Exchange Agreement - OpenTV Corp., OpenTV Inc. and Sun TSI Subsidiary Inc.
EXCHANGE AGREEMENT
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THIS EXCHANGE AGREEMENT (this "Agreement") is entered into as of
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October 23, 1999 by and among OpenTV Corp., a British Virgin Islands corporation
(the "Company"), OpenTV, Inc., a Delaware corporation ("OpenTV"), and Sun TSI
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Subsidiary, Inc., a Delaware corporation ("SSI").
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RECITALS
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A. Myriad International Holdings BV, a company organized under the
laws of the Netherlands ("MIH"), has transferred its equity interest in OpenTV,
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to the Company in exchange for which OTV Holdings Limited, a subsidiary of MIH
("OTVH"), has received B Ordinary Shares of the Company.
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B. SSI shall have the right, pursuant to this Agreement, to exchange
all of its shares of Class B Common Stock of OpenTV for shares of the B Ordinary
Shares of the Company.
C. The parties desire to enter into this Agreement subject to the
terms and conditions set forth herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereto agree as
follows:
1. Right to Exchange Securities. SSI shall have the irrevocable,
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perpetual right (the "Exchange Right"), subject to the terms and conditions of
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this Agreement, to exchange each share of Class B Common Stock of OpenTV (the
"OpenTV Shares") for B Ordinary Shares of the Company (the "Exchange
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Securities") as set forth herein. Each OpenTV Share shall be exchangeable into
the number of Exchange Securities which results from dividing the Initial
Exchange Price (as defined below) of the OpenTV Shares in effect at the time of
the exchange by the BVI Exchange Price (as defined below) in effect at the time
of the exchange. The Initial Exchange Price shall be U.S. one dollar and eleven
cents (U.S.$1.11). The BVI Exchange Price shall be U.S. one dollar and eleven
cents (U.S.$1.11). The Initial Exchange Price and the BVI Exchange Price shall
be subject to adjustment, from time to time, as set forth in paragraph 3 of this
Agreement.
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2. Mechanics of Exchange.
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(a) SSI may exercise the Exchange Right set forth in paragraph 1 above
by delivering a written notice (the "Exchange Notice") to the Company which sets
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forth the number of shares of OpenTV which SSI has elected to exchange. Each
Exchange Notice shall be irrevocable, and upon receipt of an Exchange Notice and
satisfaction of the conditions to such exchange, the Company and SSI shall be
obligated to effect the exchange of securities contemplated thereby.
(b) As promptly as practicable following receipt by the Company of an
Exchange Notice, each of the Company and SSI shall, and shall cause each of its
respective subsidiaries and the officers, directors and employees of such
subsidiaries to, (i) make any and all required applications or filings with, and
seek any required consents, approvals or waivers from, any governmental or
regulatory agencies, including, but not limited to under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended and the rules and regulations
thereunder (the "HSR Act") and applicable securities laws, (ii) use all
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reasonable efforts to obtain any and all such consents, approvals or waivers and
the termination of any applicable waiting period under the HSR Act, in each
case, which are reasonably necessary in connection with the exercise of each
Exchange Right, and (iii) use reasonable efforts to cooperate with, and express
its support for, such other party's efforts to obtain any such consents,
approvals and waivers. Upon receipt of such consents, approvals or waivers or
the expiration or termination of such waiting period, as the case may be, the
Company or SSI, as the case may be, shall notify the other of such receipt,
expiration or termination. Upon the receipt of all such required consents,
approvals or waivers and the termination of any applicable waiting period under
the HSR Act, SSI shall surrender certificates representing the OpenTV Shares
specified in the applicable Exchange Notice in exchange for the appropriate
stock certificate(s) pursuant to paragraph 2(c) hereof.
(c) At such time as all required consents, approvals, waivers and
terminations described in paragraph 2(b) have been obtained or waived, SSI shall
surrender its certificate or certificates for the Exchange Securities to be
exchanged, with appropriate stock powers attached, duly endorsed, at the office
of the Company or any transfer agent for the Exchange Securities, together with
a written notice to the Company that SSI is exchanging all or a specified number
of shares of OpenTV, represented by such certificate or certificates. Promptly
thereafter, the Company shall issue and deliver to SSI, a certificate or
certificates representing the Exchange Securities to be issued, conveyed and
delivered to SSI pursuant to paragraph 1 dated the applicable Exchange Date (as
defined below). Certificates representing the B Ordinary Shares of the Company
to be issued hereunder may include appropriate legends based on federal and
state securities laws or as required by that certain Investors' Rights Agreement
dated as of the date hereof, among the Company, SSI and others.
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(d) Each exchange of OpenTV Shares for Exchange Securities shall be
deemed to have been effected at the close of business on the date (the "Exchange
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Date") of receipt by the Company or any such transfer agent of the Exchange
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Notice referred to in paragraph 2(a) above, subject to all applicable conditions
to such exchange having been satisfied.
(e) SSI shall be treated for all purposes as the record holder or
holders of Exchange Securities as of the close of business on the Exchange Date;
provided, however, that no surrender of OpenTV Shares on any date when the stock
transfer books of the Company are closed for any purpose shall be effective to
constitute the person entitled to receive the Exchange Securities deliverable
upon such exchange as the record holder(s) of such shares of the Exchange
Securities on such date, but such surrender shall be effective (assuming all
other requirements for the valid exchange of such shares have been satisfied) to
constitute such person as the record holder of such shares of the Exchange
Securities for all purposes as of the opening of business on the next succeeding
day on which such stock transfer books are open. Without limiting the first
sentence of this paragraph 2(e), as of the close of business on an Exchange
Date, the rights and obligations of SSI as the holder of the applicable OpenTV
Shares shall cease (other than with respect to such holder's right to receive
the Exchange Securities, with respect to required consents, approvals, waivers
and terminations as described herein and its obligation to deliver the
applicable certificate(s) for OpenTV Shares as provided herein).
(f) If SSI holds OpenTV Shares at the close of business on a record
date for any payment of declared dividends on such shares and the Company has
not received an Exchange Notice with respect to such OpenTV Shares on or before
such record date, SSI shall be entitled to receive the dividend payable on such
shares on the corresponding dividend payment date notwithstanding receipt by the
Company of an Exchange Notice for such OpenTV Shares following such record date
and prior to the corresponding dividend payment date.
(g) If the OpenTV Shares represented by a certificate surrendered for
exchange are exchanged in part only, then simultaneously with any such exchange,
OpenTV shall issue and deliver to SSI, without charge therefor, a new
certificate or certificates representing in the aggregate the number of
unexchanged shares.
3. Exchange Price Adjustments. The Initial Exchange Price and the
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BVI Exchange Price shall be subject to adjustment from time to time as provided
below in this paragraph 3.
(a) Adjustment for Stock Splits and Combinations. If OpenTV at any
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time or from time to time after the date hereof effects a subdivision of the
OpenTV Shares, the Initial Exchange Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company at any time or
from time to time after the
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date hereof effects a subdivision of the outstanding Exchange Securities, the
BVI Exchange Price then in effect immediately before that subdivision shall be
proportionately decreased. If OpenTV at any time or from time to time after the
date hereof combines the outstanding OpenTV Shares into a smaller number of
shares, the Initial Exchange Price then in effect before the combination shall
be proportionately increased. If the Company at any time or from time to time
after the date hereof combines the outstanding Exchange Securities into a
smaller number of Shares, the BVI Exchange Price then in effect immediately
before the combination shall be proportionately increased. Any adjustment under
this subparagraph (a) shall become effective at the close of business on the
date the subdivision or combination becomes effective.
(b) Adjustment for Certain Dividends and Distributions. If the
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Company at any time or from time to time after the date hereof makes, or fixes a
record date for the determination of holders of Exchange Securities entitled to
receive, a dividend or other distribution payable in additional shares of
Exchange Securities, then and in each such event the BVI Exchange Price then in
effect shall be decreased as of the time of such issuance or, in the event such
record date is fixed, as of the close of business on such record date, by
multiplying the BVI Exchange Price then in effect by a fraction (1) the
numerator of which is the total number of Exchange Securities issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (2) the denominator of which shall be the
total number of Exchange Securities issued and outstanding immediately prior to
the time of such issuance or the close of business on such record date plus the
number of Exchange Securities issuable in payment of such dividend or
distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the BVI Exchange Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the BVI Exchange Price
shall be adjusted pursuant to this paragraph 3(b) as of the time of actual
payment of such dividends or distributions.
(c) Adjustments for Other Dividends and Distributions. In the event
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the Company at any time or from time to time after the date hereof makes, or
fixes a record date for the determination of holders of Exchange Securities
entitled to receive, a dividend or other distribution payable in shares of the
Company other than Exchange Securities, then and in each such event provision
shall be made so that SSI shall receive upon exchange of the OpenTV Shares, in
addition to the number of shares of Exchange Securities receivable thereupon,
the amount of securities of the Company which SSI would have received had the
OpenTV Shares owned by SSI been exchanged for Exchange Securities on the date of
such event and had SSI thereafter, during the period from the date of such event
to and including the date of exercise of the Exchange Right, retained such
securities receivable by SSI as aforesaid during such period, subject to all
other adjustments called for during such period under this paragraph 3(c) with
respect to the rights of SSI as a holder of the OpenTV Shares.
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(d) Adjustment for Reclassification, Exchange and Substitution. In
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the event that at any time or from time to time after the date hereof, Exchange
Securities issuable upon the exchange of the OpenTV Shares is changed into the
same or a different number of shares of any class or classes of stock, whether
by recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets, provided for elsewhere in this paragraph 3),
then and in any such event SSI shall have the right thereafter to convert such
shares into the kind and amount of stock and other securities and property
receivable upon such recapitalization, reclassification or other change, by
holders of the maximum number of Exchange Securities into which such OpenTV
Shares could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided
herein.
(e) Reorganizations, Mergers, Consolidations or Sales of Assets. If
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at any time or from time to time after the date hereof there is a capital
reorganization of the Exchange Securities (other than a recapitalization,
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this paragraph 3) or a merger or consolidation of the Company with
or into another corporation, or the sale of all or substantially all of the
Company's properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation or sale, provision shall be made so that
SSI shall thereafter be entitled to receive upon exchange of the OpenTV Shares
the number of shares of stock or other securities or property to which a holder
of the number of Exchange Securities deliverable upon exchange would have been
entitled on such capital reorganization, merger, consolidation, or sale. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this paragraph 3 with respect to the rights of SSI as a holder of
the OpenTV Shares after the reorganization, merger, consolidation or sale to the
end that the provisions of this paragraph 3 (including adjustment of the BVI
Exchange Price then in effect and the number of Exchange Securities receivable
upon exchange of the OpenTV Shares) shall be applicable after that event and be
as nearly equivalent as may be practicable.
4. Certificate of Adjustment. In each case of an adjustment or
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readjustment of the Initial Exchange Price or BVI Exchange Price, as the case
may be, or the number of Exchange Securities or other securities issuable upon
exchange of the OpenTV Shares, the Company, at its expense, shall cause the
Chief Financial Officer of the Company to compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment or readjustment, and shall mail such certificate, by
first class mail, postage prepaid, to SSI. The certificate shall set forth such
adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (1) the BVI
Exchange Price, (2) the number of additional B Ordinary Shares of the Company to
be received by SSI upon the exercise of its Exchange Right and (3) the type and
amount, if any, of other property which at the time would be received upon
exchange of the OpenTV Shares.
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5. Notices of Record Date. In the event of (i) any taking by the
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Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (ii) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company, any
merger or consolidation of the Company with or into any other corporation, or
any transfer of all or substantially all of the assets of the Company to any
other person or any voluntary or involuntary dissolution, liquidation or winding
up of the Company, the Company shall mail to SSI at least ten (10) days prior to
the record date specified therein (or such shorter time as may be determined in
good faith by the Board to be practicable under the circumstances, which shall
be not less than 3 Business Days), a notice (the "Notice") specifying (1) the
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date on which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (2) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective,
and (3) the date, if any, that is to be fixed, as to when the holders of record
of Exchange Securities (or other securities) shall be entitled to exchange their
Exchange Securities (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up. The Notice shall include all
material details relating to such dividend, distribution, reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up of the Company, including, without limitation, the type, amount and
the fair market value of any property or assets proposed to be distributed to
SSI as a holder of the OpenTV Shares in connection therewith.
6. Representations and Warranties of the Company. Except as set
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forth on the Schedule of Exceptions attached hereto as Exhibit A, the Company
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hereby represents and warrants to SSI as follows:
(a) Good Standing and Qualification. The Company is validly existing
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as a corporation in good standing under the laws of the British Virgin Islands
and has all requisite corporate power and authority to execute and deliver this
Agreement, to issue and sell the Exchange Securities hereunder, and to carry out
the provisions of this Agreement.
(b) Capitalization. Immediately prior to the date hereof, the Company
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will be authorized to issue (i) 500,000,000 A Ordinary Shares, none of which are
issued and outstanding; (ii) 200,000,000 B Ordinary Shares, 153,158,733 shares
of which are issued and outstanding, (iii) 500,000,000 preference shares, (A)
24,000,000 shares of which have been designated as C-1 Convertible Preference
Shares and (B) 5,000,000 shares of which have been designated as C-2 Convertible
Preference Shares, none of which are issued and outstanding. Other than as set
forth on Exhibit A, there are no outstanding options, warrants, rights
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(including conversion or preemptive rights and rights of first refusal),
securities convertible into or exchangeable for capital stock, or
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agreements of any kind for the purchase, subscription or acquisition from the
Company of any capital stock of the Company.
(c) Authorization; Binding Obligations. All corporate action on the
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part of the Company necessary for the authorization of the execution and
delivery of this Agreement and the performance of all obligations of the Company
hereunder has been taken. The Agreement, when executed and delivered, will
constitute the valid and binding obligations of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights; and (ii) general
principles of equity that restrict the availability of equitable remedies. The
issuance and sale of the Exchange Securities are not and will not be subject to
any preemptive rights, rights of first refusal, rights of first offer or other
similar rights granted by the Company that have not been properly waived or
complied with.
(d) Consents. No governmental orders, permissions, consents,
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approvals or authorizations are required to be obtained by the Company and no
registrations or declarations are required to be filed by the Company in
connection with the execution and delivery of this Agreement and the offer, sale
or issuance of the Exchange Securities, except as contemplated in Section 2(b)
and such as will be duly and validly obtained or filed.
(e) Compliance with Laws and Other Instruments. The execution,
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delivery and performance by the Company of this Agreement (a) will not require
from the board of directors or stockholders of the Company any consent or
approval that has not been validly and lawfully obtained, (b) will not cause the
Company to violate or contravene (i) any provision of law, (ii) any rule or
regulation of any agency or government, domestic or foreign, (iii) any order,
writ, judgment, injunction, decree, determination or award, or (iv) any
provision of the Memorandum or Articles of the Company, or (c) will not result
in a violation or conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under, any indenture, credit
agreement, note agreement, deed of trust, mortgage, security agreement or other
agreement, lease or instrument to which the Company is a party or by which the
Company or any of its properties or assets are bound which would have a material
adverse effect on the Company.
(f) Offering Valid. Assuming the accuracy of the representations and
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warranties of SSI contained in paragraph 7 hereof, the offer, sale and issuance
of the Exchange Securities will be exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), will have been
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registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws, and no registration, permit or qualification requirements
under the laws of the British Virgin
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Islands are applicable to the offer, sale and issuance by the Company of the
Exchange Securities in accordance herewith.
7. Representations and Warranties of SSI. As of each Exchange
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Date, SSI shall be deemed to have made the following representations and
warranties to the Company:
(a) Good Standing and Qualification. SSI has all requisite corporate
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power and authority to execute and deliver this Agreement and to carry out the
provisions of this Agreement.
(b) Authorization; Binding Obligations. All corporate action on the
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part of SSI necessary for the authorization of the execution and delivery of
this Agreement and the performance of all obligations of SSI hereunder has been
taken. The Agreement, when executed and delivered, will constitute the valid
and binding obligations of SSI enforceable against SSI in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights; and (ii) general principles of equity that
restrict the availability of equitable remedies.
(c) Consents. No governmental orders, permissions, consents, approvals
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or authorizations are required to be obtained by SSI and no registrations or
declarations are required to be filed by SSI in connection with the execution
and delivery of this Agreement, except as contemplated in Section 2(b) and such
as will be duly and validly obtained or filed.
(d) Ownership and Validity of OpenTV Shares. SSI owns beneficially
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and of record all of the OpenTV Shares, free of any liens, claims, charges,
security interests, pledges, voting or stockholder agreements (other than those
to which MIH or OTVH is a party), encumbrances or equities (other than any of
the foregoing arising under this Agreement or any Federal or state securities
laws).
(e) Compliance with Laws and Other Instruments. The execution,
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delivery and performance by SSI of this Agreement (a) will not require from the
board of directors or stockholders of SSI any consent or approval that has not
been validly and lawfully obtained, (b) will not cause SSI to violate or
contravene (i) any provision of law, (ii) any rule or regulation of any agency
or government, domestic or foreign, (iii) any order, writ, judgment, injunction,
decree, determination or award, or (iv) any provision of the certificate of
incorporation or bylaws of SSI, or (c) will not result in a violation or
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under, any indenture, credit agreement, note
agreement, deed of trust, mortgage, security agreement or other agreement, lease
or instrument to which SSI is a party or by which SSI or any of its properties
or assets are bound which would have a material adverse effect on SSI.
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(f) Investment Representations. SSI understands that none of the
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Exchange Securities have been registered under the Securities Act of 1933, as
amended (the "Securities Act"). SSI also understands that the Exchange
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Securities will be offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon SSI's representations and
warranties contained in this Agreement. SSI hereby represents and warrants as
follows:
(i) SSI Bears Economic Risk. SSI has substantial experience in
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evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. SSI must bear the economic risk of this investment indefinitely
unless the Exchange Securities (or the shares issuable upon conversion thereof)
are registered pursuant to the Securities Act, or an exemption from registration
is available.
(ii) Acquisition for Own Account. SSI is acquiring the Exchange
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Securities for SSI's own account for investment only, and not with a view
towards, or for resale in connection with, their distribution.
(iii) Accredited Investor. SSI represents that it is an
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accredited investor within the meaning of Regulation D under the Securities Act.
(iv) Company Information. SSI has had an opportunity to
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discuss the Company's business, management and financial affairs with
directors, officers and management of the Company and has had the opportunity to
review the Company's operations and facilities and is satisfied with the results
thereof. SSI has received all information it considers necessary or appropriate
for deciding whether to invest in the Company.
(v) Rule 144. SSI acknowledges and agrees that the Exchange
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Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
SSI has been advised or is aware of the provisions of Rule 144 promulgated under
the Securities Act, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions.
(vi) Residence. The office or offices of SSI in which its
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investment decision with respect to the Company was made is located at 901 San
Antonio Road, Palo Alto, California 94303.
(vii) No Public Market. SSI understands that no public market
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now exists for any of the securities issued by the Company and that the Company
has made no assurances that a public market will ever exist for the Company's
securities.
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8. Reservation of B Ordinary Shares. The Company shall at all times
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reserve and keep available for issue upon the exchange of OpenTV Shares for
Exchange Securities such number of its authorized but unissued B Ordinary Shares
as will be sufficient to permit the exchange in full of OpenTV Shares held by
SSI.
9. Antidilution. The Company, OpenTV, and SSI agree that it is their
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intention that following the date of this Agreement, SSI shall maintain the same
equity interest vis-a-vis OpenTV as it would have had if SSI had exchanged all
of its shares of Class B Common Stock of OpenTV for B Ordinary Shares of the
Company at an Exchange Rate of one Class B Common Stock for one B Ordinary
Share, subject to adjustment as provided in Section 3 hereof. In furtherance of
the foregoing, each time that the Company issues additional A Ordinary Shares or
B Ordinary Shares (other than on conversion of B Ordinary Shares), OpenTV shall
sell and the Company shall purchase, at a purchase price of $0.001 per share, an
equal number of shares of Class A Common Stock or Class B Common Stock of
OpenTV, respectively. Each such sale by OpenTV and purchase by the Company
shall occur substantially concurrently with the issuance of A Ordinary Shares or
B Ordinary Shares by the Company. SSI agrees that it shall not object to any
such transaction. Notwithstanding the foregoing, no adjustment shall be made
pursuant to this Section if it has the effect of altering any of SSI's
contractual rights or otherwise adversely affecting SSI, including, without
limitation, by eliminating or altering SSI's rights to approve any BVI or
Delaware Fundamental Business Decisions under the Amended and Restated
Stockholders Agreement, dated of even date herewith, to which the Company, SSI
and OpenTV (among others) are parties, except merely by diluting SSI's
percentage equity interest in OpenTV.
10. Miscellaneous.
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(a) Amendments. No amendment of any provision of this Agreement shall
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be valid unless the same shall be in writing and signed by the other party
hereto.
(b) Delays or Omissions. It is agreed that no delay or omission to
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exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party 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 or in
any similar breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind or
character on any party's part of any breach, default or noncompliance under this
Agreement, or any waiver on such party's part of any provisions or conditions of
the Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing.
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(c) Notices.
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(i) All notices and other communications required or permitted
under this Agreement shall be given in writing and shall be delivered to the
relevant party or sent by registered air mail or facsimile to the address of
that party or that party's facsimile number specified in subparagraph 10(c)(ii).
Unless otherwise specified herein, each notice or other communication shall be
deemed effective or having been given (i) on the date received, if personally
delivered, (ii) the earlier of actual receipt or eight (8) business days after
being sent, if sent by registered air mail, or (iii) one (1) business day after
being sent, if sent by telecopier with confirmation of transmission.
(ii) All notices and other communications shall be addressed as
follows:
if to SSI: Sun TSI Subsidiary, Inc.
c/o Sun Microsystems, Inc.
901 San Antonio Road
Mail Stop PAL1-521
Palo Alto, California 94303
Attention: Laura Fennell, Esq.
Telecopy No.: (650) 336-0359
With a copy to:
Fenwick & West LLP
Two Palo Alto Square, Suite 700
Palo Alto, California 94306
Attention: David W. Healy, Esq.
Telecopy No.: (650) 494-1417
if to the Company: OpenTV Corp.
c/o OpenTV, Inc.
401 East Middlefield Road
Mountain View, California 94043
With a copy to:
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street, 23rd Floor
Los Angeles, California 90071
Attention: Siobhan McBreen Burke
Telecopy No.: (213) 627-0705
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or such other address or telecopy number of a party, as that party shall have
notified in writing to all other parties in accordance with subparagraph
10(b)(i).
(d) Severability. Should any one or more of the provisions of this
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Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby.
(e) Parties in Interest. Except as otherwise expressly provided
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herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and permitted assigns
and shall inure to the benefit of and be enforceable by each such person.
Neither this Agreement nor any right or obligation hereunder shall be assignable
or delegable by SSI except with the prior written consent of the other party
hereto; provided, however, that SSI may assign its rights and obligations under
this Agreement to any corporation, limited liability company, trust,
association, company or partnership in which SSI or its parent, Sun
Microsystems, Inc., a Delaware corporation ("Sun"), has a direct or indirect
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ownership interest in capital or profits exceeding fifty percent (50%) or in
which SSI or Sun has the right to exercise over fifty percent (50%) of the
voting rights with respect to the selection of the board of directors or other
governing body, provided that all of the following conditions are satisfied: (i)
the transferor shall remain a party to this Agreement and hereby agrees to
guarantee the performance by the assignee or transferee of its obligations
pursuant to the provisions of this Agreement; (ii) the assignee or transferee
shall agree in writing with the Company to observe, perform and be bound by the
terms and conditions of this Agreement as if references herein to the transferor
were references to the transferee; and (iii) if the assignee or transferee
ceases to be an affiliate of SSI or Sun meeting the qualifications set forth
above, then SSI shall cause the assignee or transferee to transfer in accordance
herewith to SSI or another affiliate of SSI or Sun meeting the qualifications
set forth above, all its OpenTV Shares prior to the date of such cessation.
This Agreement shall be not assignable or delegable by the Company except with
the prior written consent of the other parties hereto; provided, however, that
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the Company may assign its rights and delegate its obligations under this
Agreement to any successor in interest of the Company, whether by merger,
reorganization, sale of assets or otherwise so long as such successor expressly
assumes the obligations hereof.
(f) Expenses. All costs and expenses (including, without limitation,
--------
all legal fees and expenses and fees and expenses of any brokers, finders or
similar agents) incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring the same.
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(g) Headings. The headings of the Sections and paragraphs of this
--------
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
(h) Choice of Law.
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(i) It is the intention of the parties that the internal
substantive laws, and not the laws of conflicts, of the State of California
should govern the enforceability and validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties.
(ii) EACH PARTY HERETO HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF SANTA
CLARA, STATE OF CALIFORNIA, AND IRREVOCABLY AGREES THAT ALL ACTIONS OR
PROCEEDINGS RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN SUCH COURTS. EACH PARTY HERETO HEREBY WAIVES TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE, IN ANY SUCH ACTION, SUIT, OR PROCEEDING, ANY CLAIM THAT IT
IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT IT
IS IMMUNE FROM EXTRATERRITORIAL INJUNCTIVE RELIEF OR OTHER INJUNCTIVE RELIEF,
THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT ANY
SUCH ACTION, SUIT, OR PROCEEDING MAY NOT BE BROUGHT OR MAINTAINED IN ONE OF THE
ABOVE-NAMED COURTS, THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT OR
MAINTAINED IN ONE OF THE ABOVE-NAMED COURTS SHOULD BE DISMISSED ON THE GROUNDS
OF FORUM NON CONVENIENS, SHOULD BE TRANSFERRED TO ANY COURT OTHER THAN ONE OF
--------------------
THE ABOVE-NAMED COURTS, OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY
NOT BE ENFORCED IN OR BY ANY OF THE ABOVE-NAMED COURTS. EACH OF THE PARTIES
HERETO HEREBY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION, SUIT, OR
PROCEEDING IN ANY MANNER PERMITTED BY THE LAWS OF THE STATE OF CALIFORNIA,
AGREES THAT SERVICE OF PROCESS BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE PERSONS AND AT THE ADDRESSES SET FORTH IN PARAGRAPH 10(C)
ABOVE, IS REASONABLY CALCULATED TO GIVE ACTUAL NOTICE, AND WAIVES AND AGREES NOT
TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION, SUIT
OR PROCEEDING ANY CLAIM THAT SUCH SERVICE OF PROCESS DOES NOT CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS.
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(iii) EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. THIS SUBPARAGRAPH 10(H)(III) HAS BEEN FULLY DISCUSSED BY
EACH OF THE PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY
EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH
PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS
AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT.
(i) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts (including
by facsimile), with the same effect as if all parties had signed the same
document. All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument.
(j) No Strict Construction. The parties hereto have participated
----------------------
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
(k) Entire Agreement. This Agreement contains the entire
----------------
understanding of the parties hereto in respect of the subject matter hereof.
This Agreement supersedes all prior agreements and understandings between the
parties hereto with respect to such subject matter.
(l) Further Assurances. Subject to the terms and conditions of this
------------------
Agreement, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable legal requirements or
otherwise, to consummate and
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make effective the transactions contemplated by this Agreement. If at any time
after the date hereof any further action is necessary or desirable to carry out
the purposes of this Agreement, either party, as the case may be, shall take or
cause to be taken all such necessary or convenient action and execute, and
deliver and file, or cause to be executed, delivered and filed, all necessary or
convenient documentation.
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IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be executed by its duly authorized representative as of the date and year
first set forth above.
COMPANY:
OPENTV CORP.
By: _____________________________
Title: _____________________________
OPENTV:
OPENTV, Inc.
By: _____________________________
Title: _____________________________
SSI:
SUN TSI SUBSIDIARY, INC.
By: _____________________________
Title: _____________________________
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EXHIBIT A
Schedule of Exceptions
17