Registration Rights Agreement - AOL Time Warner Inc. and Time Warner Cable Inc.
FORM OF
REGISTRATION RIGHTS AGREEMENT
between
AOL TIME WARNER, INC.
and
TIME WARNER CABLE INC.
-----------------------------
Dated: [ ], 200[ ]
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS....................................................................................1
1.1 Certain Definitions....................................................................1
1.2 Capitalized Terms......................................................................6
1.3 Successor Laws, Rules, Regulations and Forms...........................................6
ARTICLE II General; Securities Subject to this Agreement.................................................7
2.1 Grant of Rights........................................................................7
2.2 Registrable Securities.................................................................7
2.3 Holders of Registrable Securities......................................................7
2.4 Transfer of Registration Rights........................................................7
ARTICLE III ACKNOWLEDGEMENTS OF THE STOCKHOLDERS.........................................................8
3.1 Certain Acknowledgments of the Stockholders............................................8
ARTICLE IV Demand Registration...........................................................................9
4.1 Request for Demand Registration........................................................9
4.2 Effective Demand Registration..........................................................9
4.3 Underwriting. ........................................................................9
4.4 Hedging Transactions...................................................................9
4.5 Cutback Provisions. .................................................................10
ARTICLE V Incidental or "Piggy-Back" Registration.......................................................10
5.1 Issuer Incidental Registration. .....................................................10
5.2 Stockholder Incidental Registration...................................................11
ARTICLE VI Registration Procedures......................................................................11
6.1 Obligations of the Issuer.............................................................11
6.2 Seller Information, Compliance with Laws, Customary Agreements........................15
6.3 Notice to Discontinue, Deferral Periods...............................................16
6.4 Reports and Materials to be Filed under the Securities Act and the Exchange Act. ....17
6.5 Registration Expenses.................................................................17
6.6 Confidentiality. ....................................................................18
6.7 Restrictions on Covered Transactions..................................................19
6.8 Restrictions on Public Sales..........................................................19
6.9 Selection of Underwriters.............................................................19
6.10 Limitations on Registration...........................................................20
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6.11 Stock Split...........................................................................19
ARTICLE VII Indemnification.............................................................................21
7.1 Indemnification by the Issuer.........................................................21
7.2 Indemnification by the Stockholder....................................................21
7.3 Conduct of Indemnification Proceedings. .............................................22
7.4 Contribution. .......................................................................23
7.5 Indemnification Payments. ...........................................................23
ARTICLE VIII Miscellaneous..............................................................................24
8.1 Recapitalizations, Exchanges, etc.....................................................24
8.2 Notices...............................................................................24
8.3 Entire Agreement; No Inconsistent Agreements..........................................25
8.4 Further Assurances....................................................................26
8.5 Other Agreements. ...................................................................26
8.6 No Third-Party Beneficiaries..........................................................26
8.7 Assignment............................................................................26
8.8 Amendments and Waivers................................................................26
8.9 Nominees for Beneficial Owners........................................................26
8.10 Severability..........................................................................26
8.11 Counterparts and Signature............................................................27
8.12 Interpretation........................................................................27
8.13 GOVERNING LAW.........................................................................27
8.14 Submission to Jurisdiction............................................................27
8.15 Remedies..............................................................................28
8.16 WAIVER OF JURY TRIAL..................................................................28
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of August [ ], 200[ ] (this
"Agreement"), by and between AOL Time Warner Inc., a Delaware corporation
("AOLTW"), and Time Warner Cable Inc., a Delaware corporation (the "Issuer").
WHEREAS, AT&T Corp., a New York corporation ("AT&T"), MediaOne of
Colorado, Inc., a Colorado corporation ("MediaOne"), Comcast Corporation, a
Pennsylvania corporation, AT&T Comcast Corporation, a Pennsylvania corporation,
AOLTW, TWI Cable Inc., a Delaware corporation, Warner Communications Inc., a
Delaware corporation, American Television and Communications Corporation, a
Delaware corporation, and the Issuer have entered into a Restructuring Agreement
dated as of August 20, 2002 (the "Restructuring Agreement").
WHEREAS, AOLTW, the Issuer and MediaOne are concurrently entering into a
registration rights agreement granting certain registration rights with respect
to the MediaOne Registrable Securities (as defined below) (the "MediaOne
Registration Rights Agreement").
WHEREAS, AOLTW and the Issuer are entering into this Agreement in order
to provide for certain registration rights relating to the Class A Common Stock,
par value $0.01 per share, of the Issuer (the "Class A Common Stock") now or
hereafter held by AOLTW.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to a Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to a Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
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"AOLTW Registration Date" means the earlier to occur of (i) the date on
which MediaOne and its Affiliates no longer beneficially own Registrable
Securities with an aggregate Market Price in excess of $250,000,000 and (ii) the
date that is five years after the date of this Agreement.
"AOLTW Securities" means securities of the Issuer beneficially owned by
AOLTW or any of its Affiliates (other than Issuer Securities) that are proposed
to be offered to the public for the account of AOLTW or any of its Affiliates
(other than the Issuer or a Subsidiary of the Issuer) in a transaction
registered under the Securities Act.
"AT&T" has the meaning set forth in the recitals to this Agreement.
"beneficially own" means to possess beneficial ownership as determined
under Rule 13d-3 under the Exchange Act.
"Board of Directors" means the board of directors of the Issuer or any
committee thereof.
"Business Day" means a day of the year other than a Saturday, Sunday or
other day on which banks are required or authorized to close in New York City.
"Class A Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Closing Price" means, with respect to a security, as of the date of
determination, (a) if such security is listed on a national securities exchange,
the closing price per share of such security for such date as published in The
Wall Street Journal (National Edition) or, if no such closing price on such date
is published in The Wall Street Journal (National Edition), the average of the
closing bid and asked prices on such date, as officially reported on the
principal national securities exchange on which such security is then listed or
admitted to trading; or (b) if such security is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security by the NASD, the last trading price per share of such
security on such date; or (c) if there is no trading on such date or if such
security is not designated as a national market system security by the NASD, the
average of the reported closing bid and asked prices of such security on such
date as shown by The Nasdaq Stock Market, Inc. (or its successor) and reported
by any member firm of The New York Stock Exchange, Inc. selected by the Issuer;
or (d) if none of (a), (b) or (c) is available, a market price per security
determined in good faith by the Board of Directors or, if such determination is
not satisfactory to the Stockholders for whom such determination is being made,
by a nationally recognized investment banking firm selected by the Issuer and
such Stockholders, the expenses for which shall be borne equally by the Issuer
and such Stockholders. If trading is conducted on a continuous basis on any
exchange, then the closing price shall be at 4:00 P.M. New York City time.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
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"Common Equity" means, collectively, the Class A Common Stock and the
Class B Common Stock, par value $0.01 per share, of the Issuer.
"Cumulative Net Proceeds" means, with respect to a Person, as of any
date of determination, the "Cumulative Net Proceeds," as defined in the MediaOne
Registration Rights Agreement, of such Person as of such date of determination.
"Counterparty" means any underwriter, broker or dealer with respect to a
Disposition.
"Deferral Period" has the meaning set forth in Section 6.3(b).
"Demand Registration" has the meaning set forth in Section 4.1.
"Disposition" means an underwritten public offering, including, for the
avoidance of doubt, (1) a transaction in which the underwriter or underwriters
act as principal for the sale of Registrable Class Securities pursuant to any
Registration Statement (including in order to hedge its economic exposure to a
Hedging Transaction) and (2) a transaction that constitutes an "at the market
offering" (as such term is defined in Rule 415 under the Securities Act), in
which the counterparty acts as agent (and not as principal).
"Exchange Act" means the Securities Exchange Act of 1934 and the rules
and regulations of the Commission thereunder, all as the same shall be in effect
at the time.
"Governmental Entity" means any supranational, national, state,
municipal or local government, political subdivision or other governmental
department, court, commission, board, bureau, agency, instrumentality or other
authority thereof, or any quasi-governmental or private body (including any
self-regulatory organization) exercising any regulatory, taxing, importing or
other governmental authority, whether domestic or foreign.
"Hedging Counterparty" means a broker-dealer registered under Section
15(b) of the Exchange Act or an Affiliate thereof.
"Hedging Transaction" means any transaction involving a security linked
to the Registrable Class Securities or any security that would be deemed to be a
"derivative security" (as defined in Rule 16a-1(c) under the Exchange Act) with
respect to the Registrable Class Securities or transaction (even if not a
security) which would (were it a security) be considered such a derivative
security, or which transfers some or all of the economic risk of ownership of
the Registrable Class Securities, including, without limitation, any forward
contract, equity swap, put or call, put or call equivalent position, collar,
non-recourse loan, sale of exchangeable security or similar transaction. For the
avoidance of doubt, the following transactions shall be deemed to be Hedging
Transactions:
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(a) transactions by a Stockholder in which a Hedging Counterparty
engages in short sales of Registrable Class Securities pursuant to a Prospectus
and may use Registrable Securities to close out its short position;
(b) transactions pursuant to which a Stockholder sells short
Registrable Class Securities pursuant to a Prospectus and delivers Registrable
Securities to close out its short position;
(c) transactions by a Stockholder in which the Stockholder
delivers, in a transaction exempt from registration under the Securities Act,
Registrable Securities to the Hedging Counterparty who will then publicly resell
or otherwise transfer such Registrable Securities pursuant to a Prospectus or an
exemption from registration under the Securities Act; and
(d) a loan or pledge of Registrable Securities to a Hedging
Counterparty who may then become a selling stockholder and sell the loaned
shares or, in an event of default in the case of a pledge, then sell the pledged
shares, in each case, in a public transaction pursuant to a Prospectus.
"Incidental Registration" has the meaning set forth in Section 5.1.
"Indemnified Party" has the meaning set forth in Section 7.3.
"Indemnifying Party" has the meaning set forth in Section 7.3.
"Initial Public Offering" means the initial offering to the public of
any shares of the Common Equity in a transaction registered under the Securities
Act.
"Inspector" has the meaning set forth in Section 6.1(f).
"Issuer" has the meaning set forth in the preamble to this Agreement.
"Issuer Securities" means (i) for purposes of Section 6.10(c),
securities of the Issuer proposed to be offered to the public for the account of
the Issuer in a transaction registered under the Securities Act, together with
securities of the Issuer to be offered to the public for the account of another
Person other than AOLTW or any of its Affiliates (other than the Issuer and the
Issuer's Subsidiaries) that are proposed to be included in such offering
pursuant to Section 5.1 and (ii) for all other purposes, securities of the
Issuer proposed to be offered to the public for the account of the Issuer in a
transaction registered under the Securities Act.
"Lead Underwriter" means, with respect to an offering, the lead
book-running underwriter(s) for such offering.
"Liability" has the meaning set forth in Section 7.1.
"Lock-up Agreement" has the meaning set forth in Section 6.8.
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"Majority Requesting Stockholders" means, with respect to a Registration
Statement, Stockholders holding Registrable Securities representing more than
50% of those to be included in a Registration Statement (on an as-converted
basis).
"Majority Stockholders" means beneficial owners of Registrable
Securities representing more than 50% of the total number of outstanding
Registrable Securities (on an as-converted basis).
"Market Price" means, as of any date of determination, the average of
the daily Closing Price of the Registrable Securities for the immediately
preceding 30 days on which the national securities exchanges are open for
trading.
"MediaOne" has the meaning set forth in the recitals to this Agreement.
"MediaOne Registrable Securities" means the "Registrable Securities," as
that term is defined in the MediaOne Registration Rights Agreement.
"MediaOne Registration Rights Agreement" has the meaning set forth in
the recitals to this Agreement.
"MediaOne Stockholders" means the "Stockholders," as that term is
defined in the MediaOne Registration Rights Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"OTC Hedging Transaction" has the meaning set forth in the MediaOne
Registration Rights Agreement.
"Permitted Transferee" means any Person to whom a Stockholder has
transferred, in accordance with the terms of this Agreement, Registrable
Securities.
"Person" means any individual, firm, corporation, partnership, limited
liability company, "group" (as such term is used in Rule 13d-3 under the
Exchange Act), trust, incorporated or unincorporated association, joint venture,
joint stock company, Governmental Entity or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
"Pledgee" has the meaning set forth in Section 2.4(a).
"Prospectus" means the prospectus related to any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance on Rule 415 under the Securities Act), as amended or
supplemented by any amendment or prospectus supplement, including post-effective
amendments, and all materials incorporated by reference in such prospectus.
"Records" has the meaning set forth in Section 6.1(f).
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"Registrable Class Securities" means securities of the Issuer that are
of the same class as the relevant Registrable Securities.
"Registrable Securities" means each of the following: (a) any and all
shares of Common Equity now or hereafter held by AOLTW or its Affiliates or
issued or issuable upon conversion of any convertible security or exercise of
any warrants or options held by AOLTW or its Affiliates, (b) any shares of
Common Equity or any other securities issued or issuable to a Stockholder in
respect of any Registrable Securities by way of a conversion, exchange,
replacement, stock dividend or stock split or other distribution in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise and any shares of Common Equity or voting common
stock or other securities issuable upon conversion, exercise or exchange
thereof, and (c) all shares of Common Equity or other securities described in
(b) above owned by any Permitted Transferee that were transferred in accordance
with the terms of this Agreement and were Registrable Securities at the time
such shares or securities were transferred to such Permitted Transferee.
"Registration Expenses" has the meaning set forth in Section 6.5.
"Registration Statement" means a registration statement filed pursuant
to the Securities Act.
"Restructuring Agreement" has the meaning set forth in the recitals to
this Agreement.
"Securities Act" means the Securities Act of 1933 and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"Stockholder" means a holder of Registrable Securities.
"Stockholder Counsel" means a firm of legal counsel designated by the
Majority Stockholders.
"Strategic Investor Transaction" has the meaning set forth in the
MediaOne Registration Rights Agreement.
1.2 Capitalized Terms. Capitalized terms used herein and in the
Schedules and not otherwise defined shall have the respective meanings ascribed
to them in the Restructuring Agreement.
1.3 Successor Laws, Rules, Regulations and Forms. All references to
laws, rules, regulations and forms in this Agreement shall be deemed to be
references to the comparable successor thereto in effect at the time.
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ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT.
2.1 Grant of Rights. The Issuer hereby grants registration rights to the
Stockholders upon the terms and conditions set forth in this Agreement.
2.2 Registrable Securities. As to any particular Registrable Securities,
once issued, such securities shall cease to be Registrable Securities when (a) a
Registration Statement with respect to the sale 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, (b) they shall have
been distributed to the public pursuant to Rule 144 (or any successor provision
then in effect) under the Securities Act, (c) they shall have been otherwise
transferred, and, in accordance with Section 3.1, new certificates for them not
bearing a legend restricting further transfer shall have been delivered or (d)
they shall have ceased to be outstanding.
2.3 Holders of Registrable Securities. A Person is deemed to be a
Stockholder whenever such Person owns of record Registrable Securities, or holds
an option to purchase, or a security convertible into or exercisable or
exchangeable for, Registrable Securities, whether or not such acquisition or
conversion has actually been effected. If the Issuer receives conflicting
instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Issuer may act upon the basis of the
instructions, notice or election received from the registered owner of such
Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
2.4 Transfer of Registration Rights.
(a) Each Stockholder may transfer or pledge Registrable
Securities with the associated registration rights under this Agreement to a
Permitted Transferee or pledgee ("Pledgee") only if (1) subject to the last
sentence of this Section 2.4(a), such Permitted Transferee or Pledgee agrees in
writing to be bound as a Stockholder by the provisions of this Agreement insofar
as it pertains to the holding, owning and disposition of Registrable Securities
and (2) immediately following such transfer or pledge, the further disposition
of such Registrable Securities by such Permitted Transferee or Pledgee would be
restricted under the Securities Act. Upon any transfer of Registrable Securities
other than as set forth in this Section 2.4, such securities shall no longer
constitute Registrable Securities, except that any Registrable Securities that
are pledged or made the subject of a Hedging Transaction, whether or not the
subject of a Demand Registration, which Registrable Securities are not
ultimately disposed of by the Stockholders pursuant to such pledge or Hedging
Transaction shall, to the extent such securities remain "restricted securities"
under the Securities Act, be deemed to remain "Registrable Securities"
notwithstanding the release of such pledge or the completion of such Hedging
Transaction. Notwithstanding anything herein to the contrary, no Pledgee or
Hedging Counterparty shall be required to agree to any restriction on its
ability to trade
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in any securities, including the restrictions set forth in Section 6.8(a). The
Stockholders hereby agree that they shall act in good faith with respect to the
restrictions set forth in Section 6.8(a) and shall take no action or omit to
take any action with the intention of circumventing or evading the restrictions
applicable to them under Section 6.8(a).
(b) If a Stockholder assigns its rights under this
Agreement in connection with the transfer of less than all of its Registrable
Securities, the Stockholder shall retain its rights under this Agreement with
respect to its remaining Registrable Securities. If a Stockholder assigns its
rights under this Agreement in connection with the transfer of all of its
Registrable Securities, such Stockholder shall have no further rights or
obligations under this Agreement, except under Article VII hereof in respect of
offerings in which it participated.
ARTICLE III
ACKNOWLEDGEMENTS OF THE STOCKHOLDERS
3.1 Certain Acknowledgments of the Stockholders. Each
Stockholder acknowledges that all Registrable Securities will be issued or have
been issued pursuant to an exemption from registration under the Securities Act
and applicable state securities laws and agrees not to sell or otherwise dispose
of such Registrable Securities in any transaction which would be in violation of
the Securities Act or applicable state securities law. Each Stockholder
acknowledges that the following legend will appear on the certificates for the
Registrable Securities reflecting the foregoing restriction. The Issuer shall,
at the request of any Stockholder, remove from each certificate evidencing
Registrable Securities the following legend if the Issuer is reasonably
satisfied (based upon an opinion of counsel or other evidence) that the
securities evidenced thereby may be publicly sold without registration under the
Securities Act; provided, however, that the Issuer or Issuer's counsel shall not
be required to deliver an opinion of counsel to the effect that the securities
evidenced thereby may be publicly sold without registration under the Securities
Act unless Stockholder Counsel shall have delivered an opinion, upon which the
Issuer and Issuer's counsel are entitled to rely, to the effect that the
securities evidenced thereby may be publicly sold without registration under the
Securities Act.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, THE SECURITIES OR
"BLUE SKY" LAWS OF ANY STATE OR ANY OTHER SECURITIES LAWS.
SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED, OR OTHERWISE ASSIGNED, EXCEPT (I)
PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES WHICH IS EFFECTIVE UNDER ALL APPLICABLE SECURITIES
LAWS, OR (II) UPON THE FURNISHING TO TIME WARNER CABLE INC. BY
THE HOLDER OF THIS CERTIFICATE OF AN OPINION OF
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COUNSEL OR OTHER EVIDENCE REASONABLY ACCEPTABLE TO TIME WARNER
CABLE INC. THAT SUCH TRANSACTION IS NOT REQUIRED TO BE
REGISTERED UNDER APPLICABLE SECURITIES LAWS."
ARTICLE IV
DEMAND REGISTRATION.
4.1 Request for Demand Registration.
(a) At any time after the completion of the
Initial Public Offering, a Stockholder may make a written request to the Issuer
to register, and the Issuer shall register, on the appropriate form, under the
Securities Act, the number of Registrable Securities stated in such request (a
"Demand Registration").
(b) Each request for a Demand Registration by
Stockholders shall identify the Stockholders making such request and the amount
of the Registrable Securities proposed to be sold by each and the intended
method of disposition thereof.
4.2 Effective Demand Registration. Subject to Section
6.3(b), the Issuer shall use all commercially reasonable efforts to (i) file a
Registration Statement relating to such Demand Registration, (ii) cause such
Registration Statement to be declared effective by the Commission not later than
(1) 120 days (if the Issuer is not eligible to use Form S-3 for such Demand
Registration) or (2) 60 days (if the Issuer is eligible to use Form S-3 for such
Demand Registration), after the Issuer receives a request under Section 4.1(a)
and (iii) keep such Registration Statement continuously effective until the
later of (1) the time at which all Registrable Securities registered in the
Demand Registration have been sold and (2) the 75th day after the date such
Registration Statement is declared effective by the Commission (or such later
date as the Majority Requesting Stockholders request in writing); provided that
such 75-day period shall be extended for a number of days equal to the number of
days that elapse from (x) the date any written notice contemplated by Section
6.3(a) is given by the Issuer to (y) the date on which the Issuer delivers to
the Stockholders the supplement or amendment contemplated by Section 6.3(a).
4.3 Underwriting. If the Issuer or the Majority
Requesting Stockholders elect, the Issuer shall use all commercially reasonable
efforts to cause the sale of Registrable Securities relating to a Demand
Registration (other than an OTC Hedging Transaction) to be in the form of a firm
commitment underwritten offering, and the Lead Underwriter shall be selected in
accordance with Section 6.9.
4.4 Hedging Transactions.
(a) The Issuer agrees that, in connection with
any proposed Hedging Transaction, if, in the reasonable judgment of Stockholder
Counsel (after good faith consultation with counsel to the Issuer), it is
necessary or desirable to register under
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the Securities Act such Hedging Transactions or sales or transfers (whether
short or long) of Registrable Class Securities in connection therewith, then the
Issuer shall use all commercially reasonable efforts to take such actions (which
may include, among other things, the filing of a post-effective amendment to a
Registration Statement to include additional or changed information that is
material or is otherwise required to be disclosed, including, without
limitation, a description of such Hedging Transaction, the name of the Hedging
Counterparty, identification of the Hedging Counterparty or its Affiliates as
underwriters or potential underwriters, if applicable, or any change to the Plan
of Distribution) as may reasonably be required to register such Hedging
Transactions or sales or transfers of Registrable Class Securities in connection
therewith under the Securities Act in a manner consistent with the rights and
obligations of the Issuer hereunder with respect to the registration of
Registrable Securities. Any information regarding the Hedging Transaction
included in a Registration Statement or Prospectus pursuant to this Section
4.4(a) shall be deemed to be information provided by the Stockholders selling
Registrable Securities pursuant to such Registration Statement for purposes of
Article VII.
(b) Any registration effected pursuant to this
Section 4.4 shall be deemed to be a Demand Registration for purposes of this
Agreement.
(c) If in connection with a Hedging Transaction,
a Hedging Counterparty or any Affiliate thereof is (or may be considered) an
underwriter or selling stockholder, then it shall be required to provide
customary indemnities to the Issuer regarding the Plan of Distribution and like
matters.
(d) The Issuer further agrees to include, under
the caption "Plan of Distribution" (or the equivalent caption), in each
Registration Statement, and any related prospectus (to the extent such inclusion
is permitted under applicable Commission regulations and is consistent with
comments received from the Commission during any Commission review of the
Registration Statement), language substantially in the form of Annex A hereto
and to include in each prospectus supplement filed in connection with any
proposed Hedging Transaction language mutually agreed upon by the Issuer, the
relevant Stockholder and the Hedging Counterparty describing such Hedging
Transaction.
4.5 Cutback Provisions. All offerings made in respect of
Demand Registrations shall be subject to the limitations set forth in Section
6.10.
ARTICLE V
INCIDENTAL OR "PIGGY-BACK" REGISTRATION.
5.1 Issuer Incidental Registration. At any time after
the Closing, if a Stockholder requests a Demand Registration in accordance with
Article IV, then the Issuer shall have the right, subject to the limitations set
forth in Section 6.10, to register Issuer Securities or securities for the
account of any stockholder of the Issuer other than the Stockholders. In
connection with any Demand Registration under Article IV
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involving an underwritten offering, the Issuer shall not include any securities
of the Issuer for the account of any Person other than the Stockholders unless
such Person accepts the terms of the underwritten offering as agreed upon
between the Lead Underwriter and the Stockholders requesting registration.
5.2 Stockholder Incidental Registration.
(a) At any time after the Closing, if the Issuer
proposes to file a Registration Statement with respect to an offering of
securities (other than debt securities, or non-participating preferred equity
securities, not exchangeable for or convertible into or otherwise linked to the
Common Equity) by the Issuer for its own account or for the account of any
stockholder of the Issuer other than the Stockholders (other than (i) a
Registration Statement on Form S-4 or S-8 or (ii) a Registration Statement
relating to the issuance of securities as consideration in any acquisition by
the Issuer), then the Issuer shall give written notice (a "Filing Notice") of
such proposed filing to each Stockholder at least 10 Business Days before the
anticipated filing date, which notice shall describe the proposed registration
and distribution and offer such Stockholder the opportunity to register the
number of Registrable Securities as the Stockholder requests (an "Incidental
Registration").
(b) The Issuer shall permit the Stockholders who
have made written requests to the Issuer to participate in the Incidental
Registration within 5 Business Days after receipt of the Filing Notice to
include up to all of their Registrable Securities (subject to the limitations
set forth in Section 6.10) in such offering on the same terms and conditions as
the securities of the Issuer or for the account of such other stockholder, as
the case may be, included therein. In connection with any Incidental
Registration under this Section 5.2 involving an underwritten offering, the
Issuer shall not be required to include any Registrable Securities in such
underwritten offering unless the participating Stockholders accept the terms of
the underwritten offering as agreed upon by the Issuer and such other
stockholders, if any.
ARTICLE VI
REGISTRATION PROCEDURES.
6.1 Obligations of the Issuer. Whenever registration of
Registrable Securities has been requested pursuant to Article IV or Article V,
the Issuer shall use all commercially reasonable efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection with any such request:
(a) the Issuer shall, as expeditiously as
practicable, prepare and file with the Commission a Registration Statement on
Form S-3 (or, if the Issuer is not then eligible to use Form S-3, on any form
for which the Issuer then qualifies, which counsel for the Issuer deems
appropriate and which is available for the sale of such Registrable Securities
in accordance with the intended method of distribution thereof), and use all
commercially reasonable efforts to cause such Registration Statement to
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12
become effective as expeditiously as practicable; provided, however, that (i)
before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, the Issuer shall provide Stockholder Counsel and any other
Inspector with a reasonable opportunity to review and comment on such
Registration Statement and each Prospectus included therein (and each amendment
or supplement thereto) to be filed with the Commission, subject to such
documents being under the Issuer's control, and (ii) the Issuer shall notify
each Stockholder, Stockholder Counsel, and each other party participating in
such distribution of Registrable Securities of any stop order issued or
threatened by the Commission and take all commercially reasonable action
required to prevent the entry of such stop order or to remove it if entered;
(b) the Issuer shall, as expeditiously as
practicable, prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus as may be
necessary to keep such Registration Statement effective until the earlier of (i)
the 75th day after the effective date thereof (or such later date as the
Majority Requesting Stockholders request in writing) and (ii) the date on which
all Registrable Securities covered by such Registration Statement have been sold
(provided that such 75-day period shall be extended for a number of days equal
to the number of days that elapse from (x) the date any written notice
contemplated by Section 6.3(a) is given by the Issuer to (y) the date on which
the Issuer delivers to the Stockholders the supplement or amendment contemplated
by Section 6.3(a)); and the Issuer shall comply with the provisions of the
Securities 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 sellers thereof set forth in such Registration
Statement;
(c) the Issuer shall furnish to each seller of
Registrable Securities, prior to filing a Registration Statement, at least one
conformed copy of such Registration Statement as is proposed to be filed, and
thereafter shall promptly furnish such number of conformed copies of such
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the Prospectus included therein (including
each preliminary Prospectus and any Prospectus filed under Rule 424 under the
Securities Act) as each such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities by such seller; in
addition, the Issuer shall promptly after receipt furnish to each Stockholder
copies of the portions of any and all transmittal letters and any other
correspondence (including, but not limited to, comment letters) with the
Commission or any other Governmental Entity relating to such Registration
Statement or amendment or supplement thereto relating to the sections entitled
"Plan of Distribution" or "Selling Stockholders," and the Majority Requesting
Stockholders shall have the right to request that the Issuer modify any such
information contained in such Registration Statement or amendment and supplement
thereto pertaining to such Stockholders in such sections, and the Issuer shall
use all commercially reasonable efforts to comply with such request; provided,
however, that the Issuer shall not have any obligation to modify any information
if the Issuer reasonably expects that so doing would cause the Registration
Statement to contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading;
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13
(d) the Issuer shall use all commercially
reasonable efforts (i) to register or qualify all Registrable Securities and
other securities covered by the Registration Statement under such other
securities or "blue sky" laws of such States of the United States of America
where an exemption is not available and as the sellers of Registrable Securities
covered by the Registration Statement shall reasonably request, (ii) to keep
such registration or qualification in effect during the period during which the
Registration Statement is effective, (iii) to obtain the withdrawal of any order
or other determination suspending such registration or qualification during the
period during which the Registration Statement is effective and (iv) to take any
other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities to
be sold by such sellers, except that the Issuer shall not for any such purpose
be required to (1) qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this clause
(iv) be obligated to be so qualified, (2) subject itself to taxation in any such
jurisdiction or (3) consent to general service of process in any such
jurisdiction;
(e) the Issuer shall enter into and perform
customary agreements (including underwriting and indemnification and
contribution agreements in customary form with the Lead Underwriter or other
Counterparty and reasonably acceptable to the Counterparty) and take such other
commercially reasonable actions as are required in order to expedite or
facilitate each Disposition and shall provide all reasonable cooperation,
including causing appropriate officers to attend and participate in "road shows"
and other information meetings organized by the Counterparty, customary for
similar Dispositions;
(f) the Issuer shall make available at
reasonable times for inspection by any seller of Registrable Securities, the
Counterparties participating in any Disposition, Stockholder Counsel and any
attorney, accountant or other agent retained by any Counterparty (each, an
"Inspector" and collectively, the "Inspectors"), all financial and other
records, corporate documents of the Issuer and its Subsidiaries (collectively,
the "Records") as are reasonably necessary to enable them to exercise their due
diligence responsibilities, and cause the Issuer's and its Subsidiaries'
officers, directors and employees, and the independent public accountants of the
Issuer, to discuss the business and affairs of the Issuer and its Subsidiaries,
to supply promptly all information reasonably requested by any such Inspector in
connection with such Registration Statement and to otherwise reasonably
cooperate in the due diligence process of the Inspectors;
(g) in the case of a Disposition, the Issuer
shall use all commercially reasonable efforts to obtain "cold comfort" letters
addressed to the Issuer and the Counterparties and dated the effective date of
the Registration Statement and the date of the closing under the agreement
relating to such Disposition from the Issuer's independent public accountants in
customary form and covering such matters of the type customarily covered by
"cold comfort" letters in agreements that are customary or reasonably
appropriate for the types of offerings that are most similar to such
Disposition, as Stockholder Counsel or the Counterparty reasonably requests;
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14
(h) the Issuer shall use all commercially
reasonable efforts to furnish, at the request of any seller of Registrable
Securities, on the date such Registrable Securities are delivered to the
Counterparties for sale pursuant to such Registration Statement or, if such
Registrable Securities are not being sold through underwriters, on the date the
Registration Statement with respect to such Registrable Securities becomes
effective, a signed opinion, dated such date, of counsel representing the Issuer
for the purposes of such Disposition, addressed to the Counterparties, if any,
covering such legal matters with respect to the Disposition in respect of which
such opinion is being given as the Counterparties, if any, and such seller may
reasonably request and are customarily included in such opinions relating to
transactions similar to such Disposition;
(i) the Issuer shall comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable but no later than 15 months after the
effective date of the Registration Statement, an earnings statement covering a
period of 12 months beginning after the effective date of the Registration
Statement, in a manner that satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(j) the Issuer shall use all commercially
reasonable efforts to cause all such Registrable Securities to be listed on each
securities exchange or automated quotation system on which similar securities
issued by the Issuer are then listed (and if no such securities are then listed
on any securities exchange, on a national securities exchange or automated
quotation system selected by the Issuer) and to thereafter comply with all
applicable rules of such securities exchange or automated quotation system so as
to permit the continued listing of such securities on such exchange or automated
quotation system;
(k) the Issuer shall use all commercially
reasonable efforts to cause all Registrable Securities covered by the
Registration Statement to be registered with or approved by such Governmental
Entities as may be necessary in the written opinion of counsel to the Issuer and
counsel to the seller or sellers of Registrable Securities to enable the seller
or sellers thereof to consummate the disposition of such Registrable Securities
within the United States of America;
(l) the Issuer shall cooperate with each seller
of Registrable Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities sold pursuant to a Registration
Statement, and provide the transfer agent for the Registrable Securities with
certificates for the Registrable Securities that are in a form eligible for
deposit with The Depository Trust Company;
(m) the Issuer shall timely keep Stockholder
Counsel advised in writing as to the initiation and progress of any registration
under Article IV or Article V hereunder;
(n) the Issuer shall cooperate with each seller
of Registrable Securities and each underwriter participating in the disposition
of such Registrable
<PAGE>
15
Securities and their respective counsel in connection with any filings required
to be made with the NASD;
(o) during the time when a Prospectus is
required to be delivered under the Securities Act, the Issuer shall promptly
give notice to all Stockholders selling securities pursuant to such Prospectus
(i) of the receipt by the Issuer of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or threat
in writing of any proceeding for such purpose, (ii) of the occurrence of any of
the events described in Section 6.3(b) (provided, however, that no notice by the
Issuer shall be required pursuant to this clause (ii) in the event that the
Issuer either promptly files a Prospectus supplement or amendment to update the
Prospectus or a Form 8-K or other appropriate Exchange Act report that is
incorporated by reference into the Registration Statement, which, in either
case, contains the requisite information with respect to such event that results
in the Registration Statement no longer containing any untrue statement of
material fact or omitting to state a material fact necessary to make the
statements contained therein not misleading) and (iii) of the determination by
the Issuer that a post-effective amendment to a Registration Statement will be
filed with the Commission;
(p) if the Issuer files a Registration Statement
on Form S-3, and one or more Stockholders request to have an offering of
Registrable Securities registered under such Registration Statement pursuant to
Article IV or V hereof, the Issuer shall use all commercially reasonable efforts
to include in such Registration Statement such additional information for
marketing purposes as the Lead Underwriter with respect to such offering
reasonably requests; provided, however, that, if such additional information is
included in such Registration Statement, the time period for having such
Registration Statement declared effective pursuant to clause (ii)(2) of Section
4.2 shall be no more than 120 days and the Issuer shall use all commercially
reasonable efforts to cause such Registration Statement to be declared effective
as soon as is practicable; and
(q) the Issuer shall use all commercially
reasonable efforts to promptly take all other steps necessary to effect the
registration and sale of the Registrable Securities contemplated hereby.
6.2 Seller Information, Compliance with Laws, Customary
Agreements. The Issuer may require that (a) each seller of Registrable
Securities as to which any Registration Statement is being filed furnish the
Issuer such information regarding such seller and the distribution of such
securities as the Issuer may from time to time reasonably request in writing;
(b) each seller of Registrable Securities agree to comply with the Securities
Act and the Exchange Act and all applicable state securities laws and comply
with all applicable regulations in connection with the registration and
distribution of the Registrable Securities; and (c) each seller of Registrable
Securities use all commercially reasonable efforts to enter into and perform
customary agreements (including an underwriting and indemnification agreement in
customary form with the
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16
Lead Underwriter) and to take such other commercially reasonable actions in
order to expedite or facilitate the disposition of such Registrable Securities.
6.3 Notice to Discontinue, Deferral Periods.
(a) The Issuer shall promptly notify each
Stockholder selling securities of the Issuer pursuant to a Registration
Statement (i) upon discovery that, or upon the happening of any event as a
result of which, the Prospectus or the Registration Statement includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or of the occurrence
of any event specified in Section 6.3(b); (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement; or
(iii) of any written request by the Commission for (1) amendments to the
Registration Statement or any document incorporated or deemed to be incorporated
by reference in the Registration Statement, (2) supplements or amendments to the
Prospectus or (3) additional information. Immediately following any such event
(x) upon the request of the Issuer, each Stockholder shall suspend the use of
the Prospectus and shall not sell any Registrable Securities until such
Stockholder has received copies of the supplemented or amended Prospectus or
until it is advised by the Issuer that the Prospectus may be used, and (y) the
Issuer shall use all commercially reasonable efforts to, as promptly as
practicable or in the case of an event specified in Section 6.3(b), by the end
of the Deferral Period (as defined below), prepare and file a post-effective
amendment to the Registration Statement or a supplement or amendment to the
related Prospectus or any document that would be incorporated by reference into
the Registration Statement and Prospectus so that the Registration Statement
does not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and such Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and promptly thereafter
deliver to the holders of the Registrable Securities a reasonable number of
copies of the supplement or amendment of such Prospectus complying with the
foregoing, and, in the case of a post-effective amendment to a Registration
Statement, use all commercially reasonable efforts to cause it to be declared
effective as promptly as is reasonably practicable.
(b) The Issuer shall not be required to file any
Registration Statement pursuant to this Agreement, file any amendment thereto,
furnish any supplement or amendment to a Prospectus included in a Registration
Statement, make any other filing with the Commission, cause any Registration
Statement or other filing with the Commission to become effective, or take any
similar action (collectively, "Registration Actions") and may withdraw any
Registration Statement or other filing with the Commission, and any and all
sales of Registrable Securities by a holder thereof pursuant to a Registration
Statement shall be suspended: (i) if such Registration Action would, in the
good-faith judgment of the Board of Directors, materially interfere with
business activities or plans of the Issuer, (ii) if such Registration Action
would, in the good-faith judgment of the Board of Directors, require the
disclosure of material non-
<PAGE>
17
public information which disclosure, in the good-faith judgment of the Board of
Directors, would be detrimental to the Issuer or (iii) if such Registration
Action would require the inclusion of audited financial statements of the Issuer
that are not then available. Upon the occurrence of any condition described in
clauses (i), (ii) or (iii) of the first sentence of this Section 6.3(b), the
Issuer shall give prompt notice thereof (which notice shall state whether it
intends to delay any of the Registration Actions and/or suspend sales of
Registrable Securities) to the Stockholders. Upon the termination of the
condition described in clauses (i), (ii) or (iii) of the first sentence of this
Section 6.3(b), the Issuer shall give prompt notice to the Stockholders and, in
the case of a Demand Registration, if the request for Demand Registration has
not been revoked pursuant to Section 6.3(d), shall promptly proceed with the
Registration Actions and make any other filing with the Commission required of
it or terminate any suspension of sales it has put into effect and shall take
all such other commercially reasonable actions to permit registered sales of
Registrable Securities as contemplated by this Agreement. It is understood and
agreed that the foregoing provisions of this Section 6.3(b) shall not prevent a
sale or hedge pursuant to Rule 144 by a holder of Registrable Securities or in a
transaction exempt from registration under the Securities Act.
(c) Notwithstanding anything to the contrary in
Section 6.3(b), the Issuer may only delay Registration Actions or suspend sales
of Registrable Securities for three periods (each, a "Deferral Period") of up to
120 days in the aggregate in any period of twelve consecutive months. In
addition, no suspension pursuant to Section 6.3(b) after the Initial Public
Offering shall be effective unless (x) each director and executive officer of
the Issuer is also prohibited by the Issuer's insider trading policy or
otherwise from making purchases and sales (other than those made pursuant to
plans designed to comply with Rule 10b5-1(c)(1)(i) under the Exchange Act) by
reason of the condition specified in the first sentence of Section 6.3(b) and
(y) each other holder entitled to sell equity securities of the Issuer pursuant
to registration rights under a selling stockholder prospectus is, or agrees to
be, subject to deferral provisions substantially similar to or more restrictive
than those contained in Section 6.3(b).
6.4 Reports and Materials to be Filed under the
Securities Act and the Exchange Act. The Issuer shall timely file the reports
and materials required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Commission thereunder
(including but not limited to the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c) of Rule 144) and shall take all
commercially reasonable actions as a Stockholder or any broker or dealer
facilitating a sale of Registrable Securities may reasonably request to enable
such Stockholder to sell or hedge Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rules or regulations hereafter adopted by the
Commission. Upon the request of any Stockholder, the Issuer shall deliver to
such Stockholder a written statement as to whether it has complied with such
requirements.
6.5 Registration Expenses. The Issuer shall pay all
expenses ("Registration Expenses") arising from or incident to any Demand
Registration or
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18
Incidental Registration by the Stockholders pursuant to the terms of this
Agreement, regardless of whether the relevant Registration Statement is declared
effective; provided, however, that the Stockholders shall each bear the expense
of any broker's commission or underwriter's discount or commission relating to
registration and sale of its Registrable Securities and any of its legal fees,
incurred in connection with a Demand Registration or Incidental Registration.
Subject to the proviso included in the immediately preceding sentence,
Registration Expenses shall include, without limitation, any and all expenses
incident to performance of or compliance with any registration or marketing of
securities pursuant to Article IV or V, including, without limitation, (i) the
fees, disbursements and expenses of Issuer's counsel and accountants in
connection with this Agreement and the performance of the Issuer's counsel and
accountants in connection with this Agreement and the performance of the
Issuer's obligations hereunder; (ii) all expenses, including filing fees, in
connection with the preparation, printing and filing of any Registration
Statement, any Prospectus or preliminary Prospectus, any other offering document
and amendments and supplements thereto and the mailing and delivering of copies
thereof to any underwriters and dealers; (iii) the cost of printing or producing
any agreements among underwriters, underwriting agreements, and blue sky or
legal investment memoranda, any selling agreements and any other documents in
connection with the offering, sale or delivery of the securities to be disposed
of; (iv) all expenses in connection with the qualification of the securities to
be disposed of for offering and sale under state securities laws, including the
fees and disbursements of counsel for the underwriters in connection with such
qualification and in connection with any blue sky and legal investment surveys;
(v) the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
securities to be disposed of; (vi) transfer agents' and registrars' fees and
expenses and the fees and expenses of any other agent or trustee appointed in
connection with such offering; (vii) all security engraving and security
printing expenses; (viii) all fees and expenses payable in connection with the
listing of the securities on any securities exchange or automated interdealer
quotation system; (ix) any other fees and disbursements of underwriters
customarily paid by the issuers of securities; and (x) the costs and expenses of
the Issuer relating to analyst or investor presentations or any "road show"
undertaken in connection with the registration and/or marketing of any
Registrable Securities.
6.6 Confidentiality. Any Records provided in connection
with Section 6.1(f) that the Issuer determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall not be
publicly disclosed by the Inspectors (and the Inspectors shall confirm their
agreement in writing in advance to the Issuer if the Issuer shall so request)
unless (i) the disclosure of such Records is necessary, in the Issuer's
reasonable judgment, to avoid or correct a misstatement or omission in the
Registration Statement, (ii) the release of such Records is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction after
exhaustion of all appeals therefrom or (iii) the information in such Records was
known to the Inspectors on a non-confidential basis prior to its disclosure by
the Issuer or has been made generally available to the public or otherwise
becomes available on a non-confidential basis. Each seller of Registrable
Securities agrees that it shall, upon learning that disclosure of such Records
is sought in a court of competent jurisdiction, give notice to the Issuer and
allow
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19
the Issuer, at the Issuer's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential.
6.7 Stock Split. Prior to the Initial Public Offering,
the Issuer shall effect a split of the Class A Common Stock so that the price
per share of Class A Common Stock reasonably expected to be received in the
Initial Public Offering shall be within a range that, in the judgment of the
Lead Underwriter, will facilitate the Initial Public Offering on the best
possible terms. The Stockholders agree to take all actions necessary to permit
the Issuer to comply with its obligations pursuant to the preceding sentence.
6.8 Restrictions on Public Sales.
(a) If requested in writing by any Lead
Underwriter in connection with a public offering of shares of Common Equity (or
instruments convertible into or exchangeable for Common Equity), each of the
Stockholders (other than any Pledgee or Hedging Counterparty) and the Issuer
shall execute and deliver agreements ("Lock-up Agreements") containing such
restrictions on its ability to dispose of shares of Common Equity (or
instruments convertible into or exchangeable for Common Equity) as such Lead
Underwriter may reasonably request; provided that such restrictions shall be the
same for all parties and shall not have a duration of more than (i) 180 days
after the completion of such offering (in the case of the Initial Public
Offering) or (ii) 90 days after the completion of such offering (in the case of
other public offerings). Any Lock-up Agreements executed by the Stockholders
shall contain provisions naming the Issuer as an intended third-party
beneficiary thereof and requiring the prior written consent of the Issuer for
any amendments thereto or waivers thereof. Any Lock-up Agreements executed by
the Issuer shall contain provisions naming the Stockholders as intended
third-party beneficiaries thereof and requiring the prior written consent of the
Majority Stockholders for any amendments thereto or waivers thereof.
(b) A Stockholder shall not be required
hereunder to sign a Lock-up Agreement that restricts the Stockholder from
exercising the Incidental Registration rights set forth in Article V.
(c) In connection with a Demand Registration,
the Issuer shall use all commercially reasonable efforts to have all executive
officers, directors and holders of more than 5% of any class of the Common
Equity execute agreements that are no less restrictive than the restrictions
contained in the Lock-up Agreements.
6.9 Selection of Underwriters. In any
underwritten public offering pursuant to a Demand Registration (other than the
Initial Public Offering), (i) the Majority Requesting Stockholders shall have
the right to select one nationally-recognized investment banking firm as a
co-lead book running manager (or the equivalent) with respect to such offering,
which firm shall be reasonably acceptable to the Issuer, and the Issuer shall,
for purposes of all applicable provisions in other agreements relating to the
selection of underwriters in underwritten public offerings (including, without
limitation, Section 6.9 of the MediaOne Registration Rights Agreement), select
such firm as a co-
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20
lead book running manager (or the equivalent); and (ii) any other co-lead book
running managers (or the equivalent) that are selected pursuant to any other
applicable provisions contained in other agreements relating to the selection of
underwriters in underwritten public offerings (including, without limitation,
Section 6.9 of the MediaOne Registration Rights Agreement) shall also act as
co-lead book running managers with respect to such offering. In all other
underwritten public offerings, other than offerings in which the Issuer is only
permitted to select one co-lead book running manager (or the equivalent)
(including, without limitation, pursuant to Section 6.9 of the MediaOne
Registration Rights Agreement), the Issuer shall have the right to select all
Lead Underwriters, except that if at least $500 million of Registrable
Securities are proposed to be sold pursuant thereto, the Majority Requesting
Stockholders shall have the right to select one nationally-recognized investment
banking firm as a co-lead book running manager (or the equivalent) with respect
to such offering, which firm shall be reasonably acceptable to the Issuer, and
the Issuer shall, for purposes of all applicable provisions in other agreements
relating to the selection of underwriters in underwritten public offerings
(including, without limitation, Section 6.9 of the MediaOne Registration Rights
Agreement), select such firm as a co-lead book running manager (or the
equivalent).
6.10 Limitations on Registration. In any public
offering of securities of the Issuer registered pursuant to Article IV or V, if
any Lead Underwriter determines in good faith that the registration of all or
part of such securities requested to be included would have a material and
adverse effect on the success of such offering, then the Issuer shall be
required to include in such offering only such number of such securities as the
Lead Underwriter reasonably believes would not have such adverse effect,
according to the following priority:
(a) First, such offering shall include any
Issuer Securities proposed to be included in such offering, until the Issuer's
Cumulative Net Proceeds are $2.1 billion;
(b) Second, such offering shall include any
MediaOne Registrable Securities proposed to be included in such offering, until
the MediaOne Stockholders' Cumulative Net Proceeds are $3.0 billion; and
(c) Third,
(i) if such offering occurs prior to the
AOLTW Registration Date, such offering shall include any other securities
proposed to be included in such offering, which securities shall (A) first, be
divided equally among (x) any such securities that are MediaOne Registrable
Securities not already included in such offering and (y) any such securities
that are Issuer Securities not already included in such offering, (B) second,
include any MediaOne Registrable Securities or Issuer Securities, as the case
may be, not already included in such offering and (C) third, include any AOLTW
Securities requested to be included in such offering; and
(ii) if such offering occurs on or after
the AOLTW Registration Date, such offering shall include any other securities
proposed to be
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21
included in such offering, which securities shall be divided equally among (x)
any such securities that are MediaOne Registrable Securities not already
included in such offering, (y) any such securities that are Issuer Securities
not already included in such offering and (z) any such securities that are AOLTW
Securities not already included in such offering, in each case until all such
securities requested to be registered have been included in such offering.
Prior to the AOLTW Registration Date, to the extent that the Issuer proposes to
include any Issuer Securities whose proceeds, as described in the "Use of
Proceeds" section of the relevant Registration Statement, are to be distributed
or loaned to, or used to purchase securities issued by or held by, AOLTW or any
of its Affiliates (other than the Issuer or any of its Subsidiaries), such
Issuer Securities shall be deemed to be AOLTW Securities for purposes of
Sections 6.10(a) and (c).
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by the Issuer. The Issuer agrees to
indemnify and hold harmless each Stockholder, its partners, directors, officers,
other Affiliates and each Person who controls (within the meaning of Section 15
of the Securities Act) such Stockholder from and against any and all losses,
claims, damages, liabilities and expenses, or any action or proceeding in
respect thereof (including reasonable costs of investigation and reasonable
attorneys' fees and expenses) (each, a "Liability" and collectively,
"Liabilities"), arising out of or based upon any untrue, or allegedly untrue,
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus or notification or offering circular (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading under the circumstances such statements
were made; provided, however, that the Issuer shall not be liable (i) in any
such case to the extent that any such Liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, Prospectus or preliminary prospectus or
notification or offering circular in reliance upon and in conformity with
written information furnished to the Issuer by or on behalf of such Stockholder
(including, without limitation, the information provided pursuant to Section
7.2), specifically for use in the preparation thereof and (ii) for any Liability
if (1) the Issuer has notified such Stockholder to suspend use of the Prospectus
pursuant to Section 6.3(a) or (b), (2) such Stockholder continues to use the
relevant Prospectus notwithstanding such notice, and (3) such Liability arises
from or is based upon an untrue statement or alleged untrue statement of any
material fact or omission to state a material fact that was cured in the
supplemented or amended Prospectus contemplated by Section 6.3(a) or (b).
7.2 Indemnification by the Stockholder. In connection
with any offering in which a Stockholder is participating pursuant to Article IV
or Article V, such Stockholder shall promptly furnish to the Issuer in writing
such information with respect
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22
to such Stockholder and the distribution of the Registrable Securities as the
Issuer may reasonably request or as may be required by law for use in connection
with any related Registration Statement or Prospectus and all information
required to be disclosed in order to make the information previously furnished
to the Issuer by such Stockholder not materially misleading or necessary to
cause such Registration Statement not to omit a material fact with respect to
such Stockholder necessary in order to make the statements therein not
misleading. Each Stockholder selling Registrable Securities pursuant to a
Registration Statement and associated Prospectus agrees, severally but not
jointly, to indemnify and hold harmless the Issuer, any underwriter retained by
the Issuer, their respective directors, officers, other Affiliates and each
Person who controls the Issuer or such underwriter (within the meaning of
Section 15 of the Securities Act) to the same extent as the indemnity from the
Issuer to such Stockholder under Section 7.1 hereof but only with respect to
information provided by such Stockholder or on such Stockholder's behalf
expressly for use in such Registration Statement or Prospectus relating to the
Registrable Securities; provided, however, that the liability of the
Indemnifying Party under this Section 7.2 shall be limited to the amount of net
proceeds received by the Indemnifying Party in the transaction giving rise to
such Liability.
7.3 Conduct of Indemnification Proceedings. Any Person
entitled to indemnification under this Article VII (each, an "Indemnified
Party") agrees to give prompt written notice to each indemnifying party (each,
an "Indemnifying Party") after the receipt by the Indemnified Party of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which the Indemnified Party
intends to claim indemnification or contribution pursuant to this Agreement;
provided, however, that the failure so to notify the Indemnifying Party shall
not relieve the Indemnifying Party of any Liability that it may have to the
Indemnified Party hereunder (except to the extent that the Indemnifying Party
forfeits substantive rights or defenses by reason of such failure) and in no
event shall such failure relieve the Indemnifying Party from and against any
other Liability it may have to such Indemnified Party. If notice of commencement
of any such action is given to the Indemnifying Party as above provided, the
Indemnifying Party shall be entitled to participate in and, to the extent it may
wish, jointly with any other Indemnifying Party similarly notified, to assume
the defense of such action at its own expense, with counsel chosen by it. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense
of such action, (iii) the Indemnifying Party and the Indemnified Party shall
have mutually agreed to the retention of such counsel or (iv) the named parties
to any such action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and such parties have been advised
by such counsel that either (x) representation of such Indemnified Party and the
Indemnifying Party by the same counsel would be inappropriate under applicable
standards of professional conduct or would present a conflict of interest or (y)
there may be one or more legal defenses available to the Indemnified Party which
are different from, inconsistent with or additional to those available to the
Indemnifying Party. In any of the cases specified in clauses (ii) and (iv) of
the immediately preceding sentence, the Indemnifying Party shall not be liable
for the fees and expenses of more than one
<PAGE>
23
separate firm of attorneys (in addition to any local counsel) for all
Indemnified Parties. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the consent of such
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which such Indemnified Party is a party and indemnity has been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability for claims
that are the subject matter of such proceeding.
7.4 Contribution. If the indemnification provided for in
this Article VII shall for any reason be held by a court of competent
jurisdiction to be unavailable to an Indemnified Party, in respect of any
Liability, then, in lieu of the amount paid or payable under Section 7.1 or 7.2,
as the case may be, the Indemnified Party and the Indemnifying Party shall
contribute to the aggregate Liabilities in such proportion as is appropriate to
reflect the relative fault of the Issuer and the prospective sellers of
Registrable Securities covered by the Registration Statement in connection with
the statements or omissions which resulted in such loss, claim, damage or
liability, or action or proceeding in respect thereof, as well as any other
relevant equitable considerations (the relative fault of the Issuer and such
prospective sellers to be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuer or such prospective sellers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission). The parties hereto acknowledge that in no event
shall the obligation of any Indemnifying Party to contribute under this Section
7.4 exceed the amount that such Indemnifying Party would have been obligated to
pay by way of indemnification if the indemnification provided for under Section
7.1 or 7.2 had been available under the circumstances. The Issuer and each
Stockholder agree that it would not be just and equitable if contribution
pursuant to this Section 7.4 were determined by pro rata allocation (even if
such Stockholders were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the first sentence of this Section 7.4. 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. Such prospective sellers'
obligations to contribute as provided in this Section 7.4 are several in
proportion to the relative value of their respective Registrable Securities
covered by such Registration Statement and not joint.
7.5 Indemnification Payments. The indemnification and
contribution required by this Article VII shall be made by prompt periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or liability is
incurred.
<PAGE>
24
ARTICLE VIII
MISCELLANEOUS
8.1 Recapitalizations, Exchanges, etc. The provisions of
this Agreement shall apply to the full extent set forth herein with respect to
(i) the shares of Class A Common Stock, (ii) any and all shares of voting common
stock of the Issuer into which the shares of Class A Common Stock are converted,
exchanged or substituted in any recapitalization or other capital reorganization
by the Issuer and (iii) any and all equity securities of the Issuer or any
successor or assign or acquiror of the Issuer (whether by merger, consolidation,
sale of assets or otherwise) which may be issued in respect of, in conversion
of, in exchange for or in substitution of, the shares of Class A Common Stock
and shall be appropriately adjusted for any stock dividends, splits, reverse
splits, combinations, recapitalizations and the like occurring after the date
hereof. The Issuer shall cause any successor or assign or acquiror (whether by
merger, consolidation, sale of assets or otherwise) to enter into a new
registration rights agreement with each Stockholder on terms no less favorable
to such Stockholder than the terms provided under this Agreement as a condition
of any such transaction.
8.2 Notices. All notices, requests, claims and demands
and other communications hereunder shall be in writing and shall be deemed duly
delivered (i) four Business Days after being sent by registered or certified
mail, return receipt requested, postage prepaid, or (ii) one Business Day after
being sent by facsimile transmission (provided the sender retains confirmation
thereof) or for next Business Day delivery, fees prepaid, via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:
if to the Issuer, to:
Time Warner Cable Inc.
c/o AOL Time Warner Inc.
75 Rockefeller Center Plaza
New York, New York 10019
Attention: Executive Vice President
and General Counsel
Fax: (212) 258-3172
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Attention: Robert B. Schumer
Fax: (212) 757-3990
<PAGE>
25
if to AOLTW, to: AOL Time Warner Inc.
75 Rockefeller Center Plaza
New York, New York 10019
Attention: Executive Vice President
and General Counsel
Fax: (212) 258-3172
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Attention: Robert B. Schumer
Fax: (212) 757-3990
Any party to this Agreement may give any notice or other
communication hereunder using any other means (including personal delivery,
messenger service, telecopy or ordinary mail), but no such notice or other
communication shall be deemed to have been duly given unless and until it
actually is received by the office of the party for whom it is intended during
business hours on a Business Day in the place of receipt. Any party to this
Agreement may change the address to which notices and other communications
hereunder are to be delivered by giving the other parties to this Agreement
notice in the manner herein set forth.
8.3 Entire Agreement; No Inconsistent Agreements.
(a) This Agreement constitutes the entire
agreement among the parties hereto and supersedes any prior understandings,
agreements or representations by or among the parties hereto, or any of them,
written or oral, with respect to the subject matter hereof.
(b) The Issuer shall not hereafter enter into or
amend any agreement with respect to its securities which would (i) adversely
affect the rights granted to the holders of Registrable Securities in this
Agreement in any material respect or (ii) adversely affect the priorities set
forth in Section 6.10.
(c) It is hereby understood and acknowledged
that (i) the MediaOne Registration Rights Agreement is being executed
simultaneously with this Agreement, and, to the extent there is conflict between
the provisions of Sections 6.8, 6.9 and 6.10 of this Agreement and the
provisions Sections 6.8, 6.9 and 6.10 of the MediaOne Registration Rights
Agreement, the provisions of the MediaOne Registration Rights Agreement shall
control and be binding upon all Stockholders under this Agreement for purposes
of resolving such conflict and (ii) the MediaOne Stockholders are intended third
party beneficiaries with respect to this Section 8.3(c) until the AOLTW
Registration Date.
<PAGE>
26
8.4 Further Assurances. Each of the parties shall
execute such documents and perform such further acts as may be reasonably
required or desirable to carry out or to perform the provisions of this
Agreement.
8.5 Other Agreements. Nothing contained in this
Agreement shall be deemed to be a waiver of, or release from, any obligations
any party hereto may have under any of the other Transaction Agreements.
8.6 No Third-Party Beneficiaries. Except as provided in
Article VII or Sections 8.3(c) and 8.8, this Agreement is not intended, and
shall not be deemed, to confer any rights or remedies upon any Person other than
the parties hereto and their respective successors and permitted assigns or to
otherwise create any third-party beneficiaries hereto.
8.7 Assignment. This Agreement shall be binding upon and
inure to the benefit of and shall be enforceable by the parties hereto and their
respective successors and assigns and, with respect to each Stockholder, any
Permitted Transferee. No assignment or transfer shall be effective hereunder
unless and until the purported transferee executes and delivers an agreement, in
form and substance reasonably acceptable to the parties, agreeing to be bound by
the terms hereof.
8.8 Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless consented to in writing by the Issuer and the Majority
Stockholders. The AOLTW Company Registration Rights Agreement may not be amended
in any respect without the approval of a majority of the independent members of
the Board of Directors.
8.9 Nominees for Beneficial Owners. In the event that
any Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its election in writing delivered
to the Issuer, be treated as the holder of such Registrable Securities for
purposes of any request, consent, waiver or other action by any holder or
holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Issuer may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
8.10 Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the parties hereto agree that the
court making such determination shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or
<PAGE>
27
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified. In the event
such court does not exercise the power granted to it in the prior sentence, the
parties hereto agree to replace such invalid or unenforceable term or provision
with a valid and enforceable term or provision that shall achieve, to the extent
possible, the economic, business and other purposes of such invalid or
unenforceable term.
8.11 Counterparts and Signature. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
hereto and delivered to the other parties, it being understood that all parties
need not sign the same counterpart. This Agreement may be executed and delivered
by facsimile transmission.
8.12 Interpretation. When reference is made in this
Agreement to an Article or Section, such reference shall be to an Article or
Section of this Agreement, unless otherwise indicated. The headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa. Any reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
8.13 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF LAWS OF ANY JURISDICTIONS OTHER THAN THOSE OF THE STATE OF
NEW YORK.
8.14 Submission to Jurisdiction. Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought exclusively in any federal or state court located in the
State and City of New York, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any
<PAGE>
28
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.2 hereof as to giving
notice hereunder shall be deemed effective service of process on such party.
8.15 Remedies. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party shall be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
shall not preclude the exercise of any other remedy. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement, this
being in addition to any other remedy to which the parties are entitled at law
or in equity.
8.16 WAIVER OF JURY TRIAL. EACH OF THE ISSUER AND THE
STOCKHOLDERS HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE ACTIONS OF THE ISSUER AND THE STOCKHOLDERS IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
[Remainder of page intentionally left blank]
<PAGE>
29
IN WITNESS WHEREOF, the undersigned have executed, or
have caused to be executed, this Agreement on the date first written above.
AOL TIME WARNER INC.
By: _____________________________________
Name:
Title:
TIME WARNER CABLE INC.
By: _____________________________________
Name:
Title:
<PAGE>
ANNEX A
PLAN OF DISTRIBUTION
A selling stockholder may also enter into hedging and/or
monetization transactions. For example, a selling stockholder may:
(a) enter into transactions with a broker-dealer or affiliate of a broker-dealer
or other third party in connection with which that other party will become a
selling stockholder and engage in short sales of the common stock under this
prospectus, in which case the other party may use shares of common stock
received from the selling stockholder to close out any short positions;
(b) itself sell short common stock under this prospectus and use shares of
common stock held by it to close out any short position;
(c) enter into options, forwards or other transactions that require the selling
stockholder to deliver, in a transaction exempt from registration under the
Securities Act, common stock to a broker-dealer or an affiliate of a
broker-dealer or other third party who may then become a selling stockholder and
publicly resell or otherwise transfer that common stock under this prospectus;
or
(d) loan or pledge common stock to a broker-dealer or affiliate of a
broker-dealer or other third party who may then become a selling stockholder and
sell the loaned shares or, in an event of default in the case of a pledge,
become a selling stockholder and sell the pledged shares, under this prospectus.