EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT, dated as of
October 10, 1996, among TW INC. (to be renamed TIME
WARNER INC.), a Delaware corporation (the "Company"),
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 (the "Amended and Restated
Merger Agreement"), among Time Warner Inc., a Delaware corporation ("Parent"),
the Company, Time Warner Acquisition Corp., a Delaware corporation and a direct
wholly owned subsidiary of the Company, TW Acquisition Corp., a Georgia
corporation and a direct wholly owned subsidiary of the Company, and ▇▇▇▇▇▇
Broadcasting System, Inc., a Georgia corporation, each initial Holder will
receive shares of Common Stock (as defined below); and
WHEREAS, in order to induce the initial Holders to execute and
deliver to the Company the letters contemplated by Section 5.11 of the Amended
and Restated Merger Agreement, the Company has agreed to provide each Holder
with the registration rights set forth in this 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.
2
"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.
"Amended and Restated Merger Agreement" shall have the meaning
set forth in the introductory clauses hereof.
"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 $0.01 per
share, of the Company issued to any Holder named on the signature pages hereof
or any other shares of capital stock or other securities of the Company into
which such shares of Common Stock shall be reclassified or changed, including,
by reason of a merger, consolidation, reorganization or recapitalization. If the
Common Stock has been so reclassified or changed, or if the Company 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
3
of Common Stock outstanding immediately prior to such change, reclassification,
exchange, dividend, distribution, subdivision or combination would be entitled.
"Company" shall have the meaning set forth in the introductory
clauses hereof.
"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.
"Hold Back Period" shall have the meaning set forth in Section
4 hereof.
"Holder" means a person who owns 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 or (C) upon the disability
of any Holder, any guardian or conservator of such Holder.
4
"Interruption Period" shall have the meaning set forth in
Section 5 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.
5
"Registration Period" shall have the meaning set forth in
Section 2(a) hereof.
"Registration Statement" means any registration statement
under the Securities Act of the Company 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.
"underwritten registration or underwritten offering" means a
registration under the Securities Act in which securities of the Company are
sold to an underwriter for reoffering to the public.
SECTION 2. Demand Registration. (a) The Holders shall have the
right, during the period (the "Registration Period") commencing on the date of
this Agreement and ending on the third anniversary of the date of this
Agreement, by written notice (the "Demand Notice") given to the Company, to
request the Company 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
6
related Demand Notices received pursuant to the following sentence shall be at
least 5,000,000. Upon receipt of any such Demand Notice, the Company 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 to be registered by each such Holder. The
Holders as a group shall be entitled to three Demand Registrations pursuant to
this Section 2 unless any Demand Registration does not become effective or is
not maintained for a period (whether or not continuous) of at least 120 days (or
such shorter period as shall terminate when all the Registrable Shares covered
by such Demand Registration have been sold pursuant thereto), in which case the
Holders will be entitled to an additional Demand Registration pursuant hereto.
(b) The Company, within 45 days of the date on which the
Company receives a Demand Notice given by Holders in accordance with Section
2(a) hereof, shall file with the SEC, and the Company 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
7
include a "shelf" registration (a "Shelf Registration") pursuant to Rule 415
under the Securities Act (a "Demand Registration").
(c) The Company 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) 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 (ii) in the case of a Shelf Registration, for a period of 180 days
from the date on which the SEC declares such Registration Statement effective,
in either case (x) until all the Registrable Shares covered by such Registration
Statement have been sold pursuant to such Registration Statement), and (y) as
such period may be extended pursuant to this Section 2.
(d) The Company shall be entitled to postpone the filing of
any Registration Statement otherwise required to be prepared and filed by the
Company 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 the
Company determines that in such executive officer's reasonable judgment and good
faith the registration and distribution of the Registrable Shares covered or to
be covered by such Registration Statement would materially interfere with any
pending material financing, acquisition or corporate reorganization or other
material corporate development involving the Company 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 period of the
anticipated delay; provided, however, that (i) the aggregate number of days
included in all Delay Periods during any consecutive 12 months shall not exceed
the aggregate of (x) 180 days minus (y) the number of days
8
occurring during all Hold Back Periods and Interruption Periods during such
consecutive 12 months and (ii) a period of at least 60 days shall elapse between
the termination of any Delay Period, Hold Back Period or Interruption Period and
the commencement of the immediately succeeding Delay Period. If the Company
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 the Company 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 the Company 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". The Company
shall not be entitled to initiate a Delay Period unless it shall (A) to the
extent permitted by agreements with other security holders of the Company,
concurrently prohibit sales by such other security holders under registration
statements covering securities held by such other security holders and (B) in
accordance with the Company's policies from time to time in effect, forbid
purchases and sales in the open market by senior executives of the Company.
(e) Except to the extent required by agreements with other
security holders of the Company or Parent entered into prior to September 22,
1995, the Company shall not include any securities that are not Registrable
Shares in any Registration Statement filed pursuant to this Section 2 without
the prior written consent of the Holders of a
9
majority in number of the Registrable Shares covered by such Registration
Statement.
(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 the
Company revoking such request. The Holders of Registrable Shares who revoke such
request shall reimburse the Company 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 the Company's failure
to comply in any material respect with its obligations hereunder, such
reimbursement shall not be required.
SECTION 3. Piggyback Registration. (a) Right To Piggyback. If
at any time during the Registration Period the Company 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 the Company or its Affiliates) or
for the account of any holder of securities of the same type as the Registrable
Shares (to the extent that the Company has the right to include Registrable
Shares in any registration statement to be filed by the Company on behalf of
such holder), then the Company 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, the Company shall include in each such Piggyback Registration all
Registrable Shares with respect
10
to which the Company 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, the withdrawing Holders shall reimburse the Company for the
portion of the registration expenses payable with respect to the Registrable
Shares so withdrawn.
(b) Priority on Piggyback Registrations. The Company shall
permit the Holders to include all such Registrable Shares on the same terms and
conditions as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company 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 the Company to the Holders if the Company 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,
11
whether as a result of the issuance by the Company of any notice hereunder or
otherwise.
SECTION 4. Holdback Agreement. If (i) during the Effectiveness
Period, the Company 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 the Common Stock or similar securities or securities
convertible into, or exchangeable or exercisable for, such securities and (ii)
with reasonable prior notice, the Company (in the case of a nonunderwritten
public offering by the Company 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
the Company pursuant to such registration statement) advises the Company in
writing (in which case the Company 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 during the 10 days prior to the effective date of such registration
statement and until the earliest of (A) the abandonment of such offering, (B) 90
days from the effective date of such registration statement and (C) if such
offering is an underwritten offering, the termination in whole or in part of any
"hold back" period obtained by the underwriter or underwriters in such offering
from the Company in connection therewith (each such period, a "Hold Back
Period").
SECTION 5. Registration Procedures. In connection with the
registration obligations of the Company pursuant to and in accordance with
Sections 2 and 3 hereof (and subject to Sections 2 and 3 hereof), the Company
shall
12
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 the Company 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 the Company
then qualifies or which counsel for the Company shall deem appropriate
in accordance with such Holders' intended method or methods of
distribution thereof, subject to Section 2(b) hereof, and, subject to
the Company's right to terminate or abandon a 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 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 the Company 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), the Company shall furnish to the Holders of
Registrable Shares
13
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 the Company 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;
14
(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 the Company 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
15
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 the Company are then
listed or quoted;
(i) on or before the effective date of such Registration
Statement, provide the transfer agent of the Company 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 the Company 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 the Company determines,
16
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 the Company (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 the Company 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 the Company so that the Company, at the
Company'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 the Company and updates thereof (which
counsel and opinions (in form, scope and substance)
17
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 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 accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each selling holder of
Registrable Shares covered by the Registration Statement (unless such
accountants shall be prohibited from so addressing such letters by
applicable standards of the accounting profession) 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 hereof
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 and to the extent required thereunder.
The Company may require 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 it may from time to time reasonably request in writing. If any such
information is not furnished within a reasonable period
18
of time after receipt of such request, the Company 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 the Company 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 the Company 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 the Company, the Holder shall deliver to the
Company (at the expense of the Company) 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, the Company shall pay all
costs, fees and expenses incident to the Company's performance of or compliance
with this Agreement, including (i) all registration and filing fees, including
NASD filing fees, (ii) all fees and expenses of
19
compliance with securities or Blue Sky laws, including reasonable fees and
disbursements of counsel in connection therewith, (iii) printing 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 the Company, (vi)
fees and disbursements of all independent certified public accountants of the
Company (including expenses of any "cold comfort" letters required in connection
with this Agreement) and all other persons retained by the Company in connection
with such Registration Statement, (vii) fees and disbursements of one counsel,
other than the Company'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 the Company'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 the Company 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
20
institutions shall be reasonably satisfactory to the Company. In the case of any
underwritten offering pursuant to a Piggyback Registration, the Company 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 the Company
and such institution or institutions shall determine.
SECTION 8. Indemnification. (a) Indemnification by the
Company. The Company 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
the Company by or on behalf of such Holder expressly for use therein; provided,
however, that the Company 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
21
preliminary prospectus if (i) having previously been furnished by or on behalf
of the Company 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 the Company 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 the Company 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 furnish to the Company in writing such information as the
Company reasonably requests for use in connection with such Registration
Statement or the related Prospectus and agrees to indemnify, to the full extent
permitted by law, the Company, its directors, officers, agents or employees,
each Person who controls the Company (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
22
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 so furnished in writing by or on behalf
of such Holder to the Company expressly for use in such Registration Statement
or Prospectus.
(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
23
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
24
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 contribution 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 the immediately
preceding paragraph. 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 the Company and the Holders hereunder (other than Section 8
hereof) shall terminate on the first date on which no Registrable Shares remain
outstanding.
25
(b) Notices. All notices or communications hereunder shall be
in writing (including telecopy or similar writing), addressed as follows:
To the Company:
Time Warner Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To the Holders:
R.E. ▇▇▇▇▇▇
In care of ▇▇▇▇▇▇ Broadcasting System, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
For Courier delivery
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
26
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
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 represents the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the parties hereto with respect to the
subject matter hereof.
(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
27
to departures from the provisions hereof may not be given, unless the Company
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 contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(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.
28
(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 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
/s/ R. E. ▇▇▇▇▇▇
---------------------------------
R. E. ▇▇▇▇▇▇
▇▇▇▇▇▇ OUTDOOR, INC.,
by /s/ R. E. ▇▇▇▇▇▇
------------------------------
Name: R. E. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ FOUNDATION, INC.,
by /s/ R. E. ▇▇▇▇▇▇
------------------------------
Name: R. E. ▇▇▇▇▇▇
Title: President
29
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CHARITABLE
REMAINDER UNITRUST NO. 2,
by /s/ R. E. ▇▇▇▇▇▇
------------------------------
Name: R. E. ▇▇▇▇▇▇
Title: Trustee
▇▇▇▇▇▇ PARTNERS, L.P.,
by /s/ R. E. ▇▇▇▇▇▇
------------------------------
Name: R. E. ▇▇▇▇▇▇
Title: General Partner