EXHIBIT 10.4
June 21, 2006
Adelphia Communications Corporation
0000 XXX Xxxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Time Warner Cable Inc.
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to (i) the Asset Purchase Agreement, dated as of April
20, 2005, between Adelphia Communications Corporation ("ADELPHIA") and Time
Warner NY Cable LLC (as amended through the date hereof, the "TW NY APA"), (ii)
the Registration Rights and Sale Agreement, by and between Adelphia and Time
Warner Cable Inc. (the "ISSUER"), to be entered into in the case of a 363 Sale
(as defined in the TW NY APA) as of the Closing (as defined in the TW NY APA) in
the form attached hereto as Exhibit A (the "ADELPHIA REGISTRATION RIGHTS
AGREEMENT") and (iii) the Registration Rights Agreement, dated as of March 31,
2003, among TWE Holdings II Trust ("TWE HOLDINGS II"), Time Warner Inc. (f/k/a
AOL Time Warner Inc.) and the Issuer (as amended, the "COMCAST REGISTRATION
RIGHTS AGREEMENT").
1. Definitions. (a) Except as otherwise indicated, capitalized terms used
herein and not otherwise defined herein have the meaning assigned to such terms
in the Adelphia Registration Rights Agreement.
(b) As used in this letter agreement, the following terms have the
meanings indicated:
(i) "COMCAST LOCK-UP AGREEMENT" means a "Lock-up Agreement" as
defined in the Comcast Registration Rights Agreement.
(ii) "COMCAST LOCK-UP PERIOD" means the "Lock-Up Period" as
defined in the Redemption Agreement.
(iii) "COMCAST NATIVE SYSTEMS" has the meaning assigned to
such term in the Exchange Agreement.
(iv) "COMCAST SHARES" means "Registrable Securities" as
defined in the Comcast Registration Rights Agreement.
(v) "COMCAST STOCKHOLDER" means a "Stockholder" as defined in
the Comcast Registration Rights Agreement.
(vi) "COMCAST SHELF REGISTRATION STATEMENT" means the "Section
2.3 Registration Statement" as defined in the Comcast Registration
Rights Agreement.
(vii) "COMCAST/ADELPHIA SYSTEMS" has the meaning assigned to
such term in the Exchange Agreement.
(viii) "EXCHANGE AGREEMENT" means the Exchange Agreement,
dated as of April 20, 2005, by and among Comcast Corporation
("COMCAST"), the Issuer, Time Warner NY Cable LLC and the other
parties named therein, as such agreement may be amended from time to
time.
(ix) "EXCHANGE CLOSING" means the "Closing" as defined in the
Exchange Agreement.
(x) "REDEMPTION AGREEMENT" means the Redemption Agreement,
dated as of April 20, 2005, by and among Comcast Cable
Communications Holdings, Inc., MOC Holdco II, Inc., TWE Holdings I
Trust, TWE Holdings II, Cable Holdco II Inc., the Issuer and the
other parties named therein, as such agreement may be amended from
time to time in a manner not adverse to Adelphia.
(xi) "U.S. GOVERNMENT" means the Securities and Exchange
Commission, Department of Justice and any other Governmental Entity
of the United States of America to which Purchase Shares are
Transferred pursuant to the SEC/DOJ Settlement.
2. Certain Agreements. Adelphia, for itself and each of its Debtors, the
Issuer and TWE Holdings II agree that if the 363 Sale occurs, then
notwithstanding any provision of the Adelphia Registration Rights Agreement to
the contrary:
(a) the Stockholder shall not have the right to include any of its
Registrable Securities or any other securities of the Issuer in any
takedown under the Comcast Shelf Registration Statement;
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(b) if Comcast Shares and Registrable Securities of the Stockholder
are included in the same offering, such Comcast Shares shall have priority
over such Registrable Securities, and none of such Comcast Shares shall be
excluded from such registration or offering pursuant to any "cutback",
"priority" or similar provision (including, without limitation, Section
6.9 of the Adelphia Registration Rights Agreement) unless all such
Registrable Securities have also been excluded;
(c) if the book-running manager of any underwritten public offering
pursuant to the Comcast Registration Rights Agreement requires or
recommends that Comcast Stockholders execute Comcast Lock-up Agreements in
connection with such underwritten public offering, then the Stockholder
shall execute and deliver a Lock-up Agreement that (i) contains the same
disposition restrictions and other terms and conditions as are included in
such Comcast Lock-up Agreement, provided that (A) such disposition
restrictions shall not have a duration of more than 180 days after the
completion of the first such offering or more than 90 days after the
completion of any subsequent offering, (B) in no event shall such
disposition restrictions be in effect prior to November 1, 2006 or after
February 16, 2008, (C) no such Lock-up Agreement shall prohibit the filing
or effectiveness of the Final Registration Statement (and the Registration
Actions related thereto) or the solicitation of votes of the Adelphia
Claimants with respect to the approval of the Final Distribution, (D) with
respect to any distribution under section 1145 of the Bankruptcy Code, if
agreed to by such book-running manager, the disposition restriction on the
Stockholder may be shorter than that applicable to the Comcast
Stockholders and (E) TWE Holdings II shall not avail itself of any early
termination of such disposition restrictions agreed to by such
book-running manager except to the extent that such book-running manager
shall have agreed to an equivalent early termination of such disposition
restrictions applicable to the Stockholder, (ii) names the Comcast
Stockholders as intended third-party beneficiaries thereof and (iii)
requires the prior written consent of the Majority Stockholders (as
defined in the Comcast Registration Rights Agreement) for any amendments
thereto or waivers thereof;
(d) the Stockholder shall notify TWE Holdings II (and the Issuer, if
not already notified) in writing at least 15 days prior to effecting any
Transfer of Registrable Securities (other than pursuant to Section 2.5,
2.7 or 8.7 of the Adelphia Registration Rights Agreement) (an "ADELPHIA
OFFERING") of the Stockholder's intent to effect such Adelphia Offering
(it being understood that such notice (each, an "ADELPHIA NOTICE") shall
describe in reasonable detail the intended size and manner of such
Adelphia Offering). If (i) any public offering of Comcast Shares by a
Comcast Stockholder (or associated registration) pursuant to the Comcast
Registration Rights Agreement shall then be pending or any Comcast
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Stockholder shall determine to commence such an offering (or associated
registration) upon receipt of such Adelphia Notice (each such offering
described in this clause (i), a "COMCAST OFFERING"), (ii) the Comcast
Lockup Period is no longer in effect as of the date of such Adelphia
Notice, (iii) such Adelphia Offering would reasonably be expected to occur
before November 18, 2007 and (iv) unless the Issuer shall otherwise
consent, with respect to any Comcast Offering occurring prior to the
completion of the earlier of (x) the Initial Sale, (y) the occurrence of a
Termination Event and (z) the first sale of Comcast Shares pursuant to a
Comcast Offering, the reasonably expected net proceeds to the Comcast
Stockholders from such Comcast Offering are at least $1.5 billion in the
aggregate, then TWE Holdings II shall have the right (the "DEFERRAL
RIGHT"), exercisable upon delivery of a written notice to Adelphia and the
Issuer within five Business Days (such five Business Day period, the
"NOTICE PERIOD") after the receipt by TWE Holdings II of such Adelphia
Notice, to prohibit the Stockholder from Transferring any Registrable
Securities in such Adelphia Offering or conducting marketing efforts in
connection therewith until the earlier of (A) such time as such Comcast
Stockholder shall have ceased to pursue such Comcast Offering in good
faith (it being understood that (1) such Comcast Stockholder shall be
deemed to have ceased to pursue such Comcast Offering in good faith if it
shall have ceased to take material steps in furtherance thereof and (2)
such Comcast Stockholder shall provide the Issuer and the Stockholder with
prompt written notice if it shall cease to pursue such Comcast Offering)
and (B) 45 days (plus (1) the number of days in any Deferral Period (as
defined in the Comcast Registration Rights Agreement) relating to such
Comcast Offering and (2) without duplication, the number of days that
elapse after the Notice Period during which the Comcast Shelf Registration
Statement is not effective or sales thereunder cannot be made) from the
date of such notice delivered by TWE Holdings II. If TWE Holdings II does
not exercise its Deferral Right with respect to an Adelphia Offering and
the Stockholder has not completed such Adelphia Offering within 45 days of
the end of the Notice Period relating to such Deferral Right, then the
Stockholder shall again comply with this paragraph 2(d) prior to
Transferring any Registrable Securities (whether pursuant to such Adelphia
Offering or otherwise) or conducting any marketing efforts in connection
therewith. In addition, the Stockholder shall provide an Adelphia Notice
and otherwise comply with this paragraph 2(d) with respect to any Adelphia
Offering (i) if the Comcast Lock-up Period terminates during the period
the Stockholder is pursuing such Adelphia Offering and (ii) the
Stockholder has not entered into a customary firm commitment underwriting
agreement specifying the price applicable to the Registrable Securities
included in such Adelphia Offering prior to the fifteenth day following
the termination of the Comcast Lock-up Period. For the avoidance of doubt,
in no event shall
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the Deferral Right be exercisable by TWE Holdings II prior to November 1,
2006 or after November 17, 2007;
(e) unless the Initial Sale or the Termination Event has already
occurred or the Issuer otherwise consents, the Comcast Stockholders shall
not consummate the first Comcast Offering unless the reasonably expected
net proceeds to the Comcast Stockholders from such first Comcast Offering
are at least $1.5 billion in the aggregate;
(f) prior to November 17, 2007, no Stockholder shall Transfer any
Purchase Shares to any Person (other than the Escrow Agent) unless such
Person shall be bound (in the Comcast Stockholder's reasonable
determination) by all of the obligations of the Stockholder set forth in
this letter agreement; provided that (i) such requirement shall not apply
with respect to Transfers (A) to Adelphia Claimants pursuant to the
Remainder Plan, (B) to Permitted Assignees (but subject to paragraph 2(g)
below) and (C) pursuant to an underwritten public offering, Section 4.3(b)
of the Adelphia Registration Rights Agreement or Rule 144 under the
Securities Act (but in each case subject to paragraph 2(d) above) and (ii)
notwithstanding paragraphs 2(a) and 2(b), the U.S Government shall have
the right to include Purchase Shares received by it pursuant to the
SEC/DOJ Settlement in (A) the first takedown under the Comcast Shelf
Registration Statement on a pro rata basis with the Comcast Stockholders
(relative to the total number of shares of Class A Common Stock proposed
to be sold in such takedown by the U.S. Government, on the one hand, and
the Comcast Stockholders, on the other hand), except that the Comcast
Stockholders shall have priority to include in such takedown (and shall
not be subject to any "cutback", "priority" or similar provision in favor
of the U.S. Government) such number of Comcast Shares as would reasonably
be expected to result in the Comcast Stockholders receiving net proceeds
of at least $2.0 billion from such takedown and (B) any subsequent
takedown under the Comcast Shelf Registration Statement, it being
understood that the Comcast Shares included in such takedown shall have
priority over all Purchase Shares included by the U.S. Government in such
takedown, and none of such Comcast Shares shall be excluded from such
takedown pursuant to any to "cutback", "priority" or similar provision
unless all such Purchase Shares have also been excluded. No such Transfer
under this paragraph 2(f) (other than to the extent the transferee is the
U.S. Government) shall relieve Adelphia of its obligations hereunder with
respect to any Purchase Shares; and
(g) neither Adelphia nor any of its subsequent assignees may assign
the Adelphia Registration Rights Agreement or any of its rights thereunder
or Transfer any Purchase Shares (or the right to receive any Purchase
Shares) to a Permitted Assignee unless the applicable assignee, shall have
agreed in writing to be bound by the obligations of Adelphia set forth in
this letter agreement. No such assignment shall relieve Adelphia
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of any of its obligations and Liabilities under this letter agreement with
respect to Registrable Securities that it continues to hold, but such
assignment shall relieve Adelphia of any further obligation and Liability
under this letter agreement arising after the date of assignment with
respect to the rights or Registrable Securities so assigned if, but only
if, Adelphia provides TWE Holdings II with an indemnification agreement
(in form and substance reasonably satisfactory to TWE Holdings II, it
being understood that the amount or nature of the remaining assets or
liabilities of Adelphia shall not be a factor in such determination)
indemnifying TWE Holdings II for any breach of the obligations and
Liabilities of such assignee under this letter agreement. In addition, no
Person shall be permitted to become a party to the Adelphia Registration
Rights Agreement unless such Person shall have agreed in writing to be
bound by the obligations of the Stockholder set forth in this letter
agreement.
3. Provision of Financial Information. Comcast shall use all commercially
reasonable efforts to provide, in a timely manner, all financial statements with
respect to (a) the Comcast Native Systems for periods ending on or prior to the
Exchange Closing and (b) if the Exchange Closing does not occur substantially
contemporaneously with the Closing, the Comcast/Adelphia Systems for any
quarterly or annual period as of the end of which the Comcast/Adelphia Systems
were owned by Comcast or one or more of its Affiliates that, in each such case,
are required by the Commission for inclusion in reports under the Exchange Act
and registration statements that are to be filed under the Adelphia Registration
Rights Agreement or the Comcast Registration Rights Agreement. In addition,
Comcast shall use commercially reasonable efforts to assist the Issuer in
obtaining customary accountants' "cold comfort" letters and consents with
respect to the financial statements referred to in the immediately preceding
sentence to the extent reasonably necessary in connection with any offering
under the Securities Act. The Issuer shall reimburse Comcast for the reasonable
costs and expenses incurred by Comcast pursuant to this paragraph 3, including
reasonable out-of-pocket costs and expenses. Comcast shall give the Issuer
reasonable advance notice of the type and amount of such costs and expenses
prior to the incurrence thereof.
4. TW NY APA. Adelphia acknowledges and agrees that TWE Holdings II is a
third party beneficiary of Section 5.5(c) of the TW NY APA and, as such, is
entitled to enforce the obligations thereunder and receive remedies for breaches
thereof.
5. Termination. This letter agreement, except for paragraph 3, shall
terminate upon the occurrence of the Closing (as defined in the Redemption
Agreement).
6. Specific Performance. The parties hereto agree that irreparable damage
would occur if any provision of this letter agreement were not performed
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in accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this letter agreement or to
enforce specifically the performance of the terms and provisions hereof, in
addition to any other remedy to which they are entitled at law or in equity.
7. Miscellaneous. This letter agreement shall be governed by and construed
in accordance with the law of the State of New York, without regard to the
conflicts of law rules of such state. This letter agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. Any
provision of this letter agreement may be amended or waived only with the
written consent of, in the case of an amendment, each party hereto, or, in the
case of a waiver, the party against whom such waiver is to be effective.
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the signature page.]
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Very truly yours,
TWE HOLDINGS II TRUST
By: /s/ Xxxxx X. Holiday
----------------------------------
Name: Xxxxx X. Holiday
Title: Solely in her capacity as
Operating Trustee
COMCAST CORPORATION
By: /s/ Xxxxxx X. Pick
----------------------------------
Name: Xxxxxx X. Pick
Title: Senior Vice President
Accepted and agreed to:
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
TIME WARNER CABLE INC.
By: /s/ Satish Adige
------------------------------------
Name: Satish Adige
Title: SVP, Investments
