Stockholders' Agreement - OpenTV Corp., OTV Holdings Ltd., Sun Microsystems Inc., Sun TSI Subsidiary Inc. and OpenTV Inc.
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
dated October 23, 1999
among
OPENTV CORP.
and
OTV HOLDINGS LIMITED
and
SUN MICROSYSTEMS, INC.
and
SUN TSI SUBSIDIARY, INC.
and
OPENTV, INC.
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TABLE OF CONTENTS
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Page
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1. RECITALS...............................................................
2. DEFINITIONS AND INTERPRETATION.........................................
3. BUSINESS OF THE COMPANY................................................
4. FUNDAMENTAL BUSINESS DECISIONS.........................................
5. RESTRICTIONS ON SSI TRANSFER OF SHARES.................................
6. INTELLECTUAL PROPERTY RIGHTS AS TO SUN AS SSI..........................
7. GOVERNING LAW, ARBITRATION AND LIMITATION
ON DAMAGES.............................................................
8. DURATION AND TERMINATION...............................................
9. WAIVERS................................................................
10. ASSIGNMENT.............................................................
11. ENTIRE AGREEMENT.......................................................
12. CONFIDENTIALITY........................................................
13. NOTICES................................................................
14. RELATIONSHIP OF THE STOCKHOLDERS.......................................
15. COUNTERPARTS...........................................................
16. PARENT UNDERTAKING.....................................................
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AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this "Agreement")
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is entered into as of this 23rd day of October, 1999, by and among OpenTV Corp.,
a company incorporated in the British Virgin Islands ("OTV"), OTV Holdings
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Limited, a company incorporated in the British Virgin Islands ("OTVH"), Sun
----
Microsystems, Inc., a Delaware corporation ("Sun"), Sun TSI Subsidiary, Inc., a
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Delaware corporation ("SSI"), and OpenTV, Inc., a Delaware corporation (the
---
"Company").
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1. RECITALS
1.1 The Company, Myriad International Holdings BV ("MIH"), MIH Limited,
Sun and SSI (the "Prior Stockholders") entered into that certain
Amended and Restated Stockholders' Agreement, dated March 18, 1999
(the "Prior Stockholders' Agreement").
1.2 MIH has transferred its interest in the Company to OTV.
1.3 Pursuant to that certain Termination Agreement, dated of even date
herewith, by and among the Prior Stockholders, the Prior Stockholders'
Agreement was terminated as to MIH and MIH Limited.
1.4 In connection with the termination of the Prior Stockholders'
Agreement, the Company, OTV, Sun and SSI desire to amend and restate
the Prior Stockholders' Agreement in its entirety pursuant to this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
2. DEFINITIONS AND INTERPRETATION
2.1 The Article, Section and subsection headings used herein are inserted
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
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2.2 As used in this Agreement, the masculine, feminine or neuter gender,
and the singular or plural, shall be deemed to include the others
whenever and wherever the context so requires.
2.3 Unless the context otherwise requires, the terms defined in this
Section 2.3 shall have the meanings herein specified for all purposes
of this Agreement.
"Affiliate" - any Person which directly or indirectly
Controls, is Controlled by, or is under
common Control with, the indicated
Person.
"Agreement" - this Amended and Restated Stockholders'
Agreement and the Schedules hereto.
"Assignment
Agreements" - shall mean the following agreements: (a)
the Assignment and Bill of Sale dated as
of July 1, 1996, by and between SSI and
the Company's predecessor-in-interest,
Thomson-Sun Interactive LLC (the "LLC");
---
(b) the Assignment and Bill of
Sale dated as of July 1, 1996, by and
between Sun and SSI; and (c) the
Assignment Agreement dated as of July 1,
1996, by and between Sun and the LLC.
"Board" - the Board of Directors of the Company.
"BVI Fundamental
Business Decisions" - (i) any business combination (whether by
merger, sale of substantially all assets
or stock purchase) involving a Change of
Control of OTV (unless such business
combination has been approved by a
representative on the OTV Board
designated by SSI); (ii) any amendment of
the Memorandum of Association of OTV that
(a) materially and adversely affects
SSI's exchange rights under the Exchange
Agreement or the rights, preferences or
privileges of the B Ordinary Shares into
which SSI's Shares of the Company are
convertible, (b)
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effects SSI in a manner more adversely than OTV
Holdings Limited, or (c) would impact the
Intellectual Property Rights licensed by SSI and
Sun pursuant to the License Agreements, but
excluding any proposed change to any such
Memorandum of Association which (u) increases
the authorized Ordinary Shares or increases the
authorized Preference Shares or creates a new
class or series of Preferred Shares, (v)
implements antitakeover or change of control
provisions, (w) changes the number of directors,
(x) implements or changes the indemnification
provisions for officers, directors or agents,
(y) is necessary to implement any acquisition by
OTV or (z) is approved by a representative on
the OTV Board designated by SSI; and (iii) any
assignment or sublicensing by OTV of the
Intellectual Property Rights licensed by SSI and
Sun pursuant to the License Agreements (either
alone or with other Intellectual Property
Rights), outside the ordinary course of business
or in connection with the liquidation of OTV.
"BVI Shareholders" - SSI (for purposes of this Agreement, treating
SSI as though it had exercised in full its
rights under the Exchange Agreement and had
exchanged all of its shares of the Company for
shares of OTV as provided in the Exchange
Agreement at the then applicable exchange rate),
OTVH and their permitted transferees from time
to time in accordance with that certain
Shareholders Agreement dated of even date
herewith by and among SSI, OTVH and other
parties thereto.
"BVI Shares" - Shares in OTV of whatever class.
"Change of Control" - with respect to the Company or OTV, a business
combination resulting in shareholders of such
entity immediately prior to such combination
ceasing to hold in excess of 50% of the voting
power of the other entity
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succeeding to, or continuing to hold or
conduct the business of such entity.
"Confidential
Information" - all information and materials of a Person,
patentable or otherwise, including, without
limitation, computer programs, code,
technical information, data, reports, know-
how, patent positioning, financial
information and business plans, including any
negative developments, whether disclosed on,
before or after July 1, 1996.
"Control" - having a direct or indirect ownership
interest in capital or profits exceeding
fifty percent (50%) in a Person or 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 of such Person.
"Delaware Fundamental
Business Decision - (i) any business combination (whether by
merger, sale of substantially all assets or
stock purchase) involving a Change of
Control of the Company (unless such business
combination has been approved by a
representative on the OTV Board designated by
SSI); (ii) any amendment of the Certificate
of Incorporation of the Company that (a)
materially and adversely affects SSI's
exchange rights under the Exchange Agreement,
(b) effects SSI in a manner more adversely
than the Company, or (c) would impact the
Intellectual Property Rights licensed by SSI
and Sun pursuant to the License Agreements,
but excluding any proposed change to the
Certificate of Incorporation which (u)
increases the authorized Common Stock or
increases the authorized Preferred Stock or
makes a new class or series of Preferred
Stock, (v) implements antitakeover or change
of control provisions, (w) changes the number
of directors, (x) implements or changes the
indemnification provisions for officers,
directors or agents, (y) is
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necessary to implement any acquisition by the
Company or (z) is approved by a representative
on the OTV Board designated by SSI; and (iii)
any assignment or sublicensing by the Company of
the Intellectual Property Rights licensed by SSI
and Sun pursuant to the License Agreements
(either alone or with other Intellectual
Property Rights), outside the ordinary course of
business or in connection with the liquidation
of the Company.
"Derivative Works" - (i) for material subject to copyright or mask
work right protection, any work which as a
whole, represents an original work of
authorship, and is based upon one or more pre-
existing works, such as a revision,
modification, translation, abridgment,
condensation, expansion, collection, compilation
or any other form in which such pre-existing
works may be recast, transformed or adapted,
(ii) for patentable materials, any adaptation,
subset, addition, improvement or combination of
such materials, and (iii) for material subject
to trade secret protection, any new material,
information or data relating to and derived from
such material, including new material which may
be protectable by copyright, patent or other
proprietary rights, and, with respect to each of
the above, the preparation, use and/or
distribution of which, in the absence of the
License Agreements or other authorization from
the owner, would constitute infringement under
applicable law.
"Exchange Agreement - that certain Exchange Agreement, dated as of the
date hereof, by and among SSI and OTV.
"Intellectual
Property Rights" - all of the following worldwide legal rights: (i)
patents, patent applications, and patent rights;
(ii) rights associated with works of authorship
(including audiovisual works), including
copyrights, copyright
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applications, and copyright registrations; (iii)
rights relating to the protection of trade
secrets and confidential information; (iv) Moral
Rights; (v) design rights; (vi) any rights
analogous to those set forth in the preceding
clauses and any other proprietary rights
relating to intangible property other than
trademarks, trademark registrations and
applications therefor, trade names, rights in
trade dress and packaging; and (vii) divisions,
continuations, renewals, reissues, and
extensions of the foregoing (as applicable),
whether existing on July 1, 1996 or thereafter
filed, issued, or acquired.
"License Agreements" - all of the following agreements: (i) the
Technology License Agreement dated as of July 1,
1996, by and between Sun and SSI; (ii) the
Technology Sublicense Agreement dated as of July
1, 1996, by and between SSI and the Company;
(iii) the Trade Name License Agreement dated as
of July 1, 1996, by and between Sun and SSI; and
(iv) the Trade Name Sublicense Agreement dated
as of July 1, 1996, by and between SSI and the
Company.
"Lien" - any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind,
including, without limitation, any conditional
sale or other title retention agreement, any
lease in the nature thereof and the filing of or
agreement to give any financing statement under
the Uniform Commercial Code or any jurisdiction
and including any lien or charge arising by
statute or other law.
"Moral Rights" - any rights of paternity or integrity, any right
to claim authorship, to object to or prevent any
distortion, mutilation or modification of, or
other derogatory action in relation to the
subject work whether or not such would be
prejudicial to the author's honor or reputation,
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to withdraw from circulation or control the
publication or distribution of the subject work,
and any similar right, existing under judicial
or statutory law of any country in the world, or
under any treaty, regardless of whether or not
such right is denominated or generally referred
to as a "moral" right.
"OpenTV" - all (i) technology and software assigned,
transferred or licensed to the Company by
Thomson, TCE or any of their respective
Affiliates, (ii) technology and software,
including confidential information and know-how
contributed by Thomson, TCE, Sun and SSI to the
Company up to the creation of the Company on
July 1, 1996 and (iii) successive versions and
Derivative Works of any of the foregoing
technology and software of the Company, Thomson
and TCE created by any or all of them and of the
Shared Technology created by the Company since
its creation on July 1, 1996 and which fall
within the scope of the Existing Business
Objectives. OpenTV includes libraries, methods
of accessing and downloading distributor code
and data modules and the O-Code interpreter, to
the extent included within the foregoing
description. OpenTV does not, however, include
any of Sun's JAVA technology or any portion
thereof, except to the extent that JAVA
technology may be incorporated therein by the
Company pursuant to and in accordance with the
terms of a JAVA license entered into between the
Company and Sun.
"OTV Board" - the Board of Directors of OTV.
"Permitted
Transferees" - a Person to whom Shares are transferred in
accordance with Section 5.2.
"Person" - any natural person, corporation, limited
liability company, trust, association, company,
partnership, joint
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venture or other entity and any governmental
agency, instrumentality or political
subdivision.
"Share" - stock in the capital of the Company of
whatever class.
"Shared Technology" - shall have the meaning as that term is defined
in the Technology Sublicense Agreement by and
between SSI and the LLC entered into as of
July 1, 1996.
"Stockholders" - SSI, OTV and their respective Permitted
Transferees from time to time in accordance
herewith.
"Transfer" - in relation to any Share or any legal or
beneficial interest in a Share, includes,
whether voluntarily or involuntarily, (i) the
sale, transfer, lease, assignment, grant,
renunciation, alienation, or disposal of such
Share or of any right or interest which a
Person may have in the Company as a result of
such right or interest in that Share; (ii)
entering into any agreement in respect of the
votes attached to such Share; (iii) creating
or granting any Lien over or in respect of
such Share; and (iv) any agreement (whether or
not subject to conditions) to do or create or
grant any of the foregoing.
3. BUSINESS OF THE COMPANY
3.1 The Stockholders and the Company agree that solely for the purposes of
the License Agreements, the business objectives of the Company (the
"Existing Business Objectives") are to -
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3.1.1 design, develop, commercialize and promote OpenTV in the
interactive systems and service market place ("OpenTV
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Solutions");
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3.1.2 identify market opportunities and seek and be selected for
contracts for the OpenTV Solutions on a worldwide basis;
3.1.3 develop and promote open, standard interfaces for the OpenTV
Solutions;
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3.1.4 license the OpenTV Solutions as an operating system for
interactive services;
3.1.5 port pieces of the OpenTV Solutions to Sun, SSI and other
platforms; and
3.1.6 provide support for the OpenTV Solutions.
Notwithstanding anything to the contrary contained in any License
Agreement, the Existing Business Objectives as defined in this
Agreement shall be deemed the business objectives for all purposes of
the License Agreements, including, without limitation, as that term is
used in the defined term "Licensed Field of Use" in the License
Agreements. The parties acknowledge and agree that the definition of
Existing Business Objectives as provided herein is for the sole
purpose of providing a definition for incorporation into the License
Agreements and such definition shall in no way be construed as
defining or limiting the business, scope or objectives of the Company,
other than as expressly provided in the License Agreements.
4. FUNDAMENTAL BUSINESS DECISIONS
4.1 If the OTV Board approves of a BVI Fundamental Business Decision or
the Board approves of a Delaware Fundamental Business Decision, the
OTV Board or the Board, as the case may be, shall submit such matters
to the Stockholders, in the case of a Delaware Fundamental Business
Decision, or the BVI Shareholders, in the case of a BVI Fundamental
Business Decision for approval. No resolution shall be validly
adopted nor shall any action be taken by the Company if the resolution
or the action relates to a Delaware Fundamental Business Decision,
unless Stockholders representing 95% of the votes exercisable by all
Stockholders shall have voted in favor thereof or consented thereto,
and no resolution shall be validly adopted nor shall any action be
taken by OTV if the resolution or the action relates to a BVI
Fundamental Business Decision, unless BVI Shareholders representing
95% of the votes exercisable by all BVI Shareholders shall have voted
in favor thereof or consented thereto. For purposes of this
Agreement, SSI shall be treated as though it had exercised in full its
rights under the Exchange Agreement and had exchanged all of its
shares of the Company for shares of OTV as provided in the Exchange
Agreement at the then applicable exchange rate.
Subject to the provisions of Sections 4.2, 4.3, 4.4, and 4.5 if the
requisite percentage in interest of Stockholders or BVI Shareholders,
as the case may be, as required under this Section 4.1 do not vote in
favor of a resolution, then solely for the purposes of
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determining whether any action or matter contemplated by such
resolution shall be effective under applicable law, no vote will be
deemed to have been made in favor of such resolution.
4.2 This Section 4.2, as it relates to (i) the interest in the Company
held by SSI as of the date of this Agreement, applies to SSI in the
context where OTV shall have voted in favor of a resolution proposed
in respect of a Delaware Fundamental Business Decision in accordance
with Section 4.1 and SSI shall not have voted in favor of such
resolution in accordance therewith or to (ii) the interest in OTV held
and/or deemed held by SSI as if SSI had exercised in full its rights
under the Exchange Agreement and had exchanged all of its shares of
the Company for shares of OTV as provided in the Exchange Agreement at
the applicable exchange rate, applies to SSI in the context where OTVH
shall have voted in favor of a resolution proposed in respect of a BVI
Fundamental Business Decision in accordance with Section 4.1 and SSI
shall not have voted in favor of such resolution in accordance
therewith (either clause (i) or clause (ii) above being deemed an "SSI
---
Deadlock"). In the event of an SSI Deadlock, a nominated senior
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executive of SSI and OTV shall promptly meet to attempt to resolve the
SSI Deadlock by mutual agreement. If such SSI Deadlock shall not have
been resolved within fifteen (15) days after the date on which such
SSI Deadlock first arose, SSI and OTV shall refer the matter to a
nominated senior executive of Sun and MIH, respectively, who shall
promptly meet to attempt to resolve the deadlock by mutual agreement.
If such a deadlock shall not have been resolved within fifteen (15)
days after the date on which such SSI Deadlock first arose, then the
matter shall not be deemed approved by the Stockholders in the case a
Delaware Fundamental Business Decision or by the BVI Shareholders in
the case of a BVI Fundamental Business Decision. If an SSI Deadlock
cannot be resolved through the procedures set forth above within
thirty-one (31) days after the date on which such SSI Deadlock first
arose, then (i) unless the BVI Shares are then traded on a U.S.
national securities exchange and there is an unaffiliated public float
of at least 5% of the issued and outstanding BVI Shares, OTV shall
cause to be conducted a valuation of the Fair Market Value (as defined
herein) of the BVI Shares held and/or deemed held by SSI, within forty
(40) days following the expiration of such thirty-one (31) day period
or (ii) if the BVI Shares are then traded on a national securities
exchange and there is an unaffiliated public float of at least 5% of
the issued and outstanding BVI Shares the Fair Market Value of the BVI
Shares shall mean, the average of the per share closing prices of the
BVI Shares on such exchange over the ten (10)-day period ending on the
date on which the SSI Deadlock giving rise to this provision first
arose.
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4.3 As used herein, the Fair Market Value of the BVI Shares held and/or
deemed held by SSI, if the BVI Shares are not then traded on a U.S.
national securities exchange and there is not an unaffiliated public
float of at least 5% of the issued and outstanding BVI Shares, shall
mean the fair value of the BVI Shares as of the date on which the SSI
Deadlock giving rise to this provision first arose, without taking
into account a discount to reflect the minority interest held and/or
deemed held by SSI in OTV and shall be determined as follows. OTV
shall cause a valuation of the Fair Market Value of the BVI Shares
that SSI holds and/or is deemed to hold to be conducted by an
independent investment banking firm selected by OTV, which is not then
otherwise retained by OTV and which has recognized experience in the
valuation of technology companies. Upon the completion of such
valuation, OTV shall distribute a copy of the report of such valuation
to each Stockholder. SSI may elect to cause OTV to conduct a second
valuation of the Fair Market Value of the BVI Shares that SSI holds
and/or is deemed to hold to be conducted by an independent investment
banking firm selected by SSI, which is not then otherwise retained by
SSI and which has recognized expertise in the valuation of technology
companies. Such election of SSI shall be exercised, if at all, by the
delivery of written notice to such effect to OTV, which shall include
the identity of the independent investment banking firm as described
in the preceding sentence and which shall be delivered to OTV within
five (5) business days following receipt by SSI of the report of the
first valuation. Such second valuation shall be completed within
thirty (30) days following the delivery of such written notice from
SSI to OTV in accordance with the preceding sentence. If SSI does not
so elect to cause OTV to conduct a second valuation, then the Fair
Market Value of the BVI Shares held and/or deemed to be held by SSI
shall be determined from the valuation conducted by the independent
investment banking firm selected by OTV, and all the parties hereto
shall be bound by the decision of such investment banking firm. If SSI
does so elect to cause OTV to conduct a second valuation, then the
Fair Market Value of the BVI Shares held and/or deemed to be held by
SSI shall be determined by the average of the two valuations conducted
by such investment banking firms, and the parties hereto shall be
bound by the decision of such investment banking firms. OTV shall pay
all of the fees and expenses of the first valuation, and OTV and SSI
will each pay one-half (1/2) of the fees and expenses of the second
valuation.
4.4 If an SSI Deadlock is not resolved by the date on which the valuation
of the Fair Market Value of the BVI Shares held and/or deemed to be
held by SSI is completed as described in Section 4.3, then SSI may
resolve such SSI Deadlock by voting in favor of such resolution within
five (5) days following the completion of such valuation, and, if SSI
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does not so vote in favor of such resolution within such five (5) day
period, then OTV shall have the right, but not the obligation, to purchase
all of the Shares of the Company and BVI Shares then held by SSI at the
Fair Market Value of such Shares determined as provided in Section 4.3
(treating all Shares as exchanged for BVI Shares) not later than ten (10)
days following the completion of such valuation, and such right shall be
exercised, if at all, by the delivery of written notice to such effect to
SSI within ten (10) days following the completion of such valuation. If OTV
is not able or does not elect to so purchase such Shares and BVI Shares in
accordance with the preceding sentence, then OTV shall provide written
notice (the "OTV Notice") to the BVI Shareholders within such ten (10)-day
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period, and OTVH shall have the right, but not the obligation, to purchase
the Shares and BVI Shares at the Fair Market Value determined as provided
in Section 4.3, such right to be exercised, if at all, by the delivery of
written notice to such effect to SSI within five (5) days following receipt
of the OTV Notice. The closing of any purchase of Shares and BVI Shares
(including the transfer of certificates therefor) by OTV or OTVH, as the
case may be, in accordance herewith shall occur within fifteen (15) days
following receipt of the OTV Notice subject to the receipt of all necessary
governmental consents and approvals. The parties hereby agree to use their
respective reasonable best efforts to make all filings necessary to obtain
all necessary governmental consents and approvals and the expiration or
early termination of all waiting periods imposed by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended. Any Shares purchased by
OTVH pursuant to this Section 4.4 shall be immediately exchanged for BVI
Shares in accordance with the terms set forth in the Exchange Agreement.
4.5 Any sale of Shares or BVI Shares pursuant to the provisions set out
above shall be subject to the following additional terms and
conditions -
4.5.1 the Shares or BVI Shares in question shall be sold with all
accrued but unpaid dividends and without any Lien;
4.5.2 the purchase price for the Shares or BVI Shares in question
shall be paid in immediately available funds, in United States
Dollars, to a bank account (designated in writing by the
selling Stockholder) as soon as practicable, but in any event
within fifteen (15) days, after the completion of the appraisal
or appraisals, if applicable, described in Section 4.3 against
receipt by the purchaser of all certificates representing such
Shares or BVI Shares, duly endorsed in blank or with duly
executed stock powers with respect thereto;
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4.5.3 in connection with any sale pursuant to provisions set out
above, the terms of the License Agreements to which SSI or any
of its Affiliates is a party shall not be effected by such sale
and shall survive such sale in accordance with their terms
where applicable.
5. RESTRICTIONS ON SSI TRANSFER OF SSI SHARES
5.1 SSI undertakes that it will not Transfer any of its Shares other than
in exchange for shares of OTV pursuant to the Exchange Agreement, or
as otherwise expressly permitted in Section 5.2.
5.2 SSI may, at any time and on any terms (including as to price),
Transfer all (but not part only) of its Shares to any of its
Affiliates, provided that -
5.2.1 the transferor shall remain a party to this Agreement and
hereby agrees to guarantee the performance by the transferee of
its obligations pursuant to the provisions of this Agreement
and to indemnify the other Stockholder from and against a
breach by such transferee of any of its obligations under this
Agreement;
5.2.2 it shall be a condition precedent to any such Transfer (and any
registration thereof) that the transferee agrees in writing
with the other Stockholder 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;
5.2.3 if the transferee ceases to be an Affiliate of SSI, as the case
may be, then the transferor shall cause the transferee to
Transfer to the transferor or another Affiliate of SSI, as the
case may be, all its Shares prior to the date of such cessation
in accordance with this Section 5.2.
5.3 Any attempted Transfer by SSI other than in accordance with this
Agreement shall be void ab initio, and the Company shall not give
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effect to any Transfer made in contravention of the provisions of this
Section 5 or any other express provision of this Agreement and shall
not reflect on its records any change in record ownership of the
Shares pursuant to any such attempted Transfer.
6. INTELLECTUAL PROPERTY RIGHTS AS TO SUN AS SSI
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6.1 The Company shall promptly notify SSI of any known or suspected
infringement or misappropriation of any Intellectual Property Rights
licensed to the Company by SSI or by SSI's Affiliates which comes to
the attention of the Company. If SSI or its Affiliates do not take
active steps to enforce such Intellectual Property Rights within sixty
(60) days after the giving of such notice, then the Company may
request that SSI and/or its Affiliates enforce such Intellectual
Property Rights against the known or suspected infringer at the
Company's expense. In the event that the Company makes such a
request, the Company shall explain to SSI and/or its Affiliates why
the Company believes that SSI and/or its Affiliates should enforce
such Intellectual Property Rights. SSI and/or its Affiliates shall
consider such request in good faith, but shall have no obligation to
take the requested enforcement action. In the event that SSI and/or
its Affiliates decide to enforce such Intellectual Property Rights in
response to the Company's request, then (i) SSI and/or its Affiliates
shall have sole control over the prosecution and settlement of any
such action, although the Company may if it so desires have counsel of
its own choosing participate in any such action, (ii) the Company
shall pay or reimburse SSI and/or its Affiliates all costs of any such
action (including reasonable attorneys' fees, expert witness fees and
court costs), and (iii) all damages and settlement amounts recovered
as a result of any such action shall be paid first to the Company to
the extent of all costs and expenses incurred by or on behalf of the
Company in connection with such action and the balance, if any, shall
be paid to Sun.
6.2 In the event that at any time during the term of this Agreement, the
Company determines that it believes that any item of Shared Technology
was omitted from Exhibit B of the Technology Sublicense Agreement,
then SSI agrees to negotiate in good faith with the Company with
respect to the amendment of such Exhibit B to include the omitted item
in the definition of Shared Technology.
7. GOVERNING LAW, ARBITRATION AND LIMITATION ON DAMAGES
7.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws (without regard to the laws of conflicts of
law) of the State of California.
7.2 If any dispute arises between the parties in connection with -
7.2.1 the formation or existence of, the implementation of or the
interpretation or application of, the provisions of the
parties' respective rights and obligations in terms of or
arising out of this Agreement or its breach or termination; or
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7.2.2 the validity, enforceability, rectification, termination or
cancellation, whether in whole or in part, of this Agreement,
or
7.2.3 any matter affecting the interests of the parties in terms of
this Agreement,
and the parties are unable to resolve their dispute, then any party
shall be entitled to refer the dispute in the first instance, to the
respective nominated senior officers of the Stockholders for
resolution.
7.3 If the matter in dispute shall not have been resolved within thirty
(30) days of it having been so referred under Section 7.2, any
Stockholder may refer the matter in dispute for determination by final
arbitration in Los Angeles, California in accordance with the Rules of
the London Court of International Arbitration ("LCIA") (which Rules
----
are deemed to be incorporated by reference into this clause) by a
neutral arbitrator which shall be selected by the Stockholders
involved in the dispute. If such Stockholders have not selected an
arbitrator acceptable to such Stockholders within fifteen (15) days
after the expiration of the thirty-day period referred to in the
preceding sentence, then each such Stockholder involved in the dispute
shall select an arbitrator (a "Party Arbitrator") within five (5) days
----------------
after expiration of such fifteen (15)-day period. An additional
arbitrator, who shall be the chairman of the tribunal, shall be
appointed by agreement between the Party Arbitrators within thirty
(30) days after the date on which the Party Arbitrators were selected,
failing which, such arbitrator shall be appointed by the relevant
appointing authority under the Rules of the LCIA. The arbitrators
shall establish the procedural rules applicable to the proceedings.
The arbitration shall be governed by the substantive laws of the State
of California, except that matters relating to Section 4 of this
Agreement shall be governed by the substantive laws of the State of
Delaware. The Arbitration shall be conducted in the English language.
Any award of such arbitration shall be final and binding upon the
parties and this Agreement places no restriction on the jurisdiction
in which such award shall be enforced.
7.4 Section 7.3 shall not preclude any party from obtaining interim
injunctive relief on an urgent basis from a court of competent
jurisdiction, pending any decision of the arbitrators under Section
7.3. In addition, the parties hereto acknowledge and agree that they
have no adequate remedy at law for any breach or threatened breach of
any covenant or agreement contained in Section 12 and that any party
may, in addition to the other remedies that may be available to it,
commence proceedings in equity for an injunction preliminarily or
permanently enjoining any other party from breaching or
15
<PAGE>
threatening any such breach of any covenant or agreement contained in
Section 12 hereof. With respect to any such proceeding in equity, it
shall be presumed that the remedies at law or otherwise available to
any party would be inadequate and that it would suffer irreparable
harm as a result of the violation of any provision hereof by any other
party.
7.5 The provisions of this Section -
7.5.1 constitute an irrevocable consent by the parties to any
proceedings in terms hereof and no party shall be entitled to
withdraw therefrom or claim at any such proceedings that it is
not bound by such provisions;
7.5.2 are severable from the rest of this Agreement and shall remain
in effect despite the termination of or invalidity for any
reason of this Agreement.
7.6 In connection with any injunctive relief sought under Section 7.4,
each party to this Agreement, by its execution hereof, (i) hereby
irrevocably submits to the exclusive jurisdiction of the state courts
of the State of Delaware or the United States District Court located
in the State of Delaware, and (ii) 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, any claim that
it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or
execution, that any such proceeding brought in one of the above-named
courts is improper, or that this Agreement or the subject matter
hereof may not be enforced in or by such court. Each party hereto
hereby consents to service of process in any such proceeding in any
manner permitted by Delaware law, and agrees that service of process
by registered or certified mail, return receipt requested, at its
address specified pursuant to Section 13 hereof is reasonably
calculated to give actual notice.
7.7 No Stockholder shall be liable for any indirect, special, incidental
or consequential loss or damage (including, without limitation, loss
of profits or loss of use) suffered by any other Stockholder arising
from or relating to a Stockholder's performance, non-performance,
breach of or default under a covenant, warranty, representation, term
or condition hereof. Each Stockholder waives and relinquishes claims
for indirect, special, incidental or consequential damages.
16
<PAGE>
7.8 No Stockholder shall have the right to recover punitive damages from
the other Stockholder, and each Stockholder hereby waives and
relinquishes any and all punitive damage claims.
7.9 The limitations on liability and damages set forth in Section 7.7 and
7.8 apply to all causes of action that may be asserted under this
Agreement, whether sounding in breach of contract, breach of warranty,
tort, product liability, negligence or otherwise.
8. DURATION AND TERMINATION
8.1 Except as otherwise provided herein, this Agreement shall continue in
full force and effect without time limit until all of the Stockholders
agree in writing to terminate this Agreement or SSI exchanges all of
its Shares for shares of OTV pursuant to the Exchange Agreement.
9. WAIVERS
9.1 No delay in exercising or failure to exercise any right or remedy
under this Agreement shall operate as a waiver thereof nor shall any
single or partial exercise of any right or remedy preclude either the
further exercise thereof or the exercise of any other right or remedy
provided in this Agreement.
9.2 In the event that any party shall expressly waive any breach, default
or omission hereunder, without the prior written consent of the other
parties hereto, no such waiver shall apply to, or operate as, a waiver
of similar breaches, defaults or omissions or be deemed to be a waiver
of any other breach, default or omission hereunder.
10. ASSIGNMENT
No party hereto shall be entitled to transfer this Agreement or any of its
rights and obligations hereunder without the prior written consent of the
other parties, except to a transferee of Shares in accordance with this
Agreement.
11. ENTIRE AGREEMENT
17
<PAGE>
11.1 Effective upon the execution of this Agreement by the parties hereto,
the Prior Stockholders' Agreement shall terminate and cease to have
any further force or effect, and this Agreement shall supercede the
provisions of the Prior Stockholders' Agreement.
11.2 This Agreement constitutes the entire agreement between the parties
hereto concerning the subject matter hereof and supersedes all prior
agreements between the parties concerning the subject matter hereof.
Except as provided herein, no amendment, change or additions hereto
shall be effective or binding on any party unless reduced to writing
and executed by all of the parties hereto.
11.3 Each of the parties acknowledges that in entering into this Agreement
it is not relying on any representation or other statement which is
not set out in this Agreement.
11.4 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Subject to the immediately preceding sentence, this Agreement shall
not run to the benefit of or be enforceable by any Person other than
a party to this Agreement and its successors and permitted assigns.
12. CONFIDENTIALITY
12.1 Each of the parties hereto hereby agrees that it (and its Affiliates)
will maintain in confidence the other parties' Confidential
Information and will not disclose, divulge or otherwise communicate
such Confidential Information to others, or use it for any purpose,
except as otherwise provided or permitted under the terms of the
License Agreements or the Assignment Agreements, and hereby agrees to
exercise reasonable precautions including, without limitation, use of
written agreements to prevent and restrain the unauthorized
disclosure of such Confidential Information by any of its directors,
officers, employees, consultants, subcontractors, sublicensees or
agents. The provisions of this Section 12 will survive termination of
this Agreement. Notwithstanding the foregoing, nothing in this
Section 12.1 is intended to, nor shall it be deemed to, in any way
alter, enlarge or diminish the rights granted to the Company in any
of the License Agreements or Assignment Agreements.
12.2 The provisions of Section 12.1 shall not apply to any Confidential
Information disclosed pursuant to the License Agreements or
Assignment Agreements in accordance therewith or otherwise which:
18
<PAGE>
(a) was rightfully known or used by the receiving entity or its
Affiliates (unless known on account of research or development
done by or on behalf of the disclosing entity and distributed to
the receiving entity or its Affiliates pursuant to
confidentiality restrictions) prior to its date of disclosure to
the receiving entity, as evidenced by the written records of the
receiving entity or its Affiliates;
(b) either before or after the date of the disclosure to the
receiving entity is lawfully disclosed without restriction to the
receiving entity or its Affiliates by an independent,
unaffiliated third party rightfully in possession of the
Confidential Information (but only to the extent of the rights
received from and limitations imposed by such third party);
(c) either before or after the date of the disclosure to the
receiving entity becomes published or available to the public
through no fault or omission on the part of the receiving entity
or its Affiliates;
(d) is required to be disclosed by the receiving entity or its
Affiliates to comply with applicable laws, to defend or prosecute
litigation or to comply with governmental regulations, provided
that the receiving entity provides prior written notice of such
disclosure to the other entities and takes reasonable and lawful
actions to minimize the degree of such disclosure; or
(e) is independently developed by the receiving entity (other than on
account of research or development done on behalf of the
disclosing entity pursuant to confidentiality restrictions)
without reference to the Confidential Information, as evidenced
by written records.
13. NOTICES
13.1 All notices and communications 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 Section 13.2. Unless otherwise
specified herein, each notice or other communication shall be deemed
effective (i) on the date received, if personally delivered, (ii)
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.
19
<PAGE>
13.2 Notices and communications shall be addressed as follows:
if to MIH: Myriad International Holdings BV
Jupiterstraat 13-15
2132 HC Hoofddorp
The Netherlands
Attention: Mr. Allan Rosenzweig
Telecopy No.: 31-23-568-6880
With a copy to:
Paul, Hastings, Janofsky & Walker LLP
Twenty-Third Floor
555 South Flower Street
Los Angeles, California 90071-2371
Attention: Siobhan McBreen Burke, Esq.
Telecopy No.: (213) 627-0705
if to OTV: c/o: Myriad International Holdings BV
Jupiterstraat 13-15
2132 HC Hoofddorp
The Netherlands
Attention: Mr. Allan Rosenzweig
Telecopy No.: 31-23-568-6880
With a copy to:
Paul, Hastings, Janofsky & Walker LLP
Twenty-Third Floor
555 South Flower Street
Los Angeles, California 90071-2371
Attention: Siobhan McBreen Burke, Esq.
Telecopy No.: (213) 627-0705
if to Sun: Sun Microsystems, Inc.
901 San Antonio Road
Mail Stop PAL1-521
Palo Alto, California 94303
Attention: Laura Fennell, Esq.
20
<PAGE>
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 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, Inc.
401 E. Middlefield Road
Mountain View, California 94043
Attention: President
Telecopy No.: (650) 237-0808
With a copy to:
Davis, Graham & Stubbs, LLP
410 Arapahoe Avenue
Boulder, Colorado 80301
Attention: Jacqueline L. Studer, Esq.
Telecopy No.: (303) 544-5599
21
<PAGE>
or such other address of a party, Person and/or fax number as that
party shall have notified in writing to all other parties in
accordance with Section 13.1
13.3 All notices and communications shall be given and made in the English
language.
14. RELATIONSHIP OF THE STOCKHOLDERS
It is expressly agreed that the relationship of any Stockholders shall be
that of joint venturers and not that of partners. Accordingly, the
business of the Company shall be conducted as the business of the Company,
and no Stockholder shall represent to any Person that such Stockholder is
authorized to act on behalf of any of the other Stockholder or that any
partnership, agency, employment or joint liability exists among the
Stockholders in respect of any Person who is not a party to this Agreement.
15. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, 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.
16. PARENT UNDERTAKING
As inducement to the execution of this Agreement by the parties hereto,
each of Sun and OTVH has executed an unconditional and irrevocable guaranty
in substantially the forms as attached hereto as Schedule 1 and Schedule 2,
---------- ----------
respectively.
[SIGNATURE PAGES FOLLOW]
22
<PAGE>
[SIGNATURE PAGE TO AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT]
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized representative as of the date first set forth
above.
SUN MICROSYSTEMS, INC.
By: _______________________________________
Title: ____________________________________
SUN TSI SUBSIDIARY, INC.
By: _______________________________________
Title: ____________________________________
OPENTV, INC.
By: _______________________________________
Title: ____________________________________
OPENTV CORP.
By: ________________________________________
Title: _____________________________________
OTV HOLDINGS LIMITED
By:________________________________________
Title:_____________________________________
23
<PAGE>
SCHEDULE 1: Form of Guaranty
GUARANTY
--------
For good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, Sun Microsystems, Inc., a Delaware corporation
("Sun") hereby unconditionally and irrevocably guarantees the full, complete and
-----
timely performance of all obligations, covenants and agreements of Sun TSI
Subsidiary, Inc., a Delaware corporation ("SSI"), contained in or made pursuant
---
to that certain Amended and Restated Stockholders Agreement (the "Stockholders
------------
Agreement") among OpenTV Corp. a company incorporated in the British Virgin
---------
Islands ("OTV"), OTV Holdings Limited, a company incorporated in the British
---
Virgin Islands ("OTVH"), Sun, SSI and OpenTV, Inc., a Delaware corporation (the
----
"Company").
-------
This Guaranty shall be construed in accordance with and governed by
the laws of the State of California. Guarantor (i) hereby irrevocably submits to
the exclusive jurisdiction of the state courts of the State of California or the
United States District Court located in the State of California for the purpose
of any action, claim, cause of action or suit (in contract, tort or otherwise),
inquiry, proceeding or investigation arising out of or based upon this Guaranty
or relating to the subject matter hereof, (ii) 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, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that any such proceeding brought
in one of the above-named courts is improper, or that this Guaranty or the
subject matter hereof may not be enforced in or by such court and (iii) hereby
agrees not to commence or maintain any action, claim, cause of action or suit
(in contract, tort or otherwise), inquiry, proceeding or investigation arising
out of or based upon this Guaranty or relating to the subject matter hereof
other than before one of the above-named courts nor to make any motion or take
any other action seeking or intending to cause the transfer or removal of any
such action, claim, cause of action or suit (in contract, tort or otherwise),
inquiry, proceeding or investigation to any court other than one of the above-
named courts whether on the grounds of inconvenient forum or otherwise.
Guarantor hereby consents to service of process in any such proceeding in any
manner permitted by California law, and agrees that service of process by
registered or certified mail, return receipt requested, at its address specified
below is reasonably calculated to give actual notice.
<PAGE>
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed
by its duly authorized officer as of this 23rd day of October 1999.
GUARANTOR
SUN MICROSYSTEMS, INC.
By:__________________________
Title:_______________________
-2-
<PAGE>
SCHEDULE 2: Form of Guaranty
GUARANTY
--------
For good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, MIH Limited, a British Virgin Islands corporation
("MIH Ltd.") hereby unconditionally and irrevocably guarantees the full,
--------
complete and timely performance of all obligations, covenants and agreements of
OpenTV Corp., a British Virgin Islands corporation ("OTV"), contained in or made
---
pursuant to that certain Amended and Restated Stockholders Agreement (the
"Stockholders Agreement") among OTV, OTVH, Sun Microsystems, Inc., a Delaware
-----------------------
corporation ("Sun"), Sun TSI Subsidiary, Inc. ("SSI") and OpenTV, Inc., a
--- ---
Delaware corporation (the "Company").
-------
This Guaranty shall be construed in accordance with and governed by
the laws of England. Guarantor (i) hereby irrevocably submits to the exclusive
jurisdiction of the courts of England for the purpose of any action, claim,
cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation arising out of or based upon this Guaranty or relating to the
subject matter hereof, (ii) 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, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that any such proceeding brought in one of
the above-named courts is improper, or that this Guaranty or the subject matter
hereof may not be enforced in or by such court and (iii) hereby agrees not to
commence or maintain any action, claim, cause of action or suit (in contract,
tort or otherwise), inquiry, proceeding or investigation arising out of or based
upon this Guaranty or relating to the subject matter hereof other than before
one of the above-named courts nor to make any motion or take any other action
seeking or intending to cause the transfer or removal of any such action, claim,
cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation to any court other than one of the above-named courts whether on
the grounds of inconvenient forum or otherwise. Guarantor hereby consents to
service of process in any such proceeding in any manner permitted by English
law, and agrees that service of process by registered or certified mail, return
receipt requested, at its address specified below is reasonably calculated to
give actual notice.
<PAGE>
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed
by its duly authorized officer as of this 23rd day of October 1999.
GUARANTOR
MIH LIMITED
By:__________________________
Title:_______________________
2