11
3.9 Absence of Certain Changes..................................11
3.10 Legal Proceedings...........................................11
3.11 Compliance with Laws........................................11
3.12 Properties..................................................12
3.13 Compliance with Other Instruments...........................12
3.14 Offering Valid..............................................12
3.15 Taxes.......................................................12
3.16 Employee Benefits...........................................12
3.17 Executive Committee of the Board of Directors...............14
3.18 Board Approval; Section 203 of DGCL; California Takeover
Law; Rights Plans...........................................14
3.19 Patents and Trademarks......................................14
3.20 Brokers.....................................................15
3.21 Disclosure..................................................15
Section 4. Representations and Warranties of the Purchaser.............16
4.1 Requisite Power and Authority...............................16
4.2 Investment Representations..................................16
4.3 Transfer Restrictions.......................................17
Section 5. Conditions to Closing.......................................17
5.1 Conditions to Purchaser's Obligations.......................17
5.2 Conditions to Obligations of the Company....................20
5.3 Conditions to Obligations of both the Company and the
Purchaser...................................................21
Section 6. Additional Covenants........................................21
6.1 HSR Compliance; Other Approvals.............................21
6.2 Competing Proposals.........................................21
(a) Notification Regarding Competing Strategic
Relationships...........................................21
(b) Acquisition and Competing Strategic Relationship
Proposals...............................................22
6.3 Stockholder Approval........................................23
6.4 Ordinary Course of Business.................................23
6.5 Efforts.....................................................24
6.6 Notification of Certain Matters.............................24
6.7 Reservation of Shares.......................................24
6.8 Restated Certificate........................................24
Section 7. Miscellaneous...............................................24
7.1 Termination.................................................24
7.2 Definitions.................................................25
7.3 Governing Law...............................................25
7.4 Survival....................................................25
7.5 Successors and Assigns......................................25
7.6 Entire Agreement............................................25
7.7 Severability................................................26
7.8 Amendment and Waiver........................................26
7.9 Delays or Omissions.........................................26
7.10 Notices.....................................................26
7.11 Expenses....................................................27
7.12 Titles and Subtitles........................................27
7.13 Counterparts................................................27
7.14 Broker's Fees...............................................27
7.15 Pronouns....................................................28
7.16 California Corporate Securities Law.........................28
