Investment Agreement [Amendment No. 3] - TiVo Inc. and America Online Inc.
THIRD AMENDMENT TO INVESTMENT AGREEMENT
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This Third Amendment, dated as of March 28, 2002 (this "Third Amendment"),
to the Investment Agreement, dated as of June 9, 2000, as amended by the First
Amendment, dated as of September 11, 2000, and the Second Amendment, dated as of
January 30, 2001 (collectively, the "Investment Agreement") is made by and
between TiVo Inc., a Delaware corporation (the "Company"), and America Online,
Inc., a Delaware corporation (the "Purchaser"). Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Investment
Agreement.
WHEREAS, Section 7.8 of the Investment Agreement provides for the amendment
of the Investment Agreement upon the written consent of the Company and the
Purchaser;
WHEREAS, the Company and the Purchaser desire to amend certain provisions
of the Investment Agreement;
NOW THEREFORE, the parties hereto agree as follows:
1. Amendment to Section 1.4(b). Section 1.4(b) of the Investment Agreement
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is hereby amended by deleting such section in its entirety and substituting
therefore the following:
"(b) If (i)(x) the bona fide commercial release and deployment ("Set
Top Box Launch") of the Integrated Product (as defined in the Commercial
Agreement) has not occurred by December 31, 2001, or such later date as may
be mutually agreed by the Company and the Purchaser pursuant to Section 3.6
of the Commercial Agreement or otherwise (the "Planned Launch Date"), and
(y) the Purchaser has not committed a Material Breach (as defined in the
Commercial Agreement) of the Commercial Agreement that has not been cured
or waived at such time, or (ii) the Company breaches its obligations
pursuant to Section 6.9, Section 6.10 or Section 6.13 of this Agreement
(collectively, the "Financial Covenants"), then the Purchaser shall have
the option (the "Put Option"), exercisable for a period of one hundred
(100) days following the Planned Launch Date or each such breach, as the
case may be, subject to the further provisions set forth herein, to require
the Company, exercisable by written notice to such effect to the Company,
to repurchase that number of Preferred Shares having an initial liquidation
value equal to the amount of the Escrowed Funds at such time (excluding any
interest included therein) (the "Put Amount") and, if all the Preferred
Shares then outstanding have an aggregate initial liquidation value of less
than the Put Amount, then the Purchaser may also require the Company to
repurchase a number of shares of Common Stock held by the Purchaser having
a value (calculated as the product of the number of shares of Common Stock
and the Common Stock Price paid by the Purchaser) equal to the difference
between the aggregate initial liquidation value of the Preferred Shares, if
any, and the Put Amount. The aggregate purchase price for the repurchase of
Shares pursuant to this Section 1.4(b) shall be deemed paid by the release
to the Purchaser of all
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the Escrowed Funds (including all interest included therein); provided that
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the amount of the interest earned on funds deposited into the Escrow
Account to be released to the Purchaser shall be reduced by the amount of
dividends actually paid in cash to the Purchaser on the Preferred Shares,
subject to a maximum equal to the amount of all such interest.
Notwithstanding the foregoing, in the event that the Set Top Box Launch
occurs after the Planned Launch Date, but prior to the exercise of the Put
Option, the Put Option under clause (i) above shall immediately expire and
be of no further force of effect.
In the event that the Put Option is exercised in accordance with the
terms of this Section 1.4(b), the closing of such repurchase shall occur as
soon as practicable following delivery of the Purchaser's notice of
exercise, subject to the receipt of necessary governmental approvals. The
Company agrees to use its best efforts to obtain all such governmental
approvals and take all such other actions as shall be required to
consummate such repurchase. At such closing, the Purchaser shall deliver to
the Company certificates representing the Shares to be repurchased and the
Company shall deliver to the Purchaser and the Escrow Agent under the
Escrow Agreement any notice of release or other instrument reasonably
requested by either of them to effectuate the release of the Escrowed Funds
(including all interest earned thereon, subject to the proviso in the
second sentence of this Section 1.4(b)) in accordance with the terms of the
Escrow Agreement and this Section 1.4(b). It is agreed that, in the event
the Purchaser is entitled to exercise the Put Option pursuant to clause
(ii) of the first sentence of this Section 1.4(b), such exercise shall be
in addition to and without limiting any other remedy or right, whether at
law or equity, that the Purchaser may have as a result of the breach of a
Financial Covenant.
2. Counterparts. This Third Amendment may be executed simultaneously
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or in any number of counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same instrument.
3. Effective Date; No Other Amendments. Each of the parties hereto
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agrees that the amendment to the Investment Agreement contained herein
shall be effective as of the date and year first above written upon
execution of this Third Amendment by each party hereto. Except as expressly
amended hereby, the provisions of the Investment Agreement are hereby
ratified and confirmed by the parties and shall remain in full force and
effect. This Third Amendment shall not constitute a waiver or alteration of
any of the Purchaser's or the Company's other rights and obligations under
the Investment Agreement or any other agreement between the Purchaser and
the Company. All references in the Investment Agreement to "this Agreement"
shall be read as references to the Investment Agreement, as amended by the
First Amendment, the Second Amendment and this Third Amendment.
4. Construction and Governing Law. This Third Amendment shall be
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construed together with, and as a part of, the Investment Agreement and
shall be governed in all respects by the laws of the State of New York as
such laws are applied to agreements to be performed entirely in such state.
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IN WITNESS WHEREOF, each of the undersigned has executed this Third
Amendment dated as of the date first written above.
TIVO INC.
By: /s/ Matthew P. Zinn
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Name: Matthew P. Zinn
Title: Vice President & General Counsel
AMERICA ONLINE, INC.
By: /s/ Lynda Clarizio
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Name: Lynda Clarizio
Title: Senior Vice President
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