REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") dated as of September
4, 1996, is entered into by and between Charter Communications International,
Inc., a Nevada corporation (the "COMPANY"), Xxxxxxx X. Xxxxxxx, Xxxxxxx X.
Xxxxxxx (collectively, the "NEW HOLDERS"), The Aurum Group Limited Partnership,
a Texas limited partnership, Potere Management, Inc., a Texas corporation and
Xxxxx X. Xxxxx (collectively, "XXXXX").
WHEREAS, pursuant to Section 6.05 of that certain Acquisition Agreement
dated July 15, 1996 between the Company, Overlook Communications International
Corporation, the New Holders and OCI Acquisition Corp., a subsidiary of the
Company (the "OVERLOOK AGREEMENT"), the Company has agreed to use its best
efforts to register shares of Charter Stock in order to provide the New Holders
the right to sell the Charter Stock acquired by them pursuant to the Overlook
Agreement (the "NEW HOLDER STOCK") on and after September 27, 1997; and
WHEREAS, Xxxxx is a founding shareholder of the Company who has made
significant and additional contributions to the well being of the Company, and
the Company has agreed to provide registration rights to Xxxxx consistent with
those provided to the New Holders.
NOW, THEREFORE, in consideration for and as an inducement to the New
Holders to enter into the Overlook Agreement and in consideration of the mutual
covenants and premises set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, the parties agree as follows:
1. REGISTRATION.
1.1 REGISTRATION OBLIGATION.
1.1.1 DEMAND REGISTRATION. The Company hereby agrees, upon
written request of either New Holder or Xxxxx, to use its reasonable best
efforts to register for sale by filing with the U.S. Securities and Exchange
Commission (the "COMMISSION") such registration statements necessary for public
sale of Charter Stock (hereinafter, a "REGISTRATION") on behalf of each of the
New Holders and Xxxxx, covering all, or such lesser number of shares as may be
agreed upon in writing by the New Holders and Xxxxx, of the shares of Charter
Stock beneficially owned by each of the New Holders and Xxxxx (collectively, the
"ELIGIBLE SHARES"), subject to the terms and conditions of this Agreement. For
purposes of this Agreement, the number of shares beneficially owned by such
persons shall be determined by reference to the Form 3 or 4 filed by each such
person, which indicates (or permits the determination of) the number of Charter
Stock beneficially owned by such persons as of the close of business on the date
of this Agreement.
1.1.2 SHELF REGISTRATION. The Company shall at the request
of any holder of Eligible Shares fulfill its registration obligations under
Section 1.1.1 by filing a "shelf registration" registering all, or such lesser
number of shares as may be agreed upon in writing by the New Holders and Xxxxx,
of the Eligible Shares. The Company's obligation to maintain the effectiveness
of any such shelf registration shall terminate on the date of termination of
this Agreement or the date that the New Holders and Xxxxx have sold or otherwise
transferred or disposed of all shares registered in the shelf registration,
whichever date is earlier.
1.2 LIMITATIONS ON REGISTRATION OBLIGATION.
1.2.1 GENERAL. The Company shall not be obligated to file a
Registration or maintain the effectiveness thereof unless all the participants
in such Registration agree to accomplish the distribution of shares offered
thereby in an organized manner, which agreement shall be satisfactory to the
Company, in its reasonable discretion, and may be subject to conditions to
promote the orderly and organized distribution of such Eligible Shares,
including, without limitation, requiring that all persons participating in such
offering agree to utilize not more than one brokerage firm on any trading day,
and to limit the number of shares which may be sold in any single day.
1.2.2 OPINION LETTER AND BLUE SKY REGISTRATION. The Company
shall not be required to file any Registration or shelf registration if, prior
to the time same is required, counsel for the Company delivers an opinion to
each of the New Holders and Xxxxx that all of the Eligible Shares may be sold
pursuant to the provisions of Rule 144 within a period of not more than 90 days
from the date of such opinion. Upon a Registration, or shelf registration, the
Company shall use its reasonable efforts to cause the Eligible Shares to be
registered or qualified under the state securities laws or blue sky laws of such
jurisdictions as the New Holders or Xxxxx may reasonably request; provided,
however, that the Company shall not be required to register or qualify Eligible
Shares in any jurisdiction where such registration or qualification would
require the Company to subject itself to taxation in such jurisdiction or to
register or require it to qualify for authority to do business as a foreign
corporation or would subject the Company to general service of process.
1.3 OBLIGATIONS OF NEW HOLDERS AND XXXXX. It shall be a condition
precedent to the obligations of the Company to file a Registration that the New
Holders and Xxxxx shall furnish promptly to the Company instruments in writing
duly executed containing all information as the Company shall reasonably request
for use in connection with the preparation of the Registration, any registration
statement, or prospectus or preliminary prospectus included therein, as well as
all undertakings which the Commission may request or the Company may reasonably
request as to compliance with Rule 10b-6 under the Securities Exchange Act of
0000 (xxx "Xxxxxxxx Xxx"). In connection with any underwritten registration of
shares held by the New Holders and Xxxxx, if requested by the underwriter, the
New Holders and Xxxxx will agree not to sell or otherwise transfer or dispose of
any Charter Stock (except that this obligation shall not apply to Eligible
Shares included in such underwritten registration) for the period requested by
such underwriter.
2. WAITING PERIOD. Xxxxx hereby agrees that, notwithstanding any rights
he may have to sell or otherwise transfer or dispose of Charter Stock pursuant
to Rule 144 or otherwise, he will only sell or otherwise transfer or dispose of
Charter Stock at such times and in such amounts as each of the New Holders are
eligible to sell shares of New Holder Stock pursuant to a Registration or shelf
registration as set forth herein.
3. EXPENSES. With respect to any Registration or shelf registration:
(i) which registers for sale only New Holder Stock and Charter Stock owned
by Xxxxx, the Company shall bear all usual and customary expenses relating to
registration up to a maximum amount of $5,000 for each such registration,
including all registration, filing and
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qualification fees and expenses of counsel to the Company, all fees and
expenses of the Company's independent auditors, all fees and expenses of
underwriters (except as set forth below) and all printing costs and all fees
and expenses incidental to complying with the state securities or "blue sky"
laws with regard to Eligible Shares;
(ii) which registers for sale shares of Charter Stock in addition to New
Holder Stock and Charter Stock owned by Xxxxx, the Company shall bear all usual
and customary expenses relating to registration, including all registration,
filing and qualification fees and expenses of counsel to the Company, all fees
and expenses of the Company's independent auditors, all fees and expenses of
underwriters (except as set forth below) and all printing costs and all fees and
expenses incidental to complying with the state securities or "blue sky" laws
with regard to Eligible Shares; and
(iii) the New Holders and Xxxxx shall bear (a) all commissions and other
expenses that are customarily paid by selling stockholders relating to the
sale of such stockholders' shares pursuant to registration, such as all
selling expenses and underwriter discounts and commissions attributable to
the shares offered by either of the New Holders or Xxxxx; (b) all fees and
expenses of any special counsel or experts retained by either of the New
Holders or Xxxxx plus all out-of-pocket expenses of either of the New Holders
or Xxxxx or any agent(s) who manages the account of either of the New Holders
or Xxxxx, in connection with the registration; and (c) with respect to any
registration covered by 3(i) above, on a pro-rata basis, all usual and
customary expenses relating to registration that are in excess of $5,000.
4. INDEMNIFICATION.
4.1 INDEMNIFICATION BY THE COMPANY. In the event of any registration
of Charter Stock pursuant to this Agreement, the Company will indemnify and hold
harmless each New Holder or Xxxxx (the "INDEMNIFIED PERSON") against any and all
losses, claims, damages or liabilities, joint or several, to which the
Indemnified Person may become subject under the Securities Act of 1933, the
Exchange Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement filed in a registration pursuant to this Agreement
under which such Charter Shares were registered, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto
(collectively, the "REGISTRATION DOCUMENTS"), or arise out of or are based upon
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made; PROVIDED HOWEVER, that the Company
will not be liable in any such case to: (i) the Indemnified Person to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in the Registration Documents, in
reliance upon and in conformity with information furnished to the Company by or
on behalf of the Indemnified Person, or (ii) the Indemnified Person from whom
the person asserting any such loss, claim, damage or liability purchased the
Charter Stock if the Indemnified Person failed to send or give a copy of the
final prospectus to the person asserting such loss, claim, damage or liability,
unless such failure is by an underwriter or investment banking firm which agrees
to act on behalf of both the Company and the Indemnified Person in such
registration.
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4.2 INDEMNIFICATION BY THE NEW HOLDERS AND XXXXX. In the event of
any registration of any Charter Stock under the Securities Act of 1933 pursuant
to this Agreement, each of the New Holders and Xxxxx will, to the extent
permitted by law, indemnify and hold harmless the Company, each of its directors
and officers, each underwriter, each officer and director of each underwriter,
and each person, if any, who controls the Company (within the meaning of Section
15 of the Securities Act) and each New Holder and Xxxxx against any and all
losses, claims, damages or liabilities, joint or several, to which the Company,
the directors and officers of the Company, the underwriter, the officers and
directors of underwriter, or controlling person may become subject under the
Securities Act of 1933, Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Documents under which the Charter Shares were
registered or arise out of or are based upon any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, if the statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by such New
Holder and Xxxxx for use in connection with the preparation of such Registration
Documents.
4.3 INDEMNIFICATION PROCEDURE. The procedure for notice of any claim
for indemnity shall be made in accordance with the terms and provisions of
Section 4.03(h) of the Overlook Agreement, provided, however, that the
"Indemnity Period" shall expire at midnight of the first anniversary following
the termination of this Agreement.
5. ADDITIONAL INFORMATION. If at any time during which the delivery of a
prospectus relating to Charter Stock registered pursuant to this Agreement is
required under the Securities Act of 1933 and the Company has a current
obligation under this Agreement to maintain the effectiveness of any such
registration any event occurs as a result of which the prospectus as then
supplemented or amended would include any untrue statement of a material fact,
or omit to state a material fact necessary to make the statements therein not
misleading, the Company shall promptly notify the New Holders and Xxxxx of such
event and (i) to the extent such statement or omission can be corrected by a
supplement, the Company will promptly prepare and file a supplement with the
Commission, or (ii) to the extent such statement or omission can only be
corrected by an amendment, the Company will notify the New Holders and Xxxxx of
the occurrence of such event and will promptly prepare and file an appropriate
amendment with the Commission and will use its reasonable best efforts to cause
such amendment to be declared effective.
6. MISCELLANEOUS.
6.1 SUCCESSORS AND ASSIGNS. Neither the New Holders nor Xxxxx may
assign their rights under this Agreement in connection with the transfer or sale
of any Charter Stock held by them. This Agreement shall inure to the benefit of
and be binding upon any successors and assigns of the parties hereto (only to
the extent agreed by all the parties hereto).
6.2 NOTICES. All notices under this Agreement shall be made in
accordance with Section 12.02 of the Overlook Agreement.
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6.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.4 HEADINGS. The headings of the sections, subsections, and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.
6.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.
6.6 ENTIRE AGREEMENT. All other prior or contemporary
representations, warranties, covenants or agreements, if any, between the
parties hereto, or their representatives, with respect to the subject matter
hereof are superseded by and merged into this Agreement, and this Agreement
shall constitute the entire understanding between the parties with respect to
the matters included herein. No waiver, amendment or modification of the terms
hereof shall be valid unless made in writing signed by the party to be charged
and only then to the extent expressly set forth therein. A party may waive in
writing compliance by another party with any of the terms contained in this
Agreement. No waiver, however, shall be a waiver of any other matter or
constitute a continuing waiver.
6.7 TERMINATION. This Agreement shall terminate on the date that any
New Holder Stock is eligible for resale by the New Holders pursuant to Rule 144
or the date an instrument is signed by all of the parties hereto specifically
terminating this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth on the first page hereof.
NEW HOLDERS: COMPANY:
XXXXXXX X. XXXXXXX CHARTER COMMUNICATIONS
INTERNATIONAL, INC.
/s/ XXXXXXX X. XXXXXXX By: /s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx
President and Chief Executive
Officer
XXXXXXX X. XXXXXXX
/s/ XXXXXXX X. XXXXXXX
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XXXXX X. XXXXX
/s/ XXXXX X. XXXXX
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