Document:

<PAGE>

                                                                     EXHIBIT 4.4
--------------------------------------------------------------------------------

                 STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT

                                 by and between

                                   TIVO INC.

                                      and

                              AMERICA ONLINE, INC.

                            dated as of June 9, 2000

--------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
                               TABLE OF CONTENTS
<S>                                                                                   <C>
                                                                                      Page
                                                                                      ----

RECITALS..............................................................                   1

ARTICLE I DEFINITIONS..................................................                  1
     SECTION 1.1  Certain Defined Terms...............................                   1
     SECTION 1.2  Other Definitional Provisions.......................                   9

ARTICLE II CORPORATE GOVERNANCE OF THE COMPANY.........................                  9
     SECTION 2.1  Board Representation/Observation....................                   9
     SECTION 2.2  Available Information...............................                  11
     SECTION 2.3  Access..............................................                  12
     SECTION 2.4  Voting of Shares....................................                  12
     SECTION 2.5  Termination of Rights and Obligations...............                  13
     SECTION 2.6  Other Approval Rights...............................                  13
     SECTION 2.7  Ownership Restrictions..............................                  13

ARTICLE III TRANSFERS..................................................                 13
     SECTION 3.1  Transfer Restrictions...............................                  13
     SECTION 3.2  Transferees.........................................                  14
     SECTION 3.3  Right of First Offer................................                  14
     SECTION 3.4  Termination of Rights and Obligations...............                  15

ARTICLE IV EQUITY PURCHASE RIGHTS......................................                 16
     SECTION 4.1  Unregistered Securities Offerings...................                  16
     SECTION 4.2  Other Issuances of Common Stock.....................                  17
     SECTION 4.3  Issuances of Convertible Securities.................                  18
     SECTION 4.4  No Restrictions.....................................                  19
     SECTION 4.5  Termination of Equity Purchase Rights...............                  20

ARTICLE V REGISTRATION RIGHTS..........................................                 20
     SECTION 5.1  Registration on Request.............................                  20
     SECTION 5.2  Incidental Registrations............................                  24
     SECTION 5.3  Additional Registration Rights......................                  25

ARTICLE VI REGISTRATION PROCEDURES.....................................                 25
     SECTION 6.1  Registration Procedures.............................                  25
     SECTION 6.2  Information Supplied................................                  29
     SECTION 6.3  Restrictions on Disposition.........................                  29
     SECTION 6.4  Indemnification.....................................                  29
     SECTION 6.5  Required Reports....................................                  33
     SECTION 6.6  Holdback Agreement..................................                  33
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
<S>                                                                                   <C>
     SECTION 6.7  No Inconsistent Agreement...........................                  33

ARTICLE VII STANDSTILL.................................................                 34
     SECTION 7.1  Acquisition of Additional Voting Securities.........                  34

ARTICLE VIII RIGHT OF NOTIFICATION AND FORBEARANCE.....................                 35
     SECTION 8.1  Right of Notification...............................                  35
     SECTION 8.2  Forbearance.........................................                  36
     SECTION 8.3  Other Rights........................................                  36

ARTICLE IX MISCELLANEOUS...............................................                 36
     SECTION 9.1  Termination.........................................                  36
     SECTION 9.2  Amendments and Waivers..............................                  37
     SECTION 9.3  Successors, Assigns and Transferees.................                  37
     SECTION 9.4  Notices.............................................                  37
     SECTION 9.5  Further Assurances..................................                  37
     SECTION 9.6  Entire Agreement....................................                  37
     SECTION 9.7  Delays or Omissions.................................                  38
     SECTION 9.8  Governing Law; Jurisdiction; Waiver of Jury Trial...                  38
     SECTION 9.9  Severability........................................                  38
     SECTION 9.10  Enforcement........................................                  38
     SECTION 9.11  Titles and Subtitles...............................                  38
     SECTION 9.12  Counterparts; Facsimile Signatures.................                  38

</TABLE>
<PAGE>

                 STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT

          THIS STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT (this "Agreement")
                                                                     ---------
is entered into as of June 9, 2000, among TiVo Inc., a Delaware corporation (the
"Company"), and America Online, Inc., a Delaware corporation ( "AOL").
 -------                                                        ---

                                 RECITALS
                                 --------

          WHEREAS, the Company and AOL have entered into a Definitive Product
Integration and Marketing Relationship Agreement, dated as of the date hereof
(the "Commercial Agreement") pursuant to which the Company and AOL will work
      --------------------
together to jointly develop a branded interactive television service;

          WHEREAS, the Company and AOL have entered into a Investment Agreement,
dated as of the date hereof (the "Investment Agreement"), pursuant to which the
                                  --------------------
Company has agreed to sell to AOL and AOL has agreed to purchase from the
Company shares of its Common Stock (the "Shares") and, in certain circumstances,
                                         ------
its Series A Convertible Preferred Stock, par value $0.001 per share (the
"Preferred Shares"), upon the terms provided in the Investment Agreement and in
-----------------
the amended and restated certificate of incorporation of the Company in the form
attached to the Investment Agreement as Exhibit A, and (ii) warrants to purchase
shares of Common Stock, upon the terms provided in the Investment Agreement and
in the forms of warrants attached as Exhibits B, C, D and E to the Investment
Agreement (the "Warrants").
                --------

          WHEREAS, the parties hereto desire to enter into certain arrangements
relating to the Company and AOL's interest in the Company.

          NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual promises hereinafter set forth, the parties hereto agree as follows:

                                   ARTICLE I

                                  DEFINITIONS
                                  -----------

          SECTION1.1  Certain Defined Terms.  As used herein, the following
                      ---------------------
terms shall have the following meanings:

          "Acquisition Proposal" means any offer or proposal for any merger,
           --------------------
consolidation, purchase of substantial assets of the Company (including
securities), tender, exchange or other offer for any Equity Securities or other
business combination involving the Company or any of its Subsidiaries.
<PAGE>

          "Acquisition Proposal Notice" has the meaning assigned to such term in
           ---------------------------
Section 8.1(a).

          "Acquisition Restrictions" has the meaning assigned to such term in
           ------------------------
Section 7.1(a).

          "Adverse Effect" has the meaning ascribed to such term in Section
           --------------
5.1(g).

          "Adverse Market Effect" has the meaning ascribed to such term in
           ---------------------
Section 5.1(h).

          "Affiliate" means, with respect to any Person, any other Person that
           ---------
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person.

          "AOL Offer Notice" has the meaning assigned to such term in Section
           ----------------
3.3(a).

          "AOL Offered Securities" has the meaning assigned to such term in
           ----------------------
Section 3.3(a).

          "AOL Observer" has the meaning ascribed to such term in Section 2.1.
           ------------

          "AOL Participation Securities" has the meaning assigned to such term
           ----------------------------
in Section 4.3(a).

          "AOL Representative" has the meaning ascribed to such term in Section
           ------------------
2.1.

          "AOL Unregistered Shares" has the meaning assigned to such term in
           -----------------------
Section 4.1(a).

          "Arbitrating Investment Banker" has the meaning assigned to such term
           -----------------------------
in the definition of Fair Market Value contained in this Section 1.1.

          "beneficial owner" or "beneficially own" has the meaning given such
           ----------------      ----------------
term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of
either Common Stock or Preferred Shares or other Voting Securities of the
Company shall be calculated in accordance with the provisions of such Rule;
provided that, for purposes of determining beneficial ownership, a Person shall
--------
be deemed to be the beneficial owner of any security which may be acquired by
such Person whether within sixty (60) days or thereafter, upon the conversion,
exchange or exercise of any warrants, options, rights or other securities.

          "Business Day" means any day that is not a Saturday, a Sunday or other
           ------------
day on which banks are required or authorized by law to be closed in The City of
New York.

          "Bylaws" means the Amended and Restated Bylaws of the Company, as in
           ------
effect on the date hereof and as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof, the
terms of the Certificate and the terms of this Agreement.
<PAGE>

          "Capital Stock" means, with respect to any Person at any time, any and
           -------------
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited) or equivalent ownership interests in or issued by such
Person and, with respect to the Company, includes any and all shares of Common
Stock, the Preferred Shares and any other shares of preferred stock of the
Company.

          "Certificate" means the Amended and Restated Certificate of
           -----------
Incorporation of the Company as in effect on the date hereof and as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof and the terms of this Agreement.

          "Change of Control" means:
           -----------------

          (a)  any Person is or becomes the beneficial owner, directly or
indirectly (whether by merger, consolidation, purchase of securities or
otherwise), of more than 50% of the total voting power of all the outstanding
Voting Securities of the Company (or its successor by merger, consolidation or
purchase of all or substantially all of its assets) (for the purposes of this
clause, such person shall be deemed to beneficially own any Voting Securities of
the Company held by an entity, if such Person beneficially owns, directly or
indirectly, more than 50% of the total voting power of the Voting Securities of
such entity).

          (b)  during any period of two (2) consecutive years, individuals who
at the beginning of such period constituted the Company Board (together with any
new Directors whose election by such Company Board or whose nomination for
election by the stockholders of the Company, as the case may be, was approved by
a vote of at least a majority of the Directors then still in office who were
either Directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Company Board then in office;

          (c)  the Transfer, lease or other disposition, in one or a series of
related transactions, of all or substantially all of the assets of the Company
and its Subsidiaries taken as a whole to any Third Party; or

          (d)  the adoption by the stockholders of the Company of a plan or
proposal for the liquidation or dissolution of the Company.

          "Claims" has the meaning assigned to such term in Section 6.4(a).
           ------

          "Closing" has the meaning assigned to such term in the Investment
           -------
Agreement.

          "Commercial Agreement" has the meaning assigned to such term in the
           --------------------
Recitals.

          "Common Stock" means the common shares, par value $0.001 per share, of
           ------------
the Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend, spin-off or combination,
or any reclassification, recapitalization, merger, consolidation, exchange or
other similar reorganization or business combination.
<PAGE>

          "Company Board" means the Board of Directors of the Company.
           -------------

          "Company Offering" has the meaning assigned to such term in Section
           ----------------
5.1(h).

          "control" (including the terms "controlled by" and "under common
           -------                        -------------       ------------
control with"), with respect to the relationship between or among two or more
------------
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.

          "Delay Notice" has the meaning assigned to such term in Section
           ------------
5.1(h).

          "Demand Party" has the meaning assigned to such term in Section
           ------------
5.1(a).

          "Director" means a member of the Company Board.
           --------

          "Equity Securities" means any and all shares of Capital Stock of the
           -----------------
Company, securities of the Company convertible into, or exchangeable or
exercisable for, such shares, and options, warrants or other rights to acquire
such shares (including the Warrants).

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
           ------------
and the rules and regulations promulgated thereunder.

          "Fair Market Value" means, as of any date, (A) with respect to the
           -----------------
securities of any Person, either (x) the average of the closing reported sale
prices of such securities on the principal national securities exchange or
automated quotation service on which such security is then listed or quoted for
the ten consecutive trading days immediately prior to the date as of which
Market Value is being determined, or (y) if such securities are not publicly
traded, then the fair market value of such securities as mutually agreed in good
faith between the Company and AOL or, failing such agreement, as determined by a
nationally recognized investment banking firm selected by mutual agreement of an
investment banking firm selected by AOL and an investment banking firm selected
by the Company (the "Arbitrating Investment Banker"), and (B) with respect to
                     -----------------------------
any other assets, the fair market value of such assets as determined by the
Arbitrating Investment Banker in accordance with the procedures set forth in
clause (y) above.

          "GAAP" means generally accepted accounting principles, as in effect in
           ----
the United States of America from time to time.

          "Group" has the meaning assigned to such term in Section 13(d)(3) of
           -----
the Exchange Act.

          "Holder" means AOL and any Affiliates of AOL as well as any Transferee
           ------
of AOL or any of its Affiliates entitled to the rights under Articles V and VI
of this Agreement.

          "Incentive Issuances" means the issuance or grant of any option to
           -------------------
purchase Common Stock or shares of Common Stock (including upon the exercise of
options) in the ordinary course of business under any employee stock option,
employee stock purchase or other
<PAGE>

equity-based employee incentive plan, which plan was approved by the Company
Board prior to such grant or issuance.

          "Indemnified Parties" has the meaning assigned to such term in Section
           -------------------
6.4(a).

          "Information Delay Notice" has the meaning assigned to such term in
           ------------------------
Section 5.1(h).

          "Investment Agreement" has the meaning assigned to such term in the
           --------------------
Recitals.

          "Law" has the meaning assigned to such term in the Investment
           ---
Agreement.

          "Managing Underwriters" has the meaning assigned to such term in
           ---------------------
Section 5.1(f).

          "Material Breach of the Commercial Agreement" means a "Material
           -------------------------------------------
Breach" as defined in the Commercial Agreement.

          "NASD" means the National Association of Securities Dealers, Inc.
           ----

          "Nasdaq" means the Nasdaq National Market tier of The Nasdaq Stock
           ------
Market.

          "NYSE" means The New York Stock Exchange, Inc.
           ----

          "Other Issuance Shares" has the meaning assigned to such term in
           ---------------------
Section 4.2(a).

          "Other Share Issuance" has the meaning assigned to such term in
           --------------------
Section 4.2(a).

          "Ownership Percentage" means, at any time, the ratio, expressed as a
           --------------------
percentage, (i) of the total shares of Common Stock beneficially owned by AOL
and its Affiliates to (ii) the total number of outstanding shares of Common
Stock, in each case (x) including (A) all shares issuable upon conversion of the
Preferred Shares, if any, and (B) all shares issuable upon exercise of all the
Warrants (regardless of whether they are exercisable at such time), but (y)
excluding all shares issuable upon the conversion or exercise of Participation
Securities or any other convertible or exercisable securities of the Company.

          "Participation Offering" has the meaning assigned to such term in
           ----------------------
Section 4.3(a).

          "Participation Offering Notice" has the meaning assigned to such term
           -----------------------------
in Section 4.3(b).

          "Participation Securities" has the meaning assigned to such term in
           ------------------------
Section 4.3(a).

          "Person" means any individual, corporation, limited liability company,
           ------
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any Group comprised of two or more of the foregoing.
<PAGE>

          "Preferred Shares" has the meaning assigned to such term in the
           ----------------
Recitals.

          "Pro Rata Portion" means:
           ----------------

          (a)  for purposes of Section 4.1, on any issuance date for
Unregistered Shares, the number or amount of Unregistered Shares equal to the
product of (i) the total number or amount of Unregistered Shares to be issued by
the Company on the applicable date multiplied by (ii) the fraction determined by
dividing (A) the number of shares of Common Stock beneficially owned by AOL and
its Affiliates (including the shares of Common Stock issuable upon conversion of
the Preferred Shares, but excluding any shares of Common Stock issuable pursuant
to the Warrants or Participation Securities held by AOL on such date) by (B) the
total number of shares of Common Stock outstanding on such date;

          (b)  for purposes of Section 4.2, on any issuance date for an Other
Share Issuance, the number or amount of Other Issuance Shares included in such
Other Share Issuance equal to the product of (i) the total number or amount of
Other Issuance Shares issued by the Company on the applicable date multiplied by
(ii) the fraction determined by dividing (A) the number of shares of Common
Stock beneficially owned by AOL and its Affiliates (including the shares of
Common Stock issuable upon conversion of the Preferred Shares, but excluding any
shares of Common Stock issuable pursuant to the Warrants or Participation
Securities held by AOL on such date) by (B) the total number of shares of Common
Stock outstanding on such date; or

          (c) for purposes of Section 4.3, on any issuance date for
Participation Securities, the number or amount of Participation Securities equal
to the product of (i) the total number or amount of Participation Convertible
Securities to be issued by the Company multiplied by (ii) the fraction
determined by dividing (A) the number of shares of Common Stock beneficially
owned by AOL and its Affiliates on such date (including the shares of Common
Stock issuable upon conversion of the Preferred Shares, exercise of the
Warrants, and exercise or conversion of Participation Securities previously
issued and outstanding) by (B) the total number of shares of Common Stock
outstanding on such date (including the shares of Common Stock issuable upon
conversion of the Preferred Shares, exercise of the Warrants, and exercise or
conversion of Participation Securities previously issued and outstanding).

          "Registrable Securities" means any Preferred Shares and any Common
           ----------------------
Stock (including the Warrant Shares) held by any Holder.  For purposes of this
Agreement, any required calculation of the amount of, or percentage of,
Registrable Securities shall be based on the number of shares of Common Stock
which are Registrable Securities, including shares issuable upon the conversion,
exchange or exercise of any security convertible, exchangeable or exercisable
into Common Stock (including the Warrants and the Preferred Shares).  As to any
particular Registrable Securities, once issued, such Registrable Securities
shall cease to be Registrable Securities when:

   (i)    a registration statement with respect to the sale by the Holder of
          such securities shall have become effective under the Securities Act
          and such securities shall have been disposed of in accordance with
          such registration statement;

   (ii)   such securities shall have been distributed to the public pursuant to
          Rule 144; or
<PAGE>

   (iii)  such securities shall have ceased to be outstanding.

          "Registration Expenses" means any and all expenses incident to
           ---------------------
performance of or compliance with Articles V and VI of this Agreement,
including:

   (i)    all SEC and NYSE or other securities exchange, Nasdaq or NASD
          registration and filing fees;

   (ii)   all fees and expenses of complying with securities or blue sky laws
          (including the reasonable fees and disbursements of counsel for the
          underwriters in connection with blue sky qualifications of the
          Registrable Securities);

   (iii)  all printing, messenger and delivery expenses;

   (iv)   all fees and expenses incurred in connection with the listing of the
          Registrable Securities on Nasdaq or any other securities exchange
          pursuant to this Agreement and all rating agency fees;

   (v)    the fees and disbursements of counsel for the Company and of its
          independent public accountants, including the expenses of any special
          audits and/or "cold comfort" letters required by or incident to such
          performance and compliance;

   (vi)   any reasonable fees and disbursements of underwriters and their
          counsel customarily paid by the issuers or sellers of securities, and
          the reasonable fees and expenses of special experts retained in
          connection with the requested registration, but excluding underwriting
          discounts and commissions; and

   (vii)  all expenses incurred in connection with any road shows.

          "Rule 144" means Rule 144 (or any successor provision) promulgated
           --------
under the Securities Act.

          "Schedule 13D" means the Statement on Schedule 13D filed by AOL
           ------------
pursuant to Rule 13d-1 under the Exchange Act relating to AOL's interest in the
Company's Capital Stock, and any amendments thereto.

          "SEC" means the U.S. Securities and Exchange Commission or any other
           ---
federal agency then administering the Securities Act or the Exchange Act and
other federal securities laws.

          "Securities Act" means the Securities Act of 1933, as amended, and the
           --------------
rules and regulations promulgated thereunder.

          "Set Top Box Launch" has the meaning assigned to such term in the
           ------------------
Investment Agreement.

          "Shares" has the meaning assigned to such term in the Recitals.
           ------
<PAGE>

          "Standstill Period" means the period commencing on the date hereof and
           -----------------
continuing until the earlier of:

     (i)  the eighth anniversary of the date hereof; or

     (ii) the first date on which AOL does not own in excess of 10% of the
          outstanding shares of Common Stock.

          "Subsidiary" means (i) any corporation of which a majority of the
           ----------
securities entitled to vote generally in the election of directors thereof, at
the time as of which any determination is being made, are owned by another
entity, either directly or indirectly, and (ii) any joint venture, general or
limited partnership, limited liability company or other legal entity in which an
entity is the record or beneficial owner, directly or indirectly, of a majority
of the voting interests or the general partner.

          "Third Party" means any Person who is not an Affiliate of AOL,
           -----------
including any Group, other than a Group which includes AOL or any of its
Affiliates as members.

          "Transaction Agreements" means the, collectively, this Agreement, the
           ----------------------
Investment Agreement, the Warrants, the Voting Agreement (as defined in the
Investment Agreement), the Escrow Agreement (as defined in the Investment
Agreement), the Restated Certificate (as defined in the Investment Agreement)
and the Commercial Agreement.

          "Transaction Delay Notice" has the meaning assigned to such term in
           ------------------------
Section 5.1(h).

          "Transfer" means, directly or indirectly, to sell, transfer, assign,
           --------
pledge, encumber, hypothecate or similarly dispose of, either voluntarily or
involuntarily, or to enter into any contract with respect to the sale, transfer,
assignment, pledge, encumbrance, hypothecation or similar disposition of, any
Equity Securities beneficially owned by a Person.

          "Transferee" means any Person to whom AOL or any Transferee thereof
           ----------
Transfers Equity Securities of the Company.

          "Unregistered Offering" has the meaning assigned to such term in
           ---------------------
Section 4.1(a).

          "Unregistered Offering Notice" has the meaning assigned to such term
           ----------------------------
in Section 4.1(b).

          "Unregistered Shares" has the meaning assigned to such term in Section
           -------------------
4.1(a).

          "Voting Securities" means, at any time, shares of any class of Equity
           -----------------
Securities which are then entitled to vote generally in the election of
Directors.

          "Warrants" has the meaning assigned to such term in the Recitals.
           --------
<PAGE>

          "Warrant Shares" means the shares of Common Stock or other Equity
           --------------
Securities purchasable pursuant to the Warrants, as adjusted from time to time
in accordance with the terms of such Warrants and this Agreement, whether such
Warrant is exercisable or not.

          SECTION 1.2  Other Definitional Provisions.  (a)  The words "hereof,"
                       -----------------------------
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Article and Section references are to this Agreement unless
otherwise specified.

          (b)  The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

                                  ARTICLE II

                      CORPORATE GOVERNANCE OF THE COMPANY
                      -----------------------------------

          SECTION 2.1  Board Representation/Observation.  (a)  Subject to
                       --------------------------------
Sections 2.5 and 2.1(c), AOL will be entitled to designate one person for
election to the Company Board (the "AOL Representative").  The Company agrees to
                                    ------------------
take all such action as may be required under applicable Law:

   (i)    so that, effective as of the Closing, the Company Board will include
          the AOL Representative, and the AOL Representative shall be a member
          of the class of Directors having a term extending until the 2003
          annual meeting of shareholders of the Company;

   (ii)   to include the AOL Representative in the slate of nominees for the
          class of Directors in which the AOL Representative is designated
          recommended by the Company Board for election by the stockholders of
          the Company; and

   (iii)  to use its best efforts to cause the election of the AOL
          Representative to the Company Board, including nominating such
          individual to be elected as a Director of the Company Board.

          (b)  In the event that a vacancy is created on the Company Board at
any time by the death, disability, retirement, resignation or removal (with or
without cause) of any AOL Representative, the Company and the remaining
Directors will cause the vacancy created thereby to be filled by a new designee
of AOL as soon as possible, who is designated in the manner specified in this
Section 2.1, and the Company hereby agrees to take, or cause to be taken, at any
time and from time to time, all actions necessary to accomplish the same.
Unless requested by AOL, the Company agrees not to take any action to cause the
removal of any AOL Representative without cause.

          (c)  AOL shall have the right, exercisable at any time by written
notice to the Company, to appoint one observer (the "AOL Observer") to attend
                                                     ------------
all regular and special meetings of the Board of Directors.  Upon delivery to
the Company of the notice designating an AOL Observer, AOL shall cause the AOL
Representative, if any, to resign as a member of the
<PAGE>

Company Board; provided that the person serving as the AOL Representative shall
               --------
be permitted to serve as the AOL Observer. Upon the removal of any AOL Observer,
AOL shall have the right, at its sole discretion, subject to Section 2.6, to
appoint an AOL Representative in accordance with Section 2.1(a) or a replacement
AOL Observer in accordance with this Section 2.1(c); provided that (i) after
                                                     --------
replacing an AOL Representative with an AOL Observer, AOL shall be permitted to
freely replace such AOL Observer with an AOL Representative on one occasion, and
(ii) thereafter, if AOL desires to replace such AOL Representative with an AOL
Observer, AOL and the Company shall consult in good faith regarding AOL's desire
to designate an AOL Representative and such AOL Representative shall be subject
to the reasonable discretion of the Company. The AOL Observer shall be entitled
to receive the same notice of any such meeting and all other information and
materials (financial and otherwise) as and at the same time received by the
Directors, and shall have the right to participate therein, but shall not have
the right to vote on any matter or to be counted for purposes of determining
whether a quorum is present thereat. In addition, the AOL Observer shall have
the right to receive copies of any action proposed to be taken by written
consent of the Board of Director without a meeting.

          (d)  The Company shall reimburse each AOL Representative or AOL
Observer, as the case may be, for his or her reasonable out-of-pocket expenses
incurred by him or her for the purpose of attending meetings of the Company
Board or committees thereof.  The AOL Representative or AOL Observer shall also
be entitled to the same benefits (including coverage under insurance policies)
as other non-employee Directors.

          (e)  Notwithstanding that any AOL Representative may be a member of
the Company Board or an AOL Observer may be entitled to observe Company Board
meetings, AOL and its Affiliates may, and, to the greatest extent permitted by
the General Corporation Law of the State of Delaware, any individual serving as
an AOL Representative or an AOL Observer may in his own right or as a director,
officer, employee or shareholder of any other Person, carry on any activity,
pursue any business opportunity or enter into any agreement, arrangement or
understanding whatsoever.

          SECTION 2.2  Available Information.  (a)  So long as AOL and its
                       ---------------------
Affiliates collectively own Common Stock and Preferred Shares representing 85%
of the shares of Common Stock issued to it at the Closing or receivable upon
conversion of the Preferred Shares as of the Closing, the Company will deliver,
or will cause to be delivered, the following to AOL:

     (i)  to the extent prepared by the Company, as soon as practical after the
          preparation thereof, a consolidated balance sheet of the Company and
          its Subsidiaries as of the end of each month, consolidated statements
          of income and cash flows of the Company and its Subsidiaries, for each
          month and for the current fiscal year of the Company to date, a
          comparison of such statements to the corresponding periods of the
          prior fiscal year and to the Company's business plan then in effect;
          and

     (ii) an annual budget, a business plan and financial forecasts for the
          Company for the next fiscal year of the Company, no later than thirty
          (30) days before the beginning of the Company's next fiscal year, in
          such manner and form as approved by the Company Board, which shall
          include at least a projection of income and a projected cash flow
          statement for each fiscal quarter in such
<PAGE>

          fiscal year and a projected balance sheet as of the end of each fiscal
          quarter in such fiscal year.  Any material changes in such business
          plan shall be delivered to the AOL Representative, the AOL Observer or
          AOL, as the case may be, as promptly as practicable after such changes
          have been approved by the Company Board.

          (b)  The Company will promptly deliver to AOL when available such
number of copies of each annual report on Form 10-K and quarterly report on Form
10-Q of the Company, as filed with the SEC, as AOL shall reasonably request.  In
the event an annual report on Form 10-K or quarterly report on Form 10-Q is
unavailable, the Company may, in lieu of the requirements of the preceding
sentence, deliver, or cause to be delivered, the following to the AOL
Representative, the AOL Observer or AOL, as the case may be:

     (i)  as soon as practicable after the end of each fiscal year of the
          Company, and in any event within ninety (90) days thereafter, a
          consolidated balance sheet of the Company and its Subsidiaries as of
          the end of such fiscal year, and consolidated statements of income and
          cash flows of the Company and its Subsidiaries for such year, prepared
          in accordance with GAAP and setting forth in each case in comparative
          form the figures for the previous fiscal year, all in reasonable
          detail and followed promptly thereafter (to the extent not available)
          such financial statements accompanied by the opinion of independent
          public accountants of recognized national standing selected by the
          Company, and a Company-prepared comparison to the Company's business
          plan for such year as approved by the Company Board; and

     (ii) as soon as practicable after the end of the first, second and third
          quarterly accounting periods in each fiscal year of the Company, and
          in any event within forty-five (45) days thereafter, a consolidated
          balance sheet of the Company and its Subsidiaries as of the end of
          each such quarterly period, and consolidated statements of income and
          cash flows of the Company and its Subsidiaries for such period and for
          the current fiscal year to date, prepared in accordance with GAAP and
          setting forth in comparative form the figures for the corresponding
          periods of the previous fiscal year and to the Company's business plan
          then in effect and approved by the Company Board, subject to changes
          resulting from normal year-end audit adjustments, all in reasonable
          detail and certified by the principal financial or accounting officer
          of the Company, except that such financial statements need not contain
          the notes required by GAAP.

          SECTION 2.3  Access.  So long as AOL and its Affiliates collectively
                       ------
own Common Stock and Preferred Shares representing 85% of the shares of Common
Stock issued to it at the Closing or receivable upon conversion of the Preferred
Shares as of the Closing, the company will afford AOL the opportunity to discuss
the Company's business, affairs, finances, prospects and accounts with the
Company's Chief Executive Officer on a quarterly basis and the Company's Chief
Financial Officer on a monthly basis, and at such other times and with such
other officers, attorneys and accountants of the Company as the Company shall
approve (such approval not to be unreasonably withheld).

          SECTION 2.4  Voting of Shares.  (a)  Voting of Shares by AOL.  Subject
                       ----------------        -----------------------
to the final sentence of this Section 2.4 and to Section 2.5, AOL shall be
entitled to vote, or cause to be voted, that number of Voting Securities it owns
representing up to 19.9% of the voting power of
<PAGE>

all the outstanding Voting Securities of the Company on any matter submitted to
a vote of stockholders (or for which action in lieu of a vote is solicited by
the Company) in AOL's sole discretion. Subject to the final sentence of this
Section 2.4 and to Section 2.5, AOL agrees to vote or cause to be voted all of
the Voting Securities that it at any time owns representing in excess of 19.9%
of the total voting power of all the outstanding Voting Securities on any matter
submitted to a vote of stockholders (or for which action in lieu of a vote is
solicited by the Company) in accordance with the recommendation of the Company
Board. Notwithstanding the foregoing, AOL shall not be limited or restricted in
any manner in voting any number of Voting Securities and shall not be subject to
any voting obligation with respect to any Voting Securities in respect of any of
the following:

     (i)  any amendment to the Company's Certificate that is adverse in a
          discriminatory manner to AOL; or

     (ii) any Acquisition Proposal if the Company has materially breached any of
          its obligations under Section 6.2 or Section 6.3 of the Investment
          Agreement or Section 7.1(e), Section 7.1(f) or Article VIII of this
          Agreement.

          (b) Voting of Shares by New Investors.  In the event that prior to the
              ---------------------------------
Closing (as defined in the Investment Agreement), the Company issues any voting
securities in a transaction that is not an underwritten offering, then the
Company shall require as a condition of such issuance that the purchasers of
such securities enter into a voting agreement similar to the Voting Agreement to
vote in favor of the transactions contemplated by the Investment Agreement.

          SECTION 2.5  Termination of Rights and Obligations.  The provisions
                       --------------------------------------
of Section 2.1 and Section 2.4 shall terminate upon expiration of the Standstill
Period.

          SECTION 2.6  Other Approval Rights.  If the Company at any time after
                       ----------------------
the date hereof grants to any other holders of Equity Securities any rights to
consent to or approve any corporate action, transaction, or other event or
development concerning the Company or its business, this Agreement shall be
deemed amended to provide to AOL substantially equivalent rights of consent or
approval.

          SECTION 2.7  Ownership Restrictions.  The Company shall not adopt,
                       -----------------------
enter into or enforce any restriction on AOL's ability to acquire ownership
(beneficial or otherwise) of any securities of the Company, pursuant to a
shareholder rights plan or otherwise, except (i) as expressly provided herein
and in the other Transaction Agreements or (ii) pursuant to a customary
shareholder rights plan that expressly provides that no adverse effect on AOL
will occur (including, without limitation, the separation or exercisability of
the rights issued pursuant to such plan or the designation of AOL or its
affiliates as an "acquiring person" or the like) under such plan by reason of or
due to (x) AOL acquiring beneficial ownership of up to 30% of all the
outstanding shares of Common Stock, (y) any acquisition of beneficial or record
ownership by AOL or its Affiliates of securities of the Company pursuant to the
terms of any of the Transaction Agreements (including, without limitation,
Article I of the Investment Agreement, Articles IV or VII hereof, the
conversion, antidilution, adjustment, dividend or redemption provisions of the
Preferred Shares, the exercise, adjustment or antidilution provisions of the
Warrants or otherwise) or (z) any action taken by the Company (including,
without limitation, repurchases of securities or dividends on equity
securities).
<PAGE>

                                  ARTICLE III

                                   TRANSFERS
                                   ---------

          SECTION 3.1  Transfer Restrictions.  (a)  Subject to Sections 3.1(b)
                       ---------------------
and 3.4, neither AOL nor any of its Affiliates will transfer any of their Equity
Securities to any Person without the Company's prior consent.

          (b)  Notwithstanding the foregoing, and subject to Sections 3.3
(including Sections 3.3(d)) and 3.4, AOL and its Affiliates may Transfer all or,
from time to time, any portion of their Equity Securities:

     (i)   if, after giving effect to the Transfer, the Transferee will not, to
           AOL's knowledge, beneficially own or have the right to acquire in
           excess of 5% of the outstanding Capital Stock of the Company;

     (ii)  in response to a Third Party Acquisition Proposal that has been
           recommended or approved by the Company Board;

     (iii) to Persons who are eligible to report their ownership of Equity
           Securities on Schedule 13G under Section 13(g) of the Exchange Act or
           any successor provision;

     (iv)  pursuant to a bona fide underwritten public offering or Rule 144;
           provided that, (A) in the case of an underwritten offering, the
           --------
           underwriters have been requested to inquire, and (B) in the case of a
           sale pursuant to Rule 144 that is not executed on any securities
           exchange or in the over-the-counter market, AOL or its
           representatives have inquired, whether any purchaser in such
           transaction will beneficially own, after giving effect to such
           transaction, in excess of 5% of the outstanding Capital Stock of the
           Company;

     (v)   upon or following a Change of Control of the Company; or

     (vi)  to any Affiliate of AOL; provided that such Affiliate shall agree in
                                    --------
           writing to be bound by the terms of this Agreement in accordance with
           Section 9.4; provided further that in the event such Transferee
                        -------- -------
           ceases to be an Affiliate of AOL, such Transferee shall Transfer any
           Equity Securities then held by it to AOL or another Affiliate of AOL.

           SECTION 3.2  Transferees.  Except as set forth in Section 3.1(vi), no
                        -----------
Transferee of AOL or its Affiliates will be obligated, or entitled to rights,
under this Agreement.

           SECTION 3.3  Right of First Offer.  Subject to Sections 3.3(d) and
                        --------------------
3.4, AOL agrees not to Transfer any of its Equity Securities except as set forth
below:

           (a)  Notice.  Prior to any Transfer of Equity Securities by AOL, AOL
                ------
shall deliver to the Company written notice (the "AOL Offer Notice"), which
                                                  ----------------
notice shall state the number of
<PAGE>

Equity Securities proposed to be Transferred(the "AOL Offered Securities") and
                                                  ----------------------
the proposed purchase price therefor.

          (b)  Exercise.  For a period of ten (10) days following receipt of the
               --------
AOL Offer Notice, the Company shall have the option, but not the obligation, to
purchase all, but not less than all, of the AOL Offered Securities for a
purchase price per share in cash equal to the purchase price per share set forth
in the AOL Offer Notice and on the same terms and conditions as applicable to
the proposed Transfer.  In the event the Company elects to purchase all of the
AOL Offered Securities, the Company shall provide written notice to AOL no later
than ten (10) days following receipt by the Company of the AOL Offer Notice.
Any purchase by the Company of AOL Offered Securities under this Section 3.3
shall occur as soon as practicable following the Company's election to exercise
its rights under this Section 3.3, but in any event within twenty (20) days
following such election.  At the closing of such purchase, AOL shall deliver a
certificate or certificates to the Company, duly endorsed for transfer or
accompanied by stock powers duly executed, in either case executed in blank or
in favor of the Company against payment of the aggregate purchase price therefor
by wire transfer of immediately available funds.  In the event the Company fails
to elect to purchase all the AOL Offered Securities by delivery of a notice to
such effect pursuant to Section 3.3(a), then the Company shall be deemed to have
elected not to purchase the AOL Offered Securities pursuant to this Section 3.3.

          (c)  Completion of Transfer.  In the event the Company elects not to
               ----------------------
purchase the AOL Offered Securities pursuant to this Section 3.3, AOL may,
within one hundred twenty (120) days following the expiration of the 10-day
period set forth in Section 3.3(b), Transfer the AOL Offered Securities at a
price not lower, and on other terms no less favorable to AOL, than those set
forth in the AOL Offer Notice; provided that, if the consideration to be
                               --------
received by AOL consists in whole or in part of consideration other than cash,
the portion of the price received by AOL for the Transfer of the Offered
Securities consisting of such non-cash consideration shall deemed to be the Fair
Market Value of such non-cash consideration as of the date AOL enters into a
binding agreement with respect to the Transfer of the Offered Securities or, if
no such agreement is entered into, the date of the consummation of the Transfer
of the Offered Securities (it being understood that in connection with any
determination of Fair Market Value which involves an Arbitrating Investment
Banker, the fees and expenses of such Arbitrating Investment Banker shall be
paid by AOL if it is determined that the total price to be paid to AOL for the
Offered Securities is less than that set forth in the AOL Offer Notice and
otherwise shall be paid by the Company).  If the AOL Offered Securities are not
so Transferred within such 120-day period, such securities shall again become
subject to all of the terms and conditions of the Agreement and may not
thereafter be Transferred except in the manner and on the terms herein provided.

          (d)  Exceptions to the Right of First Offer.  This Section 3.3 shall
               --------------------------------------
not apply to Transfers of Equity Securities by AOL made in accordance with
paragraphs (ii), (iv), (v) or (vi) of Section 3.1(b).

          SECTION 3.4  Termination of Rights and Obligations.  The provisions of
                       -------------------------------------
this Article III shall terminate upon expiration of the Standstill Period.
<PAGE>

                                  ARTICLE IV

                            EQUITY PURCHASE RIGHTS
                            ----------------------

          SECTION 4.1  Unregistered Securities Offerings.  (a)  Grant of Right.
                       ---------------------------------        --------------
Subject to Section 4.5 and the other terms and conditions of this Section 4.1,
the Company hereby grants to AOL the right to subscribe for and purchase its Pro
Rata Portion (or any lesser amount as AOL may elect) of any shares of Common
Stock (the "Unregistered Shares") that the Company may, from time to time,
            -------------------
propose to issue (excluding Incentive Issuances) pursuant to an offering of
Common Stock for cash consideration that is not registered with the SEC (each an
"Unregistered Offering").  The number or amount of Unregistered Shares which AOL
 ---------------------
may subscribe for or  purchase pursuant to this Section 4.1 shall be referred to
as the "AOL Unregistered Shares."
        -----------------------

          (b)  Notice.  The Company shall deliver to AOL written notice (an
               ------
"Unregistered Offering Notice") of each proposed Unregistered Offering, which
-----------------------------
shall set forth the material terms and conditions of the proposed Unregistered
Offering that are known to the Company at the time such notice is given,
including, to the extent available, the name of any proposed purchaser(s), the
names of any underwriters, placement agents, initial purchasers or similar
participants in such offering, the proposed manner of disposition, the number
and amount of Unregistered Shares proposed to be issued and the proposed
purchase price per share (or range of purchase prices).  In addition, the
Company shall have the continuing obligation to (i) promptly provide (and, if
available to the Company prior to the time AOL must notify the Company whether
it desires to participate in such Unregistered Offering pursuant to Section
4.1(c), prior to such time) to AOL any additional material information regarding
the terms of such Unregistered Offering (including changes in such terms) that
becomes available to the Company, including as a result of discussions with
underwriters, private placement agents, initial purchasers or similar
participants in such offering and (ii) promptly provide to AOL any other
information available to the Company concerning such Unregistered Offering that
AOL shall reasonably request.  Each Unregistered Offering Notice must be
received by AOL at least fifteen (15) days prior to the proposed Unregistered
Offering.

          (c)  Exercise.  At any time during the 10-day period following receipt
               --------
of an Unregistered Offering Notice, AOL may elect to purchase any or all of the
AOL Unregistered Shares at the purchase price and upon the other terms and
conditions upon which shares of Common Stock are actually issued in the
Unregistered Offering by delivering a written notice to such effect to the
Company.  If (i) AOL elects to purchase AOL Unregistered Shares and after such
election the price at which Unregistered Shares are issued is greater than 133%
of the price specified in the Unregistered Offering Notice (or the last written
notice delivered to AOL regarding such issuance of Unregistered Shares), then
AOL shall be entitled to withdraw its election to purchase AOL Unregistered
Shares or (ii) if AOL fails to elect to purchase AOL Unregistered Shares during
such 10-day period and after such 10-day period the price at which Unregistered
Shares are issued is less than 67% of the price specified in the Unregistered
Offering Notice (or the last written notice delivered to AOL regarding such
issuance of Unregistered Shares), then AOL shall be released from its
obligations under Article VII of this Agreement for a period of sixty (60) days
following the consummation of such Unregistered Offering (or, if later, the
cessation of any restrictions under applicable Law or the rules of Nasdaq or any
stock exchange on AOL's ability to purchase Common Stock) in order to allow AOL
to purchase the number of shares of Common Stock that it could have purchased in
such
<PAGE>

Unregistered Offering.  Except as provided in the following sentence, such
purchase shall be consummated concurrently with the consummation of the
Unregistered Offering.  The closing of any purchase of AOL Unregistered Shares
by AOL may be extended beyond the closing of the transaction described in the
Unregistered Offering Notice to the extent necessary to obtain required
governmental approvals and other necessary approvals and the Company and AOL
shall use their respective reasonable best efforts to obtain such approvals.

          (d)  Completion of the Unregistered Offering.  The Company shall not
               ---------------------------------------
complete any Unregistered Offering unless it has complied with the provisions of
this Section 4.1.  If the Company fails to complete any Unregistered Offering
within thirty (30) days following the exercise by AOL of its rights to
participate in such Unregistered Offering pursuant to this Section 4.1, AOL
shall thereafter be entitled to withdraw or change its election to purchase AOL
Unregistered Shares and the Company shall continue to comply with this Section
4.1 until such time as the Company shall deliver to AOL a written notice that
the Company is terminating such Unregistered Offering.  Upon any termination of
an Unregistered Offering without any shares of Common Stock having been issued,
the Company shall have no obligation to issue or sell shares of Common Stock to
AOL, but shall be obligated to comply with this Section 4.1 for any subsequent
Unregistered Offering.

          (e)  Warrants.  Immediately following each Unregistered Offering (or
               --------
the sixty-day period specified in clause (ii) of the second sentence of Section
4.1(c), if applicable), the number of Warrant Shares shall be increased, to the
extent AOL actually purchases AOL Unregistered Shares, in the aggregate by a
number of shares of Common Stock equal to (x) a fraction, the numerator of which
is the number of AOL Unregistered Shares which AOL actually purchased in
connection with such Unregistered Offering and the denominator of which is the
number of AOL Unregistered Shares which AOL was entitled to purchase in
connection with such Unregistered Offering, multiplied by (y) that number of
shares of Common Stock necessary to restore AOL's Ownership Percentage to the
Ownership Percentage in effect immediately prior to such Unregistered Offering.
Any such increase in the number of Warrant Shares shall be allocated
proportionally among all Warrants unexercised at such time.  Upon presentation
of the Warrants to the Company by AOL, the Company shall issue to AOL new
Warrants reflecting the increased number of shares of Common Stock subject
thereto.   The Company shall at all time cause to be reserved for issuance the
aggregate number of Warrant Shares issuable pursuant to the Warrants.

          SECTION 4.2  Other Issuances of Common Stock.  (a)  Release from
                       -------------------------------        ------------
Standstill.  Subject to Section 4.5, in the event the Company issues shares of
----------
Common Stock other than pursuant to an Unregistered Offering or an Incentive
Issuance (an "Other Share Issuance"), AOL will be released from its obligations
              --------------------
under Article VII of this Agreement for a period of sixty (60) days following
its receipt of the notice described in the next sentence (or, if later, the
cessation of any restrictions under applicable Law or the rules of Nasdaq or any
stock exchange on AOL's ability to purchase Common Stock) in order to allow AOL
to purchase a number of shares of Common Stock equal to its Pro Rata Portion of
the total number of shares of Common Stock (the "Other Issuance Shares") issued
                                                 ---------------------
in such Other Share Issuance.  Upon the closing of any Other Share Issuance, the
Company shall notify AOL in writing of such fact and shall specify the number of
shares of Common Stock issued in such Other Share Issuance.
<PAGE>

          (b)  Warrants.  Immediately following the expiration of the 60-day
               --------
period referred to in Section 4.2(a), the number of Warrant Shares shall be
increased, to the extent AOL actually purchases Other Issuance Shares, in the
aggregate by a number of shares of Common Stock equal to (x) a fraction, the
numerator of which is the number of Other Issuance Shares which AOL actually
purchased in connection with such Other Share Issuance and the denominator of
which is the number of Other Issuance Shares which AOL was entitled to purchase
in connection with such Other Share Issuance multiplied by (y) that number of
shares of Common Stock necessary to restore AOL's Ownership Percentage to the
Ownership Percentage in effect immediately prior to such Other Share Issuance.
Any such increase in the number of Warrant Shares shall be allocated
proportionally among all Warrants unexercised at such time.  Upon presentation
of the Warrants to the Company by AOL, the Company shall issue to AOL new
Warrants reflecting the increased number of shares of Common Stock subject
thereto.   The Company shall at all time cause to be reserved for issuance the
aggregate number of Warrant Shares issuable pursuant to the Warrants.

          SECTION 4.3  Issuances of Convertible Securities.  (a)  Grant of
                       -----------------------------------        --------
Right.  Subject to Section 4.5 and the other terms of this Section 4.3, the
Company hereby grants to AOL the right to subscribe for and purchase its Pro
Rata Portion (or any lesser amount as AOL may elect) of any securities
exercisable for or convertible into Common Stock (the "Participation
                                                       -------------
Securities") that the Company may, from time to time, propose to issue
----------
(excluding Incentive Issuances) (each a "Participation Offering").  The number
                                         ----------------------
or amount of Participation Convertible Securities which AOL may subscribe for
and purchase pursuant to this Section 4.3 shall be referred to as the "AOL
                                                                       ---
Participation Securities."
------------------------

          (b)  Notice.  The Company shall deliver to AOL written notice (a
               ------
"Participation Offering Notice") of each proposed Participation Offering, which
------------------------------
shall set forth the material terms and conditions of the proposed Participation
Offering that are  known to the Company at the time such notice is given,
including, to the extent available, the name of any proposed purchaser(s), the
names of any underwriters, placement agents, initial purchasers or similar
participants in such offering, the proposed manner of disposition, the number
and amount of Participation Securities proposed to be issued, a description of
the conversion or exchange features of the Participation Securities and the
proposed purchase price per security (or range of purchase prices) (including a
description of any non-cash consideration sufficiently detailed to permit
valuation thereof).  In addition, the Company shall have the continuing
obligation to (i) promptly provide (and, if available to the Company prior to
the time AOL must notify the Company whether it desires to participate in such
Participation Offering pursuant to Section 4.3(c), prior to such time) to AOL
any additional material information regarding the terms of such Participation
Offering (including changes in such terms) that becomes available to the
Company, including as a result of discussions with underwriters, private
placement agents, initial purchasers or similar participants in such offering
and (ii) promptly provide to AOL any other information available to the Company
concerning such Participation Offering that AOL shall reasonably request.  Each
Participation Offering Notice must be received by AOL at least fifteen (15) days
prior to the proposed Participation Offering.

          (c)  Exercise.  At any time during the 10-day period following receipt
               --------
of a  Participation Offering Notice, AOL may elect to purchase any or all of the
AOL Participation Securities at the purchase (or if the purchase price includes
consideration other than cash, the amount in cash equal to the fair value of
such other consideration) and upon the other terms and
<PAGE>

conditions upon which the Participation Securities are actually issued by
delivering a written notice to such effect to the Company. If (i) AOL elects to
purchase AOL Participation Securities and after such election the price at which
Participation Securities are issued is greater than 133% of the price specified
in the Participation Offering Notice (or the last written notice delivered to
AOL regarding such issuance of Participation Securities Shares), then AOL shall
be entitled to withdraw its election to purchase AOL Participation Securities or
(ii) if AOL fails to elect to purchase AOL Participation Securities during such
10-day period and after such 10-day period the price at which Participation
Securities are issued is less than 67% of the price specified in the
Participation Offering Notice (or the last written notice delivered to AOL
regarding such issuance of Participation Securities), then AOL shall be released
from its obligations under Article VII of this Agreement for a period of sixty
(60) days in order to allow AOL to purchase the number of shares of Common Stock
that would be issuable upon conversion of the all Participation Securities it
could have purchased in such Participation Offering. Except as provided in the
following sentence, such purchase shall be consummated concurrently with the
consummation of the Participation Offering. The closing of any purchase of AOL
Participation Securities by AOL may be extended beyond the closing of the
transaction described in the Participation Notice to the extent necessary to
obtain required governmental approvals and other necessary approvals and the
Company and AOL shall use their respective reasonable best efforts to obtain
such approvals.

          (d)  Completion of the Participation Offering.  The Company shall not
               ----------------------------------------
complete any Participation Offering unless it has complied with the provisions
of this Section 4.3.  If the Company fails to complete any Participation
Offering within thirty (30) days following the exercise by AOL of its rights to
participate in such Participation Offering pursuant to this Section 4.3, AOL
shall thereafter be entitled to withdraw or change its election to purchase AOL
Participation Securities and the Company shall continue to comply with this
Section 4.3 until such time as the Company shall deliver to AOL a written notice
that the Company is terminating such Participation Offering.  Upon any
termination of an Participation Offering without any Participation Securities
having been issued, the Company shall have no obligation to issue or sell any
AOL Participation Securities to AOL, but shall be obligated to comply with this
Section 4.3 for any subsequent Participation Offering.

          SECTION 4.4  No Restrictions.  The Company shall not enter into or
                       ---------------
permit to become effective any restrictions on AOL's rights under this Article
IV, whether pursuant to a contract, provision of the Certificate or Bylaws or
otherwise.  The Company represents to AOL that it has, and for each purchase of
securities pursuant to this Article IV it will, approve the acquisition of
securities by AOL for purposes of Section 203 of the General Corporation Law of
the State of Delaware.

          SECTION 4.5  Termination of Equity Purchase Rights.  AOL's equity
                       -------------------------------------
purchase rights under this Article IV will expire upon the earlier of (i)
December 31, 2001 or (ii) the Set Top Box Launch.
<PAGE>

                                   ARTICLE V

                              REGISTRATION RIGHTS
                              -------------------

          SECTION 5.1  Registration on Request.
                       -----------------------

          (a)  Request.  Subject to Section 5.1(b), at any time after the date
               -------
hereof, AOL (or any other Holder; provided that no Transferee of AOL or any of
                                  --------
its Affiliates or of any Transferee may request a registration pursuant to this
Section 5.1 unless the right to make such a request was transferred to such
Transferee pursuant to Section 9.3) (individually or collectively, as the case
may be, the "Demand Party") may request in writing that the Company effect the
             ------------
registration under the Securities Act of an underwritten offering of all or part
of such Demand Party's Registrable Securities, specifying the number of
Registrable Securities proposed to be sold.  Subject to the other provisions of
this Section 5.1, the Company shall promptly give written notice of such
requested registration to all other Holders, and thereupon will, as
expeditiously as possible, use its efforts to best effect the registration under
the Securities Act of:

     (i)  the Registrable Securities which the Company has been so requested to
          register by the Demand Party; and

     (ii) all other Registrable Securities which the Company has been requested
          to register by any other Holder thereof by written request given to
          the Company within thirty (30) days after the giving of such written
          notice by the Company (which request shall specify the amount of such
          Registrable Securities), all to the extent necessary to permit the
          disposition of the Registrable Securities so to be registered.

          (b)  Limits on Registration Requests.  Notwithstanding Section 5.1(a):
               -------------------------------

     (i)   in no event will the Company be required to effect more than four (4)
           registrations pursuant to this Section 5.1;

     (ii)  following the nine month anniversary of the Closing, upon the request
           of AOL, the Company will be required to effect up to two (2)
           registrations pursuant to Section 5.1(a);

     (iii) except as set forth in paragraph (ii) above, the Company will not be
           required to effect a registration pursuant to Section 5.1(a) until
           the earliest of:

           (A)  the second anniversary of the date hereof;

           (B)  the termination of the Commercial Agreement pursuant to the
                mutual agreement of the Company and AOL;

           (C)  the occurrence of a Material Breach of the Commercial Agreement
                by the Company, so long as such Material Breach has not been
                cured prior to the Demand Party's request for a registration
                pursuant to Section 5.1(a); or

           (D)  the expiration of the Commercial Agreement in accordance with
                its terms; and

     (iv)  if AOL commits a Material Breach of the Commercial Agreement, the
           Company will not be obligated to file a registration statement
           relating to any request under
<PAGE>

           this Section 5.1 prior to the earlier of (x) the expiration of a
           period of twelve (12) months from the date such Material Breach
           occurred and (y) the date such Material Breach has been cured.

           Nothing in this Section 5.1 shall operate to limit the right of any
Holder to (i) request the registration of Common Stock issuable upon the
exercise or conversion of any Warrants or Preferred Shares held by such Holder
notwithstanding the fact that at the time of request such Holder does not hold
the Common Stock underlying such Warrants or Preferred Shares or (ii) request
the registration at one time of both Preferred Shares convertible into Common
Stock and the Common Stock underlying any such Preferred Shares.

           (c)  Registration Statement Form.  The Company shall select the
                ---------------------------
registration statement form for any registration pursuant to this Section 5.1.

           (d)  Expenses.  In connection with registrations pursuant to this
                --------
Section 5.1:

      (i)  each Holder will pay its own underwriting fees and discounts, if any,
           and the fees and expenses of its legal, accounting and other advisors
           with respect to the sale of its Registrable Securities; and

     (ii)  the Company will pay all other Registration Expenses; provided that
                                                                --------
           the Company shall not be required to pay for expenses of any
           registration proceeding begun pursuant to this Section 5.1 (other
           than SEC registration fees which the Company is able to apply to a
           subsequent registration statement), the request of which has been
           subsequently withdrawn by the Demand Party, unless (a) the withdrawal
           is based upon material adverse information or developments concerning
           the Company of which the Demand Party was not aware at the time of
           such request, (b) the Holders of a majority of the Registrable
           Securities agree to forfeit their right to one requested registration
           pursuant to Section 5.1 (in which event such right shall be forfeited
           by all Holders), (c) the Company has exercised its right to postpone
           such registration pursuant to Section 5.1(h), (d) any event of the
           kinds described in Section 6.1(f) occurs or (e) the requested
           registration is not timely completed due to the Company's failure to
           comply with any of its obligations hereunder or other actions or
           omissions of the Company.

           (e)  Effective Registration Statement.  A registration requested
                --------------------------------
pursuant to this Section 5.1 will not be deemed to have been effected:

      (i)  unless a registration statement with respect thereto has become
           effective and remained effective in compliance with the provisions of
           the Securities Act with respect to the disposition of all Registrable
           Securities covered by such registration statement until the earlier
           of (x) such time as all of such Registrable Securities have been
           disposed of in accordance with the intended methods of disposition
           thereof set forth in such registration statement or (y) one-hundred-
           eighty (180) days after the effective date of such registration
           statement;

     (ii)  if after it has become effective, the registration statement is
           interfered with by any stop order, injunction or other order or
           requirement of the SEC or other
<PAGE>

           governmental agency or authority and does not thereafter become
           effective and remain effective for the period specified in paragraph
           (i) above; or

    (iii)  if the conditions to closing specified in the underwriting
           agreement, if any, entered into in connection with such registration
           are not satisfied or waived, other than by reason of a failure on the
           part of the Demand Party or other Holders.

           (f)  Underwriters.  The managing underwriters for any registration
                ------------
under this Section 5.1 shall each be a nationally recognized investment banking
firm and shall be selected by the Company; provided, that such underwriter(s)
                                           --------
shall be reasonably satisfactory to AOL (the "Managing Underwriters").
                                              ---------------------

           (g)  Priority in Requested Registrations. If the Managing Underwriter
                -----------------------------------
 of a requested registration pursuant to this Section 5.1 advises the Company in
 writing that, in its opinion, the number of securities to be included in such
 registration would be likely to have a material adverse effect on the price,
 timing or distribution of the securities to be offered in such offering as
 contemplated by the Holders (an "Adverse Effect"), then the Company shall
                                  --------------
 include in such registration: (i) first, 100% of the Registrable Securities
                                   -----
 requested to be included by the Demand Party and all other Holders of
 Registrable Securities, if any (reduced, if necessary, pro rata in proportion
 to the respective number of shares proposed to be included by each); (b)
 second, after inclusion of all the Registrable Securities proposed to be
 ------
 included in such registration by the Demand Party and the other Holders, to the
 extent of the amount of Equity Securities requested to be included by the
 Company in such registration which, in the opinion of such Managing
 Underwriter, can be sold without having the material adverse effect referred to
 above, such Equity Securities requested to be included by the Company; and (c)
 third, after inclusion of all the Registrable Securities proposed to be
 -----
 included in such registration by the Demand Party and the other Holders and all
 the Equity Securities proposed to be included by the Company, to the extent of
 the amount of Equity Securities requested to be included by the other
 stockholders of the Company in such registration which, in the opinion of such
 Managing Underwriter, can be sold without having the material adverse effect
 referred to above, such Equity Securities requested to be included by other
 stockholders of the Company. If the Managing Underwriter of any underwritten
 offering shall advise the Holders participating in a registration pursuant to
 this Section 5.1 that the Registrable Securities covered by the registration
 statement cannot be sold in such offering within a price range acceptable to
 the Demand Party, then the Demand Party shall have the right to notify the
 Company that it has determined that the registration statement be abandoned or
 withdrawn, in which event the Company shall abandon or withdraw such
 registration statement and such requested and withdrawn registration shall not
 be deemed to have been effected pursuant to Section 5.1(b)(i).

          (h)  Postponements in Requested Registrations.
               ----------------------------------------

     (i)  If, upon receipt of a registration request pursuant to Section 5.1(a),
          the Company is advised in writing by the Managing Underwriter that, in
          such firm's opinion, a registration at the time and on the terms
          requested would materially adversely affect any public offering of
          Common Stock by the Company (other than in connection with employee
          benefit and similar plans) (a "Company Offering") with respect to
                                         ----------------
          which the Company has commenced preparations for a registration prior
          to the receipt of a registration request pursuant to Section 5.1(a) or
          the
<PAGE>

          Company Board has concluded in good faith based on the written
          advice of an investment banking firm of national reputation that the
          completion of the distribution with respect to the offering
          contemplated by the registration request pursuant to Section 5.1(a)
          would have a long-term material adverse effect on the trading market
          for the Common Stock (an "Adverse Market Effect"), and, in either
                                    ---------------------
          case, the Company furnishes the Holders with a certificate signed by
          the Chief Executive Officer or Chief Financial Officer of the Company
          to such effect (and attaching the written advice of such Managing
          Underwriter or investment banking firm)  (the "Transaction Delay
                                                         -----------------
          Notice") promptly after such request, the Company shall not be
          ------
          required to effect a registration pursuant to Section 5.1(a) until the
          earliest of (A) sixty (60) days after the completion of such Company
          Offering, (B) promptly after the abandonment of such Company Offering,
          (C) promptly after a determination by the Company Board that no
          Adverse Market Effect would occur or (D) ninety (90) days after the
          date of the Transaction Delay Notice.

     (ii) If upon receipt of a registration request pursuant to Section 5.1(a)
          or while a registration request pursuant to Section 5.1(a) is pending,
          the Company Board determines in its good faith reasonable judgment
          after consultation with its principal outside securities counsel that
          the filing of a registration statement would require disclosure of
          material information which the Company has a bona fide business
          purpose for preserving as confidential and the Company provides the
          Holders written notice (the "Information Delay Notice" and, together
                                       ------------------------
          with the Transaction Delay Notice, the "Delay Notice") thereof
                                                  ------------
          promptly after the Company makes such determination, which shall be
          made promptly after the receipt of any request, the Company shall not
          be required to comply with its obligations under Section 5.1(a) until
          the earlier of (A) the date upon which such material information is
          disclosed to the public or ceases to be material or (B) ninety (90)
          days after the Holders' receipt of such notice.

    (iii) Notwithstanding the foregoing provisions of this Section 5.1(h), the
          Company shall be entitled to serve (x) only one (1) Delay Notice with
          respect to any registration requested pursuant to Section 5.1(a) and
          (y) only two (2) Delay Notices in the aggregate.

          SECTION 5.2  Incidental Registrations.  (a)  If the Company at any
                       ------------------------
time after the date hereof proposes to register Equity Securities under the
Securities Act (other than a registration on Form S-4 or S-8, or any successor
or other forms promulgated for similar purposes), whether or not for sale for
its own account, in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will, at each
such time, give prompt written notice to all Holders of its intention to do so
and of such Holders' rights under this Agreement.  Upon the written request of
any such Holder made within thirty (30) days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Holder), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holders thereof; provided that:
                                                                  --------
<PAGE>

     (i)  if, at any time after giving written notice of its intention to
          register any securities and prior to the effective date of the
          registration statement filed in connection with such registration, the
          Company shall determine for any reason not to proceed with the
          proposed registration of the securities to be sold by it, the Company
          may, at its election, give written notice of such determination to
          each Holder and, thereupon, shall be relieved of its obligation to
          register any Registrable Securities in connection with such
          registration (but not from its obligation to pay the Registration
          Expenses in connection therewith); and

     (ii) if such registration involves an underwritten offering, all Holders
          requesting to be included in the Company's registration must sell
          their Registrable Securities to the underwriters selected by the
          Company on the same terms and conditions as apply to the Company, with
          such differences, including any with respect to indemnification and
          liability insurance, as may be customary or appropriate in combined
          primary and secondary offerings.

          If a registration requested pursuant to this Section 5.2 involves an
underwritten public offering, any Holder requesting to be included in such
registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register all or any part of such securities in connection with such
registration.  Nothing in this Section shall operate to limit the right of any
Holder to request the registration of Common Stock issuable upon conversion,
exchange or exercise of securities, including Warrants or Preferred Shares, held
by such Holder notwithstanding the fact that at the time of request such Holder
does not hold the Common Stock underlying such securities. The registrations
provided for in this Section 5.2 are in addition to, and not in lieu of,
registrations made upon the request of any Demand Party in accordance with
Section 5.1.

          (b)  Expenses.  In connection with each registration of Registrable
               --------
Securities requested pursuant to this Section 5.2:

     (i)  each Holder will pay its own underwriting fees and discounts, if any,
          and the fees and expenses of its legal, accounting and other advisors
          with respect to the sale of its Registrable Securities; and

     (ii) the Company will pay all other Registration Expenses.

          (c)  Priority in Incidental Registrations.  If a registration pursuant
               ------------------------------------
to this Section 5.2 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
Registrable Securities requested to be included in such registration would be
likely to have a material adverse effect on the price, timing or distribution of
the securities to be offered in such offering as contemplated by the Company
(other than the Registrable Securities), then the Company shall include in such
registration (i) first, 100% of the securities proposed to be included by the
                 -----
Company, if any, and the Holders (reduced, if necessary, pro rata in proportion
to the respective number of shares proposed to be included by each; provided
                                                                    --------
that in no event shall the securities to be issued by the Company be reduced to
less than 75% of the total number of securities to be included in the offering)
and (b) second, to the extent of the amount of Equity Securities requested to be
        ------
included by other stockholders of the Company in such registration which, in the
opinion of such
<PAGE>

managing underwriter, can be sold without having the material adverse effect
referred to above, such Equity Securities requested to be included by other
stockholders of the Company.

          SECTION 5.3  Additional Registration Rights.  If the Company at any
                       ------------------------------
time after the date hereof grants to any other holders of Common Stock (or
securities that are convertible, exchangeable or exercisable into Common Stock)
any rights to request the Company to effect the registration under the
Securities Act of any such shares of Common Stock (or any such securities) on
terms more favorable to such holders than the terms set forth in this Article V
or Article VI, the terms of this Article V or Article VI, as the case may be,
will be deemed amended or supplemented to the extent necessary to provide the
Holders such more favorable rights and benefits.

                                  ARTICLE VI

                            REGISTRATION PROCEDURES
                            -----------------------

          SECTION 6.1  Registration Procedures.  If and whenever the Company is
                       -----------------------
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company will, as expeditiously as possible:

          (a)  prepare and, in any event within thirty (30) days after the
receipt of a request for registration, file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective within ninety (90) days
of the initial filing;

          (b)  prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period not
in excess of one-hundred-eighty (180) days and to comply with the provisions of
the Securities Act and the Exchange Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement; provided, however, that before
                                                  --------  -------
filing a registration statement or prospectus, or any amendments or supplements
thereto in accordance with Sections 6.1(a) or (b), the Company will furnish to
AOL copies of all documents proposed to be filed, which documents will be
subject to the prompt and reasonable review and comment by the Holders and their
counsel; provided further that, except for any section of the prospectus, or any
         -------- -------
amendment or supplement thereto, relating to the Holders of Registrable
Securities and the plan of distribution of the Registrable Securities, the
content of such registration or any supplement or amendment thereto shall be
within the reasonable discretion of the Company;

          (c)  furnish to each seller of such Registrable Securities such number
of copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits filed therewith, including any
documents incorporated by reference), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements of the
<PAGE>

Securities and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities by such
seller;

          (d)  use its best efforts to register or qualify such Registrable
Securities covered by such registration in such jurisdictions as each seller
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this subsection (d), it would not be
obligated to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;

          (e)  use its commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such Registrable
Securities;

          (f)  notify each seller of any such Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Company's becoming
aware that the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such seller, prepare and furnish to such seller a reasonable
number of copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the sellers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;

          (g)  otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable (but not more than eighteen (18) months) after
the effective date of the registration statement, an earnings statement which
shall satisfy the provisions of Section 11(a) of the Securities Act;

          (h)  use its best efforts to list all Registrable Securities covered
by such registration statement on Nasdaq or any other national securities
exchange on which Registrable Securities of the same class covered by such
registration statement are then listed and, if no such Registrable Securities
are so listed, on Nasdaq or any national securities exchange on which the Common
Stock is then listed;

          (i)  enter into such customary agreements (including an underwriting
agreement in customary form), which may include indemnification provisions in
favor of underwriters and other Persons in addition to, or in substitution for
the provisions of Section 6.4 hereof, and take such other actions as sellers of
a majority of shares of such Registrable Securities or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;
<PAGE>

          (j)  obtain a "cold comfort" letter or letters from the Company's
independent public accounts in customary form and covering matters of the type
customarily covered by "cold comfort" letters as the seller or sellers of a
majority of shares of such Registrable Securities shall reasonably request;

          (k)  make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
requested by any such seller, underwriter, attorney, accountant or agent
reasonably necessary to facilitate the disposition of such securities or to
establish by any such person that it conducted due diligence or a reasonable
investigation of the Company in connection with such registration and
disposition;

          (l)  notify the Holders of Registrable Securities included in such
registration statement and the managing underwriter or agent, immediately, and
confirm the notice in writing:

   (i)    when the registration statement, or any post-effective amendment to
          the registration statement, shall have become effective, or any
          supplement to the prospectus or any amendment to the prospectus shall
          have been filed;

   (ii)   of the receipt of any comments from the SEC;

   (iii)  of any request of the SEC to amend the registration statement or
          amend or supplement the prospectus or for additional information; and

   (iv)   of the issuance by the SEC of any stop order suspending the
          effectiveness of the registration statement or of any order preventing
          or suspending the use of any preliminary prospectus, or of the
          suspension of the qualification of the registration statement for
          offering or sale in any jurisdiction, or of the institution or
          threatening of any proceedings for any of such purposes;

          (m)  use its best efforts to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;

          (n)  if requested by the managing underwriter or agent or any Holder
of Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such Holder reasonably
requests to be included therein, including, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter or agent,
the purchase price being paid therefor by such underwriter or agent and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment;
<PAGE>

          (o)  cooperate with the Holders of Registrable Securities covered by
the registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or agent, if any, or such Holders may
request;

          (p)  use its best efforts to obtain for delivery to the Holders of
Registrable Securities being registered and to the underwriter or agent an
opinion or opinions from counsel for the Company in customary form and in form,
substance and scope reasonably satisfactory to such Holders, underwriters or
agents and their counsel;

          (q)  cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD or Nasdaq or any other securities exchange or self
regulatory organization; and

          (r)  subject to and consistent with the best judgment of the
underwriters, use its commercially reasonable efforts (taking into account the
interests of the Company) to make available the executive officers of the
Company to participate with the Holders and any underwriters in any "road shows"
or other selling efforts that may be reasonably requested by the Holders in
connection with the methods of distribution for the Registrable Securities.

          SECTION 6.2  Information Supplied.  The Company may require each
                       --------------------
seller of Registrable Securities as to which any registration is being effected
to furnish it with such information regarding such seller and pertinent to the
disclosure requirements relating to the registration and the distribution of
such securities as the Company may from time to time reasonably request in
writing.

          SECTION 6.3  Restrictions on Disposition.  Each Holder agrees that,
                       ---------------------------
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 6.1(f), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 6.1(f), and,
if so directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.  In the event the Company shall
give any such notice, the period mentioned in Section 6.1(b) shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6.1(f) and to and including the date
when each seller of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 6.1(f).

          SECTION 6.4  Indemnification.  (a)  Indemnification by the Company.
                       ---------------        ------------------------------
In the event of any registration of any securities of the Company under the
Securities Act pursuant to Article V, the Company shall indemnify, to the extent
permitted by law, the seller of any Registrable Securities covered by such
registration statement, each Affiliate of such seller and their respective
directors, officers, employees and stockholders or members or general and
limited partners (and any director, officer, Affiliate, employee, stockholder
and controlling
<PAGE>

Person of any of the foregoing), each Person who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls such seller or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any and all
                                   -------------------
losses, claims, damages or liabilities, joint or several, actions or proceedings
(whether commenced or threatened) in respect thereof ("Claims") and expenses
                                                       ------
(including reasonable attorney's fees and reasonable expenses of investigation)
to which such Indemnified Party may become subject under the Securities Act,
common law or otherwise, insofar as such Claims or expenses arise out of, relate
to or are based upon:

     (i)  any untrue statement or alleged untrue statement of any material fact
          contained in any registration statement under which such securities
          were registered under the Securities Act, any preliminary, final or
          summary prospectus contained therein, or any amendment or supplement
          thereto; or

     (ii) any omission or alleged omission to state therein a material fact
          required to be stated therein or necessary to make the statements
          therein (in the case of a prospectus, in light of the circumstances
          under which they were made) not misleading.

          (b)  Limits on Indemnification by the Company.  Notwithstanding the
               ----------------------------------------
foregoing, the Company shall not be liable to any Indemnified Party in any such
case to the extent, but only to the extent:

     (i)  that any such Claim or expense arises out of, relates to or is based
          upon any untrue statement or alleged untrue statement or omission or
          alleged omission made in such registration statement or amendment or
          supplement thereto or in any such preliminary, final or summary
          prospectus in reliance upon and in conformity with written information
          regarding the seller of Registrable Securities furnished to the
          Company through an instrument duly executed by or on behalf of such
          seller specifically stating that it is for use in the preparation
          thereof; and

     (ii) that the foregoing indemnity with respect to any untrue statement
          contained in or omitted from a registration statement or the
          prospectus shall not inure to the benefit of any party (or any person
          controlling such party) who is obligated to deliver a prospectus in
          transactions in a security as to which a registration statement has
          been filed pursuant to the Securities Act and from whom the person
          asserting any such Claims purchased any of the Registrable Securities
          to the extent that it is finally judicially determined that such
          Claims resulted solely from the fact that such party sold Registrable
          Securities to a person to whom there was not sent or given, at or
          prior to the written confirmation of such sale, a copy of the
          registration statement or the prospectus, as amended or supplemented,
          and (x) the Company shall have previously and timely furnished
          sufficient copies of the registration statement or prospectus, as so
          amended or supplemented, to such party in accordance with this
          Agreement and (y) the registration statement or prospectus, as so
          amended or supplemented, would have corrected such untrue statement or
          omission of a material fact.
<PAGE>

          (c)  Survival of the Company's Indemnification Obligation.  The
               ----------------------------------------------------
indemnity provided by this Section 6.4 will remain in full force and effect
regardless of any investigation made by or on behalf of any Indemnified Party
and shall survive the Transfer of securities by any seller.

          (d)  Indemnification by the Prospective Sellers.  The Company may
               ------------------------------------------
require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Sections 5.1 or 5.2 herein, that
it shall have received an undertaking reasonably satisfactory to it from the
prospective seller of such Registrable Securities or any underwriter to
indemnify (in the same manner and to the same extent as set forth in Section
6.4(a)) the Company and all other prospective sellers or any underwriter, as the
case may be, with respect to any untrue statement or alleged untrue statement in
or omission or alleged omission from such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, if such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by or on behalf of such seller or underwriter specifically stating that it is
for use in the preparation of such registration statement, preliminary, final or
summary prospectus or amendment or supplement, or a document incorporated by
reference into any of the foregoing.  Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company
or any of the prospective sellers, or any of their respective Affiliates,
directors, officers or controlling Persons and shall survive the Transfer of
securities by any seller.  In no event shall the liability of any seller of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds actually received by such seller upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

          (e)  Notice and Defense of Action.  Promptly after receipt by an
               ----------------------------
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 6.4, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action or proceeding; provided, however, that
                                                         --------  -------
the failure of the indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Section 6.4, except to
the extent that the indemnifying party is materially prejudiced by such failure
to give notice.  In case any such action or proceeding is brought against an
indemnified party, unless in such indemnified party's reasonable judgment (after
consultation with legal counsel) a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such action or proceeding, the
indemnifying party will be entitled to participate in and to assume the defense
thereof (at its expense), jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
                                                              --------
that in the event that (i) the indemnifying party declines or fails to assume
the defense of the action or proceeding or to employ counsel reasonably
satisfactory to the indemnified party, in either case within a 30-day period,
(ii) if the indemnifying party is not vigorously defending such action or
proceeding or (iii) the named parties to any proceeding (including impleaded
parties) include both such indemnified party and the indemnifying party,
<PAGE>

and such indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, then such indemnified
party may employ counsel to represent or defend it in any such action or
proceeding and the indemnifying party shall pay the reasonable fees and
disbursements of such counsel or other representative as incurred; provided,
                                                                   --------
however, that the indemnifying party shall not be required to pay the fees and
-------
disbursements of more than one counsel for all indemnified parties (together
with appropriate local counsel) in any jurisdiction in any single action or
proceeding.

          (f)  Settlement.  No indemnifying party will settle any action or
               ----------
proceeding or consent to the entry of any judgment without the prior written
consent of the indemnified party, unless such settlement or judgment (i)
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a release to such indemnified party from all liability in respect
of such action or proceeding and (ii) does not involve the imposition of
equitable remedies or the imposition of any obligations on such indemnified
party and does not otherwise adversely affect such indemnified party, other than
as a result of the imposition of financial obligations for which such
indemnified party will be indemnified hereunder.  No indemnified party will
settle any action or proceeding or consent to the entry of any judgment without
the prior written consent of the indemnifying party, unless such settlement or
judgment (i) includes as an unconditional term thereof a release of such
indemnifying party from all liability in respect of such action or proceeding or
(ii) the indemnifying party fails to assume and maintain the defense of the
applicable action or proceeding pursuant to this Section 6.4(c).

          (g)  Contribution.
               ------------

     (i)  If the indemnification provided for in this Section 6.4 from the
          indemnifying party is unavailable to an indemnified party hereunder in
          respect of any Claim or expenses referred to herein, then the
          indemnifying party, in lieu of indemnifying such indemnified party, to
          the extent permitted by applicable law, shall contribute to the amount
          paid or payable by such indemnified party as a result of such Claim or
          expenses in such proportion as is appropriate to reflect the relative
          fault of the indemnifying party and indemnified party in connection
          with the actions which resulted in such Claim or expenses, as well as
          any other relevant equitable considerations.  The relative fault of
          such indemnifying party and indemnified party shall be determined by
          agreement of the indemnifying party and indemnified party or, failing
          that, by a court of law, by reference to, among other things, whether
          any action in question, including any untrue or alleged untrue
          statement of a material fact or omission or alleged omission to state
          a material fact, has been made by, or relates to information supplied
          by, such indemnifying party or indemnified party, and the parties'
          relative intent, knowledge, access to information and opportunity to
          correct or prevent such action.  The amount paid or payable by a party
          under this Section 6.4(g) as a result of the Claim and expenses
          referred to above shall be deemed to include any legal or other fees
          or expenses reasonably incurred by such party in connection with any
          action or proceeding.

     (ii) The parties hereto agree that it would not be just and equitable if
          contribution pursuant to this Section 6.4(g) were determined by pro
          rata allocation or by any
<PAGE>

          other method of allocation which does not take account of the
          equitable considerations referred to in Section 6.4(g)(i).  No Person
          guilty of fraudulent misrepresentation (within the meaning of Section
          11(f) of the Securities Act) shall be entitled to contribution from
          any Person who was not guilty of such fraudulent misrepresentation.

          (h)  Other Indemnification Obligations.  Indemnification similar to
               ---------------------------------
that specified in this Section 6.4 (with appropriate modifications) shall be
given by the Company and each seller of Registrable Securities with respect to
any required registration or other qualification of securities under any Law or
with any governmental authority other than as required by the Securities Act.

          (i)  Additional Liabilities.  The obligations of the parties under
               ----------------------
this Section 6.4 shall be in addition to any liability which any party may
otherwise have to any other party.

          SECTION 6.5  Required Reports.  The Company covenants that it will
                       ----------------
file the reports required to be filed by it under the Securities Act and the
Exchange Act (or, if the Company is not required to file such reports, it will,
upon the request of any Holder, make publicly available such information), and
it will take such further action as any Holder may reasonably request, all to
the extent required from time to time to enable such Holder to sell shares of
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144, as such Rule may be
amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC.  Upon the request of any Holder, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.

          SECTION 6.6  Holdback Agreement.  If any registration under Section
                       ------------------
5.1 or under Section 5.2 in which a Holder participates is in connection with an
underwritten public offering, each Holder agrees not to effect any public sale
or distribution, including any sale pursuant to Rule 144 under the Securities
Act, of any Equity Securities of the Company (in each case, other than as part
of such underwritten public offering), within seven (7) days before, or one
hundred eighty (180) days (or such lesser period as the managing underwriters
may permit) after, the effective date of any such registration pursuant to
Sections 5.1 or 5.2, and the Company hereby also so agrees, and agrees to use
reasonable efforts to cause each other holder of any equity security of the
Company purchased from the Company (at any time other than in a public
offering), to agree to similar limitations of like duration.

          SECTION 6.7  No Inconsistent Agreement.  The Company represents and
                       -------------------------
warrants that it will not enter into, or cause or permit any of its Subsidiaries
to enter into, any agreement which conflicts with or limits or prohibits the
exercise of the rights granted to the Holders of Registrable Securities in this
Agreement.

<PAGE>

                                  ARTICLE VII

                                  STANDSTILL
                                  ----------

          SECTION 7.1  Acquisition of Additional Voting Securities.  (a)
                       -------------------------------------------
Subject to Section 7.1(c) and Sections 4.1, 4.2 and 4.3, during the Standstill
Period, AOL hereby agrees that it may not, and that it will not permit its
controlled Affiliates to, without the prior approval of the Company Board
(excluding, for purposes of such approval, the AOL Representative):

   (i)    acquire or agree to acquire the beneficial ownership of any additional
          Equity Securities of the Company or any voting rights with respect to
          the Capital Stock of the Company; provided that the foregoing
                                            --------
          restrictions shall not apply to any acquisition or proposed
          acquisition of beneficial ownership of any additional Voting
          Securities of the Company:

          (x)  which is by way of stock dividends, stock reclassifications or
               other distributions or offerings made available on a pro rata
               basis to holders of Equity Securities of the Company generally;
               or

          (y)  involves Equity Securities acquired from the Company (including
               upon exercise of the Warrants, conversion of Preferred Shares and
               Participation Securities or pursuant to Article IV) or otherwise
               in accordance with the provisions of this Agreement and the other
               Transaction Agreements;

   (ii)   make, or in any way participate in, any "solicitation" of "proxies"
          (as such terms are defined or used in Regulation 14A under the
          Exchange Act) to vote any Voting Securities of the Company or seek to
          influence any Person with respect to the voting of any Voting
          Securities of the Company or publicly announce its intention to do so;

   (iii)  make any public announcement with respect to, or submit any offer or
          purchase proposal that is required under applicable law to be made
          public by the Company for, any Acquisition Proposal;

   (iv)   act, either independently or in concert with others, in connection
          with any Acquisition Proposal, or form or join a Group; provided that
                                                                  --------
          this Section 7.1(a)(iv) shall not restrict AOL from acting
          independently to submit an Acquisition Proposal that is not prohibited
          under paragraph (iii) of this Section 7.1(a); or

   (v)    make any demand, request or proposal to amend, waive or terminate any
          provision of this Section 7.1

(collectively, the "Acquisition Restrictions").
                    ------------------------

          (b)   Nothing contained in this Section 7.1 shall be construed to
limit or restrict any action taken in good faith by the AOL Representative or
AOL Observer in his or her capacity as a Director or observer on the Company
Board.

          (c)  The Acquisition Restrictions will cease to apply from and after
such time as (i) the Company materially breaches any of its obligations under
Section 7.1(e) or Article VIII of this Agreement, (ii) the Company materially
breaches its obligations under Sections 6.2 or 6.3 of
<PAGE>

the Investment Agreement or (iii) the Company or any representative of the
Company delivers confidential information to any Third Party who has expressed
an interest in making, or has made, an Acquisition Proposal and such Third Party
has not entered into a "standstill" agreement or other agreement containing
restrictions similar to those contained in this Section 7.1 with the Company.

          (d)  Notwithstanding the Acquisition Restrictions, AOL shall be
permitted to file one or more amendments to its Schedule 13D and any other
similar or successor forms required to be filed with the SEC to reflect any
proposals or announcements it is not prohibited from making, or other actions it
is not prohibited from taking, pursuant to this Section 7.1.

          (e)  In the event (i) the Company or any representative of the Company
solicits an Acquisition Proposal or any interest in making an Acquisition
Proposal from any Third Party or (ii) the Company receives an unsolicited
Acquisition Proposal which it determines to consider, then AOL shall be notified
promptly, but in any event, within five (5) Business Days of such event and will
be released from the Acquisition Restrictions to the extent required in order to
submit an Acquisition Proposal to the Company and participate in the process
developed by the Company for consideration of Acquisition Proposals (if any), so
long as AOL agrees to be bound by the same rules (if any) as are applicable to
other Third Parties participating in such process; provided, however, in no
                                                   --------  -------
event will AOL be required to agree to any rules governing the conduct of any
Third Party that are in any way more restrictive to AOL than its obligations
contained in this Section 7.1.

          (f)  If the Company or any representative of the Company at any time
delivers confidential information to any Third Party who has expressed an
interest in making, or has made, an Acquisition Proposal and such Third Party
has entered into a "standstill" agreement with the Company which contains terms
that are more favorable to such Third Party than AOL's obligations under this
Section 7.1, then the Acquisition Restrictions and the other provisions of this
Section 7.1 shall be deemed amended or supplemented to the extent necessary to
provide AOL with the benefit of such more favorable terms.

                                 ARTICLE VIII

                     RIGHT OF NOTIFICATION AND FORBEARANCE
                     -------------------------------------

          SECTION 8.1  Right of Notification.  (a)  During the Standstill
                       ---------------------
Period, the Company will notify AOL in writing within five (5) Business Days of
(i) its receipt of a bona fide Acquisition Proposal from a Third Party, (ii) the
determination by the Company Board to solicit any Acquisition Proposal from a
Third Party, and (iii) the determination by the Company Board to provide
confidential information to, or enter into negotiations or discussions with, a
Third Party who has expressed an interest (which Third Party in the case of
clause (iii) has included a potential price or price range which the Company
Board has determined warrants exploration) in making, or has made, an
Acquisition Proposal (each, an "Acquisition Proposal Notice").
                                ---------------------------

          (b)  Within two (2) Business Days of receipt of any Acquisition
Proposal Notice, AOL may provide a list of at least fifteen (15) entities, each
of which AOL in good faith deems to be (i) capable of completing an acquisition
of the Company and (ii) either (w) a television or
<PAGE>

film media company, (x) a video service operator, (y) an Internet service
provider or (z) a company providing interactive video services or enabling
platform technologies.

          (c)  Within one (1) Business Day of the Company's receipt of such
list, the Company will specify whether or not the Third Party making such
Acquisition Proposal or expressing interest in making an Acquisition Proposal is
or is an Affiliate of one of the entities set forth on such list.

          SECTION 8.2  Forbearance.  During the Standstill Period, the Company
                       -----------
shall not enter into any agreement, letter of intent or similar document
(whether binding or not) with respect to any Acquisition Proposal prior to the
expiration of a five (5) Business Day period following delivery of an
Acquisition Proposal Notice under paragraph (ii) or (iii) of Section 8.1(a),
relating to such Acquisition Proposal.

          SECTION 8.3  Other Rights.  If the Company at any time after the date
                       ------------
hereof grants to any Person(s) any rights of notification or forbearance with
terms that are more favorable to such Person(s) than the terms set forth in this
Article VIII, the terms of this Article VIII will be deemed amended or
supplemented to the extent necessary to provide AOL such more favorable terms.

                                  ARTICLE IX

                                 MISCELLANEOUS
                                 -------------

          SECTION 9.1  Termination.  (a)  Except as specifically set forth
                       -----------
herein, the provisions of this Agreement shall terminate as follows:

   (i)    by mutual agreement of the parties;

   (ii)   at such time as no Holder holds any Registrable Securities; or

   (iii)  upon the termination of the Investment Agreement prior to the
          closing of the issuance of the Shares, Preferred Shares (if any) and
          Warrants thereunder.

          (b)  Nothing herein shall relieve any party from any liability for the
breach of any of the agreements set forth in this Agreement.

          SECTION 9.2  Amendments and Waivers.  Except as otherwise provided
                       ----------------------
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against any party hereto unless such modification, amendment
or waiver is approved in writing by such party.  The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.

          SECTION 9.3  Successors, Assigns and Transferees.  This Agreement
                       -----------------------------------
shall bind and inure to the benefit of and be enforceable by the parties hereto
and their respective
<PAGE>

successors, permitted assigns and Transferees. Except as expressly provided
herein, this Agreement may not be assigned without the prior written consent of
the other party, except that (i) AOL may assign its rights and obligations
hereunder to any of its Affiliates and (ii) AOL (or any Transferee of Equity
Securities) may assign any or all of its rights under Articles V and VI to any
Transferee of Equity Securities.

          SECTION 9.4  Notices.  (a)  All notices required or permitted
                       -------
hereunder shall be in writing and shall be deemed effectively given (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient or, if not,
then on the next Business Day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid or (iv)
one (1) Business Day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt.

          (b)   All communications shall be sent as follows:

          (i)   to the Company and AOL, to their respective addresses specified
     in Section 7.10 of the Investment Agreement;

          (ii)  to any other Holder, to the address of such Holder as shown in
     the stock record books of the Company; or

          (iii) to such other address for any party as it may specify by like
     notice.

          SECTION 9.5  Further Assurances.  At any time or from time to time
                       ------------------
after the date hereof, the parties agree to cooperate with each other, and at
the request of any other party, to execute and deliver any further instruments
or documents and to take all such further action as the other party may
reasonably request in order to evidence or effectuate the consummation of the
transactions contemplated hereby and to otherwise carry out the intent of the
parties hereunder.

          SECTION 9.6  Entire Agreement.  Except as otherwise expressly set
                       ----------------
forth herein, this document and the other Transaction Agreements embody the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersede and preempt any prior understandings,
agreements or representations by or among the parties, written or oral, that may
have related to the subject matter hereof in any way.

          SECTION 9.7  Delays or Omissions.  It is agreed that no delay or
                       -------------------
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring.  It is
further agreed that any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach, default or
noncompliance under this Agreement or any waiver on such party's part of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing.  All
remedies, either under this Agreement, by law, or otherwise afforded to any
party, shall be cumulative and not alternative.
<PAGE>

          SECTION 9.8  Governing Law; Jurisdiction; Waiver of Jury Trial.  This
                       -------------------------------------------------
Agreement shall be governed in all respects by the laws of the State of New
York, except, in the case of the Company and with respect to Section 2.1, to the
extent that the General Corporation Law of the State of Delaware is applicable.
Any suit, action or proceeding with respect to this Agreement may be brought in
any court or before any similar authority in a court of competent jurisdiction
in the State of New York, and the parties hereto hereby submit to the non-
exclusive jurisdiction of such courts for the purpose of such suit, proceeding
or judgment.  Each of the parties hereto hereby irrevocably and unconditionally
waives trial by jury in any legal action or proceeding in relation to this
Agreement and for any counterclaim therein.

          SECTION 9.9  Severability.  In case any provision of this Agreement
                       ------------
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

          SECTION 9.10  Enforcement.  Each party hereto acknowledges that money
                        -----------
damages would not be an adequate remedy in the event that any of the covenants
or agreements in this Agreement are not performed in accordance with its terms,
and it is therefore agreed that in addition to and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
the terms and provisions hereof.

          SECTION 9.11  Titles and Subtitles.  The titles of the sections and
                        --------------------
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

          SECTION 9.12  Counterparts; Facsimile Signatures.  This Agreement may
                        ----------------------------------
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.  This Agreement may
be executed by facsimile signature(s).

                 [Remainder of page intentionally left blank.]
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed the STOCKHOLDERS
AND REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                              TIVO INC.

                              By: /s/ Michael Ramsay
                                 -------------------------------
                                 Name:   Michael Ramsay
                                 Title:  Chief Executive Officer and Chairman
                                         of the Board of Directors (Principal
                                         Executive Officer)

                              AMERICA ONLINE, INC.

                              By:/s/ David M. Colburn
                                 -------------------------------
                                 Name:  David M. Colburn
                                 Title: President, Business Affairs<PAGE>

                                   TIVO INC.

                             INVESTMENT AGREEMENT

     This Investment Agreement (the "Agreement") is entered into as of June 9,
2000, by and between TiVo Inc., a Delaware corporation (the "Company"), and
America Online, Inc., a Delaware Corporation (the "Purchaser"), relating to,
among other things, the Company's common stock, par value $0.001 per share (the
"Common Stock"), and the Company's Series A Convertible Preferred Stock, par
value $0.001 per share (the "Preferred Stock").

                                    Recitals

     Whereas, the Company desires to sell to the Purchaser and the Purchaser
desires to purchase from the Company, Common Stock and, depending on the trading
price of the Common Stock, Preferred Stock (collectively, the "Shares") on the
terms and conditions set forth in this Agreement (the "Share Purchase");

     Whereas, in connection with the sale and issuance of the Shares, the
Company desires to issue to the Purchaser the Warrants (as defined herein) to
purchase shares of Common Stock;

     Whereas, simultaneously herewith, the Company and the Purchaser are
entering into (i) a Stockholders and Registration Rights Agreement (the
"Stockholders Agreement") which will provide for certain rights and obligations
of the parties related to, among other things, the Purchaser's equity interests
in the Company, and (ii) a Product Integration and Marketing Agreement (the
"Commercial Agreement"), pursuant to which the Company and the Purchaser will
work together to jointly develop a branded interactive television service;

     Whereas, simultaneously herewith, certain stockholders of the Company
collectively owning in excess of a majority of the outstanding shares of Common
Stock are entering into a Voting Agreement (the "Voting Agreement") with the
Purchaser, pursuant to which such stockholders agree to vote their shares of
Common Stock in favor of certain of the transactions contemplated hereby and by
the Related Agreements (as defined herein);

     Now, Therefore, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

SECTION 1.  Agreement To Sell And Purchase.

     1.1  Authorization of Shares.  Subject to receipt of the Company
Stockholder Approval (as defined below), the Company has authorized (i) the sale
and issuance to the Purchaser of the Shares and the Warrants, (ii) the issuance
of the shares of Common Stock to be issued upon conversion of the Preferred
Shares (the "Conversion Shares") and (iii) the issuance of the Warrant Shares
(as defined herein) to be issued upon exercise of the Warrants. The Shares,
Conversion Shares and Warrant Shares shall have the rights, preferences,
privileges and

                                       1.
<PAGE>

restrictions set forth in the Amended and Restated Certificate of Incorporation
of the Company in the form attached hereto as Exhibit A (the "Restated
Certificate").

     1.2  Sale and Purchase.

          (a)  Common Stock.  Subject to Section 1.2(c) and the other terms and
conditions of this Agreement, the Company agrees to issue and sell to the
Purchaser and the Purchaser agrees to purchase at the Closing (as defined below)
that number of shares of Common Stock, which when multiplied by the Common Stock
Price (as defined below) is as near as possible to two hundred million dollars
($200,000,000) (the "Common Shares"). Subject to Section 1.2(b), the per share
purchase price for the Common Shares shall be equal to the higher of (i) $23.00,
or (ii) the average closing price of the Common Stock on the Nasdaq National
Market System for the 10 consecutive full trading days ending on the
Determination Date (as defined below) (the "Closing Average"), subject to a
maximum per share purchase price of thirty-five dollars ($35) (the "Common Stock
Price"). If the Closing Average is less than ten dollars ($10) per share, the
Purchaser will have the right to terminate this Agreement and the transactions
contemplated hereby, subject to the Company's rights under Section 1.2(b), at
any time during the four Business Day period commencing on the Determination
Date, exercisable by the Purchaser's delivery of written notice to such effect
to the Company during such four Business Day period; provided that such notice
and the Purchaser's termination of this Agreement may be withdrawn at any time
during such four Business Day period. For purposes hereof, "Determination Date"
means the trading day immediately preceding the date on which all the conditions
to Closing (other than conditions that, by their terms, cannot be satisfied
until the Closing) set forth in Section 5 hereof shall have been satisfied or
waived.

          (b)  Adjustment of Common Stock Price.  If the Purchaser exercises its
termination right pursuant to Section 1.2(a), the Company shall have the right,
exercisable during the three Business Day period following the date of the
Purchaser's notice of termination by delivery of written notice to the Purchaser
during such three Business Day period, to adjust the Common Stock Price to be
ten dollars ($10) per share. If the Company makes an election to adjust the
terms of the transaction as contemplated by the preceding sentence within such
three Business Day period, (i) no termination of this Agreement shall be deemed
to have occurred pursuant to Section 1.2(a) and (ii) this Agreement shall remain
in effect in accordance with its terms, except that all references in this
Agreement to the Common Stock Price shall be deemed to refer to the Common Stock
Price as adjusted pursuant to this Section 1.2(b).

          (c)  Restructuring of Share Purchase if Common Stock Price Is Less
Than Thirty Dollars.  In the event that the Common Stock Price is less than
thirty dollars ($30) per share, the number of shares of Common Stock to be
purchased by the Purchaser shall be reduced and, subject to the terms and
conditions of this Agreement, the Company shall issue to the Purchaser shares of
Preferred Stock in accordance with this Section 1.2(c). For purposes of this
Section 1.2(c), the term "Adjustment Price" shall mean (i) if the Closing
Average is equal to or greater than ten dollars ($10) per share, the Common
Stock Price or (ii) if the Closing Average is less than $10, the Closing
Average.

               (i)   Decrease in Number of Common Shares Purchased.  The number
of Common Shares that the Company shall issue to the Purchaser shall be reduced
to a

                                       2.
<PAGE>

number equal to 6,666,667 shares multiplied by a fraction, the numerator of
which is the Adjustment Price and the denominator of which is thirty dollars
($30).

               (ii)   Sale of Preferred Stock to the Purchaser.  The Company
agrees to issue to the Purchaser and the Purchaser agrees to purchase in
accordance with the terms hereof that number of shares of Preferred Stock having
an aggregate initial liquidation value equal to (x) two hundred million dollars
($200,000,000) less (y) the aggregate number of Common Shares purchased
multiplied by the Adjustment Price (the "Preferred Shares"). If, as of the
Closing Date, the sum of (1) the aggregate initial liquidation value of the
Preferred Shares to be purchased pursuant to the preceding sentence, (2) the
value of the Common Shares to be purchased (calculated as the product of the
number of Common Shares to be purchased and the Common Stock Price) and (3) the
value of the Common Stock previously owned by the Purchaser (calculated as the
product of the number of such shares and the amount paid therefor), exceeds 25%
of the sum of (1) the aggregate initial liquidation value of Preferred Shares to
be purchased, (2) the value of Common Shares to be purchased (calculated as the
product of the number of Common Shares to be purchased and the Common Stock
Price) and (3) the value of all the shares of Common Stock outstanding on the
Closing Date prior to the transactions contemplated hereby (calculated as the
product of the number of such shares and the Closing Average) (such excess above
25%, the "Excess Equity Value"), then the number of shares of Preferred Stock to
be purchased by the Purchaser shall be reduced by a number of shares as would
have an aggregate initial liquidation value equal to the Excess Equity Value
(the "Excess Preferred Shares").

     1.3  Warrants.  Upon the closing of the Share Purchase, in accordance with
this Section 1.3, the Company shall issue to the Purchaser warrants (the
"Warrants") to purchase in the aggregate a number of shares of Common Stock
which, when combined with the number of shares of Common Stock owned by the
Purchaser as of the Closing Date and the number of shares of Common Stock that
would be issuable as of the Closing pursuant to the Preferred Shares to be
issued pursuant to Section 1.2(c)(ii), if any, would constitute (after issuance)
30% of all the issued and outstanding capital stock of the Company as of the
Closing Date, rounded to the nearest whole share (the "Warrant Shares"). The
Warrant Shares shall be allocated among different forms of warrants as follows:

          (i)   a warrant to purchase the lesser of (i) 33 1/3% of all the
Warrant Shares and (ii) 2,941,402 Warrant Shares shall be issued in the form of
Exhibit B hereto;

          (ii)  a warrant to purchase the lesser of (i) 33 1/3% of all the
Warrant Shares and (ii) 2,941,401 Warrant Shares shall be issued in the form of
Exhibit C hereto; and

          (iii) (A) if the Closing Average is equal to or greater than thirty
dollars ($30), a warrant to purchase the remaining Warrant Shares after the
allocation set forth in clauses (i) and (ii) above (the "Vested Warrant Shares")
in the form of Exhibit D hereto, having a per share exercise price equal to the
Common Stock Price or (B) if the Closing Average is less than thirty dollars
($30), (1) a warrant to purchase a number of Warrant Shares equal to the number
of Vested Warrant Shares multiplied by a fraction, the numerator of which is the
Adjustment Price and the denominator of which is thirty dollars ($30) in the
form of Exhibit D hereto, having a per share exercise price equal to the Common
Stock Price, and (2) a warrant to purchase the

                                       3.
<PAGE>

remaining Vested Warrant Shares after the allocation set forth in the preceding
clause (1) in the form of Exhibit E hereto, having a per share exercise price
equal to the lesser of (x) thirty dollars ($30) and (y) three times the Closing
Average; provided that a portion of any Warrant to be issued pursuant to this
Section 1.3(iii)(B)(2) shall be mandatorily exercisable in accordance with its
terms with respect to a number of Vested Warrant Shares equal to the number of
shares of Common Stock, if any, that would have been issuable upon conversion of
the Excess Preferred Shares (if they were issued) as of the Closing Date,
subject to a maximum of all the Vested Warrant Shares subject to such Warrant.

The Purchaser shall not be obligated to pay any additional consideration for the
issuance of the Warrants and, in addition to the terms set forth above, the
terms of each of the Warrants shall be as set forth in Exhibits B, C, D and, if
applicable, E.

     1.4  Use and Escrow of Certain Funds.

          (a)  The Company and the Purchaser agree that (i) sixty percent (60%)
of the proceeds received by the Company in the Share Purchase and forty percent
(40%) of the proceeds received by the Company upon the exercise of any of the
Warrants shall be retained by the Company without any restriction whatsoever on
the use thereof and (ii) an amount in cash equal to forty percent (40%) of any
proceeds received by the Company in the Share Purchase and sixty percent (60%)
of the proceeds received by the Company upon the exercise of any of the Warrants
shall be deposited into an interest-bearing escrow account (the "Escrow
Account") with an escrow agent to be selected by mutual agreement of the Company
and the Purchaser pursuant to an escrow agreement in the form of Exhibit F
hereto, with such changes and additions as shall be requested by the escrow
agent or the L/C Bank (as defined below) and reasonably acceptable to the
Company and the Purchaser (the "Escrow Agreement"). At any time that this
Agreement provides for the Escrowed Funds to be released from the Escrow
Account, both parties agree to take any action required under the Escrow
Agreement to cause the release of the Escrowed Funds. Such proceeds shall be
allocated in such manner until such time as the aggregate amount of proceeds
retained by the Company pursuant to clause (i) above equals one hundred million
dollars ($100,000,000), after which time an amount in cash equal to all such
proceeds shall be deposited into the Escrow Account until such time as all such
deposited funds (but excluding any interest earned on such funds) equal one
hundred million dollars ($100,000,000), after which time all further proceeds
shall be retained by the Company. All amounts deposited into the Escrow Account,
together with all interest earned on amounts in the Escrow Account (all such
funds and interest, the "Escrowed Funds"), shall be held as a trust fund and
shall not be subject to any lien, attachment, trustee process or any other
judicial process of any creditor of any party hereto, and shall be held and
distributed in accordance with the terms, at the times and to the parties in
accordance with the terms hereof and the Escrow Agreement. Upon release to the
Company in accordance with this Section 1.4 and the terms of the Escrow
Agreement, one hundred million dollars ($100,000,000) of the Escrowed Funds
shall be designated as "Earmarked Funds" and used exclusively in accordance with
Section 8.2 of the Commercial Agreement and any additional Escrowed Funds shall
be released to the Company and may be used by the Company for any purpose
whatsoever. If, upon the release of the Escrowed Funds to the Company in
accordance with the terms of the Escrow Agreement, the amount of Escrowed Funds
(excluding any interest earned while in the Escrow Account) is less than one
hundred million dollars ($100,000,000) at such time, then 60% of the proceeds
from the exercise of any

                                       4.
<PAGE>

of the Warrants (up to the difference between one hundred million dollars
($100,000,000) and such amount of Escrowed Funds) shall also be designated as
"Earmarked Funds" and used exclusively in accordance with Section 8.2 of the
Commercial Agreement.

          (b)  If (i) the bona fide commercial release and deployment ("Set Top
Box Launch") of the Integrated Product (as defined in the Commercial Agreement)
has not occurred by December 31, 2001, and (ii) the Purchaser has not committed
a Material Breach (as defined in the Commercial Agreement) of the Commercial
Agreement that has not been cured or waived at such time, then the Purchaser
shall have the option to require the Company, exercisable by written notice to
such effect to the Company (a "Put Notice"), to repurchase that number of
Preferred Shares having an initial liquidation value equal to one hundred
million dollars ($100,000,000) (the "Put Amount") and, if all the Preferred
Shares have an aggregate initial liquidation value of less than the Put Amount,
then the Purchaser may also require the Company to repurchase a number of shares
of Common Stock having a value (calculated as the product of the number of
shares of Common Stock and the Common Stock Price) equal to the difference
between the aggregate initial liquidation value of the Preferred Shares and the
Put Amount. Subject to Section 1.4(c), the aggregate purchase price for the
repurchase of Shares pursuant to this Section 1.4(b) shall be deemed paid by the
release to the Purchaser of all the Escrowed Funds (including all interest
included therein); provided that amount of the interest earned on funds
deposited into the Escrow Account to be released to the Purchaser shall be
reduced by the amount of dividends actually paid in cash or Common Stock to the
Purchaser on the Preferred Shares, subject to a maximum equal to the amount of
all such interest. The closing of such repurchase shall occur as soon as
practicable following delivery of the Purchaser's notice of exercise, subject to
the receipt of necessary governmental approvals. The Company agrees to use its
best efforts to obtain all such governmental approvals and take all such other
actions as shall be required to consummate such repurchase. At such closing, the
Purchaser shall deliver to the Company certificates representing the Shares to
be repurchased and the Company shall deliver to the Purchaser and the escrow
agent under the Escrow Agreement any notice of release or other instrument
reasonably requested by either of them to effectuate the release of the Escrowed
Funds (including all interest earned thereon, subject to the proviso in the
second sentence of this section) in accordance with the terms of the Escrow
Agreement and this Section 1.4(b).

          (c)  Within thirty (30) days after the execution and delivery of this
Agreement, the Company and the Purchaser shall establish with a financial
institution selected by the Purchaser (the "L/C Bank") an irrevocable letter of
credit in an amount equal to the amount of Escrowed Funds (as changed from time
to time) for the benefit of the Purchaser substantially in the form attached
hereto as Exhibit G (the "Letter of Credit"), which Letter of Credit shall be
available for drawing by the Purchaser pursuant to this Section 1.4(c) and shall
be secured by a first priority security interest in the Escrowed Funds as
collateral for the Company's repayment of any amounts drawn on the Letter of
Credit. The terms of the Letter of Credit shall include, without limitation, (i)
a draw down period that shall expire no earlier than the 180th day after
December 31, 2001 and (ii) the right of the Purchaser to draw upon the Letter of
Credit as provided under this Section 1.4(c) without action or authorization on
the part of the Company. In the event that, for any reason, all or any portion
of the Escrowed Funds are not released to the Purchaser in accordance with
Section 1.4(b) and the terms of the Escrow Agreement within thirty (30) days of
the Purchaser's Put Notice, then the Purchaser shall have the right to draw on

                                       5.
<PAGE>

the Letter of Credit in an amount equal to the total amount of Escrowed Funds at
the time of Purchaser's Put Notice less the amounts of any Escrowed Funds
actually received by the Purchaser, and the Purchaser shall receive such funds
at the closing contemplated by Section 1.4(b). The costs of the Letter of Credit
shall be divided equally between the Company and the Purchaser; provided that
the Company shall not be required to pay more than four hundred thousand dollars
($400,000) of such costs.

          (d)  If the Set Top Box Launch occurs prior to December 31, 2001, the
Company shall be entitled to receive from the escrow under the Escrow Agreement
all Escrowed Funds. One hundred million dollars ($100,000,000) of the Escrowed
Funds released to the Company shall be designated as Earmarked Funds and used
exclusively in accordance with Section 8.2 of the Commercial Agreement and any
additional Escrowed Funds shall be released to the Company and may be used by
the Company for any purpose whatsoever. If, upon the release of the Escrowed
Funds to the Company in accordance with the foregoing and the terms of the
Escrow Agreement, the amount of Escrowed Funds (excluding any interest earned
thereon) is less than one hundred million dollars ($100,000,000) at such time,
then 60% of the proceeds from the exercise of any of the Warrants (up to the
difference between one hundred million dollars ($100,000,000) and such amount of
Escrowed Funds) shall also be designated as Earmarked Funds and used exclusively
in accordance with Section 8.2 of the Commercial Agreement.

     1.5  Adjustments.  To the extent not actually adjusted pursuant to the
adjustment provisions for the Preferred Stock in the Restated Certificate or in
the terms of each applicable Warrant, the applicable purchase price, conversion
price and exercise price with respect to the purchase of the Shares, the
conversion of the Preferred Stock and the exercise of the Warrants and the
number and nature of the securities to be received upon the conversion of the
Preferred Stock and the exercise of the Warrants shall be adjusted to reflect
any stock splits, cash or noncash dividends, recapitalizations, mergers,
combinations, distributions, issuances, reclassifications, exchanges,
substitutions or other similar events with respect to the capital stock of the
Company, or sales of capital stock below the applicable purchase price with
respect to the Shares, in each case, to provide the Purchaser with such terms
and rights, economic and otherwise, that the Purchaser would have received if
such event occurred after the Closing.

SECTION 2.  Closing, Delivery and Payment.

     2.1  Closing.  The closing of the sale and purchase of the Shares and
Warrants by the Purchaser under this Agreement (the "Closing") shall take place
five (5) days following the Determination Date, unless the Purchaser shall have
delivered to the Company a notice exercising its termination right pursuant to
Section 1.2(a) and the Company shall have exercised its right to adjust the
terms of the transactions contemplated hereby pursuant to Section 1.2(b), in
which case the Closing shall occur ten (10) Business Days following the
Determination Date (or, if any such day is not a Business Day, on the next
succeeding Business Day), at the offices of Cooley Godward LLP, 3175 Hanover
Street, Palo Alto, California 94304 or at such other time or place as the
Company and the Purchaser may mutually agree (the "Closing Date").

     2.2  Delivery.  At the Closing, subject to the terms and conditions hereof,
the Company shall deliver to the Purchaser (i) certificates registered in the
name of the Purchaser

                                       6.
<PAGE>

representing the Shares to be purchased by the Purchaser in accordance with
Section 1, free and clear of all liens, claims, encumbrances (other than those
arising pursuant to this Agreement and the Related Agreements), and (ii) the
Warrants in the form of the applicable exhibits attached hereto, for the
Warrants to be issued to the Purchaser in accordance with Section 1, free and
clear of all liens, claims and encumbrances (other than those arising pursuant
to this Agreement and the Related Agreements), in each case duly executed by an
authorized officer of the Company and registered in the name of the Purchaser.
At the Closing, subject to the terms and conditions hereof, the Purchaser shall
deliver to the Company the purchase price for the Shares by check or wire
transfer of immediately available funds.

SECTION 3.  Representations and Warranties of the Company.

     Except as expressly set forth on a Schedule of Exceptions delivered by the
Company to the Purchaser simultaneously herewith, the Company hereby represents
and warrants to the Purchaser as of the date of this Agreement and the Closing
Date as follows:

     3.1  Organization, Good Standing and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.  The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement and the Stockholders Agreement, the Commercial Agreement, the
Warrants and the Escrow Agreement, (collectively, the "Related Agreements"), to
give affect to the Restated Certificate, to issue and sell the Shares, the
Warrants, the Warrant Shares and the Conversion Shares, to carry out the
provisions of this Agreement, the Related Agreements and the Restated
Certificate, and to carry on its business as presently conducted and as
presently proposed to be conducted.  The Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so could not reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the
Company or its business, assets, financial condition, prospects, liabilities or
results of operations (a "Material Adverse Effect").  The Company does not,
directly or indirectly, own or control any interest in any corporation, joint
venture, limited partnership or similar entity.  Attached hereto as Exhibit H is
a complete and correct copy of the by-laws of the Company, as amended to the
date of this Agreement (the "By-laws").

     3.2  Capitalization; Voting Rights.  The authorized capital stock of the
Company as of May 31, 2000 consists of seventy-five million (75,000,000) shares
of Common Stock (par value $.001 per share), of which (i) 37,977,220 shares were
issued and outstanding and (ii) 6,141,409 shares were reserved for future
issuance to employees and non-employee directors pursuant to outstanding stock
options issued pursuant to the Company Option Plans (as defined below) and (iii)
25,000 shares were reserved for future issuance pursuant to the Outstanding
Warrants (as defined below), and two million (2,000,000) shares of Preferred
Stock (par value $.001 per share), of which no shares have been issued.  The
Company has not issued any shares of its capital stock between May 31, 2000 and
the date of this Agreement, except pursuant to the exercise of options. All
issued and outstanding shares of the Company's Common Stock: (a) have been duly
authorized and validly issued, (b) are fully paid and nonassessable, (c) were
issued without violation of any preemptive or preferential right, and (d) were
issued in

                                       7.
<PAGE>

compliance with all applicable state and federal laws concerning the issuance of
securities. The rights, preferences, privileges and restrictions of the Shares
are as stated in the Restated Certificate. The Company will reserve an adequate
number of shares of Common Stock for issuance upon conversion of the Preferred
Shares and exercise of the Warrants. Except as may be granted pursuant to the
Related Agreements, stock awards and options to purchase shares of Common Stock
granted pursuant to the Company's 1997 Equity Incentive Plan, 1999 Equity
Incentive Plan and 1999 Non-Employee Directors' Stock Option Plan (the "Company
Option Plans") issued pursuant to the 1999 Employee Stock Purchase Plan (the
"Purchase Plan") and outstanding warrants to purchase shares of the Company's
Common Stock (the "Outstanding Warrants"), there are no outstanding options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal), proxy or shareholder agreements, or agreements of any kind for the
purchase or acquisition from the Company of any of its securities or the
designation of any board member by any series of Preferred Stock or by holders
of Common Stock. The Company has reserved 12,800,000 shares of Common Stock for
issuance to employees, officers or directors of, or consultants or advisors to
the Company pursuant to the Company Option Plans, of which 3,677,766 remain
available for future grant and has reserved 600,000 shares of Common Stock for
issuance to employees pursuant to the Purchase Plan, of which 516,033 shares
remain available for future issuance. When issued in compliance with the
provisions of this Agreement and the Restated Certificate, the Shares, the
Warrant Shares and the Conversion Shares will be duly authorized, validly
issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Shares and the Conversion Shares may
be subject to restrictions on transfer under state and/or federal securities
laws as set forth herein or as otherwise required by such laws at the time a
transfer is proposed. Except as contained in the Related Agreements and the
Restated Certificate, or as set forth in Section 3.2 of the Schedule of
Exceptions, the Company is not aware of any written agreement or other
understandings relating to the voting of its securities. Except as expressly
provided in this Agreement or the Related Agreements, (x) there are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any securities of the Company and (y) there are no other subscriptions,
options, calls, warrants or other rights (including registration rights, whether
demand or piggyback registration rights), agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
the Company to which the Company or any of its subsidiaries is a party. Except
as set forth in Section 3.2 of the Schedule of Exceptions, the consummation of
the transactions contemplated by this Agreement and the Related Agreements will
not trigger the anti-dilution provisions or other price or conversion adjustment
mechanisms of any outstanding subscriptions, options, calls, warrants,
commitments, contracts, preemptive rights, rights of first refusal, demands,
conversion rights or other agreements or arrangements of any character or nature
whatsoever under which the Company is or may be obligated to issue or acquire
shares of any of its capital stock. The sale of the Shares and the issuance of
the Conversion Shares in accordance with the terms of the Restated Certificate
and the issuance of the Warrant Shares in accordance with the terms of the
Warrants is not and will not be subject to any preemptive rights, rights of
first refusal, subscription or similar rights that have not been properly
waived.

     3.3  Authorization; Binding Obligations.

          (a)  All corporate action on the part of the Company, its officers,
directors and shareholders necessary for the authorization, execution and
delivery of this Agreement and the

                                       8.
<PAGE>

Related Agreements, the performance of all obligations of the Company hereunder
and thereunder as of the Closing and the authorization, sale, issuance and
delivery of the Shares pursuant hereto and the Conversion Shares pursuant to the
Restated Certificate has been taken, except for the approval by the stockholders
of the Company (i) by a majority of the votes cast of the issuance of the
Shares, the Warrant Shares and the Conversion Shares and (ii) by the holders of
a majority of all the outstanding shares of Common Stock of the adoption of the
Restated Certificate (together, the "Company Stockholder Approval"). The Company
Stockholder Approval is the only vote of the holders of any class or series of
the Company's securities necessary to adopt this Agreement and any of the
Related Agreements and approve the transactions contemplated hereby and thereby.
Each of the Agreement and the Related Agreements, are valid and binding
obligations of the Company enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors' rights;
(b) general principles of equity that restrict the availability of equitable
remedies; and (c) to the extent that the enforceability of the indemnification
provisions in Section 6.4 of the Stockholders Agreement may be limited by
applicable laws. The issuance and sale of the Shares and the Warrants, the
subsequent exercise of the Warrants and the issuance of shares of Common Stock
in connection therewith and the subsequent conversion of the Preferred Shares
into Conversion Shares are not and will not be subject to any preemptive rights
or rights of first refusal.

          (b)  Other than filings which may be necessary pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or filings required under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") or
applicable state securities laws, no notice to, filing with, exemption or review
by, or authorization, consent or approval of, any public body or authority is
necessary for the consummation by the Company of the transactions contemplated
by this Agreement.

     3.4  SEC Filings.

          (a)  The Company has made available to the Purchaser accurate and
complete copies (including exhibits thereto) of (i) its registration statement
on Form S-1 (Reg. No. 333-83515 that was declared effective by the SEC on
September 29, 1999, (ii) its quarterly report on Form 10-Q for the quarter ended
September 30, 1999, (iii) its annual report on Form 10-K for the fiscal year
ended December 31, 1999, as amended by Form 10-K/A filed April 28, 2000 (the
"Form 10-K"), (iv) its quarterly report on Form 10-Q for the quarter ended March
31, 2000 and (v) all other forms, reports, schedules, statements and other
documents required to be filed by the Company on a form other than Form D or
Form S-8 with the SEC prior to the Closing (collectively, with all exhibits and
schedules thereof and documents incorporated by reference therein, the "Company
SEC Documents").

          (b)  Without limiting the foregoing, there are no contracts or other
documents of the Company which are required to be filed as exhibits to the
Company SEC Document which have not been so filed.

          (c)  As of the time it was filed with the SEC (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing): (i) each of the

                                       9.
<PAGE>

Company SEC Documents complied or will comply in all material respects with the
applicable requirements of the Securities Act or the Exchange Act (as the case
may be) and the rules and regulations promulgated thereunder; and (ii) none of
the Company SEC Documents contained or will contain any untrue statement of a
material fact or omitted or will omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

     3.5  Financial Statements.  The financial statements contained in the
Company SEC Documents: (i) comply as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with U.S. generally accepted accounting principles
applied on a consistent basis throughout the periods covered, except as may be
indicated in the notes to such financial statements and (in the case of
unaudited statements) as permitted by Form 10-Q of the SEC, and except that
unaudited financial statements may not contain footnotes and are subject to
normal and recurring year-end audit adjustments (which will not, individually or
in the aggregate, be material); and (iii) fairly present the consolidated
financial position of the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company for the periods
covered thereby.

     3.6  Undisclosed Liabilities.  Except for liabilities included or reserved
for in the audited balance sheet of the Company for the year ended December 31,
1999, included in the Form 10-K or the unaudited consolidated balance sheet of
the Company included in its Quarterly Report on Form 10-Q (the "Form 10-Q") for
the quarter ended March 31, 2000 (the "Balance Sheet"), each as filed with the
SEC, at March 31, 2000, the Company did not have, and since such date it has not
incurred, liabilities or any other obligations whatsoever that are material
(individually or in the aggregate) to the Company, except current liabilities
incurred in the ordinary course of business consistent with past practice
subsequent to March 31, 2000.

     3.7  Contracts; Action.

          (a)  Except as set forth in Section 3.7(a) of the Schedule of
Exceptions or as disclosed in the Form 10-K, there are no contracts, agreements,
understandings or proposed transactions between the Company and any of its
officers, directors or affiliates or any family member or affiliate thereof that
would be required to be disclosed pursuant to Item 404 of Regulation S-K of the
SEC.

          (b)  For purposes of this Agreement, the term "Contracts" shall mean
(i) all "material contracts" within the meaning of Item 601 of Regulation S-K of
the SEC, (ii) contracts with distributors or suppliers or for services involving
revenues or expenditures in excess of $800,000 annually, (iii) all contracts
involving revenues or expenditures in excess of $250,000 annually containing
non-competition provisions that purport to bind affiliates of the Company, (iv)
all contracts restricting the payment of dividends upon, or the redemption or
conversion of, the Shares, (v) those contracts identified in Section 3.7(b)(v)
of the Schedule of Exceptions, and (vi) contracts under which the Company or any
subsidiary has granted or received exclusive rights relating to the TiVo Channel
(as defined in the Commercial Agreement). Except as set forth in Section 3.7(b)
of the Schedule of Exceptions, the Company is not, nor to the Company's
knowledge is any other party to any Contract, in material default under, or in
material breach or

                                      10.
<PAGE>

material violation of, any Contract and, to the knowledge of the Company, no
event has occurred which, with the giving of notice or passage of time or both
would constitute a material default by the Company or any other party under any
Contract. Other than Contracts which have terminated or expired in accordance
with their terms, each of the Contracts is in full force and effect and
(assuming due execution and delivery by the counterparties thereto) is a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms (subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing).

          (c)  Section 3.7 of the Schedule of Exceptions contains a list of all
Contracts.

     3.8  Obligations to Related Parties.  Except as set forth in the Form 10-K,
there are no, and since January 1, 1999 there have not been any, (i) obligations
to or transactions with the Company's officers, directors, stockholders or
employees or any family member or affiliate thereof of a type required to be
disclosed pursuant to Item 402 of Regulation S-K of the SEC or (ii) obligations
of or transactions with the Company's officers, directors, stockholders or
employees or any family member or affiliate thereof of a type required to be
disclosed pursuant to Item 404 of Regulation S-K of the SEC.

     3.9  Absence of Certain Changes.  Since December 31, 1999, (i) no event,
change or circumstance has occurred which would have, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
and (ii) the Company has carried on its business in the ordinary course
consistent with past practices.

     3.10  Legal Proceedings.  Other than as disclosed in the Company SEC
Documents filed and publicly available prior to the date hereof, there is no
Action (as hereinafter defined), before or by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting the Company, which is required to be disclosed
in any Company SEC Document or which could have a Material Adverse Effect, or
which might materially and adversely affect the consummation of the transactions
contemplated by this Agreement or the Related Agreements. All summaries or
descriptions of legal or governmental proceedings or contingencies contained in
the Company SEC Documents are current and accurate in all material respects with
respect to such matters.

     3.11  Compliance with Laws.  The Company is not in violation of any law,
ordinance, governmental rule or regulation or court order, judgement or decree
to which it is subject, other than violations (if any) that individually or in
the aggregate will not have a Material Adverse Effect.  Other than as disclosed
in the Company SEC Documents filed and publicly available prior to the date
hereof, the Company possesses such certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies or
bodies the absence of which would have a Material Adverse Effect, and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.

                                      11.
<PAGE>

     3.12  Properties.  Except as otherwise stated in the Company SEC Documents
filed and publicly available prior to the date hereof, the Company has good and
marketable title, free and clear of all liens, encumbrances or claims to all of
its material real and personal property, except liens, encumbrances and equities
which are not material in the aggregate and do not materially affect the value
of such property or interfere with the conduct of the business of the Company
and, except as otherwise stated in the Company SEC Documents filed and publicly
available prior to the date hereof, the Company has valid and binding leases to
all of the real and personal property described in the Company SEC Documents as
under lease to it with such exceptions as are not material and do not interfere
with the conduct of the business of the Company.

     3.13  Compliance with Other Instruments.  The Company is not in violation
or default of (i) any term of its Restated Certificate or Bylaws, or (ii) any
provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ or any statute, rule or regulation applicable to the Company
which in the case of clause (ii) could reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect or which could have a
Material Adverse Effect, or which might materially and adversely affect the
consummation of the transactions contemplated by this Agreement or the Related
Agreements. The execution, delivery, and performance of and compliance with this
Agreement, and the Related Agreements, and the issuance and sale of the Shares
and the Warrants pursuant hereto and of the Conversion Shares pursuant to the
Restated Certificate and the Warrant Shares pursuant to the Warrants, will not
result in any such violation, or be in conflict with or constitute a default
under any such term, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or the
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to the Company, its business or
operations or any of its assets or properties.

     3.14  Offering Valid.  Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 4 hereof, the offer, sale and
issuance of the Shares, the Warrants, the Warrant Shares and the Conversion
Shares will be exempt from the registration requirements of the Securities Act
and will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws.  Neither the Company nor any agent on its
behalf has solicited or will solicit any offers to sell or has offered to sell
or will offer to sell all or any part of the Shares to any person or persons or
take any other action so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.

     3.15  Taxes.  The Company has filed all necessary material federal, state
and foreign income and franchise tax returns and has paid all material taxes
shown as due thereon, and the Company has no knowledge of any material tax
deficiency which has been or might be asserted against the Company.

     3.16  Employee Benefits.

           (a)  General.  The Company is not a party to and does not participate
in or have any liability or contingent liability with respect to any "employee
welfare benefit plan" or

                                      12.
<PAGE>

"employee pension benefit plan" as those terms are respectively defined in
sections 3(1) and 3(2) of ERISA, or any "multiemployer plan" (as defined in
section 3(37) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), except for the TeleWorld 401(k) Plan (hereinafter the "Plan") or as
disclosed in Section 3.16 of the Schedule of Exceptions.

          (b)  Compliance with Laws; Liabilities.  As to the Plan:

               (i)    The Plan complies and has been administered in form and in
operation in all material respects with all requirements of law applicable
thereto (including but not limited to ERISA and the Code), and there has been no
notice issued by any Governmental Authority questioning or challenging such
compliance. "Governmental Authority" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or entity and any court or
other tribunal).

               (ii)   The Plan complies in form and in operation in all material
respects with all applicable requirements of sections 401(a) and 501(a) of the
Code and the Company has received a favorable determination letter regarding its
qualification; there have been no amendments to such plans except amendments (A)
which are the subject of a determination letter issued with respect thereto by
the Internal Revenue Service or (B) with respect to which the remedial amendment
period (within the meaning of Treasury Regulation (S) 1.401(b)-1) has not
expired; and to the knowledge of the Company no event has occurred which will or
could give rise to disqualification of any such plan under such sections or to a
tax under section 511 of the Code.

               (iii)  None of the assets of the Plan is invested in employer
securities or employer real property.

               (iv)   To the knowledge of the Company, there have been no
"prohibited transactions" (as described in section 406 of ERISA or section 4975
of the Code) with respect to the Plan.

               (v)    To the knowledge of the Company, there has been no act or
omission which has given rise to or may give rise to fines, penalties, taxes, or
related charges under sections 502(c), 502(i), 502(l) or 4071 of ERISA or
Chapters 43, 47, or 68 of the Code for which the Company may be liable.

               (vi)   There are no actions, suits, or claims (other than routine
claims for benefits) pending or, to the knowledge of the Company, threatened
involving the Plan or the assets thereof, and no facts exist which could give
rise to any such actions, suits, or claims (other than routine claims for
benefits).

               (vii)  The Plan is not subject to Title IV of ERISA.

               (viii) There has been no act or omission that would impair the
right or ability of the Company to unilaterally amend or terminate the Plan.

                                      13.
<PAGE>

          (c)  With respect to each employee benefit plan, agreement, program,
policy or other arrangement, whether or not subject to ERISA, maintained by the
Company (including, but not limited to the Plan) (a "Company Plan"), the Company
has delivered to the Purchaser a current, accurate and complete copy thereof
and, to the extent applicable: (i) any related trust agreement or other funding
instrument; (ii) the most recent determination letter, if applicable; (iii) any
summary plan description; and (iv) for the two most recent years (A) the Form
5500 and attached schedules, (B) audited financial statements and (C) actuarial
valuation reports.

          (d)  No Company Plan exists that could result in the payment to any
present or former employee of the Company of any money or other property or
accelerate or provide any other rights or benefits to any present or former
employee of the Company as a result of the transaction contemplated by this
Agreement. There is no contract, plan or arrangement (written or otherwise)
covering any employee or former employee of the Company that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible pursuant to the terms of Section 280G of the Code.

     3.17  Executive Committee of the Board of Directors. The Company represents
and warrants that (a) no officer, director or employee of any of the Company's
corporate partners or corporate investors is a member of the Executive Committee
of the Company's Board of Directors, (b) no current member of the of the
Executive Committee of the Company's Board of Directors has been designated by
any of the Company's corporate partners or corporate investors and (c) that it
does not intend to designate or appoint, nor has it agreed to any contract or
other instrument providing for the designation or appointment of, any officer,
director or employee of any of the Company's corporate partners or corporate
investors to the Executive Committee of the Company's Board of Directors.

     3.18  Board Approval; Section 203 of DGCL; California Takeover Law; Rights
Plans. The Board of Directors of the Company has, prior to the execution hereof
and prior to the execution of any of the Related Agreements, approved the
execution and delivery by the Company of this Agreement and each of the Related
Agreements to which it is a party, and the execution and delivery by the parties
thereto of the Voting Agreement and the consummation of the transactions
contemplated by this Agreement and each of the Related Agreements. Such approval
is sufficient to render inapplicable to this Agreement, the Related Agreements
and the Voting Agreement and the transactions contemplated hereby and thereby
(collectively, the "Investment") the provisions of Section 203 of the Delaware
General Corporation Law. No takeover statute or similar statute or regulation of
the State of California is applicable to this Agreement, the Related Agreements
or the Voting Agreement or the Investment. Except as expressly provided in the
Stockholders Agreement and Section 3.18 of the Schedule of Exceptions, no
provision in the certificate of incorporation, bylaws or other governing
instruments of the Company or the terms of any rights plan or preferred stock of
the Company, would directly or indirectly restrict or impair the ability of the
Purchaser to vote, or otherwise to exercise the rights of a stockholder with
respect to, securities of the Company that may be acquired or controlled by the
Purchaser or permit any stockholder to acquire securities of the Company on a
basis not available to the Purchaser.

     3.19  Patents and Trademarks.  Section 3.19 of the Schedule of Exceptions
sets forth a list of all patents, patent applications, registered copyrights and
trademarks of the Company

                                      14.
<PAGE>

existing as of the date hereof. The Company owns or possesses sufficient legal
rights to all patents, trademarks, service marks, trade names, copyrights, trade
secrets, information and other proprietary rights and processes necessary for
its business as now conducted and as proposed to be conducted, and such conduct
of its business does not, to the Company's knowledge, infringe upon the rights
of others, except as set forth in Section 3.19 to the Schedule of Exceptions.
There are no outstanding options, licenses or agreements with respect to the
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes of any third
party which are necessary to the operation of the Company's products, other than
such licenses or agreements arising from the purchase of "off the shelf" or
standard products. Except as set forth in Section 3.19 of the Schedule of
Exceptions, the Company has not received any communications alleging that the
Company has violated or, by conducting its business as proposed, would violate
any of the patents, trademarks, service marks, trade names, copyrights, trade
secrets, confidential information or other proprietary rights of any other
person or entity. The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
the Company or that would conflict with the Company's business as proposed to be
conducted. Neither the execution nor delivery of this Agreement or any of the
Related Agreements, nor the carrying on of the Company's business by the
employees of the Company, nor the conduct of the Company's business as proposed,
will, to the Company's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any employee is now obligated. The Company
does not believe it is or will be necessary to utilize any inventions, trade
secrets or proprietary information of any of its employees made prior to their
employment by the Company, except for inventions, trade secrets or proprietary
information that have been assigned to the Company. To the Company's knowledge,
none of the Company's officers or employees have used nor are such officers or
employees making use of any confidential information or trade secrets of others
without authorization, including those of any former employer of such officer or
employee. The Company is not aware of any violation by a third party of any of
the Company's patents, licenses, trademarks, trade names, service marks,
copyrights, trade secrets, confidential information or other proprietary rights.

     3.20  Brokers.  No broker, investment banker, financial advisor or other
person other than Credit Suisse First Boston Corporation is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement or the Related
Agreements based upon arrangements made by or on behalf of the Company.  The
fees and expenses of Credit Suisse First Boston Corporation will be paid by the
Company.

     3.21  Disclosure.  Neither this Agreement (including all Exhibits and
Schedules hereto) nor any of the Related Agreements or any other agreements or
instruments contemplated to be executed and delivered by the Company in
connection with this Agreement, taken together with the Company SEC Documents,
contain any untrue statement of material fact; and none of such documents omits
to state any material fact necessary to make any of the representations,
warranties or other statements or information contained therein not misleading.

                                      15.
<PAGE>

SECTION 4.  Representations and Warranties of the Purchaser.

     The Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):

     4.1  Requisite Power and Authority.  The Purchaser has all necessary
corporate power under all applicable provisions of law to execute and deliver
this Agreement and the Related Agreements and to carry out their provisions. All
action on the Purchaser's part required for the lawful execution and delivery of
this Agreement and the Related Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of the Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of Section 6.4
of the Stockholders Agreement may be limited by applicable laws.

     4.2  Investment Representations.  The Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act. The Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon the Purchaser's representations contained in the Agreement. The
Purchaser hereby represents and warrants as follows:

          (a)  Purchaser Bears Economic Risk.  The Purchaser is capable of
evaluating the merits and risks of its investment in the Company and by reason
of its, or of its management's, business or financial experience, the Purchaser
has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements. The
Purchaser may bear the economic risk of this investment indefinitely unless the
Shares (or the Conversion Shares) are registered pursuant to the Securities Act,
or an exemption from registration is available. The Purchaser also understands
that there is no assurance that any exemption from registration under the
Securities Act will be available and that, even if available, such exemption may
not allow the Purchaser to transfer all or any portion of the Shares or the
Conversion Shares under the circumstances, in the amounts or at the times the
Purchaser might propose.

          (b)  Acquisition for Own Account.  The Purchaser is acquiring the
Shares and the Conversion Shares for the Purchaser's own account for investment
only, and not with a view towards their distribution.

          (c)  Accredited Investor.  The Purchaser is an accredited investor
within the meaning of Regulation D under the Securities Act.

          (d)  Company Information.  The Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company. The Purchaser has also had the
opportunity to ask questions of

                                      16.
<PAGE>

and receive answers from, the Company and its management regarding the terms and
conditions of this investment.

          (e)  Rule 144.  The Purchaser acknowledges and agrees that the Shares,
and, if issued, the Conversion Shares may be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. The Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.

          (f)  Residence.  The office or offices of the Purchaser in which its
investment decision was made is located at 22000 AOL Way, Dulles, Virginia,
20166-9323.

     4.3  Transfer Restrictions.  The Purchaser acknowledges and agrees that the
Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Stockholders Agreement.

SECTION 5.  Conditions to Closing.

     5.1  Conditions to Purchaser's Obligations.  The Purchaser's obligations to
purchase the Shares at the Closing are subject to the satisfaction, at or prior
to such Closing, of the following conditions, unless otherwise waived:

          (a)  Representations and Warranties True; Performance of Obligations.
The representations and warranties made by the Company in Section 3 hereof that
are qualified by materiality or Material Adverse Effect shall be true and
correct and those not so qualified shall be true and correct in all material
respects in each case as of the Closing Date with the same force and effect as
if they had been made as of such Closing Date, and the Company shall have
performed and complied with all agreements, obligations and conditions herein
required to be performed or complied with by it on or prior to such Closing.

          (b)  Legal Investment.  On the Closing Date, the sale and issuance of
the Shares and the Warrants and the proposed issuance of the Conversion Shares
and the Warrant Shares shall be legally permitted by all laws and regulations to
which the Purchaser and the Company are subject, and there shall not be in
effect any statute, law, rule, regulation, order, judgment or decree in effect
which has the effect of rendering the consummation of any of the transactions
contemplated by this Agreement or the Related Agreements unlawful

          (c)  Consents, Permits, and Waivers.  The Company shall have obtained
any and all consents, authorizations, approvals, permits and waivers necessary
or appropriate for consummation of the transactions contemplated by the
Agreement and the Related Agreements (except for such as may be properly
obtained subsequent to such Closing).

                                      17.
<PAGE>

          (d)  Filing of Restated Certificate.  The Restated Certificate shall
have been accepted for filing by the Secretary of State of the State of Delaware
and shall be in full force and effect as of the Closing Date.

          (e)  Corporate Documents.  The Company shall have delivered to the
Purchaser or its counsel, copies of all corporate documents of the Company as
the Purchaser shall reasonably request.

          (f)  Compliance Certificate.  The Company shall have delivered to the
Purchaser a Compliance Certificate, executed by the President of the Company,
dated the date of such Closing, to the effect that the conditions specified in
subsections (a), (c) and (d) of this Section 5.1 have been satisfied.

          (g)  Other Agreements.  Each of the Commercial Agreement, the
Stockholders Agreement and the Escrow Agreement shall have been executed and
delivered by the parties thereto, shall be in full force and effect, except for
failures to be in full force and effect due to the actions or omissions of the
Purchaser, and shall not have been breached by the Company, and the Purchaser
and the Company shall have agreed on and finalized the Specifications, the
Milestone Schedule and the Acceptance Criteria (as each such term is defined in
the Commercial Agreement) pursuant to Sections 3.1(c) and 3.1(e) of the
Commercial Agreement.

          (h)  Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing hereby and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser and its special counsel, and
the Purchaser and its special counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably
request.

          (i)  Secretary's Certificate.  The Purchaser shall have received from
the Company's Secretary, a certificate having attached thereto (i) the Company's
Restated Certificate, (ii) the Company's Bylaws as in effect at the time of the
Closing, (iii) resolutions approved by the Board of Directors of the Company
authorizing the transactions contemplated hereby, and (iv) good standing
certificates (including tax good standing) with respect to the Company from the
applicable authority(ies) in Delaware and any other jurisdiction in which the
Company is qualified to do business, dated a recent date before the Closing.

          (j)  HSR Compliance.  Any waiting period applicable to the purchase of
the Shares under the HSR Act shall have terminated or expired.

          (k)  Legal Opinion.  The Purchaser shall have received from Cooley
Godward LLP, legal counsel to the Company, an opinion addressed to the
Purchaser, dated as of the Closing Date, in form and substance reasonably
satisfactory to counsel for the Purchaser, and subject to customary exceptions
and qualifications (including without limitation a qualification regarding
interpretation in accordance with California law), to the effect that:

          (i)  the Company (A) has been duly incorporated and is validly
existing in good standing under the laws of the State of Delaware, (B) to the
best knowledge of

                                      18.
<PAGE>

such counsel, is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the owning or leasing of properties or the conduct of
business makes such qualification necessary, except where the failure to so
qualify would not have a Material Adverse Effect, and (C) has full corporate
power and authority to carry on its business as described in the Company SEC
Documents and to own and operate its properties. The Company has full corporate
power and authority to enter into and perform this Agreement, the Stockholders
Agreement, the Commercial Agreement and the Warrants, and to issue, sell and
deliver the Shares, the Warrants, the Warrant Shares and the Conversion Shares.
All legally required corporate proceedings in connection with the authorization
and issuance of the Shares, the Warrants, the Warrant Shares and the Conversion
Shares and the sale of the Shares, the Warrants, the Warrant Shares by the
Company in accordance with the terms of this Agreement (including but not
limited to all required Board of Directors and stockholder approvals) have been
taken or have been obtained;

               (ii)   this Agreement, the Stockholders Agreement and the
Warrants have been duly executed and delivered by the Company and are legal,
valid and binding agreements of the Company enforceable in accordance with their
terms, except as rights to indemnification thereunder may be limited and subject
to laws regarding creditor rights and general equitable principles;

               (iii)  other than in connection with any securities laws (with
respect to which counsel need express no opinion other than as provided in (vi)
below), all consents, approvals, permits, orders or authorizations of, and all
qualifications, registrations, designations or declarations with, any federal,
Delaware corporate or California state governmental authority required on the
part of the Company in connection with the execution and delivery of this
Agreement, the Stockholders Agreement and the Warrants and consummation of the
transactions occurring at the Closing hereunder and thereunder have been
obtained and are effective, and such counsel is not aware of any proceedings, or
written threat of any proceedings, that question the validity thereof;

               (iv)   all the outstanding shares of the Company's Common Stock
have been, and the Shares, the Warrant Shares and the Conversion Shares, upon
issuance and delivery and payment therefor in the manner herein described, will
be, duly authorized, validly issued, fully paid and nonassessable. No preemptive
rights to subscribe for or to purchase, and no restriction upon the voting or
transfer of, the Shares, the Warrants Shares or the Conversion Shares exist
pursuant to the Restated Certificate or Bylaws, or, to the best of such
counsel's knowledge, pursuant to any agreement or other instrument to which the
Company is a party or by which it may be bound;

               (v)    to the best of such counsel's knowledge there are no legal
or governmental proceedings pending or overtly threatened against the Company
required to be disclosed in the Company SEC Documents which are not so
disclosed;

               (vi)   the offer and sale of the Shares, the Warrants, the
Warrant Shares and the Conversion Shares is exempt from the registration
requirements of the Securities Act, subject to the timely filing of a Form D
pursuant to Securities Exchange Commission Regulation D; and

                                      19.
<PAGE>

               (vii)  the execution and delivery of this Agreement, the Related
Agreements by the Company, and the issuance and sale of the Shares, the
Warrants, the Warrant Shares and the Conversion Shares and the consummation of
the transactions contemplated by this Agreement, the Stockholders Agreement and
the Warrants by the Company will not conflict with or constitute a breach of or
a default (with the passage of time or otherwise) under (i) the Restated
Certificate or Bylaws of the Company, (ii) any Delaware corporate or California
statute, law or regulation to which the Company or any of its properties may be
subject, or any judgment, decree or order, known to such counsel, of any court
or governmental agency or authority entered in any proceeding to which the
Company was or is now a party or by which it is bound, except for any conflict,
breach or default that would not have a Material Adverse Effect or (iii) any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject which has been identified in a certificate of the Chief Financial
Officer of the Company as material to the Company, except for any conflict,
breach or default that would not have a Material Adverse Effect.

               (viii) As of the Closing Date, the Restated Certificate will be
in full force and effect.

          (l)  Board Representative.  A representative of the Purchaser shall
have been appointed, at the option of the Purchaser, as either a member of or an
observer to the board of directors of the Company in accordance with Section 2.1
of the Stockholders Agreement.

     5.2  Conditions to Obligations of the Company.  The Company's obligation to
issue and sell the Shares at the Closing is subject to the satisfaction, on or
prior to such Closing, of the following conditions, unless otherwise waived:

          (a)  Representations and Warranties True.  The representations and
warranties made by the Purchaser in Section 4 hereof shall be true and correct
in all material respects at the date of such Closing, with the same force and
effect as if they had been made on and as of said date.

          (b)  Performance of Obligations. The Purchaser shall have performed
and complied with all agreements and conditions herein required to be performed
or complied with by the Purchaser on or before such Closing.

          (c)  Filing of Restated Certificate.  The Restated Certificate shall
have been accepted for filing with the Secretary of State of the State of
Delaware and shall be in full force and effect as of such Closing Date.

          (d)  Other Agreements.  Each of the Commercial Agreement, the
Stockholders Agreement and the Escrow Agreement shall have been executed and
delivered by the parties thereto, shall be in full force and effect, except for
failures to be in full force and effect due to the actions or omissions of the
Company, and shall not have been breached by the Purchaser.

          (e)  HSR Compliance.  Any waiting period applicable to the purchase of
the Shares under the HSR Act shall have terminated or expired.

                                      20.
<PAGE>

     5.3  Conditions to Obligations of both the Company and the Purchaser.

          (a)  Stockholder Approval.  The Company Stockholder Approval shall
have been obtained.

SECTION 6. ADDITIONAL COVENANTS.

     6.1  HSR Compliance; Other Approvals.

          (a)  The Company and the Purchaser shall, promptly after the date of
this Agreement, prepare and file the notifications required under the HSR Act
for the issuance and sale of the Shares, the Warrants, the Warrant Shares and
the Conversion Shares. The Company and the Purchaser shall respond as promptly
as practicable to (i) any inquiries or requests received from the Federal Trade
Commission or the Department of Justice for additional information or
documentation and (ii) any inquiries or requests received from any state
attorney general or other governmental body in connection with antitrust or
related matters. Each of the Company and the Purchaser shall promptly inform the
other party of any communication to or from the Federal Trade Commission, the
Department of Justice or any other governmental body. The Company and the
Purchaser will consult and cooperate with one another, and will consider in good
faith the views of one another, in connection with any analysis, appearance,
presentation, memorandum, brief, argument, opinion or proposal made or submitted
in connection with any legal proceeding under or relating to the HSR Act or any
other federal or state antitrust or fair trade law.

          (b)  Each of the parties hereto shall use their commercially
reasonable efforts to give such notices and obtain all other authorizations,
consents, orders and approvals of all governmental authorities and other third
parties that may be or become necessary or desirable for its execution and
delivery of, and the performance of its obligations pursuant to, this Agreement
and the Related Agreements and will cooperate fully with the other party hereto
in promptly seeking to obtain all such authorizations, consents, orders and
approvals.

     6.2  Competing Proposals                                   .

          (a)  Notification Regarding Competing Strategic Relationships. Prior
to receipt of the Company Stockholder Approval, the Company will notify the
Purchaser in writing within five Business Days of:

               (i)    the Company's receipt of a bona fide proposal from a third
party for a strategic relationship that would be preclusive of any of the
transactions contemplated by this Agreement (a "Competing Strategic
Relationship");

               (ii)   the determination by the Company's Board of Directors to
solicit any Competing Strategic Relationship; or

               (iii)  the determination by the Company's Board of Directors to
provide confidential information to, or enter into discussions or negotiations
with, any third party concerning any Competing Strategic Relationship.

                                      21.
<PAGE>

Such notice shall disclose the identity of the party making or involved in such
proposal for a Competing Strategic Relationship and the material terms of any
such proposed Competing Strategic Relationship.

          (b)  Acquisition and Competing Strategic Relationship Proposals.
Prior to the Closing, the Company shall, and shall cause its nonstockholder
affiliates and the officers, directors and employees of the Company and its
subsidiaries to, and shall instruct its stockholder affiliates and the
representatives and agents of the Company and its subsidiaries (including,
without limitation, any investment banker, attorney or accountant retained by
the Company or any of its subsidiaries) to, immediately cease and terminate any
existing activities, discussions or negotiations, if any, with any parties
conducted heretofore with respect to any (i) Competing Strategic Relationship or
(ii) acquisition or exchange of all or any material portion of the assets of, or
more than 15% of the equity interest in, the Company (by direct purchase from
the Company, tender or exchange offer or otherwise) or any business combination,
merger or similar transaction (including an exchange of stock or assets) with or
involving the Company (an "Acquisition Transaction"), other than the
transactions contemplated hereby. Except as set forth in this Section 6.2(b),
prior to the Closing, the Company shall not, and shall cause its nonstockholder
affiliates and the officers, directors and employees of the Company and its
subsidiaries not to, and shall instruct its stockholder affiliates and the
representatives and agents of the Company and its subsidiaries (including,
without limitation, any investment banker, attorney or accountant retained by
the Company or any of its subsidiaries) not to, directly or indirectly,
knowingly encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information or data (other than the Company's
standard public information package) to, any corporation, partnership, person or
other entity or group (other than Purchaser, any affiliate or associate of
Purchaser or any designees of Purchaser) with respect to any inquiries or the
making of any offer or proposal (including, without limitation, any offer or
proposal to the stockholders of the Company) concerning an Acquisition
Transaction (an "Acquisition Proposal") or a Competing Strategic Relationship (a
"Competing Strategic Relationship Proposal") or otherwise knowingly facilitate
any effort or attempt to make or implement an Acquisition Proposal or a
Competing Strategic Relationship Proposal; provided, however, that (x) prior to
                                           -----------------
the receipt of the Company Stockholder Approval, the Company may furnish
information and access, but only in response to a request for information or
access, to any person or entity making a bona fide written Acquisition Proposal
to the board of directors of the Company after the date hereof which was not
knowingly encouraged, solicited or initiated by the Company or any of its
affiliates or any director, employee, representative or agent of the Company or
any of its subsidiaries (including, without limitation, any investment banker,
attorney or accountant retained by the Company or any of its subsidiaries) on or
after the date hereof and may participate in discussions and negotiate with such
person or entity concerning any such Acquisition Proposal and (y) after the
Company Stockholders Meeting, the Board of Directors of the Company may
authorize the Company, to enter into a binding written agreement concerning a
Superior Proposal (as defined below), if and only if, in any such case under
clause (x) or (y) above, (i) the board of directors of the Company determines in
good faith, (A) taking into account the written, reasoned advice of outside
counsel to the Company to the effect that failing to provide such information or
access or to participate in such discussions or negotiations or so to authorize,
as the case may be, is reasonably likely to constitute a breach of such board's
fiduciary duties under applicable law, (B) taking into account the written
advice of financial advisors to the Company to such effect, that such
Acquisition Proposal, if accepted, is reasonably

                                      22.
<PAGE>

likely to be consummated, taking into account all legal, financial and
regulatory aspects of the proposal and the person or entity making the proposal
and would, if consummated, result in a transaction more favorable to the
Company's stockholders from a financial point of view than the transaction
contemplated by this Agreement (any such more favorable Acquisition Proposal as
to which both of the determinations referred to in subclauses (A) and (B) of
this clause (i) have been made being referred to in this Agreement as a
"Superior Proposal"), and (ii) the board of directors of the Company receives
from the person or entity making such bona fide written Acquisition Proposal an
executed confidentiality agreement the terms of which are (without regard to the
terms of such Acquisition Proposal) (A) no less favorable to the Company, and
(B) no less restrictive to the person or entity making such bona fide written
Acquisition Proposal than those contained in the Stockholders Agreement. Nothing
in this Agreement shall prohibit the Board of Directors of the Company from, to
the extent applicable, complying with Rule 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal.

     6.3  Stockholder Approval.  As promptly as practicable following the date
hereof, the Company shall take all action necessary to obtain the Company
Stockholder Approval, including, without limitation, preparing, filing with the
SEC and mailing to its stockholders a proxy statement or statements with respect
thereto, and duly calling, giving notice of, convening and holding a meeting or
meetings of its stockholders for such purpose (the "Company Stockholders
Meeting"). Notwithstanding that any of the other conditions to the Closing may
not be satisfied, the Company will use its best efforts to cause the Company
Stockholders Meeting to occur as soon as reasonably possible after the date
hereof. The Board shall recommend that its stockholders provide the Company
Stockholder Approval, and may not withdraw or modify such recommendation prior
to the taking of the votes to be taken at the Company Stockholders Meeting.

     6.4  Ordinary Course of Business.

          (a)  Except as otherwise contemplated by the terms of this Agreement,
during the period from the date of this Agreement to the Closing Date (the "Pre-
Closing Period"), each of the Company and its subsidiaries shall use
commercially reasonable efforts to preserve intact its current business
organizations, keep available the services of its officers and employees and
preserve its relationships with customers, suppliers, licensors, licensees,
advertisers, distributors and others having business dealings with it to the end
that its goodwill and ongoing businesses shall be unimpaired.

          (b)  Without limiting the generality of the foregoing, during the Pre-
Closing Period, each of the Company and its subsidiaries shall not, without the
prior consent of Purchaser:

               (i)    (A) remove the chief executive officer or president (or,
if there are no officers with such titles, the officers whose responsibility is
executive oversight of the Company's and its subsidiaries' operations) or any
executive vice president, or appoint any person to fill a vacancy in any such
office, or (B) approve any new, or modify any existing material executive
officer and director compensation plans or agreements;

                                      23.
<PAGE>

               (ii)   change the number of directors or the composition or
structure of the Company's Board of Directors;

               (iii)  except as contemplated by the Restated Certificate,
increase or decrease the total number of authorized or issued shares of
Preferred Stock;

               (iv)   take any action which would require the approval of the
holders of the Preferred Stock pursuant to Article III, Section D.2(b) of the
Restated Certificate, if the Preferred Stock were issued;

               (v)    redeem, acquire or otherwise purchase any shares of Common
Stock or preferred stock of the Company, except pursuant to Company Plans or
agreements entered into in the ordinary course with employees of the Company;

               (vi)   sell a subsidiary's securities to any third party (other
than the Company or any other wholly owned subsidiary of the Company);

               (vii)  sell or transfer any of the Company's or its subsidiaries'
technology or other Intellectual Property, to any other person, other than in
the ordinary course of business; or

               (viii) enter into any arrangement or contract to do any of the
foregoing.

     6.5  Efforts.  Each party hereto agrees to use commercially reasonable
efforts to take any and all actions required in order to consummate the
transactions contemplated in this Agreement and the Related Agreements.

     6.6  Notification of Certain Matters.  During the Pre-Closing Period, the
Company shall give prompt notice to the Purchaser of the occurrence or non-
occurrence of any event known to the Company the occurrence or non-occurrence of
which would reasonably be expected to cause any representation or warranty
contained in Section 3 to be untrue in any material respect, the failure of the
Company to comply with or satisfy any covenant or agreement under this
Agreement, or the failure to be satisfied of any of the conditions set forth in
Section 5.

     6.7  Reservation of Shares.  From and after the Closing, the Company shall
at all times reserve and keep available for issuance such number of its
authorized but unissued shares of Common Stock as shall be sufficient to permit
the exercise in full of all the Warrants and the conversion in full of all the
Preferred Stock.

     6.8  Restated Certificate.  Upon receipt of the Company Stockholder
Approval, the Company shall take all such action to file the Restated
Certificate with the Secretary of State of the State of Delaware and all such
other action to cause the Restated Certificate to be accepted for filing and
effective.

SECTION 7.  MISCELLANEOUS.

     7.1  Termination.  This Agreement may be terminated by (i) mutual agreement
of the parties hereto, (ii) by the Purchaser pursuant to Section 1.2(a), subject
to the Company's rights

                                      24.
<PAGE>

under Section 1.2(b), (iii) by the Purchaser or the Company in the event the
Closing has not occurred by February 28, 2001; provided, that the termination
right pursuant to this clause (iii) may not be exercised by a party whose
nonperformance has delayed the Closing or (iv) by either party in the event the
Commercial Agreement is terminated prior to the Closing. Upon termination of
this Agreement pursuant to this Section 7.1 (and subject to Section 1.2(b)),
this Agreement (except for Section 7.9) shall be void and of no further force
and effect and no party shall have any liability to any other party under this
Agreement, except that nothing herein shall relieve any party from any liability
for the breach of any of the representations, warranties, covenants and
agreements set forth in this Agreement.

     7.2  Definitions.  For purposes of this Agreement:

          "affiliate" means any person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person;

          "Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in The City of
New York;

          "knowledge" of any person means knowledge of a particular fact or
matter of which such person (or if such person is not an individual, any of its
directors or officers) is actually aware or of which a prudent person (or if
such person is not an individual, its directors or officers acting prudently)
would be aware after reasonable inquiry; and

          "person" means any individual, corporation, partnership, association,
trust, unincorporated organization, limited liability company, or other entity
or a group (as defined in Section 13(d)(3) of the Exchange Act of 1934, as
amended) of the foregoing.

     7.3  Governing Law.  This Agreement shall be governed in all respects by
the laws of the State of New York as such laws are applied to agreements to be
performed entirely in New York.

     7.4  Survival.  The representations, warranties, covenants and agreements
made herein shall survive any investigation made by the Purchaser and each
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

     7.5  Successors and Assigns.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares or the Warrants from time to time.

     7.6  Entire Agreement.  This Agreement, the Exhibits and Schedules hereto,
the Related Agreements and the other documents delivered pursuant hereto and
thereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects

                                      25.
<PAGE>

hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.

     7.7  Severability.  In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

     7.8  Amendment and Waiver.

          (a)  This Agreement may be amended or modified only upon the written
consent of the Company and the Purchaser.

          (b)  The obligations of the Company and the rights of the holders of
the Shares, the Warrants, the Warrant Shares and the Conversion Shares under
this Agreement may be waived only with the written consent of the Purchaser.

     7.9  Delays or Omissions.  It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Restated Certificate, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on the Purchaser'
part of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Restated Certificate or any waiver on such party's part
of any provisions or conditions of this Agreement, the Related Agreements, or
the Restated Certificate must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this
Agreement, the Related Agreements, the Restated Certificate, by law, or
otherwise afforded to any party, shall be cumulative and not alternative.

     7.10  Notices.  All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next Business
Day; (c) five (5) Business Days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) one (1)
Business Day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent in each case to the respective address specified
below:

          (a)  If to the Purchaser, to:

               America Online, Inc.
               22000 AOL Way
               Dulles, VA 20166-9323
               Attn:  General Counsel
               Fax:  (703) 265-1495
               E-mail:  PTCapp@aol.com

                                      26.
<PAGE>

               With a copy to:

               Simpson Thacher & Bartlett
               425 Lexington Avenue
               New York, NY  10017-3954
               Attn:  David J. Sorkin, Esq.
               Fax:  (212) 455-2502
               E-mail:  D_Sorkin@stblaw.com

          (b)  If to the Company, to

               TiVo Inc.
               2160 Gold Street
               Alviso, CA 95002
               Attn:  Chief Financial Officer
               Fax:  (408) 519-5333
               E-mail:  dave@tivo.com

               With a copy to:

               Latham & Watkins
               135 Commonwealth Drive
               Menlo Park, CA 94025
               Attn:  Alan Mendelson, Esq.
               Fax:  (650) 463-2600
               E-mail:  alan.mendelson@lw.com

or at such other address as the Company or the Purchaser may designate by ten
(10) days advance written notice to the other parties hereto.

     7.11  Expenses.  Each Party shall pay its own costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement.

     7.12  Titles and Subtitles.  The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

     7.13  Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

     7.14  Broker's Fees.  Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 7.13 being untrue.

                                      27.
<PAGE>

     7.15  Pronouns.  All pronouns contained herein, and any variations thereof,
shall be deemed to refer to the masculine, feminine or neutral, singular or
plural, as to the identity of the parties hereto may require.

     7.16  California Corporate Securities Law.  THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE.

                                      28.
<PAGE>

     In Witness Whereof, the parties hereto have executed this Investment
Agreement as of the date set forth in the first paragraph hereof.

                                 Company:

                                 Tivo Inc.

                                 By: /s/ Michael Ramsay
                                    ----------------------------------
                                    Michael Ramsay, President
                                    --------------
                                     and Chief Executive Officer

                              SIGNATURE PAGE TO
                             INVESTMENT AGREEMENT

                                      29.
<PAGE>

     In Witness Whereof, the parties hereto have executed this Investment
Agreement as of the date set forth in the first paragraph hereof.

                                 Purchaser:

                                 America Online, Inc.

                                 By:    /s/ David M. Colburn
                                    ----------------------------------
                                 Name:  David M. Colburn
                                      --------------------------------
                                 Title: President, Business Affairs
                                       -------------------------------

                               SIGNATURE PAGE TO
                             INVESTMENT AGREEMENT

                                      30.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]