Warrant Purchase and Equity Rights Agreement - TiVo Inc. and Quantum Corp.
WARRANT PURCHASE AND EQUITY RIGHTS AGREEMENT
This Warrant Purchase and Equity Rights Agreement (the "Agreement") is made
and entered into as of November 6, 1998, by and between TIVO, INC., a Delaware
corporation (the "Company"), and QUANTUM CORPORATION, a Delaware corporation
("Quantum").
WHEREAS, the Company wishes to sell to Quantum, and Quantum wishes to
acquire from the Company, a Series C Preferred Stock Warrant, in the form of
Exhibit A (the "Series C Warrant"), and a Series D Preferred Stock Warrant, in
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the form of Exhibit B (the "Series D Warrant"), upon the terms and conditions
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hereinafter set forth (the Series C Warrant and the Series D Warrant being
sometimes referred to collectively as the "Warrants").
WHEREAS, the Warrants are being issued to Quantum in connection with the
Hard Disk Drive Supply Agreement, dated of even date herewith, between the
Company and Quantum (the "Supply Agreement"). All capitalized terms not defined
herein shall have the meanings set forth in the Supply Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereby agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS
Simultaneously herewith, the Company is issuing and delivering the Warrants
to Quantum as an inducement to and in consideration for Quantum entering into
the Supply Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Quantum and agrees that:
2.1 Organization, Good Standing and Qualification. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on its business or
properties. The rights, preferences, privileges and restrictions granted to or
imposed upon the shares issuable upon exercise of the Warrants (the "Shares"),
and the holders thereof are as set forth in the Company's Articles of
Incorporation, as amended (the "Charter"), a true and complete copy of which has
been delivered to Quantum.
2.2 Authorization; Binding Obligation. All corporate action on the part
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of the Company, its officers, directors and stockholders necessary for the
authorization, execution and
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delivery of this Agreement and the Warrants, the performance of all obligations
of the Company hereunder and thereunder and the authorization, issuance and
delivery of the Warrants has been taken, and this Agreement and the Warrants
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms. The shares of
Series C Preferred Stock to be issued upon exercise of the Series C Warrant have
been duly authorized and reserved for issuance by the Company, and the Shares,
when issued in accordance with the terms of the Warrants, will be validly
issued, fully paid and nonassessable.
2.3 Capitalization. The authorized capital of the Company consists of (i)
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13,000,000 shares of Preferred Stock, of which 5,200,000 shares have been
designated Series A Preferred and 5,000,000 shares of which are issued and
outstanding, of which 4,400,000 shares have been designated Series B Preferred
Stock and 3,660,914 shares of which are issued and outstanding, and of which
3,400,000 shares have been designated Series C Preferred Stock and 2,500,000
shares of which are issued and outstanding and (ii) 25,500,000 shares of Common
Stock, 5,017,604 shares of which are issued and outstanding. All of the
outstanding shares of capital stock have been duly and validly authorized and
issued, are fully paid and nonassessable, and were issued in compliance with the
registration or qualification provisions of the Securities Act of 1933, as
amended (the "Securities Act"), any applicable state securities laws, or in each
case pursuant to valid exemptions therefrom. Except for: (a) rights of first
refusal, anti-dilution rights and conversion privileges of the Preferred Stock,
(b) outstanding options to purchase 762,500 shares of the Company's Common Stock
granted pursuant to the Company's 1997 Equity Incentive Plan, (c) outstanding
warrants to purchase 52,083 shares of the Company's Series A Preferred Stock,
and (d) the Warrants and other transactions contemplated hereby, there are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or agreements, orally or in writing, for the purchase or acquisition
from the Company of any securities of the Company.
2.4 No Consents. The execution and delivery of this Agreement and the
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Warrants, the issuance of the Shares upon exercise of the Warrants in accordance
with the terms thereof and the compliance by the Company with the provisions
hereof or thereof (i) are not and will not be inconsistent with the Company's
Charter or Bylaws except that the Company's Board of Directors and stockholders
must approve an amendment to the Company's Charter to authorize the Series D
Preferred Stock, (ii) do not and will not contravene any law, governmental rule
or regulation, judgment or order applicable to the Company, and (iii) do not and
will not contravene any material provision of, or constitute a default under,
any indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound or require the consent or approval of, the giving
of notice to, the registration with or the taking of any action in respect of or
by, any federal, state or local government authority or agency or other person,
except for such actions as may be required to comply with applicable federal and
state securities laws.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1 Representation of Quantum. Quantum is purchasing the Warrants and
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Shares issued upon exercise thereof for investment for its own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act,
2.
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or applicable state securities laws. Quantum further represents, warrants and
agrees that the Warrants and Shares have not been registered under the
Securities Act or applicable state securities laws by reason of specific
exemptions therefrom, which exemptions depend upon, among other things, the bona
fide nature of Quantum's investment intent as expressed herein. Quantum
represents, warrants and agrees that the Warrants and any Shares purchased upon
exercise thereof must be held indefinitely unless such securities are
subsequently registered under the Securities Act and all applicable state
securities laws and regulations or an exemption from such registration or
qualification is available, and that the Company is under no obligation to
register or qualify such securities except as set forth in the Warrants between
the Company and Quantum.
3.2 Accredited Investor. Quantum is an "accredited investor" (as such
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term is defined in Rule 501(a) promulgated under the Securities Act).
3.3 Legends. Quantum acknowledges, understands and agrees that the
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instruments evidencing the Warrants and any certificates evidencing the Shares
(and Common Stock issuable upon conversion thereof) shall bear the legends as
specified in the Warrants, other agreements entered into in the connection with
the issuance of the Shares and any other legends required under state or federal
securities laws in the opinion of legal counsel for the Company. Quantum
understands, acknowledges and agrees that additional restrictions, including the
imposition of stop transfer orders and certain market stand off provisions,
shall be and are imposed on the Shares in accordance with the Second Amended and
Restated Investors Rights Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 Survival of Warranties. All representations and warranties of the
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parties contained herein shall survive the grant and exercise of the Warrants or
the termination or expiration of rights hereunder or under the Supply Agreement
or the Warrants. All agreements of the Company contained herein shall survive
indefinitely until, by their respective terms, they are no longer operative.
4.2 Entire Agreement. This Agreement, the Exhibits attached hereto and
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the Supply Agreement represent the entire agreement between the Company and
Quantum regarding the subject matter hereof and thereof and supersede all prior
agreements and understandings among the parties with respect thereto.
4.3 Amendment, Modification or Waiver. This Agreement shall not be
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altered or otherwise amended except pursuant to an instrument in writing signed
by each of the parties hereto.
4.4 Successors; Assigns. All the terms of this Agreement shall be binding
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upon and shall inure to the benefit of the successors, assigns, heirs, executors
and administrators of the respective parties hereto. Anything contained herein
to the contrary notwithstanding, this Agreement shall not be assignable by any
party hereto without the written consent of the other party hereto.
3.
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4.5 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California, without regard to its
conflicts of laws principles.
4.6 Titles and Subtitles. The titles and subtitles used in this Agreement
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are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
4.7 Notices. All notices, requests, demands and other communications
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under this Agreement or in connection herewith shall be given to or made upon
(i) Quantum at Quantum Corporation, 500 McCarthy Boulevard, Milpitas, CA 95035,
attention: General Counsel; with copies to Wilson Sonsini Goodrich & Rosati, 650
Page Mill Road, Palo Alto, CA 94304, attention: Jeffrey A. Herbst and (ii) the
Company at TiVo, Inc., 894 Ross Drive, Sunnyvale, CA 94089, attention:
President; with copies to Cooley Godward LLP, Five Palo Alto Square, 3000 El
Camino Real, Palo Alto, CA 94304, attention: Alan Mendelson. All notices,
requests, demands and other communications given or made in accordance with the
provisions of this Agreement shall be in writing and shall be deemed received by
the holder upon the earlier of actual receipt or, if sent by certified mail
(postage pre-paid), five (5) days after deposit in the U.S. mail. Any party
may, by written notice to the other, alter its address or respondent.
4.8 Severability. If one or more provisions of this Agreement are held to
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be unenforceable under applicable law, portions of such provisions, or such
provisions in their entirety, to the extent necessary, shall be severed from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
4.9 Counterparts. The Agreement may be executed in counterparts, each of
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which shall be an original, but all of which together shall constitute one
agreement.
[Remainder of Page Intentionally Left Blank]
4.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
TIVO, INC. QUANTUM CORPORATION,
a Delaware corporation a Delaware corporation
By: /s/ Michael Ramsay By: /s/ Richard L. Clemmer
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Name: Michael Ramsay Name: Richard l. Clemmer
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Title: CEO, President Title: CFO, EVP
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5.
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EXHIBIT A
FORM OF SERIES C WARRANT
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6.
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EXHIBIT B
FORM OF SERIES D WARRANT
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7.
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NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER SECURITIES ACT
OF 1933, AS AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION
OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii)
AN OPINION OF COUNSEL IN FORM REASONABLY SATISFACTORY TO
COUNSEL TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED AND THAT AN APPLICABLE EXEMPTION IS AVAILABLE OR
(iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION TO EFFECT THAT REGISTRATION UNDER THE
ACT IS NOT REQUIRED.
TIVO, INC.
WARRANT TO PURCHASE
SHARES OF SERIES C PREFERRED STOCK
THIS CERTIFIES THAT, for value received, QUANTUM CORPORATION, a
Delaware corporation ("Quantum"), is entitled to subscribe for and purchase
324,325 shares (as adjusted pursuant to the provisions hereof, the "Shares") of
the Series C Preferred Stock of TiVo, Inc., a Delaware corporation (the
"Company"), at an exercise price of $0.01 per share (as adjusted pursuant to the
provisions hereof, the "Exercise Price"), upon such terms and conditions as
hereinafter set forth. As used herein, the term "Series C Preferred Stock"
shall mean the Company's Series C Preferred Stock, and any stock into or for
which such Series C Preferred Stock may hereafter be converted or exchanged, and
the term "Grant Date" shall mean November 6, 1998. The Series C Preferred Stock
shall initially be convertible into one share of Common Stock of the Company.
Capitalized terms not defined herein shall have the meanings set forth in the
Hard Disk Drive Supply Agreement dated of even date herewith between Quantum and
the Company (the "Supply Agreement").
1. Term and Vesting.
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1.1 Term. Subject to vesting requirements set forth in Section
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1.2 below, this Warrant is exercisable, in whole and not in part, at any time
from and after the Grant Date and prior to the earlier of (a) the fourth
anniversary of the Grant Date; (b) the consummation of the Company's initial
public offering of its capital stock pursuant to a registration statement filed
under the Securities Act of 1933, as amended (the "Securities Act"); and (c) the
consummation of a liquidation, dissolution or winding up of the Company as set
forth in the Company's Charter. The Company shall be obligated to provide
Quantum with written notice of termination of this Warrant at least 30 days
prior thereto.
1.2 Vesting. The right to purchase the Shares hereunder shall
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vest and become exercisable only as follows: (i) in the event that the Company
or its licensees become eligible to receive the Milestone 1 Discount set forth
in Section 4.2 of the Supply Agreement for the purchase of Hard Disk Drives or
Drive Equivalents; (ii) in the event that Quantum waives the eligibility
requirements for such Milestone 1 Discount; (iii) immediately prior to the
consummation of the Company's initial public offering of its capital stock; or
(iv) immediately
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prior to the consummation of a liquidation, dissolution or winding up of the
Company as set forth in the Company's Charter.
2. Method of Exercise; Net Issue Exercise.
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2.1 Method of Exercise; Payment; Issuance of New Warrant. This
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Warrant may be exercised by Quantum, in whole and not in part, by the surrender
of this Warrant (with the Notice of Exercise form attached hereto as Exhibit A-1
duly executed) at the principal office of the Company and by the payment to the
Company, by cash, check, wire transfer in immediately available funds or
cancellation of indebtedness, of an amount equal to the Exercise Price per share
multiplied by the number of Shares then being purchased hereunder. The person or
persons in whose name(s) any certificate(s) representing Shares shall be
issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the Shares represented thereby (and such Shares shall be deemed to
have been issued) immediately prior to the close of business on the date or
dates upon which this Warrant is exercised. In the event of any exercise of this
Warrant, certificates for the Shares so purchased shall be delivered to Quantum
as soon as possible and in any event within fifteen (15) days of receipt of such
notice (or, following the Company's initial public offering, within five (5)
days of receipt of such notice) and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the Shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be issued to Quantum as soon as possible thereafter.
2.2 Automatic Exercise. To the extent this Warrant is not
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previously exercised, and if the fair market value of one share of the Company's
Series C Preferred Stock is greater than the Exercise Price then in effect, this
Warrant shall be deemed automatically exercised pursuant to Section 2.3 below
(even if not surrendered) at such time that is immediately prior to the
expiration of this Warrant. For purposes of such automatic exercise, the fair
market value of one share of the Company's Series C Preferred Stock upon such
expiration shall be determined pursuant to Section 2.3(b) below. To the extent
this Warrant or any portion thereof is deemed automatically exercised pursuant
to this Section 2.2, the Company agrees to promptly notify Quantum of the number
of Shares, if any, Quantum is to receive by reason of such automatic exercise.
2.3 Right to Convert Warrant into Stock; Net Issuance.
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(a) In addition to and without limiting the rights of
Quantum under the terms of this Warrant and in lieu of exercising this Warrant
under Section 2.1(a) above, Quantum may elect to convert this Warrant (the
"Conversion Right") into shares of Series C Preferred Stock, the aggregate value
of which shares shall be equal to the value of this Warrant. The Conversion
Right may be exercised by Quantum by surrender of this Warrant at the principal
office of the Company (with the Notice of Exercise form attached hereto as
Exhibit A-1 duly executed), in which event the Company shall issue to Quantum a
number of shares of the Company's Series C Preferred Stock computed using the
following formula:
X = Y (A-B)
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A
2.
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Where: X = The number of shares of Series C Preferred Stock to be issued to
Quantum.
Y = The number of shares of Series C Preferred Stock purchasable
under this Warrant at the date of such calculation.
A = The fair market value of one share of the Company's Series C
Preferred Stock.
B = Exercise Price (as adjusted to the date of such calculations).
(b) For purposes of this Section 2.3, the "fair market value"
per share of the Company's Series C Preferred Stock shall mean:
(i) If the Conversion Right is exercised in connection with
and contingent upon the Company's initial public offering, and if the Company's
registration statement relating to such offering has been declared effective by
the Securities and Exchange Commission, then the initial "Price to Public"
specified in the final prospectus with respect to such offering; or
(ii) If the Conversion Right is not exercised in connection
with and contingent upon the Company's initial public offering, then the highest
of the following:
(A) The price per share in the Company's most recent
Preferred Stock financing;
(B) The price per share of the Company's Series C
Preferred Stock as determined by an independent valuation firm chosen by the
Company's Board of Directors and acceptable to Quantum; and
(C) The price per share of the Company's Series C
Preferred Stock as determined by the Company's Board of Directors in good faith.
3. Stock Fully Paid; Reservation of Shares. All Shares to be issued upon
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the exercise of this Warrant, and all Common Stock issuable upon conversion of
the Shares shall, upon issuance, be validly issued, fully paid and
nonassessable, and free from all liens and charges with respect to the issuance
thereof. During the period within which this Warrant may be exercised, the
Company will at all times have duly authorized and reserved, for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Series
C Preferred Stock (and Common Stock issuable upon conversion thereof).
4. Charges, Taxes and Expenses. Issuance of certificates for shares of
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Series C Preferred Stock upon the exercise of this Warrant shall be made without
charge to Quantum for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the registered holder of this Warrant or in such name or names as may be
directed by the registered holder of this Warrant; provided, however, that upon
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any transfer involved in the issuance or delivery of any certificates for shares
of Series C Preferred Stock, the
3.
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Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
5. Adjustments to Exercise Price and Number of Shares. The number and
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kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification; Consolidation or Merger. In case of any
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reclassification of the Series C Preferred Stock (other than a change in par
value, or as a result of a subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger with another corporation in which the Company is
a continuing corporation and in which the Company's stockholders immediately
preceding such consolidation or merger own at least 50% of the voting securities
of the Company following such consolidation or merger and which does not result
in any reclassification of the shares issuable upon exercise of this Warrant),
or in the case of any sale of all or substantially all of the assets of the
Company, the Company, or such successor or purchasing corporation as the case
may be, shall execute a new Warrant, providing that Quantum shall have the right
to exercise such new Warrant, and procure upon such exercise and payment of the
same aggregate Exercise Price, in lieu of the shares of Series C Preferred Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such
reclassification, change, consolidation, sale of all or substantially all of the
Company's assets or merger by a holder of an equivalent number of shares of
Series C Preferred Stock. Such new Warrant shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 5. The provisions of this subsection (a) shall similarly
apply to successive reclassifications, consolidations, mergers, and the sale of
all or substantially all of the Company's assets.
(b) Subdivision or Combination of Shares. If the Company at any
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time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Series C Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision or increased in the case
of a combination.
(c) Stock Dividends and other Distributions. If the Company at
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any time while this Warrant is outstanding and unexpired shall pay a dividend
with respect to Series C Preferred Stock payable in, or make any other
distribution with respect to, Series C Preferred Stock (except any distribution
specifically provided for in the foregoing subsections 5(a) or 5(b)), then the
Exercise Price shall be adjusted, from and after the date of determination of
stockholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Exercise Price in effect immediately prior to such
date of determination by a fraction (1) the numerator of which shall be the
total number of shares of Series C Preferred Stock outstanding immediately prior
to such dividend or distribution, and (2) the denominator of which shall be the
total number of shares of Series C Preferred Stock outstanding immediately after
such dividend or distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in the
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Exercise Price pursuant to subsections 5(a)-(c) hereof, the number of shares of
Series C Preferred Stock purchasable hereunder shall be adjusted, to the nearest
whole share, to the product
4.
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obtained by multiplying the number of shares of Series C Preferred Stock
purchasable immediately prior to such adjustment in the Exercise Price by a
fraction, the numerator of which shall be the Exercise Price immediately prior
to such adjustment and the denominator of which shall be the Exercise Price
immediately thereafter.
(e) Conversion of Series C Preferred Stock. In the event that
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all of the authorized and outstanding shares of Series C Preferred Stock of the
Company are redeemed or converted or reclassified into other securities or
property pursuant to the Company's Charter or otherwise, or the Series C
Preferred Stock otherwise ceases to exist, then, in such case, Quantum, upon
exercise hereof at any time alter the date on which the Series C Preferred Stock
is so redeemed or converted, reclassified or ceases to exist (the "Termination
Date"), shall receive, in lieu of the number of shares of Series C Preferred
Stock that would have been issuable upon such exercise immediately prior to the
Termination Date, the securities or property that would have been received if
this Warrant had been exercised in full and the Series C Preferred Stock
received thereupon had been simultaneously converted immediately prior to the
Termination Date, all subject to further adjustment as provided in this Warrant.
Additionally, the Exercise Price shall be immediately adjusted to equal the
quotient obtained by dividing (x) the aggregate Exercise Price of the maximum
number of shares of Series C Preferred Stock for which this Warrant was
exercisable immediately prior to the Termination Date by (y) the number of
shares of the Company for which this Warrant is exercisable immediately after
the Termination Date, all subject to further adjustment as provided herein.
(f) Certificate as to Adjustment. In each case of any
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adjustment in either the Exercise Price or in the number of shares of Series C
Preferred Stock, or other stock, securities or property receivable on the
exercise of this Warrant, the Company shall compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate signed by
its Chief Financial Officer, President or other designated officer setting forth
such adjustment and showing in reasonable detail the facts upon which such
adjustment is based, including a statement of the adjusted Exercise Price. The
Company will cause copies of such certificate to be mailed to the registered
holder.
6. Notices of Record Date. In the event of any taking by the Company of a
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record of its stockholders for the purpose of determining stockholders who are
entitled to receive payment of any dividend or other distribution, any right to
subscribe for, purchase or otherwise acquire any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining stockholders who are entitled to vote in connection with any
proposed merger or consolidation of the Company with or into any other
corporation, or any proposed sale, lease or conveyance of all or substantially
all of the assets of the Company, or any proposed liquidation, dissolution or
winding up of the Company, then, in connection with each such event, the Company
shall mail to Quantum at least twenty (20) days prior written notice of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right(s) or vote of the stockholders. Each such written notice
shall specify the amount and character of any such dividend, distribution or
right(s), and shall set forth, in reasonable detail, the matter requiting any
such vote of the stockholders.
7. Fractional Shares. No fractional shares of Series C Preferred Stock
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will be issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall
5.
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make a cash payment therefor based upon the per share fair market value of the
Series C Preferred Stock on the date of exercise.
8. Compliance with Securities Act; Disposition of Warrant or Shares of
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Series C Preferred Stock.
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(a) Compliance with Securities Act. Quantum, by acceptance
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hereof, agrees that this Warrant, the Shares to be issued upon exercise hereof
and the Common Stock to be issued upon conversion of such Shares are being
acquired for investment and that Quantum will not offer, sell or otherwise
dispose of this Warrant or any Shares to be issued upon exercise hereof (or
Common Stock issued upon conversion of such Shares) except under circumstances
which will not result in a violation of the Securities Act. This Warrant and all
Shares issued upon exercise of this Warrant (unless registered under the
Securities Act) shall be stamped or imprinted with a legend in substantially the
following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1935, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
(i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN
OPINION OF COUNSEL IN FORM REASONABLY SATISFACTORY TO COUNSEL TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT AN
APPLICABLE EXEMPTION IS AVAILABLE, OR (iii) RECEIPT OF A NO-
ACTION LETTER FROM SECURITIES AND EXCHANGE COMMISSION TO THE
EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
(b) Disposition of Warrant and Shares. With respect to any
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offer, sale or other disposition of this Warrant or any Shares acquired pursuant
to the exercise of this Warrant (or Common Stock issued upon conversion of such
Shares) prior to registration thereof, Quantum and each subsequent holder of
this Warrant agrees to give written notice to the Company prior thereto,
describing briefly the manner thereof, together with a written opinion of such
holder's counsel, if reasonably requested by the Company, to the effect that
such offer, sale or other disposition may be effected without registration or
qualification (under the Securities Act as then in effect or any federal or
state law then in effect) of this Warrant or such Shares or Common Stock and
indicating whether or not under the Securities Act certificates for this Warrant
or such Shares or Common Stock to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
insure compliance with the Securities Act. Each certificate representing this
Warrant or the Shares or Common Stock thus transferred (except a transfer
pursuant to Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Securities Act unless, in
the aforesaid opinion of counsel for Quantum, such legend is not required in
order to insure compliance with the Securities Act. Nothing herein shall
restrict the transfer of this Warrant or any portion hereof by the initial
holder hereof to any subsidiary of the initial holder provided such transfer may
be made in compliance with applicable federal and state securities laws. The
Company may issue stop transfer instructions to its transfer agent in connection
with the foregoing restrictions.
6.
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9. No Rights as Stockholders. No holder of this Warrant, as such, shall
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be entitled to the rights of a stockholder or to vote upon any matter submitted
to stockholders at any meeting thereof, or to receive notice of meetings, or be
deemed the holder of Series C Preferred Stock or entitled to the rights of a
holder of Series C Preferred Stock under the Second Amended and Restated
Investors Rights Agreement by and among the Company and the holders of Preferred
Stock of the Company (the "Investors Rights Agreement"), unless and until this
Warrant shall have been exercised and the Shares purchasable upon such exercise
shall have become deliverable, as provided herein.
10. Additional Rights.
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10.1 Registration and Investor Rights. The rights of Quantum
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and the obligations of the Company with respect to registration of the shares of
Common Stock issuable upon conversion of the Shares under the Securities Act and
the applicable rules and regulations thereunder are as set forth in the
Investors Rights Agreement, the provisions of which are incorporated by
reference herein with the same effect as if set forth in full herein. The
Company covenants that it will use its best efforts to ensure that Quantum
becomes a party to the Investors Rights Agreement with the same rights as the
holders of Series C Preferred Stock thereunder upon the exercise of this
Warrant. Except as set forth in the Investors Rights Agreement, the Company is
not, pursuant to the terms of any other agreement currently in existence, under
any obligation to register under the Securities Act any of its presently
outstanding securities or any of its securities which may hereafter be issued.
10.4 Mergers. The Company agrees to provide Quantum with at
-------
least thirty (30) days' prior written notice of the consummation of any proposed
transaction, in which the Company would (i) sell, lease, exchange, convey or
otherwise dispose of all or substantially all of its assets or business, or (ii)
merge into or consolidate with any other corporation (other than a wholly-owned
subsidiary of the Company), or effect any transaction (including a merger or
other reorganization) or series of related transactions, in which more than
fifty percent (50%) of the voting power of the Company is transferred.
11. Amendment of Conversion Rights. During the term of this Warrant, the
------------------------------
Company agrees that it shall not amend its Charter, as amended through the Grant
Date, without the prior written consent of Quantum if, as a result of such
amendment, any of the conversion rights, including without limitation the
conversion price or antidilution protection privileges, of the Series C
Preferred Stock would be adversely affected; provided, however, that no such
-----------------
consent shall be required if such amendment is approved by the stockholders of
the Company in accordance with the Charter and such amendment affects the shares
of Series C Preferred Stock issued to Quantum upon exercise of this Warrant and
the shares of Series C Preferred Stock held by other holders equally. The
Company shall promptly provide Quantum with any restatement, amendment,
modification or waiver of the Charter promptly after the same has been made.
12. Exchange and Registry of Warrant. This Warrant is exchangeable, upon
--------------------------------
the surrender hereof by the registered holder at the above-mentioned office or
agency of the Company, for a new Warrant of like tenor and dated as of such
exchange. The Company shall maintain at the above-mentioned office or agency a
registry showing the name and address of the registered holder. This Warrant may
be surrendered for exchange, transfer or exercise, in
7.
<PAGE>
accordance with its terms, at such office or agency of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.
13. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
----------------------------------
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.
14. Modification and Waiver. This Warrant and any provision hereof may be
-----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
15. Notices. All notices, requests, demands and other communications
-------
under this Warrant or in connection herewith shall be given to or made upon (i)
Quantum at Quantum Corporation, 500 McCarthy Boulevard, Milpitas, CA 95035,
attention: General Counsel; with copies to Wilson Sonsini Goodrich & Rosati,
650 Page Mill Road, Palo Alto, CA 94304, attention: Jeffrey A. Herbst and (ii)
the Company at TiVo, Inc., 894 Ross Drive, Sunnyvale, CA 94089, attention:
President; with copies to Cooley Godward LLP, Five Palo Alto Square, 3000 E1
Camino Real, Palo Alto, CA 94304, attention: Alan Mendelson. All notices,
requests, demands and other communications given or made in accordance with the
provisions of this Warrant shall be in writing and shall be deemed received by a
party upon the earlier of actual receipt or, if sent by certified mail (postage
pre-paid), five (5) days after deposit in the U.S. mail. Any party may, by
written notice to the other, alter its address or respondent.
16. Binding Effect on Successors. This Warrant shall be binding upon any
----------------------------
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Shares, or the Company's Common Stock issuable upon
conversion thereof, shall survive the exercise and termination of this Warrant.
All of the covenants and agreements of between the parties shall inure to the
benefit of the successors and assigns of each party. The Company will, at the
time of the exercise of this Warrant, upon request of Quantum but at the
Company's expense, acknowledge in writing its continuing obligation to Quantum
in respect of any rights (including, without limitation, any right to
registration of the Shares) to which Quantum shall continue to be entitled after
such exercise in accordance with this Warrant; provided, that the failure of
Quantum to make any such request shall not affect the continuing obligation of
the Company to Quantum in respect of such rights.
17. Lost Warrants or Stock Certificates. The Company covenants to Quantum
-----------------------------------
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft destruction, or mutilation of this Warrant or any stock certificate
issued upon exercise thereof and, in the ease of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the ease of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company shall make and deliver a new
Warrant or stock certificate of like tenor in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
18. No Impairment. The Company will not, by amendment of its Charter or
-------------
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or
8.
<PAGE>
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of
Quantum against impairment.
19. Descriptive Heading. The descriptive headings of the several
-------------------
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
20. Recovery of Litigation Costs. If any legal action or other
----------------------------
proceeding is brought for the enforcement of this Warrant, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Warrant, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
21. Governing Law. This Warrant shall be construed and enforced in
-------------
accordance with, and governed by, the internal laws of the State of California,
excluding the body of law applicable to conflicts of laws.
22. Assignment. This Warrant may be assigned by Quantum in whole and not
----------
in part. Upon delivery of a duly executed Assignment Form in the form attached
hereto as Exhibit A-2, the Company shall record such assignment on its books and
-----------
all references to Quantum hereunder shall be references to such registered
holder.
TIVO, INC.,
a Delaware corporation
By: /s/ Michael Ramsay
---------------------------------
Name: Michael Ramsay
-------------------------------
Title: CEO/President
----------------------------
9.
<PAGE>
EXHIBIT A-1
NOTICE OF EXERCISE
------------------
To:________________________
(Company Name)
1. The undersigned hereby:
[_] elects to purchase shares of Series C Preferred Stock of the
Company pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in
full; or
[_] elects to exercise its net issuance rights pursuant to Section
2.3 of the attached Warrant with respect to shares of Series C
Preferred Stock.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below:
____________________________
(Name)
____________________________
(Address)
____________________________
(Address)
3. The undersigned represents that the aforesaid shares being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares.
________________
(Date)
______________________________
(Signature)
<PAGE>
EXHIBIT A-2
ASSIGNMENT FORM
---------------
(To assign the foregoing Warrant, execute this form and supply the required
information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
____________________________________________________
(Please Print)
whose address is_____________________________________
(Please Print)
Dated:________________________________________
Holder's Signature:___________________________
Holder's Address:_____________________________
______________________________________________
Guaranteed Signature:_________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by an eligible guarantor institution
such as a bank, stockbroker, savings and loan association or credit union with
membership in an approved medallion signature guarantee program. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
The undersigned transferee agrees to hold the Warrant and any stock issuable
upon exercise or conversion of the Warrant subject to the restrictions on
transfer set forth in the Warrant.
By:________________________
Date:______________________
<PAGE>
NEITHER THIS WARRANT NOR THE SHARES OF STOCK
ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER SECURITIES ACT OF 1933, AS
AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF
THIS WARRANT OR SAID SHARES MAY BE EFFECTED
WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO, (ii) AN OPINION OF COUNSEL IN FORM
REASONABLY SATISFACTORY TO COUNSEL TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
AND THAT AN APPLICABLE EXEXEMPTION IS AVAILABLE
OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION TO EFFECT
THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
TIVO, INC.
WARRANT TO PURCHASE
SHARES OF SERIES D PREFERRED STOCK
THIS CERTIFIES THAT, for value received, QUANTUM CORPORATION, a Delaware
corporation ("Quantum"), is entitled to subscribe for and purchase up to that
number of shares (as adjusted pursuant to the provisions hereof, the "Shares")
of the Series D Preferred Stock of TiVo, Inc., a Delaware corporation (the
"Company"), at an exercise price of $0.01 per share (as adjusted pursuant to the
provisions hereof, the "Exercise Price"), as shall be determined by reference to
Section 2.4 hereof and upon such terms and conditions hereinafter set forth.
As used herein, the term "Series D Preferred Stock" shall mean the
Company's Series D Preferred Stock (or Series E Preferred Stock in the event the
Company sells Series D Preferred Stock prior to January 1, 1999 in an offering
that is not a Qualified Financing (as defined in Section 2.4 hereof), in which
case all references herein to Series D Preferred Stock shall be deemed to be
Series E Preferred Stock), and any stock into or for which such Series D
Preferred Stock may hereafter be convened or exchanged, and the term "Grant
Date" shall mean November 6, 1998. Quantum acknowledges that the Company intends
to conduct an offering of Series D Preferred Stock which is expected to close on
or prior to March 31, 1999. In the event (i) the right to purchase Shares under
this Warrant has vested in part or in whole and (ii) (A) that the Company does
not complete a Qualified Financing prior to May 30, 1999, or (B) of an
assignment for the benefit of creditors, the filing of a voluntary or
involuntary petition for bankruptcy relating to the Company or the insolvency or
liquidation of the Company, or (C) of a merger or consolidation of the Company
with or into any other corporation or corporations as a result of which
consolidation or merger the shareholders of the Company immediately prior to
such consolidation or merger hold securities representing less than fifty
percent (50%) of the voting securities of the surviving corporation, or a sale
of all or substantially all of the assets of the Company, or (D) thirty days
prior to the date of expiration of this Warrant, then the Company covenants and
agrees to effect a designation of Series D Preferred Stock with rights and
preferences equal to and substantially similar to the Company's Series C
Preferred Stock in all respects. In the event that the Company fails to so
designate the Series D Preferred Stock, this
1.
<PAGE>
Warrant shall be exercisable for shares of Series C Preferred Stock of the
Company, in which case all references herein to Series D Preferred Stock shall
be deemed to be Series C Preferred Stock. The Series D Preferred Stock shall
initially be convertible into one share of Common Stock of the Company.
Capitalized terms not defined herein shall have the meanings set forth in
the Hard Disk Drive Supply Agreement dated of even date herewith between Quantum
and the Company (the "Supply Agreement").
1. Term and Vesting.
----------------
1.1 Term. Subject to vesting requirements set forth in Section 1.2
----
below, this Warrant is exercisable, in whole or in part, at any time from and
after the Grant Date and prior to the earlier of (a) the fourth anniversary of
the Grant Date; (b) the consummation of the Company's initial public offering of
its capital stock pursuant to a registration statement filed under the
Securities Act of 1933, as amended (the "Securities Act"); and (c) the
consummation of a liquidation, dissolution or winding up of the Company as set
forth in the Company's Charter. The Company shall be obligated to provide
Quantum with written notice of termination of this Warrant at least 30 days
prior thereto.
1.2. Vesting.
-------
(a) The right to purchase the Shares hereunder shall vest and
become exercisable only as follows: (a) the right to purchase 25% of the Shares
subject to this Warrant shall be vested in the event that (i) the Company or its
licensees become eligible to receive the Milestone 2 Discount set forth in
Section 4.3 of the Supply Agreement for the purchase of Hard Disk Drives or
Drive Equivalents or (ii) Quantum waives the eligibility requirements for such
Milestone 1 Discount; (b) the right to purchase an additional 25% of the Shares
subject to this Warrant shall be vested upon the cumulative shipment of [*] Hard
Disk Drives or Drive Equivalents by Quantum to the Company or its licensees; (c)
the right to purchase an additional 25% of the Shares subject to this Warrant
shall be vested upon the cumulative shipment of [*] Disk Drives or Drive
Equivalents by Quantum to the Company or its licensees; and (d) the right to
purchase an additional 25% of the Shares subject to this Warrant shall be vested
upon the cumulative shipment of [*] Disk Drives or Drive Equivalents by Quantum
to the Company or its licensees; provided, however, that the right to purchase
-------- -------
100 % of the Shares subject to this Warrant shall be vested in full immediately
prior to the consummation of the Company's initial public offering of its
capital stock or the consummation of a liquidation, dissolution or winding up of
the Company as set forth in the Company's Charter.
(b) Notwithstanding anything to the contrary in subsection (a)
above, if the Company defaults in the payment of any amounts owed by the Company
to Quantum under the Supply Agreement (including without limitation, the
Company's obligations for periodic payments under Section 4.4 thereof), and
fails to cure or correct such default within thirty (30) days after written
notice thereof from Quantum, then, in addition to any other remedies Quantum may
have, Quantum's right to purchase Shares hereunder shall vest as to an
additional 5% of the Shares subject to this Warrant for every $100,000 on which
the Company remains in default upon the expiration of such thirty-day notice
period.
[*]Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.
<PAGE>
2. Method of Exercise; Net Issue Exercise; Determination of Number of
------------------------------------------------------------------
Shares.
------
2.1 Method of Exercise; Payment; Issuance of New Warrant. This
----------------------------------------------------
Warrant may be exercised by Quantum, in whole or in part and from time to time,
by the surrender of this Warrant (with the Notice of Exercise form attached
hereto as Exhibit A-1 duly executed) at the principal office of the Company and
by the payment to the Company, by cash, check, wire transfer in immediately
available funds or cancellation of indebtedness, of an amount equal to the
Exercise Price per share multiplied by the number of Shares then being purchased
hereunder. The person or persons in whose name(s) any certificate(s)
representing Shares shall be issuable upon exercise of this Warrant shall be
deemed to have become the holder(s) of record of, and shall be treated for all
purposes as the record holder(s) of, the Shares represented thereby (and such
Shares shall be deemed to have been issued) immediately prior to the close of
business on the date or dates upon which this Warrant is exercised. In the event
of any exercise of this Warrant, certificates for the Shares so purchased shall
be delivered to Quantum as soon as possible and in any event within fifteen (15)
days of receipt of such notice (or, following the Company's initial public
offering, within five (5) days of receipt of such notice) and, unless this
Warrant has been fully exercised or expired, a new Warrant representing the
portion of the Shares, if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to Quantum as soon as possible
thereafter.
2.2 Automatic Exercise. To the extent this Warrant is not previously
------------------
exercised, and if the fair market value of one share of the Company's Series D
Preferred Stock is greater than the Exercise Price then in effect, this Warrant
shall be deemed automatically exercised pursuant to Section 2.3 below (even if
not surrendered) at such time that is immediately prior to the expiration of
this Warrant. For purposes of such automatic exercise, the fair market value of
one share of the Company's Series D Preferred Stock upon such expiration shall
be determined pursuant to Section 2.3(b) below. To the extent this Warrant or
any portion thereof is deemed automatically exercised pursuant to this
Section 2.2, the Company agrees to promptly notify Quantum of the number of
Shares, if any, Quantum is to receive by reason of such automatic exercise.
2.3 Right to Convert Warrant into Stock; Net Issuance.
-------------------------------------------------
(a) In addition to and without limiting the rights of
Quantum under the terms of this Warrant and in lieu of exercising this Warrant
under Section 2.1(a) above, Quantum may elect to convert this Warrant or any
portion thereof (the "Conversion Right") into shares of Series D Preferred
Stock, the aggregate value of which shares shall be equal to the value of this
Warrant or the portion thereof being converted. The Conversion Right may be
exercised by Quantum by surrender of this Warrant at the principal office of the
Company (with the Notice of Exercise form attached hereto as Exhibit A-1 duly
executed), in which event the Company shall issue to Quantum a number of shares
of the Company's Series D Preferred Stock computed using the following formula:
Y(A - B)
X = --------
A
3.
<PAGE>
Where: X = The number of shares of Series D Preferred Stock to be issued to
Quantum.
Y = The number of shares of Series D Preferred Stock purchasable under
this Warrant subject to the exercise election.
A = The fair market value of one share of the Company's Series D
Preferred Stock.
B = Exercise Price (as adjusted to the date of such calculations).
(b) For purposes of this Section 2.3, the "fair market value"
per share of the Company's Series D Preferred Stock shall mean:
(i) If the Conversion Right is exercised in connection with
and contingent upon the Company's initial public offering, and if the Company's
registration statement relating to such offering has been declared effective by
the Securities and Exchange Commission, then the initial "Price to Public"
specified in the final prospectus with respect to such offering; or
(ii) If the Conversion Right is not exercised in connection
with and contingent upon the Company's initial public offering, then the highest
of the following:
(A) The price per share in the Company's most recent Preferred
Stock financing;
(B) The price per share of the Company's Series D Preferred
Stock as determined by an independent valuation firm chosen by the Company's
Board of Directors and acceptable to Quantum; and
(C) The price per share of the Company's Series D Preferred
Stock as determined by the Company's Board of Directors in good faith.
2.4 Determination of Number of Shares. The number of Shares granted
---------------------------------
pursuant to this Warrant shall be the number obtained by dividing $2,000,000 by
the Preferred Price. For purposes of this Section 2.4, the "Preferred Price"
shall be determined as follows:
(A) If, prior to May 30, 1999, the Company completes a private
offering of equity securities (a "Qualified Financing"), then the Preferred
Price shall be the price per share on a common stock equivalent basis of equity
securities sold in the Qualified Financing; provided, however, that for purposes
-------- -------
of this Warrant, a Qualified Financing shall not include one private offering of
equity securities prior to January 1, 1999 with aggregate gross proceeds less
than $2,000,000.
(B) If the Company does not complete a Qualified Financing prior
to May 30, 1999 or if this Warrant is exercised prior to completion of a
Qualified Financing and prior to May 30, 1999, then the Preferred Price shall
be equal to the quotient determined by dividing (a) the lesser of (i)
$100,000,000 and (ii) the valuation of the Company on May 30,
4.
<PAGE>
1999, as determined by a third-party valuation firm mutually agreeable to
Quantum and the Company, by (b) the fully diluted capitalization of the Company
(which shall include, without limitation, shares subject to outstanding options
or warrants or reserved for issuance pursuant to the Company's stock plans).
3. Stock Fully Paid; Reservation of Shares. All Shares to be issued upon
---------------------------------------
the exercise of this Warrant, and all Common Stock issuable upon conversion of
the Shares shall, upon issuance, be validly issued, fully paid and
nonassessable, and free from all liens and charges with respect to the issuance
thereof. During the period within which this Warrant may be exercised, the
Company will at all times have duly authorized and reserved, for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Series
D Preferred Stock (and Common Stock issuable upon conversion thereof).
4. Charges, Taxes and Expenses. Issuance of certificates for shares of
---------------------------
Series D Preferred Stock upon the exercise of this Warrant shall be made without
charge to Quantum for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the registered holder of this Warrant or in such name or names as may be
directed by the registered holder of this Warrant; provided, however, that upon
any transfer involved in the issuance or delivery of any certificates for shares
of Series D Preferred Stock, the Company may require, as a condition thereto,
the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto.
5. Adjustments to Exercise Price and Number of Shares. The number and
--------------------------------------------------
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification; Consolidation or Merger. In case of any
-----------------------------------------
reclassification of the Series D Preferred Stock (other than a change in par
value, or as a result of a subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger with another corporation in which the Company is
a continuing corporation and in which the Company's stockholders immediately
preceding such consolidation or merger own at least 50% of the voting securities
of the Company following such consolidation or merger and which does not result
in any reclassification of the shares issuable upon exercise of this Warrant),
or in the case of any sale of all or substantially all of the assets of the
Company, the Company, or such successor or purchasing corporation as the case
may be, shall execute a new Warrant, providing that Quantum shall have the right
to exercise such new Warrant, and procure upon such exercise and payment of the
same aggregate Exercise Price, in lieu of the shares of Series D Preferred Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such
reclassification, change, consolidation, sale of all or substantially all of the
Company's assets or merger by a holder of an equivalent number of shares of
Series D Preferred Stock. Such new Warrant shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 5. The provisions of this subsection (a) shall similarly
apply to successive reclassifications, consolidations, mergers, and the sale of
all or substantially all of the Company's assets.
5.
<PAGE>
(b) Subdivision or Combination of Shares. If the Company at any time
------------------------------------
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Series D Preferred Stock, the Exercise Price shall be proportionately
decreased in the case of a subdivision or increased in the case of a
combination.
(c) Stock Dividends and Other Distributions. If the Company at any
---------------------------------------
time while this Warrant is outstanding and unexpired shall pay a dividend with
respect to Series D Preferred Stock payable in, or make any other distribution
with respect to, Series D Preferred Stock (except any distribution specifically
provided for in the foregoing subsections 5(a) or 5(b)), then the Exercise Price
shall be adjusted, from and after the date of determination of stockholders
entitled to receive such dividend or distribution, to that price determined by
multiplying the Exercise Price in effect immediately prior to such date of
determination by a fraction (1) the numerator of which shall be the total number
of shares of Series D Preferred Stock outstanding immediately prior to such
dividend or distribution, and (2) the denominator of which shall be the total
number of shares of Series D Preferred Stock outstanding immediately after such
dividend or distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in the
------------------------------
Exercise Price pursuant to subsections 5(a)-(c) hereof, the number of shares of
Series D Preferred Stock purchasable hereunder shall be adjusted, to the nearest
whole share, to the product obtained by multiplying the number of shares of
Series D Preferred Stock purchasable immediately prior to such adjustment in the
Exercise Price by a fraction, the numerator of which shall be the Exercise Price
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price immediately thereafter.
(e) Conversion of Series D Preferred Stock. In the event that all of
--------------------------------------
the authorized and outstanding shares of Series D Preferred Stock of the Company
are redeemed or converted or reclassified into other securities or property
pursuant to the Company's Charter or otherwise, or the Series D Preferred stock
otherwise ceases to exist, then, in such case, Quantum, upon exercise hereof at
any time after the date on which the Series D Preferred Stock is so redeemed or
converted, reclassified or ceases to exist (the "Termination Date"), shall
receive, in lieu of the number of shares of Series D Preferred Stock that would
have been issuable upon such exercise immediately prior to the Termination Date,
the securities or property that would have been received if this Warrant had
been exercised in full and the Series D Preferred Stock received thereupon had
been simultaneously converted immediately prior to the Termination Date, all
subject to further adjustment as provided in this Warrant. Additionally, the
Exercise Price shall be immediately adjusted to equal the quotient obtained by
dividing (x) the aggregate Exercise Price of the maximum number of shares of
Series D Preferred Stock for which this Warrant was exercisable immediately
prior to the Termination Date by (y) the number of shares of the Company for
which this Warrant is exercisable immediately after the Termination Date, all
subject to further adjustment as provided herein.
(f) Certificate as to Adjustment. In each case of any adjustment in
----------------------------
either the Exercise Price or in the number of shares of Series D Preferred
Stock, or other stock, securities or property receivable on the exercise of this
Warrant, the Company shall compute such adjustment in accordance with the terms
of this Warrant and prepare a certificate signed by its Chief Financial Officer,
President or other designated officer setting forth such adjustment and
6.
<PAGE>
showing in reasonable detail the facts upon which such adjustment is based,
including a statement of the adjusted Exercise Price. The Company will cause
copies of such certificate to be mailed to the registered holder.
6. Notices of Record Date. In the event of any taking by the Company of a
----------------------
record of its stockholders for the purpose of determining stockholders who are
entitled to receive payment of any dividend or other distribution, any right to
subscribe for, purchase or otherwise acquire any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining stockholders who are entitled to vote in connection with any
proposed merger or consolidation of the Company with or into any other
corporation, or any proposed sale, lease or conveyance of all or substantially
all of the assets of the Company, or any proposed liquidation, dissolution or
winding up of the Company, then, in connection with each such event, the Company
shall mail to Quantum at least twenty (20) days prior written notice of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right(s) or vote of the stockholders. Each such written notice
shall specify the amount and character of any such dividend, distribution or
right(s), and shall set forth, in reasonable detail, the matter requiring any
such vote of the stockholders.
7. Fractional Shares. No fractional shares of Series D Preferred Stock
-----------------
will be issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor based upon the
per share fair market value of the Series D Preferred Stock on the date of
exercise.
8. Compliance with Securities Act: Disposition of Warrant or Shares of
-------------------------------------------------------------------
Series D Preferred Stock.
------------------------
(a) Compliance with Securities Act. Quantum, by acceptance hereof,
------------------------------
agrees that this Warrant, the Shares to be issued upon exercise hereof and the
Common Stock to be issued upon conversion of such Shares are being acquired for
investment and that Quantum will not offer, sell or otherwise dispose of this
Warrant or any Shares to be issued upon exercise hereof (or Common Stock issued
upon conversion of such Shares) except under circumstances which will not result
in a violation of the Securities Act. This Warrant and all Shares issued upon
exercise of this Warrant (unless registered under the Securities Act) shall be
stamped or imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO, (ii) AN OPINION OF COUNSEL IN FORM REASONABLY
SATISFACTORY TO COUNSEL TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED AND THAT AN APPLICABLE EXEMPTION IS AVAILABLE,
OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER
THE ACT IS NOT REQUIRED.
7.
<PAGE>
(b) Disposition of Warrant and Shares. With respect to any offer,
---------------------------------
sale or other disposition of this Warrant or any Shares acquired pursuant to
the exercise of this Warrant (or Common Stock issued upon conversion of such
Shares) prior to registration thereof, Quantum and each subsequent holder of
this Warrant agrees to give written notice to the Company prior thereto,
describing briefly the manner thereof, together with a written opinion of such
holder's counsel, if reasonably requested by the Company, to the effect that
such offer, sale or other disposition may be effected without registration or
qualification (under the Securities Act as then in effect or any federal or
state law then in effect) of this Warrant or such Shares or Common Stock and
indicating whether or not under the Securities Act certificates for this Warrant
or such Shares or Common Stock to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
insure compliance with the Securities Act. Each certificate representing this
Warrant or the Shares or Common Stock thus transferred (except a transfer
pursuant to Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Securities Act unless, in
the aforesaid opinion of counsel for Quantum, such legend is not required in
order to insure compliance with the Securities Act. Nothing herein shall
restrict the transfer of this Warrant or any portion hereof by the initial
holder hereof to any subsidiary of the initial holder provided such transfer may
be made in compliance with applicable federal and state securities laws. The
Company may issue stop transfer instructions to its transfer agent in connection
with the foregoing restrictions.
9. No Rights as Stockholders. No holder of this Warrant, as such,
-------------------------
shall be entitled to the rights of a stockholder or to vote upon any matter
submitted to stockholders at any meeting thereof, or to receive notice of
meetings, or be deemed the holder of Series D Preferred Stock or entitled to the
rights of a holder of Preferred Stock under the Second Amended and Restated
Investors Rights Agreement by and among the Company and the holders of Preferred
Stock of the Company (the "Investors Rights Agreement"), unless and until this
Warrant shall have been exercised and the Shares purchasable upon such exercise
shall have become deliverable, as provided herein.
10. Additional Rights.
-----------------
10.1 Registration and Investor Rights. The rights of Quantum and the
--------------------------------
obligations of the Company with respect to registration of the shares of Common
Stock issuable upon conversion of the Shares under the Securities Act and the
applicable rules and regulations thereunder are as set forth in the Investors
Rights Agreement, the provisions of which are incorporated by reference herein
with the same effect as if set forth in full herein. The Company covenants that
it will use its best efforts to ensure that Quantum becomes a party to the
Investors Rights Agreement with the same rights as the holders of Series C
Preferred Stock thereunder upon the exercise of this Warrant. Except as set
forth in the Investors Rights Agreement, the Company is not, pursuant to the
terms of any other agreement currently in existence, under any obligation to
register under the Securities Act any of its presently outstanding securities or
any of its securities which may hereafter be issued.
10.4 Mergers. The Company agrees to provide Quantum with at least
-------
thirty (30) days' prior written notice of the consummation of any proposed
transaction, in which the Company would (i) sell, lease, exchange, convey or
otherwise dispose of all or substantially all
8
<PAGE>
of its assets or business, or (ii) merge into or consolidate with any other
corporation (other than a wholly-owned subsidiary of the Company), or effect any
transaction (including a merger or other reorganization) or series of related
transactions, in which more than fifty percent (50%) of the voting power of the
Company is transferred.
11. Amendment of Conversion Rights. During the term of this Warrant, the
------------------------------
Company agrees that it shall not amend its Charter, as amended through the Grant
Date, without the prior written consent of Quantum if, as a result of such
amendment, any of the conversion rights, including without limitation the
conversion price or antidilution protection privileges, of the Series D
Preferred Stock would be adversely affected; provided, however, that no such
--------- -------
consent shall be required if such amendment is approved by the stockholders of
the Company in accordance with the Charter and such amendment affects the shares
of Series D Preferred Stock issued to Quantum upon exercise of this Warrant and
the shares of Series D Preferred Stock held by other holders equally. The
Company shall promptly provide Quantum with any restatement, amendment,
modification or waiver of the Charter promptly after the same has been made.
12. Exchange and Registry of Warrant. This Warrant is exchangeable, upon
--------------------------------
the surrender hereof by the registered holder at the above-mentioned office or
agency of the Company, for a new Warrant of like tenor and dated as of such
exchange. The Company shall maintain at the above-mentioned office or agency a
registry showing the name and address of the registered holder. This Warrant may
be surrendered for exchange, transfer or exercise, in accordance with its terms,
at such office or agency of the Company, and the Company shall be entitled to
rely in all respects, prior to written notice to the contrary, upon such
registry.
13. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
---------------------------------
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.
14. Modification and Waiver. This Warrant and any provision hereof may be
-----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
15. Notices. All notices, requests, demands and other communications under
-------
this Warrant or in connection herewith shall be given to or made upon (i)
Quantum at Quantum Corporation, 500 McCarthy Boulevard, Milpitas, CA 95035,
attention: General Counsel; with copies to Wilson Sonsini Goodrich & Rosati, 650
Page Mill Road, Palo Alto, CA 94304, attention: Jeffrey A. Herbst and (ii) the
Company at TiVo, Inc., 894 Ross Drive, Sunnyvale, CA 94089, attention:
President; with copies to Cooley Godward LLP, Five Palo Alto Square, 3000 El
Camino Real, Palo Alto, CA 94304, attention: Alan Mendelson. All notices,
requests, demands and other communications given or made in accordance with the
provisions of this Warrant shall be in writing and shall be deemed received by a
party upon the earlier of actual receipt or, if sent by certified mail (postage
pre-paid), five (5) days after deposit in the U.S. mail. Any party may, by
written notice to the other, alter its address or respondent.
16. Binding Effect on Success. This Warrant shall be binding upon any
-------------------------
corporation succeeding the Company by merger, consolidation or acquisition of
all or
9.
<PAGE>
substantially all of the Company's assets. All of the obligations of the Company
relating to the Shares, or the Company's Common Stock issuable upon conversion
thereof, shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of between the parties shall inure to the benefit of
the successors and assigns of each party. The Company will, at the time of the
exercise of this Warrant, in whole or in part, upon request of Quantum but at
the Company's expense, acknowledge in writing its continuing obligation to
Quantum in respect of any rights (including, without limitation, any right to
registration of the Shares) to which Quantum shall continue to be entitled after
such exercise in accordance with this Warrant; provided, that the failure of
Quantum to make any such request shall not affect the continuing obligation of
the Company to Quantum in respect of such rights.
17. Lost Warrants or Stock Certificates. The Company covenants to Quantum
-----------------------------------
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant or any stock certificate
issued upon exercise thereof and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company shall make and deliver a new
Warrant or stock certificate of like tenor in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
18. No Impairment. The Company will not, by amendment of its Charter or
-------------
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of Quantum against impairment.
19. Descriptive Headings. The descriptive headings of the several
--------------------
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
20. Recovery of Litigation Costs. If any legal action or other proceeding
----------------------------
is brought for the enforcement of this Warrant, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Warrant, the successful or prevailing party or parties shall
be entitled to recover reasonable attorneys' fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled.
21. Governing Law. This Warrant shall be construed and enforced in
-------------
accordance with, and governed by, the internal laws of the State of California,
excluding the body of law applicable to conflicts of laws.
22. Assignment. This Warrant may be assigned by Quantum in whole and not
----------
in part. Upon delivery of a duly executed Assignment Form in the form attached
hereto as Exhibit A-2 the Company shall record such assignment on its books and
all references to Quantum hereunder shall be references to such registered
holder.
10
<PAGE>
TiVo, Inc.
a Delaware corporation
By: /s/ Michael Ramsay
-------------------------------
Name: Michael Ramsay
-----------------------------
Title: CEO, President
----------------------------
11.