Registration Rights Agreement - MediaOne of Colorado Inc., AOL Time Warner Inc. and Time Warner Cable Inc.
FORM OF
REGISTRATION RIGHTS AGREEMENT
among
MEDIAONE OF COLORADO, INC.,
AOL TIME WARNER, INC.
and
TIME WARNER CABLE INC.
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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........................................8
1.3 Successor Laws, Rules, Regulations and Forms.............8
ARTICLE II General; Securities Subject to this Agreement..........8
2.1 Grant of Rights..........................................8
2.2 Registrable Securities...................................8
2.3 Holders of Registrable Securities........................9
2.4 Transfer of Registration Rights..........................9
ARTICLE III Representations and Warranties........................10
3.1 Certain Acknowledgments of the Stockholders.............10
3.2 Representations and Warranties of the Issuer............10
ARTICLE IV Demand Registration...................................11
4.1 Request for Demand Registration.........................11
4.2 Effective Demand Registration...........................12
4.3 Underwriting. .........................................13
4.4 Hedging Transactions....................................13
4.5 Cutback Provisions. ...................................14
ARTICLE V Incidental or "Piggy-Back" Registration...............14
5.1 Issuer Incidental Registration..........................14
5.2 Stockholder Incidental Registration.....................14
ARTICLE VI Registration Procedures...............................15
6.1 Obligations of the Issuer...............................15
6.2 Seller Information, Compliance with Laws, Customary
Agreements..............................................19
6.3 Notice to Discontinue, Deferral Periods.................20
6.4 Reports and Materials to be Filed under the Securities
Act and the Exchange Act................................21
6.5 Registration Expenses...................................22
6.6 Confidentiality. ......................................22
6.7 Restrictions on Covered Transactions....................23
6.8 Restrictions on Public Sales............................23
6.9 Selection of Underwriters. ............................24
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6.10 Limitations on Registration.............................24
6.11 Stock Split.............................................25
ARTICLE VII Indemnification.......................................26
7.1 Indemnification by the Issuer...........................26
7.2 Indemnification by the Stockholder......................26
7.3 Conduct of Indemnification Proceedings. ...............27
7.4 Contribution. .........................................27
7.5 Indemnification Payments. .............................28
ARTICLE VIII Miscellaneous.........................................28
8.1 Recapitalizations, Exchanges, etc.......................28
8.2 Notices.................................................29
8.3 Entire Agreement; No Inconsistent Agreements............31
8.4 Further Assurances......................................31
8.5 Other Agreements. .....................................31
8.6 No Third-Party Beneficiaries............................31
8.7 Assignment..............................................31
8.8 Amendments and Waivers..................................31
8.9 Nominees for Beneficial Owners..........................32
8.10 Severability............................................32
8.11 Counterparts and Signature..............................32
8.12 Interpretation..........................................32
8.13 GOVERNING LAW...........................................33
8.14 Submission to Jurisdiction..............................33
8.15 Remedies................................................33
8.16 WAIVER OF JURY TRIAL....................................33
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of [ ], 200[ ] (this
"Agreement"), by and among MediaOne of Colorado, Inc., a Colorado
corporation,(1) 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, the Issuer, 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, and
American Television and Communications Corporation, a Delaware corporation, have
entered into a Restructuring Agreement dated as of August [20], 2002 (the
"Restructuring Agreement").
WHEREAS, MediaOne, 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") held by MediaOne.
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
--------
(1) If MediaOne of Colorado, Inc. has transferred its interest in the
Issuer to a Disposition Trust, then such Disposition Trust shall
replace MediaOne of Colorado as a party to this Agreement.
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2
otherwise. For the avoidance of doubt, MediaOne shall not be deemed to be an
Affiliate of the Issuer, and the Issuer shall not be deemed to be an Affiliate
of MediaOne.
"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.
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"Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"Common Equity" means, collectively, the Class A Common Stock
and the Class B Common Stock, par value $0.01 per share, of the Issuer.
"Covered Transaction" means a Hedging Transaction or a Private
Placement but shall not include a Strategic Investor Transaction.
"Covered Transaction Proceeds" means, with respect to a
Person, as of any date of determination, the aggregate proceeds (net of
underwriting fees, discounts, commissions and other offering expenses) of
Covered Transactions other than Regulatory Sales received by such Person in the
270 days prior to such date of determination.
"Covered Transaction Proceeds Limit" means the greater of (x)
$250,000,000 and (y) 10% of the current aggregate Market Price as of any date of
determination of all shares of Common Equity (or instruments convertible into or
exchangeable for Common Equity) that (1) have been sold in an offering
registered under the Securities Act, (2) have been sold or distributed to the
public pursuant to Rule 144 under the Securities Act or (3) are not held by
AOLTW, MediaOne or any of their respective Affiliates and are able to be sold
pursuant to Rule 144(k) under the Securities Act.
"Counterparty" means any underwriter, broker or dealer with
respect to a Disposition.
"Cumulative Net Proceeds" means, with respect to a Person, as
of any date of determination, (i) the aggregate proceeds (net of underwriting
fees, discounts, commissions and other offering expenses) received by such
Person after the date of this Agreement and on or prior to such date of
determination from (1) the sale to the public of securities of the Issuer in
transactions registered under the Securities Act, (2) Covered Transactions and
(3) Strategic Investor Transactions, plus (ii) solely for purposes of Sections
6.7(b) and 6.10, the estimated proceeds (net of underwriting fees, discounts,
commissions and other offering expenses) to be received by such Person from (1)
any then currently proposed sale to the public of securities of the Issuer in
transactions registered under the Securities Act, (2) any then currently
proposed Covered Transactions and (3) any then currently proposed Strategic
Investor Transactions. All estimates of proceeds for purposes of this definition
shall be based on the Market Price of the securities proposed to be sold or
monetized (in each case, net of underwriting fees, discounts, commissions and
other offering expenses), as of the date of such determination.
"Deferral Period" has the meaning set forth in Section 6.3(b).
"Demand Registration" has the meaning set forth in Section
4.1.
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"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:
(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
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(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 Demand Registration" means a Demand Registration that
is requested pursuant to this Agreement prior to the Initial Public Offering but
which may not be requested prior to the 90th day after the date hereof or while
a Registration Statement with respect to the Initial Public Offering has been
filed and not withdrawn.
"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 Release Date" means the later to occur of (i) the 30th
day after the first date on which Stockholders are permitted to make a request
for Demand Registration (other than a Demand Registration that results in the
Initial Public Offering) after the Stockholder Release Date and (ii) if a
request for Demand Registration (other than a Demand Registration that results
in the Initial Public Offering) has been made by Stockholders on or prior to
such 30th day, the date on which (1) the offering pursuant to such Demand
Registration is completed (including any related underwriter lock-up period
applicable to the Issuer) or (2) such Demand Registration is revoked.
"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" means MediaOne of Colorado, Inc., a Colorado
corporation, or any trust in which Registrable Securities are held for the
benefit of MediaOne of Colorado, Inc.
"NASD" means the National Association of Securities Dealers,
Inc.
"OTC Hedging Transaction" means any Hedging Transaction that
is privately negotiated, and entered into on a principal-to-principal basis,
between a Stockholder and a Hedging Counterparty, including (i) any swap
agreement, put option, call option, collar transaction, call spread, put spread
or forward contract or any combination of any of the foregoing, in each case
whether to be settled by the delivery of securities, cash or otherwise, (ii) any
option to enter into any of the foregoing, and (iii) any other similar
agreement, contract or transaction that, in the case of this clause (iii) only,
would (in the reasonable, good-faith judgment of one nationally-recognized
investment banking firm selected by each of the Issuer, on the one hand, and the
Stockholders holding a majority of the securities proposed to be included in
such Hedging Transaction, on the other hand) make it commercially impracticable
for more than one Hedging Counterparty to jointly effect such agreement,
contract or transaction or any related market hedge of the Hedging
Counterparty's economic exposure thereunder.
"Partnership Interest Sale Agreement" means the Partnership
Interest Sale Agreement, dated as of the date hereof, by and among AOLTW, the
Issuer and MediaOne.
"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).
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"Private Placement" means a private placement of Common Equity
(or instruments convertible into or exchangeable for Common Equity) exempt from
registration under the Securities Act.
"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).
"Registrable Class Securities" means securities of the Issuer
that are of the same class as the relevant Registrable Securities.
"Registrable Securities" means, subject to Section 2.4(a),
each of the following: (a) any and all shares of Class A Common Stock issued or
issuable (i) to MediaOne or its Affiliates pursuant to the Restructuring
Agreement or (ii) to any Selling Partner (as defined in the Partnership Interest
Sale Agreement) pursuant to Section 3 or 4 of the Partnership Interest Sale
Agreement (provided that such Selling Partner has first agreed to be bound by
the terms and conditions of this Agreement as contemplated by Section 5(a)(y) of
the Partnership Interest Sale Agreement), (b) any shares of Class A Common Stock
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 Class A Common Stock or voting common stock or other
securities issuable upon conversion, exercise or exchange thereof, and (c) all
shares of Class A Common Stock 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.
"Regulatory Sale" means a sale of Registrable Securities that
is a Private Placement or Hedging Transaction (other than pursuant to a Demand
Registration) by a Disposition Trust that is a Permitted Transferee occurring
not earlier than the date that is six months prior to the date (the "Regulatory
Sale Date") after which the sole obligation of the trustee under such
Disposition Trust with respect to the Registrable Securities held by it becomes
the obligation to sell such Registrable Securities as quickly as possible,
without regard to the value that can be obtained in any sale, only if the
Regulatory Sale Date is not prior to the third anniversary of the closing of the
AT&T-Comcast Merger.
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"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.
"Stockholder Release Date" means the earlier to occur of (i)
the date on which the Issuer has Cumulative Net Proceeds of at least $2.1
billion and (ii) the first anniversary of the Closing.
"Strategic Investor Transaction" means a Private Placement to
a single strategic investor purchasing for investment purposes and not with an
eye towards resale in the near term, where such investor agrees to be bound (i)
pursuant to Section 2.4(a) by the provisions of this Agreement (including
Section 6.7(a)) as a Stockholder (in the case of such a Private Placement by a
Stockholder) or (ii) by restrictions that are the same in all material respects
as those contained in Sections 6.7(b) (with any Covered Transaction by such
strategic investor being deemed to be a Covered Transaction by the Issuer for
purposes of such Section 6.7(b)) and 6.8 (in the case of such a Private
Placement by the Issuer).
1.2 Capitalized Terms. Capitalized terms used herein and
in the Schedules hereto 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.
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
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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 penultimate 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 in any securities, including the
restrictions set forth in Sections 6.7(a) and 6.8(a). The Stockholders hereby
agree that they shall act in good faith with respect to the restrictions set
forth in Sections 6.7(a) and 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 Sections 6.7(a) and 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.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Certain Acknowledgments of the Stockholders. Each
Stockholder acknowledges that all Registrable Securities will be 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 COUNSEL OR
OTHER EVIDENCE REASONABLY ACCEPTABLE TO TIME WARNER CABLE INC.
THAT SUCH TRANSACTION IS NOT REQUIRED TO BE REGISTERED UNDER
APPLICABLE SECURITIES LAWS."
3.2 Representations and Warranties of the Issuer. The
Issuer hereby represents and warrants to each Stockholder as follows:
(a) Power, Binding Agreement. The Issuer is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has all requisite corporate power and
authority to enter into this Agreement. This Agreement has been duly and validly
authorized by all necessary corporate action and has been duly executed and
delivered by the Issuer. This Agreement constitutes the valid and binding
obligation of the Issuer and (assuming due execution
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and delivery by the other parties hereto) is enforceable in accordance with its
terms, except as the indemnification and contribution provisions contained in
Article VII may be held to be unenforceable as against public policy and except
as such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(b) No Conflicts.
(i) Except as set forth on Schedule A
hereto, the execution and delivery of this Agreement by the Issuer does not, and
the consummation by the Issuer of the transactions contemplated by this
Agreement will not, (1) conflict with, or result in any violation or breach of,
any provision of the charter, by-laws or other organizational document of the
Issuer, (2) conflict with, or result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or give
rise to a right of termination, cancellation or acceleration of any obligation)
under, require a consent or waiver under, constitute a change in control under,
or result in the imposition of any Lien on the Issuer's assets under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or instrument to which the Issuer is a party or by
which it or any of its properties or assets may be bound, or (3) conflict with
or violate any permit, concession, franchise, license, judgment, injunction,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Issuer or any of its properties or assets, except in the case of clauses (2) and
(3) of this Section 3.2(b)(i) for any such conflicts, violations, breaches,
defaults, terminations, cancellations, accelerations or Liens as would not,
individually or in the aggregate, have a material adverse effect on the ability
of the Issuer to consummate the transactions contemplated by this Agreement or
the effectiveness of any Registration Statement.
(ii) Except as set forth on Schedule A
hereto, no consent, approval, license, permit, order or authorization of, or
registration, declaration, notice or filing with, any Governmental Entity is
required by or with respect to the Issuer in connection with the execution,
delivery and performance of this Agreement by the Issuer or the consummation by
the Issuer of the transactions contemplated by this Agreement, other than
filings and other actions required by the Securities Act, the Exchange Act, the
rules of any stock exchange or automated quotation system on which the
Registrable Securities are to be listed, the rules of any self-regulatory
organization and state securities or "blue sky" laws.
ARTICLE IV
DEMAND REGISTRATION.
4.1 Request for Demand Registration.
(a) At any time after the date of this
Agreement, a Stockholder may make a written request to the Issuer to register,
and the Issuer shall register, on the
<PAGE>
12
appropriate form, under the Securities Act, the number of Registrable Securities
stated in such request (a "Demand Registration"); provided, however, that the
Issuer shall not be obligated to effect (i) more than one such Demand
Registration in any period of 270 days, (ii) more than five such Demand
Registrations in addition to the Initial Demand Registration, if any, (iii) any
Demand Registration with respect to a sale of Registrable Securities for
aggregate consideration (based on the Market Price of such Registrable
Securities on the date of such written request for Demand Registration) for all
Stockholders of less than $250,000,000 (unless such request is with respect to
all remaining Registrable Securities beneficially owned by the Stockholders
making such request) or (iv) any Demand Registration at any time that the
Covered Transaction Proceeds exceeds the Covered Transaction Proceeds Limit. For
purposes of the preceding sentence, two or more Registration Statements filed in
response to one demand shall be counted as one 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.
(c) On up to two occasions during the term of
this Agreement, the Majority Stockholders may revoke any Demand Registration
prior to the effective date of the Registration Statement relating to such
Demand Registration, and, if the Stockholders have promptly reimbursed the
Issuer for all Registration Expenses arising from, in connection with or
relating to, such revoked Demand Registration, such revoked Demand Registration
shall not count as a Demand Registration for purposes of Section 4.1(a). Upon
the revocation of a Demand Registration, the Issuer shall be permitted to
withdraw the related Registration Statement.
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; 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);
provided, further, that the Issuer's obligations under Sections 4.1 and 4.2 with
respect to a Demand Registration shall not be deemed to be fulfilled if more
than 50% of the Registrable Securities included in such Registration Statement
are not sold pursuant to such Registration Statement and either (x) after such
Demand Registration has become effective, such registration or the related
offer, sale or distribution of Registrable Securities thereunder is interfered
with by any stop order, injunction or other order or requirement of the
Commission or other
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13
Governmental Entity for any reason not attributable to any Stockholder
requesting such Demand Registration or (y) the conditions specified in the
underwriting agreement, if any, entered into in connection with such Demand
Registration are not satisfied or waived, other than by reason of a failure by
any Stockholder requesting such Demand Registration.
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 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 Section
4.1(a)(ii) and shall be subject to the limitations on such Demand Registration
contained in this Agreement (including, without limitation, Sections 4.1, 4.2
and 6.10).
(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) In addition, regardless of whether the
Hedging Counterparty in any Hedging Transaction is considered under applicable
law to be an underwriter, in any Hedging Transaction other than an OTC Hedging
Transaction where
<PAGE>
14
the aggregate Market Value of Registrable Securities proposed to be hedged is
greater than $375 million, (i) the Stockholders holding a majority of the
securities proposed to be included in such Hedging Transaction shall have the
right to select one nationally-recognized investment banking firm to act as a
co-lead book-running Hedging Counterparty (or the equivalent) with respect to
such Hedging Transaction, which firm shall be reasonably acceptable to the
Issuer; and (ii) the Issuer shall have the right to select one
nationally-recognized investment banking firm to act as a co-lead book-running
Hedging Counterparty (or the equivalent) with respect to such Hedging
Transaction, which firm shall be reasonably acceptable to the Stockholders
holding a majority of the securities proposed to be included in such Hedging
Transaction. To the extent that the Issuer has the right to select a
nationally-recognized investment banking firm to act as a co-lead book-running
Hedging Counterparty (or the equivalent) pursuant to this Section 4.4(d), the
Stockholders proposing to effect such Hedging Transaction shall give the Issuer
reasonable notice, taking into account the type of Hedging Transaction, of their
intention to enter into such Hedging Transaction, which notice shall contain a
reasonably detailed description of the terms of such Hedging Transaction.
(e) 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 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.
<PAGE>
15
(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 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
<PAGE>
16
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 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; notwithstanding anything to the contrary in this Agreement, the
Issuer shall not be required to file or have declared effective more than one
post-effective amendment of any Registration Statement filed in response to a
Demand Registration and shall not be required to file more than five supplements
to the Prospectus contained in such Registration Statement, in each case, in
connection with one or more Hedging Transactions or changes to the Plan of
Distribution therein;
(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;
(d) the Issuer shall use all commercially
reasonable efforts (i) to register or qualify all Registrable Securities and
other securities covered by the
<PAGE>
17
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 delivered in underwritings or under 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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18
(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
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19
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
<PAGE>
20
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>
21
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).
(d) In the event that the Issuer delays any of
the Registration Actions or suspends sales of Registrable Securities pursuant to
Section 6.3(b) for 25 days or more with respect to a Demand Registration, the
Majority Requesting Stockholders shall have the right to revoke such Demand
Registration without such request counting as a Demand Registration or a
revocation of a Demand Registration for purposes of Section 4.1(c) and without
any liability for Registration Expenses arising from, in connection with or
relating to, such revoked Demand Registration.
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
<PAGE>
22
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 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
<PAGE>
23
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 the Issuer, at the Issuer's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential.
6.7 Restrictions on Covered Transactions.
(a) Prior to the Stockholder Release Date, the
Stockholders (other than any Pledgee or Hedging Counterparty) shall not effect
any Covered Transaction.
(b) Prior to the Issuer Release Date, the Issuer
shall not effect any Covered Transaction except for (i) Covered Transactions
that do not result in the Issuer having Cumulative Net Proceeds in excess of
$2.1 billion and (ii) issuances of securities as consideration in acquisitions
or as compensation to employees.
(c) During the 270 days following the completion
of an offering pursuant to a Demand Registration, the Stockholders shall not
effect Covered Transactions (other than Regulatory Sales) with aggregate
proceeds (net of underwriting fees, discounts, commissions and other offering
expenses) in excess of the Covered Transaction Proceeds Limit.
(d) Prior to the AOLTW Registration Date, (i)
the Issuer shall not effect any Covered Transaction if the proceeds of such
Covered Transaction are to be distributed or loaned to, or used to purchase
securities issued or held by, AOLTW or any of its Affiliates, other than the
Issuer or any of its Subsidiaries; and (ii) the Issuer shall deliver to the
Stockholders, upon completion of any Covered Transaction, an officer's
certificate (or other evidence reasonably acceptable to the Majority
Stockholders) to the effect that the proceeds of such Covered Transaction are
not to be distributed or loaned to, or used to purchase securities issued or
held by, AOLTW or any of its Affiliates, other than the Issuer or any of its
Subsidiaries.
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), the Issuer and
AOLTW 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
<PAGE>
24
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 AOLTW and the Issuer as intended
third-party beneficiaries thereof and requiring the prior written consent of
AOLTW and the Issuer for any amendments thereto or waivers thereof. Any Lock-up
Agreements executed by AOLTW or 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), in which at least $500 million of Registrable Securities (or, if
less, all remaining Registrable Securities beneficially owned by the
Stockholders) are proposed to be sold, (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 (ii) the
Issuer shall have the right to select only 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 Majority
Requesting Stockholders. In all other underwritten public offerings, 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.
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:
<PAGE>
25
(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
Registrable Securities proposed to be included in such offering, until the
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 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
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 included in such offering, which securities shall be divided
equally among (x) any such securities that are 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).
6.11 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. AOLTW and the Stockholders agree to take all actions necessary
to permit the Issuer to comply with its obligations pursuant to the preceding
sentence.
6.12 Limitations on Certain Transactions by AOLTW. Prior
to the AOLTW Registration Date, none of AOLTW and its Affiliates (other than the
Issuer and its Subsidiaries) shall dispose of or monetize any securities of the
Issuer to any parties
<PAGE>
26
(other than AOLTW or any of its Affiliates) other than pursuant to a
Registration Statement.
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 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
<PAGE>
27
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 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
<PAGE>
28
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.
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,
<PAGE>
29
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:
<TABLE>
if to AOLTW or the Issuer, to:
<S> <C>
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
if to MediaOne prior to the closing of the AT&T Corp.
AT&T-Comcast Merger, to: 295 North Maple Avenue
Basking Ridge, New Jersey 07920
Attention: Corporate Secretary
Fax: (908) 953-8360
</TABLE>
<PAGE>
30
<TABLE>
<S> <C>
With a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Trevor Norwitz
Fax: (212) 403-2000
and:
Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102
Attention: General Counsel
Fax: (215) 981-7794
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Dennis S. Hersch
William L. Taylor
Fax: (212) 450-4800
if to MediaOne following the closing of the Comcast Corporation
AT&T-Comcast Merger, to: 1500 Market Street
Philadelphia, Pennsylvania 19102
Attention: General Counsel
Fax: (215) 981-7794
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Dennis S. Hersch
William L. Taylor
Fax: (212) 450-4800
</TABLE>
<PAGE>
31
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.
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 Section 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.
<PAGE>
32
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
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"
<PAGE>
33
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 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.
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34
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35
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first written above.
MEDIAONE OF COLORADO, INC.
By:
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Name:
Title:
AOL TIME WARNER INC.
By:
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Name:
Title:
TIME WARNER CABLE INC.
By:
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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.