EXHIBIT 10.03
AT HOME CORPORATION
STOCK PURCHASE AND EXCHANGE AGREEMENT
August 1, 1996
TABLE OF CONTENTS
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Page
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1. Purchase, Sale and Exchange of Stock...............................................
1.1 Sale and Issuance of Series A Convertible Preferred...........................
Stock and Series K Convertible Preferred Stock................................
1.2 Exchange of Shares of Series T Preferred Stock for Series A Preferred.........
1.3 Closing.......................................................................
2. Representations, Warranties and Covenants of the Company...........................
2.1 Organization, Good Standing and Qualification.................................
2.2 Restated Certificate..........................................................
2.3 Restated Bylaws...............................................................
2.4 Capitalization................................................................
2.5 Outstanding Securities........................................................
2.6 Current Board.................................................................
2.7 Subsidiaries..................................................................
2.8 Authorization.................................................................
2.9 Consents and Approvals; No Conflict...........................................
2.10 Valid Issuance of Purchased and Conversion Shares.............................
2.11 No Registration Required......................................................
2.12 Litigation....................................................................
2.13 Status of Proprietary Assets and Agreements...................................
2.14 Registration Rights...........................................................
2.15 Title to Property and Assets..................................................
2.16 Financial Statements; Undisclosed Liabilities;................................
No Material Adverse Changes................................................
2.17 Disclosure....................................................................
2.18 ERISA Plans...................................................................
2.19 Tax Returns and Payments......................................................
2.20 Labor Agreements and Actions..................................................
2.21 Governmental Consents.........................................................
2.22 Actions Requiring Certain Pre-Closing Consents................................
2.23 Brokers or Finders............................................................
2.24 Registration Rights Agreement.................................................
2.25 Stockholders' Agreement.......................................................
2.26 Reasonable Efforts............................................................
2.27 Additional Issuances of Preferred Stock.......................................
2.28 Voting Agreements.............................................................
3. Representations, Warranties and Covenants of the Purchasers........................
3.1 Experience....................................................................
3.2 Investment....................................................................
3.3 Accredited Purchaser Status...................................................
3.4 Restricted Securities.........................................................
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3.5 Authorization...................................................................
3.6 Consents and Approvals; No Conflict.............................................
3.7 Disclosure of Information.......................................................
3.8 Information Concerning Purchaser................................................
3.9 Brokers or Finders..............................................................
3.10 Registration Rights Agreement...................................................
3.11 Stockholders' Agreement.........................................................
3.12 Reasonable Efforts..............................................................
4. Additional Representations of the KPCB Purchasers....................................
5. Legends; Notations...................................................................
6. Xxxx-Xxxxx-Xxxxxx Act................................................................
7. Conditions to the Purchasers' Obligations at Closing.................................
7.1 Correctness of Representations and Warranties...................................
7.2 Performance of Agreements.......................................................
7.3 Restated Certificate............................................................
7.4 Restated Bylaws.................................................................
7.5 Securities Exemption............................................................
7.6 No Material Litigation..........................................................
7.7 Government Approvals and Consents...............................................
7.8 Proceedings and Documents.......................................................
7.9 Board of Directors..............................................................
7.10 Opinion of Company Counsel......................................................
7.11 Stockholders' Agreement.........................................................
7.12 Registration Rights Agreement...................................................
7.13 Other...........................................................................
7.14 Simultaneous Closing............................................................
7.15 Delivery of Stock Certificates..................................................
8. Conditions to Obligations of Comcast Sub and Cox Sub at Closing;.....................
Covenants of TCI Sub and the KPCB Purchasers........................................
9. Conditions to the Company's Obligations at Closing...................................
9.1 Correctness of Representations and Warranties...................................
9.2 Performance of Agreements.......................................................
9.3 No Material Litigation..........................................................
9.4 Restated Certificate............................................................
9.5 Restated Bylaws.................................................................
9.6 Securities Exemption............................................................
9.7 Government Approvals and Consents...............................................
9.8 Proceedings and Documents.......................................................
9.9 Stockholders' Agreement.........................................................
9.10 Registration Rights Agreement...................................................
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9.11 Simultaneous Closing...........................................................
9.12 Payment of Purchase Price......................................................
10. Miscellaneous.......................................................................
10.1 Governing Law..................................................................
10.2 Survival.......................................................................
10.3 Successors and Assigns.........................................................
10.4 Limitation on Rights of Others.................................................
10.5 Entire Agreement; Amendment....................................................
10.6 Notices, Etc...................................................................
10.7 Delays or Omissions............................................................
10.8 Expenses.......................................................................
10.9 Counterparts...................................................................
10.10 Severability..................................................................
10.11 Obligations Several, Not Joint................................................
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EXHIBITS
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Exhibit A Certificate of Retirement
Exhibit B Schedule of Exceptions
Exhibit C Second Amended and Restated Certificate of Incorporation
Exhibit D Amended and Restated Bylaws
Exhibit E First Amended and Restated Registration Rights Agreement
Exhibit F Financial Statements
Exhibit G Amended and Restated Stockholders' Agreement
Exhibit H-1 and H-2 Opinions of Counsel
Exhibit I Information Concerning Purchasers
Exhibit J Purchasers' Affiliates
Exhibit K Written Consent of Stockholders
SCHEDULES
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Schedule 3.6 Purchaser Consents, Approvals and Conflicts
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STOCK PURCHASE AND EXCHANGE AGREEMENT
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THIS STOCK PURCHASE AND EXCHANGE AGREEMENT ("AGREEMENT") is made as of
August 1, 1996, by and among AT HOME CORPORATION, a Delaware corporation (the
"COMPANY"), TCI INTERNET HOLDINGS, INC., a Colorado corporation ("TCI SUB"),
KLEINER, PERKINS, XXXXXXXX & XXXXX VII and KPCB INFORMATION SCIENCES ZAIBATSU
FUND II, each a California limited partnership and Xxxxx Xxxxx (each, a "KPCB
PURCHASER" and together, the "KPCB PURCHASERS"), COMCAST PC INVESTMENTS, INC., a
Delaware corporation ("COMCAST SUB"), and COX TELEPORT PROVIDENCE, INC., a
Delaware corporation ("COX SUB"). (Each of the KPCB Purchasers, TCI Sub,
Comcast Sub and Cox Sub is referred to hereinafter separately as a "PURCHASER"
or together as the "PURCHASERS".)
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase, Sale and Exchange of Stock.
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1.1 Sale and Issuance of Series AM, Series AT, Series AX and Series K
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Convertible Preferred Stock. Subject to the terms and conditions of this
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Agreement, (a) the Company agrees to issue and sell to TCI Sub, and TCI Sub
agrees to purchase from the Company, at the Closing, 783,000 shares of the
Company's Series AT Convertible Participating Preferred Stock, par value $.01
per share (the "SERIES AT PREFERRED"), for an aggregate purchase price of
$7,830,000, (b) the Company agrees to issue and sell to the KPCB Purchasers, and
the KPCB Purchasers, jointly and severally, agree to purchase from the Company,
at the Closing, an aggregate of 233,883 shares/*/ of the Company's Series K
Convertible Participating Preferred Stock, par value $.01 per share (the "SERIES
K PREFERRED"), for an aggregate purchase price of $2,338,830, (c) the Company
agrees to issue and sell to Comcast Sub, and Comcast Sub agrees to purchase from
the Company, at the Closing, 727,865 shares of the Company's Series AM
Convertible Participating Preferred Stock, par value $.01 per share (the "SERIES
AM PREFERRED") for an aggregate purchase price of $7,278,650, and (d) the
Company agrees to issue and sell to Cox Sub, and Cox Sub agrees to purchase from
the Company, at the Closing, 727,865 shares of the Company's Series AX
Convertible Participating Preferred Stock, par value $.01 per share (the "SERIES
AX PREFERRED") for an aggregate purchase price of $7,278,650. The Series AM
Preferred, the Series AT Preferred and the Series AX Preferred are collectively
referred to herein as the "SERIES A PREFERRED."
1.2 Exchange of Shares of Series T Preferred Stock for Series AT
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Preferred. Subject to the terms and conditions of this Agreement, the Company
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agrees to issue to TCI Sub, and TCI Sub agrees to acquire from the Company, at
the Closing, 770,000 shares of Series AT Preferred in consideration of and in
exchange for 770,000 shares/*/ of Series T Preferred Stock, par value $.01 per
share ("SERIES T PREFERRED") owned by TCI Sub, which shares of Series T
Preferred shall be canceled and shall not be reissued by the Company.
Subsequent to the Closing, the Company shall promptly file a Certificate of
Retirement in the form of Exhibit A attached hereto (the "CERTIFICATE OF
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RETIREMENT") to reduce the number of authorized shares of Series T Preferred to
770,000 shares./*/ (The exchange of shares of Series T Preferred for shares
______________________
* After effecting a 10-to-1 reverse stock split of the Company's outstanding
Series T Preferred and Series K Preferred by filing the Second Amended and
Restated Certificate of Incorporation of the Company.
of Series AT Preferred by TCI Sub is referred to herein as the "TCI EXCHANGE."
The shares of Series A Preferred and Series K Preferred being acquired pursuant
to this Agreement are collectively referred to herein as the "PURCHASED
SHARES.")
1.3 Closing. The closing of the purchase, sale and exchange of the
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Purchased Shares (the "CLOSING") shall take place at the offices of Xxxxx &
Xxxxx L.L.P., 599 Lexington Avenue, New York, New York, or such other place as
the Company and the Purchasers shall mutually agree, at 10:00 a.m., local time,
on a mutually agreed date occurring no later than the 10th day following the
satisfaction or waiver of the conditions to Closing set forth in Sections 7, 8
and 9 hereof (other than any such conditions which are capable of being
satisfied only as of the Closing), but in no event later than August 15, 1996.
The date on which the Closing occurs is referred to herein as the "CLOSING
DATE." At the Closing, the Company shall deliver (a) to TCI Sub a certificate
or certificates registered in the name of TCI Sub representing 783,000 shares of
Series AT Preferred against payment of the purchase price therefor in cash or by
wire transfer in immediately available funds and a certificate or certificates
registered in the name of TCI Sub representing 770,000 shares of Series AT
Preferred against delivery of a certificate or certificates representing 770,000
shares of Series T Preferred duly endorsed for transfer or accompanied by a duly
executed Stock Assignment Separate From Certificate, (b) to the KPCB Purchasers
certificates registered in the name of the KPCB Purchasers representing an
aggregate of 233,883 shares of Series K Preferred (in such relative amounts as
the KPCB Purchasers may request) against payment of the purchase price therefor
in cash or by wire transfer in immediately available funds, (c) to Comcast Sub a
certificate or certificates registered in the name of Comcast Sub representing
727,865 shares of Series AM Preferred against payment of the purchase price
therefor in cash or by wire transfer in immediately available funds, and (d) to
Cox Sub a certificate or certificates registered in the name of Cox Sub
representing 727,865 shares of Series AX Preferred against payment of the
purchase price therefor in cash or by wire transfer in immediately available
funds.
2. Representations, Warranties and Covenants of the Company. The Company
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hereby represents and warrants to, and covenants with, each of the Purchasers as
follows, except as set forth in the Schedule of Exceptions ("SCHEDULE OF
EXCEPTIONS") attached to this Agreement as Exhibit B (which Schedule of
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Exceptions shall be deemed to be representations and warranties to the
Purchasers by the Company under this Section 2):
2.1 Organization, Good Standing and Qualification. The Company and
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the Subsidiary (as hereinafter defined) are corporations duly organized, validly
existing and in good standing under the laws of the States of Delaware and
California, respectively, and have all requisite corporate power and authority
to carry on their respective businesses as currently conducted and as currently
proposed to be conducted. The Company and the Subsidiary each have qualified to
do business in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the business, properties, prospects or financial
condition of the Company and the Subsidiary taken as a whole. The Company has
delivered to each of the Purchasers true and accurate copies of (i) the
Company's Certificate of Incorporation and Bylaws, and (ii) the Subsidiary's
Articles of Incorporation and Bylaws, each as amended through, and in effect on,
the date hereof. Other than the filing of the Restated Certificate (as defined
below) and the adoption of the Restated Bylaws (as defined below), there shall
be no amendments to, or other actions taken with respect to, the Certificate of
Incorporation or the Bylaws of the Company prior to the Closing.
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2.2 Restated Certificate. The Board of Directors of the Company has
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duly approved and adopted the Second Amended and Restated Certificate of
Incorporation of the Company in the form attached hereto as Exhibit C (the
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"RESTATED CERTIFICATE") pursuant to Section 242 of the Delaware General
Corporation Law (the "DGCL") and has obtained or will obtain prior to the
Closing the approval of the Restated Certificate by the required vote of the
Company's stockholders.
2.3 Restated Bylaws. The Board of Directors of the Company has duly
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approved and adopted the Amended and Restated Bylaws of the Company in the form
attached hereto as Exhibit D (the "RESTATED BYLAWS") pursuant to Section 109 of
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the DGCL and has obtained or will obtain prior to the Closing the approval of
the Restated Bylaws by the required vote of the Company's stockholders.
2.4 Capitalization. Upon the filing of the Restated Certificate with
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the Secretary of State of Delaware, the authorized capital stock of the Company
shall consist of 90,138,830 shares of common stock, par value $.01 per share
(the "COMMON STOCK"), and 15,292,613 shares of preferred stock, par value $.01
per share ("PREFERRED STOCK"). The authorized shares of Common Stock shall be
allocated as follows: (a) 75,000,000 shares shall be designated as "Series A
Common Stock," (b) 7,700,000 shares shall be designated as "Series B Common
Stock," and (c) 7,438,830 shares shall be designated as "Series K Common Stock."
The authorized shares of Preferred Stock shall be allocated as follows: (i)
727,865 shares shall be designated as Series AM Preferred, (ii) 1,553,000 shares
shall be designated as Series AT Preferred, (iii) 727,865 shares shall be
designated as Series AX Preferred, (iv) 743,883 shares shall be designated as
Series K Preferred, (v) 1,540,000 shares shall be designated as Series T
Preferred and (vi) 10,000,000 shares shall be undesignated as to series and
shall be issuable pursuant to authority granted in the Restated Certificate to
the Board of Directors (the "SERIES PREFERRED STOCK"). Prior to the Closing,
the Company shall have reserved and shall thereafter at all times keep reserved
(x) such number of shares of Series B Common Stock as is sufficient to provide
for the conversion of the Series T Preferred outstanding from time to time, (y)
such number of shares of Series K Common Stock as is sufficient to provide for
the conversion of the Series K Preferred outstanding from time to time, and (z)
such number of shares of Series A Common Stock as is sufficient to provide for
the conversion of the Series A Preferred outstanding from time to time, the
Series B Common Stock outstanding from time to time or issuable upon conversion
of the Series T Preferred, and the Series K Common Stock outstanding from time
to time or issuable upon conversion of the Series K Preferred. (The shares of
Series A Common Stock, Series B Common Stock and Series K Common Stock issuable
upon conversion of the Purchased Shares and the shares of Series A Common Stock
issuable upon conversion of such shares of Series B Common Stock and Series K
Common Stock are sometimes referred to herein as the "CONVERSION SHARES.") The
authorized capital stock of the Subsidiary consists of 10,000,000 shares of
common stock, without par value, and 5,000,000 shares of preferred stock,
without par value.
2.5 Outstanding Securities. As of the date of this Agreement, the
----------------------
outstanding securities of the Company consist of 3,411,000 shares of Series A
Common Stock, 5,100,000 shares of Series K Preferred (before effecting a 10-to-1
reverse stock split by filing the Restated Certificate), 15,400,000 shares of
Series T Preferred (before effecting a 10-to-1 reverse stock split by filing the
Restated Certificate) and options to purchase an aggregate of 1,865,750 shares
of Series A Common Stock. The Company has reserved for issuance pursuant to its
1996
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Incentive Stock Option Plan and its 1996 Incentive Stock Option Plan No. 2
(collectively, the "OPTION PLANS") an aggregate of 6,500,000 shares of Series A
Common Stock for issuance to employees, officers, directors, consultants and
independent contractors of the Company (less the number of shares of Series A
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Common Stock purchased outside the Option Plans by employees, officers,
directors, consultants and independent contractors of the Company, whether such
purchases occur before and after the dates of the Plans, unless specifically
provided otherwise in a resolution adopted by the Company's Board of Directors
at the time it approves the sale of Series A Common Stock to such employee,
officer, director, consultant or independent contractor, and plus the number of
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shares of Series A Common Stock repurchased by the Company upon termination of
any such person's employment or service relationship with the Company or upon
exercise of the Company's right of first refusal upon transfers by such
persons); the number of shares available for issuance under the Option Plans as
of the date of this Agreement is 1,144,250 shares. As of the date of this
Agreement, the outstanding securities of the Subsidiary consist of one (1) share
of common stock, which is owned by the Company. Except as expressly provided
herein, in that certain August 29, 1995 Stockholders' Agreement among the
Company, TCI Sub and the KPCB Purchasers, as amended as of May 9, 1996 (the
"1995 STOCKHOLDERS' AGREEMENT"), in the Restated Certificate and in the other
Transaction Agreements (as defined below), there are no other outstanding
rights, options, warrants, preemptive rights, rights of first refusal or similar
rights for the purchase or acquisition from the Company or the Subsidiary of any
securities of the Company or the Subsidiary nor are there any commitments to
issue or execute any such rights, options, warrants, preemptive rights or rights
of first refusal.
2.6 Current Board. Immediately prior to the Closing, the Company's
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Board of Directors consists of the following persons, each of whom has been duly
elected or appointed in accordance with the Bylaws of the Company: L. Xxxx
Xxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxx Xxxxxxxxx and
Xxxxxxx Xxxxxxxx Xxxxxx III; and the Subsidiary's Board of Directors consists of
the following person who has been duly elected or appointed in accordance with
the Bylaws of the Subsidiary: Xxxxxx X. Xxxxxxxx.
2.7 Subsidiaries. Except for its wholly-owned subsidiary xxxxxx.xxx,
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a California corporation (the "SUBSIDIARY"), the Company does not presently own
or control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association or other entity.
2.8 Authorization. The Company has full power and authority to
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execute, deliver and perform its obligations under each of this Agreement, the
Registration Rights Agreement (as defined in Section 2.14 below), the
Stockholders' Agreement (as defined in Section 2.25 below), and those provisions
of Article VII of the Term Sheet, dated June 4, 1996, as amended as of the
Closing Date, among the parties hereto and certain of their affiliates (the
"TERM SHEET"), including any other provisions or definitions in other sections
of the Term Sheet which are referenced in Article VII (such provisions are
hereafter collectively the "MASTER DISTRIBUTION AGREEMENT"; provided that if the
matters set forth in Article VII of the Term Sheet are superseded by a
definitive agreement which is executed by the applicable parties to the Term
Sheet, such definitive agreement will constitute the Master Distribution
Agreement for all purposes hereunder) (the Registration Rights Agreement, the
Stockholders' Agreement, the Master Distribution Agreement and this Agreement
are hereinafter referred to collectively as the "TRANSACTION AGREEMENTS"). All
corporate action on the part of the Company necessary for the
4
authorization, execution and delivery of the Transaction Agreements and the
performance of all obligations of the Company hereunder and thereunder has been
taken or will be taken prior to Closing. Each of the Transaction Agreements,
when executed and delivered by the Company, assuming the due execution and
delivery thereof by the other parties hereto or thereto, shall constitute a
valid and legally binding obligation of the Company, enforceable against it in
accordance with its terms, subject to: (a) judicial principles limiting the
availability of specific performance, injunctive relief and other equitable
remedies, (b) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect generally relating to or affecting
creditors' rights, and (c) limitations on the enforceability of the
indemnification and contribution provisions of the Registration Rights Agreement
imposed by law or public policy.
2.9 Consents and Approvals; No Conflict. The execution, delivery and
-----------------------------------
performance of each of the Transaction Agreements and the consummation of each
of the transactions contemplated hereby and thereby (including the offering,
sale and issuance of the Purchased Shares and the issuance of the Conversion
Shares) do not and will not (a) conflict with or result in a breach of the
terms, conditions or provisions of, (b) constitute a default under, (c) result
in the creation of any lien, security interest, charge or encumbrance upon the
Company's or the Subsidiary's capital stock or assets pursuant to, (d) give any
third party the right to accelerate any obligation under, (e) result in a
violation of, or (f) require any order, qualification, waiver, permit,
authorization, consent, approval, exemption or other action by or from, or any
registration, notice, declaration, application or filing to or with, any court
or administrative or governmental body pursuant to (i) the Restated Certificate
or the Restated Bylaws of the Company or the Articles of Incorporation or the
Bylaws of the Subsidiary, (ii) any agreement to which the Company or the
Subsidiary is a party or is bound or to which either of their assets are subject
or (iii) any law, statute, rule or regulation to which the Company or the
Subsidiary is subject; provided, however, that with respect to clause (f) of
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this Section 2.9, no representation or warranty is made as to any such
requirements applicable to the Company as a result of the specific legal or
regulatory status of any Purchaser (including without limitation any agreements
between any Purchaser or its affiliate and any local or municipal government
related to the provision of cable television services within a local area) or as
a result of any other facts that specifically relate to any Purchaser, any
business in which any such Purchaser has engaged or proposes to engage or any
financing arrangements or transactions entered into or proposed to be entered
into by or on behalf of any such Purchaser.
2.10 Valid Issuance of Purchased and Conversion Shares. The Purchased
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Shares, when issued, sold and delivered in accordance with the terms of this
Agreement will be duly authorized, validly issued, fully paid and nonassessable,
free of any liens, claims, charges, security interests, pledges or encumbrances
of any kind (other than any of the foregoing created herein or by the applicable
Purchaser or in the Stockholders' Agreement or the Master Distribution Agreement
or as a result of applicable state and federal securities laws) and will possess
all of the rights, privileges and preferences provided therefor in the Restated
Certificate. The Conversion Shares will have been duly and validly reserved for
issuance prior to the Closing and, upon issuance in accordance with the terms of
the Restated Certificate, will be duly authorized, validly issued, fully paid
and nonassessable, free of any liens, claims, charges, security interests,
pledges or encumbrances of any kind (other than any of the foregoing created
herein or by the applicable Purchaser, or in the Stockholders' Agreement or the
Master Distribution Agreement or as a result of applicable state and federal
securities laws) and will possess all of the rights and powers provided therefor
in the Restated Certificate.
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2.11 No Registration Required. Based in part on the representations
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made by the Purchasers in Section 3 hereof, the Purchased Shares and (assuming
no change in applicable law and no unlawful distribution of Purchased Shares by
Purchasers or other parties) the Conversion Shares will be issued in full
compliance with the registration and prospectus delivery requirements of the
U.S. Securities Act of 1933, as amended (the "SECURITIES ACT") and the
registration and qualification requirements of the securities laws of the States
of California, Colorado, Georgia and Delaware (provided that, with respect to
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the Conversion Shares, no commission or other remuneration is paid or given,
directly or indirectly, for soliciting the issuance of Conversion Shares upon
the conversion of the Purchased Shares and no additional consideration is paid
for the Conversion Shares other than surrender of the applicable Purchased
Shares upon conversion thereof in accordance with the Restated Certificate).
2.12 Litigation. There is no action, suit or proceeding pending or,
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to the best of the Company's knowledge, any investigation pending or any action,
suit, proceeding or investigation threatened against, involving or affecting the
Company or the Subsidiary or any of their respective properties, nor is there
any judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against the Company or the Subsidiary, which questions the validity of any of
the Transaction Agreements or the right of the Company to enter into any of
them, or to consummate the transactions contemplated hereby or thereby, or which
could have, either individually or in the aggregate, a material adverse effect
on the condition (financial or otherwise), business, property, results of
operations, assets or liabilities of the Company and the Subsidiary taken as a
whole.
2.13 Status of Proprietary Assets and Agreements.
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(a) Status. To the best of the Company's knowledge, the Company
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and the Subsidiary each have full title and ownership of, or are duly licensed
under or otherwise have the right to use, all patents, patent applications,
trademarks, service marks, trade names, copyrights, mask works, trade secrets,
confidential and proprietary information, designs and proprietary rights used in
their business as now conducted or as contemplated to be conducted (all of the
foregoing collectively hereinafter referred to as the "PROPRIETARY ASSETS")
without any conflict with or infringement of the rights of others. The Company
has not received any written notice asserting that it or the Subsidiary is
infringing any proprietary rights of any third party. Section 2.13(a) of the
Schedule of Exceptions sets forth a list of all pending applications for and
issued patents, trademark and service xxxx registrations and copyright
registrations.
(b) Licenses; Other Agreements Relating to Proprietary Assets.
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Neither the Company nor the Subsidiary has granted any options, licenses or
agreements relating to any Proprietary Asset of the Company or the Subsidiary,
nor is the Company or the Subsidiary obligated to pay any royalties or other
payments to third parties with respect to the marketing, sale, distribution,
manufacture, license or use of any Proprietary Asset.
(c) List of Other Agreements. Section 2.13(c) of the Schedule of
------------------------
Exceptions sets forth a complete list of all contracts, leases, licenses and
other agreements to which the Company or the Subsidiary is a party or by which
either of them is bound ("LISTED AGREEMENTS"); provided that for purposes of
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this Section 2.13(c) only, no agreement, other than a .Com Agreement or
Promotional Agreement (each as defined in the Restated Certificate), that
involves the receipt or payment of funds by the Company or the Subsidiary or a
liability, contingent or otherwise, of the Company or the Subsidiary, in the
amount of $100,000 or less
6
will be required to be listed on Section 2.13(c) of the Schedule of Exceptions.
Section 2.13(c) of the Schedule of Exceptions separately identifies those Listed
Agreements entered into in respect of a Related Party Transaction (as defined in
the Restated Certificate).
2.14 Registration Rights. Except as provided in the First Amended
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and Restated Registration Rights Agreement, in the form of Exhibit E attached
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hereto (the "REGISTRATION RIGHTS AGREEMENT") to be entered into at or prior to
the Closing and except as provided in that certain August 29, 1995 Registration
Rights Agreement, as amended as of May 9, 1996, which is to be replaced and
superseded in its entirety by the Registration Rights Agreement, neither the
Company nor the Subsidiary has granted or agreed to grant to any person or
entity any rights (including piggyback registration rights) to have any
securities of the Company or the Subsidiary registered with the United States
Securities and Exchange Commission ("SEC") or any other governmental authority.
2.15 Title to Property and Assets. The properties and assets the
----------------------------
Company or the Subsidiary owns are owned by the Company or the Subsidiary,
respectively, free and clear of all mortgages, deeds of trust, liens,
encumbrances and security interests except for statutory liens for the payment
of current taxes that are not yet delinquent and liens, encumbrances and
security interests which arise in the ordinary course of business and which do
not materially affect properties and assets of the Company and the Subsidiary
taken as a whole. With respect to the property and assets they lease, the
Company and the Subsidiary each have a valid leasehold interest in such property
and assets and are in material compliance with such leases.
2.16 Financial Statements; Undisclosed Liabilities; No Material
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Adverse Changes.
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(a) Financial Statements. Attached to this Agreement as Exhibit
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F is an unaudited consolidated balance sheet of the Company dated June 30, 1996
-
(the "BALANCE SHEET DATE") and an unaudited consolidated income statement of the
Company for the six-month period ended June 30, 1996 (such consolidated
financial statements being collectively referred to herein as the "FINANCIAL
STATEMENTS"). The Financial Statements (a) are in accordance with the books and
records of the Company, (b) are true, correct and complete and present fairly
the financial condition of the Company at the date or dates therein indicated
and the results of operations for the period or periods therein specified, and
(c) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except for the omission of notes
thereto and normal year-end audit adjustments.
(b) No Material Undisclosed Liabilities. Neither the Company nor
-----------------------------------
the Subsidiary has any liability, contingent or otherwise, that is material to
the financial condition of the Company and the Subsidiary taken as a whole,
which is not reflected on or provided for in the Financial Statements, except as
set forth on the Schedule of Exceptions.
(c) No Material Adverse Changes. Since the Balance Sheet Date,
---------------------------
there has not been any event or change which materially and adversely affects
the financial condition of the Company and the Subsidiary taken as a whole,
except that, since the Balance Sheet Date, the Company has continued to incur
substantial expenses and operating losses in the ordinary course of its
business.
7
2.17 Disclosure. The representations and warranties made by the
----------
Company in this Agreement, including the Exhibits hereto and the Schedule of
Exceptions (when read together), do not contain any untrue statement of a
material fact and do not omit to state a material fact necessary to make the
statements herein as a whole not misleading.
2.18 ERISA Plans. Neither the Company nor the Subsidiary has any
-----------
Employee Pension Benefit Plan as defined in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended.
2.19 Tax Returns and Payments. The Company and the Subsidiary have
------------------------
timely filed all tax returns and reports required by law and have never been
audited by any state or federal taxing authority. All tax returns and reports
of the Company and the Subsidiary are true and correct in all material respects.
All taxes shown on such returns as due have been paid.
2.20 Labor Agreements and Actions. Neither the Company nor the
----------------------------
Subsidiary is bound by or subject to any contract, commitment or arrangement
with any labor union, and to the Company's best knowledge, no labor union has
requested, sought or attempted to represent any employees, representatives or
agents of the Company or the Subsidiary. There is no strike or other labor
dispute involving the Company or the Subsidiary pending nor, to the Company's
best knowledge, threatened, nor is the Company aware of any labor organization
activity involving its or the Subsidiary's employees. Neither the Company nor
the Subsidiary has committed any unfair labor practice.
2.21 Governmental Consents. No consent, approval, order or
---------------------
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company or the Subsidiary is required in connection with the consummation of
the transactions contemplated by this Agreement, except for: (i) the filing of
------ ---
a Notice of Transaction pursuant to Section 25102(f) of the California Corporate
Securities Law of 1968, as amended, and the rules thereunder (the "CALIFORNIA
SECURITIES LAW"), which filing will be effected within the time prescribed by
law; (ii) such other qualifications or filings under the Securities Act and the
regulations thereunder and all other applicable securities laws as may be
required in connection with the transactions contemplated by this Agreement,
including, without limitation, filings under state "blue sky" securities laws in
connection with the conversion of the Purchased Shares and issuance of the
Conversion Shares; and (iii) any agreements between any Purchaser or its
affiliates and any local or municipal government related to the provision of
cable television services within a local area. All such qualifications and
filings will, in the case of qualifications, be effective on the Closing and
will, in the case of filings, be made within the time prescribed by law.
2.22 Actions Requiring Certain Pre-Closing Consents. No actions have
----------------------------------------------
been taken on or after June 4, 1996 and prior to the Closing by the Company or
the Subsidiary (other than adoption and approval of the Restated Certificate and
Restated Bylaws and the other Transaction Agreements) that, if taken after the
Closing, would have required the consent or approval of (a) either or both of
Comcast Sub and Cox Sub (as if the Closing had occurred and such Purchaser(s)
were then stockholders of the Company) or (b) the .Com Committee (as defined in
the Restated Certificate), unless such pre-Closing action was consented to or
approved by such of TCI Sub, the KPCB Purchasers, Comcast Sub and/or Cox Sub (or
their respective designees on the Company's Board of Directors) or by the .Com
Committee as would have been required had the Closing already occurred.
8
2.23 Brokers or Finders. There is no investment banker, broker,
------------------
agent, financial advisor or other person or entity which has been retained by or
is authorized to act on behalf of the Company who is or will be entitled to any
fee, commission, reimbursement of expenses or other similar charge upon
consummation of or otherwise in connection with this Agreement or any of the
transactions contemplated hereby. The Company agrees to indemnify and hold each
of the Purchasers harmless from and against any and all claims, liabilities or
obligations with respect to any such fees, commissions, expenses or claims
(including the costs, expenses and legal fees of defending against such
liability) for which the Company or the Subsidiary, or any of the employees or
representatives thereof, is responsible.
2.24 Registration Rights Agreement. Subject to fulfillment of the
-----------------------------
applicable conditions to Closing, the Company agrees to enter into the
Registration Rights Agreement in the form attached hereto as Exhibit E at or
---------
prior to the Closing.
2.25 Stockholders' Agreement. Subject to fulfillment of the
-----------------------
applicable conditions to Closing, the Company agrees to enter into the Amended
and Restated Stockholders' Agreement in the form attached hereto as Exhibit G
---------
(the "STOCKHOLDERS' AGREEMENT") at or prior to the Closing.
2.26 Reasonable Efforts. The Company agrees to use its commercially
------------------
reasonable efforts to cause each condition to the Closing set forth in Sections
7 and 8 hereof, insofar as satisfaction of such condition requires any action by
or otherwise is in the control of the Company, to be satisfied as soon as
reasonably practicable and, in general, to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as reasonably practicable
the purchase and sale of the Purchased Shares in accordance with the terms of
this Agreement.
2.27 [Intentionally omitted]
2.28 Voting Agreements. In consideration of the purchase of the
-----------------
Purchased Shares by the Purchasers, the Company hereby covenants and agrees that
it will cause at any time and from time to time those officers and directors of
the Company holding not less than 50.1% of the outstanding shares of Series A
Common Stock (other than shares issued upon conversion of shares of Series A
Preferred, Series K Preferred, Series T Preferred, Series B Common Stock or
Series K Common Stock), to enter into a written agreement providing that with
respect to any matter upon which the separate vote of the holders of the
Company's Series A Common Stock is required under Section 242(b) of the Delaware
General Corporation law prior to the closing of the Company's initial public
offering of Series A Common Stock pursuant to a registration statement filed
with and declared effective by the SEC (the "COMPANY IPO"), each such individual
will cast all votes attributable to his shares in the same proportion as the
holders of the Company's outstanding shares of Series A, Series K and Series T
Preferred Stock cast their votes upon such matter, or, if there are no shares of
such Preferred Stock outstanding, in the same manner as the holders of the
Company's outstanding shares of Series B Common Stock cast their votes upon such
matter. Such agreements shall further provide that the obligations described in
this Section shall be binding on any transferee to whom the shares of Series A
Common Stock are transferred by such individual or any subsequent transferee and
that, as a condition of any transfer of the shares prior to the Company IPO,
such individual shall require any transferee, and any such transferee shall
require his transferee, to agree to be bound by the provisions of such agreement
in the same manner as such individual is bound.
9
3. Representations, Warranties and Covenants of the Purchasers. Each
-----------------------------------------------------------
Purchaser, on behalf of itself and not jointly with the other Purchasers, hereby
represents and warrants to, and covenants with, the Company as follows:
3.1 Experience. Such Purchaser is experienced in evaluating start-
----------
up companies such as the Company, and has such knowledge and experience in
financial and business matters to enable such Purchaser to evaluate the merits
and risks of such Purchaser's prospective investment in the Company, and such
Purchaser has the ability to bear the economic risks of such investment.
3.2 Investment. Such Purchaser is acquiring the Purchased Shares and
----------
any Conversion Shares solely for the purpose of investment for such Purchaser's
own account, not as a nominee or agent, and not with a view to, or for offer or
sale in connection with, any distribution thereof in any transaction which would
be in violation of the securities laws of the United States of America or any
state thereof. Such Purchaser does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to any
third person with respect to any of the Purchased Shares or the Conversion
Shares. Such Purchaser understands that the Purchased Shares and the Conversion
Shares have not been registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein.
3.3 Accredited Purchaser Status. Such Purchaser is an "accredited
---------------------------
investor" within the meaning of Regulation D promulgated under the 0000 Xxx.
3.4 Restricted Securities. Such Purchaser understands that the
---------------------
Purchased Shares and any Conversion Shares may not be sold, transferred or
otherwise disposed of without registration under the Securities Act or the
availability of an exemption therefrom, and that in the absence of an effective
registration statement covering such stock or an available exemption from
registration, the Purchased Shares and any Conversion Shares must be held
indefinitely. In the absence of an effective registration statement under the
Securities Act with respect to the Purchased Shares or any Conversion Shares
such Purchaser shall notify the Company of any proposed disposition by such
Purchaser of any Purchased Shares or any Conversion Shares, shall furnish the
Company with a statement of the circumstances surrounding the proposed
disposition and, if reasonably requested by the Company, shall furnish the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require the registration of such Purchased Shares or
such Conversion Shares under the Securities Act. Such Purchaser shall not sell,
transfer or otherwise dispose of any Purchased Shares or any Conversion Shares
except in a manner fully consistent with its representations contained in this
Section 3 and otherwise in full compliance with the terms and conditions of this
Agreement and the Stockholders' Agreement and the provisions of applicable law.
Such Purchaser understands that no public market now exists for any of the
Purchased Shares and that the Company is under no obligation to register any of
the securities sold hereunder except as provided in the Registration Rights
Agreement.
3.5 Authorization. Such Purchaser is a corporation or partnership
-------------
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has full power and authority to execute,
deliver and perform its obligations under each of the Transaction Agreements to
which it is a party. Such Purchaser has taken all corporate or
10
partnership action necessary to authorize the execution, delivery and
performance of its obligations under each of the Transaction Agreements to which
it is a party, and each such Transaction Agreement, when executed and delivered
by such Purchaser, assuming the due execution and delivery thereof by the other
parties hereto or thereto, shall constitute a valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, subject to: (i) judicial principles respecting election of remedies or
limiting the availability of specific performance, injunctive relief, and other
equitable remedies; and (ii) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect generally relating to or
affecting creditors' rights.
3.6 Consents and Approvals; No Conflict. Except as set forth on
-----------------------------------
Schedule 3.6 and except as could not reasonably be expected, individually or in
the aggregate, to have a material adverse effect on such Purchaser, the
execution, delivery and performance of each of the Transaction Agreements to
which such Purchaser is a party and the consummation of each of the transactions
contemplated hereby or thereby do not and will not (a) conflict with or result
in a breach of the terms, conditions or provisions of, (b) constitute a default
under, (c) result in the creation of any lien, security interest, charge or
encumbrance upon any material properties or assets pursuant to, (d) give any
third party the right to accelerate any obligation under, (e) result in a
violation of, or (f) require any order, qualification, waiver, permit,
authorization, consent, approval, exemption or other action by or from, or any
registration, notice, declaration, application or filing to or with, any court
or administrative or governmental body pursuant to (i) the Certificate (or
Articles) of Incorporation, Bylaws, partnership agreement (or other governing
documents) of such Purchaser, (ii) any agreement to which such Purchaser is a
party or is bound or to which its assets are subject or (iii) any law, statute,
rule or regulation to which such Purchaser is subject; provided, however, that
-------- -------
with respect to clause (f) of this Section 3.6, no representation or warranty is
made as to any such requirements applicable to such Purchaser as a result of the
specific legal or regulatory status of any other party to this Agreement
(including without limitation any agreements between any Purchaser or its
affiliates and any local or municipal government related to the provision of
cable television services within a local area) or as a result of any other facts
that specifically relate to any such other party, any business in which any such
other party has engaged or proposes to engage or any financing arrangements or
transactions entered into or proposed to be entered into by or on behalf of any
such other party.
3.7 Disclosure of Information. Such Purchaser has received or has
-------------------------
had full access to all the information it considers necessary or appropriate to
make an informed investment decision with respect to the Purchased Shares to be
purchased by such Purchaser under this Agreement. Such Purchaser further has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Purchased Shares and
to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to such Purchaser or to which such
Purchaser had access. The foregoing, however, does not in any way limit or
modify the representations and warranties made by the Company in Section 2.
3.8 Information Concerning Purchaser. Exhibit I hereto sets forth
-------------------------------- ---------
such Purchaser's jurisdiction of organization, the location of said Purchaser's
principal office and the jurisdiction in which such Purchaser will accept the
Company's offer to sell the Purchased Shares and will purchase the Purchased
Shares. Exhibit J also sets forth for each Purchaser (i) the
---------
11
Purchaser's Parent and Ultimate Parent (each as defined in the Stockholders'
Agreement), (ii) if applicable, the Purchaser's Cable Parent (as defined in the
Stockholders' Agreement) and (iii) the ownership relationship among the
Purchaser, its Parent, its Ultimate Parent and its Cable Parent, if any.
3.9 Brokers or Finders. There is no investment banker, broker,
------------------
agent, financial advisor or other person or entity which has been retained by or
is authorized to act on behalf of such Purchaser who is or will be entitled to
any fee, commission, reimbursement of expenses or other similar charge upon
consummation of or otherwise in connection with this Agreement or any of the
transactions contemplated hereby. Such Purchaser agrees to indemnify and hold
harmless the Company from and against any and all claims, liabilities or
obligations with respect to any such fees, commissions, expenses or claims
(including the costs, expenses and legal fees of defending against such
liability) for which such Purchaser, or any of its partners, employees or
representatives, is responsible.
3.10 Registration Rights Agreement. Subject to fulfillment of the
-----------------------------
applicable conditions to Closing, such Purchaser agrees to enter into the
Registration Rights Agreement in the form attached hereto as Exhibit E at or
---------
prior to the Closing.
3.11 Stockholders' Agreement. Subject to fulfillment of the
-----------------------
applicable conditions to Closing, such Purchaser agrees to enter into the
Stockholders' Agreement in the form attached hereto as Exhibit G at or prior to
---------
the Closing.
3.12 Reasonable Efforts. Such Purchaser agrees to use its
------------------
commercially reasonable efforts to cause each condition to the Closing set forth
in Section 9 hereof, insofar as satisfaction of such condition requires any
action by or otherwise is in the control of such Purchaser, to be satisfied as
soon as reasonably practicable and, in general, to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as reasonably practicable
the purchase and sale of the Purchased Shares in accordance with the terms of
this Agreement.
4. Additional Representation of the KPCB Purchasers. Each KPCB Purchaser
------------------------------------------------
represents and warrants that KPCB VII Associates, a California limited
partnership (the "KPCB PARTNER"), is a general partner of each of the KPCB
Purchasers that is a partnership and that each of L. Xxxx Xxxxx and Xxxxxxx
Xxxxxxxx Xxxxxx III is a general partner of the KPCB Partner.
5. Legends; Notations. The certificates evidencing the Purchased Shares
------------------
or any Conversion Shares shall be endorsed with the legends set forth below:
(a) a conspicuously noted legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANS FERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, SUCH SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
12
DISPOSITION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE
ACT AND SUCH LAWS";
(b) any legend required by any applicable state securities law;
and
(c) a conspicuously noted legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THAT
CERTAIN STOCKHOLDERS' AGREEMENT AND THAT CERTAIN STOCK PURCHASE AND EXCHANGE
AGREEMENT, EACH DATED AS OF AUGUST 1, 1996 AMONG THE COMPANY AND THE OTHER
PARTIES THERETO CONTAINING, AMONG OTHER THINGS, RESTRICTIONS ON THE SALE,
TRANSFER OR OTHER DISPOSITION OF SUCH SECURITIES AND RESTRICTIONS UPON AND
COMMITMENTS TO VOTE ON CERTAIN MATTERS. A COUNTERPART OF EACH SUCH AGREEMENT
HAS BEEN DEPOSITED WITH THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS, AND THE
COMPANY SHALL FURNISH A COPY OF EACH SUCH AGREEMENT TO THE RECORD HOLDER HEREOF
WITHOUT CHARGE UPON WRITTEN REQUEST."
The Company shall make a notation on its stock books regarding the
restrictions on transfer of the Purchased Shares and any Conversion Shares and
will transfer securities on the books of the Company only to the extent not
inconsistent therewith.
6. Xxxx-Xxxxx-Xxxxxx Act. If any Purchaser reasonably believes that its
---------------------
conversion of the Purchased Shares would be subject to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 and the rules and regulations thereunder (the
"HSR ACT AND RULES") prior to such conversion and following such Purchaser's
notice to the Company of such Purchaser's intention to convert, the Company and
such Purchaser shall promptly comply with any applicable requirements under the
HSR Act and Rules relating to filing and furnishing of information (the "HSR
REPORT") to the Federal Trade Commission (the "FTC") and the Antitrust Division
of the Department of Justice. Without limiting the foregoing, such Purchaser
and the Company shall file the HSR Report and take all other action required by
the HSR Act and Rules and shall use their respective commercially reasonable
efforts to (a) coordinate with respect to the filing of the HSR Reports of such
Purchaser and the Company (and exchanging drafts thereof), so as to present all
required HSR Reports to the FTC and the Department of Justice at the time
selected by such Purchaser, and to avoid substantial errors or inconsistencies
among such HSR Reports in the description of the transaction, (b) comply with
any additional request for documents or information made by the FTC or the
Department of Justice or by a court and to assist the other parties to so comply
and (c) cause all persons which are part of the same "person" (as defined for
purposes of the HSR Act and Rules) as the Company to cooperate and assist in
such filing and compliance. Each of the Company and such Purchaser shall bear
and pay any costs or expenses that it incurs in complying with this Section 6.
7. Conditions to the Purchasers' Obligations at Closing. The obligation
----------------------------------------------------
of each Purchaser to purchase and/or acquire Purchased Shares at the Closing is
several and not joint and such obligation is subject to the satisfaction, at or
prior to the Closing, of each of the following conditions, any of which may be
waived by a Purchaser by written notice to the Company pursuant to Section 10.6
of this Agreement, but any such waiver shall not be effective against a
Purchaser unless consented to by such Purchaser:
13
7.1 Correctness of Representations and Warranties. The
---------------------------------------------
representations and warranties of the Company set forth in this Agreement shall,
if specifically qualified by materiality, be true and correct and, if not so
qualified, be true and correct in all material respects in each case as of the
date of this Agreement and as of the Closing Date with the same effect as if
made on and as of the Closing Date, and such Purchaser shall have received a
certificate to such effect from the Company, signed by its duly authorized
officer.
7.2 Performance of Agreements. Each other party to this Agreement
-------------------------
shall have performed and complied with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing Date, and such Purchaser shall have
received a certificate to such effect from each such party, signed by its duly
authorized officer.
7.3 Restated Certificate. The Restated Certificate shall have been
--------------------
duly adopted by the Company by all necessary corporate action of its Board of
Directors and stockholders, and shall have been duly filed with and accepted by
the Secretary of State of the State of Delaware and shall be in full force and
effect under the DGCL.
7.4 Restated Bylaws. The Restated Bylaws shall have been duly
---------------
adopted by the Company by all necessary corporate action of its Board of
Directors and stockholders and shall be in full force and effect under the DGCL.
7.5 Securities Exemption. The offer and sale of the Purchased
--------------------
Shares to the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act, the qualification requirements
of the California Securities Law and the registration and/or qualification
requirements of all other applicable state securities laws.
7.6 No Material Litigation. There shall not be pending on the
----------------------
Closing Date any lawsuit, claim, proceeding or other legal action by or before
any court or other regulatory, administrative or governmental authority that
seeks to restrain, restrict or prohibit or impose substantial penalties or
damages with respect to (or any other materially adverse relief or remedy in
connection with), and there shall not be in effect on the Closing Date any
injunction or other order of any governmental authority or arbitration panel
that restrains, restricts, prohibits or imposes substantial penalties or damages
with respect to (or any other materially adverse relief or remedy in connection
with), the consummation of any of the transactions contemplated hereby or by any
of the other Transaction Agreements.
7.7 Government Approvals and Consents. All governmental consents
---------------------------------
required in connection with the consummation of the transactions contemplated by
this Agreement shall have been obtained and shall be in full force and effect
and all governmental filings required in connection with the consummation of the
transactions contemplated by this Agreement shall have been made, and all
waiting periods, if any, applicable to the consummation of such transactions
imposed by any governmental entity shall have expired, other than those which,
if not obtained, in force or effect, made or expired (as the case may be) would
not, whether individually or in the aggregate, have a material adverse effect on
the transactions contemplated by this Agreement.
7.8 Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated hereby at the Closing, and all
documents and
14
instruments incident to these transactions, shall be reasonably satisfactory in
substance to such Purchaser and its counsel and each Purchaser shall have
received all such counterpart originals and certified or other copies of such
documents as such Purchaser may reasonably request. Such documents shall include
(but not be limited to) the following:
(a) Certified Charter Documents. A copy of the Restated
---------------------------
Certificate and the Restated Bylaws of the Company (as amended through the date
of the Closing), certified by the Secretary of the Company as true and correct
copies thereof as of the Closing.
(b) Corporate Actions. A copy of the resolutions of the Board
-----------------
of Directors and the stockholders of the Company evidencing the adoption and
approval of the Restated Certificate and the Restated Bylaws, the authorization
of issuance and sale of the Purchased Shares, the approval of this Agreement and
the other Transaction Agreements, and the other matters contemplated hereby and
thereby.
(c) Good Standing Certificates. Certificates of corporate
--------------------------
standing issued by the Secretary of State of the States of California and
Delaware.
7.9 Board of Directors. At the Closing, the authorized number of
------------------
directors of the Company shall be nine, and the holders of each series of
Convertible Preferred Stock shall have the right to elect its director by
executing the written consent of stockholders in substantially the form attached
hereto as Exhibit K.
---------
7.10 Opinion of Company Counsel. Each Purchaser shall have received
--------------------------
an opinion from Fenwick & West LLP, counsel for the Company, dated as of the
date of the Closing, in the form attached hereto as Exhibit H-1 and an opinion
-----------
from Xxxxxxxx, Xxxxxx & Finger, P.A., special counsel to the Company in
Delaware, dated as of the date of the Closing, in the form attached hereto as
Exhibit H-2.
-----------
7.11 Stockholders' Agreement. The Company and each Purchaser (other
-----------------------
than the Purchaser whose obligation to perform is dependent upon satisfaction of
such condition) shall have executed and delivered the Stockholders' Agreement.
7.12 Registration Rights Agreement. The Company and each Purchaser
-----------------------------
(other than the Purchaser whose obligation to perform is dependent upon
satisfaction of such condition) shall have executed and delivered the
Registration Rights Agreement.
7.13 Other. Each Purchaser shall be reasonably satisfied that all
-----
conditions to (a) the other Purchasers' obligation to purchase and pay for the
Purchased Shares to be purchased by such other Purchasers, and (b) the Company's
obligation to sell the Purchased Shares to be sold to the other Purchasers,
shall have been satisfied or waived.
7.14 Simultaneous Closing. All Purchasers shall perform all of their
--------------------
respective covenants and obligations required to be performed under this
Agreement on or before the Closing and shall purchase and pay for the respective
Purchased Shares to be purchased by each Purchaser simultaneously with the
purchase of and payment for the Purchased Shares to be purchased by the other
Purchasers.
15
7.15 Delivery of Stock Certificates. The Company shall have
------------------------------
delivered to each Purchaser the stock certificate specified for such Purchaser
in Section 1.1 and/or Section 1.2.
8. Condition to Obligations of Comcast Sub and Cox Sub at Closing;
---------------------------------------------------------------
Covenants of TCI Sub and the KPCB Purchasers. Comcast Sub and Cox Sub hereby
--------------------------------------------
consent to and approve each of the actions set forth in Section 2.22 of the
Schedule of Exceptions. On or before the Closing, any preemptive rights, rights
of first refusal and other rights (including but not limited to, the right to
receive notice of the transactions contemplated by this Agreement) of TCI Sub,
and the KPCB Partner and the KPCB Purchasers, and their respective Stockholder
Groups (as defined in the Stockholders' Agreement) under the Stockholders'
Agreement, dated as of August 29, 1995, among the Company, the KPCB Partner, the
KPCB Purchasers, and TCI Sub, as amended as of May 9, 1996, or otherwise, shall
have been waived as and to the extent such rights apply to the TCI Exchange and
the issuance and sale of the Purchased Shares and the Conversion Shares
hereunder and the other transactions contemplated hereby.
9. Conditions to the Company's Obligations at Closing. The obligations
--------------------------------------------------
of the Company to issue and sell the Purchased Shares to the Purchasers at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions:
9.1 Correctness of Representations and Warranties. The
---------------------------------------------
representations and warranties of the Purchasers contained in this Agreement
shall, if specifically qualified by materiality, be true and correct and, if not
so qualified, be true and correct in all material respects in each case as of
the date of this Agreement and as of the Closing Date with the same effect as if
made on and as of the Closing Date, and the Company shall have received a
certificate to such effect from each Purchaser, signed by its duly authorized
officer.
9.2 Performance of Agreements. The Purchasers shall have
-------------------------
performed and complied with all covenants, agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by them on or before the Closing Date, and the Company shall have
received a certificate to such effect from each Purchaser, signed by its duly
authorized officer.
9.3 No Material Litigation. There shall not be pending on the
----------------------
Closing Date any lawsuit, claim, proceeding or other legal action by or before
any court or other regulatory, administrative or governmental authority that
seeks to restrain, restrict or prohibit or impose substantial penalties or
damages with respect to (or any other materially adverse relief or remedy in
connection with), and there shall not be in effect on the Closing Date any
injunction or other order of any governmental authority or arbitration panel
that restrains, restricts, prohibits or imposes substantial penalties or damages
with respect to (or any other materially adverse relief or remedy in connection
with), the consummation of any of the transactions contemplated hereby or by any
of the other Transaction Agreements.
9.4 Restated Certificate. The Restated Certificate shall have
--------------------
been duly adopted by the Company by all necessary corporate action of its Board
of Directors and stockholders and shall have been duly filed with and accepted
by the Secretary of State of the State of Delaware and shall be in full force
and effect under the DGCL.
16
9.5 Restated Bylaws. The Restated Bylaws shall have been duly
---------------
adopted by the Company by all necessary corporate action of its Board of
Directors and stockholders and shall be in full force and effect under the DGCL.
9.6 Securities Exemption. The offer and sale of the Purchased
--------------------
Shares to the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act, the qualification requirements
of the California Securities Law and the registration and/or qualification
requirements of all other applicable state securities laws, provided that the
Company shall be obligated to use its commercially reasonable efforts to make
all filings and take all such other actions required to perfect such exemptions.
9.7 Government Approvals and Consents. All governmental
---------------------------------
consents required in connection with the consummation of the transactions
contemplated by this Agreement shall have been obtained and shall be in full
force and effect and all governmental filings required in connection with the
consummation of the transactions contemplated by this Agreement shall have been
made, and all waiting periods, if any, applicable to the consummation of such
transactions imposed by any governmental entity shall have expired, other than
those which, if not obtained, in force or effect, made or expired (as the case
may be) would not, whether individually or in the aggregate, have a material
adverse effect on the transactions contemplated by this Agreement.
9.8 Proceedings and Documents. All corporate and other
-------------------------
proceedings in connection with the transactions contemplated hereby at the
Closing, and all documents and instruments incident to these transactions, shall
be reasonably satisfactory in substance to the Company and its counsel and they
shall each have received all such counterpart originals and certified or other
copies of such documents as they may reasonably request.
9.9 Stockholders' Agreement. The Stockholders' Agreement shall
-----------------------
have been duly executed and delivered by each party thereto other than the
Company.
9.10 Registration Rights Agreement. The Registration Rights
-----------------------------
Agreement shall have been duly executed and delivered by each party thereto
other than the Company.
9.11 Simultaneous Closing. All Purchasers shall perform all of
--------------------
their respective covenants and obligations required to be performed under this
Agreement on or before the Closing and shall purchase and pay for the respective
Purchased Shares to be purchased by each such Purchaser simultaneously with the
purchase of and payment for the Purchased Shares to be purchased by the other
Purchasers.
9.12 Payment of Purchase Price. Each Purchaser shall have
-------------------------
delivered to the Company the purchase price specified for such Purchaser in
Section 1.1 and TCI Sub shall have delivered the consideration described in
Section 1.2 with respect to the TCI Exchange.
10. Miscellaneous.
-------------
10.1 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, in all respects the laws of the State of Delaware,
without regard to the conflicts of law rules of such State.
17
10.2 Survival. The representations and warranties made herein
--------
shall survive any investigation made by any Purchaser and the closing of the
transactions contemplated hereby for a period of fifteen (15) months after the
Closing.
10.3 Successors and Assigns. Neither this Agreement nor any of
----------------------
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of each of the other parties hereto. Any assignment or
delegation in contravention of this Agreement shall be void and shall not
relieve the assigning or delegating party of any obligation hereunder. Subject
to the foregoing provisions of this Section 10.3, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
10.4 Limitation on Rights of Others. Nothing in this Agreement,
------------------------------
whether express or implied, shall be construed to give any person, other than
the parties hereto, any legal or equitable right, remedy or claim under or in
respect of this Agreement.
10.5 Entire Agreement; Amendment. This Agreement and the other
---------------------------
Transaction Agreements supersede the provisions of the Term Sheet except as
specified in the Stockholders' Agreement. This Agreement, the other Transaction
Agreements and the other documents delivered pursuant hereto, constitute the
full and entire understanding and agreement among the parties with regard to the
subjects hereof and thereof and supersede all prior agreements and
understandings, both written and oral, among the parties with regard to the
subject matter hereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
10.6 Notices, Etc. All notices and other communications required
------------
or permitted to be given by any provision of this Agreement shall be in writing
and mailed (certified or registered mail, postage prepaid, return receipt
requested) or sent by hand or overnight courier, or by facsimile transmission
(with acknowledgment received), charges prepaid and addressed to the intended
recipient as follows, or to such other address or number as may be specified
from time to time by like notice to the parties:
(a) If to TCI Sub:
-------------
TCI Internet Holdings, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
President
with copies to:
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. XxXxxxx, Esq.
18
(b) If to the KPCB Purchasers:
-------------------------
Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxx
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: L. Xxxx Xxxxx
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
(c) If to Comcast Sub:
-----------------
Comcast PC Investments, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
with copies to:
Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Pick,
Vice President
and to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx
Packard Building, 7th Floor
00xx xxx Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
19
(d) If to Cox Sub:
-------------
Cox Teleport Providence, Inc.
c/o: Xxx Communications, Inc.
0000 Xxxx Xxxxx Xxxxx, XX
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Senior Vice President
with copies to:
Dow Xxxxxx & Xxxxxxxxx P.L.L.C.
0000 Xxx Xxxxxxxxx Xxx., X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(e) If to the Company:
-----------------
At Home Corporation
000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
with copies to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Any party may from time to time specify a different address for notices by like
notice to the other parties. All notices and other communications given in
accordance with the provisions of this Agreement shall be deemed to have been
given and received (i) four (4) business days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii)
when delivered by hand or transmitted by facsimile (with acknowledgment received
and, in the case of a facsimile only, a copy of such notice is sent no later
than the next business day by a reliable overnight courier service, with
acknowledgment of receipt) or (iii) one (1) business day after the same are sent
by a reliable overnight courier service, with acknowledgment of receipt.
10.7 Delays or Omissions. No delay or omission to exercise any
-------------------
right, power or remedy accruing to any party upon any breach or default of any
other party under this Agreement shall impair any such right, power or remedy of
such first party, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any
20
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach or default under
this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing or as provided in this
Agreement. All remedies, either under this Agreement or by law or otherwise
afforded to any party, shall be cumulative and not alternative.
10.8 Expenses. Each of the Company and each Purchaser shall bear
--------
its own expenses and legal fees incurred on its behalf in connection with this
Agreement and the transactions contemplated hereby.
10.9 Counterparts. This Agreement may be executed in any number
------------
of counterparts with the same effect as if all parties hereto had signed the
same document. Each counterpart shall be enforceable against the parties
actually executing such counterpart, and all counterparts shall be construed
together and shall constitute one instrument.
10.10 Severability. In the event that any provision of this
------------
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
10.11 Obligations Several, Not Joint. Each Purchaser shall be (i)
------------------------------
obligated hereunder only with respect to the purchase of the number and kind of
Purchased Shares set forth in Section 1 of this Agreement, and no Purchaser
shall have any liability with respect to any other Purchaser's obligations
hereunder and (ii) separately and independently entitled to rely on the
representations and warranties of the other Purchasers and the Company made to
such Purchaser in this Agreement and to the benefit of all covenants and
agreements of the other Purchasers and the Company made with such Purchaser
herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AT HOME CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------------------
Name:XXXXXX X XXXXXXXX
Title: PRESIDENT AND CEO
TCI INTERNET HOLDINGS, INC.
By: /s/ X. XXXXXXX
-------------------------------------------
Name:XXXXX X. XXXXXXX
Title:PRESIDENT AND CEO
COMCAST PC INVESTMENTS, INC.
By: /s/ XXXXXX X. BLOCK
-------------------------------------------
Name: XXXXXX X. BLOCK
Title: VICE PRESIDENT
COX TELEPORT PROVIDENCE, INC.
By: /s/ XXXXX X. XXXXXXX
-------------------------------------------
Name: XXXXX X XXXXXXX
Title: PRES.
KLEINER, PERKINS, XXXXXXXX & XXXXX VII
By: KPCB VII ASSOCIATES,
its General Partner
By: /s/ L. XXXX XXXXX
-------------------------------------------
Name: L. XXXX XXXXX
Title: GENERAL PARTNER
KPCB INFORMATION SCIENCES ZAIBATSU FUND II
By: KPCB VII ASSOCIATES,
its General Partner
By: /s/ L. XXXX XXXXX
-------------------------------------------
Name: L. XXXX XXXXX
Title: GENERAL PARTNER
[SIGNATURE PAGE TO STOCK PURCHASE AND EXCHANGE AGREEMENT]
22
/s/ XXXXX XXXXXX
-----------------------------------------
Xxxxx Xxxxx
[SIGNATURE PAGE TO STOCK PURCHASE AND EXCHANGE AGREEMENT]
23
CERTIFICATE OF RETIREMENT
OF
SERIES T PREFERRED STOCK
OF
AT HOME CORPORATION
(PURSUANT TO SECTION 243(B) OF THE DELAWARE GENERAL CORPORATION LAW)
At Home Corporation, a Delaware corporation (the "Company"), hereby
certifies:
1. That the Board of Directors of the Company has duly adopted a
resolution retiring the following shares of capital stock of the Company which
are no longer outstanding:
770,000 shares of Series T Convertible Participating Preferred Stock,
par value of $0.01 per share.
2. That the Second Amended and Restated Certificate of Incorporation
("Restated Certificate") of the Company prohibits the reissuance of the shares
of Preferred Stock so retired; and pursuant to the provisions of Section 243 of
the Delaware General Corporation Law, upon the effective date of filing of this
certificate, the Certificate of Incorporation of the Company shall be amended so
as to effect a reduction in the authorized number of shares of the Company's
capital stock to the extent of 770,000 shares of Series T Preferred Stock so
that the total number of authorized shares of Series T Preferred Stock is
770,000 and the total number of authorized shares of Preferred Stock is
14,522,613.
Capitalized terms used herein and not defined herein shall have the
definitions set forth in the Restated Certificate.
IN WITNESS WHEREOF, said corporation has caused this Certificate of
Retirement to be signed by its duly authorized officer this 2nd day of
---
August, 1996.
At Home Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx, President
EXHIBIT I
INFORMATION CONCERNING PURCHASERS
JURISDICTION IN
WHICH PURCHASER
WILL ACCEPT THE
LOCATION OF COMPANY'S OFFER TO
JURISDICTION OF PURCHASER'S PRINCIPAL SELL THE PURCHASED NUMBER OF SHARES
PURCHASER ORGANIZATION OFFICE SHARES PURCHASED
------------------------------------------------------------------------------------------------------------------------------
Comcast PC Investments, Inc. Delaware Delaware Delaware 727,865 shares of Series AM
Preferred Stock
Cox Teleport Providence, Inc. Delaware Georgia Georgia 727,865 shares of Series AX
Preferred Stock
Kleiner, Perkins, Xxxxxxxx & California California California 179,286 shares of Series K
Xxxxx VII Preferred Stock
KPCB Information Sciences California California California 4,597 shares of Series K
Zaibatsu Fund II Preferred Stock
Xxxxx Xxxxx California California California 50,000 shares of Series K
Preferred Stock
TCI Internet Holdings, Inc. Colorado Colorado Colorado 783,000 shares of Series AT
Preferred Stock for
cash; and
770,000 shares of Series AT
Preferred Stock in
the Exchange
EXHIBIT J
PURCHASERS' AFFILIATES
CABLE PARENT RELATIONSHIPS TO
PURCHASER (IF APPLICABLE) PARENT ULTIMATE PARENT PURCHASER
-----------------------------------------------------------------------------------------------------------------------------------
Comcast PC Investments, Comcast Cable Comcast Corporation, a Comcast Comcast Cable and
Inc., a Delaware Communications, Inc., a Pennsylvania corporation Comcast On-Line
corporation ("COMCAST Delaware corporation ("COMCAST") directly own 0% and
SUB") ("COMCAST CABLE") and 100%, respectively, of
Comcast On-Line the voting equity
Communications, Inc., a securities of Comcast
Delaware corporation Sub. Comcast directly
("COMCAST ON-LINE") owns 100% and 100% of
(collectively being a the voting equity
single Cable Parent) securities of Comcast
Cable and Comcast
On-Line, respectively.
Cox Teleport Providence, Xxx Communications, CCI Xxx Enterprises, CCI directly owns 100%
Inc., a Delaware Inc., a Delaware Inc., a Delaware of the voting equity
corporation ("COX SUB") corporation ("CCI") corporation ("CEI") securities of Cox Sub.
CEI indirectly owns
through three
susbsidiaries 75.3% of
the voting equity
securities of CCI.
Kleiner, Perkins, Xxxxxxxx N/A KPCB VII Associates, a N/A KPCB is the general
& Xxxxx VII California partnership partner of the
("KPCB") Purchaser.
KPCB Information Sciences N/A KPCB N/A KPCB is the general
Zaibatsu Fund II partner of the
Purchaser.
Xxxxx Xxxxx N/A N/A N/A N/A
TCI Internet Holdings, TCI Internet Services, Tele-Communications, Inc., TCI TCI Services, TCI
Inc., a Colorado Inc., a Colorado a Delaware corporation Communications and TCI
corporation (formerly corporation ("XXX ("XXX") Investments directly
named TCI Internet SERVICES"); TCI own 100%, 0% and 0%,
Services, Inc.) ("TCI Communications, Inc., a respectively, of the
SUB") Delaware corporation voting equity
("TCI COMMUNICATIONS"); securities of TCI Sub.
and TCI Cable TCI directly owns 100%
Investments, Inc., a and 100% of the voting
Delaware corporation equity securities of
("TCI INVESTMENTS") TCI Services and TCI
(collectively being a Investments,
single Cable Parent) respectively. TCI
owns 100% of the
outstanding common
stock of TCI
Communications, and
third parties own
preferred stock of TCI
Communications, which
preferred stock is
exchangeable into
stock of TCI and not
of TCI Communications.
