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STOCK PURCHASE & EXCHANGE Agreement

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Sectors: Media, Telecommunications
Governing Law: Delaware, View Delaware State Laws
Effective Date: August 01, 1996
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EXHIBIT 10.03



AT HOME CORPORATION



STOCK PURCHASE AND EXCHANGE AGREEMENT



August 1, 1996





TABLE OF CONTENTS

-----------------



Page

----

1. Purchase, Sale and Exchange of Stock...............................................

1.1 Sale and Issuance of Series A Convertible Preferred...........................

Stock and Series K Convertible Preferred Stock................................

1.2 Exchange of Shares of Series T Preferred Stock for Series A Preferred.........

1.3 Closing.......................................................................



2. Representations, Warranties and Covenants of the Company...........................

2.1 Organization, Good Standing and Qualification.................................

2.2 Restated Certificate..........................................................

2.3 Restated Bylaws...............................................................

2.4 Capitalization................................................................

2.5 Outstanding Securities........................................................

2.6 Current Board.................................................................

2.7 Subsidiaries..................................................................

2.8 Authorization.................................................................

2.9 Consents and Approvals; No Conflict...........................................

2.10 Valid Issuance of Purchased and Conversion Shares.............................

2.11 No Registration Required......................................................

2.12 Litigation....................................................................

2.13 Status of Proprietary Assets and Agreements...................................

2.14 Registration Rights...........................................................

2.15 Title to Property and Assets..................................................

2.16 Financial Statements; Undisclosed Liabilities;................................

No Material Adverse Changes................................................

2.17 Disclosure....................................................................

2.18 ERISA Plans...................................................................

2.19 Tax Returns and Payments......................................................

2.20 Labor Agreements and Actions..................................................

2.21 Governmental Consents.........................................................

2.22 Actions Requiring Certain Pre-Closing Consents................................

2.23 Brokers or Finders............................................................

2.24 Registration Rights Agreement.................................................

2.25 Stockholders' Agreement.......................................................

2.26 Reasonable Efforts............................................................

2.27 Additional Issuances of Preferred Stock.......................................

2.28 Voting Agreements.............................................................



3. Representations, Warranties and Covenants of the Purchasers........................

3.1 Experience....................................................................

3.2 Investment....................................................................

3.3 Accredited Purchaser Status...................................................

3.4 Restricted Securities.........................................................



3.5 Authorization...................................................................

3.6 Consents and Approvals; No Conflict.............................................

3.7 Disclosure of Information.......................................................

3.8 Information Concerning Purchaser................................................

3.9 Brokers or Finders..............................................................

3.10 Registration Rights Agreement...................................................

3.11 Stockholders' Agreement.........................................................

3.12 Reasonable Efforts..............................................................



4. Additional Representations of the KPCB Purchasers....................................



5. Legends; Notations...................................................................



6. Hart-Scott-Rodino Act................................................................



7. Conditions to the Purchasers' Obligations at Closing.................................

7.1 Correctness of Representations and Warranties...................................

7.2 Performance of Agreements.......................................................

7.3 Restated Certificate............................................................

7.4 Restated Bylaws.................................................................

7.5 Securities Exemption............................................................

7.6 No Material Litigation..........................................................

7.7 Government Approvals and Consents...............................................

7.8 Proceedings and Documents.......................................................

7.9 Board of Directors..............................................................

7.10 Opinion of Company Counsel......................................................

7.11 Stockholders' Agreement.........................................................

7.12 Registration Rights Agreement...................................................

7.13 Other...........................................................................

7.14 Simultaneous Closing............................................................

7.15 Delivery of Stock Certificates..................................................



8. Conditions to Obligations of Comcast Sub and Cox Sub at Closing;.....................

Covenants of TCI Sub and the KPCB Purchasers........................................



9. Conditions to the Company's Obligations at Closing...................................

9.1 Correctness of Representations and Warranties...................................

9.2 Performance of Agreements.......................................................

9.3 No Material Litigation..........................................................

9.4 Restated Certificate............................................................

9.5 Restated Bylaws.................................................................

9.6 Securities Exemption............................................................

9.7 Government Approvals and Consents...............................................

9.8 Proceedings and Documents.......................................................

9.9 Stockholders' Agreement.........................................................

9.10 Registration Rights Agreement...................................................



9.11 Simultaneous Closing...........................................................

9.12 Payment of Purchase Price......................................................



10. Miscellaneous.......................................................................

10.1 Governing Law..................................................................

10.2 Survival.......................................................................

10.3 Successors and Assigns.........................................................

10.4 Limitation on Rights of Others.................................................

10.5 Entire Agreement; Amendment....................................................

10.6 Notices, Etc...................................................................

10.7 Delays or Omissions............................................................

10.8 Expenses.......................................................................

10.9 Counterparts...................................................................

10.10 Severability..................................................................

10.11 Obligations Several, Not Joint................................................



EXHIBITS - --------



Exhibit A Certificate of Retirement

Exhibit B Schedule of Exceptions

Exhibit C Second Amended and Restated Certificate of Incorporation

Exhibit D Amended and Restated Bylaws

Exhibit E First Amended and Restated Registration Rights Agreement

Exhibit F Financial Statements

Exhibit G Amended and Restated Stockholders' Agreement

Exhibit H-1 and H-2 Opinions of Counsel

Exhibit I Information Concerning Purchasers

Exhibit J Purchasers' Affiliates

Exhibit K Written Consent of Stockholders

SCHEDULES - ---------

Schedule 3.6 Purchaser Consents, Approvals and Conflicts





STOCK PURCHASE AND EXCHANGE AGREEMENT

-------------------------------------



THIS STOCK PURCHASE AND EXCHANGE AGREEMENT ("AGREEMENT") is made as of August 1, 1996, by and among AT HOME CORPORATION, a Delaware corporation (the "COMPANY"), TCI INTERNET HOLDINGS, INC., a Colorado corporation ("TCI SUB"), KLEINER, PERKINS, CAUFIELD & BYERS VII and KPCB INFORMATION SCIENCES ZAIBATSU FUND II, each a California limited partnership and James Clark (each, a "KPCB PURCHASER" and together, the "KPCB PURCHASERS"), COMCAST PC INVESTMENTS, INC., a Delaware corporation ("COMCAST SUB"), and COX TELEPORT PROVIDENCE, INC., a Delaware corporation ("COX SUB"). (Each of the KPCB Purchasers, TCI Sub, Comcast Sub and Cox Sub is referred to hereinafter separately as a "PURCHASER" or together as the "PURCHASERS".)



THE PARTIES HEREBY AGREE AS FOLLOWS:



1. Purchase, Sale and Exchange of Stock.

------------------------------------



1.1 Sale and Issuance of Series AM, Series AT, Series AX and Series K

----------------------------------------------------------------- Convertible Preferred Stock. Subject to the terms and conditions of this - --------------------------- Agreement, (a) the Company agrees to issue and sell to TCI Sub, and TCI Sub agrees to purchase from the Company, at the Closing, 783,000 shares of the Company's Series AT Convertible Participating Preferred Stock, par value $.01 per share (the "SERIES AT PREFERRED"), for an aggregate purchase price of $7,830,000, (b) the Company agrees to issue and sell to the KPCB Purchasers, and the KPCB Purchasers, jointly and severally, agree to purchase from the Company, at the Closing, an aggregate of 233,883 shares/*/ of the Company's Series K Convertible Participating Preferred Stock, par value $.01 per share (the "SERIES K PREFERRED"), for an aggregate purchase price of $2,338,830, (c) the Company agrees to issue and sell to Comcast Sub, and Comcast Sub agrees to purchase from the Company, at the Closing, 727,865 shares of the Company's Series AM Convertible Participating Preferred Stock, par value $.01 per share (the "SERIES AM PREFERRED") for an aggregate purchase price of $7,278,650, and (d) the Company agrees to issue and sell to Cox Sub, and Cox Sub agrees to purchase from the Company, at the Closing, 727,865 shares of the Company's Series AX Convertible Participating Preferred Stock, par value $.01 per share (the "SERIES AX PREFERRED") for an aggregate purchase price of $7,278,650. The Series AM Preferred, the Series AT Preferred and the Series AX Preferred are collectively referred to herein as the "SERIES A PREFERRED."



1.2 Exchange of Shares of Series T Preferred Stock for Series AT

------------------------------------------------------------ Preferred. Subject to the terms and conditions of this Agreement, the Company - --------- agrees to issue to TCI Sub, and TCI Sub agrees to acquire from the Company, at the Closing, 770,000 shares of Series AT Preferred in consideration of and in exchange for 770,000 shares/*/ of Series T Preferred Stock, par value $.01 per share ("SERIES T PREFERRED") owned by TCI Sub, which shares of Series T Preferred shall be canceled and shall not be reissued by the Company. Subsequent to the Closing, the Company shall promptly file a Certificate of Retirement in the form of Exhibit A attached hereto (the "CERTIFICATE OF

--------- RETIREMENT") to reduce the number of authorized shares of Series T Preferred to 770,000 shares./*/ (The exchange of shares of Series T Preferred for shares



______________________

* After effecting a 10-to-1 reverse stock split of the Company's outstanding

Series T Preferred and Series K Preferred by filing the Second Amended and

Restated Certificate of Incorporation of the Company. of Series AT Preferred by TCI Sub is referred to herein as the "TCI EXCHANGE." The shares of Series A Preferred and Series K Preferred being acquired pursuant to this Agreement are collectively referred to herein as the "PURCHASED SHARES.")



1.3 Closing. The closing of the purchase, sale and exchange of the

------- Purchased Shares (the "CLOSING") shall take place at the offices of Baker & Botts L.L.P., 599 Lexington Avenue, New York, New York, or such other place as the Company and the Purchasers shall mutually agree, at 10:00 a.m., local time, on a mutually agreed date occurring no later than the 10th day following the satisfaction or waiver of the conditions to Closing set forth in Sections 7, 8 and 9 hereof (other than any such conditions which are capable of being satisfied only as of the Closing), but in no event later than August 15, 1996. The date on which the Closing occurs is referred to herein as the "CLOSING DATE." At the Closing, the Company shall deliver (a) to TCI Sub a certificate or certificates registered in the name of TCI Sub representing 783,000 shares of Series AT Preferred against payment of the purchase price therefor in cash or by wire transfer in immediately available funds and a certificate or certificates registered in the name of TCI Sub representing 770,000 shares of Series AT Preferred against delivery of a certificate or certificates representing 770,000 shares of Series T Preferred duly endorsed for transfer or accompanied by a duly executed Stock Assignment Separate From Certificate, (b) to the KPCB Purchasers certificates registered in the name of the KPCB Purchasers representing an aggregate of 233,883 shares of Series K Preferred (in such relative amounts as the KPCB Purchasers may request) against payment of the purchase price therefor in cash or by wire transfer in immediately available funds, (c) to Comcast Sub a certificate or certificates registered in the name of Comcast Sub representing 727,865 shares of Series AM Preferred against payment of the purchase price therefor in cash or by wire transfer in immediately available funds, and (d) to Cox Sub a certificate or certificates registered in the name of Cox Sub representing 727,865 shares of Series AX Preferred against payment of the purchase price therefor in cash or by wire transfer in immediately available funds.



2. Representations, Warranties and Covenants of the Company. The Company

-------------------------------------------------------- hereby represents and warrants to, and covenants with, each of the Purchasers as follows, except as set forth in the Schedule of Exceptions ("SCHEDULE OF EXCEPTIONS") attached to this Agreement as Exhibit B (which Schedule of

--------- Exceptions shall be deemed to be representations and warranties to the Purchasers by the Company under this Section 2):



2.1 Organization, Good Standing and Qualification. The Company and

--------------------------------------------- the Subsidiary (as hereinafter defined) are corporations duly organized, validly existing and in good standing under the laws of the States of Delaware and California, respectively, and have all requisite corporate power and authority to carry on their respective businesses as currently conducted and as currently proposed to be conducted. The Company and the Subsidiary each have qualified to do business in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business, properties, prospects or financial condition of the Company and the Subsidiary taken as a whole. The Company has delivered to each of the Purchasers true and accurate copies of (i) the Company's Certificate of Incorporation and Bylaws, and (ii) the Subsidiary's Articles of Incorporation and Bylaws, each as amended through, and in effect on, the date hereof. Other than the filing of the Restated Certificate (as defined below) and the adoption of the Restated Bylaws (as defined below), there shall be no amendments to, or other actions taken with respect to, the Certificate of Incorporation or the Bylaws of the Company prior to the Closing.





2.2 Restated Certificate. The Board of Directors of the Company has

-------------------- duly approved and adopted the Second Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Exhibit C (the

--------- "RESTATED CERTIFICATE") pursuant to Section 242 of the Delaware General Corporation Law (the "DGCL") and has obtained or will obtain prior to the Closing the approval of the Restated Certificate by the required vote of the Company's stockholders.



2.3 Restated Bylaws. The Board of Directors of the Company has duly

--------------- approved and adopted the Amended and Restated Bylaws of the Company in the form attached hereto as Exhibit D (the "RESTATED BYLAWS") pursuant to Section 109 of

--------- the DGCL and has obtained or will obtain prior to the Closing the approval of the Restated Bylaws by the required vote of the Company's stockholders.



2.4 Capitalization. Upon the filing of the Restated Certificate with

-------------- the Secretary of State of Delaware, the authorized capital stock of the Company shall consist of 90,138,830 shares of common stock, par value $.01 per share (the "COMMON STOCK"), and 15,292,613 shares of preferred stock, par value $.01 per share ("PREFERRED STOCK"). The authorized shares of Common Stock shall be allocated as follows: (a) 75,000,000 shares shall be designated as "Series A Common Stock," (b) 7,700,000 shares shall be designated as "Series B Common Stock," and (c) 7,438,830 shares shall be designated as "Series K Common Stock." The authorized shares of Preferred Stock shall be allocated as follows: (i) 727,865 shares shall be designated as Series AM Preferred, (ii) 1,553,000 shares shall be designated as Series AT Preferred, (iii) 727,865 shares shall be designated as Series AX Preferred, (iv) 743,883 shares shall be designated as Series K Preferred, (v) 1,540,000 shares shall be designated as Series T Preferred and (vi) 10,000,000 shares shall be undesignated as to series and shall be issuable pursuant to authority granted in the Restated Certificate to the Board of Directors (the "SERIES PREFERRED STOCK"). Prior to the Closing, the Company shall have reserved and shall thereafter at all times keep reserved (x) such number of shares of Series B Common Stock as is sufficient to provide for the conversion of the Series T Preferred outstanding from time to time, (y) such number of shares of Series K Common Stock as is sufficient to provide for the conversion of the Series K Preferred outstanding from time to time, and (z) such number of shares of Series A Common Stock as is sufficient to provide for the conversion of the Series A Preferred outstanding from time to time, the Series B Common Stock outstanding from time to time or issuable upon conversion of the Series T Preferred, and the Series K Common Stock outstanding from time to time or issuable upon conversion of the Series K Preferred. (The shares of Series A Common Stock, Series B Common Stock and Series K Common Stock issuable upon conversion of the Purchased Shares and the shares of Series A Common Stock issuable upon conversion of such shares of Series B Common Stock and Series K Common Stock are sometimes referred to herein as the "CONVERSION SHARES.") The authorized capital stock of the Subsidiary consists of 10,000,000 shares of common stock, without par value, and 5,000,000 shares of preferred stock, without par value.



2.5 Outstanding Securities. As of the date of this Agreement, the

---------------------- outstanding securities of the Company consist of 3,411,000 shares of Series A Common Stock, 5,100,000 shares of Series K Preferred (before effecting a 10-to-1 reverse stock split by filing the Restated Certificate), 15,400,000 shares of Series T Preferred (before effecting a 10-to-1 reverse stock split by filing the Restated Certificate) and options to purchase an aggregate of 1,865,750 shares of Series A Common Stock. The Company has reserved for issuance pursuant to its



Incentive Stock Option Plan and its 1996 Incentive Stock Option Plan No. 2 (collectively, the "OPTION PLANS") an aggregate of 6,500,000 shares of Series A Common Stock for issuance to employees, officers, directors, consultants and independent contractors of the Company (less the number of shares of Series A

---- Common Stock purchased outside the Option Plans by employees, officers, directors, consultants and independent contractors of the Company, whether such purchases occur before and after the dates of the Plans, unless specifically provided otherwise in a resolution adopted by the Company's Board of Directors at the time it approves the sale of Series A Common Stock to such employee, officer, director, consultant or independent contractor, and plus the number of

---- shares of Series A Common Stock repurchased by the Company upon termination of any such person's employment or service relationship with the Company or upon exercise of the Company's right of first refusal upon transfers by such persons); the number of shares available for issuance under the Option Plans as of the date of this Agreement is 1,144,250 shares. As of the date of this Agreement, the outstanding securities of the Subsidiary consist of one (1) share of common stock, which is owned by the Company. Except as expressly provided herein, in that certain August 29, 1995 Stockholders' Agreement among the Company, TCI Sub and the KPCB Purchasers, as amended as of May 9, 1996 (the "1995 STOCKHOLDERS' AGREEMENT"), in the Restated Certificate and in the other Transaction Agreements (as defined below), there are no other outstanding rights, options, warrants, preemptive rights, rights of first refusal or similar rights for the purchase or acquisition from the Company or the Subsidiary of any securities of the Company or the Subsidiary nor are there any commitments to issue or execute any such rights, options, warrants, preemptive rights or rights of first refusal.



2.6 Current Board. Immediately prior to the Closing, the Company's

-------------- Board of Directors consists of the following persons, each of whom has been duly elected or appointed in accordance with the Bylaws of the Company: L. John Doerr, Bruce Ravenel, Larry Romrell, Thomas A. Jermoluk, James Barksdale and William Randolph Hearst III; and the Subsidiary's Board of Directors consists of the following person who has been duly elected or appointed in accordance with the Bylaws of the Subsidiary: Thomas A. Jermoluk.



2.7 Subsidiaries. Except for its wholly-owned subsidiary athome.net,

------------ a California corporation (the "SUBSIDIARY"), the Company does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, association or other entity.



2.8 Authorization. The Company has full power and authority to

------------- execute, deliver and perform its obligations under each of this Agreement, the Registration Rights Agreement (as defined in Section 2.14 below), the Stockholders' Agreement (as defined in Section 2.25 below), and those provisions of Article VII of the Term Sheet, dated June 4, 1996, as amended as of the Closing Date, among the parties hereto and certain of their affiliates (the "TERM SHEET"), including any other provisions or definitions in other sections of the Term Sheet which are referenced in Article VII (such provisions are hereafter collectively the "MASTER DISTRIBUTION AGREEMENT"; provided that if the matters set forth in Article VII of the Term Sheet
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