EXHIBIT: 4.4
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
between
AOL TIME WARNER INC.
and
TIME WARNER CABLE INC.
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Dated: March 31, 2003
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS................................................................................... 1
1.1 Certain Definitions................................................................... 1
1.2 Capitalized Terms..................................................................... 6
1.3 Successor Laws, Rules, Regulations and Forms.......................................... 6
ARTICLE II General; Securities Subject to this Agreement................................................ 7
2.1 Grant of Rights....................................................................... 7
2.2 Registrable Securities................................................................ 7
2.3 Holders of Registrable Securities..................................................... 7
2.4 Transfer of Registration Rights....................................................... 7
ARTICLE III ACKNOWLEDGEMENTS OF THE STOCKHOLDERS........................................................ 8
3.1 Certain Acknowledgments of the Stockholders........................................... 8
ARTICLE IV Demand Registration.......................................................................... 9
4.1 Request for Demand Registration....................................................... 9
4.2 Effective Demand Registration......................................................... 9
4.3 Underwriting. ....................................................................... 9
4.4 Hedging Transactions.................................................................. 9
4.5 Cutback Provisions. ................................................................. 10
ARTICLE V Incidental or "Piggy-Back" Registration....................................................... 10
5.1 Issuer Incidental Registration. ..................................................... 10
5.2 Stockholder Incidental Registration................................................... 11
ARTICLE VI Registration Procedures...................................................................... 11
6.1 Obligations of the Issuer............................................................. 11
6.2 Seller Information, Compliance with Laws, Customary
Agreements............................................................................ 15
6.3 Notice to Discontinue, Deferral Periods............................................... 16
6.4 Reports and Materials to be Filed under the Securities Act
and the Exchange Act. ............................................................... 17
6.5 Registration Expenses................................................................. 18
6.6 Confidentiality. .................................................................... 18
6.7 Restrictions on Covered Transactions.................................................. 19
6.8 Restrictions on Public Sales.......................................................... 19
6.9 Selection of Underwriters............................................................. 19
6.10 Limitations on Registration........................................................... 20
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6.11 Stock Split........................................................................... 19
ARTICLE VII Indemnification............................................................................. 21
7.1 Indemnification by the Issuer......................................................... 21
7.2 Indemnification by the Stockholder.................................................... 22
7.3 Conduct of Indemnification Proceedings. ............................................. 22
7.4 Contribution. ....................................................................... 23
7.5 Indemnification Payments. ........................................................... 23
ARTICLE VIII Miscellaneous.............................................................................. 24
8.1 Recapitalizations, Exchanges, etc..................................................... 24
8.2 Notices............................................................................... 24
8.3 Entire Agreement; No Inconsistent Agreements.......................................... 25
8.4 Further Assurances.................................................................... 26
8.5 Other Agreements. ................................................................... 26
8.6 No Third-Party Beneficiaries.......................................................... 26
8.7 Assignment............................................................................ 26
8.8 Amendments and Waivers................................................................ 26
8.9 Nominees for Beneficial Owners........................................................ 26
8.10 Severability.......................................................................... 27
8.11 Counterparts and Signature............................................................ 27
8.12 Interpretation........................................................................ 27
8.13 GOVERNING LAW......................................................................... 27
8.14 Submission to Jurisdiction............................................................ 28
8.15 Remedies.............................................................................. 28
8.16 WAIVER OF JURY TRIAL.................................................................. 28
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 31, 2003
(this "Agreement"), by and between AOL Time Warner Inc., a Delaware corporation
("AOLTW"), and Time Warner Cable Inc., a Delaware corporation (the "Issuer").
WHEREAS, the Issuer, Comcast Corporation, a Pennsylvania
corporation (formerly named AT&T Comcast Corporation, "Comcast"), AOLTW and the
other parties named therein have entered into a Restructuring Agreement, dated
as of August 20, 2002 (as amended, the "Restructuring Agreement");
WHEREAS, AOLTW, the Issuer and TWE Holdings II Trust, a
Delaware statutory trust ("Trust II"), are concurrently entering into a
registration rights agreement granting certain registration rights with respect
to the Trust Registrable Securities (as defined below) (the "Trust Registration
Rights Agreement"); and
WHEREAS, AOLTW and the Issuer are entering into this Agreement
in order to provide for certain registration rights relating to the Class A
Common Stock, par value $0.01 per share, of the Issuer (the "Class A Common
Stock") now or hereafter held by AOLTW.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, and
unless the context requires a different meaning, the following terms have the
meanings indicated:
"Affiliate" means, with respect to a Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to a
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided, that, solely for purposes of this definition of Affiliate, Trust II
(and its controlled Affiliates) will be deemed to be controlled by any Person or
Persons who beneficially own directly or indirectly a majority of the beneficial
interests of Trust II (and any other Person or Persons who control such Person).
"Agreement" has the meaning set forth in the preamble to this
Agreement.
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"AOLTW" has the meaning set forth in the preamble to this
Agreement.
"AOLTW Registration Date" means the earlier to occur of (i)
the date on which Trust II 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.
"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.
"Comcast" has the meaning set forth in the recitals to this
Agreement.
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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.
"Cumulative Net Proceeds" means, with respect to a Person, as
of any date of determination, the "Cumulative Net Proceeds," as defined in the
Trust Registration Rights Agreement, of such Person as of such date of
determination.
"Counterparty" means any underwriter, broker or dealer with
respect to a Disposition.
"Deferral Period" has the meaning set forth in Section 6.3(b).
"Demand Registration" has the meaning set forth in Section
4.1.
"Disposition" means an underwritten public offering,
including, for the avoidance of doubt, (1) a transaction in which the
underwriter or underwriters act as principal for the sale of Registrable Class
Securities pursuant to any Registration Statement (including in order to hedge
its economic exposure to a Hedging Transaction) and (2) a transaction that
constitutes an "at the market offering" (as such term is defined in Rule 415
under the Securities Act), in which the counterparty acts as agent (and not as
principal).
"Exchange Act" means the Securities Exchange Act of 1934 and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect at the time.
"Governmental Entity" means any supranational, national,
state, municipal or local government, political subdivision or other
governmental department, court, commission, board, bureau, agency,
instrumentality or other authority thereof, or any quasi-governmental or private
body (including any self-regulatory organization) exercising any regulatory,
taxing, importing or other governmental authority, whether domestic or foreign.
"Hedging Counterparty" means a broker-dealer registered under
Section 15(b) of the Exchange Act or an Affiliate thereof.
"Hedging Transaction" means any transaction involving a
security linked to the Registrable Class Securities or any security that would
be deemed to be a "derivative security" (as defined in Rule 16a-1(c) under the
Exchange Act) with respect to the Registrable Class Securities or transaction
(even if not a security) which would (were it a security) be considered such a
derivative security, or which transfers some or all of the economic risk of
ownership of the Registrable Class Securities, including, without limitation,
any forward contract, equity swap, put or call, put or call equivalent position,
collar, non-recourse loan, sale of exchangeable security or similar transaction.
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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
(d) a loan or pledge of Registrable Securities to a
Hedging Counterparty who may then become a selling stockholder and sell the
loaned shares or, in an event of default in the case of a pledge, then sell the
pledged shares, in each case, in a public transaction pursuant to a Prospectus.
"Incidental Registration" has the meaning set forth in Section
5.1.
"Indemnified Party" has the meaning set forth in Section 7.3.
"Indemnifying Party" has the meaning set forth in Section 7.3.
"Initial Public Offering" means the initial offering to the
public of any shares of the Common Equity in a transaction registered under the
Securities Act.
"Inspector" has the meaning set forth in Section 6.1(f).
"Issuer" has the meaning set forth in the preamble to this
Agreement.
"Issuer Securities" means (i) for purposes of Section 6.10(c),
securities of the Issuer proposed to be offered to the public for the account of
the Issuer in a transaction registered under the Securities Act, together with
securities of the Issuer to be offered to the public for the account of another
Person other than AOLTW or any of its Affiliates (other than the Issuer and the
Issuer's Subsidiaries) that are proposed to be included in such offering
pursuant to Section 5.1 and (ii) for all other purposes, securities of the
Issuer proposed to be offered to the public for the account of the Issuer in a
transaction registered under the Securities Act.
"Lead Underwriter" means, with respect to an offering, the
lead book-running underwriter(s) for such offering.
"Liability" has the meaning set forth in Section 7.1.
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"Lock-up Agreement" has the meaning set forth in Section 6.8.
"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.
"NASD" means the National Association of Securities Dealers,
Inc.
"OTC Hedging Transaction" has the meaning set forth in the
Trust Registration Rights Agreement.
"Permitted Transferee" means any Person to whom a Stockholder
has transferred, in accordance with the terms of this Agreement, Registrable
Securities.
"Person" means any individual, firm, corporation, partnership,
limited liability company, "group" (as such term is used in Rule 13d-3 under the
Exchange Act), trust, incorporated or unincorporated association, joint venture,
joint stock company, Governmental Entity or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
"Pledgee" has the meaning set forth in Section 2.4(a).
"Prospectus" means the prospectus related to any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance on Rule 415 under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference in such
prospectus.
"Records" has the meaning set forth in Section 6.1(f).
"Registrable Class Securities" means securities of the Issuer
that are of the same class as the relevant Registrable Securities.
"Registrable Securities" means each of the following: (a) any
and all shares of Common Equity now or hereafter held by AOLTW or its Affiliates
or issued or issuable upon conversion of any convertible security or exercise of
any warrants or options held by AOLTW or its Affiliates, (b) any shares of
Common Equity or any other securities issued or issuable to a Stockholder or any
of its Affiliates in respect of any Registrable Securities by way of a
conversion, exchange, replacement, stock dividend or
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stock split or other distribution in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, spin-off or
otherwise and any shares of Common Equity or voting common stock or other
securities issuable upon conversion, exercise or exchange thereof, and (c) all
shares of Common Equity or other securities described in (b) above owned by any
Permitted Transferee that were transferred in accordance with the terms of this
Agreement and were Registrable Securities at the time such shares or securities
were transferred to such Permitted Transferee.
"Registration Expenses" has the meaning set forth in Section
6.5.
"Registration Statement" means a registration statement filed
pursuant to the Securities Act.
"Restructuring Agreement" has the meaning set forth in the
recitals to this Agreement.
"Securities Act" means the Securities Act of 1933 and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Stockholder" means a holder of Registrable Securities.
"Stockholder Counsel" means a firm of legal counsel designated
by the Majority Stockholders.
"Strategic Investor Transaction" has the meaning set forth in
the Trust Registration Rights Agreement.
"Trust II" has the meaning set forth in the recitals to this
Agreement.
"Trust Registrable Securities" means the "Registrable
Securities", as that term is defined in the Trust Registration Rights Agreement.
"Trust Registration Rights Agreement" has the meaning set
forth in the recitals to this Agreement.
"Trust Stockholders" means the "Stockholders", as that term is
defined in the Trust Registration Rights Agreement.
1.2 Capitalized Terms. Capitalized terms used herein and
in the Schedules and not otherwise defined shall have the respective meanings
ascribed to them in the Restructuring Agreement.
1.3 Successor Laws, Rules, Regulations and Forms. All
references to laws, rules, regulations and forms in this Agreement shall be
deemed to be references to the comparable successor thereto in effect at the
time.
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ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT.
2.1 Grant of Rights. The Issuer hereby grants
registration rights to the Stockholders upon the terms and conditions set forth
in this Agreement.
2.2 Registrable Securities. As to any particular
Registrable Securities, once issued, such securities shall cease to be
Registrable Securities when (a) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement, (b) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision then in effect) under the Securities Act, (c)
they shall have been otherwise transferred, and, in accordance with Section 3.1,
new certificates for them not bearing a legend restricting further transfer
shall have been delivered, (d) they shall have become freely transferable
without registration under the Securities Act or (e) they shall have ceased to
be outstanding.
2.3 Holders of Registrable Securities. A Person is deemed
to be a Stockholder whenever such Person owns of record Registrable Securities,
or holds an option to purchase, or a security convertible into or exercisable or
exchangeable for, Registrable Securities, whether or not such acquisition or
conversion has actually been effected. If the Issuer receives conflicting
instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Issuer may act upon the basis of the
instructions, notice or election received from the registered owner of such
Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
2.4 Transfer of Registration Rights.
(a) Each Stockholder may transfer or pledge
Registrable Securities with the associated registration rights under this
Agreement to a Permitted Transferee or pledgee ("Pledgee") only if (1) subject
to the last sentence of this Section 2.4(a), such Permitted Transferee or
Pledgee agrees in writing to be bound as a Stockholder by the provisions of this
Agreement insofar as it pertains to the holding, owning and disposition of
Registrable Securities and (2) immediately following such transfer or pledge,
the further disposition of such Registrable Securities by such Permitted
Transferee or Pledgee would be restricted under the Securities Act. Upon any
transfer of Registrable Securities other than as set forth in this Section 2.4,
such securities shall no longer constitute Registrable Securities, except that
any Registrable Securities that are pledged or made the subject of a Hedging
Transaction, whether or not the subject of a Demand Registration, which
Registrable Securities are not ultimately disposed of by the Stockholders
pursuant to such pledge or Hedging Transaction shall, to the extent such
securities remain "restricted securities" under the Securities Act, be deemed to
remain "Registrable Securities" notwithstanding the release of such pledge or
the completion of such Hedging Transaction. Notwithstanding anything herein to
the contrary, no Pledgee
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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
Section 6.8(a). The Stockholders hereby agree that they shall act in good faith
with respect to the restrictions set forth in Section 6.8(a) and shall take no
action or omit to take any action with the intention of circumventing or evading
the restrictions applicable to them under Section 6.8(a).
(b) If a Stockholder assigns its rights under
this Agreement in connection with the transfer of less than all of its
Registrable Securities, the Stockholder shall retain its rights under this
Agreement with respect to its remaining Registrable Securities. If a Stockholder
assigns its rights under this Agreement in connection with the transfer of all
of its Registrable Securities, such Stockholder shall have no further rights or
obligations under this Agreement, except under Article VII hereof in respect of
offerings in which it participated.
ARTICLE III
ACKNOWLEDGEMENTS OF THE STOCKHOLDERS
3.1 Certain Acknowledgments of the Stockholders. Each
Stockholder acknowledges that all Registrable Securities will be issued or have
been issued pursuant to an exemption from registration under the Securities Act
and applicable state securities laws and agrees not to sell or otherwise dispose
of such Registrable Securities in any transaction which would be in violation of
the Securities Act or applicable state securities law. Each Stockholder
acknowledges that the following legend will appear on the certificates for the
Registrable Securities reflecting the foregoing restriction. The Issuer shall,
at the request of any Stockholder, remove from each certificate evidencing
Registrable Securities the following legend if the Issuer is reasonably
satisfied (based upon an opinion of counsel or other evidence) that the
securities evidenced thereby may be publicly sold without registration under the
Securities Act; provided, however, that the Issuer or Issuer's counsel shall not
be required to deliver an opinion of counsel to the effect that the securities
evidenced thereby may be publicly sold without registration under the Securities
Act unless Stockholder Counsel shall have delivered an opinion, upon which the
Issuer and Issuer's counsel are entitled to rely, to the effect that the
securities evidenced thereby may be publicly sold without registration under the
Securities Act.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, THE SECURITIES OR
"BLUE SKY" LAWS OF ANY STATE OR ANY OTHER SECURITIES LAWS.
SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED, OR OTHERWISE ASSIGNED, EXCEPT (I)
PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES WHICH IS EFFECTIVE UNDER ALL APPLICABLE SECURITIES
LAWS, OR (II) UPON THE FURNISHING TO TIME WARNER CABLE INC. BY
THE
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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."
ARTICLE IV
DEMAND REGISTRATION.
4.1 Request for Demand Registration.
(a) At any time after the completion of the
Initial Public Offering, a Stockholder may make a written request to the Issuer
to register, and the Issuer shall register, on the appropriate form, under the
Securities Act, the number of Registrable Securities stated in such request (a
"Demand Registration").
(b) Each request for a Demand Registration by
Stockholders shall identify the Stockholders making such request and the amount
of the Registrable Securities proposed to be sold by each and the intended
method of disposition thereof.
4.2 Effective Demand Registration. Subject to Section
6.3(b), the Issuer shall use all commercially reasonable efforts to (i) file a
Registration Statement relating to such Demand Registration, (ii) cause such
Registration Statement to be declared effective by the Commission not later than
(1) 120 days (if the Issuer is not eligible to use Form S-3 for such Demand
Registration) or (2) 60 days (if the Issuer is eligible to use Form S-3 for such
Demand Registration), after the Issuer receives a request under Section 4.1(a)
and (iii) keep such Registration Statement continuously effective until the
later of (1) the time at which all Registrable Securities registered in the
Demand Registration have been sold and (2) the 75th day after the date such
Registration Statement is declared effective by the Commission (or such later
date as the Majority Requesting Stockholders request in writing); provided that
such 75-day period shall be extended for a number of days equal to the number of
days that elapse from (x) the date any written notice contemplated by Section
6.3(a) is given by the Issuer to (y) the date on which the Issuer delivers to
the Stockholders the supplement or amendment contemplated by Section 6.3(a).
4.3 Underwriting. If the Issuer or the Majority
Requesting Stockholders elect, the Issuer shall use all commercially reasonable
efforts to cause the sale of Registrable Securities relating to a Demand
Registration (other than an OTC Hedging Transaction) to be in the form of a firm
commitment underwritten offering, and the Lead Underwriter shall be selected in
accordance with Section 6.9.
4.4 Hedging Transactions.
(a) The Issuer agrees that, in connection with
any proposed Hedging Transaction, if, in the reasonable judgment of Stockholder
Counsel (after good
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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 this
Agreement.
(c) If in connection with a Hedging Transaction,
a Hedging Counterparty or any Affiliate thereof is (or may be considered) an
underwriter or selling stockholder, then it shall be required to provide
customary indemnities to the Issuer regarding the Plan of Distribution and like
matters.
(d) The Issuer further agrees to include, under
the caption "Plan of Distribution" (or the equivalent caption), in each
Registration Statement, and any related prospectus (to the extent such inclusion
is permitted under applicable Commission regulations and is consistent with
comments received from the Commission during any Commission review of the
Registration Statement), language substantially in the form of Annex A hereto
and to include in each prospectus supplement filed in connection with any
proposed Hedging Transaction language mutually agreed upon by the Issuer, the
relevant Stockholder and the Hedging Counterparty describing such Hedging
Transaction.
4.5 Cutback Provisions. All offerings made in respect of
Demand Registrations shall be subject to the limitations set forth in Section
6.10.
ARTICLE V
INCIDENTAL OR "PIGGY-BACK" REGISTRATION.
5.1 Issuer Incidental Registration. At any time after the
Closing, if a Stockholder requests a Demand Registration in accordance with
Article IV, then the Issuer shall have the right, subject to the limitations set
forth in Section 6.10, to register Issuer Securities or securities for the
account of any stockholder of the Issuer other than
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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.
(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),
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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 participating
in such distribution of Registrable Securities of any stop order issued or
threatened by the Commission and take all commercially reasonable action
required to prevent the entry of such stop order or to remove it if entered;
(b) the Issuer shall, as expeditiously as
practicable, prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus as may be
necessary to keep such Registration Statement effective until the earlier of (i)
the 75th day after the effective date thereof (or such later date as the
Majority Requesting Stockholders request in writing) and (ii) the date on which
all Registrable Securities covered by such Registration Statement have been sold
(provided that such 75-day period shall be extended for a number of days equal
to the number of days that elapse from (x) the date any written notice
contemplated by Section 6.3(a) is given by the Issuer to (y) the date on which
the Issuer delivers to the Stockholders the supplement or amendment contemplated
by Section 6.3(a)); and the Issuer shall comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Registration
Statement;
(c) the Issuer shall furnish to each seller of
Registrable Securities, prior to filing a Registration Statement, at least one
conformed copy of such Registration Statement as is proposed to be filed, and
thereafter shall promptly furnish such number of conformed copies of such
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the Prospectus included therein (including
each preliminary Prospectus and any Prospectus filed under Rule 424 under the
Securities Act) as each such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities by such seller; in
addition, the Issuer shall promptly after receipt furnish to each Stockholder
copies of the portions of any and all transmittal letters and any other
correspondence (including, but not limited to, comment letters) with the
Commission or any other Governmental Entity relating to such Registration
Statement or amendment or supplement thereto relating to the sections entitled
"Plan of Distribution" or "Selling Stockholders," and the Majority Requesting
Stockholders shall have the right to request that the Issuer modify any such
information contained in such Registration Statement or amendment and supplement
thereto pertaining to such Stockholders in such sections, and the Issuer shall
use all commercially reasonable efforts to comply with such request; provided,
however, that the Issuer shall not have any obligation to modify any information
if the Issuer reasonably expects that so doing would cause the Registration
Statement to contain an untrue statement of a material
13
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 Registration Statement under such other
securities or "blue sky" laws of such States of the United States of America
where an exemption is not available and as the sellers of Registrable Securities
covered by the Registration Statement shall reasonably request, (ii) to keep
such registration or qualification in effect during the period during which the
Registration Statement is effective, (iii) to obtain the withdrawal of any order
or other determination suspending such registration or qualification during the
period during which the Registration Statement is effective and (iv) to take any
other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities to
be sold by such sellers, except that the Issuer shall not for any such purpose
be required to (1) qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this clause
(iv) be obligated to be so qualified, (2) subject itself to taxation in any such
jurisdiction or (3) consent to general service of process in any such
jurisdiction;
(e) the Issuer shall enter into and perform
customary agreements (including underwriting and indemnification and
contribution agreements in customary form with the Lead Underwriter or other
Counterparty and reasonably acceptable to the Counterparty) and take such other
commercially reasonable actions as are required in order to expedite or
facilitate each Disposition and shall provide all reasonable cooperation,
including causing appropriate officers to attend and participate in "road shows"
and other information meetings organized by the Counterparty, customary for
similar Dispositions;
(f) the Issuer shall make available at
reasonable times for inspection by any seller of Registrable Securities, the
Counterparties participating in any Disposition, Stockholder Counsel and any
attorney, accountant or other agent retained by any Counterparty (each, an
"Inspector" and collectively, the "Inspectors"), all financial and other
records, corporate documents of the Issuer and its Subsidiaries (collectively,
the "Records") as are reasonably necessary to enable them to exercise their due
diligence responsibilities, and cause the Issuer's and its Subsidiaries'
officers, directors and employees, and the independent public accountants of the
Issuer, to discuss the business and affairs of the Issuer and its Subsidiaries,
to supply promptly all information reasonably requested by any such Inspector in
connection with such Registration Statement and to otherwise reasonably
cooperate in the due diligence process of the Inspectors;
(g) in the case of a Disposition, the Issuer
shall use all commercially reasonable efforts to obtain "cold comfort" letters
addressed to the Issuer and the Counterparties and dated the effective date of
the Registration Statement and the date of the closing under the agreement
relating to such Disposition from the Issuer's independent public accountants in
customary form and covering such matters of the type customarily covered by
"cold comfort" letters in agreements that are customary or
14
reasonably appropriate for the types of offerings that are most similar to such
Disposition, as Stockholder Counsel or the Counterparty reasonably requests;
(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;
15
(n) the Issuer shall cooperate with each seller
of Registrable Securities and each underwriter participating in the disposition
of such Registrable 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
16
(including an underwriting and indemnification agreement in customary form with
the 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 pursuant to the
Registration Statement 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
17
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-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 xxxxxxx xxxxxxx policy or
otherwise from making purchases and sales (other than those made pursuant to
plans designed to comply with Rule 10b5-1(c)(1)(i) under the Exchange Act) by
reason of the condition specified in the first sentence of Section 6.3(b) and
(y) each other holder entitled to sell equity securities of the Issuer pursuant
to registration rights under a selling stockholder prospectus is, or agrees to
be, subject to deferral provisions substantially similar to or more restrictive
than those contained in Section 6.3(b).
6.4 Reports and Materials to be Filed under the
Securities Act and the Exchange Act. The Issuer shall timely file the reports
and materials required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Commission thereunder
(including but not limited to the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c) of Rule 144) and shall take all
commercially reasonable actions as a Stockholder or any broker or dealer
facilitating a sale of Registrable Securities may reasonably request to enable
such Stockholder to sell or hedge Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rules or regulations hereafter adopted by the
Commission. Upon the request of any Stockholder, the Issuer shall deliver to
such Stockholder a written statement as to whether it has complied with such
requirements.
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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 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
19
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 Stock Split. Prior to the Initial Public Offering,
the Issuer shall effect a split of the Class A Common Stock so that the price
per share of Class A Common Stock reasonably expected to be received in the
Initial Public Offering shall be within a range that, in the judgment of the
Lead Underwriter, will facilitate the Initial Public Offering on the best
possible terms. The Stockholders agree to take all actions necessary to permit
the Issuer to comply with its obligations pursuant to the preceding sentence.
6.8 Restrictions on Public Sales.
(a) If requested in writing by any Lead
Underwriter in connection with a public offering of shares of Common Equity (or
instruments convertible into or exchangeable for Common Equity), each of the
Stockholders (other than any Pledgee or Hedging Counterparty) and the Issuer
shall execute and deliver agreements ("Lock-up Agreements") containing such
restrictions on its ability to dispose of shares of Common Equity (or
instruments convertible into or exchangeable for Common Equity) as such Lead
Underwriter may reasonably request; provided that such restrictions shall be the
same for all parties and shall not have a duration of more than (i) 180 days
after the completion of such offering (in the case of the Initial Public
Offering) or (ii) 90 days after the completion of such offering (in the case of
other public offerings). Any Lock-up Agreements executed by the Stockholders
shall contain provisions naming the Issuer as an intended third-party
beneficiary thereof and requiring the prior written consent of the Issuer for
any amendments thereto or waivers thereof. Any Lock-up Agreements executed by
the Issuer shall contain provisions naming the Stockholders as intended
third-party beneficiaries thereof and requiring the prior written consent of the
Majority Stockholders for any amendments thereto or waivers thereof.
(b) A Stockholder shall not be required
hereunder to sign a Lock-up Agreement that restricts the Stockholder from
exercising the Incidental Registration rights set forth in Article V.
(c) In connection with a Demand Registration,
the Issuer shall use all commercially reasonable efforts to have all executive
officers, directors and holders of more than 5% of any class of the Common
Equity execute agreements that are no less restrictive than the restrictions
contained in the Lock-up Agreements.
6.9 Selection of Underwriters. In any underwritten public
offering pursuant to a Demand Registration (other than the Initial Public
Offering), (i) the Majority Requesting Stockholders shall have the right to
select one nationally-recognized investment banking firm as a co-lead book
running manager (or the equivalent) with respect to such offering, which firm
shall be reasonably acceptable to the Issuer, and the Issuer shall, for purposes
of all applicable provisions in other agreements relating to the
20
selection of underwriters in underwritten public offerings (including, without
limitation, Section 6.9 of the Trust Registration Rights Agreement), select such
firm as a co-lead book running manager (or the equivalent); and (ii) any other
co-lead book running managers (or the equivalent) that are selected pursuant to
any other applicable provisions contained in other agreements relating to the
selection of underwriters in underwritten public offerings (including, without
limitation, Section 6.9 of the Trust Registration Rights Agreement) shall also
act as co-lead book running managers with respect to such offering. In all other
underwritten public offerings, other than offerings in which the Issuer is only
permitted to select one co-lead book running manager (or the equivalent)
(including, without limitation, pursuant to Section 6.9 of the Trust
Registration Rights Agreement), the Issuer shall have the right to select all
Lead Underwriters, except that if at least $500 million of Registrable
Securities are proposed to be sold pursuant thereto, the Majority Requesting
Stockholders shall have the right to select one nationally-recognized investment
banking firm as a co-lead book running manager (or the equivalent) with respect
to such offering, which firm shall be reasonably acceptable to the Issuer, and
the Issuer shall, for purposes of all applicable provisions in other agreements
relating to the selection of underwriters in underwritten public offerings
(including, without limitation, Section 6.9 of the Trust Registration Rights
Agreement), select such firm as a co-lead book running manager (or the
equivalent).
6.10 Limitations on Registration. In any public offering
of securities of the Issuer registered pursuant to Article IV or V, if any Lead
Underwriter determines in good faith that the registration of all or part of
such securities requested to be included would have a material and adverse
effect on the success of such offering, then the Issuer shall be required to
include in such offering only such number of such securities as the Lead
Underwriter reasonably believes would not have such adverse effect, according to
the following priority:
(a) First, such offering shall include any
Issuer Securities proposed to be included in such offering, until the Issuer's
Cumulative Net Proceeds are $2.1 billion;
(b) Second, such offering shall include any
Trust Registrable Securities proposed to be included in such offering, until the
Cumulative Net Proceeds of the Trust Stockholders and their Affiliates 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 Trust 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 Trust 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
21
(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 Trust Registrable Securities not
already included in such offering, (y) any such securities that are Issuer
Securities not already included in such offering and (z) any such securities
that are AOLTW Securities not already included in such offering, in each case
until all such securities requested to be registered have been included in such
offering.
Prior to the AOLTW Registration Date, to the extent that the Issuer proposes to
include any Issuer Securities whose proceeds, as described in the "Use of
Proceeds" section of the relevant Registration Statement, are to be distributed
or loaned to, or used to purchase securities issued by or held by, AOLTW or any
of its Affiliates (other than the Issuer or any of its Subsidiaries), such
Issuer Securities shall be deemed to be AOLTW Securities for purposes of
Sections 6.10(a) and (c).
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by the Issuer. The Issuer agrees to
indemnify and hold harmless each Stockholder, its partners, directors, officers,
other Affiliates and each Person who controls (within the meaning of Section 15
of the Securities Act) such Stockholder from and against any and all losses,
claims, damages, liabilities and expenses, or any action or proceeding in
respect thereof (including reasonable costs of investigation and reasonable
attorneys' fees and expenses) (each, a "Liability" and collectively,
"Liabilities"), arising out of or based upon any untrue, or allegedly untrue,
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus or notification or offering circular (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading under the circumstances such statements
were made; provided, however, that the Issuer shall not be liable (i) in any
such case to the extent that any such Liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, Prospectus or preliminary prospectus or
notification or offering circular in reliance upon and in conformity with
written information furnished to the Issuer by or on behalf of such Stockholder
(including, without limitation, the information provided pursuant to Section
7.2), specifically for use in the preparation thereof and (ii) for any Liability
if (1) the Issuer has notified such Stockholder to suspend use of the Prospectus
pursuant to Section 6.3(a) or (b), (2) such Stockholder continues to use the
relevant Prospectus notwithstanding such notice, and (3) such Liability arises
from or is based upon an untrue statement or alleged untrue statement of any
material fact or omission to state a material fact that was cured in the
supplemented or amended Prospectus contemplated by Section 6.3(a) or (b).
22
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 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
23
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 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.
24
ARTICLE VIII
MISCELLANEOUS
8.1 Recapitalizations, Exchanges, etc. The provisions of
this Agreement shall apply to the full extent set forth herein with respect to
(i) the shares of Class A Common Stock, (ii) any and all shares of voting common
stock of the Issuer (excluding any such securities that are freely transferable
without registration under the Securities Act) 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 (excluding any such securities that are freely transferable without
registration under the Securities Act) of the Issuer or any of its Affiliates or
any successor or assign or acquiror of the Issuer or any of its Affiliates
(whether by merger, consolidation, sale of assets or otherwise) which may be
issued in respect of, in conversion of, in exchange for, in substitution of or
as a distribution on, 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 such Affiliate, successor or assign or acquiror
(whether by merger, consolidation, sale of assets or otherwise) to enter into a
new registration rights agreement with respect to such equity securities with
each Stockholder on terms no less favorable to such Stockholder than the terms
provided under this Agreement as a condition of any such transaction.
8.2 Notices. All notices, requests, claims and demands
and other communications hereunder shall be in writing and shall be deemed duly
delivered (i) four Business Days after being sent by registered or certified
mail, return receipt requested, postage prepaid, or (ii) one Business Day after
being sent by facsimile transmission (provided the sender retains confirmation
thereof) or for next Business Day delivery, fees prepaid, via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:
if to the Issuer, to:
Time Warner Cable Inc.
c/o AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Executive Vice President,
General Counsel and
Secretary
Fax: (000) 000-0000
25
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
if to AOLTW, to: AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Executive Vice President,
General Counsel and
Secretary
Fax: (000) 000-0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
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.
26
(c) It is hereby understood and acknowledged
that (i) the Trust Registration Rights Agreement is being executed
simultaneously with this Agreement, and, to the extent there is conflict between
the provisions of Sections 6.8, 6.9 and 6.10 of this Agreement and the
provisions Sections 6.8, 6.9 and 6.10 of the Trust Registration Rights
Agreement, the provisions of the Trust Registration Rights Agreement shall
control and be binding upon all Stockholders under this Agreement for purposes
of resolving such conflict and (ii) the Trust Stockholders are intended third
party beneficiaries with respect to this Section 8.3(c) until the AOLTW
Registration Date.
8.4 Further Assurances. Each of the parties shall execute
such documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
8.5 Other Agreements. Nothing contained in this Agreement
shall be deemed to be a waiver of, or release from, any obligations any party
hereto may have under any of the other Transaction Agreements.
8.6 No Third-Party Beneficiaries. Except as provided in
Article VII or Sections 8.3(c) and 8.8, this Agreement is not intended, and
shall not be deemed, to confer any rights or remedies upon any Person other than
the parties hereto and their respective successors and permitted assigns or to
otherwise create any third-party beneficiaries hereto.
8.7 Assignment. This Agreement shall be binding upon and
inure to the benefit of and shall be enforceable by the parties hereto and their
respective successors and assigns and, with respect to each Stockholder, any
Permitted Transferee. No assignment or transfer shall be effective hereunder
unless and until the purported transferee executes and delivers an agreement, in
form and substance reasonably acceptable to the parties, agreeing to be bound by
the terms hereof.
8.8 Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless consented to in writing by the Issuer and the Majority
Stockholders. The AOLTW Company Registration Rights Agreement may not be amended
in any respect without the approval of a majority of the independent members of
the Board of Directors.
8.9 Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Issuer, be treated as the holder of such Registrable Securities for purposes of
any request, consent, waiver or other action by any holder or holders of
Registrable Securities pursuant to this Agreement or any determination of any
number or percentage of shares of Registrable Securities held by any holder or
holders of Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the Issuer may require
assurances reasonably satisfactory to it of such owner's beneficial ownership of
such Registrable Securities.
27
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" 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.
28
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.
[Remainder of page intentionally left blank]
29
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first written above.
AOL TIME WARNER INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
TIME WARNER CABLE INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Executive Vice President, General
Counsel & Secretary
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.
