UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
INTERACTIVE NETWORK, INC.
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(Name of Issuer)
Common Stock, No par value 45837P 108
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(Title of Class of Securities) (CUSIP Number)
Richard Cotton, Esq., National Broadcasting Company, Inc., 30 Rockefeller
Plaza, New York, New York, 10112 (212) 664-4000
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
April 23, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following
box / /.
Page 1 of 43 Pages
<PAGE>
SCHEDULE 13D
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CUSIP No. 45837P 108 PAGE 2 OF 43 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NATIONAL BROADCASTING COMPANY, INC. 14-1682529
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
NUMBER OF 3,645,575
SHARES ------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING ------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
3,645,575
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
3,645,575
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.4%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP No. 45837P 108 PAGE 3 OF 43 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NATIONAL BROADCASTING COMPANY HOLDING, INC. 13-3448662
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
NOT APPLICABLE
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
NUMBER OF DISCLAIMED (SEE 11 BELOW)
SHARES ------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING ------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
DISCLAIMED (SEE 11 BELOW)
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
BENEFICIAL OWNERSHIP OF ALL SHARES DISCLAIMED BY NATIONAL
BROADCASTING COMPANY HOLDING, INC.
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
NOT APPLICABLE (SEE 11 ABOVE)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP No. 45837P 108 PAGE 4 OF 43 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
GENERAL ELECTRIC COMPANY 14-0689340
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
NOT APPLICABLE
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
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7 SOLE VOTING POWER
DISCLAIMED (SEE 11 BELOW)
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH DISCLAIMED (SEE 11 BELOW)
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
BENEFICIAL OWNERSHIP OF ALL SHARES DISCLAIMED BY GENERAL ELECTRIC
COMPANY
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
NOT APPLICABLE (SEE 11 ABOVE)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 1 to Schedule 13D relates to the shares of Common
Stock, no par value (the "Common Stock"), of Interactive Network, Inc. (the
"Company"), a corporation organized under the laws of the State of California.
The principal executive offices of the Company are located at 1161 Old County
Road, Belmont, California 94002.
ITEM 2. IDENTITY AND BACKGROUND.
This Amendment No. 1 to Schedule 13D amends and restates in its
entirety the Schedule 13D originally filed by National Broadcasting Company,
Inc. ("NBC") and is filed on behalf of NBC, National Broadcasting Company
Holding, Inc. ("NBCH") and General Electric Company ("GE"). NBC, NBCH, and GE
are herein referred to as the "Reporting Persons". NBC is a wholly-owned
subsidiary of NBCH, who in turn is a wholly-owned subsidiary of GE. An agreement
among the Reporting Persons with respect to the filing of this statement is
attached hereto as Exhibit 1.
NBC is a Delaware corporation with principal executive offices located
at 30 Rockefeller Plaza, New York, New York 10112. The principal business
activities of NBC are the operation of television and cable broadcast networks,
internet properties and television stations. NBCH is a Delaware corporation with
principal executive offices located at 30 Rockefeller Plaza, New York, New York
10112. NBCH is a holding company for NBC. GE is a New York corporation with its
principal executive offices located at 3135 Easton Turnpike, Fairfield,
Connecticut 06431. GE engages in providing a wide variety of industrial,
commercial and consumer products and services.
The name, business address, present principal occupation or employment,
and citizenship of each director and executive officer of NBC, NBCH and GE are
set forth on Schedules A, B, and C attached hereto, respectively.
Except as set forth on Schedule D hereto, during the last five years
none of the Reporting Persons, nor, to the best of their knowledge, any of the
their directors or executive officers has been (i) convicted of any criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgement, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to federal or state securities laws or finding
any violation with respect to such laws.
This statement is being filed while the Reporting Persons are in the
process of verifying information required herein from their respective
directors, executive officers or trustees. If the Reporting Person obtains
<PAGE>
information concerning such individuals which would cause a material change in
the disclosure contained herein, an amendment to this statement will be filed
that will disclose such change.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
NBC acquired the Secured Note and the Funding Warrants (each as defined
in Item 4 herein) purchased by it for $5,250,000, consisting of $4,750,000 in
cash and the cancellation of $500,000 in outstanding indebtedness of the
Company. The funds for the purchase of the Secured Note and the Funding Warrants
purchased by it came from NBC's working capital. NBC also acquired the
Convertible Note (as defined in item 5 herein) for $1,250,000 in cash and two
notes for an aggregate of $500,000 in cash (which were used as part of the
consideration for the Secured Notes acquired by NBC) in August 1994, the funds
for which also came from NBC's working capital.
In connection with certain litigation involving the company, a Mutual
Release and Settlement Agreement, dated as of July 10, 1998 (the "Settlement
Agreement"), was executed among the Company, Tele-Communications, Inc. ("TCI"),
TCI Communications, Inc. (TCIC"), TCI Development Corporation, Inc. ("TCID"),
TCI Programming Holding Company III ("TCI Programming"), TCI Cablevision of
California, Inc. ("TCI Cablevision"), Gary S. Howard ("Howard", and collectively
with TCI, TCIC, TCID, TCI Programming and TCI Cablevision, the "TCI Parties"),
NBC, Sprint Corporation ("Sprint") and Motorola, Inc. ("Motorola"). Pursuant to
the Settlement Agreement, NBC agreed to accept additional shares of Common Stock
of the Company in consideration for the cancellation by NBC of certain
outstanding indebtedness of the Company owed to NBC, at a price per share to be
determined by the Board of Directors of the company. To effect this exchange,
the Settlement Agreement provided for the execution of an Exchange Agreement,
executed on April 15, 1999 (the "Exchange Agreement"), among TCI Programming,
TCID, NBC, Sprint and Motorola (each a "Holder" and collectively referred to as
the "Holders"). Pursuant to the Exchange Agreement each Holder exchanged all of
the promissory notes of the Company held by it for newly issued shares of Common
Stock (the "Exchange Shares"). The closing of the Exchange Agreement occurred
April 23, 1999 and NBC received 1,902,279 Exchange Shares thereunder.
ITEM 4. PURPOSE OF THE TRANSACTION.
Background. On September 26, 1994, NBC, TCI Programming, a wholly-owned
subsidiary of TCI, Motorola and Sprint (collectively, the "Investors"), pursuant
to a Note Purchase Agreement dated as of September 19, 1994 among the Company
and the Investors (the "Note Purchase Agreement") purchased from the Company
approximately $24 million aggregate principal amount of its 12% Senior Secured
Convertible Notes due 1996 (the "Secured Notes") and warrants to purchase Common
Stock (the "Funding Warrants"). The Note Purchase Agreement was entered into to
provide secured financing in connection with the Company's general business
<PAGE>
operations, including the expansion of the current test marketing program of the
Company's interactive game playing service. NBC purchased a Secured Note in the
original principal amount of $5,250,000 and Funding Warrants to purchase 57,065
shares of Common Stock.
The Secured Notes accrued interest at 12% per annum, payable in
additional notes having the same terms as the Secured Notes, would have matured
on the second anniversary of their issue date, and were secured by a first
priority lien on substantially all of Interactive Network's assets. The Secured
Notes were convertible in whole or in part at the option of the holder thereof
at any time prior to the Mandatory Conversion Date (as defined below), and on
the Mandatory Conversion Date all then outstanding Secured Notes would have been
automatically converted. In each case, the Secured Notes were convertible into
shares of cumulative voting participating preferred stock of the Company (the
"Preferred Stock") which in turn was convertible into shares of Common Stock, at
an initial effective conversion rate of $4.00 per share of Common Stock. The
Preferred Stock was entitled to cumulative dividends at a rate of 12% per annum,
payable in additional shares of Preferred Stock, and to vote together with the
holders of the Common Stock on an as-converted basis, except as otherwise
required by law (subject to certain exceptions as set forth in the Note Purchase
Agreement). The Preferred Stock was convertible into Common Stock once the
Company's shareholders approved an amendment to the Company's articles of
incorporation to increase the number of authorized shares of Common Stock (the
"Charter Amendment"). Upon approval and effectiveness of the Charter Amendment,
the Preferred Stock became convertible at the option of the holder, in whole or
in part, into shares of Common Stock at any time prior to the Mandatory
Conversion Date, and, upon the Mandatory Conversion Date and immediately after
the conversion of any outstanding Secured Notes, would have automatically
converted into shares of Common Stock.
The "Mandatory Conversion Date" would have occurred if prior to the
stated maturity date of the Secured Notes (i) the Charter Amendment was filed
and had become effective and (ii) the Company had consummated the sale of shares
of its Common Stock or securities convertible into exchangeable or exercisable
for, or otherwise representing the right to purchase, shares of Common Stock
("Common Stock Equivalents") having aggregate net cash proceeds to the Company
of at least $45,000,000 (the "Target Amount"), subject to certain exclusions.
Until the Mandatory Conversion Date, except in certain circumstances,
if the Company issued additional shares of Common Stock or Common Stock
Equivalents at a price per share that was lower than the effective conversion
rate per share of Common Stock upon the conversion of the Secured Notes and the
Preferred Stock, the applicable conversion rate would have automatically
decreased to such lower price. The number and kind of securities issuable upon
conversion of the Secured Notes and the Preferred Stock was also subject to
adjustment in the event of (i) a merger or consolidation of the Company, a
transfer of all or substantially all of the Company's assets or reclassification
of the Common Stock; (ii) an adjustment in the Company's capital stock in the
event of a stock dividend, stock split, reverse stock split or a
<PAGE>
reclassification not involving the transactions referred to in (i) above; or
(iii) a distribution by the Company to its stockholders of assets, debt
securities, warrants, or other rights to purchase securities.
The Funding Warrants entitled the holder thereof to purchase shares of
Common Stock at any time prior to September 23, 1999 at an exercise price of
$8.00 per share, subject to adjustment in the event of dilutive issuances of
securities by the Company. Until the Mandatory Conversion Date, except in
certain circumstances, if the Company issued additional shares of Common Stock
or Common Stock Equivalents at a price per share that was lower than the
exercise price, the exercise price would have automatically decreased to such
lower price. After the Mandatory Conversion Date, the adjustment for dilutive
issuances was based upon a weighted average formula specified in the Funding
Warrants. The number and kind of securities issuable upon exercise of the
Funding Warrants was also subject to adjustment in the event of a merger, stock
dividend, distribution to all holders of Common Stock or similar event in the
same manner as provided for the Secured Notes and the Preferred Stock. The
Funding Warrants were exercisable in whole or in part.
The Company informed NBC that it sold a number of shares of Common
Stock at an effective price per share of less than $4.00, resulting in the
issuance of additional shares of Common Stock to the Reporting Person pursuant
to the anti-dilution provisions contained in the Note Purchase Agreement and the
Stock Purchase Agreement, as well as increases in the number of shares of Common
Stock ultimately issuable upon conversion of the Secured Notes and the
Convertible Note and upon exercise of the Funding Warrants.
Concurrently with the execution and delivery of the Note Purchase
Agreement, NBC and the Company amended the warrant agreement dated December 21,
1987, as amended (the "NBC Warrant Agreement"), pursuant to which the Company
previously issued three warrants to NBC which, if certain conditions were
satisfied, would have enabled NBC to purchase 5%, 10% and 10%, respectively, of
the outstanding Common Stock on the date of exercise, at a purchase price to be
selected by NBC of either a fixed dollar exercise price or 75% of the then
current fair market value of the Common Stock (the "Original NBC Warrants"). The
amendment provided that the fixed dollar exercise price for these three warrants
was $8.50 per share. In addition, the Company granted to NBC a warrant to
purchase an additional 200,000 shares of Common Stock at a price of $5.625 per
share (the "Additional NBC Warrants"), which warrant was exercisable if NBC
promoted the interactive nature of television programs available in markets
where NBC had an owned and operated station from November 15, 1994 through April
15, 1995. The exercise prices of all of these warrants were subject to
adjustment for certain dilutive issuances of securities by the company.
The Company has advised NBC that in its view the Funding Warrants,
Original NBC Warrants and Additional NBC Warrants have ceased to be effective
under the provisions of the Settlement Agreement and NBC has acknowledged that
it agrees with this result.
<PAGE>
Present Transaction. In August 1995, the Company commenced litigation
(the "Litigation") against the TCI Parties. The Company alleged that the TCI
Parties had sought to acquire the Company's intellectual property by obtaining
liens on the intellectual property through the secured loans made by them,
refusing to honor purported commitments to make further loans and then seeking
to foreclose on the Company's intellectual property when the Company could not
sustain its business without additional funds. The TCI Parties denied the
Company's allegations and TCI Programming, in its capacity as agent for the
Secured Settling Parties (defined below), cross-claimed to foreclose their liens
through the Litigation.
On July 10, 1998, the Company, the TCI Parties, NBC, Sprint, and
Motorola entered into a Mutual Release and Settlement Agreement (the "Settlement
Agreement") with respect to the Litigation and certain other obligations among
the parties thereto. As of the date thereof, TCI, NBC, Sprint and Motorola (the
"Secured Settling Parties") held Secured Notes and Convertible Notes of the
Company. Under the Settlement Agreement, the Company agreed to file a petition
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court
for the Northern District of California (the "Bankruptcy Court"), and the
Secured Settling Parties agreed, upon entry by the Bankruptcy Court of a final
non-appealable order confirming the Company's plan of reorganization (the
"Plan"), to enter into the Exchange Agreement pursuant to which each Secured
Settling Party would exchange all of its Secured Notes and Convertible Notes for
the Exchange Shares and release its security interest in the Company's assets.
In addition, the TCI Parties agreed to pay $10 million to the Company and an
additional $2.5 million to the Company's counsel for the legal services rendered
to the Company. The Exchange Agreement is attached hereto as Exhibit 2. The
Company in turn agreed to release the Settling Parties, and the Settling Parties
agreed to release the Company and each other, from all claims relating to or
arising out of any matter, conduct, transaction or activity involving the
Company and the Settling Parties up until the date of the Settlement Agreement,
including but limited to such matters, conduct, transactions and/or activities
related to the Litigation, any outstanding warrants, including those held by
NBC, and any registration rights of the Settling Parties. The Settlement
Agreement is attached hereto as Exhibit 3.
The Company filed its petition under Chapter 11 of the Bankruptcy Code
on September 14, 1998. The Plan was filed on December 22, 1998 and an amendment
thereto was filed on February 18, 1999. The Bankruptcy Court entered its order
confirming the Plan on April 12, 1999.
NBC acquired the shares of Common Stock of the Company, including the
Exchange Sharer, as an investment to hold in the ordinary course of business and
not with the purpose or effect of causing a change in control of the Company.
NBC intends to review its investment in the Company independently and
on a regular basis and as a result thereof may at any time, or from time to
time, acquire additional securities of the Company or dispose of all or a
<PAGE>
portion of any securities of the Company in the open market or otherwise. Any
such acquisition or disposition would be made in compliance with all applicable
laws and regulations, including Federal securities laws.
Although the foregoing represents the range of activities presently
contemplated by the Reporting Persons with respect to the Company, it should be
noted that the possible activities of the Reporting Persons are subject to
change at any time. Except as set forth above, none of the Reporting Persons has
any present plans or proposals which relate to or would result in any of the
actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The responses of the Reporting Persons to Items 11 through 13 of
the cover pages of this Schedule 13D are incorporated herein by reference. As of
April 26, 1999, NBC beneficially owned in the aggregate 3,645,575 shares of
Common Stock of the Company, representing approximately 9.4% of the outstanding
shares of Common Stock (based on 30,840,441 shares of Common Stock outstanding
as reported in the Company's Annual Report for the year ended December 31, 1998,
plus the additional 7,814,589 shares issued by the Company pursuant to the
Exchange Agreement).
Except as set forth in this Item 5(a), none of the Reporting Persons,
nor, to the best of their knowledge, any of their directors or executive
officers, beneficially owns any shares of Common Stock of the Company.
(b) The responses of the Reporting Persons to (i) Items 7 through 10 of
the cover pages of this Schedule 13D and (ii) Item 5(a) hereof are incorporated
herein by reference.
NBC has the sole power to vote or to direct the voting power of the
shares that it beneficially owns, subject to the Voting Agreement described in
Item 6 below, and it has the sole power to dispose of or direct the disposition
of all of said shares.
Except as set forth in this Item 5(b), none of the Reporting Persons,
nor to the best of their knowledge, any of their directors or executive
officers, presently has the power to vote or to direct the vote or to dispose or
direct the disposition of any of the shares of Common Stock of the Company which
they may be deemed to beneficially own.
(c) Except as set forth in Item 3 hereof, none of the Reporting
Persons, nor, to the best of their knowledge, any of their directors or
executive officers, has effected any transaction in the Common Stock of the
Company during the past 60 days.
(d) Not applicable.
<PAGE>
(e) Not applicable.
Neither the filing of this Schedule 13D of any amendment thereto, nor
anything contained herein is intended as, or should be construed as, an
admission that NBCH or GE is the "beneficial owner" of any shares of Common
Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Persons' response to Item 3 hereof is incorporated herein
by reference.
Pursuant to the Settlement Agreement and the Exchange Agreement, the
Company and the Holders entered into a Voting Agreement dated April 23, 1999
(the "Voting Agreement"), which provides that, except for any matter regarding
David Lockton (including his election to the Board of Directors) and certain
other major events with respect to the Company, the Holders will vote their
respective Exchange Shares as directed by a committee of three independent
persons (the "Committee"), selected as set forth in the Voting Agreement. The
Committee will initially consist of John Bohrer, Donald Graham and Bruce Bauer.
The Voting Agreement is attached hereto as Exhibit 4.
An agreement among the Reporting Persons with respect to the filing of
this Schedule 13D and any amendments thereto is attached hereto as Exhibit 1.
Except as disclosed in this Item 6, none of the Reporting Persons, nor,
to the best of their knowledge, any of their directors or executive officers,
are parties to any contract, arrangement, understanding or relationship (legal
or otherwise) with respect to the securities of the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Joint Filing Agreement by and among National Broadcasting Company,
Inc., National Broadcasting Company Holding, Inc., and General
Electric Company.
Exhibit 2 Exchange Agreement, dated as of April 15, 1999, by and between
Interactive Network, Inc., TCI Programming Holding Company, III, TCI
Development, LLC (the successor-in-interest to TCI Development
Corporation), National Broadcasting Company, Inc., Sprint
Corporation, and Motorola, Inc.
Exhibit 3 Mutual Release and Settlement Agreement, dated as of July 10,
1998, by and among Interactive Network, Inc., Tele-Communications,
Inc., TCI Communications, Inc., TCI Development Corporation, Inc.,
<PAGE>
TCI Holding Company, III, TCI Cablevision of California, Inc., Gary
S. Howard, National Broadcasting Company, Inc., Sprint Corporation,
and Motorola, Inc., incorporated herein by reference to Exhibit A to
the Plan of Reorganization of Interactive Network, Inc. filed as
Exhibit 1.1 to Interactive Network, Inc.'s Report on Form 8-K filed
on December 24, 1998.
Exhibit 4 Voting Agreement, included as Exhibit 2 to the Exchange Agreement
attached hereto as Exhibit 3.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 4, 1999
NATIONAL BROADCASTING COMPANY, INC.
By: Mark Begor
--------------------------------
Executive Vice President
NATIONAL BROADCASTING COMPANY HOLDING, INC.
By: Mark Begor
--------------------------------
Treasurer
GENERAL ELECTRIC COMPANY
By: Mark Begor
--------------------------------
Vice President
<PAGE>
SCHEDULE A TO SCHEDULE 13D
Filed by National Broadcasting Company, Inc.
NATIONAL BROADCASTING COMPANY, INC.
DIRECTORS AND EXECUTIVE OFFICERS
PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION
- ---- ---------------- --------------------
DIRECTORS
- ---------
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman,
Suite 103 Illinois Tool Works
Lake Forest, IL 60045
Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer,
New York, NY 10105 Avon Products, Inc.
G.G. Michelson Federated Department Stores Former Member of the
151 West 34th Street Board of Directors,
New York, NY 10001 Federated Department
Stores
E. F. Murphy General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company
S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
J.D. Opie General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company
R.S. Penske Penske Corporation Chairman of the Board
13400 Outer Drive, West and President, Penske
Detroit, MI 48239-4001 Corporation
F.H.T. Rhodes Cornell University President Emeritus
3104 Snee Building Cornell University
Ithaca, NY 14853
<PAGE>
A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO
1 Champion Plaza and former Director,
Stamford, CT 06921 Champion International
Corporation
D.A. Warner III J. P. Morgan & Co., Inc. Chairman of the Board,
& Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer,
New York, NY 10260 J.P. Morgan & Co.
Incorporated and Morgan
Guaranty Trust Company
J.F. Welch, Jr. General Electric Company Chairman of the Board
3135 Easton Turnpike and Chief Executive
Fairfield, CT 06431 Officer, General Electric
Company
EXECUTIVE OFFICERS
- ------------------
John F. Welch Jr. National Broadcasting Chairman
Company, Inc.
3135 Easton Turnpike
Fairfield, CT 06431
Robert C. Wright National Broadcasting Chief Executive
Company, Inc. Officer & President
30 Rockefeller Plaza
New York, NY 10112
Mark Begor National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
William Bolster CNBC, Inc. Executive Vice
2200 Fletcher Ave. President
Fort Lee, NJ 07024
Richard Cotton National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
<PAGE>
Duncan Ebersol National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Randel A. Falco National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Andrew Lack National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Donald Ohlmeyer National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Thomas Rogers National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Scott Sassa National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Edward Scanlon National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Patrick Wallace National Broadcasting Executive Vice
Company, Inc. President
30 Rockefeller Plaza
New York, NY 10112
Kassie Canter National Broadcasting Senior Vice President
Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Each person listed above is a citizen of the United States of America except
Andrea Jung, who is a citizen of Canada.
<PAGE>
SCHEDULE B TO SCHEDULE 13D
Filed by National Broadcasting Company Holding, Inc.
NATIONAL BROADCASTING COMPANY HOLDING, INC.
DIRECTORS AND EXECUTIVE OFFICERS
PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION
- ---- ---------------- --------------------
DIRECTORS
- ---------
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman,
Suite 103 Illinois Tool Works
Lake Forest, IL 60045
Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer,
New York, NY 10105 Avon Products, Inc.
G.G. Michelson Federated Department Stores Former Member of the
151 West 34th Street Board of Directors,
New York, NY 10001 Federated Department
Stores
E. F. Murphy General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company
S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
J.D. Opie General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company
R.S. Penske Penske Corporation Chairman of the Board
13400 Outer Drive, West and President, Penske
Detroit, MI 48239-4001 Corporation
F.H.T. Rhodes Cornell University President Emeritus
3104 Snee Building Cornell University
Ithaca, NY 14853
A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO
1 Champion Plaza and former Director,
Stamford, CT 06921 Champion International
Corporation
D.A. Warner III J. P. Morgan & Co., Inc. Chairman of the Board,
& Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer,
New York, NY 10260 J.P. Morgan & Co.
Incorporated and Morgan
Guaranty Trust Company
J.F. Welch, Jr. General Electric Company Chairman of the Board
3135 Easton Turnpike and Chief Executive
Fairfield, CT 06431 Officer, General Electric
Company
EXECUTIVE OFFICERS
- ------------------
Robert C. Wright National Broadcasting Chief Executive
Company, Inc. Officer & President
30 Rockefeller Plaza
New York, NY 10112
Each person listed above is a citizen of the United States of America except
Andrea Jung, who is a citizen of Canada.
<PAGE>
SCHEDULE C TO SCHEDULE 13D
Filed by General Electric Company
GENERAL ELECTRIC COMPANY
DIRECTORS AND EXECUTIVE OFFICERS
PRESENT PRESENT
NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION
- ---- ---------------- --------------------
DIRECTORS
- ---------
J.I. Cash, Jr. Harvard Business School Professor of Business
Baker Library 187 Administration-Graduate
Soldiers Field School of Business
Boston, MA 02163 Administration, Harvard
University
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman,
Suite 103 Illinois Tool Works
Lake Forest, IL 60045
D.D. Dammerman General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer,
Fairfield, CT 06431 General Electric Company;
Chairman and Chief
Executive Officer,General
Electric Capital
Services, Inc.
P. Fresco Fiat SpA Chairman of the Board,
via Nizza 250 Fiat SpA
10126 Torino, Italy
C.X. Gonzalez Kimberly-Clark de Mexico, Chairman of the Board
S.A. de C.V. and Chief Executive
Jose Luis Lagrange 103, Officer,
Tercero Piso Kimberly-Clark de Mexico,
Colonia Los Morales S.A. de C.V.
Mexico, D.F. 11510, Mexico
Andrea Jung Avon Products, Inc. President and Chief
1345 Avenue of the Americas Operating Officer,
New York, NY 10105 Avon Products, Inc.
G.G. Michelson Federated Department Stores Former Member of the
151 West 34th Street Board of Directors,
New York, NY 10001 Federated Department
Stores
E. F. Murphy General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company
S. Nunn King & Spalding Partner, King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
J.D. Opie General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer, General Electric
Company
R.S. Penske Penske Corporation Chairman of the Board
13400 Outer Drive, West and President, Penske
Detroit, MI 48239-4001 Corporation
F.H.T. Rhodes Cornell University President Emeritus
3104 Snee Building Cornell University
Ithaca, NY 14853
A.C. Sigler Champion International Retired Chairman of the
Corporation Board and CEO
1 Champion Plaza and former Director,
Stamford, CT 06921 Champion International
Corporation
D.A. Warner III J. P. Morgan & Co., Inc. Chairman of the Board,
& Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer,
New York, NY 10260 J.P. Morgan & Co.
Incorporated and Morgan
Guaranty Trust Company
J.F. Welch, Jr. General Electric Company Chairman of the Board
3135 Easton Turnpike and Chief Executive
Fairfield, CT 06431 Officer, General Electric
Company
<PAGE>
PRESENT PRESENT
NAME BUSINESS ADDRESS INCIPAL OCCUPATION
- ---- ---------------- ------------------
EXECUTIVE OFFICERS
- ------------------
J.F. Welch, Jr. General Electric Company Chairman of the Board and
3135 Easton Turnpike Chief Executive Officer
Fairfield, CT 06431
P.D. Ameen General Electric Company Vice President and
3135 Easton Turnpike Comptroller
Fairfield, CT 06431
J.R. Bunt General Electric Company Vice President and
3135 Easton Turnpike Treasurer
Fairfield, CT 06431
D.L. Calhoun General Electric Company Senior Vice President -
Nela Park GE Lighting
Cleveland, OH 44122
W.J. Conaty General Electric Company Senior Vice President -
3135 Easton Turnpike Human Resources
Fairfield, CT 06431
D.M. Cote General Electric Company Senior Vice President -
3135 Easton Turnpike GE Appliances
Fairfield, CT 06431
L.S. Edelheit General Electric Company Senior Vice President -
P. O. Box 8 Corporate Research
Schenectady, NY 12301 and Development
B.W. Heineman, Jr. General Electric Company Senior Vice President -
3135 Easton Turnpike General Counsel and
Fairfield, CT 06431 Secretary
J.R. Immelt General Electric Company Senior Vice President -
P.O. Box 414 GE Medical Systems
Milwaukee, WI 53201
G.S. Malm General Electric Company Senior Vice President -
3135 Easton Turnpike Asia
Fairfield, CT 06431
<PAGE>
W.J. McNerney, Jr. General Electric Company Senior Vice President -
1 Neumann Way GE Aircraft Engines
Cincinnati, OH 05215
E.F. Murphy General Electric Company Vice Chairman of the Board
3135 Easton Turnpike and Executive Officer
Fairfield, CT 06431
R.L. Nardelli General Electric Company Senior Vice President -
1 River Road GE Power Systems
Schenectady, NY 12345
R.W. Nelson General Electric Company Vice President -
3135 Easton Turnpike Corporate Financial
Fairfield, CT 06431 Planning and Analysis
J.D. Opie General Electric Company Vice Chairman of the
3135 Easton Turnpike Board and Executive
Fairfield, CT 06431 Officer
G.M. Reiner General Electric Company Senior Vice President -
3135 Easton Turnpike Chief Information Officer
Fairfield, CT 06431
J.G. Rice General Electric Company Vice President -
2901 East Lake Road GE Transportation Systems
Erie, PA 16531
G.L. Rogers General Electric Company Senior Vice President -
1 Plastics Avenue GE Plastics
Pittsfield, MA 01201
K.S. Sherin General Electric Company Senior Vice President -
3135 Easton Turnpike Finance and Chief Financial
Fairfield, CT 06431 Officer
L.G. Trotter General Electric Company Senior Vice President -
41 Woodford Avenue GE Industrial Systems
Plainville, CT 06062
Each person listed above is a citizen of the United States of America except
C.X. Gonzalez, who is a citizen of Mexico, P. Fresco, who is a citizen of Italy,
Andrea Jung, who is a citizen of Canada and G.S. Malm, who is a citizen of
Sweden.
<PAGE>
SCHEDULE D TO SCHEDULE 13D
GE CONVICTIONS WITHIN THE PAST FIVE YEARS
1. Her Majesty's Inspectorate of Pollution v. IGE Medical Systems Limited
(St. Albans Magistrates Court, St. Albans, Hertsfordshire, England,
Case No. 04/00320181)
In April, 1994, IGE Medical Systems Limited (IGEMS), a U.K. subsidiary
of GE Medical Systems, discovered the loss of a radioactive barium source at the
Radlett, England facility. The lost source, used to calibrate nuclear camera
detectors, emits a very low level of radiation. IGEMS immediately reported the
loss as required by the U.K. Radioactive Substances Act. An ensuing
investigation, conducted in cooperation with government authorities, failed to
locate the source. On July 21, 1994, Her Majesty's Inspectorate of Pollution
(HMIP) charged IGEMS with violating the Radioactive Substances Act by failing to
comply with a condition of registration. The Act provides that a registrant like
IGEMS, which "does not comply with a limitation or condition subject to which
(it) is so registered ... shall be guilty of (a criminal) offense." Condition 7
of IGEMS' registration states that it "shall so far as is reasonably practicable
prevent ... loss of any registered source."
At the beginning of trial on February 24, 1995, IGEMS entered a guilty
plea and agreed to pay of fine of (pound)5,000 and assessed costs of
(pound)5,754. The prosecutor's presentation focused primarily on the 1991 change
in internal IGEMS procedures and, in particular, the source logging procedure.
The prosecutor complimented IGEMS' investigation and efforts to locate the
source and advised the court that IGEMS had no previous violations of the
Radioactive Substances Act. He also told the court that the Radlett plant had
been highlighted as an exemplary facility to HMIP inspectors as part of their
training. In mitigation, IGEMS emphasized the significant infrastructure and
expense undertaken by IGEMS to provide security for radiation sources and the
significant effort and expense incurred in attempting to locate the missing
source.
<PAGE>
EXHIBIT INDEX
Exhibit No.
- -----------
Exhibit 1 Joint Filing Agreement by and among National Broadcasting
Company, Inc., National Broadcasting Company Holding, Inc., and
General Electric Company.
Exhibit 2 Exchange Agreement, dated as of April 15, 1999, by and between
Interactive Network, Inc., TCI Programming Holding Company, III,
TCI Development, LLC (the successor-in-interest to TCI
Development Corporation), National Broadcasting Company, Inc.,
Sprint Corporation, and Motorola, Inc.
Exhibit 3 Mutual Release and Settlement Agreement, dated as of July 10,
1998, by and among Interactive Network, Inc.,
Tele-Communications, Inc., TCI Communications, Inc., TCI
Development Corporation, Inc., TCI Holding Company, III, TCI
Cablevision of California, Inc., Gary S. Howard, National
Broadcasting Company, Inc., Sprint Corporation, and Motorola,
Inc., incorporated herein by reference to Exhibit A to the Plan
of Reorganization of Interactive Network, Inc. filed as Exhibit
1.1 to Interactive Network, Inc.'s Report on Form 8-K filed on
December 24, 1998.
Exhibit 4 Voting Agreement, included as Exhibit 2 to the Exchange Agreement
attached hereto as Exhibit 3.
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
This will confirm the agreement by and among the undersigned that the
Schedule 13D filed on or about this date and any amendments thereto with respect
to beneficial ownership by the undersigned of shares of the Common Stock, no par
value, of Interactive Network, Inc. is being filed on behalf of each of the
undersigned in accordance with Rule 13d-2(a) under the Securities Exchange Act
of 1934.
Dated: May 4, 1999
NATIONAL BROADCASTING COMPANY, INC.
By: Mark W. Begor
-------------------------------
Executive Vice President
NATIONAL BROADCASTING COMPANY HOLDING, INC.
By: Mark W. Begor
-------------------------------
Treasurer
GENERAL ELECTRIC COMPANY
By: Mark W. Begor
-------------------------------
Vice President
<PAGE>
EXHIBIT 2
EXCHANGE AGREEMENT
This Exchange Agreement is made and entered into as of the 15th day of
April, 1999, by and between Interactive Network, Inc. ("IN"), a California
corporation, First Party, and TCI Programming Holding Company, III ("TCI
Programming"), TCI Development, LLC ("TCID") (the successor-in-interest to TCI
Development Corporation) (TCI Programming and TCID being hereafter collectively
referred to as "TCI") National Broadcasting Company, Inc. ("NBC"), Sprint
Corporation ("Sprint"), and Motorola, Inc. ("Motorola") (TCI, NBC, Sprint and
Motorola being collectively referred to herein as the "Noteholders"), Second
Parties.
RECITALS
- --------
1. IN and the Noteholders have entered into a Mutual Release and
Settlement Agreement (the "Settlement Agreement") dated as of July 10, 1998,
Section 5 of which contemplates the execution of this Agreement in order to
effectuate the exchange of certain promissory notes of IN held by the
Noteholders for shares of IN's common stock.
2. Pursuant to Section 7 of the Settlement Agreement, IN filed a
petition with the United States Bankruptcy Court of the Northern District of
California under Chapter 11 of the Bankruptcy Code (Case No. 98-34055-DM-11) on
September 14, 1998, and on December 22, 1998, filed its plan of reorganization.
On April 12, 1999, the Bankruptcy Court entered its order (the "Bankruptcy Court
Confirming Order") confirming IN's plan of reorganization (a copy of which has
been delivered to each Noteholder).
Now, therefore, in consideration of the foregoing premises and the
following terms, covenants and conditions, the Parties hereby agree as follows:
1. EXCHANGE OF SECURITIES
1.1 Subject to the terms and conditions set forth herein, the
Noteholders agree to convey to IN at the Closing (as that term is defined below)
for cancellation promissory notes of IN (the "Notes") in the aggregate principal
amounts indicated below, duly endorsed to IN, and in exchange IN agrees to
deliver to each Noteholder a stock certificate of IN issued in the name of each
Noteholder evidencing the number of shares of IN's common stock, no par value,
indicated below after the name of each Noteholder (the aggregate number of
shares issuable hereunder being referred to herein as the "Shares"):
<PAGE>
NUMBER OF SHARES OF IN COMMON
STOCK TO BE RECEIVED
NOTEHOLDER PRINCIPAL AMOUNT OF NOTES BY NOTEHOLDER
- ---------- ------------------------- -------------
TCI Programming 2,600,351 (TCI Programming)
and TCID $10,008,216.80 342,556 (TCID)
NBC 6,503,287.65 1,902,279
Sprint 5,000,000.00 1,484,520
Motorola 5,001,220.88 1,484,883
-------------- ---------
TOTAL: $26,512,723.00 7,814,589
1.2 The Noteholders hereby acknowledge that upon transfer of the Notes
to IN, and upon receipt of the Shares in exchange therefor, all obligations of
IN with respect to the Notes, including principal and interest accrued thereon,
will be deemed cancelled and extinguished.
1.3 The IN Stock Certificates being delivered to the Noteholders in
accordance with Section 1.1 will have endorsed on the face thereof a legend
conspicuously stating: "The shares evidenced hereby are subject to a voting
agreement, dated as of April 23, 1999, and expiring on April 22, 2003, a copy of
which is on file at the office of Interactive Network, Inc."
2. DISBURSEMENT OF ESCROW FUNDS
TCI will cause Wells Fargo Bank, 525 Market Street, San Francisco,
California 94163, contemporaneously with the exchange of securities at the
Closing contemplated in section 1 of this Agreement, to wire transfer (a) to
IN's Account No. 0029106168 at Wells Fargo Bank's IRA Operations Office, 525
Market Street, 4th Floor (Transit No. 121000248), the sum of $10,000,000,
currently held in its Escrow Account No. 6029 108453, plus any accrued interest
or appreciation thereon, and (b) to the Account No. 01-13449-3 maintained in the
name of Cotchett, Pitre & Simon - Money Market Account, at Peninsula Bank of
Commerce, 1001 Broadway, Millbrae, California, the sum of $2,500,000, currently
held in Wells Fargo Bank, Escrow Account No. 6029-108461, plus any accrued
interest or appreciation thereon. TCI will secure the cooperation of Legal
Strategies Group in effecting the aforesaid transfer to Cotchett, Pitre & Simon.
3. RELEASE OF SECURITY INTERESTS
At the Closing, TCI will, contemporaneously with the exchange of
securities contemplated in Section 1 of this Agreement, deliver to IN any
intellectual property of IN and a release of all security liens and/or interests
held by any of the TCI Parties (as defined in the Settlement Agreement), NBC,
Sprint or Motorola in any IN assets, as contemplated in Section 4 of the
Settlement Agreement. Such release will be in the form attached hereto as
Exhibit 1. The Noteholders will execute such further documents and take such
further actions as IN may reasonably require to effectuate the release of liens
on the assets of IN held by or for the benefit of the Noteholders at the time of
Closing.
4. VOTING AGREEMENT
At the Closing, the Noteholders and IN will contemporaneously with the
exchange of securities contemplated in Section 1 of the Agreement enter into a
<PAGE>
voting agreement (the "Voting Agreement") with respect to the shares of IN
common stock issued to the Noteholders pursuant to this Agreement. Such Voting
Agreement will be in the form attached hereto as Exhibit 2.
5. OPINION OF COUNSEL
At the Closing, IN will deliver to the Noteholders an opinion of
Morrison & Foerster LLP, counsel to IN, in the form attached hereto as
Exhibit 3.
6. CLOSING
The closing will be held at 10:00 a.m. Pacific Time, on April 23, 1999,
at the offices of Morrison & Foerster LLP, 425 Market Street, San Francisco,
California 94105, or at such other time and place as the parties shall mutually
agree.
7. REPRESENTATIONS AND WARRANTIES OF THE NOTEHOLDERS
Each of the Noteholders represents and warrants to IN, severally and
not jointly as to itself only and not to any other Noteholder, that:
(a) It is a corporation duly organized, validly existing and in good
standing under the laws of its respective state of incorporation and has full
corporate power to carry on its business as it is now being conducted.
(b) It has full right, power and authority to execute, deliver and
perform this Agreement and the Voting Agreement.
(c) This Agreement and the Voting Agreement each constitutes a valid
and binding agreement of it enforceable in accordance with its terms.
(d) It has good and marketable title to all of the Notes to be
exchanged by it pursuant to Section 1 of this Agreement free and clear of any
lien, claim, charge, restriction, security interest, equity or encumbrance of
any kind whatsoever and, except as otherwise provided in the Notes (which
restrictions are hereby waived), has the complete and unrestricted right, power
and authority to sell, transfer and deliver said Notes.
(e) To the best of its knowledge, the only place where filings are
required to effect the release of liens held by it at the time of Closing on the
assets of IN as contemplated in Section 3 of this Agreement are set forth in
Exhibit 4 attached hereto.
8. REPRESENTATIONS AND WARRANTIES OF IN
IN represents and warrants to the Noteholders that:
(a) IN is a corporation duly organized, validly existing and in good
standing under the laws of the State of California and has full corporate power
to carry on its business as it is now being conducted.
<PAGE>
(b) IN has full right, power and authority to execute, deliver and
perform this Agreement and the Voting Agreement.
(c) This Agreement and the Voting Agreement each constitutes a valid
and binding agreement of IN enforceable in accordance with its terms.
(d) The shares of common stock to be issued to each of the Noteholders
pursuant to Section 1 hereof have been duly authorized by the board of directors
of IN, will be validly issued, fully paid and non-assessable, and will be free
and clear of any lien, claim, charge, restriction, security interest, equity or
encumbrance of any kind whatsoever.
(e) Neither the execution of this Agreement nor the consummation of the
transactions contemplated herein require the consent of, approval of,
declaration of, filing with or registration with any governmental or
non-governmental person, entity or authority, including, without limitation, any
filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
(f) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will (i) not conflict with, or result in
(or with notice or lapse of time result in) a breach of the terms of or default
under or violate (A) any provision of applicable law, or (B) any agreement,
commitment, contract, instrument, order, decree, ruling or injunction to which
IN is subject or a party or by which IN is bound or to which any shares or
properties or assets of IN are subject; (ii) not cause the cancellation,
discontinuance or alteration of any contract or agreement held by IN, or to
which IN is a party; (iii) not result in a default or breach under the
provisions of any note of which IN is the maker or guarantor or under any
indenture, agreement or other instrument to which IN is a party or by which IN
is bound or to which the properties or assets of IN are subject; (iv) not cause
any acceleration of maturity of any loan or material obligations to which IN is
a party or by which IN is bound or with respect to which IN is an obligor or
guarantor; or (v) not result in the creation or imposition of any material lien,
claim, charge, restriction or encumbrance of any kind whatsoever upon, or give
to any other person any interest or right (including any right of termination or
cancellation) in or with respect to, any of the material properties, assets,
business, agreements or contracts of IN or the stock of IN.
(g) The issuance of the shares contemplated by this Agreement is exempt
under Section 3(a)(9) of the Securities Act of 1933.
(h) No commission or other remuneration was or will be paid or given,
directly or indirectly, by IN to any person or entity for soliciting the
exchange of the Notes contemplated by this Agreement.
(i) There are 30,840,441 shares of common stock of IN issued and
outstanding as of the date hereof, immediately prior to consummation of this
Agreement. No shares or rights or options to purchase shares of common stock of
IN have been issued or granted since July 10, 1998, except for options granted
on February 26, 1999, to William H. Green and William L. Groeneveld, as
Directors of the Company, to purchase 25,000 shares and 12,500 shares,
respectively, of the Company's Common Stock at 42 cents per share under the
Company's 1999 Stock Option Plan.
<PAGE>
(j) The number of shares of common stock of IN and/or stock options
held or claimed to be held by David Lockton, or for the benefit of David
Lockton, as disclosed on the stock records of the Company are set forth in
Exhibit 5 attached hereto. IN's current management is not aware of any common
stock and/or stock options of IN held by or for the benefit of any members of
Mr. Lockton's family or any corporations or other entities directly or
indirectly controlled by Mr. Lockton, except as disclosed in Amendment No. 1 to
his Schedule 13D filed with the Securities and Exchange Commission on December
7, 1998, and reflected in Exhibit 5 attached hereto.
9. TCI AS AGENT
The Noteholders hereby appoint TCI as their agent-in-fact to take any
actions and execute any documents for their benefit to carry out the provisions
of this Agreement, including, without limitation, approval of documents as to
form, and executing instruments to effectuate the release of liens on IN's
assets as contemplated in Section 3 of this Agreement, and (except for NBC,
which reserves its right to consider any such waiver) waiver of the requirement
that the Bankruptcy Court's Confirming Order be final and non-appealable,
provided that TCI shall not take any action that would alter the provisions for
exchange of securities set forth in Section 1 of this Agreement or adversely
affect the rights of the Noteholders hereunder or under the Voting Agreement.
The Noteholders will each arrange to receipt for and take possession of the
stock certificates evidencing their shares.
10. MISCELLANEOUS PROVISIONS
(a) No Waiver. No failure to exercise, and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof. No waiver
of any breach of any provision shall be deemed to be a waiver of any proceeding
or succeeding breach of the same or any other provision. No extension of time of
performance of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of the time for performance of any
other obligations or any other acts.
(b) No Assignment. The rights and obligations of this Agreement may not
be assigned in whole or in part without the prior written consent of the other
party hereto.
(c) Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original but all of which together shall constitute one and
the same instrument.
(d) Entire Agreement/Amendments/Titles. This Agreement constitutes the
entire agreement between the parties and no waiver, modification or termination
of the terms hereof shall be valid unless in writing signed by the parties and
only to the extent therein set forth. The capitalized titles to the various
paragraphs and subparagraphs hereof are for convenience only and shall not
effect the construction or interpretation of the actual provisions.
(e) Reaffirmation and Survival of Warranties. The representations and
warranties set forth herein shall be deemed to have been made again at and as of
the Closing, and said representations and warranties shall survive the Closing.
<PAGE>
(f) Expenses. Each party hereto shall pay its own expenses incident to
this Agreement and the transactions contemplated hereby except (i) any
applicable excise, sales, transfer, documentary or other similar taxes, if any,
that may be imposed upon or payable or collectible as a consequence of the
transactions provided for herein shall be payable by the Noteholders and (ii) as
may be provided otherwise in this Agreement.
(g) Notices. All notices, requests, demands and other communications
shall be in writing and shall be deemed to have been duly given only if for
delivery prepaid via a traceable over-business-night delivery service.
To the Noteholders:
TCI:
Tele-Communications, Inc.
9197 South Peoria Street
Englewood, Co 80112
Attn: Gary Howard
with copies to:
Bertram Perkel, Esq.
Baker & Botts
599 Lexington Avenue
New York, NY 10022-6030
and
Joshua R. Floum
Legal Strategies Group
5905 Christie Avenue
Emeryville, CA 94608-1925
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Attn: Thomas S. Rogers, President
NBC Cable and Business Development
with a copy to:
Elizabeth Newell, Esq.
Law Department, Suite 1075E
National Broadcasting Company
30 Rockefeller Plaza
New York, NY 10112
<PAGE>
Motorola, Inc., Law Department
1303 East Algonquin Road
Schaumburg, IL 60196
Attn: Linda B. Valentine, Vice President
and Assistant General Counsel
with a copy to:
Hans Stucki, Esq.
Dickinson-Wright
225 W. Washington Street, Suite 400
Chicago, IL 60606
Sprint Corporation
Department of Law
2330 Shawnee Mission Parkway
Westwood, KS 66205
Attn: Corporate Secretary
or such other addresses as may be subsequently designated by each
of the Noteholders.
To IN:
Bruce Bauer, Chairman of the Board,
President and Chief Executive Officer
Interactive Network, Inc.
1161 Old County Road
Belmont, CA 94002
with a copy to:
Marshall L. Small, Esq.
Morrison & Foerster LLP
425 Market Street
San Francisco, CA 94105
or such other address as may be subsequently designated by IN.
(h) Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of the state of California as applied to contracts
made and performed in such State.
<PAGE>
In witness whereof, IN and the Noteholders have duly executed this
Agreement on the date first set forth above.
Interactive Network, Inc. TCI Programming Holding Company, III
By: Bruce Bauer By: Gary Howard
- ------------------------- -------------------------
Bruce W. Bauer, Gary Howard,
Chairman of the Board, President and
President and Chief Executive Officer
Chief Executive Officer
TCI Development, LLC
First Party
By: Stephen M. Bret
-------------------------
Stephen M. Brett,
Vice President
National Broadcasting Company, Inc.
By: Thomas S. Rogers
-------------------------
Thomas S. Rogers, President
NBC Cable and
Business Development
Sprint Corporation
By: Dan A. Jensen
-------------------------
Motorola, Inc.
By: Linda Valentine
-------------------------
Senior Vice President
Second Parties
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit No. Description
- ----------- -----------
1 Instrument(s) releasing liens on IN assets
2 Voting Agreement
3 Opinion of Morrison & Foerster LLP
4 Places where filings are required to effect release of liens
on IN assets
5 Stockholdings and options of David Lockton
<PAGE>
EXHIBIT 1
- ---------
INSTRUMENTS RELEASING LIENS ON IN ASSETS
- ----------------------------------------
1. Patent Assignment from TCI Programming Holding Company, III, to Interactive
Network, Inc., for filing in U.S. Patent & Trademark Office
2. Trademark Assignment from TCI Programming Holding Company, III, to
Interactive Network, Inc., for filing in U.S. Patent & Trademark Office
3. Patent Assignment from TCI Programming Holding Company, III, to Interactive
Network, Inc., for filing in Canadian Intellectual Property Office
4. California Uniform Commercial Code, Termination Statement executed by TCI
Programming Holding Company, III, for filing with the California Secretary
of State on its own behalf and as agent for NBC, Sprint and Motorola
5. California Uniform Commercial Code Termination Statement executed by TCI
Development, LLC, as successor to TCI Development Corporation, for filing
with the California Secretary of State
6. Assignment and termination of Security Interests and Liens
<PAGE>
EXHIBIT 2
VOTING AGREEMENT
This Voting Agreement is made and entered into as of the 23rd day of
April, 1999, by and between Interactive Network, Inc. ("IN"), a California
corporation, First Party, and TCI Programming Holding Company, III ("TCI
Programming"), TCI Development, LLC ("TCID") (the successor-in-interest to TCI
Development Corporation) (TCI Programming and TCID being hereafter sometimes
collectively referred to as "TCI"), National Broadcasting Company, Inc. ("NBC"),
Sprint Corporation ("Sprint"), and Motorola, Inc. ("Motorola") (TCI, NBC, Sprint
and Motorola being collectively referred to herein as the "Shareholders"),
Second Parties.
RECITALS
1. IN and the Shareholders entered into a Mutual Release and Settlement
Agreement (the "Settlement Agreement"), dated as of July 10, 1998, Section 6 of
which contemplates the execution of this Agreement in connection with
consummation of the Exchange Agreement (the "Exchange Agreement) to which a copy
of this Agreement is attached as Exhibit 2.
2. The Exchange Agreement has been consummated on this date, and each
of the Shareholders has received a certificate evidencing the numbers of shares
of common stock of IN set opposite its name in Section 1 of this Agreement.
Now, therefore, in consideration of the foregoing premises and the
following terms, covenants and conditions, the Parties hereto agree as follows:
1. SHARES SUBJECT TO THIS AGREEMENT
The shares of common stock of IN (hereinafter referred to as the
"Shares") subject to this Agreement are the shares set forth opposite the name
of each Shareholder below issued pursuant to the Exchange Agreement and
initially represented by the stock certificate indicated below:
SHAREHOLDER NUMBER OF SHARES CERTIFICATE NUMBER
- ----------- ---------------- ------------------
TCI Programming 2,600,351
TCID 347,556
NBC 1,902,279
Sprint 1,484,520
Motorola 1,484,883
---------
TOTAL: 7,814,589
<PAGE>
2. AGREEMENT TO VOTE SHARES
Each holder will vote the shares received by it under the Exchange
Agreement as directed by a committee of Independent Persons (as such term is
defined in the Settlement Agreement) who shall consist of three persons and
shall make its decisions by majority vote. The committee shall initially consist
of John Bohrer, Donald Graham and Bruce Bauer. If any of them shall resign, die
or become incapacitated, he shall first be replaced by William Green, if William
Green is then available and willing to serve in such capacity. If Green is
unavailable and/or unwilling, the members of the committee shall, by majority
vote, select a new member or members in their discretion, provided that no new
member shall be David Lockton or a member of David Lockton's family. If the
remaining members are unable to agree upon a new member by majority vote, then
they shall apply to the chief Judge of the Superior Court of Alameda County to
appoint such a member. However, (i) each Holder shall be entitled to vote its
Shares as it determines in its sole discretion with respect to the election of
David Lockton or any of his family members as a director of IN, or any other
matter regarding Mr. Lockton, and (ii) each Holder shall be entitled to vote its
Shares (to the extent stockholder approval or a consent to such action is
required, whether sought by IN or any other person) as it determines in its sole
discretion with respect to the following matters:
(a) any liquidation or dissolution of IN or the filing of any
voluntary bankruptcy petition (other than as contemplated in the
Settlement Agreement);
(b) any sale of IN; or
(c) the declaration and payment of any cash dividends or other
distributions on the common stock or any other cash payments to
stockholders as such.
This Agreement shall constitute a voting agreement within the meaning
of Section 706 of the California Corporations Code.
3. DURATION OF AGREEMENT
This Agreement will terminate on April 22, 2003, unless sooner
terminated upon a breach of its terms.
4. APPLICATION TO TRANSFEREES; LEGENDING OF STOCK CERTIFICATES
The terms of this Agreement shall be binding upon any transferee(s) of
the shares, who, as a condition to transfer of the shares, shall sign a
counterpart of this Agreement evidencing the agreement of the transferee to be
bound by this Agreement. Stock certificates evidencing the shares shall be
evidenced with a conspicuous legend on the face thereof stating: "The shares
evidenced hereby are subject to a voting agreement dated as of April 23, 1999,
and expiring on April 22, 2003, a copy of which is on file at the office of
Interactive Network, Inc." Each of the Second Parties reserves the right upon 5
business days prior written notice to the other Second Parties and the Company
to assert under Section 12.2 of the Settlement Agreement that transferees of its
shares may not be bound by this Agreement.
<PAGE>
5. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
an original but all of which together shall constitute one and the same
instrument.
In witness whereof, IN and the Shareholders have duly executed this
Agreement on the date first set forth above.
Interactive Network, Inc. TCI Programming Holding Company, III
BY: __________________________ BY: __________________________
BRUCE W. BAUER, GARY HOWARD,
CHAIRMAN OF THE BOARD, PRESIDENT AND
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CHIEF EXECUTIVE OFFICER
TCI Development LLC
First Party
BY: __________________________
STEPHEN M. BRETT,
VICE PRESIDENT
National Broadcasting Company, Inc.
BY: __________________________
THOMAS S. ROGERS, PRESIDENT
NBC CABLE AND
BUSINESS DEVELOPMENT
Sprint Corporation
BY: __________________________
Motorola, Inc.
BY: __________________________
Second Parties
<PAGE>
EXHIBIT 3
April 23, 1999
TCI Programming Holdings, III
TCI Development, LLC
National Broadcasting Company, Inc.
Sprint Corporation
Motorola, Inc.
Re: Interactive Network, Inc.
Mesdames and Gentlemen:
This opinion is furnished to you pursuant to Section 5 of the Exchange
Agreement, dated as of April 15, 1999, between you and Interactive Network, Inc.
(the "Company").
We have examined originals or copies of the following documents (the
"Documents"):
(i) Exchange Agreement dated as of April 15, 1999, between you
and the Company (the "Exchange Agreement");
(ii) Amended and Restated Articles of Incorporation of the
Company, filed on November 14, 1991 with the California Secretary of
State, and Certificate of Amendment of Amended and Restated Articles of
Incorporation of the Company, filed on May 26, 1995 with the California
Secretary of State;
(iii) Resolutions of Board of Directors of the Company, dated
December 16, 1998, and resolutions of Executive Committee of Board of
Directors of the Company, dated March 26, 1999; and
(iv) Order confirming the Company's Chapter 11 plan of
reorganization, filed on April 12, 1999, by the United States
Bankruptcy Court for the Northern District of California (the "Order").
Unless otherwise defined herein, terms defined in the Documents shall have the
same meanings herein.
In addition, we have examined such records, documents, certificates of
public officials and of the Company, made such inquiries of officials of the
Company, and considered such questions of law as we have deemed necessary for
the purpose of rendering the opinions set forth herein.
We have assumed the genuineness of all signatures and the authenticity
of all items submitted to us as originals and the conformity with originals of
all items submitted to us as copies. In making our examination of the Documents,
<PAGE>
we have assumed that each party to one or more of the Documents other than the
Company has the power and authority to execute and deliver, and to perform and
observe the provisions of the Documents, and has duly authorized, executed and
delivered such Documents, and that such Documents constitute the legal, valid
and binding obligations of such party.
Our opinion in paragraph (a) below as to the good standing of the
Company is based solely upon a certificate of public officials in the state
named in that paragraph. Our opinion in paragraph (d) below with respect to
preemptive rights is based upon the assumption that by executing that certain
Mutual Release and Settlement Agreement, dated as of July 10, 1998, between you
and the Company (the "Settlement Agreement"), and by executing the Exchange
Agreement, Tele-Communications, Inc. has relinquished any preemptive right it
may have under Section 10 of that certain Amended and Restated Stock Purchase
Agreement, dated as of June 4, 1993, between TCI Development Corporation and the
Company.
Whenever our opinion herein with respect to the existence or absence of
facts is indicated to be based on our knowledge, it is intended to signify that,
in the course of our representation of the Company, none of Adam Lewis, Ellen
Borgersen, Darryl Rains, Marshall Small or David Goldenberg has acquired actual
knowledge of the existence or absence of such facts.
We have not undertaken any independent investigation to determine the
existence or absence of such facts, and no inference as to our knowledge of the
existence or absence of such facts should be drawn from the fact of our
representation of the Company.
The opinions hereinafter expressed are subject to the following further
qualifications and exceptions:
Other than the effect of the Order on the Settlement Agreement, the
effect of bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws relating to or affecting the rights of creditors generally,
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferences and equitable subordination.
Limitations imposed by general principles of equity upon the
availability of equitable remedies or the enforcement of provisions of the
Documents; and the effect of judicial decisions which have held that certain
provisions are unenforceable where their enforcement would violate the implied
covenant of good faith and fair dealing, or would be commercially unreasonable.
We express no opinion as to the effect on the opinions expressed herein
of (1) the compliance or non-compliance of any party to the Documents (other
than the Company) with any laws or regulations applicable to it, or (2) the
legal or regulatory status or the nature of the business of any such party.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that:
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of California.
The Company has the corporate power and authority to execute and
deliver, and to perform and observe the provisions of, the Exchange Agreement.
The Exchange Agreement has been duly authorized, executed and delivered
by the Company. The Exchange Agreement constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
The shares of Common Stock of the Company issued to you by the Company
pursuant to the Exchange Agreement are duly authorized, validly issued, fully
paid and non-assessable, free of any liens and to our knowledge, after due
investigation, subject to no-preemptive rights.
We express no opinion as to matters governed by any laws other than the
substantive laws of the State of California and federal laws of the United
States (without reference to choice-of-law rules), which are in effect on the
date hereof.
This opinion is solely for your benefit and may not be relied upon by,
nor may copies be delivered to, any other person without our prior written
consent.
Very truly yours,
<PAGE>
EXHIBIT 4
- ---------
PLACES WHERE FILINGS ARE REQUIRED
- ---------------------------------
TO EFFECT RELEASE OF LIENS ON IN ASSETS
- ---------------------------------------
1. U.S. Patent & Trademark Office
2. Canadian Patent Office
3. California Secretary of State (Uniform Commercial Code)
4. Offices of County Clerk and County Recorder Santa Clara County,
California
<PAGE>
EXHIBIT 5
STOCKHOLDINGS AND OPTIONS OF
DAVID LOCKTON
In Amendment No. 1 to the Schedule 13D filed by David Lockton with the
Securities and Exchange Commission on December 7, 1998, he disclosed beneficial
ownership of 2,759,000 shares of IN's common stock, including vested options for
2,103,000 shares exercisable at $.09 per share.
IN's list of record shareholders as of March 1, 1999, as supplied by
its stock transfer agent, discloses that David Lockton is the holder of record
of 656,600 shares of IN's common stock and is the holder of record for 2,400
shares of IN's common stock as custodian for Richard A. Lockton under the
Uniform Gifts to Minors Act, and John Lockton is the holder of record of 90,000
shares of IN's common stock.
