Execution Copy
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is entered into as
of March 4, 1998, by and among Cablevision Systems Corporation, a Delaware
corporation (including any successor pursuant to this Agreement, the
"Parent"), Tele-Communications, Inc., a Delaware corporation (including any
successor pursuant to this Agreement, the "Company"), and the Class B
Entities (as defined below).
WHEREAS, Parent, TCI Communications, Inc. and the Company have
entered into an Amended and Restated Contribution and Merger Agreement dated
as of June 6, 1997 (the "Merger Agreement") providing for, among other
things, the Contribution and the Merger;
WHEREAS, the respective boards of directors of each of Parent and
the Company have approved this Agreement;
WHEREAS, upon consummation of the Transactions pursuant to the
Merger Agreement, the Company and the Class B Entities will Beneficially Own
(as defined below) Shares (as defined below) and the Class B Entities will
Beneficially Own in the aggregate Shares constituting a majority of the Total
Voting Power (as defined below);
WHEREAS, the execution and delivery of this Agreement by the
parties hereto is a condition to the consummation of the Contribution
Closing; and
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements as provided in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. CERTAIN DEFINITIONS. (a) Capitalized terms that are used but
not otherwise defined herein shall have the meanings given to them in the
Merger Agreement.
(b) For the purposes of this Agreement, the following terms shall
have the following meanings:
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"Affiliate" and "Associate" when used with reference to any Person
shall have the meanings assigned to such terms in Rule 12b-2 of the Exchange
Act as in effect of the date hereof; PROVIDED, that Parent and its
Subsidiaries and the officers and directors of Parent and its Subsidiaries
who are not Investor Directors and who are not directors or officers of the
Company or any of its Subsidiaries shall not, solely as a result of holding
such office of Parent or any of its Subsidiaries, be deemed Affiliates or
Associates of any Investor for purposes of this Agreement.
"Acquisition Transaction" shall mean (i) any merger or other
business combination or reorganization transaction involving Parent or any of
its Subsidiaries or (ii) any transaction involving the acquisition of capital
stock or assets or assumption of liabilities of any Person by Parent or any
of its Subsidiaries the fair market value of which exceeds $5 million in the
aggregate and which is not made in the ordinary course of business.
"Annualized Operating Cash Flow" shall mean, as of any date, an
amount equal to Operating Cash Flow for the period of three complete
consecutive calendar months ending on or most recently prior to such date,
multiplied by four.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities as to
which such Person is or may be deemed to be the beneficial owner pursuant to
Rule 13d-3 and 13d-5 under the Exchange Act, as such rules are in effect on
the date of this Agreement, as well as any securities as to which such Person
has the right to become Beneficial Owner (whether such right is exercisable
immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a BONA FIDE public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; PROVIDED, HOWEVER, that no Person shall be deemed the
"Beneficial Owner" or to have "Beneficial Ownership" of, or to "Beneficially
Own," any Shares solely by virtue of the rights set forth in Sections 7, 8, 9
and 10; PROVIDED, FURTHER, that a Person shall not be deemed the "Beneficial
Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any
Shares (i) solely because such Shares have been tendered pursuant to a
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tender or exchange offer made by such Person, or any of such Person's
Affiliates or Associates, until such tendered Shares are accepted for payment
or exchange or (ii) solely because such Person, or any of such Person's
Affiliates or Associates, has or shares the power to vote or direct the
voting of such Shares pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act, except if
such power (or the arrangements relating thereto) is then reportable under
Item 6 of Schedule 13D under the Exchange Act (or any similar provision of a
comparable or successor report). For purposes of this Agreement, in
determining the percentage of the outstanding Shares with respect to which a
Person is the Beneficial Owner, all Shares as to which such Person is deemed
the Beneficial Owner shall be deemed outstanding.
"Board" shall mean the Board of Directors of Parent.
"Cash Flow Ratio" shall mean, as of any date, the ratio of (A) the
sum of (i) the aggregate principal amount of all Indebtedness of Parent and
its Indenture Restricted Subsidiaries plus (ii) the aggregate Redemption
Amounts on such date in respect of all outstanding preferred stock of Parent
and any of its Indenture Restricted Subsidiaries, to (B) Annualized Operating
Cash Flow determined as of the last day of the calendar month which precedes
such date by at least 10 business days.
"Cash Flow Ratio Threshold" shall mean 8.0 to 1.0 until and through
December 31, 1998; 7.75 to 1.0 from January 1, 1999 until and through
December 31, 1999; and 7.5 to 1.0 after December 31, 1999.
"Change of Control" shall mean, with respect to the Investor or any
Class B Entity (other than any Class B Entity that is a natural person), any
transaction or series of transactions occurring after the date that such
Person becomes subject to this Agreement pursuant to which any Person becomes
the Beneficial Owner of Voting Securities of the Investor or such Class B
Entity that have the power to cast at least 50% of the votes entitled to be
cast in elections of directors (or similar officials) of the Investor or such
Class B Entity, as the case may be; PROVIDED, that if the Investor or Class B
Entity is a trust, this definition shall apply when any Person becomes the
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Beneficial Owner of interests in such trust constituting at least 50% of the
beneficial interest.
"Class B Entities" shall mean Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx
1997 Grantor Retained Annuity Trust, Xxxxx Descendants Trust, Xxxxx Progeny
Trust, Xxxxx Grandchildren Trust, Xxxxx Spouse Trust, DC Xxxxxxxx Trust, DC
Xxxxxxx Trust, DC Xxxxxxxx Trust, DC Patrick Trust, XX Xxxxxx Trust, DC James
Trust, CFD Trust Xx. 0, XXX Xxxxx Xx. 0, XXX Trust Xx. 0, XXX Xxxxx Xx. 0,
XXX Trust No. 5, CFD Trust No. 6 and CFD Trust No. 10.
"Closing Date" shall mean the date of the Contribution Closing.
"Competitor" shall mean a competitor of Parent or any of its
Subsidiaries in one or more of Parent's or any of its Subsidiaries'
significant lines of business.
"Controlled Subsidiary" shall mean, with respect to any Person, a
Subsidiary at least a majority of the Voting Securities and other equity
interests of which are owned, directly or indirectly, by such Person.
"Family Members" shall mean, with respect to any natural person,
such person's spouse, siblings, descendants and any spouse of such siblings
and descendants and descendants of such siblings, including for this purpose
persons in a step or adoptive relationship.
"Group" shall have the meaning assigned to such term in Rule 13d-5
under the Exchange Act as in effect on the date hereof.
"Holding Company Merger" shall mean any merger or other business
combination or reorganization transaction where the stockholders of Parent
immediately prior to such transaction will Beneficially Own in the aggregate
100% of the surviving corporation's Voting Securities and other equity
interests immediately following such transaction in the same proportion as
immediately prior to such transaction subject only to any disproportionality
resulting solely from any issuance of Shares in the Partnership Contribution.
"Indebtedness" shall have the meaning set forth in the Indenture.
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"Indenture" shall mean the Indenture dated as of November 1, 1995,
between CSC and The Bank of New York, as Trustee, as in effect on the date of
the Merger Agreement and without regard to whether such Indenture shall be in
effect or amended in any respect.
"Indenture Restricted Subsidiary" shall mean "Restricted
Subsidiary" as defined in the Indenture as applied to Parent as opposed to
CSC.
"Investor" shall mean the Company or any Permitted Transferee that
may from time to time become a party as the Investor to a counterpart of this
Agreement.
"Minority Shares" shall mean the Voting Securities of Parent that
are Beneficially Owned by Minority Stockholders.
"Minority Stockholders" shall mean the Beneficial Owners of Voting
Securities of Parent who (i) are not the Investor or a Class B Entity, or
Affiliates or Associates of the Investor or a Class B Entity, and (ii) are
not members of a Group of which the Investor or a Class B Entity, or
Affiliates or Associates of the Investor or a Class B Entity, are members
with respect to Voting Securities of Parent.
"Operating Cash Flow" shall mean, for any period, "Operating Cash
Flow" as defined in the Indenture as applied to Parent and its Indenture
Restricted Subsidiaries on a consolidated basis.
"Outstanding Share Capital" shall mean, from time to time, the
issued and outstanding Shares, excluding any treasury Shares.
"Parent Share Issuance Commitments" shall mean those commitments to
issue Shares set forth in Schedule 1.
"Permitted Transferee" shall mean a permitted transferee under
Section 6(a) or Section 6(h).
"Qualified Parties" shall mean, with respect to any Person, any
(i) trust described in Section 664 of the Code or other trust of which the
Person or Family Members or Qualified Parties of the Person are greater than
50% income beneficiaries, (ii) charitable organization described in Section
501(c)(3) of the Code, (iii) with respect to any
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Class B Entity that is a natural person, estate of such natural person and
(iv) Family Members of any Person that is a natural person.
"Redemption Amounts" shall mean the sum of all amounts payable
(whether or not then due) by Parent or any of its Indenture Restricted
Subsidiaries (or principal amount of indebtedness issuable by Parent or any of
its Indenture Restricted Subsidiaries) in respect of any preferred stock of
Parent or any of its Indenture Restricted Subsidiaries which is by its terms at
any time required to be redeemed, purchased or otherwise retired or extinguished
(other than by delivery of common stock or of preferred stock of Parent or its
Indenture Restricted Subsidiaries), or which by its terms is convertible into
any Indebtedness of Parent or any Indenture Restricted Subsidiary at a fixed or
determinable date, at the option of any Person other than Parent or such
Indenture Restricted Subsidiary or upon the occurrence of a condition not solely
within the control of Parent or such Indenture Restricted Subsidiary, or which
by its terms is convertible into preferred stock of Parent or any of its
Indenture Restricted Subsidiaries that can be so redeemed, retired, extinguished
or converted.
"Restricted Subsidiary" shall mean any Significant Subsidiary of
Parent other than Madison Square Garden L.P.
"Shares" shall mean the Parent Class A Shares and Parent Class B
Shares and any other shares of common stock of Parent.
"Special Committee" shall mean the committee of directors of the Board
formed pursuant to Article II, Section 9 of the By-laws of Parent.
"Special Directors" shall mean those directors of the Board who are
members of the Special Committee.
"Subsidiary" shall mean, with respect to any Person, any entity at
least 50% of the Voting Securities of which are owned directly or indirectly by
such Person.
"Total Voting Power" shall mean the aggregate votes that are entitled
to be cast by all Shares, calculated with respect to any Person in accordance
with Rule 13d-3(d)(1)(i) under the Exchange Act.
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"Transfer" shall mean (i) any direct or indirect sale, transfer,
assignment, pledge, hypothecation, mortgage, or other disposition or
encumbrance, including those by operation or succession of law, merger or
otherwise, and (ii) with respect to any Shares that are Beneficially Owned by
the Investor, any Change of Control of such Investor where, at the time
immediately following such Change of Control, the fair market value of such
Shares represents more than 20% of the fair market value of all assets of such
Investor and (iii) with respect to any Shares that are Beneficially Owned by any
Class B Entity, any Change of Control of such Class B Entity.
"Ultimate Parent Entity" shall mean, with respect to any Person that
is a Subsidiary of a Person, the Person that, directly or indirectly,
Beneficially Owns at least 50% of the Voting Securities of such Subsidiary and
is not a Subsidiary of any Person who is not a natural person.
"Voting Securities" shall mean any securities entitled to vote in the
ordinary course in the election of directors or of Persons serving in a similar
governing capacity of any partnership, limited liability company or other
entity, including the voting rights attached to such securities.
(c) For the purposes of this Agreement, the following terms shall
have the meanings assigned to them in the corresponding Sections of this
Agreement (whether or not such Sections have been terminated):
TERM SECTION
------ -------
Agreement . . . . . . . . . . . . . . . . . . .Recitals
Company . . . . . . . . . . . . . . . . . . . .Recitals
Demand Registration . . . . . . . . . . . . . . Annex A
Drag-Along Transaction. . . . . . . . . . . . . . .8(b)
Investor Directors. . . . . . . . . . . . . . . . 11(a)
Investor Proposal Notice. . . . . . . . . . . . . .9(a)
Merger Agreement. . . . . . . . . . . . . . . .Recitals
Parent. . . . . . . . . . . . . . . . . . . . .Recitals
Piggy-back Registration . . . . . . . . . . . . Annex A
Proposal Notice . . . . . . . . . . . . . . . . . .7(a)
Tag-Along Transaction . . . . . . . . . . . . . . .8(a)
Transfer Transaction. . . . . . . . . . . . . . . .7(a)
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(2) REPRESENTATIONS OF THE COMPANY. As of the date hereof,
the Company represents and warrants to Parent and to each of the Class B
Entities that:
(a) other than those Voting Securities of CSC or Shares issued in
exchange thereof in the Merger disclosed to Parent prior to the Contribution
Closing, the Company does not Beneficially Own any Shares other than those
Shares issued in connection with the Contribution at the Contribution Closing;
(b) the Company has all requisite corporate power and authority and
has taken all corporate action necessary in order to execute and deliver this
Agreement;
(c) this Agreement has been duly executed and delivered by the
Company and is a valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, subject to the Bankruptcy and Equity
Exception;
(d) no notices, reports or other filings are required to be made by
the Company with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Company from, any Governmental
Entity, in connection with the execution and delivery of this Agreement by the
Company, except those that have been made or obtained or that the failure to
make or obtain are not, individually or in the aggregate, reasonably likely to
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement; and
(e) the execution, delivery and performance of this Agreement by the
Company do not, and the consummation by the Company of the transactions
contemplated hereby will not, constitute or result in (i) a breach or violation
of, or a default under, the certificate of incorporation or by-laws of the
Company, (ii) a breach of or violation of or a default under, or the
acceleration of any obligations of or the creation of a Lien on the assets of
the Company (with or without notice, lapse of time or both) pursuant to, any
Contracts binding upon the Company or any Law or governmental or
non-governmental permit or license to which the Company is subject or (iii) any
change in the rights or obligations of any party under any of such Contracts to
which the Company is a party, except, in the case of clause (ii) or (iii) above,
for any breach, violation,
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default, acceleration, creation or change that, individually or in the
aggregate, is not reasonably likely to prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
(3) REPRESENTATIONS OF THE CLASS B ENTITIES. As of the
date hereof, the Class B Entities each severally represents and warrants to the
Company and to Parent that:
(a) such Class B Entity Beneficially Owns such Shares as set forth
opposite its name in Schedule 3 hereto;
(b) such Class B Entity has all requisite power and authority
(corporate or otherwise) and has taken all action (corporate or otherwise)
necessary in order to execute and deliver this Agreement;
(c) this Agreement has been duly executed and delivered by such Class
B Entity and is a valid and binding agreement of such Class B Entity enforceable
against it in accordance with its terms, subject to the Bankruptcy and Equity
Exception;
(d) no notices, reports or other filings are required to be made by
such Class B Entity with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by such Class B Entity from,
any Governmental Entity, in connection with the execution and delivery of this
Agreement by such Class B Entity, except those that have been made or obtained
or that the failure to make or obtain are not, individually or in the aggregate,
reasonably likely to prevent, materially delay or materially impair the ability
of such Class B Entity to consummate the transactions contemplated by this
Agreement; and
(e) the execution, delivery and performance of this Agreement by such
Class B Entity does not, and the consummation by such Class B Entity of the
transactions contemplated hereby will not, constitute or result in (i) a breach
or violation of, or a default under, the certificate of incorporation or by-laws
of such Class B Entity or any of its comparable governing instruments, (ii) a
breach of or violation of or a default under, or the acceleration of any
obligations of or the creation of a Lien on the assets of such Class B Entity
(with or without notice, lapse of time or both) pursuant to, any Contracts
binding upon such Class
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B Entity or any Law or governmental or non-governmental permit or license to
which such Class B Entity is subject or (iii) any change in the rights or
obligations of any party under any of such Contracts to which such Class B
Entity is a party, except, in the case of clause (ii) or (iii) above, for (x)
Contracts, Laws, permits and licenses also binding upon CSC or to which CSC
or its business also is subject and (y) any breach, violation, default,
acceleration, creation or change that, individually or in the aggregate, is
not reasonably likely to prevent, materially delay or materially impair the
ability of such Class B Entity to consummate the transactions contemplated by
this Agreement.
(4) REPRESENTATIONS OF PARENT. As of the date hereof, Parent
represents and warrants to the Company and the Class B Entities that:
(a) Parent has all requisite corporate power and authority and has
taken all corporate action necessary in order to execute and deliver this
Agreement;
(b) this Agreement has been duly executed and delivered by Parent and
is a valid and binding agreement of Parent enforceable against Parent in
accordance with its terms, subject to the Bankruptcy and Equity Exception;
(c) no notices, reports or other filings are required to be made by
Parent with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Parent from, any Governmental Entity,
in connection with the execution and delivery of this Agreement by Parent,
except those that have been made or obtained or that the failure to make or
obtain are not, individually or in the aggregate, reasonably likely to prevent,
materially delay or materially impair the ability of Parent to consummate the
transactions contemplated by this Agreement; and
(d) the execution, delivery and performance of this Agreement by
Parent do not, and the consummation by Parent of the transactions contemplated
hereby will not, constitute or result in (i) a breach or violation of, or a
default under, the certificate of incorporation or by-laws of Parent, (ii) a
breach of or violation of or a default under, or the acceleration of any
obligations of or the creation of a Lien on the assets of Parent (with or
without notice, lapse of time or both) pursuant to, any Contracts binding upon
Parent or any Law or governmental or non-
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governmental permit or license to which Parent is subject or (iii) any change
in the rights or obligations of any party under any of such Contracts to
which Parent is a party, except, in the case of clause (ii) or (iii) above,
for any breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to prevent,
materially delay or materially impair the ability of Parent to consummate the
transactions contemplated by this Agreement.
(5) STANDSTILL PROVISIONS. The Investor shall not, and shall not
suffer or permit any Subsidiaries of the Investor to or, to the extent the
Investor possesses the power to prevent, permit any Affiliates or Associates of
the Investor to (and shall use all reasonable best efforts to cause such
Affiliates and Associates not to), whether acting alone or in concert with
others:
(a) form, join or participate in, or encourage the formation of, a
Group with respect to any Shares, other than a Group consisting solely of the
Investor, or Affiliates or Associates of the Investor, of Class B Entities or of
Qualified Parties of Class B Entities or the Investor;
(b) deposit any Shares into a voting trust or (except as provided in
this Agreement) subject any such Shares to any arrangement or agreement with
respect to the voting or Transfer thereof, other than any such trust,
arrangement or agreement (i) the only parties to, or beneficiaries of which, are
the Investor or any Controlled Subsidiaries of the Investor, any of the Class B
Entities, Parent or any Qualified Parties of the Investor or any of the Class B
Entities and (ii) the terms of which prohibit any party thereto from acting in a
manner inconsistent with this Agreement; PROVIDED, that all of the Shares
deposited into any such trust or subjected to any such arrangement or agreement
shall be deemed to be Beneficially Owned by the Investor or Affiliates or
Associates of the Investor for all purposes of this Agreement;
(c) (i) except for Shares acquired in the Contribution or upon
exercise of the Investor's rights set forth in Section 7 or 10, purchase or
otherwise acquire Beneficial Ownership of or otherwise Beneficially Own any
Voting Securities of Parent such that the Investor, together with the Affiliates
of the Investor, will Beneficially Own 10% or more of the Parent Class A Shares
(it being
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understood and agreed that any Shares acquired and from time to time
Beneficially Owned by the Investor and its Affiliates as a result of the
ownership of the Voting Securities of CSC and the exchange thereof in the
Merger as disclosed to Parent pursuant to Section 2(a) shall be included and
count toward such 10% threshold), or (ii) at any time purchase or otherwise
acquire any Shares in violation of Regulation M under the Exchange Act (or
any successor provision) and the policies of the SEC promulgated thereunder;
(d) effect or agree to effect any reduction in its equity interest in
Parent for up to 180 days following delivery by Parent of a written notice that
Parent is proposing to consummate a business combination to be accounted for as
a pooling of interests; PROVIDED, that this restriction shall terminate if
Parent has not consummated such business combination within 90 days of the date
of such written notice and PROVIDED, FURTHER, that this restriction shall be
inapplicable to the extent any reduction would not adversely affect the
accounting treatment of such business combination as a pooling of interests; or
(e) advise, assist (including by knowingly providing or arranging
financing for that purpose) or knowingly encourage, induce or attempt to
encourage or induce any other Person to take any actions referred to in the
foregoing paragraphs (a) through (d).
6. SHARE TRANSFERS. The Investor shall not Transfer, in any single
transaction or group of related transactions, any Shares that are Beneficially
Owned by the Investor, except for a Transfer in connection with a Holding
Company Merger or pursuant to Section 8 or for a Transfer that complies with any
of the following subsections:
(a) a Transfer (i) of all (but not less than all) of such Shares to
any Controlled Subsidiary of the Company or (ii) of all or any of such Shares to
a Subsidiary all of the Voting Securities and all of the equity securities
(other than preferred stock held by institutional or public investors) of which
are Beneficially Owned, directly or indirectly, by the Company; PROVIDED, that
contemporaneously with any such Transfer such Controlled Subsidiary or wholly
owned Subsidiary, as the case may be, becomes a party to a counterpart of this
Agreement and the Investor and the Company guarantee the performance of all
obligations of such Controlled Subsidiary or wholly owned Subsidiary, as the
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case may be, under this Agreement; PROVIDED, FURTHER, that such Controlled
Subsidiary or wholly owned Subsidiary, as the case may be, and the Company shall
prior to such Transfer covenant and agree with Parent and the Class B Entities
that, for so long as the Controlled Subsidiary or wholly owned Subsidiary, as
the case may be, Beneficially Owns such Shares, it shall continue to be a
Controlled Subsidiary or wholly owned Subsidiary, as the case may be, of the
Company;
(b) a Transfer of all or any of such Shares to any Person such that
such Person, together with the Affiliates and Associates of such Person, will
not Beneficially Own, after giving effect to such Transfer, Voting Securities of
Parent constituting 10% or more of the outstanding Parent Class A Shares or
Shares constituting 5% or more of the Outstanding Share Capital; PROVIDED, that
the Investor shall not, and shall not suffer or permit any Subsidiaries of the
Investor to or, to the extent the Investor has the power to prevent, permit any
Affiliates or Associates of the Investor to (and shall use all reasonable best
efforts to cause such Affiliates and Associates not to), in any case, form, join
or participate in or encourage the formation of a Group with such Person or any
Affiliates or Associates of such Person;
(c) a sale of all or any of such Shares to any Person that is
conducted publicly through one or more registered broker-dealers over the AMEX
or such other stock exchange or interdealer quotation service where Parent Class
A Shares may be listed or quoted pursuant to which the sale of such Shares will
be in a manner to effect a broad distribution, with such distribution certified
to Parent by the lead broker-dealer in any such sale;
(d) a Transfer of all or any of such Shares to underwriters in
connection with an underwritten public offering of such Shares on a firm
commitment basis registered under the Securities Act pursuant to which the sale
of such Shares will be in a manner to effect a broad distribution, with such
distribution certified to Parent by the lead or managing underwriter or
underwriters in any such offering;
(e) a Transfer of all or any of such Shares to Parent or any
Controlled Subsidiary of Parent;
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(f) for so long as the Parent Class B Shares are entitled in
accordance with their terms to elect 75% of the Board, a Transfer of all or any
of such Shares to any Class B Entity;
(g) a Transfer of all or any of such Shares in a BONA FIDE pledge of
such Shares to a financial institution to secure borrowings as permitted by
applicable Law; PROVIDED, that contemporaneously with such pledge such financial
institution agrees with Parent that upon any foreclosure on such pledge it shall
be bound by the obligations of the Company and the Investor under this Agreement
(but shall not have any of the rights of the Company and the Investor under this
Agreement except as provided in this Section and in Sections 11, 14(c), 15 and
16 pursuant to an assignment effected in accordance with the terms hereof); or
(h) a Transfer of all (but not less than all) of such Shares to any
Person after complying with all of the provisions set forth in Section 9;
PROVIDED, that contemporaneously with such Transfer (i) such Person becomes a
party to a counterpart of this Agreement as the Investor (whereupon, subject to
Section 16(f), any reference to the Investor herein shall be deemed to be a
reference to such Person), (ii) if such Person is a Subsidiary of any other
Person that is not a natural person, the Ultimate Parent Entity of such Person
shall also become a party to a counterpart of this Agreement and assume all
obligations of the Company hereunder (whereupon, subject to Section 16(f), any
reference to the Company herein shall be deemed to be a reference to such
Ultimate Parent Entity) and (iii) such Person causes to be delivered to Parent a
legal opinion of counsel of national standing, in form and substance reasonably
acceptable to Parent, to the effect set forth in Sections 2(b) and 2(c).
(7) THE COMPANY'S RIGHT OF CONSULTATION WITH PARENT AND THE CLASS B
ENTITIES. The Company, Parent and the Class B Entities hereby agree with each
other that, until the date that the Investor ceases to be entitled to nominate
two Investor Directors pursuant to Section 11(a) or, if earlier and at such time
the Investor does not Beneficially Own at least 33% of the Outstanding Share
Capital or such lesser percentage that results solely from any dilution for
issuances for which no preemptive rights under Section 10 are given to the
Investor or results solely from dilution for issuances for which no
anti-dilution adjustment was
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required to be made under the Merger Agreement, ten years from the date
hereof, the Company, Parent and the Class B Entities shall be entitled to the
respective rights and be subject to the respective obligations set forth in
this Section:
(a) NOTICE. Prior to (i) the Class B Entities effecting a Transfer
(other than in a BONA FIDE pledge or grant of security interest to a financial
institution to secure borrowings) of Shares to any Person (other than any Class
B Entity or any Qualified Parties or Controlled Subsidiaries of any Class B
Entities) in any transaction or series of transactions pursuant to which there
is a Transfer of Shares that would constitute at least 10% of the Total Voting
Power, (ii) Parent or its Subsidiaries effecting a Transfer (other than in a
BONA FIDE pledge or grant of security interest to a financial institution to
secure borrowings) of Beneficial Ownership of capital stock or other equity
interests in any Restricted Subsidiary other than to Parent or to a Controlled
Subsidiary or stockholders of Parent or (iii) Parent or its Subsidiaries
effecting a Transfer (other than in a BONA FIDE pledge or grant of security
interest to a financial institution to secure borrowings) of a substantial
portion of the assets of Parent or any Restricted Subsidiary other than to
Parent or to a Controlled Subsidiary of Parent (collectively, a "Transfer
Transaction"), Parent or the Class B Entity desiring to make such a Transfer
shall first notify the Company in writing (a "Proposal Notice") of the
possibility of such a transaction and the number of and a description of the
interests contemplated to be Transferred.
(b) CONSULTATION. Following the Company's receipt of the Proposal
Notice, Parent or the Class B Entity sending the notice shall discuss with the
Company the possibility of effecting a Transfer Transaction with the Company.
If the Company wishes to pursue such a transaction and is capable of completing
a Transfer Transaction, then, for a period of 30 days after the Company's
receipt of the Proposal Notice (or such shorter period if the Company responds
in writing that it is not interested in pursuing such a transaction), Parent or
the Class B Entity shall negotiate in good faith and exclusively with the
Company to determine whether it is possible to agree to a Transfer Transaction
with the Company but shall not be obligated to enter into any agreement with the
Company to do so. Parent or the Class B Entity shall be free to negotiate and
to initiate and hold discussions with other potential
-15-
purchasers at any time before the Proposal Notice or after the expiration of
such 30-day or shorter period and may agree to enter into a Transfer
Transaction at any time after the expiration of such 30-day or shorter period
even if such Transfer Transaction has a lower value to Parent or the Class B
Entity than any transaction proposed by the Company. The Company agrees to
keep confidential the fact that Parent or a Class B Entity is considering
effecting a Transfer Transaction, the possible terms thereof and any
confidential information obtained by the Company in pursuing negotiations
contemplated by this Section or otherwise obtained from Parent or any of the
Class B Entities or their respective representatives.
(8) THE INVESTOR'S TAG-ALONG RIGHTS; THE CLASS B ENTITIES' DRAG-ALONG
RIGHTS. The Company and the Class B Entities hereby agree with each other that,
for so long as the Parent Class B Shares are entitled in accordance with their
terms to elect 75% of the Board or until this Section 8 terminates as provided
in Section 16(f), the Company and the Class B Entities shall be entitled to the
respective rights and subject to the respective obligations set forth in this
Section:
(a) TAG-ALONG. If any Class B Entity proposes to Transfer any
Shares Beneficially Owned by it to any Person (other than any Class B Entity or
any Qualified Parties or Controlled Subsidiaries of any Class B Entities) in a
transaction or series of transactions pursuant to which such Person, together
with Affiliates and Associates of such Person (excluding from such Affiliates or
Associates any Class B Entity or any Qualified Parties or Controlled
Subsidiaries of any Class B Entities) (a "Tag-Along Transaction"), would become
the Beneficial Owner of Voting Securities of Parent that have the power to cast
at least 50% of the votes entitled to be cast in elections of directors of
Parent, the Investor shall be given the opportunity and shall have the right to
Transfer such number (but no less or more than such number) of the Shares then
Beneficially Owned by the Investor that is the same in proportion to the total
number of Shares that are Beneficially Owned by the Investor as the proportion
of the number of Shares being or to be Transferred by the Class B Entities
concurrently to such Person in the transaction or series of transactions
constituting the Tag-Along Transaction to the total number of Shares that are
Beneficially Owned by all of the Class B Entities on terms (including the form
and amount of, and the time of receipt
-16-
of, consideration therefor) and conditions identical in all material respects
to those applicable to such Class B Entity in connection with such Transfer.
Any such Class B Entity shall give written notice to the Investor setting
forth in detail the material terms and conditions of the applicable proposed
Transfer, and the Investor shall have at least ten business days after such
notice is given within which to exercise its rights contained in this Section
by written notice thereof given to such Class B Entity (it being understood
and agreed that, if no such notice is received by such Class B Entity within
such period, the Investor shall be deemed to have elected not to have
exercised its rights under this Section). Any such notice shall constitute
an irrevocable offer by the Investor to sell to such Person such Shares on
the terms and conditions received by any such Class B Entity in connection
with such Transfer.
(b) DRAG-ALONG. If the Investor does not exercise the rights set
forth in the foregoing paragraph (a), then any Class B Entity that is
Transferring Shares to a Person (other than any Class B Entity or any Qualified
Parties or Controlled Subsidiaries of a Class B Entity or any Person that before
entering into the definitive documentation relating to such Transfer was an
Associate or Affiliate of any Class B Entity or of a Qualified Party of a Class
B Entity) in a transaction or series of transactions pursuant to which such
Person, together with Affiliates and Associates of such Person (excluding from
such Affiliates or Associates any Class B Entity or any Qualified Parties or
Controlled Subsidiaries of any Class B Entities) (a "Drag-Along Transaction"),
would become the Beneficial Owner of Voting Securities of Parent that have the
power to cast at least 50% of the votes entitled to be cast in elections of
directors of Parent may give written notice to the Investor during the period
expiring on the close of business on the tenth business day following the
expiration of the five business day period set forth in the foregoing paragraph
(a) requiring the Investor to Transfer such number (but no less or more than
such number) of the Shares then Beneficially Owned by the Investor that is the
same in proportion to the total number of Shares that are Beneficially Owned by
the Investor as the proportion of the number of Shares being or to be
Transferred by the Class B Entities concurrently to such Person in the
transaction or series of transactions constituting the Drag-Along Transaction to
the number of Shares that are Beneficially Owned by the Class B Entities on
terms (including the form and amount of, and the time of receipt of,
consideration therefor) and conditions no less
-17-
favorable in all material respects to those applicable to such Class B Entity
(and its Affiliates and Associates) in connection with such Transfer.
(c) PARITY; CLOSING. The terms on which the applicable Class B
Entity actually Transfers its Shares shall not be materially more favorable to
the Class B Entity (and its Affiliates, Associates and Qualified Parties), and
include no more cash, than the terms set forth in the notice given by it
pursuant to the foregoing paragraph (a). The Investor shall give the same
representations, warranties, covenants and agreements as are given by the Class
B Entity in connection with any Transfer pursuant to this Section, but only
insofar as they relate to the Investor's ownership of Shares or are
representations and warranties to the effect set forth in Section 2, and shall
take all such actions as may be necessary to permit such Transfer to lawfully
occur. The closing of the purchase and sale of the Investor's Shares by any
Person pursuant to this Section shall, to the extent legally practicable, take
place at the same time and place as the closing of the Transfer by any such
Class B Entity giving rise to the tag-along rights and drag-along rights set
forth in this Section. At such closing, (i) the Investor shall deliver to such
Person certificates representing the Shares being sold, free and clear of any
Lien (and the Investor hereby represents and warrants to the Class B Entities
and shall represent and warrant to such Person that such Shares shall,
immediately prior to such sale, be so free and clear), (ii) such Person shall
deliver to the Investor the consideration to be paid for such Shares in
accordance with the terms of the purchase and sale of such Shares and (iii) the
Investor shall execute such other documents and take such other action as shall
be reasonably necessary to consummate the purchase and sale of such Shares;
PROVIDED, that if the Investor is required to Transfer Shares pursuant to a
Class B Entity's exercise of its drag-along rights, the Investor shall not be
required to enter into any noncompete or other agreement that in any material
respect restricts or has an adverse effect on the business or operations of the
Investor or any of its Affiliates.
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9. PARENT'S RIGHT OF CONSULTATION WITH THE
INVESTOR. The Company and Parent hereby agree with each other that the Company
and Parent shall be entitled to the respective rights and subject to the
respective obligations set forth in this Section:
(a) NOTICE. If at any time the Investor desires to Transfer in a
transaction or series of transactions any Shares to any other Person pursuant to
Section 6(h), the Investor shall first notify Parent in writing (an "Investor
Proposal Notice") of the possibility of such a transaction, the number of
Shares proposed to be Transferred and the aggregate number of and a description
of the Shares that are Beneficially Owned by the Investor.
(b) CONSULTATION. Following Parent's receipt of an Investor Proposal
Notice the Investor shall discuss with Parent the possibility of effecting such
a transaction with Parent. If Parent wishes to pursue such a transaction and is
capable of completing such a transaction, then, for a period of 30 days after
Parent's receipt of the Investor Proposal Notice (or such shorter period if
Parent responds in writing that it is not interested in pursuing such a
transaction), the Investor shall negotiate in good faith and exclusively with
Parent to determine whether it is possible to agree to such a transaction with
Parent but shall not be obligated to enter into any agreement with Parent to do
so. The Investor shall be free to negotiate and to initiate and hold
discussions with other potential purchasers at any time before the Investor
Proposal Notice or after the expiration of such 30-day or shorter period and may
agree to enter into such a transaction at any time after the expiration of such
30-day or shorter period even if such transaction has a lower value to the
Investor than any transaction proposed by Parent. Parent agrees to keep
confidential the fact that the Investor is considering effecting such a
transaction, the possible terms thereof and any confidential information
obtained by Parent in pursuing negotiations contemplated by this Section.
10. THE INVESTOR'S PREEMPTIVE RIGHTS. The Company and Parent hereby
agree with each other that the Investor and Parent shall be entitled to the
respective rights and subject to the respective obligations set forth in this
Section:
(a) NOTICE; EXERCISE; CLOSING. If Parent proposes to issue, grant
or sell Shares, Parent shall give
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to the Investor a written notice setting forth in reasonable detail the per
share consideration (including, in the case of any convertible or derivative
security, the issue consideration pro rated per Share for such security) and
other terms on which such Shares are proposed to be issued, granted or sold
and the amount thereof proposed to be issued, granted or sold. The Investor
shall thereafter have the preemptive right, exercisable by notice to Parent
no later than 15 days after Parent's notice is given, to purchase up to such
number of Parent Class A Shares so that, after giving effect to such
issuance, grant or sale and the preemptive subscription by the Investor, the
Investor, together with its Affiliates and Associates, will Beneficially Own
in the aggregate the same proportion of the Outstanding Share Capital as
Beneficially Owned as of the date of Parent's notice, for the consideration
in cash and on the other terms set forth in Parent's notice. Any written
notice by the Investor exercising the right to purchase Shares pursuant to
this Section shall constitute an irrevocable commitment to purchase from
Parent the Shares specified in such notice, subject to the maximum set forth
in the preceding sentence. The closing of the purchase of Shares by the
Investor shall, to the extent legally practicable, take place at the same
time and place as the closing of such issuance, grant or sale to the Persons
giving rise to the preemptive rights set forth in this Section and if not at
the same time shall take place as soon thereafter as is practicable; PROVIDED
that such closing shall, to the extent applicable, be conditioned upon the
expiration or termination of any waiting period under the HSR Act and the
making of any necessary filings with and obtaining of any approvals from any
Governmental Entities except those that the failure to make or obtain are
not, individually or in the aggregate, reasonably likely to have a Parent
Material Adverse Effect or a material adverse effect on the financial
condition, properties, business or results of operations of the Company and
its Subsidiaries taken as a whole. At such closing, (i) Parent shall deliver
to the Investor certificates representing the Shares being subscribed, and
such Shares will be validly issued, fully paid and nonassessable, (ii) the
Investor shall deliver to Parent the consideration to be paid for such Shares
and (iii) the Investor and Parent shall execute such other documents and take
such other action as shall be reasonably necessary to consummate the
subscription of such Shares.
(b) NON-EXERCISE. From the expiration of the 15-day period first
referred to in the foregoing paragraph (a)
-20-
and for a period of 90 days thereafter, Parent may offer, issue, grant and
sell to any Person up to the amount of Shares set forth in Parent's notice
relating to such Shares for a price and other terms no less favorable to
Parent, and including no less cash, than those set forth in such notice
(without deduction for reasonable underwriting, sales agency and similar fees
payable in connection therewith); PROVIDED, HOWEVER, that Parent may not
issue, grant or sell Shares in an amount greater than the amount set forth in
such notice minus the amount purchased or committed to be purchased by the
Investor upon exercise of its preemptive rights without granting the Investor
the preemptive rights in this Section with respect to such greater amount of
Shares.
(c) EXEMPTIONS. The provisions of this Section shall not apply to
(i) any issuance and sale of Shares by Parent in a Demand Registration (as
defined in Annex A) or in a Piggy-back Registration (as defined in Annex A) in
which the Investor is participating; (ii) the grant or exercise of employee,
management or director stock options to purchase Shares pursuant to, or the
issuance of Shares otherwise under or pursuant to, the Parent Share Issuance
Commitments; (iii) any grant or exercise of employee, management or director
stock options not included in the Parent Share Issuance Commitments the grant of
which, when aggregated with options or Shares included in or issued under the
Parent Share Issuance Commitments, was or is consistent with CSC's and Parent's
past practices; (iv) any sale, grant or issuance of Shares that, together with
any previous sales, grants or issuances made in reliance on this clause (iv),
represents less than 1% of the Outstanding Share Capital as of the date of such
sale, grant or issuance; and (v) any other sale, grant or issuance of Shares
that has been approved in writing by the Investor.
(d) NON-CASH VALUATION. In the event that any offer, issue, grant or
sale includes or is proposed to include any non-cash consideration, Parent and
the Investor shall in good faith seek to agree upon the value of such non-cash
consideration. If Parent and the Investor fail to agree on such value during
the 15-day period contemplated by paragraph (a) of this Section, then Parent
shall refer the items in dispute to a nationally recognized investment banking
firm that is selected by the Board and that shall make a final and binding
determination within 10 days. The value of any securities shall be the fair
market value of such securities and the value of any property other than
securities shall be the fair market value of such property.
-21-
If a determination under this paragraph (d) is required, any deadline for
acceptance provided for in this Section shall be postponed until the fifth
business day after the date of such determination. Whichever of the Investor
or Parent whose last estimate differed the most from that finally decided by
the investment banking firm shall be responsible for and pay all of the
expenses of such investment banking firm. All determinations made pursuant to
this paragraph (d) shall be final and binding on the Investor and Parent.
(e) HSR CONDITION. If in the reasonable judgment of the Investor,
the Investor's acquisition of Shares upon exercise of its rights under this
Section 10 would require a filing under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), Parent and the Investor
each will take such actions as may be required promptly to comply with the
requirements of the HSR Act relating to the filing and furnishing of information
(an "HSR Report") to the Federal Trade Commission ("FTC") and the Antitrust
Division of the Department of Justice ("DOJ"), such actions to include
(i) preparing and cooperating with each other in preparing the HSR Report to be
filed by or on behalf of each of them so as to avoid errors or inconsistencies
between their HSR Reports in the description of the reported transaction and to
permit the filing of their HSR Reports in a timely fashion, (ii) complying with
any request for additional documents or information made by the FTC, the DOJ or
any other Governmental Entity or by any court and assisting the other in so
complying and (iii) causing all Persons which are part of the same "person" (as
defined for purposes of the HSR Act) as such party to cooperate and assist in
such compliance. Parent and the Investor each will pay any costs that it incurs
in complying with the obligations set forth in this paragraph. It will be a
condition precedent to the acquisition of Shares by the Investor that either
(i) no filing under the HSR Act by the Investor is required in connection with
such acquisition or (ii) any applicable waiting period under the HSR Act has
expired or been terminated. If the applicable waiting period under the HSR Act
has not expired or been terminated within 180 days after filing of the HSR
Report or if the Investor and Parent agree to withdraw the HSR Report, then
Parent will use its reasonable best efforts to afford to the Investor the
benefits intended to be provided by this Section 10 by granting to the Investor
the right to acquire, on the same terms as the securities originally to be
acquired, other securities of Parent having substantially
-22-
the same rights, privileges and preferences as the securities originally to
be acquired, except that such other securities will not possess voting rights
and will be convertible into the Shares that the Investor was to acquire
pursuant to this Section.
11. BOARD REPRESENTATION.
(a) INVESTOR DIRECTORS. For so long as, and only for so long as, the
Investor Beneficially Owns Parent Class A Shares that in the aggregate comprise
at least 20% of the Outstanding Share Capital, the Investor shall be entitled to
nominate two and no more than two directors (the "Investor Directors") to the
Board, each of whom shall be a person that is reasonably acceptable to Parent
(it being agreed for this purpose that, subject to applicable legal
requirements, any executive officer or member of the board of directors of the
Company shall be acceptable to Parent); PROVIDED, that in the event that the
Investor shall at any time cease to Beneficially Own Parent Class A Shares that
in the aggregate comprise at least 20% of the Outstanding Share Capital but
shall continue to Beneficially Own Parent Class A Shares that in the aggregate
comprise at least 10% of the Outstanding Share Capital, the Investor shall
thenceforth be entitled to nominate one and no more than one Investor Director
under this Section 11 and Parent or any of the Class B Entities may request that
one of the Investor Directors then on the Board resign as a director of Parent
and, upon such request, one of the Investor Directors shall, and the Investor
shall use best efforts to cause one of the Investor Directors to, resign
immediately and relinquish all rights and privileges as a member of the Board;
PROVIDED, FURTHER, that each of the Investor Directors shall in all cases be a
director elected to the Board by the Parent Class B Shares. In the event that
the Investor shall at any time cease to Beneficially Own Parent Class A Shares
that in the aggregate comprise at least 10% of the Outstanding Share Capital,
the Investor shall thenceforth not be entitled to nominate any Investor
Directors under this Section 11 and Parent or any of the Class B Entities may
request that any Investor Directors then on the Board resign as directors of
Parent and, upon such request, the Investor Directors shall, and the Investor
shall use its reasonable best efforts to, cause such Investor Directors to,
resign immediately and relinquish all rights and privileges as a member of the
Board.
-23-
Prior to the election of directors to the Board, the Investor may give
reasonable advance written notice to Parent prior to the mailing of the proxy
statement relating to such matters requesting that Parent include, and Parent
and the Class B Entities (in their capacity as stockholders of Parent) agree
that Parent shall include, the Investor Directors as nominees for the slate of
directors to be elected to the Board.
Notwithstanding the foregoing, in the event that the holders of the
Class B Shares cease at any time to be entitled to elect 75% of the Board in
accordance with the terms of the Parent Class B Shares, the Investor shall
thenceforth no longer be entitled to any rights under this Section and the
Investor agrees that, following such event, Parent may request that all or any
of the Investor Directors then on the Board resign as Investor Directors, and
upon such request by Parent, the Investor Directors shall, and the Investor
shall use reasonable best efforts to cause such Investor Directors to, resign as
Investor Directors and relinquish all rights and privileges as a member of the
Board at the next meeting of stockholders of Parent called for the purpose of
electing directors to the Board; PROVIDED, that such Investor Directors may in
any case be nominees as directors to the Board at any meetings called for
election of directors in accordance with this Agreement and with the By-laws of
Parent. Notwithstanding anything to the contrary in this Agreement, no more
than 25% of the directors on the Board (rounded up to the nearest whole
director) shall be nominees of the Investor or any Affiliate or Associate of the
Investor.
(b) SPECIAL COMMITTEE. For so long as, and only for so long as, the
Investor is entitled to nominate two Investor Directors pursuant to Section
11(a) (without giving effect to any reduction in the number of Investor
Directors resulting from the last sentence of Section 11(a)), (i) two (or one,
if the number of Investor Directors is reduced as a result of Section 11(a)) of
the Special Directors shall be the Investor Directors and (ii) Section 9 of
Article II of Parent's By-laws may not be amended without the prior written
consent of the Investor. If only one of the Special Directors is an Investor
Director as a result of any reduction resulting from the last sentence of
Section 11(a), then any matter requiring the approval of the Special Directors
shall not be approved without the approval of the Investor Director. The
Investor, Parent and the Class B Entities agree that the Investor Directors
shall not be
-24-
entitled to vote on the transactions contemplated by the Partnership
Contribution or on the approval or adoption of the Partnership Contribution
Agreement notwithstanding the fact that such transaction and such agreement
may be referred to the Special Committee.
(c) EFFORTS TO NOMINATE AND ELECT DIRECTORS. Parent shall nominate
and Parent and the Class B Entities shall use their respective best efforts to
take and cause to be taken all necessary action (corporate and other), which
efforts shall include the voting of or granting consents with respect to all
Voting Securities of Parent Beneficially Owned by them, to elect to the Board
the Investor Directors required to be nominated for election as directors in
accordance with the terms of this Section.
12. INVESTOR VOTING. For so long as the Class B Shares are entitled
in accordance with their terms to elect 75% of the Board, with respect to the
election of directors to or removal of directors from the Board and any increase
of authorized Shares, the Investor shall vote or grant consent with respect to,
and shall cause to be voted or to be granted any consents with respect to, all
Voting Securities that are Beneficially Owned by the Investor on all matters
submitted to the holders of Voting Securities in direct proportion to the votes
or consents of the Minority Shares on any such matter. The Investor and the
Class B Entities shall cause all Shares owned by the Investor and the Class B
Entities, as the case may be, and shall use reasonable best efforts to cause all
of their respective Affiliates and Associates to be represented, in person or by
proxy, at all meetings of holders of Shares of which the Investor or the Class B
Entities, as the case may be, have actual notice, so that all of such Shares may
be counted for the purpose of determining the presence of a quorum at such
meetings.
13. ACQUISITION TRANSACTIONS. For so long as, and only for so long
as, the Investor is entitled to nominate two Investor Directors pursuant to
Section 11(a), Parent shall not, without the prior written consent of the
Company, consummate an Acquisition Transaction if, after giving effect to such
transaction, the Cash Flow Ratio will exceed the Cash Flow Ratio Threshold.
Before consummation of an Acquisition Transaction that is reasonably likely to
result in the Cash Flow Ratio Threshold being exceeded, Parent shall provide
written notice and a reasonable description of such transaction, including pro
forma calculations of the
-25-
Cash Flow Ratio giving effect to such transaction as of the beginning of the
most recent three-month period for which Annualized Operating Cash Flow can
be calculated, together with reasonable documentary supporting information
for such calculation. To the extent reasonably practicable under the
circumstances of such transaction, such notice shall be given 30 days prior
to such consummation, but in no event shall such notice be given less than 10
days prior to such consummation.
14. ADDITIONAL AGREEMENTS.
(a) EXCHANGE ACT REPORTING. For so long as, and only for so long as,
any of the Shares Beneficially Owned by the Investor are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, unless Parent is
then subject to and in compliance with Section 13 or 15(d) of the Exchange Act
as contemplated by Rule 144(c)(1) under the Securities Act, Parent shall make
publicly available any information concerning Parent that is contemplated by
Rule 144(c)(2) under the Securities Act.
(b) MAINTENANCE OF ULTIMATE PARENT ENTITY AS A PARTY. In the event
that the Company shall at any time become or be a Subsidiary of any Person that
is not a natural person, the Company covenants and agrees that the Ultimate
Parent Entity of such Person shall forthwith execute a counterpart of this
Agreement and shall assume all obligations of the Company hereunder and all
references herein to the Company shall be deemed a reference to such Ultimate
Parent Entity. This paragraph shall similarly apply to any subsequent Ultimate
Parent Entities.
(c) REGISTRATION RIGHTS. The Investor shall have the registration
rights set forth in Annex A hereto.
(d) VOLUME DISCOUNTS. The Company shall use its reasonable best
efforts to make available to Parent and its Subsidiaries the benefits of its
agreements with vendors on terms no less favorable than those generally
available to the Company or Affiliates of the Company.
15. LEGENDS. (a) Each of the Investor and the Class B Entities
agrees that all certificates representing the Shares that are from time to time
subject to this Agreement shall bear the following legend:
-26-
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS AGREEMENT DATED MARCH 4, 1998(A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE CORPORATION) WHICH PROVIDES, AMONG OTHER
THINGS, FOR CERTAIN RESTRICTIONS ON THE TRANSFER AND VOTING THEREOF.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT SHALL BE
VOID."
Upon termination with respect to the Investor or the Class B Entities of this
Agreement in accordance with its terms or upon any Shares ceasing to be subject
to this Agreement and upon the written request by the Investor or any of the
Class B Entities, as the case may be, Parent shall issue new certificates with
the foregoing legend removed.
(b) The Investor agrees that all certificates representing the Shares
that were issued in the Contribution and that are Transferred pursuant to this
Agreement (unless a registration statement with respect to such Shares is then
effective) shall bear the following legend until such time as the Investor or
any transferee thereof delivers an opinion of counsel reasonably acceptable to
Parent to the effect that such legend is no longer required under the Securities
Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE SOLD WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND MAY BE OFFERED
OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES ACT OF 1933 OR IF
AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
16. MISCELLANEOUS.
(a) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH AND
SUBJECT TO THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO CONFLICTS OF
LAWS PRINCIPLES.
(b) VENUE; WAIVER OF JURY TRIAL. The parties hereby irrevocably
submit to the jurisdiction of the courts of the State of Delaware and the
Federal court of the United States of America located in the State of Delaware
solely in
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respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect
of the transactions contemplated hereby, and hereby waive, and agree not to
assert, as a defense in any action, suit or proceeding for the interpretation
or enforcement hereof or of any such document, that it is not subject thereto
or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect
to such action or proceeding shall be heard and determined in such a Delaware
State or Federal court. The parties hereby consent to and grant any such
court jurisdiction over the person of such parties and over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in
paragraph (c) of this Section or in such other manner as may be permitted by
law shall be valid and sufficient service thereof.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS PARAGRAPH (b).
(c) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given (i) on
the first business day following the date received, if delivered personally or
by telecopy (with telephonic confirmation of receipt by the addressee), (ii) on
the business day following timely deposit with an overnight courier service, if
sent by overnight courier specifying next day delivery and (iii) on
-28-
the first business day that is at least five days following deposit in the
mails, if sent by first class mail, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
If to the Company or the Investor, to:
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000/(000) 000-0000
Attention: President/Legal Department
with a copy to:
Xxxxxxx & Xxxxxx L.L.C.
Suite 3000
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to Parent, to:
Xxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to any of the Class B Entities, to:
-29-
Xxxxxxx X. Xxxxx
One Media Crossways
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
and
Xxxxxxx X. Xxxxxx, Xx.
Xxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(d) SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (ii) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
(e) COUNTERPARTS. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which shall together constitute the same
agreement.
-30-
(f) TERMINATION; SURVIVAL. Immediately upon the Investor, together
with all of the Affiliates of the Investor, ceasing to Beneficially Own in the
aggregate at least 20% of the Outstanding Share Capital, Sections 7 and 9 shall
terminate automatically without any action by any party and such terminated
provision shall not survive such termination. Immediately upon the Investor,
together with all of the Affiliates of the Investor, ceasing to Beneficially Own
in the aggregate at least 10% of the Outstanding Share Capital, this Agreement
(other than Sections 1, 2, 3, 4, 5, 14(c), 15 and 16) shall terminate
automatically without any action by any party and such terminated provisions of
this Agreement shall not survive such termination. On the day that is two years
after the date of such termination, Section 5 shall terminate automatically
without any action by any party and shall not survive such termination.
Immediately upon a Transfer to a Permitted Transferee pursuant to Section 6(h),
Sections 7, 9, 11(b) and 13 shall terminate automatically without any action by
any party and such terminated provisions of this Agreement shall not survive
such termination; PROVIDED, that if such Permitted Transferee is a Competitor,
all of Section 11 shall terminate automatically without any action by any party
and such terminated provision shall not survive such termination; PROVIDED,
FURTHER, that on the day that is five years following a Transfer to any such
Permitted Transferee, Section 10 shall terminate automatically without any
action by any party and such terminated provision shall not survive such
termination. This Section 16 and Sections 1, 2, 3, 4, 14(c) and 15 shall
survive any termination of all or any part of this Agreement indefinitely.
(g) HEADINGS; RECITALS. All Section headings and the recitals herein
are for convenience of reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.
(h) SPECIFIC PERFORMANCE. Each party hereto acknowledges that it
will be impossible to measure in money the damage to the other party if a party
hereto fails to comply with any of the obligations imposed by this Agreement,
that every such obligation is material and that, in the event of any such
failure, the other party will not have an adequate remedy at law or damages.
Accordingly, each party hereto agrees that injunctive relief or other equitable
remedy, in addition to remedies at law or damages, is the appropriate remedy for
any such failure and will not oppose the granting of such relief on the basis
that the
-31-
other party has an adequate remedy at law. Each party hereto agrees that it
shall not seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with any other party's seeking or obtaining
such equitable relief.
(i) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns and shall not be assignable except to the extent expressly
permitted hereby and any purported assignment in violation of this Agreement
shall be void. Any Class B Entity may assign this Agreement in connection with
a Transfer of any Shares to a Class B Entity or any Qualified Parties or
Controlled Subsidiaries of any Class B Entities; PROVIDED, that such transferee
shall become a party to a counterpart of this Agreement and become bound as a
Class B Entity hereunder. In the case of a merger or other business combination
or reorganization transaction involving Parent where securities other than those
of Parent are issued to the holders of Shares, this Agreement shall be assigned
to and shall inure to the benefit of and be binding upon the Person issuing
securities in such transaction and any reference herein to Parent shall be
deemed to be a reference to such Person. The rights and obligations under this
Agreement (excluding Sections 7, 9, 11(b) and 13) shall be assigned by the
Investor and the Company to a Permitted Transferee in connection with the
Transfer to such Permitted Transferee pursuant to Section 6(h); PROVIDED, that
if such Permitted Transferee is a Competitor, Section 11 shall also be excluded
from such assignment, which assignment shall not terminate any portion of this
Agreement except in accordance with Section 16(f). The Investor may assign its
rights and obligations (w) under this Agreement to a Permitted Transferee
pursuant to Section 6(a)(i), (x) under this Agreement to a Permitted Transferee
pursuant to Section 6(a)(ii), (y) under Sections 14(c), 15 and 16 to a
transferee pursuant to Section 6(b) and (z) under Sections 6, 11, 14(c), 15 and
16 to a transferee pursuant to Section 6(g), which assignment shall not
terminate any obligations of the Investor hereunder; PROVIDED, that in the event
of an assignment described in (x), (y) or (z) above, the Investor agrees with
Parent that the transferee(s) and the Investor shall, with respect to Parent,
act as one Investor under such assigned Sections.
(j) ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement (including
any annexes and schedules hereto) and
-32-
the Merger Agreement (including any exhibits and schedules thereto) supersede
all prior agreements, written or oral, among the parties hereto with respect
to the subject matter hereof and contains the entire agreement among the
parties with respect to the subject matter hereof. This Agreement may not be
amended, supplemented or modified, and no provisions hereof may be modified
or waived, except by an instrument in writing signed by the party or parties
affected or to be affected thereby. No waiver of any provisions hereof by
any party shall be deemed a waiver of any other provisions hereof by any such
party, nor shall any such waiver be deemed a continuing waiver of any
provision hereof by such party.
(k) NO REQUEST FOR AMENDMENT OR WAIVER. The Company shall not, and
shall cause its Affiliates not to and use reasonable best efforts to cause its
Associates not to, request publicly that Parent or any of the Class B Entities
or any of their respective agents or representatives, directly or indirectly,
amend or waive any provision of this Agreement or make any such request
privately if it could reasonably be expected to require Parent to make a public
announcement regarding such request.
(l) NO RELIEF OF LIABILITIES. No Transfer by the Investor or any
Class B Entity of Beneficial Ownership of any Shares shall relieve the Investor
or such Class B Entity of any liabilities or obligations to Parent or to a
Class B Entity (in the case of a Transfer by the Investor) or to the Investor
(in the case of a Transfer by a Class B Entity) that arose or accrued prior to
the date of such Transfer.
(m) SECURITIES SUBJECT TO AGREEMENT; INEFFECTIVE TRANSFERS. All
Shares that are Beneficially Owned by the Investor (including any Shares
disclosed pursuant to Section 2(a) for as long as such Shares are Beneficially
Owned by the Investor or its Affiliates), and the Class B Entities and, to the
extent provided herein, the Affiliates and Associates of the Investor and the
Class B Entities, shall be subject to this Agreement. No Transfer or
acquisition of any Shares in violation of any provision of this Agreement shall
be effective to pass any title to, or create any interest in favor of, any
Person, but the Investor or Class B Entities, as the case may be, in attempting
to effect or in permitting or suffering such Transfer or acquisition, shall be
deemed to have committed a material breach hereof.
-33-
(n) FURTHER ASSURANCES. The parties hereto shall execute and deliver
such additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of the terms of this Agreement and the transactions contemplated
hereby.
(o) THIRD PARTY BENEFICIARIES. NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER UPON ANY THIRD PARTY ANY RIGHTS OR REMEDIES OF
ANY NATURE WHATSOEVER UNDER OR BY REASON OF THIS AGREEMENT.
-34-
IN WITNESS WHEREOF, Parent, each Class B Entity and the Company have
executed and delivered this Agreement, or a counterpart hereof, as of the date
first written above or, where applicable, across from a party's signature on
such counterpart.
PARENT:
CABLEVISION SYSTEMS CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
General Counsel and Secretary
THE COMPANY:
TELE-COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
The Company hereby irrevocably and unconditionally guarantees the
performance of all obligations under this Agreement of each of the Investors on
the signature page attached hereto and hereby covenants and agrees with Parent
and each of the Class B Entities that each such Investor, for so long as such
Investor Beneficially Owns Shares, shall continue to be a Controlled Subsidiary
or wholly owned Subsidiary of the Company.
THE COMPANY:
TELE-COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
-35-
THE INVESTORS:
COUNTRY CABLE III, INC.
CCC SUB, INC.
TCI CSC II, Inc.
TCI CSC III, Inc.
TCI CSC IV, Inc.
TCI CSC V, Inc.
TCI CSC VI, Inc.
TCI CSC VII, Inc.
TCI CSC VIII, Inc.
TCI CSC IX, Inc.
TCI CSC X, Inc.
TCI CSC XI, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxxxxxxx,
Vice President
-36-
XXXXXXX X. XXXXX
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
XXXXXXX X. XXXXX 1997 GRANTOR RETAINED ANNUITY TRUST
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Trustee
XXXXX DESCENDANTS TRUST
By:
-----------------------------------
Name:
Title:
XXXXX PROGENY TRUST
By:
-----------------------------------
Name:
Title:
XXXXX GRANDCHILDREN TRUST
By:
-----------------------------------
Name:
Title:
XXXXX SPOUSE TRUST
By:
-----------------------------------
Name:
Title:
-37-
XXXXXXX X. XXXXX
By:
-----------------------------------
XXXXXXX X. XXXXX 1997 GRANTOR RETAINED ANNUITY TRUST
By:
-----------------------------------
Name:
Title:
XXXXX DESCENDANTS TRUST
By: /s/ Xxxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Trustee
XXXXX PROGENY TRUST
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Trustee
XXXXX GRANDCHILDREN TRUST
/s/ Xxxxxx X. Xxxxx
By: /s/ Xxxxxxxx Xxxxx Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx,
Xxxxxxxx Xxxxx Xxxxx
Title: Trustees
XXXXX SPOUSE TRUST
/s/ Xxxxxx X. Xxxxx
By: /s/ Xxxxxxxx Xxxxx Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx,
Xxxxxxxx Xxxxx Xxxxx
Title: Trustees
-37-
XXXXXXX X. XXXXX
By:
-----------------------------------
XXXXXXX X. XXXXX 1997 GRANTOR RETAINED ANNUITY TRUST
By:
-----------------------------------
Name:
Title:
XXXXX DESCENDANTS TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
XXXXX PROGENY TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
XXXXX GRANDCHILDREN TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
XXXXX SPOUSE TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
-37-
XXXXXXX X. XXXXX
By:
-----------------------------------
XXXXXXX X. XXXXX 1997 GRANTOR RETAINED ANNUITY TRUST
By:
-----------------------------------
Name:
Title:
XXXXX DESCENDANTS TRUST
By:
-----------------------------------
Name:
Title:
XXXXX PROGENY TRUST
By: /s/ Xxxxxxx Xxxxx-Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx-Xxxxxxx
Title: Trustee
XXXXX GRANDCHILDREN TRUST
By:
-----------------------------------
Name:
Title:
XXXXX SPOUSE TRUST
By:
-----------------------------------
Name:
Title:
-37-
DC XXXXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC XXXXXXX TRUST
By: /s/ Xxxxxxx Xxxxx-Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx-Xxxxxxx
Title: Trustee
DC XXXXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC PATRICK TRUST
By:
-----------------------------------
Name:
Title:
XX XXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC JAMES TRUST
By:
-----------------------------------
Name:
Title:
-38-
DC XXXXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC XXXXXXX TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
DC XXXXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC PATRICK TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
XX XXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC JAMES TRUST
By:
-----------------------------------
Name:
Title:
-38-
DC XXXXXXXX TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
DC XXXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC XXXXXXXX TRUST
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Trustee
DC PATRICK TRUST
By:
-----------------------------------
Name:
Title:
XX XXXXXX TRUST
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Trustee
DC JAMES TRUST
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
-38-
DC XXXXXXXX TRUST
By: /s/ Xxxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Trustee
DC XXXXXXX TRUST
By:
-----------------------------------
Name:
Title:
DC XXXXXXXX TRUST
By: /s/ Xxxxxxxx Xxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxx Xxxxx
Title: Trustee
DC PATRICK TRUST
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Trustee
XX XXXXXX TRUST
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Trustee
DC JAMES TRUST
By:
-----------------------------------
Name:
Title:
-00-
XXX XXXXX XX. 0
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx XxxXxxxxxx
Title: Trustee
CFD TRUST NO. 2
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx XxxXxxxxxx
Title: Trustee
CFD TRUST NO. 3
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx XxxXxxxxxx
Title: Trustee
CFD TRUST NO. 4
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx XxxXxxxxxx
Title: Trustee
CFD TRUST NO. 5
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx XxxXxxxxxx
Title: Trustee
CFD TRUST NO. 6
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx XxxXxxxxxx
Title: Trustee
-39-
CFD TRUST NO. 10
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx XxxXxxxxxx
Title: Trustee
-40-
SCHEDULE 1
(Parent Share Issuance Commitments)
1. CSC Stock Plans.
2. Any Parent Class A Shares issuable upon conversion of any Parent Class B
Shares.
3. Any Shares issuable upon conversion of the Series C Cumulative Preferred
Stock, par value $.01 per share, of Parent outstanding as of the date of
the Merger Agreement.
-1-
SCHEDULE 3
(Parent Class B Shares of the Class B Entities)*
ENTITY CLASS B SHARES
------ --------------
Xxxxxxx X. Xxxxx 4,859,281
Xxxxxxx X. Xxxxx 1997
Grantor Retained Annuity Trust 1,240,000
Xxxxx Descendants Trust 413,625
Xxxxx Progeny Trust 513,625
Xxxxx Grandchildren Trust 307,625
Xxxxx Spouse Trust 52,945
DC Xxxxxxxx Trust 303,116
DC Xxxxxxx Trust 303,116
DC Xxxxxxxx Trust 294,285
DC Patrick Trust 294,285
XX Xxxxxx Trust 303,116
DC James Trust 303,116
CFD Trust No. 1 302,880
CFD Trust No. 2 302,880
CFD Trust No. 3 294,049
CFD Trust No. 4 294,049
CFD Trust No. 5 302,880
CFD Trust No. 6 302,880
CFD Trust No. 10 93,456
--------------------------
* To be updated as of Contribution Closing.
-1-
ANNEX A
REGISTRATION RIGHTS
The Parent Class A Shares that are Beneficially Owned by the Investor from
time to time are hereinafter referred to as the "Registrable Securities" and
shall have the benefit of the following registration rights.
Demand
Registration: After the date that is six months following the Contribution
Closing, the Investor may request, by written notice to
Parent, that Parent file a registration statement
registering for offering and sale Registrable Securities in
an amount equal to or in excess of 2,000,000 Shares or, if
less, the Shares then Beneficially Owned by the Investor and
any transferees with rights hereunder in an underwritten
public offering (a "Demand Registration"). Parent will use
its reasonable best efforts to file a registration statement
on an appropriate form with the SEC covering the Registrable
Securities for which registration was so requested within
30 days of Parent's receipt of such request, subject to
Parent's blackout rights described below, and shall use its
reasonable best efforts to cause such registration statement
to be declared effective as soon thereafter as practicable.
In addition, Parent shall amend or supplement such
registration statement so that the Investor may use such
registration statement and the related prospectus in
connection with an underwritten offering of such Registrable
Securities for 90 days from the effective date of such
registration statement, subject to Parent's blackout rights
described below. Parent agrees to keep the Demand
Registration effective for such 90-day period and, after the
expiration of such 90-day period, may deregister the
Registrable
A-1
Securities registered thereon. Parent shall not
be obligated to effect more than one Demand Registration for
the Investor in each of the years following the date that is
six months following the Contribution Closing.
Piggy-back
Registration: The Investor shall be entitled to "piggy-back" registration
rights on any registrations of Shares registering for
offering and sale at least $100 million of Shares (based
upon the market value thereof on the date of filing), other
than a registration on Form X-0, Xxxx X-0 or any successors
to such forms (a "Piggy-back Registration"), subject to the
cutback provisions described below.
Registration
Expenses: The Investor will pay a proportional amount (based upon the
number of shares registered by the Investor) of any and all
fees and expenses in a Piggy-back Registration; PROVIDED,
that the Investor will not be responsible for counsel
expenses of other selling stockholders. In a Demand
Registration, Parent will pay any and all fees and expenses;
PROVIDED that Parent will not be responsible for the counsel
expenses of the Investor or any underwriting fees and
commissions for the Shares sold by the Investor.
Underwriters: In case of any Demand Registration or Piggy-back
Registration, Parent shall select the underwriter or
underwriters that shall manage or lead such registration.
The Investor shall not be entitled to participate in any
underwritten offering unless and until the Investor has
entered into an underwriting or other agreement with such
underwriter or underwriters in such form as Parent and such
underwriter or underwriters shall determine.
A-2
In addition, in connection with any underwritten offering
proposed by the Investor hereunder, Parent shall enter into
an underwriting or other agreement with the underwriters
thereof containing customary representations, warranties,
covenants, indemnities and other terms.
Transfer of
Registration
Rights: The Investor may transfer or assign its registration rights
in connection with any Transfer of Registrable Securities to
a Permitted Transferee or a transferee under Section 6(b) or
6(g); PROVIDED, that any such transferee shall agree to be
bound by the terms hereof relating to Shares or securities
convertible or exchangeable for Shares and, with respect to
Parent, all of such transferees must act as one Investor
hereunder.
Lock-Up Provision: The Investor will not engage in transactions involving
Parent's equity securities, including by commencing any
public offering of Parent's equity securities or by causing
a Demand Registration, for a period not to exceed 180 days
after the effective date of any Parent registration
statement that is equal to the shortest period that such
restriction is made applicable to any director, officer or
Affiliate of Parent.
Blackout Rights: Upon written notice to the Investor, Parent may suspend the
Investor's right to sell Registrable Securities under a
registration statement or temporarily refuse to proceed with
a Demand Registration under the following circumstances: (a)
Parent reasonably believes that the use of such registration
statement would require disclosure of a material corporate
development not otherwise required to be disclosed that
Parent has a valid
A-3
business purpose for not disclosing, (b) Parent is in
the process of making, or preparing to make, a registered
offering of securities and Parent reasonably deems it
advisable to temporarily discontinue disposition of
Registrable Securities or (c) Parent reasonably believes
that disposition of Registrable Securities at such time
would have a material adverse effect on Parent. Parent
shall notify the Investor immediately upon the conditions in
clause (a) or (c) above ceasing to exist, at which time such
suspension shall terminate. Notwithstanding the foregoing,
(i) the maximum period in which Parent can suspend the
Investor's rights under clauses (a), (b) and (c) above is 60
days on any single occasion and 145 consecutive days in any
one-year period, (ii) Parent may not suspend such rights
more than three times in any one-year period commencing
after the date that the Demand Registration becomes
effective and (iii) the Investor shall in any event, taking
into account the blackout rights and lock-up provisions set
forth herein, be entitled to 180 days in any one-year period
(other than the period prior to the date that is six months
following the Stock Closing) that are not subject to any
blackout or lock-up. The Investor's rights hereunder may
not be suspended unless corresponding rights of other
stockholders are similarly suspended.
Cutback Rights: In the event that the Investor, Parent and/or any
stockholder or Affiliate of Parent are participating in an
underwritten equity offering and the managing or lead
underwriter or underwriters thereof shall determine in its
or their reasonable good faith judgment that it cannot sell,
or that it would not be advisable to sell, all the Shares
desired to be sold, then the number of Shares that each such
Person
A-4
may have included shall be reduced according to the
following terms until the managing or lead underwriter or
underwriters shall believe that the remaining Shares can be
sold and it would not be inadvisable to sell such number of
Shares:
(a) in the event that the offering in question
includes a primary offering of Shares by Parent, then
the number of Shares that Parent may have included
shall not be reduced and the number of Shares which the
Investor and any other Persons may have included shall
be reduced pro rata in proportion to the total number
of Shares sought to be included by each such Person,
and
(b) in the event that the offering in question
does not include a primary offering of Shares by
Parent, then the number of shares that the Investor and
any other Persons may have included shall be reduced
pro rata in proportion to the total number of Shares
sought to be included by each such Person.
Indemnification: Parent will indemnify the Investor and the Investor's
officers, directors and controlling persons against any
losses, claims, damages, expenses or liabilities incurred by
the Investor arising out of, or based upon, any untrue
statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus or
amendment or supplement thereto, including any document
incorporated by reference therein, or the omission or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were
A-5
made, not misleading; PROVIDED, that Parent shall not be
liable to the extent that any loss, claim, damage,
expense or liability arises out of information supplied
in writing by the Investor or any of its Affiliates or
Associates for use in any registration statement or
prospectus or amendment or supplement thereto, including
any document incorporated by reference therein. The
Investor shall indemnify Parent and Parent's officers,
directors and controlling persons against any losses,
claims, damages, expenses or liabilities incurred by
Parent arising out of, or based upon, any untrue
statement or alleged untrue statement of a material fact
relating to the Investor contained in any registration
statement or prospectus or amendment or supplement
thereto, including any document incorporated by reference
therein, which information was supplied in writing by the
Investor or any of its Affiliates or Associates for use
in any registration statement or prospectus or amendment
or supplement thereto, or the omission or alleged
omission therefrom of a material fact relating to the
Investor necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
Promptly after receipt by an indemnified party under the
preceding paragraph of notice of the commencement of any
action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under
such paragraph, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify
A-6
the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party
otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and
it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that
it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the
indemnifying party shall not be liable to such
indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or
threatened action or claim in respect of which
indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or
potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii)
does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of
any indemnified party.
Termination of
Registration
Rights: The Investor's registration rights hereunder will
automatically expire with no action by either Parent or the
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Investor if and at the time that the Investor is able to
sell all of its Registrable Securities in any 90-day period
pursuant to Rule 144 or any successor exemption under the
Securities Act.
Further Actions: In connection with sales of Registrable Securities by the
Investor, Parent shall take such further actions as are
customarily required of issuers providing registration
rights, including using its reasonable best efforts to (i)
list the shares on the principal securities exchanges or
markets on which or in which the outstanding securities of
the same class are listed or traded, (ii) obtain any
required clearance with state securities regulators, (iii)
file Exchange Act reports on a timely basis, (iv) make
available for inspection corporate documents at reasonable
times, (v) participate in a reasonable number of management
due diligence sessions at reasonable times (but Parent's
management shall not be required to travel outside of the
metropolitan area in which its principal executive offices
are located) and (vi) furnish copies of required
prospectuses, in each case, at the expense of the Investor.
Savings Clause: The registration rights granted hereunder are subject in all
respects to the rights granted to Cablevision Systems
Company and CSC Holdings Company pursuant to the
Registration Rights Agreements, each dated January 27, 1986,
between CSC and each of such parties as in effect on the
date of the Merger Agreement, true and complete copies of
which have been provided to the Company.
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