Exhibit 4.3
TIVO INC.
EIGHTH AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
Table of Contents
PAGE
Section 1. General........................................... 1
1.1 Definitions......................................... 1
Section 2. Registration; Restrictions on Transfer............ 3
2.1 Restrictions on Transfer............................ 3
2.2 Demand Registration................................. 4
2.3 Piggyback Registrations............................. 5
2.4 Form S-3 Registration............................... 6
2.5 Expenses of Registration............................ 7
2.6 Obligations of the Company.......................... 7
2.7 Termination of Registration Rights.................. 8
2.8 Delay of Registration; Furnishing Information....... 8
2.9 Indemnification..................................... 9
2.10 Assignment of Registration Rights................... 11
2.11 Amendment Of Registration Rights.................... 11
2.12 "Market Stand-Off" Agreement........................ 11
2.13 Rule 144 Reporting.................................. 12
Section 3. Covenants of the Company and Certain Stockholders. 12
3.1 Basic Financial Information and Reporting........... 12
3.2 Inspection Rights................................... 13
3.3 Confidentiality of Records.......................... 14
3.4 Strategic Value I, L.P. Board Observer.............. 14
3.5 Vulcan Ventures Incorporated Board Observer......... 14
3.6 Showtime Board Observer............................. 15
3.7 DIRECTV Board Seat.................................. 15
3.8 Series H Preferred Stock Board Seat................. 15
3.9 Series I Preferred Stock Board Seat................. 16
3.10 Future Authorization of Series I Preferred Stock.... 16
3.11 Reservation of Common Stock......................... 16
3.12 Proprietary Information and Inventions Agreement.... 16
3.13 Board of Directors.................................. 16
3.14 Termination of Covenants............................ 16
Table of Contents
(Continued)
PAGE
Section 4. Rights of First Refusal........................... 16
4.1 Subsequent Offerings................................ 16
4.2 Exercise of Rights.................................. 17
4.3 Issuance of Equity Securities to Other Persons...... 17
4.4 Termination of Rights of First Refusal.............. 17
4.5 Transfer of Rights of First Refusal................. 17
4.6 Excluded Securities................................. 17
Section 5. Miscellaneous..................................... 18
5.1 Governing Law....................................... 18
5.2 Survival............................................ 18
5.3 Successors and Assigns.............................. 18
5.4 Entire Agreement.................................... 18
5.5 Severability........................................ 18
5.6 Amendment and Waiver................................ 18
5.7 Delays or Omissions................................. 19
5.8 Notices............................................. 19
5.9 Titles and Subtitles................................ 19
5.10 Amendment of Prior Agreement........................ 19
5.11 Counterparts........................................ 20
TIVO INC.
EIGHTH AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
This Eighth Amended and Restated Investor Rights Agreement (the
"Agreement") is entered into as of the 21st day of July, 1999, by and among TiVo
Inc., a Delaware corporation (the "Company") and the purchasers of the Company's
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock,
Series G Preferred Stock, Series H Preferred Stock, Series I Preferred Stock
(together, the "Series Preferred") and Registrable Common Stock set forth on
Exhibit A hereto. The purchasers of the Series Preferred and Registrable Common
Stock shall be referred to hereinafter as the "Investors" and each individually
as an "Investor."
Recitals
Whereas, certain of the Investors hold shares of the Company's Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock and Registrable Common Stock and
possess registration rights, information rights and other rights pursuant to
that certain Seventh Amended and Restated Investor Rights Agreement dated as of
April 23, 1999, between the Company and such Investors (the "Prior Agreement");
Whereas, the Company proposes to sell and issue up to Three Million Three
Hundred Fifteen Thousand (3,315,000) shares of its Series I Preferred Stock
pursuant to that certain Series I Preferred Stock Purchase Agreement by and
between the Company and the purchasers listed on Exhibit A thereto (the
"Purchase Agreement");
Whereas, the undersigned Investors who hold the Company's Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock and Registrable Common Stock desire to
terminate the Prior Agreement and to accept the rights created pursuant hereto
in lieu of rights granted to them under the Prior Agreement; and
Whereas, in order to induce the Company and certain of the Investors to
enter into the Purchase Agreement, the Investors and the Company hereby agree
that this Agreement shall amend and restate the Prior Agreement and shall extend
to the Investors the registration rights, information rights and other rights as
set forth below.
Now, Therefore, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Purchase Agreement, the parties mutually agree as follows:
Section 1. General
1.1 Definitions. As used in this Agreement the following terms shall have
the following respective meanings:
1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"Holder" means any person owning of record Registrable Securities that
have not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 2.10 hereof.
"Initial Offering" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Common Stock" means Common Stock of the Company issued to
DIRECTV, Inc., a California corporation ("DIRECTV"), pursuant to that Marketing
Agreement dated April 13, 1999, by and between the Company and DIRECTV.
"Registrable Securities" means (a) Common Stock of the Company issued
or issuable upon conversion of the Shares; (b) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such above-described securities and
(c) the Registrable Common Stock. Notwithstanding the foregoing, Registrable
Securities shall not include any securities (i) sold by a person to the public
either pursuant to a registration statement or Rule 144, (ii) sold in a private
transaction in which the transferor's rights under Section 2 of this Agreement
are not assigned, or (iii) held by a Holder whose registration rights have
expired under Section 2.7.
"Registrable Securities then outstanding" shall be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"Shares" shall mean the Company's Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series H
Preferred Stock and Series I Preferred Stock held by the Investors listed on
Exhibit A hereto and their permitted assigns.
Section 2. Registration; Restrictions on Transfer.
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound by
the terms of this Agreement, (B) such Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a reasonably
detailed written statement of the circumstances surrounding the proposed
disposition (such statement to include, without limitation, the name of the
transferee, the number of shares to be transferred, the price per share and type
of consideration to be received in the transfer (except for transfers to
affiliates that do not manufacture or distribute customizable personal
television systems or services) and the timing of such transfer) and (C) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by a Holder (A) which is a partnership to its partners or former
partners in accordance with partnership interests, (B) which is a corporation to
its stockholders in accordance with their interest in the corporation, (C) which
is a limited liability company to its members or former members in accordance
with their interest in the limited liability company, (D) to the Holder's family
member or trust for the benefit of an individual Holder, or (E) to an affiliate
of Holder that does not manufacture or distribute customizable personal
television systems or services; provided that in each case the transferee will
be subject to the terms of this Agreement to the same extent as if he were an
original Holder hereunder.
(b) Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of the Agreement) be stamped
or otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws or as
provided elsewhere in this Agreement):
3.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
INVESTOR RIGHTS AGREEMENT, AS AMENDED, THAT CONTAINS CERTAIN
RESTRICTIONS ON THE TRANSFERABILITY OF THE SECURITIES, INCLUDING
A MARKET STAND-OFF AGREEMENT. A COPY OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.2 Demand Registration.
(a) Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of at least thirty percent
(30%) of the Registrable Securities then outstanding (the "Initiating Holders")
that the Company file a registration statement under the Securities Act covering
the registration of Registrable Securities having an aggregate offering price to
the public of at least $10,000,000 (a "Qualified Public Offering"), then the
Company shall, within thirty (30) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this
Section 2.2, use its best efforts to effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that the
Holders request to be registered.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
or any request pursuant to Section 2.4 and the Company shall include such
information in the written notice referred to in Section 2.2(a) or Section
2.4(a), as applicable. In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities
4.
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the
underwriter advises the Company that marketing factors require a limitation of
the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders). Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:
(i) prior to the earlier of September 1, 2001 or 180 days
after the effective date of a registration statement pertaining to the Initial
Offering; and
(ii) after the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective.
2.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford each such Holder an opportunity
to include in such registration statement all or part of such Registrable
Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within fifteen (15) days after the above-described notice from the
Company, so notify the Company in writing. Such notice shall state the intended
method of disposition of the Registrable Securities by such Holder. If a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
(a) Underwriting. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities in the above-
described notice. In such event, the right of any such Holder to be included in
a registration pursuant to this Section 2.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of the Agreement, if the
5.
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Holders on a pro rata basis based on the total number of Registrable
Securities held by the Holders; and third, to any stockholder of the Company
(other than a Holder) on a pro rata basis. No such reduction shall (i) reduce
the securities being offered by the Company for its own account to be included
in the registration and underwriting, or (ii) reduce the amount of securities of
the selling Holders included in the registration below thirty percent (30%) of
the total amount of securities included in such registration, unless such
offering is the Initial Offering and such registration does not include shares
of any other selling stockholders, in which event any or all of the Registrable
Securities of the Holders may be excluded in accordance with the immediately
preceding sentence.
(b) Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 2.3
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The Registration Expenses of
such withdrawn registration shall be borne by the Company in accordance with
Section 2.5 hereof.
2.4 Form S-3 Registration. In case the Company shall receive from any
Holder or Holders of at least 100,000 shares of Registrable Securities a written
request or requests that the Company effect a registration on Form S-3 (or any
successor to Form S-3) or any similar short-form registration statement and any
related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders, or
(ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public of less than $3,000,000, or
(iii) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected two (2) registrations on
Form S-3 for the Holders pursuant to this Section 2.4, or
6.
(iv) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All such Registration Expenses incurred in
connection with registrations requested pursuant to this Section 2.4 after the
first four (4) registrations shall be paid by the selling Holders pro rata in
proportion to the number of shares sold by each.
2.5 Expenses of Registration. Except as specifically provided herein, all
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the holders of the securities so registered pro rata on the basis of the
number of shares so registered. The Company shall not, however, be required to
pay for expenses of any registration proceeding begun pursuant to Section 2.2 or
2.4, the request of which has been subsequently withdrawn by the Initiating
Holders unless (a) the withdrawal is based upon material adverse information
concerning the Company of which the Initiating Holders were not aware at the
time of such request or (b) the Holders of a majority of Registrable Securities
agree to forfeit their right to one requested registration pursuant to Section
2.2 or Section 2.4, as applicable, in which event such right shall be forfeited
by all Holders. If the Holders are required to pay the Registration Expenses,
such expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested. If the Company is required to pay the
Registration Expenses of a withdrawn offering pursuant to clause (a) above, then
the Holders shall not forfeit their rights pursuant to Section 2.2 or Section
2.4 to a demand registration.
2.6 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
7.
(d) Use all reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of a majority in interest of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
2.7 Termination of Registration Rights. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect five
(5) years after the date of the Company's Initial Offering. In addition, a
Holder's registration rights shall expire if (a) the Company has completed its
Initial Offering and is subject to the provisions of the Exchange Act, and (b)
all Registrable Securities held by and issuable to such Holder may be sold under
Rule 144 during any ninety (90) day period. Following such expiration provided
for in the preceding two sentences, such Holder's shares of Common Stock of the
Company shall no longer be considered Registrable Securities for purposes of
this Section 2.
2.8 Delay of Registration; Furnishing Information.
(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
8.
(b) The Company shall not be required to submit any registration
statement to the Commission pursuant to Section 2.2, 2.3 or 2.4 if the selling
Holders have not furnished to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of disposition
of such securities as shall be required to effect the registration of their
Registrable Securities; provided, however, that the Company may eliminate the
shares proposed to be sold by any selling Holder from registration pursuant to
Section 2.2, 2.3 or 2.4 if such Holder has not provided such information, to the
reasonable satisfaction of the Company, within twenty (20) days of having
received written notice of a request for such information from the Company.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.2(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in Section 2.2 or Section 2.4,
whichever is applicable.
2.9 Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) The Company will indemnify and hold harmless each Holder, the
partners, officers, directors and legal counsel of each Holder, any underwriter
(as defined in the Securities Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will reimburse each such
Holder, partner, officer, director, legal counsel, underwriter or controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided however, that the indemnity agreement contained in this Section
2.9(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company, which consent shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Holder, partner,
officer, director, legal counsel, underwriter or controlling person of such
Holder.
9.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration qualifications or
compliance is being effected, indemnify and hold harmless the Company, each of
its directors, its officers, and legal counsel and each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
and any other Holder selling securities under such registration statement or any
of such other Holder's partners, directors or officers or any person who
controls such Holder, against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, underwriter or other such Holder, or partner, director, officer or
controlling person of such other Holder may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder under an instrument duly executed
by such Holder and stated to be specifically for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, legal counsel,
controlling person, underwriter or other Holder, or partner, officer, director,
legal counsel or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 2.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 2.9 exceed the proceeds from the offering received
by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
2.9 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.9.
(d) If the indemnification provided for in this Section 2.9 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to
10.
the amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section
2.9 shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
2.10 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee or assignee of Registrable Securities which (a) (i) is
a subsidiary, parent, affiliate, general partner, limited partner or retired
partner of a Holder, or (ii) is a Holder's family member or trust for the
benefit of an individual Holder, and (b) acquires at least thirty percent (30%)
of the shares of Registrable Securities held by a Holder as of the date of this
Agreement. No assignment of Registrable Securities pursuant to this Section 2.10
shall be effective unless (A) the transferor shall, within ten (10) days after
such transfer, furnish to the Company written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned and (B) such transferee shall agree to be
subject to all restrictions set forth in this Agreement.
2.11 Amendment Of Registration Rights. Any provision of this Section 2
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least sixty-six and two-
thirds percent (66-2/3%) of the Registrable Securities then outstanding;
provided, however, that any alteration or change in the rights or privileges of
any series of Series Preferred that discriminates against such series of Series
Preferred shall additionally require the written consent of at least sixty-six
and two-thirds percent (66-2/3%) of such series of Series Preferred. Any
amendment or waiver effected in accordance with this Section 2.11 shall be
binding upon each Holder and the Company. By acceptance of any benefits under
this Section 2, Holders of Registrable Securities hereby agree to be bound by
the provisions hereunder.
2.12 "Market Stand-Off" Agreement. Each Holder hereby agrees that such
Holder shall not sell or otherwise transfer or dispose of any Common Stock (or
other securities) of the Company held by such Holder (other than those included
in the registration) for a period
11.
specified by the representative of the underwriters of Common Stock (or other
securities) of the Company not to exceed one hundred eighty (180) days following
the effective date of a registration statement of the Company filed under the
Securities Act, provided that such agreement shall apply only to the Company's
Initial Offering.
Each Holder agrees to execute and deliver such other agreements as may be
reasonably requested by the Company or the underwriter which are consistent with
the foregoing or which are necessary to give further effect thereto. The
obligations described in this Section 2.12 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said one hundred eighty (180) day period.
2.13 Rule 144 Reporting. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act;
(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
Section 3. Covenants of the Company and Certain Stockholders.
3.1 Basic Financial Information and Reporting.
(a) The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal year of the
Company, and in any event within ninety (90) days thereafter, the Company will
furnish each Investor a balance sheet of the Company, as at the end of such
fiscal year, and a statement of income and a
12.
statement of cash flows of the Company, for such year, all prepared in
accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail. Such financial statements shall be
accompanied by a report and opinion thereon by independent public accountants of
national standing selected by the Company's Board of Directors.
(c) The Company will furnish each Investor, as soon as practicable
after the end of each month, and in any event within thirty (30) days
thereafter, a balance sheet of the Company as of the end of each such month, and
a statement of income and a statement of cash flows of the Company for such
month and for the current fiscal year to date, prepared in accordance with
generally accepted accounting principles, with the exception that no notes need
be attached to such statements and year-end audit adjustments may not have been
made.
(d) To each Investor (with its affiliates) who owns not less than
four hundred eighty thousand (480,000) shares of Registrable Securities (a
"Major Investor"), the Company will furnish each such Major Investor (i) as soon
as practicable after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Company, and in any event within forty-five
(45) days thereafter, a balance sheet of the Company as of the end of each such
quarterly period, and a statement of income and a statement of cash flows of the
Company for such period and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles, with the exception
that no notes need be attached to such statements and year-end audit adjustments
may not have been made; (ii) at least thirty (30) days prior to the beginning of
each fiscal year an annual budget and operating plans for such fiscal year (and
as soon as available, any subsequent revisions thereto); and (iii) as soon as
practicable after the end of each month, and in any event within thirty (30)
days thereafter, a balance sheet of the Company as of the end of each such
month, and a statement of income and a statement of cash flows of the Company
for such month and for the current fiscal year to date, including a comparison
to plan figures for such period and to the financial statements for the
comparable period for the prior fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied, with the
exception that no notes need be attached to such statements and year-end audit
adjustments may not have been made.
(e) In the event Showtime Networks, Inc. ("Showtime") has
Registrable Securities included in the Company's Registration Statement on Form
S-1 with the Securities and Exchange Commission in connection with the Company's
Initial Offering, as soon as practical after the filing of such Form S-1, and
any amendment thereto, the Company shall deliver to Showtime one (1) copy of (i)
such Form S-1 or amendment, and (ii) each exhibit as filed with such Form S-1 or
amendment.
3.2 Inspection Rights. Each Major Investor shall have the right to visit
and inspect any of the properties of the Company or any of its subsidiaries, and
to discuss the affairs, finances and accounts of the Company or any of its
subsidiaries with its officers, and to review such information as is reasonably
requested all at such reasonable times and as often as may be reasonably
requested; provided, however, that the Company shall not be obligated under this
Section 3.2 with respect to a competitor of the Company or with respect to
information which the Board of Directors determines in good faith is
confidential and should not, therefore, be disclosed. So long as NBC Multimedia,
Inc. and National Broadcasting Company, Inc.
13.
(including, in each case, their affiliates) do not manufacture or distribute
customizable personal television systems or services, the Company acknowledges
and agrees that NBC Multimedia, Inc. and National Broadcasting Company, Inc.
shall not be considered to be competitors of the Company for purposes of this
Section 3.2. So long as Xxxx Disney Company (including, in each case, their
affiliates) do not manufacture or distribute customizable personal television
systems or services, the Company acknowledges and agrees that Xxxx Disney
Company shall not be considered to be competitors of the Company for purposes of
this Section 3.2.
3.3 Confidentiality of Records. Each Investor agrees to use, and to use
its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information
to keep confidential any information furnished to it which the Company
identifies as being confidential or proprietary (so long as such information is
not in the public domain), except that such Investor may disclose such
proprietary or confidential information to any partner, subsidiary or parent of
such Investor for the purpose of evaluating its investment in the Company as
long as such partner, subsidiary or parent is advised of the confidentiality
provisions of this Section 3.3.
3.4 Strategic Value I, L.P. Board Observer. So long as Strategic Value
I, L.P. ("SVI") or one of its affiliates holds at least 730,000 shares of the
Company's Series C Preferred Stock or Common Stock, SVI shall have the right to
appoint a representative (the "SVI Representative") who shall have the right to
attend all meetings of the Company's Board of Directors in a nonvoting observer
capacity, to receive notice of such meetings and to receive the information
provided by the Company to the Board of Directors; provided, however, that the
Company may require as a condition precedent to SVI's rights under this Section
3.4 that each person proposing to attend any meeting of the Company's Board of
Directors and each person to have access to any of the information provided by
the Company to the Board of Directors shall agree to hold in confidence and
trust and to act in a fiduciary manner with respect to all information so
received during such meetings or otherwise; and, provided further, that the
Company reserves the right not to provide information and to exclude the SVI
Representative from any meeting or portion thereof if delivery of such
information or attendance at such meeting by such SVI Representative would
result in disclosure of trade secrets to the SVI Representative or would
adversely affect the attorney-client privilege between the Company and its
counsel. Notwithstanding the foregoing, SVI shall have no rights under this
Section 3.4 during any period in which an officer of SVI is serving as a
director of the Company.
3.5 Vulcan Ventures Incorporated Board Observer. So long as Vulcan
Ventures Incorporated ("Vulcan") or one of its affiliates holds at least
1,000,000 shares of the Company's Series D Preferred Stock or Common Stock,
Vulcan shall have the right to appoint a representative (the "Vulcan
Representative") who shall have the right to attend all meetings of the
Company's Board of Directors in a nonvoting observer capacity, to receive notice
of such meetings and to receive the information provided by the Company to the
Board of Directors; provided, however, that the Company may require as a
condition precedent to Vulcan's rights under this Section 3.5 that each person
proposing to attend any meeting of the Company's Board of Directors and each
person to have access to any of the information provided by the Company to the
Board of Directors shall agree to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so received during such
meetings or otherwise; and, provided further, that the Company reserves the
right not to provide information and to exclude
14.
the Vulcan Representative from any meeting or portion thereof if delivery of
such information or attendance at such meeting by such Vulcan Representative
would result in disclosure of trade secrets to the Vulcan Representative or
would adversely affect the attorney-client privilege between the Company and its
counsel. Notwithstanding the foregoing, Vulcan shall have no rights under this
Section 3.5 during any period in which an officer of Vulcan is serving as a
director of the Company.
3.6 Showtime Board Observer. So long as Showtime or one of its
affiliates holds at least 200,000 shares of the Company's Series E Preferred
Stock or Common Stock, Showtime shall have the right to appoint a representative
(the "Showtime Representative") who shall have the right to attend all meetings
of the Company's Board of Directors in a nonvoting observer capacity, to receive
notice of such meetings and to receive the information provided by the Company
to the Board of Directors; provided, however, that the Showtime Representative
executes a nondisclosure agreement in a form acceptable to the Company; provided
further, that the Company may require as a condition precedent to Showtime's
rights under this Section 3.6 that each person proposing to attend any meeting
of the Company's Board of Directors and each person to have access to any of the
information provided by the Company to the Board of Directors shall agree to
hold in confidence and trust and to act in a fiduciary manner with respect to
all information so received during such meetings or otherwise; and, provided
further, that the Company reserves the right not to provide information and to
exclude the Showtime Representative from any meeting or portion thereof if
delivery of such information or attendance at such meeting by such Showtime
Representative would result in disclosure of trade secrets to the Showtime
Representative or would adversely affect the attorney-client privilege between
the Company and its counsel. Notwithstanding the foregoing, Showtime shall have
no rights under this Section 3.6 during any period in which an officer of
Showtime is serving as a director of the Company.
3.7 DIRECTV Board Seat. So long as DIRECTV, Inc. ("DIRECTV") or one of
its affiliates holds at least 2,500,000 shares of the Company's capital stock
(consisting of the Company's Series F Preferred Stock and Common Stock), the
Holders of the Company's Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock shall vote to designate a person designated by DIRECTV
as the director which such Holders are entitled to designate pursuant to Section
D.2(c)(iii) of Article III of the Company's Amended and Restated Certificate of
Incorporation; provided that the person initially designated by DIRECTV shall be
Xxxxx X. Xxxxxxx and any subsequent replacement shall be chosen by such Holders
from a list of three executives of DIRECTV provided to such Holders in DIRECTV's
sole discretion. In addition to the requirements set forth in Section 5.6
below, and so long as DIRECTV or one of its affiliates holds at least 2,500,000
shares of the Company's capital stock (consisting of Series F Preferred Stock
and Common Stock), any amendment or waiver of this Section 3.7 shall require the
prior written consent of DIRECTV.
3.8 Series H Preferred Stock Board Seat. The Holders of all of the
outstanding shares of the Company's Series H Preferred Stock hereby agree that
any individual to be designated and elected as a director of the Company
pursuant to Section D.2(c)(v) of Article III of the Company's Amended and
Restated Certificate of Incorporation shall be mutually agreed to by such
Holders and all other directors of the Company.
15.
3.9 Series I Preferred Stock Board Seat. The individual designated and
elected by the holders of Series I Preferred Stock as a director of the Company
pursuant to Section D.2(c)(vi) of Article III of the Company's Amended and
Restated Certificate of Incorporation shall, prior to the closing of the
Company's Initial Offering, be designated as a Class III director (as described
in the Company's Amended and Restated Certificate of Incorporation to be
effective as of the closing of the Initial Offering and attached hereto as
Exhibit B). As soon as practicable after the date of this Agreement, the
Company agrees to take all necessary corporate action to effect the purposes of
this Section 3.9. The Company represents and warrants that the Company's Board
of Directors approved such designation on July 14, 1999, and agrees that it will
take no action in contravention of this Section 3.9. The Holders agree,
severally and not jointly, not to take any action, or cause or direct its
designees on the Company's Board of Directors to take any action, in
contravention of this Section 3.9. In addition to the requirements set forth in
Section 5.6 below, any amendment or waiver of this Section 3.9 shall require the
prior written consent of holders of at least sixty-six and two-thirds percent
(66-2/3%) of the Series I Preferred Stock.
3.10 Future Authorization of Series I Preferred Stock. The Company shall
not authorize, designate or issue any shares of Series I Preferred Stock other
than the 3,315,000 shares currently authorized in the Company's Amended and
Restated Certificate of Incorporation. In addition to the requirements set forth
in Section 5.6 below, any amendment or waiver of this Section 3.10 shall require
the prior written consent of holders of at least sixty-six and two-thirds
percent (66-2/3%) of the Series I Preferred Stock.
3.11 Reservation of Common Stock. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
3.12 Proprietary Information and Inventions Agreement. The Company shall
require all employees and consultants to execute and deliver a Proprietary
Information and Inventions Agreement in the form attached to the Purchase
Agreement.
3.13 Board of Directors. As of the date of this Agreement (i) the
authorized size of the Board of Directors of the Company is eleven members, and
(ii) the members of the Board of Directors of the Company include Xxxxxxx
Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxxx and three vacancies.
3.14 Termination of Covenants. All covenants of the Company contained in
Section 3 of this Agreement shall expire and terminate as to each Investor on
the effective date of the registration statement pertaining to the Initial
Offering.
Section 4. Rights of First Refusal.
4.1 Subsequent Offerings. Each Investor shall have a right of first
refusal to purchase its pro rata share of all Equity Securities, as defined
below, that the Company may, from time to time, propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section
4.6 hereof. Each Investor's pro rata share is equal to the ratio of (a) the
number of shares of the Company's Common Stock (including all shares of
16.
Common Stock issued or issuable upon conversion of the Shares) which such
Investor is deemed to be a holder immediately prior to the issuance of such
Equity Securities to (b) the total number of shares of the Company's outstanding
Common Stock (including all shares of Common Stock issued or issuable upon
conversion of the Shares or upon the exercise of any outstanding warrants or
options) immediately prior to the issuance of the Equity Securities. The term
"Equity Securities" shall mean (i) any Common Stock, Preferred Stock or other
security of the Company, (ii) any security convertible, with or without
consideration, into any Common Stock, Preferred Stock or other security
(including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to subscribe to or purchase any Common
Stock, Preferred Stock or other security or (iv) any such warrant or right.
4.2 Exercise of Rights. If the Company proposes to issue any Equity
Securities, it shall give each Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Investor shall have fifteen
(15) days from the giving of such notice to agree to purchase its pro rata share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Investor who would cause the Company to be in violation of
applicable federal securities laws by virtue of such offer or sale.
4.3 Issuance of Equity Securities to Other Persons. If the Investors
fail to exercise in full the rights of first refusal, the Company shall have
ninety (90) days thereafter to sell the Equity Securities in respect of which
the Investor's rights were not exercised, at a price and upon general terms and
conditions materially no more favorable to the purchasers thereof than specified
in the Company's notice to the Investors pursuant to Section 4.2 hereof. If the
Company has not sold such Equity Securities within ninety (90) days of the
notice provided pursuant to Section 4.2, the Company shall not thereafter issue
or sell any Equity Securities, without first offering such securities to the
Investors in the manner provided above.
4.4 Termination of Rights of First Refusal. The rights of first refusal
established by this Section 4 shall not apply to, and shall terminate upon the
effective date of the registration statement pertaining to the Company's Initial
Offering.
4.5 Transfer of Rights of First Refusal. The rights of first refusal of
each Investor under this Section 4 may be transferred to the same parties,
subject to the same restrictions as any transfer of registration rights pursuant
to Section 2.10.
4.6 Excluded Securities. The rights of first refusal established by this
Section 4 shall have no application to any of the following Equity Securities:
(a) shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or other
rights) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary, pursuant to stock
purchase or stock option plans or other compensatory arrangements that are
approved by the Board of Directors;
17.
(b) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business combination
approved by the Board of Directors;
(c) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;
(d) shares of Common Stock issued upon conversion of the Shares;
(e) any Equity Securities issued pursuant to any equipment leasing
arrangement, or debt financing from a bank or other institution; provided that
such transactions and the issuance of shares therein, have been approved by the
Company's Board of Directors; and
(f) any Equity Securities issued in connection with strategic
transactions involving the Company and other entities, including (i) joint
ventures, manufacturing, marketing or distribution arrangements or (ii)
technology transfer or development arrangements; provided that such strategic
transactions and the issuance of shares therein, have been approved by the
Company's Board of Directors.
Section 5. Miscellaneous.
5.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
5.2 Survival. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the 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.
5.3 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 Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price.
5.4 Entire Agreement. This Agreement, the Exhibits and Schedules hereto,
the Purchase Agreement and the other documents delivered pursuant 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.
18.
5.5 Severability. In case any provision of the 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.
5.6 Amendment and Waiver.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of at least sixty-six and two-thirds percent (66-2/3%) of the Registrable
Securities; provided, however, that any amendment to the rights of any series of
Series Preferred under this Agreement that disproportionately and adversely
affects or otherwise discriminates against such series of Series Preferred shall
additionally require the written consent of at least sixty-six and two-thirds
percent (66 2/3%) of such series of Series Preferred.
(b) Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the Registrable Securities.
(c) Notwithstanding the foregoing, this Agreement may be amended
with only the written consent of the Company to include additional purchasers of
Shares as "Investors," "Holders" and parties hereto.
5.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement 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 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
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
5.8 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) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the party
to be notified at the address as set forth on the signature pages hereof or
Exhibit A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.
5.9 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.
5.10 Amendment of Prior Agreement. Effective upon the execution of this
Agreement by the Company and the Holders of a majority of the Registrable
Securities covered
19.
by the Prior Agreement, the Prior Agreement shall be null and void and shall be
superseded by the provisions of this Agreement. Each Investor that was a party
to the Prior Agreement hereby waives the right of first refusal contained in
Section 4 of the Prior Agreement with respect to the sale and issuance of the
Series I Preferred Stock and the Common Stock issuable upon conversion thereof,
including any notice requirements related to such rights of first offer.
5.11 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.
20.
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Company:
TiVo Inc.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx Xxxxxx, President
and Chief Executive Officer
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Investors:
New Enterprise Associates VII, Limited
Partnership
By: NEA Partners VII, Limited Partnership
Its General Partner
By: /s/ Xxxx X. Xxxxx
-----------------------------
Xxxx X. Xxxxx
General Partner
NEA Presidents Fund, L. P.
By: NEA General Partners, L.P.
By: General Partner
By: /s/ Xxxx X. Xxxxx
-----------------------------
General Partner
NEA Ventures 1997, Limited Partnership
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------
Vice President
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Institutional Venture Partners VII, L.P.
By Its General Partner
Institutional Venture Management VII, L.P.
By: /s/ Xxxxxxxx X. Xxxx
------------------------------
Xxxxxxxx X. Xxxx
General Partner
Institutional Venture Management VII, L.P.
By: /s/ Xxxxxxxx X. Xxxx
------------------------------
Xxxxxxxx X. Xxxx
General Partner
IVP Founders Fund I, L.P.
By Its General Partner
Institutional Venture Management VI, L.P.
By: /s/ Xxxxxxxx X. Xxxx
------------------------------
Xxxxxxxx X. Xxxx
General Partner
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
------------------------------
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
------------------------------
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
----------------------------
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Strategic Value I, L.P.
By Its General Partner
SV Partners, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------
Title: Managing Member, SV Partners LLC
-----------------------------------
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Vulcan Ventures Incorporated
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Vice President
------------------------------
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
DIRECTV, Inc.
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxxx
-------------------------------
Title: Executive Vice President
------------------------------
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
NBC Multimedia, Inc.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title:________________________________
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Philips Corporate External Ventures
B.V.
By: /s/ Jan Oosterveld
----------------------------------
Name: Jan Oosterveld
----------------------------------
Title: Member, Group Management Committee
----------------------------------
Royal Philips Electronics
----------------------------------
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Advance/Xxxxxxxx Programming Partnership
By: Advance Communication Corp. a
General Partner
By: /s/ Xxxxxx X. Xxxxx
___________________________________
Xxxxxx X. Xxxxx, President
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
CBS Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
_________________________________
Name: Xxxxxxx X. Xxxxxxxx
_______________________________
Title: Executive Vice President
Chief Financial Officer
______________________________
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Catalyst Investments, L.L.C.
By: The Xxxx Disney Company Sole Member
By: /s/ Xxxxxxx Xxxx
_________________________________
Name: Xxxxxxx Xxxx
_______________________________
Title: Vice President
______________________________
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Comcast Interactive Investments, Inc.
By: /s/ Xxxxx Xxxxxxxx
_________________________________
Name: Xxxxx Xxxxxxxx
_______________________________
Title: VP
______________________________
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Xxx Communications Holdings, Inc.
By: /s/ Xxxxxx X. Xxxxxx
_________________________________
Name: Xxxxxx X. Xxxxxx
_______________________________
Title: Secretary
______________________________
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Discovery Communications, Inc.
By: /s/ Xxxxxxx X. Xxxxx
_____________________________
Name: Xxxxxxx X. Xxxxx
___________________________
Title: Chief Financial Officer
__________________________
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
TV Guide Interactive, Inc.
By: /s/ Xxxx XxXxxxx
_________________________________
Name: Xxxx XxXxxxx
_______________________________
Title: V.P. Corp. Dev.
______________________________
In Witness Whereof, the parties hereto have executed this Eighth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
Liberty DMX, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
_________________________________
Name: Xxxxxxx X. Xxxxxx
_______________________________
Title: Senior Vice President
______________________________
Exhibit A
INVESTOR RIGHTS AGREEMENT
SCHEDULE OF INVESTORS
Series A Preferred Stock
Name Shares Aggregate Purchase Price
---------------------------------------------------------- --------------------------- -------------------------------
New Enterprise Associates VII, L.P. 1,950,000 $ 1,170,000.00
NEA Presidents Fund, L.P. 41,667 $ 25,000.20
NEA Ventures 1997, L.P. 8,333 $ 4,999.80
Institutional Venture Partners VII, L.P. 1,890,000 $ 1,134,000.00
Institutional Venture Management VII, L.P. 40,000 $ 24,000.00
IVP Founders Fund I, L.P. 70,000 $ 42,000.00
Xxxxxxx Xxxxxx 666,667 $ 400,000.20
(holds 656,667 after
transfers described
below)
Xxxxx Xxxxxx 166,667 $ 100,000.20
Xxxx Xxxxxxxx Survivors' Trust 41,667 $ 25,000.20
Xxxxxx X. Xxxxxx, Xx. 83,333 $ 49,999.80
GC&H Investments 41,666 $ 24,999.60
Xxxxx X. Xxxxx 5,000 Transfer from
Xxxxxxx Xxxxxx
Xxx Xxxxxxx 5,000 Transfer from
Xxxxxxx Xxxxxx
Total: 5,000,000 $ 3,000,000
1.
EXHIBIT A (CONT.)
SCHEDULE OF INVESTORS
Series B Preferred Stock
Name Shares Aggregate Purchase Price
--------------------------------------------------------- ------------------------ ------------------------------------
First Closing: May 29, 1998
New Enterprise Associates VII, L.P. 1,587,302 $ 2,000,000.52
Institutional Venture Partners VII, L.P. 1,539,683 $ 1,940,000.58
Institutional Venture Management VII, L.P. 31,746 $ 39,999.96
IVP Founders Fund I, L.P. 15,873 $ 19,999.98
=========== ==================
Subtotal: 3,174,604 $ 4,000,001.04
Second Closing: June 26, 1998
Xxxxxx Xxxxxx 119,048 $ 150,000.48
Xxxxxx X. XxxXxxx 59,524 $ 75,000.24
Ta-Xxx Xxxxx 59,524 $ 75,000.24
Xxxxxx X. Xxxxxx, Xx. 39,683 $ 50,000.58
Xxxxxxxxx Family Trust UTA DTD 9/4/91 39,683 $ 50,000.58
R. Xxxxxxxx Xxxxx 39,683 $ 50,000.58
Xxxxxxx Xxxxxx 39,683 $ 50,000.58
Xxxxx Xxxxxxx 24,800 $ 31,248.00
Xxxx-Xxxx Chow 19,841 $ 24,999.66
Xxxx X. Xxx 19,841 $ 24,999.66
=========== ==================
Subtotal: 3,635,914 $ 4,581,251.64
Third Closing: July 27, 1998
Xxxxxx X. XxxXxxx 25,000 (all 31,500
transferred to
2.
Xxxxx Xxxxxxxxx)
Xxxxx Xxxxxxxxx 25,000 Transferred from
Xxxxxx X. XxxXxxx
25,000 $ 31,500.00
========= =============
Total: 3,660,914 $4,612,751.64
3.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Series C Preferred Stock
Name Shares Aggregate Purchase Price
-------------------------------------------------------- -------------------- ---------------------------------
First Closing: October 8, 1998
Strategic Value I, L.P. 972,973 $1,800,000.05
New Enterprise Associates VII, L.P. 594,595 $1,100,000.75
Institutional Venture Partners VII, L.P. 576,757 $1,067,000.45
Institutional Venture Management VII, L.P. 11,892 $ 22,000.20
IVP Founders Fund I, L.P. 5,946 $ 11,000.10
Subtotal: 2,162,163 $4,000,001.55
Second Closing: October 30, 1998
Comdisco 135,136 $ 250,001.60
Odyssey Capital, LLC 135,136 $ 250,001.60
XxxxxXxx Xxxxx and Xxxxx Xxxxx as Trustees of the
1998 Xxxxx family Trust 13,513 $ 24,999.05
Xxxxxxxx X. Xxxxxxxx & Xxxxxx X. Xxxxxxxx as Trustees
for the Xxxxxxxx X. Xxxxxxxx Living Trust, dated
December 27, 1994 13,513 $ 24,999.05
Xxxx X. Xxxxx 13,513 $ 24,999.05
Xxxxx Xxxxx Xxxxxxx and Xxxxxxx Xxxxxx 13,513 $ 24,999.05
Xxxxxxx
Xxxxxx X. Xxxxxx 13,513 $ 24,999.05
========= =============
Subtotal 337,837 $ 624,998.45
TOTAL 2,500,000 $4,625,000.00
Subsequent Sales of Series C:
Odyssey Capital, LLC 13,513 $ 24,999.05
4.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Series D Preferred Stock
Name Shares Aggregate Purchase Price
-------------------------------------------------------- -------------------- ---------------------------------
Vulcan Ventures Incorporated 1,358,695 $4,999,997.60
Total: 1,358,695 $4,999,997.60
5.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Series E Preferred Stock
Name Shares Aggregate Purchase Price
-------------------------------------------------------- -------------------- ---------------------------------
Showtime Networks Inc. 270,270 1,999,998
Total: 270,270 1,999,998
6.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Series F Preferred Stock
Name Shares Aggregate Purchase Price
-------------------------------------------------------- -------------------- ---------------------------------
DIRECTV, Inc. 405,405 $2,999,997
Total: 405,405 $2,999,997
7.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Series G Preferred Stock
Aggregate
Name Shares Purchase Price
------------------------------------------------ ------------- --------------------
NBC Multimedia, Inc. 1,013,513 $7,499,996.20
Total: 1,013,513 $7,499,996.20
8.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Series H Preferred Stock
Name Shares Consideration
------------------------------------------------ ------------- --------------------
Philips Corporate External Ventures B.V. 1,351,351 $9,999,997.40
Total: 1,351,351 $9,999,997.40
9.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Series I Preferred Stock
Name Shares Consideration
------------------------------------------------ ------------- --------------------
Advance/Xxxxxxxx Programming Partnership 240,153 $ 2,499,992.73
CBS Corporation 240,153 $ 2,499,992.73
Catalyst Investments, L.L.C. 720,461 $ 7,499,999.01
Comcast Interactive Investments, Inc. 480,307 $ 4,999,995.87
Xxx Communications Holdings, Inc. 240,153 $ 2,499,992.73
Discovery Communications, Inc. 720,461 $ 7,499,999.01
TV Guide Interactive, Inc. 240,153 $ 2,499,992.73
Liberty DMX, Inc. 240,153 $ 2,499,992.73
Total: 3,121,994 $32,499,957.54
10.
Exhibit A (cont.)
SCHEDULE OF INVESTORS
Registrable Common Stock
Name Shares Consideration
------------------------------------------------ ------------- --------------------
DIRECTV, Inc. 2,981,196 Services, support and
promissory note as set forth
in the Marketing Agreement
Total: 2,981,196 Services, support and
promissory note as set forth
in the Marketing Agreement
11.
