EXHIBIT E TO
SECOND AMENDED AND RESTATED
LMC AGREEMENT
LMC REGISTRATION RIGHTS AGREEMENT, dated as of [ ], among
TW INC., a Delaware corporation, which will be renamed "Time
Warner Inc." ("Holdco"), and the Holders (as defined below).
WHEREAS, in connection with the Amended and Restated Agreement
and Plan of Merger, dated as of September 22, 1995, as amended by
Amendment No. 1 thereto dated as of August ___, 1996 (the "Merger
Agreement"), among Holdco, Time Warner Inc., Time Warner Acquisition
Corp., TW Acquisition Corp., and Turner Broadcasting System, Inc., a
Georgia corporation, each initial Holder will receive shares of Common
Stock (as defined below); and
WHEREAS, in connection with the Merger Agreement, Holdco,
Liberty Media Corporation and certain of the other initial Holders have
entered into the LMC Agreement (as hereinafter defined); and
WHEREAS this is the Registration Rights Agreement provided for
by the LMC Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
SECTION 1. Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 5 hereof.
"Affiliate" means, with respect to any specified person, any
other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person. For
the purposes of this definition, "control" when used with respect to any
specified person means the power to direct the management and policies
of such person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Affiliated Holder" means any Holder that is an affiliate of
Holdco within the meaning of Rule 144 under the Securities Act. For the
purposes of this definition, in determining whether or not any Holder is
an affiliate of Holdco within the meaning of such Rule 144, any
limitation on the voting or other rights of such Holder with respect to
Registrable Shares owned by such Holder arising under the
FTC Consent Decree shall not be considered and Registrable Shares
issuable upon conversion of Holdco LMC Common Stock owned by such Holder
shall be deemed to have been issued.
"Business Day" means any day that is not a Saturday, a Sunday
or a legal holiday on which banking institutions in the State of New
York are not required to be open.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participations or other equivalents (however
designated) of corporate stock issued by such person, including each
class of common stock and preferred stock of such person.
"Common Stock" means the Common Stock, par value $.01 per
share, of Holdco (i) issued to any of the initial Holders pursuant
to the Merger Agreement, (ii) issued to any of the initial Holders
pursuant to the Contribution and Exchange Agreement, (iii) issuable
upon conversion of any Holdco LMC Common Stock for which the shares
of Common Stock referred to in clause (i) and clause (ii) above may
be exchanged pursuant to the LMC Agreement, (iv) issuable upon
conversion of any Holdco LMC Common Stock issued pursuant to the
SSSI Agreement, (v) issued to any Turner Stockholder (as such term
is defined in the First Refusal Agreement) and acquired by any
Holder pursuant to the First Refusal Agreement, or (vi) issuable
upon conversion of any Holdco LMC Common Stock for which any Common
Stock, Voting Holdco LMC Common Stock or LMCN-V Common Stock
referred in clauses (i) through (v) above may be exchanged from time
to time, and any other shares of capital stock or other securities
of Holdco into which such shares of Common Stock shall be
reclassified or changed, including by reason of a merger,
consolidation, reorganization or recapitalization; provided,
however, that in the case of any Demand Registration pursuant to
Section 2(a)(ii) hereof, "Common Stock" shall include all Common
Stock, and any other shares of capital stock or other securities of
Holdco into which such shares of Common Stock shall be reclassified
or changed, including by reason of a merger, consolidation,
reorganization or recapitalization, held at the time of such Demand
Registration by any Holder that is a Liberty Party or SpinCo Party
or issuable upon conversion of any Holdco LMC Common Stock held at
the time of such Demand Registration by any Holder that is a Liberty
Party or SpinCo Party. If the Common Stock has been reclassified or
changed, or if Holdco pays a dividend or makes a distribution on the
Common Stock in shares of capital stock, or subdivides (or combines)
its outstanding shares of Common Stock into a greater (or smaller)
number of shares of Common Stock, a share of Common Stock shall be
deemed to be such number of shares of stock and amount of other
securities to which a holder of a share of Common Stock outstanding
immediately prior to such change,
reclassification, exchange, dividend, distribution, subdivision or
combination would be entitled.
"Contribution and Exchange Agreement" has the meaning set
forth in the LMC Agreement.
"Delay Period" shall have the meaning set forth in Section
2(d) hereof.
"Demand Notice" shall have the meaning set forth in Section
2(a) hereof.
"Demand Registration" shall have the meaning set forth in
Section 2(b) hereof.
"Effectiveness Period" shall have the meaning set forth in
Section 2(d) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
"First Refusal Agreement" has the meaning set forth in the LMC
Agreement.
"FTC Consent Decree" has the meaning set forth in the LMC
Agreement.
"Hold Back Period" shall have the meaning set forth in Section
4 hereof.
"Holdco" shall have the meaning set forth in the introductory
clauses hereof.
"Holdco LMC Common Stock" means the Voting Holdco LMC Common
Stock and the LMCN-V Common Stock.
"Holder" means a person who owns Registrable Shares or Holdco
LMC Common Stock that is convertible into Registrable Shares and is
either (i) named on the signature pages hereof as a Holder, or (ii) a
person who has agreed to be bound by the terms of this Agreement as if
such person were a Holder and is (A) a person to whom a Holder has
transferred Registrable Shares pursuant to Rule "4(1-1/2)" (or any
similar private transfer exemption), (B) upon the death of any Holder,
the executor of
the estate of such Holder or any of such Holder's heirs, devisees,
legatees or assigns, (C) upon the disability of any Holder, any guardian
or conservator of such Holder or (D) an Affiliate of a Holder to which a
Holder has transferred any Common Stock or Holdco LMC Common Stock.
"Interruption Period" shall have the meaning set forth in
Section 5 hereof.
"Liberty Party" has the meaning set forth in the LMC
Agreement.
"LMC Agreement" means the Second Amended and Restated LMC
Agreement dated as of September 22, 1995, among Holdco, Time Warner
Inc., Liberty Media Corporation and certain subsidiaries of Liberty
Media Corporation.
"LMCN-V Common Stock" shall mean the Series LMCN-V Common
Stock of Holdco.
"Merger Agreement" shall have the meaning set forth in the
introductory clauses hereof.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
"Piggyback Registration" shall have the meaning set forth in
Section 3 hereof.
"Prospectus" means the prospectus included in any Registration
Statement (including a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), as amended or
supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Shares covered by
such Registration Statement and all other amendments and supplements
to such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such prospectus.
"Registrable Shares" means shares of Common Stock unless (i)
they have been effectively registered under Section 5 of the
Securities Act and disposed of pursuant to an effective Registration
Statement, (ii) such securities can be freely sold and transferred
without restriction under Rule 145 or any other restrictions under
the Securities Act or (iii) such securities have been transferred
pursuant to Rule 144 under
the Securities Act or any successor rule such that, after any such
transfer referred to in this clause (iii), such securities may be freely
transferred without restriction under the Securities Act.
"Registration" means registration under the Securities Act of
an offering of Registrable Shares pursuant to a Demand Registration or a
Piggyback Registration.
"Registration Period" shall have the meaning set forth in
Section 2(a) hereof.
"Registration Statement" means any registration statement of
Holdco under the Securities Act that covers any of the Registrable
Shares pursuant to the provisions of this Agreement, including the
related Prospectus, all amendments and supplements to such registration
statement, including pre- and post-effective amendments, all exhibits
thereto and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Shelf Registration" shall have the meaning set forth in
Section 2(b) hereof.
"SpinCo Party" has the meaning set forth in the LMC Agreement.
"SSSI Agreement" has the meaning set forth in the LMC
Agreement.
"underwritten registration or underwritten offering" means a
registration under the Securities Act pursuant to which securities of
Holdco are offered and sold by Holdco in a public offering through one
or more underwriters.
"Voting Holdco LMC Common Stock" shall mean the Series LMC
Common Stock of Holdco.
SECTION 2. Demand Registration. (a) (i) The Holders of not
less than a majority of the Registrable Shares then held by all Holders
shall have the right, during the period (the "Registration Period")
commencing on the date of this Agreement and ending as to each Holder on
the later of (x) the third anniversary of
the date of this Agreement and (y) if such Holder is an Affiliated
Holder, the date such Holder shall cease to be an Affiliated Holder, by
written notice (the "Demand Notice") given to Holdco, to request Holdco
to register under and in accordance with the provisions of the
Securities Act all or any portion of the Registrable Shares designated
by such Holders; provided, however, that the aggregate number of
Registrable Shares requested to be registered pursuant to any Demand
Notice and pursuant to any related Demand Notices received pursuant to
the following sentence shall be at least 4,000,000 or the remaining
Registrable Shares, if less. For purposes of this Agreement, a Holder
shall be deemed to hold as of any relevant date all Registrable Shares
issuable upon conversion of any Holdco LMC Common Stock then held by
such Holder. Upon receipt of any such Demand Notice, Holdco shall
promptly notify all other Holders of the receipt of such Demand Notice
and allow them the opportunity to include Registrable Shares held by
them in the proposed registration by submitting their own Demand Notice.
In connection with any Demand Registration in which more than one Holder
participates, in the event that such Demand Registration involves an
underwritten offering and the managing underwriter or underwriters
participating in such offering advise in writing the Holders of
Registrable Shares to be included in such offering that the total number
of Registrable Shares to be included in such offering exceeds the amount
that can be sold in (or during the time of) such offering without
delaying or jeopardizing the success of such offering (including the
price per share of the Registrable Shares to be sold), then the amount
of Registrable Shares to be offered for the account of such Holders
shall be reduced pro rata on the basis of the number of Registrable
Shares requested to be registered by each such Holder or on such other
basis as the Holders may agree. The Holders as a group shall be entitled
to three Demand Registrations pursuant to this Section 2(a)(i). Any
Demand Registration that does not become effective or is not maintained
for the period (whether or not continuous) specified in Section 2(c) (or
such shorter period as shall terminate when all the Registrable Shares
covered by such Demand Registration have been sold pursuant thereto)
shall not reduce the number of Demand Registrations available to the
Holders hereunder.
(ii) If, at any time during the Registration Period or
thereafter, a Prohibited Effect (as defined in the LMC Agreement) shall
occur which would give rise to an obligation of Holdco to compensate the
Liberty Parties or SpinCo Parties pursuant to Section 4.3 of the LMC
Agreement, any Holders that are Liberty Parties or SpinCo Parties shall
be immediately entitled to a Demand Registration, exercisable at any
time that such Prohibited Effect shall have occurred and be continuing,
whether or not a Demand Registration would then be available pursuant to
clause (i) of this Section 2(a).
(b) Holdco, within 45 days of the date on which Holdco
receives a Demand Notice given by Holders in accordance with Section
2(a) hereof, shall file with the SEC, and Holdco shall thereafter use
its best efforts to cause to be declared effective, a Registration
Statement on the appropriate form for the registration and sale, in
accordance with the intended method or methods of distribution, of the
total number of Registrable Shares specified by the Holders in such
Demand Notice, which may include a "shelf" registration (a "Shelf
Registration") pursuant to Rule 415 under the Securities Act (a "Demand
Registration").
(c) Holdco shall use commercially reasonable efforts to keep
each Registration Statement filed pursuant to this Section 2
continuously effective and usable for the resale of the Registrable
Shares covered thereby (i)(A) in the case of a Registration that is not
a Shelf Registration, for a period of 120 days from the date on which
the SEC declares such Registration Statement effective and (B) in the
case of a Shelf Registration, for a period of two years from the date on
which the SEC declares such Registration Statement effective (or such
shorter period of time as shall be applicable to such Shelf Registration
pursuant to the next two sentences) or (ii) until all the Registrable
Shares covered by such Registration Statement have been sold pursuant to
such Registration Statement, if earlier, in either case, as such period
may be extended pursuant to this Section 2. Notwithstanding clause
(i)(B) of the preceding sentence, if Holdco in good faith determines
that the number of Registrable Shares to be included in any Shelf
Registration would have a material adverse effect on the public market
price of Holdco's Common Stock, par value $.01 per share, Holdco may,
within 5 days after receipt of the Demand Notice relating thereto,
notify the Holders of such determination, stating the basis for such
determination. Upon receipt of any such notice, the Holders and Holdco
will discuss in good faith the basis for a mutually acceptable
compromise, which may include (1) a reduction in the period provided for
in clause (i)(B) of this Section 2(c), (2) a reduction in the number of
Registrable Shares included in such Shelf Registration, or (3) a
combination of the foregoing, as Holdco and Holders of a majority of the
Registrable Shares shall agree; provided, however, that if Holdco and
such Holders are unable to agree on such a mutually acceptable
compromise within 10 days after Holdco delivers such notice, the period
provided for in clause (i)(B) shall be reduced to 180 days; and provided
further that there shall be no reduction in the number of Registrable
Shares included in such Shelf Registration without the consent of the
Holders of a majority of the Registrable Shares.
(d) Holdco shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed by
Holdco pursuant to this Section 2, or suspend the use of any effective
Registration Statement under this Section 2, for a reasonable period of
time, but not in excess of 90 days (a "Delay
Period"), if any executive officer of Holdco determines in good
faith that in such executive officer's reasonable judgment the
registration and distribution of the Registrable Shares covered or
to be covered by such Registration Statement would materially
interfere with any pending financing, acquisition or corporate
reorganization or other corporate development involving Holdco or
any of its subsidiaries or would require premature disclosure
thereof and promptly gives the Holders written notice of such
determination, containing a general statement of the reasons for
such postponement and an approximation of the anticipated delay;
provided, however, that (i) the aggregate number of days included in
all Delay Periods and Hold Back Periods during any consecutive 12
months shall not exceed 180 days and (ii) a period of at least 60
days shall elapse between the termination of any Delay Period or
Hold Back Period and the commencement of the immediately succeeding
Delay Period or Hold Back Period. Holdco shall promptly notify the
Holders of the expiration of any Delay Period. If Holdco shall so
postpone the filing of a Registration Statement, the Holders of
Registrable Shares to be registered shall have the right to withdraw
the request for registration by giving written notice from the
Holders of a majority of the Registrable Shares that were to be
registered to Holdco within 45 days after receipt of the notice of
postponement or, if earlier, the termination of such Delay Period
(and, in the event of such withdrawal, such request shall not be
counted for purposes of determining the number of requests for
registration to which the Holders of Registrable Shares are entitled
pursuant to this Section 2). The time period for which Holdco is
required to maintain the effectiveness of any Registration Statement
shall be extended by the aggregate number of days of all Delay
Periods, all Hold Back Periods and all Interruption Periods
occurring during such Registration and such period and any extension
thereof is hereinafter referred to as the "Effectiveness Period".
(e) In the case of a proposed firm commitment underwritten
offering pursuant to a Demand Registration, Holdco may include other
Holdco securities in the related Registration Statement, if of the same
type as the Registrable Shares covered by such Registration Statement,
for the account of other security holders, if any, who have piggyback
registration rights with respect thereto, on the same terms and
conditions as the Registrable Shares. Holdco shall give the managing
underwriter or underwriters participating in such offering written
notice of its intent to include any such Holdco securities in such
Registration within 10 days of receipt of the initial Demand Notice
applicable to such Registration. Notwithstanding the foregoing, if the
managing underwriter or underwriters participating in such offering
conclude that the total amount of Holdco securities proposed to be
included in such Demand Registration exceeds the amount which can be
sold in (or during the time of) such offering without delaying or
jeopardizing the success of such offering (including the
price per share of the Registrable Shares to be sold), then the amount
of securities to be offered for the account of all holders other than
the Holders shall be reduced (to zero if necessary) to an amount
recommended by such managing underwriter or underwriters before any
reduction in the number of Registrable Shares proposed to be offered by
the Holders.
(f) Holders of a majority in number of the Registrable Shares
to be included in a Registration Statement pursuant to this Section 2
may, at any time prior to the effective date of the Registration
Statement relating to such Registration, revoke such request by
providing a written notice to Holdco revoking such request. The Holders
of Registrable Shares who revoke such request shall reimburse Holdco for
all its out-of-pocket expenses incurred in the preparation, filing and
processing of the Registration Statement; provided, however, that, if
such revocation was based on Holdco's failure to comply in any material
respect with its obligations hereunder or if such revocation results
from a material adverse change in the operating results, financial
condition or business of Holdco of which the Holders were not aware at
the time of delivery of a Demand Notice pursuant to Section 2(a), such
reimbursement shall not be required.
SECTION 3. Piggyback Registration. (a) Right to Piggyback. If
at any time during the Registration Period Holdco proposes to file a
registration statement under the Securities Act with respect to a public
offering of securities of the same type as the Registrable Shares
pursuant to a firm commitment underwritten offering solely for cash for
its own account (other than a registration statement (i) on Form S-8 or
any successor forms thereto, or (ii) filed solely in connection with a
dividend reinvestment plan or employee benefit plan covering officers or
directors of Holdco or its Affiliates), then Holdco shall give written
notice of such proposed filing to the Holders at least 15 days before
the anticipated filing date. Such notice shall offer the Holders the
opportunity to register such amount of Registrable Shares as they may
request (a "Piggyback Registration"). Subject to Section 3(b) hereof,
Holdco shall include in each such Piggyback Registration all Registrable
Shares with respect to which Holdco has received written requests for
inclusion therein within 10 days after notice has been given to the
Holders. Each Holder shall be permitted to withdraw all or any portion
of the Registrable Shares of such Holder from a Piggyback Registration
at any time prior to the effective date of such Piggyback Registration;
provided, however, that if such withdrawal occurs after the filing of
the Registration Statement with respect to such Piggyback Registration
and Holdco does not exercise its right to abandon the Registration
Statement under Section 3(c), the withdrawing Holders shall reimburse
Holdco for the portion of the SEC registration fee payable with respect
to the Registrable Shares so withdrawn and all other
registration expenses allocable to such Registrable Shares of the types
described in clauses (i), (ii) and (vii) of Section 6 hereof.
(b) Priority on Piggyback Registrations. Holdco shall permit
the Holders to include all such Registrable Shares on the same terms and
conditions as any similar securities, if any, of Holdco included
therein. Notwithstanding the foregoing, if Holdco or the managing
underwriter or underwriters participating in such offering advise the
Holders in writing that the total amount of securities requested to be
included in such Piggyback Registration exceeds the amount which can be
sold in (or during the time of) such offering without delaying or
jeopardizing the success of the offering (including the price per share
of the securities to be sold), then the amount of securities to be
offered for the account of the Holders and other holders of securities
who have piggyback registration rights with respect thereto shall be
reduced (to zero if necessary) pro rata on the basis of the number of
common stock equivalents requested to be registered by each such Holder
or holder participating in such offering.
(c) Right To Abandon. Nothing in this Section 3 shall create
any liability on the part of Holdco to the Holders if Holdco in its sole
discretion should decide not to file a registration statement proposed
to be filed pursuant to Section 3(a) hereof or to withdraw such
registration statement subsequent to its filing, regardless of any
action whatsoever that a Holder may have taken, whether as a result of
the issuance by Holdco of any notice hereunder or otherwise.
SECTION 4. Holdback Agreement. If (i) during the Effectiveness
Period, Holdco shall file a registration statement (other than in
connection with the registration of securities issuable pursuant to an
employee stock option, stock purchase or similar plan or pursuant to a
merger, exchange offer or a transaction of the type specified in Rule
145(a) under the Securities Act) with respect to an issuance by Holdco
of Common Stock or similar securities or securities convertible into, or
exchangeable or exercisable for, such securities and (ii) with
reasonable prior notice, Holdco (in the case of a non-underwritten
public offering by Holdco pursuant to such registration statement)
advises the Holders in writing that a public sale or distribution of
such Registrable Shares would materially adversely affect such offering
or the managing underwriter or underwriters (in the case of an
underwritten public offering by Holdco pursuant to such registration
statement) advises Holdco in writing (in which case Holdco shall notify
the Holders) that a public sale or distribution of Registrable Shares
would materially adversely impact such offering, then each Holder shall,
to the extent not inconsistent with applicable law, refrain from
effecting any public sale or distribution of Registrable Shares pursuant
to any then effective Shelf Registration during the ten days prior to,
and during the 90-day period beginning on,
the effective date of such registration statement or such shorter period
as may be requested by such underwriters (each such period, a "Hold Back
Period"), and any public sale by a Holder of Registrable Shares during
such Hold Back Period shall be made in accordance with the volume
limitations set forth in Rule 144(e) under the Securities Act
(determined without regard for Rule 144(k)). Notwithstanding the
foregoing, a Holder shall not be obligated to refrain from effecting an
underwritten public offering of Registrable Shares during a Hold Back
period if, at least five Business Days prior to receiving the notice
from Holdco contemplated by clause (ii) above, the Holder shall have
notified Holdco of its current intention to effect an underwritten
public offering of Registrable Shares (with a view to consummating such
an offering within 45 days after the date of such notice) pursuant to a
then effective Shelf Registration during such Hold Back Period.
SECTION 5. Registration Procedures. In connection with the
registration obligations of Holdco pursuant to and in accordance with
Sections 2 and 3 hereof (and subject to Sections 2 and 3 hereof), Holdco
shall use commercially reasonable efforts to effect such registration to
permit the sale of such Registrable Shares in accordance with the
intended method or methods of disposition thereof, and pursuant thereto
Holdco shall as expeditiously as possible (but subject to Sections 2 and
3 hereof):
(a) prepare and file with the SEC a Registration Statement for
the sale of the Registrable Shares on any form for which Holdco
then qualifies and which counsel for Holdco shall deem appropriate
in accordance with the intended method or methods of distribution
specified by the Holders thereof, and, subject to Holdco's right to
terminate or abandon a Piggyback Registration pursuant to Section
3(c) hereof, use commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective as
provided herein;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) to such Registration Statement, and such
supplements to the related Prospectus, as may be required by the
rules, regulations or instructions applicable to such Registration
Statement under the Securities Act during the applicable period in
accordance with the intended methods of disposition specified by
the Holders of the Registrable Shares covered by such Registration
Statement, make generally available earnings statements satisfying
the provisions of Section 11(a) of the Securities Act (provided
that Holdco shall be deemed to have complied with this clause if it
has complied with Rule 158 under the Securities Act), and cause the
related Prospectus as so supplemented to be filed pursuant to Rule
424 under the Securities Act;
provided, however, that before filing a Registration Statement or
Prospectus, or any amendments or supplements thereto (other than
reports required to be filed by it under the Exchange Act), Holdco
shall furnish to the Holders of Registrable Shares covered by such
Registration Statement and their counsel for review and comment,
copies of all documents required to be filed;
(c) notify the Holders of any Registrable Shares covered by
such Registration Statement promptly and (if requested) confirm
such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to such Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request
by the SEC for amendments or supplements to such Registration
Statement or the related Prospectus or for additional information
regarding such Holders, (iii) of the issuance by the SEC of any
stop order suspending the effectiveness of such Registration
Statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by Holdco of any notification with respect to
the suspension of the qualification or exemption from qualification
of any of the Registrable Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose,
and (v) of the happening of any event that requires the making of
any changes in such Registration Statement, Prospectus or documents
incorporated or deemed to be incorporated therein by reference so
that they will 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;
(d) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such
Registration Statement, or the lifting of any suspension of the
qualification or exemption from qualification of any Registrable
Shares for sale in any jurisdiction in the United States;
(e) furnish to the Holder of any Registrable Shares covered by
such Registration Statement, each counsel for such Holders and each
managing underwriter, if any, without charge, one conformed copy of
such Registration Statement, as declared effective by the SEC, and
of each post-effective amendment thereto, in each case including
financial statements and schedules and all exhibits and reports
incorporated or deemed to be incorporated therein by reference; and
deliver, without charge, such number of copies of the preliminary
prospectus, any amended preliminary prospectus, each final
Prospectus and any post-effective amendment or supplement thereto,
as such Holder may reasonably request in order to facilitate the
disposition of the
Registrable Shares of such Holder covered by such Registration
Statement in conformity with the requirements of the Securities
Act;
(f) prior to any public offering of Registrable Shares
covered by such Registration Statement, use commercially
reasonable efforts to register or qualify such Registrable
Shares for offer and sale under the securities or Blue Sky laws
of such jurisdictions as the Holders of such Registrable Shares
shall reasonably request in writing; provided, however, that
Holdco shall in no event be required to qualify generally to do
business as a foreign corporation or as a dealer in any
jurisdiction where it is not at the time so qualified or to
execute or file a general consent to service of process in any
such jurisdiction where it has not theretofore done so or to
take any action that would subject it to general service of
process or taxation in any such jurisdiction where it is not
then subject;
(g) upon the occurrence of any event contemplated by
paragraph 5(c)(v) above, prepare a supplement or post-effective
amendment to such Registration Statement or the related
Prospectus or any document incorporated or deemed to be
incorporated therein by reference and file any other required
document so that, as thereafter delivered to the purchasers of
the Registrable Shares being sold thereunder (including upon
the termination of any Delay Period), such Prospectus will not
contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading;
(h) use commercially reasonable efforts to cause all
Registrable Shares covered by such Registration Statement to be
listed on each securities exchange or automated interdealer
quotation system, if any, on which similar securities issued by
Holdco are then listed or quoted;
(i) on or before the effective date of such Registration
Statement, provide the transfer agent of Holdco for the
Registrable Shares with printed certificates for the
Registrable Shares covered by such Registration Statement,
which are in a form eligible for deposit with The Depository
Trust Company;
(j) if such offering is an underwritten offering, make
available for inspection by any Holder of Registrable Shares
included in such Registration Statement, any underwriter
participating in any offering pursuant to such Registration
Statement, and any attorney, accountant or other agent retained
by any such Holder or underwriter (collectively, the
"Inspectors"), all financial
and other records and other information, pertinent corporate
documents and properties of any of Holdco and its subsidiaries
and affiliates (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due
diligence responsibilities; provided, however, that the Records
that Holdco determines, in good faith, to be confidential and
which it notifies the Inspectors in writing are confidential
shall not be disclosed to any Inspector unless such Inspector
signs a confidentiality agreement reasonably satisfactory to
Holdco (which shall permit the disclosure of such Records in
such Registration Statement or the related Prospectus if
necessary to avoid or correct a material misstatement in or
material omission from such Registration Statement or
Prospectus) or either (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in
such Registration Statement or (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction; provided further, however, that (A)
any decision regarding the disclosure of information pursuant
to subclause (i) shall be made only after consultation with
counsel for the applicable Inspectors and Holdco and (B) with
respect to any release of Records pursuant to subclause (ii),
each Holder of Registrable Shares agrees that it shall,
promptly after learning that disclosure of such Records is
sought in a court having jurisdiction, give notice to Holdco so
that Holdco, at Holdco's expense, may undertake appropriate
action to prevent disclosure of such Records; and
(k) if such offering is an underwritten offering, enter
into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten
offerings) and take all such other appropriate and reasonable
actions requested by the Holders of a majority of the
Registrable Shares being sold in connection therewith (including
those reasonably requested by the managing underwriters) in
order to expedite or facilitate the disposition of such
Registrable Shares, and in such connection, (i) use commercially
reasonable efforts to obtain opinions of counsel to Holdco and
updated thereof (which counsel and opinion (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters and counsel to the Holders of the Registrable
Shares being sold), addressed to each selling Holder of
Registrable Shares covered by such Registration Statement and
each of the underwriters as to the matters customarily covered
in opinions and requested in underwritten offerings and such
other matters as may be reasonably requested by such counsel and
underwriters, (ii) use commercially reasonable efforts to obtain
"cold comfort" letters and updates thereof from the independent
certified public accounts of Holdco (and, if necessary, any
other independent certified public accountants of any subsidiary
of Holdco or
of any business acquired by Holdco for which financial statements
and financial data are, or are required to be, included in the
Registration Statment), addressed to each selling Holder of
Registrable Shares covered by the Registration Statment (unless
such accountants shall be prohibited from so addressing such
letters by applicable standards of the accounting profession in
which case such letters shall be addressed to the extent
permissible in a manner permitting such Holder to rely thereon) and
each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings, (iii) if
requested and if an underwriting agreement is entered into, provide
indemnification provisions and procedures substantially to the
effect set forth in Section 8 hereto with respect to all parties to
be indemnified pursuant to said Section. The above shall be done at
each closing under such underwriting or similar agreement, or as to
the extent required thereunder.
Holdco may request in writing each Holder of Registrable
Shares covered by a Registration Statement to furnish such information
regarding such Holder and such Holder's intended method of disposition
of such Registrable Shares as is required by the form of such
Registration Statement, applicable law or the SEC. If any such
information is not furnished within a reasonable period of time after
receipt of such request, Holdco may exclude such Holder's Registrable
Shares from such Registration Statement.
Each Holder of Registrable Shares covered by a Registration
Statement agrees that, upon receipt of any notice from Holdco of the
happening of any event of the kind described in Section 5(c)(ii),
5(c)(iii), 5(c)(iv) or 5(c)(v) hereof, that such Holder shall forthwith
discontinue disposition of any Registrable Shares covered by such
Registration Statement or the related Prospectus until receipt of the
copies of the supplemented or amended Prospectus contemplated by Section
5(g) hereof, or until such Holder is advised in writing (the "Advice")
by Holdco that the use of the applicable Prospectus may be resumed, and
has received copies of any amended or supplemented Prospectus or any
additional or supplemental filings which are incorporated, or deemed to
be incorporated, by reference in such Prospectus (such period during
which disposition is discontinued being an "Interruption Period") and,
if requested by Holdco, the Holder shall deliver to Holdco (at the
expense of Holdco) all copies then in its possession, other than
permanent file copies then in such holder's possession, of the
Prospectus covering such Registrable Shares at the time of receipt of
such request.
Each Holder of Registrable Shares covered by a Registration
Statement further agrees not to utilize any material other than the
applicable current preliminary prospectus or Prospectus in connection
with the offering of such Registrable Shares.
SECTION 6. Registration Expenses. Whether or not any
Registration Statement is filed or becomes effective, Holdco shall
pay all costs, fees and expenses incident to Holdco's performance of
or compliance with this Agreement, including (i) all registration and
filing fees, including NASD filing fees and any applicable stock
exchange or interdealer quotation system listing fees, (ii) all fees
and expenses of compliance with securities or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection
therewith, (iii) printing and photocopying expenses (including
expenses of printing certificates for Registrable Shares and of
printing prospectuses if the printing of prospectuses is requested by
the Holders or the managing underwriter, if any), (iv) messenger,
telephone and delivery expenses, (v) fees and disbursements of
counsel for Holdco, (vi) fees and disbursements of all independent
certified public accountants of Holdco (including expenses of any
"cold comfort" letters required in connection with this Agreement)
and all other persons retained by Holdco in connection with such
Registration Statement, (vii) fees and disbursements of one counsel,
other than Holdco's counsel, selected by Holders of a majority of the
Registrable Shares being registered, to represent all such Holders,
(viii) fees and disbursements of underwriters customarily paid by the
issuers or sellers of securities and (ix) all other costs, fees and
expenses incident to Holdco's performance or compliance with this
Agreement. Notwithstanding the foregoing, the fees and expenses of
any persons retained by any Holder, other than one counsel for all
such Holders, and any discounts, commissions or brokers' fees or fees
of similar securities industry professionals and any transfer taxes
relating to the disposition of the Registrable Shares by a Holder,
will be payable by such Holder and Holdco will have no obligation to
pay any such amounts.
SECTION 7. Underwriting Requirements. (a) Subject to
Section 7(b) hereof, any Holder shall have the right, by written
notice, to request that any Demand Registration provide for an
underwritten offering.
(b) In the case of any underwritten offering pursuant to a
Demand Registration, the Holders of a majority of the Registrable
Shares to be disposed of in connection therewith shall select the
institution or institutions that shall manage or lead such offering,
which institution or institutions shall be reasonably satisfactory to
Holdco. In the case of any underwritten offering pursuant to a
Piggyback Registration, Holdco shall select the institution or
institutions that shall manage or lead such offering. No Holder shall
be entitled to participate in an underwritten offering unless and
until such Holder has entered into an underwriting or other
agreement with such institution or institutions for such offering in
such form as Holdco, the Holders of a majority of the Registrable
Shares included in any Demand Registration and such institution or
institutions shall mutually determine.
SECTION 8. Indemnification. (a) Indemnification by Holdco.
Holdco shall, without limitation as to time, indemnify and hold
harmless, to the full extent permitted by law, each Holder of
Registrable Shares whose Registrable Shares are covered by a
Registration Statement or Prospectus, the officers, directors and
agents and employees of each of them, each Person who controls each
such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of each such controlling person, to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, judgment, costs (including, without limitation, costs of
preparation and reasonable attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or based upon
any untrue or alleged untrue statement of a material fact contained
in such Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are based upon
information furnished in writing to Holdco by or on behalf of such
Holder expressly for use therein; provided, however, that Holdco
shall not be liable to any such Holder to the extent that any such
Losses arise out of or are based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any
preliminary prospectus if (i) having previously been furnished by or
on behalf of Holdco with copies of the Prospectus, such Holder failed
to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registrable Shares by
such Holder to the person asserting the claim from which such Losses
arise and (ii) the Prospectus would have corrected in all material
respects such untrue statement or alleged untrue statement or such
omission or alleged omission; and provided further, however, that
Holdco shall not be liable in any such case to the extent that any
such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the
Prospectus, if (x) such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in all material respects in
an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of Holdco with copies of
the Prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such Prospectus as so amended or supplemented, prior
to or concurrently with the sale of Registrable Shares.
(b) Indemnification by Holder of Registrable Shares. In
connection with any Registration Statement in which a Holder is
participating, such Holder shall
indemnify, to the full extent permitted by law, Holdco, its
directors, officers, agents or employees, each Person who controls
Holdco (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) and the directors, officers, agents
or employees of such controlling Persons, from and against all Losses
arising out of or based upon any untrue or alleged untrue statement
of a material fact contained in such Registration Statement or the
related Prospectus or any amendment or supplement thereto, or any
preliminary prospectus, or arising out of or based upon any omission
or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue or alleged untrue
statement or omission or alleged omission is based upon any
information furnished in writing by or on behalf of such Holder to
Holdco expressly for use in such Registration Statement or
Prospectus; provided, however, that such Holder shall not be liable
in any such case (i) to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
any Prospectus used by any person (other than such Holder or an
Affiliate of such Holder) after such time as such Holder advised
Holdco of the need for a correction thereof or (ii) in an amount that
exceeds the net proceeds received by such Holder from the sale of
Registrable Shares pursuant to such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Person
shall be entitled to indemnity hereunder (an "indemnified party"),
such indemnified party shall give prompt notice to the party from
which such indemnity is sought (the "indemnifying party") of any
claim or of the commencement of any proceeding with respect to which
such indemnified party seeks indemnification or contribution pursuant
hereto; provided, however, that the delay or failure to so notify the
indemnifying party shall not relieve the indemnifying party from any
obligation or liability except to the extent that the indemnifying
party has been prejudiced by such delay or failure. The indemnifying
party shall have the right, exercisable by giving written notice to
an indemnified party promptly after the receipt of written notice
from such indemnified party of such claim or proceeding, to assume,
at the indemnifying party's expense, the defense of any such claim or
proceeding, with counsel reasonably satisfactory to such indemnified
party; provided, however, that (i) an indemnified party shall have
the right to employ separate counsel in any such claim or proceeding
and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such indemnified party
unless: (1) the indemnifying party agrees to pay such fees and
expenses; (2) the indemnifying party fails promptly to assume the
defense of such claim or proceeding or fails to employ counsel
reasonably satisfactory to such indemnified party; or (3) the named
parties to any proceeding (including impleaded parties) include both
such indemnified party and the indemnifying party, and such
indemnified party shall have been advised by counsel that there may
be one or more legal defenses available to it
that are inconsistent with those available to the indemnifying party
or that a conflict of interest is likely to exist among such
indemnified party and any other indemnified parties (in which case
the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party); and (ii) subject
to clause (3) above, the indemnifying party shall not, in connection
with any one such claim or proceeding or separate but substantially
similar or related claims or proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one firm of attorneys
(together with appropriate local counsel) at any time for all of the
indemnified parties, or for fees and expenses that are not
reasonable. Whether or not such defense is assumed by the
indemnifying party, such indemnified party shall not be subject to
any liability for any settlement made without its consent. The
indemnifying party shall not consent to entry of any judgment or
enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance reasonably
satisfactory to the indemnified party, from all liability in respect
of such claim or litigation for which such indemnified party would be
entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in
this Section 8 is unavailable to an indemnified party in respect of
any Losses (other than in accordance with its terms), then each
applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other
hand, in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party, on the
one hand, and indemnified party, on the other hand, shall be
determined by reference to, among other things, whether any action in
question, including any untrue statement of a material fact or
omission or alleged omission to state a material fact, has been taken
by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party
as a result of any Losses shall be deemed to include any legal or
other fees or expenses incurred by such party in connection with any
investigation or proceeding. The parties hereto agree that it would
not be just and equitable if contributions pursuant to this Section
8(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in this Section 8(d). Notwithstanding the provision of
this Section 8(d), an indemnifying party that is a Holder shall not
be required to contribute any amount which is in excess of the amount
by which the total
proceeds received by such Holder from the sale of the Registrable Shares
sold by such Holder (net of all underwriting discounts and commissions)
exceeds the amount of any damages that such indemnifying party has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. 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.
SECTION 9. Miscellaneous. (a) Termination. This Agreement and
the obligations of Holdco and the Holders hereunder (other than Section
8 hereof) shall terminate on the first date on which no Registrable
Shares remain outstanding.
(a) Notices. All notices or communications hereunder shall be
in writing (including telecopy or similar writing), addressed as
follows:
If to Holdco, to it at:
75 Rockefeller Plaza
New York, New York 10019
Telecopier no.: (212) 956-7281
Attention: General Counsel
With a copy (which shall not constitute notice) to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Richard Hall, Esq.
Telecopier no.: (212) 474-3700
If to a Holder, to it at:
c/o Liberty Media Corporation
8101 East Prentice Avenue
Suite 500
Englewood, Colorado 80111
Telecopier No. (303) 721-5415
Attention: President
With a copy (which shall not constitute notice) to
each of:
Steve M. Brett, Esq.
General Counsel
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, CO 80111-3000
Telecopier No.: (303) 488-3245
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022-6030
Attention: Elizabeth Markowski, Esq.
Telecopier no.: (212) 705-5125
Any such notice or communication shall be deemed given (i)
when made, if made by hand delivery, (ii) upon transmission, if sent
by confirmed telecopier, (iii) one business day after being deposited
with a next-day courier, postage prepaid, or (iv) three business days
after being sent certified or registered mail, return receipt
requested, postage prepaid, in each case addressed as above (or to
such other address or to such other telecopier number as such party
may designate in writing from time to time).
(c) Separability. If any provision of this Agreement shall
be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining
provisions hereof which shall remain in full force and effect.
(d) Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
heirs, devisees, legatees, legal representatives, successors and
assigns.
(e) Entire Agreement. This Agreement, the Merger Agreement,
the LMC Agreement and the agreements referred to herein and therein
together represent the entire agreement of the parties with respect
to the subject matter hereof and supersede any and all prior
contracts, arrangements or understandings between the parties hereto
with respect to such subject matter.
(f) 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 Holdco has obtained the
written consent of Holders of at least a majority in number of the
Registrable Shares then outstanding.
(g) Publicity. No public release or announcement concerning
the transactions contemplated hereby shall be issued by any party
without the prior consent of the other parties, except to the extent
that such party is advised by counsel that such release or
announcement is necessary or advisable under applicable law or the
rules or regulations of any securities exchange, in which case the
party required to make the release or announcement shall to the
extent practicable provide the other party with an opportunity to
review and comment on such release or announcement in advance of its
issuance.
(h) Expenses. Whether or not the transactions contemplated
hereby are consummated, except as otherwise provided herein, all
costs and expenses
incurred in connection with the execution of this Agreement shall be
paid by the party incurring such costs or expenses, except as
otherwise set forth herein.
(i) Interpretation. The headings of the articles and
sections contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not
affect the meaning or interpretation of this Agreement. The
definitions in Section 1 and elsewhere in this Agreement shall apply
equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The words "herein", "hereof" and
"hereunder" and words of similar import refer to this Agreement in
its entirety and not to any part hereof unless the context shall
otherwise require. All references herein to Sections shall be deemed
references to Sections of this Agreement unless the context shall
otherwise require. Unless otherwise expressly provided herein or
unless the context shall otherwise require, any references as of any
time to any agreement (including this Agreement) or other contract,
instrument or document or to any statute or regulation or any
specific section or other provision thereof are to it as amended and
supplemented through such time (and, in the case of a statute or
regulation or specific section or other provision thereof, to any
successor of such statute, regulation, section or other provision).
Unless otherwise expressly provided herein or unless the context
shall otherwise require, any provision of this Agreement using a
defined term (by way of example and without limitation, such as
"Affiliate") which is based on a specified characteristic,
qualification, feature, relationship or status shall, as of any time,
refer only to such Persons who have the specified characteristic,
qualification, feature, relationship or status as of that particular
time.
(j) Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be one and the same agreement,
and shall become effective when counterparts have been signed by each
of the parties and delivered to each other party.
(k) Governing Law. This Agreement shall be construed,
interpreted, and governed in accordance with the internal laws of New
York.
(l) Calculation of Time Periods. Except as otherwise
indicated, all periods of time referred to herein shall include all
Saturdays, Sundays and holidays; provided, however, that if the date
to perform the act or give any notice with respect to this Agreement
shall fall on a day other than a Business Day, such act or notice
may be timely performed or given if performed or given on the next
succeeding Business Day.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first written above.
TW INC.
By:
Name:
Title:
LIBERTY MEDIA CORPORATION
By:
Name:
Title:
TCI TURNER PREFERRED, INC.
By:
Name:
Title:
LIBERTY BROADCASTING, INC.
By:
Name:
Title:
COMMUNICATION CAPITAL CORP.
By:
Name:
Title:
SOUTHERN SATELLITE SYSTEMS,
INC.
By:
Name:
Title: